1
POST-PETITION LOAN AND SECURITY AGREEMENT
by and among
CONGRESS FINANCIAL CORPORATION (SOUTHERN),
as Administrative Agent,
FLEET NATIONAL BANK,
as Collateral Agent,
DYERSBURG CORPORATION, DYERSBURG FABRICS LIMITED PARTNERSHIP, I,
DYERSBURG FABRICS INC., UNITED KNITTING, INC., UNITED KNITTING LIMITED
PARTNERSHIP, I, IQUE, INC., IQUE LIMITED PARTNERSHIP, I, AIH INC. and
ALAMAC KNIT FABRICS, INC.,
as Borrowers
and
DFIC, INC., IQUEIC, INC., UKIC, INC.,
ALAMAC ENTERPRISES INC., and ALAMAC
KNIT FABRICS LLC,
as Guarantors
Dated: September 25, 2000
2
TABLE OF CONTENTS
Page
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Section 1. DEFINITIONS.................................................................-1-
Section 2. CREDIT FACILITIES..........................................................-24-
2.1 Revolving Loans............................................................-24-
2.2 Letter of Credit Accommodations............................................-27-
2.3 Term Loan..................................................................-31-
2.4 Availability Reserve.......................................................-31-
2.5 Borrowers' Representative..................................................-31-
Section 3. INTEREST AND FEES..........................................................-32-
3.1 Interest...................................................................-32-
3.2 Closing Fee................................................................-34-
3.3 Syndication Fee............................................................-34-
3.4 Collateral Agent Fee.......................................................-34-
3.5 Administrative Agent Fee...................................................-34-
3.6 Unused Line Fee............................................................-34-
3.7 Success Fee................................................................-35-
3.8 Changes in Laws and Increased Costs of Revolving Loans.....................-35-
3.9 Maximum Interest...........................................................-36-
3.10 Nature and Extent of Each Obligor's Liability;
Guaranty of Payment and Performance........................................-37-
Section 4. CONDITIONS PRECEDENT.......................................................-39-
4.1 Conditions Precedent to Initial Loans and Letter of Credit Accommodations..-39-
4.2 Conditions Precedent to All Loans and Letter of Credit Accommodations......-40-
Section 5. SECURITY INTEREST..........................................................-41-
5.1 Grant of Security Interest.................................................-41-
5.2 Exclusion for Certain Contracts and Leases.................................-41-
5.3 Foreign Subsidiary Stock...................................................-42-
5.4 Liens Under Financing Orders...............................................-42-
5.5 Pledged Collateral.........................................................-42-
5.6 Lien Priority..............................................................-42-
Section 6. LOAN ADMINISTRATION........................................................-42-
6.1. Manner of Borrowing and Funding Revolving Loans............................-42-
6.2. Defaulting Lenders.........................................................-46-
6.3. Special Provisions Governing LIBOR Rate Loans..............................-46-
6.4. Loan Accounts; the Register; Account Stated................................-46-
6.5 Collection of Accounts.....................................................-47-
6.6 Payments...................................................................-48-
6.7 Prepayments................................................................-48-
6.8 Telephone Authorizations...................................................-49-
6.9 Use of Proceeds............................................................-50-
6.10 Agents' Allocation of Payments and Collections.............................-50-
(i)
3
6.11 Gross Up for Taxes.........................................................-51-
6.12 Withholding Tax Exemption..................................................-51-
Section 7. COLLATERAL REPORTING AND COVENANTS.........................................-52-
7.1 Collateral Reporting.......................................................-52-
7.2 Accounts Covenants.........................................................-52-
7.3 Inventory Covenants........................................................-54-
7.4 Equipment Covenants........................................................-54-
7.5 Power of Attorney..........................................................-55-
7.6 Right to Cure..............................................................-55-
7.7 Access to Premises.........................................................-55-
Section 8. REPRESENTATIONS AND WARRANTIES.............................................-56-
8.1 Corporate Existence, Power and Authority; Subsidiaries.....................-56-
8.2 Financial Statements; No Material Adverse Change...........................-56-
8.3 Chief Executive Office; Collateral Locations...............................-56-
8.4 Priority of Liens; Title to Properties.....................................-56-
8.5 Tax Returns................................................................-56-
8.6 Litigation.................................................................-57-
8.7 Compliance with Other Agreements and Applicable Laws.......................-57-
8.8 Employee Benefits..........................................................-57-
8.9 Environmental Compliance...................................................-58-
8.10 Bank Accounts..............................................................-58-
8.11 Accuracy and Completeness of Information...................................-58-
8.12 Survival of Warranties; Cumulative.........................................-58-
8.13 Not a Regulated Entity.....................................................-59-
8.14 Margin Stock...............................................................-59-
Section 9. AFFIRMATIVE AND NEGATIVE COVENANTS.........................................-59-
9.1 Maintenance of Existence...................................................-59-
9.2 New Collateral Locations...................................................-59-
9.3 Compliance with Laws, Regulations, etc.....................................-59-
9.4 Payment of Taxes and Claims................................................-60-
9.5 Insurance..................................................................-60-
9.6 Financial Statements and Other Information.................................-60-
9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc....................-62-
9.8 Encumbrances...............................................................-63-
9.9 Indebtedness...............................................................-63-
9.10 Loans, Investments, Guarantees, Etc........................................-64-
9.11 Dividends and Redemptions..................................................-64-
9.12 Transactions with Affiliates...............................................-64-
9.13 Additional Bank Accounts...................................................-64-
9.14 Compliance with ERISA......................................................-65-
9.15 Consolidated EBITDA........................................................-65-
9.16 After Acquired Real Property...............................................-65-
9.17 Costs and Expenses.........................................................-66-
9.18 Excess Availability........................................................-66-
9.19 Obligations Constitute Senior Debt.........................................-66-
(ii)
4
9.20 Payment of Claims..........................................................-66-
9.21 Fiscal Year................................................................-66-
9.22 Upstream Payments..........................................................-67-
9.23 Filing of Motions and Applications.........................................-67-
9.24 Notices....................................................................-67-
9.25 Further Assurances.........................................................-67-
Section 10. EVENTS OF DEFAULT AND REMEDIES.............................................-67-
10.1 Events of Default..........................................................-67-
10.2 Remedies...................................................................-70-
Section 11. AGENTS.....................................................................-71-
11.1 Appointment, Authority and Duties of Agents................................-71-
11.2 Agreements Regarding Collateral............................................-73-
11.3 Reliance by Agents.........................................................-73-
11.4 Action Upon Default........................................................-74-
11.5 Ratable Sharing............................................................-75-
11.6 Indemnification of Agents..................................................-75-
11.7 Limitation on Responsibilities of Agents...................................-76-
11.8 Successor Agents and Co-Agents.............................................-76-
11.9 Consents, Amendments and Waivers...........................................-77-
11.10 Due Diligence and Non-Reliance.............................................-79-
11.11 Representations and Warranties of Lenders..................................-79-
11.12 Required Lenders...........................................................-79-
11.13 Several Obligations........................................................-79-
11.14 Agents in Their Individual Capacities......................................-80-
11.15 No Third-Party Beneficiaries...............................................-80-
11.16 Notice of Transfer.........................................................-80-
11.17 Replacement of Certain Lenders.............................................-80-
11.18 Remittance of Payments and Collections.....................................-81-
Section 12. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS.......................-81-
12.1 Successors and Assigns.....................................................-81-
12.2 Participations.............................................................-81-
12.3 Assignments................................................................-82-
12.4 Tax Treatment..............................................................-83-
12.5 Participant's Security Interest............................................-83-
Section 13. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; ............................-83-
13.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver......-83-
13.2 Waiver of Notices..........................................................-85-
13.3 Amendments and Waivers.....................................................-85-
13.4 Waiver of Counterclaims....................................................-85-
13.5 Indemnification............................................................-85-
Section 14. DIP TERM; MISCELLANEOUS....................................................-86-
14.1 Term.......................................................................-86-
14.2 Notices....................................................................-87-
(iii)
5
14.3 Partial Invalidity.........................................................-87-
14.4 Successors.................................................................-87-
14.5 Entire Agreement...........................................................-87-
(iv)
6
(v)
7
(vi)
8
(vii)
9
INDEX TO
EXHIBITS AND SCHEDULES
Exhibit A Form of Revolving Note
Exhibit B Form of Term Note
Exhibit C Form of Settlement Note
Exhibit D Form of Notice of Conversion/Continuation
Exhibit E Form of Notice of Borrowing
Exhibit F Compliance Certificate
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Notice
Exhibit I Borrowing Base Certificate
Exhibit J Opinion Letter Requirements
Schedule 1.1 Congress Letters of Credit
Schedule 8.4 Existing Liens
Schedule 8.9 Environmental
Schedule 8.10 Bank Accounts
Schedule 9.7 New Subsidiaries
Schedule 9.9 Existing Indebtedness
Schedule 9.10 Existing Loans, Advances and Guarantees
(viii)
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POST-PETITION LOAN AND SECURITY AGREEMENT
This POST-PETITION LOAN AND SECURITY AGREEMENT is made on September 25,
2000, by and among DYERSBURG CORPORATION, a Tennessee corporation ("Dyersburg");
DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited partnership
("DFLP"); DYERSBURG FABRICS INC., a Tennessee corporation ("DFI"); UNITED
KNITTING, INC., a Tennessee corporation ("UKI"); UNITED KNITTING LIMITED
PARTNERSHIP, I, a Tennessee limited partnership ("United Knitting"); IQUE, INC.,
a Tennessee corporation ("IQUE, Inc."); IQUE LIMITED PARTNERSHIP, I, a Tennessee
limited partnership ("IQUE"); ALAMAC KNIT FABRICS, INC., a Delaware corporation
("Alamac"); AIH INC., a Delaware corporation ("AIH"; each of Dyersburg, DFLP,
DFI, UKI, United Knitting, IQUE Inc., IQUE, Alamac and AIH individually referred
to hereinafter as a "Borrower" and collectively as "Borrowers"); DFIC, INC., a
Delaware corporation ("DFIC"); IQUEIC, INC., a Delaware corporation ("IQUEIC");
UKIC, INC., a Delaware corporation ("UKIC"); ALAMAC ENTERPRISES INC., a Delaware
corporation ("Alamac Enterprises"); and ALAMAC KNIT FABRICS LLC, a Delaware
limited liability company ("Alamac LLC"; each of DFIC, IQUEIC, UKIC, Alamac
Enterprises and Alamac LLC individually referred to as a "Guarantor" and
collectively as "Guarantors"); the various financial institutions listed on the
signature pages hereof and their respective successors and permitted assigns
which become "Lenders" as provided herein; CONGRESS FINANCIAL CORPORATION
(SOUTHERN), a Georgia corporation, in its capacity as administrative agent for
the Lenders pursuant to SECTION 11 hereof (together with its successors in such
capacity, "Administrative Agent"); and FLEET NATIONAL BANK, a national banking
association, in its capacity as collateral agent for the Lenders pursuant to
SECTION 11 hereof (together with its successors in such capacity, "Collateral
Agent"; Administrative Agent and Collateral Agent sometimes collectively
referred to hereinafter as "Agents").
RECITALS:
Each Borrower is a debtor-in-possession under Chapter 11 of the
Bankruptcy Code in a case pending in the United States Bankruptcy Court for the
District of Delaware (the "Court") (each a "Chapter 11 Case" and collectively
the "Chapter 11 Cases"). Each Borrower has requested that Lenders extend
financing to Borrowers in connection with the Chapter 11 Cases in accordance
with the provisions of this Agreement.
Lenders are willing to make loans and other extensions of credit to
Borrowers, subject to the terms and conditions of this Agreement and subject to
the terms and conditions set forth in orders of the Court approving the proposed
financing.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS
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All terms used herein which are defined in Article 1 or Article 9 of
the UCC shall have the meanings given therein unless otherwise defined in this
Agreement. All references to the plural herein shall also mean the singular and
to the singular shall also mean the plural unless the context otherwise
requires. All references to a Borrower, an Obligor, an Agent or a Lender
pursuant to the definitions set forth in the recitals hereto, or to any other
Person herein, shall include their respective successors and assigns. The words
"hereof," "herein," "hereunder," "this Agreement" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not any
particular provision of this Agreement and as this Agreement now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced. All references to any instrument or agreement, including any of the
DIP Financing Documents, shall include any amendment, modification, renewal,
restatement or replacement thereof or supplement thereto. All references to any
statute shall include all amendments thereto and modifications thereof and all
related rules and regulations. The word "including" when used in this Agreement
shall mean "including, without limitation." An Event of Default shall exist or
continue or be continuing until such Event of Default is waived in accordance
with SECTION 11.9 or is cured in a manner satisfactory to Agents, if such Event
of Default is capable of being cured as determined by Agents. Any accounting
term used herein unless otherwise defined in this Agreement shall have the
meanings customarily given to such term in accordance with GAAP. All references
to the time of day shall mean the time of day in Atlanta, Georgia. For purposes
of this Agreement, the following terms shall have the respective meanings given
to them below:
"Acceptable Plan" shall mean a Reorganization Plan which provides
for payment in full of all Obligations and any then outstanding
Pre-Petition Debt (including the securing with Cash Collateral of any
Letter of Credit Accommodations) on the effective date of such
Reorganization Plan and which is otherwise acceptable to Collateral
Agent and each Lender, in their sole and absolute discretion.
"Accounts" shall have the meaning ascribed to "account" in the
UCC and shall include all present and future rights of an Obligor to
payment for goods sold or leased or for services rendered, which are
not evidenced by instruments or chattel paper, and whether or not
earned by performance.
"Accuval Appraisal" shall mean that certain appraisal dated June
18, 1999, that was prepared by Accuval Associates, Incorporated with
respect to certain Real Property and certain Equipment of Borrowers.
"Adjusted LIBOR Rate" shall mean, with respect to each Interest
Period for any LIBOR Rate Loan, the rate per annum (rounded upwards, if
necessary, to the next one-sixteenth (1/16) of one percent (1%))
determined by dividing (a) the LIBOR Rate for such Interest Period by
(b) a percentage equal to: (i) one (1) minus (ii) the Reserve
Percentage. For purposes hereof, "Reserve Percentage" shall mean the
reserve percentage, expressed as a decimal, prescribed by any United
States or foreign banking authority for determining the reserve
requirement which is or would be applicable to deposits of United
States dollars in a non-United States or an international banking
office of Reference Bank used to fund a LIBOR Rate Loan or any LIBOR
Rate Loan made with the proceeds of such deposit, whether or not the
Reference Bank actually holds or has made any such deposits or loans.
The Adjusted LIBOR Rate shall be adjusted on and as of the effective
day of any change in the Reserve Percentage.
"Affiliate" shall mean a Person (other than a Subsidiary): (i)
which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, a
Person; (ii) which beneficially owns or holds 5% or more of any class
of the Equity Interests of a Person; or (iii) 5% or more of the Equity
Interests of which is beneficially owned or held by a Person or a
Subsidiary of a Person.
-2-
12
"Agent Indemnitees" shall mean collectively, (i) Administrative
Agent in its capacity as administrative agent hereunder and under the
other DIP Financing Documents and all of Administrative Agent's present
and future officers, directors, employees and agents, and (ii)
Collateral Agent in its capacity as collateral agent hereunder and
under the other DIP Financing Documents and all of Collateral Agent's
present and future officers, directors, employees and agents.
"Agreement" shall mean this Post-Petition Loan and Security
Agreement and all Exhibits hereto.
"Applicable Law" shall mean all laws, rules and regulations
applicable to the Person, conduct, transaction, covenant or DIP
Financing Document in question, including all applicable common law and
equitable principles; all provisions of all applicable state and
federal constitutions, statutes, rules, regulations and orders of
governmental bodies; and orders, judgments and decrees of all courts
and arbitrators.
"Applicable Margin" shall mean a percentage equal to (i) 3.0%
with respect to Revolving Loans consisting of LIBOR Rate Loans; (ii)
1.0% with respect to Revolving Loans consisting of Base Rate Loans;
(iii) 3.5% with respect to any portion of the Term Loan consisting of
LIBOR Rate Loans; and (iv) 1.5% with respect to any portion of the Term
Loan consisting of Base Rate Loans.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an Eligible Assignee and
accepted by Agents, in the form of EXHIBIT G attached hereto.
"Availability Reserve" shall mean, on any date of determination
thereof, an amount equal to the sum of the following (without
duplication): (i) the amount of the Pre-Petition Revolver outstanding
at such date; (ii) a reserve for general Inventory shrinkage, whether
as a result of theft or otherwise, that is determined by Agents from
time to time in their reasonable credit judgment based upon any
Borrower's historical losses due to such shrinkage; (iii) any amount
that any Borrower is obligated to pay pursuant to the provisions of any
of the DIP Financing Documents that Agents elect to pay for the account
of any Borrower in accordance with authority contained in any of the
DIP Financing Documents; (iv) the Factor Reserve; (v) a reserve to
reflect events, conditions, contingencies or risks, which, as
determined by Agents, do or may affect (a) the Collateral or any other
Property that is security for the Obligations or its value, (b) the
assets, business or prospects of any Borrower or any Obligor or (c) the
Liens of Collateral Agent (including the enforceability, perfection or
priority thereof); (vi) the amount of the Letter of Credit
Accommodations; (vii) the Professional Expense Reserve; and (viii) for
so long as any Event of Default exists, such additional reserves as
Collateral Agent in its sole and absolute discretion may elect to
impose from time to time, without waiving any such Event of Default or
Lenders' entitlement to accelerate the maturity of the Obligations as a
consequence thereof.
"Bankruptcy Code" shall mean title 11 of the United States Code.
"Base Rate" shall mean the rate from time to time publicly
announced by the Reference Bank from time to time as its base rate,
whether or not such announced rate is the best rate available at such
bank; and, if such base rate for commercial loans is discontinued by
Reference Bank as a standard, a comparable reference rate designated by
Reference Bank as a substitute therefor shall be the Base Rate.
"Base Rate Loan" shall mean any Loan or portion thereof on which
interest is payable based on the Base Rate in accordance with the terms
hereof.
-3-
13
"Blocked Accounts" shall have the meaning set forth in SECTION
6.5 of this Agreement.
"Bond Letter of Credit" shall mean that certain irrevocable
direct-pay letter of credit issued by First Union prior to the Petition
Date for the benefit of the Bond Trustee in the principal amount of
$8,056,903.
"Bond Trustee" shall mean SunTrust Bank (formerly known as Trust
Company Bank), as trustee for the Bonds.
"Bonds" shall mean the $7,900,000 Industrial Development Board of
the City of Trenton, Tennessee Industrial Development Revenue Bonds
(Dyersburg Fabrics Inc. Project) Series 1990.
"Borrowing" shall mean a borrowing consisting of Loans of one
Type made on the same day by Lenders (or by Fleet Capital in the case
of a Borrowing funded by Settlement Loans) or a conversion of a Loan or
Loans of one Type from Lenders on the same day.
"Borrowing Agent" shall mean Dyersburg Corporation, a Tennessee
corporation.
"Borrowing Base Certificate" shall mean a certificate which is
substantially in the form of EXHIBIT I attached hereto, as such form
may from time to time be modified by Agents, is duly completed
(including all schedules thereto) and executed by the chief financial
officer or other appropriate financial officer of Borrowers acceptable
to Agents and delivered to Collateral Agent.
"Business Day" shall mean any day other than a Saturday, Sunday,
or other day on which commercial banks are authorized or required to
close under the laws of the State of New York or the State of Georgia,
and a day on which the Reference Bank, Agents and Lenders are open for
the transaction of business, except that if a determination of a
Business Day shall relate to any LIBOR Rate Loans, the term Business
Day shall also exclude any day on which banks are closed for dealings
in dollar deposits in the London interbank market or other applicable
LIBOR Rate market.
"Capital Expenditures" shall mean expenditures made or
liabilities incurred for the acquisition of any fixed assets or
improvements, replacements, substitutions or additions thereto that
have a useful life of more than one year, including the total principal
portion of Capitalized Lease Obligations.
"Capitalized Lease Obligation" shall mean any debt represented by
obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
"Carve-Out" shall, during the Interim Period, have the meaning
ascribed to it in the Interim Financing Order and, thereafter, shall
have the meaning ascribed to it in the Final Financing Order.
"Cash Collateral Account" shall mean a demand deposit, money
market or other account established by Collateral Agent at such
financial institution as Collateral Agent may select in its discretion,
which account shall be in Collateral Agent's name and subject to
Collateral Agent's Lien.
"Cash Management Agreements" shall mean any agreement entered
into from time to time between an Obligor or any Subsidiary of an
Obligor, on the one hand, and First Union, Fleet National Bank or any
of their Affiliates or any other banking or financial institution, on
the other, in connection with cash
-4-
14
management services for operating, collections, payroll and trust
accounts of Obligors or any of their Subsidiaries provided by such
banking or financial institution, including automatic clearinghouse
services, controlled disbursement services, electronic funds transfer
services, information reporting services, lockbox services, stop
payment services and wire transfer services.
"Chapter 11 Case" and "Chapter 11 Cases" shall have the meaning
ascribed to them in the Recitals hereto.
"Claims" shall mean any and all claims, demands, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
awards, remedial response costs, expenses or disbursements of any kind
or nature whatsoever (including reasonable attorneys', accountants',
consultants' or paralegals' fees and expenses), whether arising under
or in connection with the DIP Financing Documents, any Applicable Law
(including any Environmental Law) or otherwise, that may now or
hereafter be suffered or incurred by a Person and whether suffered or
incurred in or as a result of any investigation, litigation,
arbitration or other judicial or non-judicial proceeding or any appeals
related thereto.
"Closing Date" shall mean the date on which all of the conditions
precedent in SECTION 4 of this Agreement are satisfied (or waived by
Agents in their sole and absolute discretion) and the initial Loans are
made under this Agreement.
"Code" shall mean the Internal Revenue Code of 1986.
"Collateral" shall have the meaning set forth in SECTION 5 of
this Agreement.
"Commitment" shall mean, at any date for any Lender, the
aggregate amount of such Lender's Revolving Commitment and Term Loan
Commitment on such date, and "Commitments" shall mean the aggregate
amount of all Revolving Commitments and Term Loan Commitments.
"Commitment Termination Date" shall mean the date that is the
soonest to occur of: (i) the last day of the DIP Term, (ii) the
effective date of any Acceptable Plan or the date of entry of a
Confirmation Order with respect to any other Reorganization Plan, (iii)
the sale of all or a substantial part of the Collateral, (iv) the date
on which Collateral Agent terminates the DIP Facility pursuant to
SECTION 14.1 of this Agreement or (v) the date on which Borrowers elect
to terminate the DIP Facility pursuant to SECTION 14.1 of this
Agreement.
"Committee" shall mean a creditors' or equity security holders'
committee appointed in the Chapter 11 Cases by the U. S. Trustee.
"Compliance Certificate" shall mean a certificate in the form of
EXHIBIT F attached hereto, duly completed.
"Confirmation Order" shall mean an order entered by the Court,
confirming a Reorganization Plan.
"Congress" shall mean Congress Financial Corporation (Southern),
a Georgia corporation, and its successors and assigns.
-5-
15
"Congress Indemnitees" shall mean Congress and all of its present
and future officers, directors, employees and agents.
"Congress Letters of Credit" shall mean Letters of Credit
procured by Congress from First Union, as more particularly described
on SCHEDULE 1.1, including the Bond Letter of Credit.
"Consolidated" shall mean the consolidation in accordance with
GAAP of the accounts or other items as to which such term applies.
"Consolidated EBITDA" shall mean, for any fiscal period of
Borrowers, on a Consolidated basis, Borrowers' and their Consolidated
Subsidiaries' (i) income (or loss) before interest and taxes (excluding
therefrom (to the extent otherwise included therein) any gains or
losses, together with any related provisions for taxes, realized upon
any sale of assets other than in the ordinary course of business) plus
(ii) to the extent deducted in determining such income (or loss),
depreciation, amortization and other non-cash charges plus (iii) to the
extent deducted in determining such income (or loss), Restructuring
Expenses.
"Consolidated Subsidiaries" shall mean, as to a Borrower, those
Subsidiaries of such Borrower whose accounts are at the time in
question, in accordance with GAAP (and, with respect to any
Subsidiaries created, to the extent permitted by this Agreement, after
the date hereof, pursuant to the written consent of Agents, which
consent may be withheld in their absolute discretion and which may be
conditioned upon, inter alia, the execution and delivery of guaranties,
security agreements, mortgages and other documents required by Agents
in their absolute discretion), consolidated with those of such
Borrower.
"Contingent Obligation" shall mean, with respect to any Person,
any obligation of such Person arising from any guaranty, indemnity or
other assurance of payment or performance of any Debt, lease, dividend
or other obligation ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including (i) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to
make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement, (iii) 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 (1) for the
purchase or payment of any such primary obligations or (2) 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 holder of such primary
obligation against loss in respect thereof. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to
which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such Person may be liable
pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability with respect thereto (assuming such Person is
required to perform thereunder), as determined by such Person in good
faith.
"Court" shall have the meaning ascribed to it in the Recitals
hereto.
-6-
16
"Debt" shall mean, as applied to a Person, without duplication:
(i) all items that, in accordance with GAAP, would be included in
determining total liabilities as shown on the liability side of a
balance sheet of such Person on the date as of which Debt is to be
determined, including Capitalized Lease Obligations; (ii) all
obligations of other Persons which such Person has guaranteed; (iii)
all reimbursement obligations in connection with letters of credit or
letter of credit guaranties issued for the account of such Person; and
(iv) in the case of Borrower (without duplication), the Obligations.
"Default" shall mean an event or condition the occurrence of
which would, with the lapse of time or the giving of notice or both,
become an Event of Default.
"Default Rate" shall mean, with respect to any Loan, a
fluctuating rate per annum which, on any date, is equal to two percent
(2%) above the rate otherwise in effect for such Loan on such date.
"Deposit Accounts" shall mean all of a Person's demand, time,
savings, passbook, money market or other depository accounts, and all
certificates of deposit, maintained by such Person with any bank,
savings and loan association, credit union or other depository
institution.
"DIP Facility" shall mean the $96,600,000 credit facility
established by Agents and Lenders in favor of Borrowers pursuant to
this Agreement and pursuant to which the Revolving Commitments and Term
Loan Commitments are made available by Lenders.
"DIP Financing Documents" shall mean, collectively, this
Agreement, the Notes, the Mortgages, the Environmental Indemnity
Agreement, the Trademark Security Agreements, the Patent Security
Agreements, the Letter of Credit Documents, any Factor Assignment
Agreements, any Factor Intercreditor Agreements and all other notes,
guarantees, security agreements, interest rate protection agreements
and other agreements, documents and instruments now or at any time
hereafter executed and/or delivered by any or all Borrowers or any
Obligor in connection with this Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
"DIP Motion" shall mean the joint motion of Borrowers and
Guarantors for approval of the financing under the DIP Facility
pursuant to this Agreement.
"DIP Term" shall mean a period commencing on the date of entry of
the Interim Financing Order and ending on that date which is 180 days
after the date of entry of the Interim Financing Order.
"Dollars and the $" shall mean lawful money of the United States
of America.
"Domestic Subsidiary" shall mean a Subsidiary of a Borrower
(other than a Subsidiary that is a Borrower) that is incorporated under
the laws of a state of the United States.
"Due From Factor Report" shall mean a report prepared by
Borrowers that reflects the amount of Factored Accounts as of the date
of the report and the aggregate amount standing to the credit of
Borrowers from all Factors as of such date.
"Eligible Accounts" shall mean Accounts created by a Borrower
which are and continue to be acceptable to Agents based on the criteria
set forth below. In general, Accounts shall be Eligible Accounts if:
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(a) such Accounts arise from the actual and bona fide
sale and delivery of goods by a Borrower or rendition of services
by a Borrower in the ordinary course of its business, which
transactions are completed in accordance with the terms and
provisions contained in any documents related thereto;
(b) such Accounts are not unpaid more than sixty (60)
days after the original due date thereof or more than one hundred
twenty (120) days after the date of the original invoice;
(c) such Accounts comply with the terms and conditions
contained in SECTION 7.2 of this Agreement;
(d) such Accounts do not arise from sales on
consignment, guaranteed sale, sale and return, sale on approval,
or other terms under which payment by the account debtor may be
conditional or contingent;
(e) the chief executive office of the account debtor
with respect to such Accounts is located in the United States of
America, or, at Agents' option, if either: (i) the account debtor
has delivered to a Borrower an irrevocable letter of credit
issued or confirmed by a bank satisfactory to Agents and payable
only in the United States of America and in U.S. dollars,
sufficient to cover such Account, in form and substance
satisfactory to Agents and, if required by Agents, the original
of such letter of credit has been delivered to Collateral Agent
and the issuer thereof notified of the assignment of the proceeds
of such letter of credit to Collateral Agent, or (ii) such
Account is subject to credit insurance payable to Collateral
Agent issued by an insurer and on terms and in an amount
acceptable to Agents, or (iii) such Account is otherwise
acceptable in all respects to Agents (subject to such lending
formula with respect thereto as Agents may determine);
(f) such Accounts do not consist of progress billings,
bill and hold invoices or retainage invoices, except as to bill
and hold invoices, if Agents shall have received an agreement in
writing from the account debtor, in form and substance
satisfactory to Agents, confirming the unconditional obligation
of the account debtor to take the goods related thereto and pay
such invoice;
(g) the account debtor with respect to such Accounts
has not asserted a counterclaim, defense or dispute and does not
have, and does not engage in transactions which may give rise to,
any right of setoff against such Accounts (but the portion of the
Accounts of such account debtor in excess of the amount at any
time and from time to time owed by a Borrower to such account
debtor or claimed owed by such account debtor may be deemed
Eligible Accounts);
(h) there are no facts, events or occurrences which
would impair the validity, enforceability or collectibility of
such Accounts or reduce the amount payable or delay payment
thereunder;
(i) such Accounts are subject to the first priority,
valid and perfected security interest of Collateral Agent and any
goods giving rise thereto are not, and were not at the time of
the sale thereof, subject to any Liens except those permitted in
this Agreement;
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(j) neither the account debtor nor any officer or
employee of the account debtor with respect to such Accounts is
an officer, employee or agent of or affiliated with any Borrower
or any other Obligor directly or indirectly by virtue of family
membership, ownership, control, management or otherwise;
(k) the account debtor with respect to such Accounts
is not any foreign government, the United States of America, any
State, political subdivision, department, agency or
instrumentality thereof, unless, if the account debtor is the
United States of America, any State, political subdivision,
department, agency or instrumentality thereof, upon Agents'
request, the Federal Assignment of Claims Act of 1940, or any
similar State or local law, if applicable, has been complied with
in a manner satisfactory to Agents;
(l) there are no proceedings or actions which are
threatened or pending against the account debtors with respect to
such Accounts that might result in any material adverse change in
any such account debtor's financial condition;
(m) such Accounts of a single account debtor or its
Affiliates do not constitute more than twenty percent (20%) of
all otherwise Eligible Accounts (but the portion of the Accounts
not in excess of such percentage may be deemed Eligible
Accounts);
(n) such Accounts are not owed by an account debtor
who has Accounts that constitute more than fifty percent (50%) of
the total Accounts of such account debtor;
(o) such Accounts are owed by account debtors whose
total Debts to a Borrower do not exceed the credit limit with
respect to such account debtors as determined by Agents from time
to time (but the portion of the Accounts not in excess of such
credit limit may be deemed Eligible Accounts); and
(p) such Accounts are owed by account debtors deemed
creditworthy at all times by Agents, as determined by Agents.
General criteria for Eligible Accounts may be established and revised
from time to time by Agents in good faith. Any Accounts which are not
Eligible Accounts shall nevertheless be part of the Collateral.
"Eligible Alamac Stock-In-Process" shall mean Inventory that (i)
is owned by Alamac, (ii) consists of categories of stock-in-process
that have been historically reflected on inventory reports prepared by
Borrowers, the form of which reports were delivered to Agents prior to
the Closing Date and (iii) otherwise constitutes Eligible Inventory.
"Eligible Assignee" shall mean a Lender or a U.S.-based Affiliate
of a Lender, or any other financial institution that is acceptable to
Agents and Lenders, in the ordinary course of business extends credit
of the type evidenced by the Notes and has total assets in excess of
$15 billion.
"Eligible Cotton Inventory" shall mean Inventory that consists of
unopened baled cotton that has not been purchased directly from a
producer (unless it has been paid for) and that otherwise constitutes
Eligible Inventory.
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"Eligible Factored Amounts" shall mean, on any date of
determination thereof, an amount equal to the aggregate balance
standing to the credit of Borrowers as reflected on a Due From Factor
Report delivered to Agents by Borrowers on or within one (1) Business
Day prior to such date, or, in the absence of such timely delivery of a
Due From Factor Report, an amount that is either determined by Agents
in their sole and absolute discretion or, at Agents' election,
represents the aggregate amount reflected on the most recent Factor
Status Statements as the aggregate balance standing to the credit of
Borrowers from Factors, minus the sum of any fees, commissions,
reserves or other charges due from a Borrower to any Factor on such
date under its Factoring Agreement.
"Eligible Finished Goods" shall mean Inventory that consists of
finished goods and held for sale in the ordinary course of business and
that otherwise constitutes Eligible Inventory.
"Eligible Finishing Department Inventory" shall mean Inventory
that (i) is owned by Alamac, (ii) consists of categories of Inventory
that are located in the finishing department at Alamac and that have
been historically reflected on inventory reports prepared by Borrowers,
the form of which reports were delivered to Agents prior to the
execution of the Pre-Petition Loan Agreement and (iii) otherwise
constitutes Eligible Inventory.
"Eligible Inventory" shall mean Inventory consisting of Eligible
Cotton Inventory, Eligible Finished Goods, Eligible Finishing
Department Inventory, Eligible Raw Materials, Eligible Alamac
Stock-in-Process and Eligible Work-in-Process, which, in each case, are
acceptable to Agents based upon the criteria set forth below. In
general, Eligible Inventory shall not include (a) work-in-process that
is not in a ready salable form (other than work-in-process that is
deemed to constitute Eligible Alamac Stock-in-Process and Eligible
Finishing Department Inventory); (b) components that are not part of
finished goods; (c) spare parts for equipment; (d) packaging and
shipping materials; (e) supplies used or consumed in a Borrower's
business; (f) Inventory at premises other than those owned and
controlled by a Borrower, except if Agents shall have received an
agreement in writing from the Person in possession of such Inventory
and/or the owner or operator of such premises in form and substance
satisfactory to Agents acknowledging Collateral Agent's first priority
security interest in the Inventory, waiving security interests and
claims by such Person against the Inventory and permitting Agents
access to, and the right to remain on, the premises so as to exercise
Agents' rights and remedies and otherwise deal with the Collateral; (g)
Inventory subject to a Lien in favor of any Person other than Agents
except those permitted in this Agreement; (h) bill and hold goods; (i)
unserviceable, obsolete or slow-moving Inventory; (j) Inventory that is
not subject to the first priority, valid and perfected security
interest of Collateral Agent; (k) returned and not first quality goods,
damaged and/or defective Inventory; and (l) Inventory purchased or sold
on consignment. General criteria for Eligible Inventory may be
established and revised from time to time by Agents. Any Inventory that
is not Eligible Inventory shall nevertheless be part of the Collateral.
"Eligible Raw Materials" shall mean Inventory that consists of
raw materials and that otherwise constitutes Eligible Inventory.
"Eligible Work-in-Process" shall mean Inventory that consists of
work-in-process and that otherwise constitutes Eligible Inventory.
"Environmental Indemnity Agreement" shall mean the Environmental
Indemnity Agreement to be executed by Borrowers on or before the
Closing Date in favor of Agents and Lenders.
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"Environmental Laws" shall mean all foreign, federal, state and
local laws (including common law), legislation, rules, codes, licenses,
permits (including any conditions imposed therein), authorizations,
judicial or administrative decisions, injunctions or agreements between
any Borrower and any governmental authority, (a) relating to pollution
and the protection, preservation or restoration of the environment
(including air, water vapor, surface water, ground water, drinking
water, drinking water supply, surface land, subsurface land, plant and
animal life or any other natural resource), or to human health or
safety, (b) relating to the exposure to, or the use, storage,
recycling, treatment, generation, manufacture, processing,
distribution, transportation, handling, labeling, production, release
or disposal, or threatened release, of Hazardous Materials, or (c)
relating to all laws with regard to recordkeeping, notification,
disclosure and reporting requirements respecting Hazardous Materials.
The term "Environmental Laws" includes (i) the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Federal Superfund Amendments and Reauthorization Act, the Federal Water
Pollution Control Act of 1972, the Federal Clean Water Act, the Federal
Clean Air Act, the Federal Resource Conservation and Recovery Act of
1976 (including the Hazardous and Solid Waste Amendments thereto), the
Federal Solid Waste Disposal and the Federal Toxic Substances Control
Act, the Federal Insecticide, Fungicide and Rodenticide Act, and the
Federal Safe Drinking Water Act of 1974, (ii) applicable state
counterparts to such laws, and (iii) any common law or equitable
doctrine that may impose liability or obligations for injuries or
damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Materials.
"Equipment" shall mean all of an Obligor's now owned and
hereafter acquired equipment, machinery, computers and computer
hardware and software (whether owned or licensed), vehicles, tools,
furniture, fixtures, all attachments, accessions and property now or
hereafter affixed thereto or used in connection therewith, and
substitutions and replacements thereof, wherever located.
"Equity Interest" shall mean the interest of (i) a shareholder in
a corporation, (ii) a partner (whether general or limited) in a
partnership (whether general, limited or limited liability), (iii) a
member in a limited liability company, or (iv) any other Person having
any other form of equity security or ownership interest.
"ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974.
"ERISA Affiliate" shall mean any person required to be aggregated
with Borrowers or any of their Subsidiaries under Sections 414(b),
414(c), 414(m) or 414(o) of the Code.
"Estate" shall mean, with respect to each Obligor, the estate
created in the Chapter 11 Case of such Obligor pursuant to 11 U.S.C.
ss. 541(a).
"Event of Default" shall mean the occurrence or existence of any
event or condition described in SECTION 10.1 hereof.
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"Excess Availability" shall mean the amount, as determined by
Agents, calculated at any time, equal to: the lesser of: (i) the amount
of the Revolving Loans available to Borrowers as of such time based on
the applicable lending formulas multiplied by the Net Amount of
Eligible Accounts and the Eligible Factored Amounts and the Value of
Eligible Inventory, as determined by Agents, and subject to the
sublimits and the Availability Reserve from time to time established by
Agents hereunder, and (ii) the Maximum Revolving Credit minus the sum
of: (x) the amount of all then outstanding and unpaid Obligations (but
not including for this purpose the then outstanding principal amount of
the Term Loan), plus (y) the aggregate amount of all then outstanding
and unpaid, undisputed trade payables of Borrowers arising after the
Petition Date which are more than sixty (60) days past due as of such
time, plus (z) the amount of checks issued by Borrowers to pay trade
payables, but not yet sent and the book overdraft of Borrowers.
"Extraordinary Expense" shall mean all costs, expenses, fees, and
advances which either or both Agents or any Lender may suffer or incur,
whether prior to or after the occurrence of an Event of Default, on
account of or in connection with (i) the audit, inspection,
repossession, storage, repair, appraisal, insuring, completion of the
manufacture of, preparing for sale, advertising for sale, selling,
collecting or otherwise preserving or realizing upon any Collateral;
(ii) the defense of Collateral Agent's Lien upon any Collateral or the
priority thereof or any adverse claim with respect to the Revolving
Loans, the DIP Financing Documents or the Collateral asserted by any
Obligor, any receiver or trustee for any Obligor or any creditor or
representative of creditors of any Obligor; (iii) the settlement or
satisfaction of any Liens upon any Collateral (whether or not such
Liens are Permitted Liens); (iv) the collection of any of the
Obligations; (v) the negotiation, documentation, and closing of any
restructuring or forbearance agreement with respect to the DIP
Financing Documents or Obligations; (vi) amounts advanced by Collateral
Agent pursuant to SECTION 7.6 of this Agreement; (vii) the enforcement
of any of the provisions of any of the DIP Financing Documents; or
(viii) any payment under indemnity or other payment agreement provided
by either or both Agents to any financial institution in connection
with any Blocked Account. Such costs, expenses and advances may include
transfer fees, Taxes, storage fees, insurance costs, permit fees,
utility reservation and standby fees, legal fees, appraisal fees,
brokers' fees and commissions, auctioneers' fees and commissions,
accountants' fees, environmental study fees, wages and salaries paid to
employees of a Borrower or independent contractors in liquidating any
Collateral, travel expenses, all other fees and expenses payable or
reimbursable by a Borrower or any other Obligor under any of the DIP
Financing Documents, and all other fees and expenses associated with
the enforcement of rights or remedies under any of the DIP Financing
Documents, but excluding compensation paid to employees (including
inside legal counsel who are employees) of Agents.
"Facility Amount" shall mean, on any date, (i) the Revolving
Commitments in effect on such date, plus (ii) the outstanding principal
balance of the Term Loan on such date.
"Factor" shall mean a Person that executes a Factoring Agreement
with a Borrower and that is approved by Agents in writing.
"Factor Assignment Agreement" shall mean a collateral assignment
of factoring proceeds executed by a Borrower in favor of Collateral
Agent in connection with a Factoring Agreement between a Borrower and a
Factor.
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"Factor Eligibility Conditions" shall mean each of the following
conditions, the satisfaction of each of which in a manner acceptable in
all respects to Agents shall be a condition to any advances hereunder
based upon any Eligible Factored Amounts: (i) no Default or Event of
Default exists at such time or would result; (ii) Agents shall have
received the applicable Factoring Agreement and found it acceptable in
all respects; (iii) Borrowers shall have executed and delivered a
Factor Assignment Agreement, in form and substance satisfactory to
Agents; and (iv) Collateral Agent shall have entered into a Factor
Intercreditor Agreement with the Factor.
"Factor Intercreditor Agreement" shall mean an intercreditor
agreement, in form and substance satisfactory in all respects to
Agents, that is executed by a Factor in favor of Collateral Agent in
connection with a Factoring Agreement between a Borrower and a Factor.
"Factor Reserve" shall mean the amount which at any time may be
charged to a Borrower under a Factoring Agreement or withheld from
amounts otherwise due to a Borrower under a Factoring Agreement,
including interest, fees, commissions, ledger debt and other charges
due a Factor under a Factoring Agreement and the amount of any actual
or anticipated disputes or claims arising with respect to any Factored
Accounts.
"Factor Status Statement" shall mean an account current statement
or similar report issued by a Factor on a monthly basis under its
Factoring Agreement and setting forth the status of the Factored
Accounts under such Factoring Agreement.
"Factored Account" shall mean an Account factored by a Factor
under a Factoring Agreement.
"Factoring Agreement" shall mean a factoring agreement executed
by a Borrower in favor of a Factor.
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate per annum equal for each date during such period to the
weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) in Atlanta, Georgia by the
Federal Reserve Bank of Atlanta, or if such rate is not so published
for any day which is a Business Day, the average of the quotations for
such day on such transactions received by Collateral Agent from three
(3) federal funds brokers of recognized standing selected by Collateral
Agent.
"Final Financing Order" shall mean an order entered by the Court
pursuant to Section 364(c) and (d) of the Bankruptcy Code and
Bankruptcy Rule 4001(c), authorizing Borrowers to incur, after the
final hearing on the DIP Motion, post-petition secured and
superpriority Debt under the DIP Facility in accordance with this
Agreement and affording adequate protection to the Liens in favor of
Pre-Petition Agents under the Pre-Petition Loan Documents, to be in
form and substance satisfactory to Agents and Lenders and to authorize
Lenders to repay any or all of any Pre-Petition Debt outstanding from
the proceeds of Loans made after entry of such order.
"Final Order" shall mean a final order of the Court in respect of
which the time for appeal, certiorari or review has expired.
"Financing Orders" shall mean the Interim Financing Order and the
Final Financing Order.
"First Union" shall mean First Union National Bank, a national
bank.
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"Fleet Capital" shall mean Fleet Capital Corporation, a Rhode
Island corporation, and its successors and assigns.
"Fleet Letters of Credit" shall mean Letters of Credit procured
by Fleet Capital from Fleet National Bank for any Borrower's account
after the Petition Date.
"Fleet National Bank" shall mean Fleet National Bank, a national
bank.
"Fleet National Bank Indemnities" shall mean Fleet National Bank
and all of its present and future officers, directors, employees and
agents.
"Foreign Subsidiary" shall mean a Subsidiary that is not a
Domestic Subsidiary.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in
the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards
Board which are applicable to the circumstances as of the date of
determination consistently applied, except that, for purposes of
SECTION 9.15 hereof, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used
in the preparation of the audited financial statements delivered to
Agents and Lenders prior to the date hereof.
"General Intangible" shall have the meaning ascribed to the term
"general intangible" in the UCC and shall include all interests in
intellectual property.
"Guarantors" shall mean each Borrower, DFIC, IQUEIC, UKIC, Alamac
Enterprises, Alamac LLC and each other Person who may hereafter
guarantee payment or performance of the whole or any part of the
Obligations.
"Hazardous Materials" shall mean any hazardous or toxic
substances, materials and wastes, including hydrocarbons (including
petroleum and hydrocarbons), flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, biological substances,
polychlorinated biphenyls, pesticides or herbicides (including
materials which include hazardous constituents), solvents and/or any
other similar substances, materials, or wastes and including any other
substances, materials or wastes that are or become regulated as
hazardous or toxic under any Environmental Law.
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"Indemnified Amount" shall mean, in the case of Agent
Indemnitees, the amount of any loss, cost, expenses or damages suffered
or incurred by Agent Indemnitees and against which Lenders or any
Obligor have agreed to indemnify Agent Indemnitees pursuant to the
terms of this Agreement or any of the other DIP Financing Documents; in
the case of Lender Indemnitees, the amount of any loss, cost, expenses
or damages suffered or incurred by Lender Indemnitees and against which
Lenders or any Obligor have agreed to indemnify Lender Indemnitees
pursuant to the terms of this Agreement or any of the other DIP
Financing Documents; and, in the case of Congress Indemnitees, the
amount of any loss, cost, expenses or damages suffered or incurred by
Congress Indemnitees and against which Lenders or any Obligor have
agreed to indemnify Congress Indemnitees pursuant to the terms of this
Agreement or any of the other DIP Financing Documents; and in the case
of Fleet Bank Indemnitees, the amount of any loss, cost, expenses or
damages suffered or incurred by Fleet Bank Indemnitees and against
which Lenders or any Obligor have agreed to indemnify Fleet Bank
Indemnitees pursuant to the terms of this Agreement or any of the other
DIP Financing Documents.
"Information Certificates" shall mean the Information
Certificates of Borrowers constituting EXHIBIT K attached to the
Pre-Petition Loan Agreement.
"Initial Projections" shall mean the projected monthly balance
sheets, income statements and statements of cash flow of Borrowers for
the period from July 31, 2000 through September 30, 2000, and projected
annual balance sheets, income statements and statements of cash flow of
Borrowers for the Fiscal Years ending September 30, 2001 through
September 30, 2005, in each case as certified by a Senior Officer to
Collateral Agent and Lenders.
"Insolvency Proceeding" shall mean any action, case or proceeding
commenced by or against a Person, or any agreement of such Person, for
(i) the entry of an order for relief under any chapter of the
Bankruptcy Code or other insolvency or debt adjustment law (whether
state, federal or foreign), (ii) the appointment of a receiver,
trustee, liquidator or other custodian for such Person or any part of
its Property, (iii) an assignment or trust mortgage for the benefit of
creditors of such Person, or (iv) the liquidation, dissolution or
winding up of the affairs of such Person.
"Interest Period" shall have the meaning set forth in SECTION
3.1(E) of this Agreement.
"Interest Rate" shall mean, (i) as to Revolving Loans consisting
of Base Rate Loans, the Applicable Margin plus the Base Rate in effect
from time to time; (ii) as to Revolving Loans consisting of LIBOR Rate
Loans, the Applicable Margin, plus the Adjusted LIBOR Rate (based on
the LIBOR Rate applicable for the Interest Period selected by Borrowers
as in effect two (2) Business Days after the date of receipt by
Collateral Agent of the request of Borrowers for such LIBOR Rate Loans
in accordance with the terms hereof, whether such rate is higher or
lower than any rate previously quoted to Borrowers); (iii) as to all or
any portion of the Term Loan consisting of Base Rate Loans, the
Applicable Margin, plus the Base Rate in effect from time to time; and
(iv) as to all or any portion of the Term Loan consisting of LIBOR Rate
Loans, the Applicable Margin, plus the Adjusted LIBOR Rate (based on
the LIBOR Rate applicable for the Interest Period selected by Borrowers
as in effect two (2) Business Days after the date of receipt by
Collateral Agent of the request of Borrowers for such LIBOR Rate Loans
in accordance with the terms hereof.
"Interim Financing Order" shall mean the order entered by the
Court pursuant to Section 364(c) and (d) of the Bankruptcy Code and
Bankruptcy Rule 4001(c), authorizing Borrowers to incur, during the
Interim Period, post-petition secured and superpriority Debt under the
DIP Facility in accordance with
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this Agreement and affording adequate protection of the Liens in favor
of Pre-Petition Agents under the Pre-Petition Loan Documents, to be in
form and substance satisfactory to Agents and Lenders.
"Interim Period" shall mean the period commencing upon entry of
the Interim Financing Order and ending on the entry of the Final
Financing Order.
"Inventory" shall mean, with respect to each Obligor, all of such
Obligor's now owned and hereafter existing or acquired raw materials,
work in process, finished goods and all other inventory of whatsoever
kind or nature, wherever located.
"Investment Property" shall have the meaning ascribed to it in
the UCC.
"Lender Indemnitee" shall mean a Lender in its capacity as a
lender under this Agreement and its present and future officers,
directors, employees and agents.
"Lenders" shall mean Fleet Capital (whether in its capacity as a
provider of Loans under SECTION 2 of this Agreement or as the provider
of Settlement Loans under SECTION 6.1(C) of this Agreement or as the
procurer of Letter of Credit Accommodations (other than the Congress
Letters of Credit) under SECTION 2.2 of this Agreement), Congress
(whether in its capacity as a provider of Loans under SECTION 2 of this
Agreement or as the procurer of the Congress Letters of Credit under
SECTION 2.2 of this Agreement), and any other Person who may from time
to time become a "Lender" under this Agreement, and their respective
successors and permitted assigns.
"Letter of Credit" shall mean any documentary letter of credit,
standby letter of credit or direct-pay letter of credit.
"Letter of Credit Accommodations" shall mean the Letters of
Credit, merchandise purchase or other guaranties which have been prior
to the Petition Date, or are from time to time hereafter, which were
issued prior to or after the Petition Date and are either (a) Congress
Letters of Credit or Fleet Letters of Credit for the account of any
Borrower or other Obligor or (b) Letters of Credit with respect to
which Fleet Capital or Congress has agreed to indemnify the issuer or
guaranteed to the issuer the performance by a Borrower of its
obligations to such issuer.
"Letter of Credit Documents" shall mean each Letter of Credit and
any and all other instruments, documents or agreements executed in
connection with any Letter of Credit.
"LIBOR Rate" shall mean with respect to the Interest Period for a
LIBOR Rate Loan, the interest rate per annum equal to the arithmetic
average of the rates of interest per annum (rounded upwards, if
necessary, to the next one-sixteenth (1/16) of one (1%) percent) at
which Reference Bank is offered deposits of Dollars in the London
interbank market (or other LIBOR Rate market selected by Borrowers and
approved by Agents and Lenders) on or about 9:00 a.m. (New York time)
two (2) Business Days prior to the commencement of such Interest Period
in amounts substantially equal to the principal amount of the LIBOR
Rate Loans requested by and available to Borrowers in accordance with
this Agreement, with a maturity of comparable duration to the Interest
Period selected by Borrowers.
"LIBOR Rate Loans" shall mean any Loans or portion thereof on
which interest is payable based upon the Adjusted LIBOR Rate in
accordance with the terms hereof.
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"Lien" shall mean any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on common law, statute or contract. The
term "Lien" shall also include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases
and other title exceptions and encumbrances affecting Property. For the
purpose of this Agreement, a Borrower shall be deemed to be the owner
of any Property which it has acquired or holds subject to a conditional
sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for
security purposes.
"Loans" shall mean the Revolving Loans and the Term Loan.
"Material Adverse Effect" shall mean the effect of any event or
condition occurring after the Petition Date which, alone or when taken
together with other events or conditions occurring or existing
concurrently therewith, (i) has a material adverse effect upon the
business, operations, prospects, Properties or condition (financial or
otherwise) of Borrowers, taken as a whole; (ii) has or may be
reasonably expected to have any material adverse effect whatsoever upon
the validity or enforceability of this Agreement or any of the other
DIP Financing Documents; (iii) has any material adverse effect upon the
value of the whole or any material part of the Collateral, the Liens of
Collateral Agent with respect to the Collateral or the priority of any
such Liens; (iv) materially impairs the ability of any Obligor to
perform its obligations under this Agreement or any of the other DIP
Financing Documents, including repayment of any of the Obligations when
due; or (v) materially impairs the ability of either or both Agents or
any Lender to enforce or collect the Obligations or realize upon any of
the Collateral in accordance with the DIP Financing Documents and
Applicable Law.
"Maximum Rate" shall mean the maximum non-usurious rate of
interest under applicable federal or state law as in effect from time
to time, that may be contracted for, taken, reserved, charged or
received in respect of the Debt of Borrowers to Lenders, or, to the
extent that at any time such Applicable Law may thereafter permit a
higher maximum non-usurious rate of interest, then such higher rate
that Applicable Law may allow. Notwithstanding any other provision
hereof, the Maximum Rate shall be calculated on a daily basis (computed
on the actual number of days elapsed over a year of three hundred
sixty-five (365) or three hundred sixty-six (366) days, as the case may
be).
"Maximum Revolving Credit" shall mean, on any date, an amount
equal to $74,000,000, minus the amount of the Revolving Loans and
Letter of Credit Accommodations outstanding under the Pre-Petition Loan
Agreement on such date.
"Mortgages" shall mean, individually and collectively, (a) each
of the following agreements that were executed and delivered prior to
the Petition Date: (i) the North Carolina Deed of Trust, Security
Agreement and Assignment of Rents executed by Alamac in favor of
Collateral Agent with respect to the Real Property and related assets
of Alamac located in Martin County, North Carolina, (ii) the North
Carolina Deed of Trust, Security Agreement and Assignment of Rents
executed by Alamac in favor of Collateral Agent with respect to the
Real Property and related assets of Alamac located in Bladen County,
North Carolina, (iii) the North Carolina Deed of Trust, Security
Agreement and Assignment of Rents executed by Alamac in favor of
Collateral Agent with respect to the Real Property and related assets
of Alamac located in Robeson County, North Carolina, (iv) the North
Carolina Deed of Trust, Security Agreement and Assignment of Rents
executed by Alamac in favor of Collateral Agent with respect to the
Real Property and related assets of Alamac located in Sampson County,
North Carolina, (v) the Tennessee Deed of Trust, Security Agreement and
Assignment of Rents executed by DFLP in favor of Collateral Agent with
respect to the Real Property and related assets of DFLP located in Dyer
County,
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Tennessee, (vi) the Tennessee Deed of Trust, Security Agreement and
Assignment of Rents executed by DFLP in favor of Collateral Agent with
respect to the Real Property and related assets of DFLP located in
Gibson County, Tennessee, (vii) the Tennessee Deed of Trust, Security
Agreement and Assignment of Rents executed by DFLP in favor of
Collateral Agent with respect to the Real Property and related assets
of DFLP located in Bradley County, Tennessee, (viii) the Tennessee
Leasehold Deed of Trust and Security Agreement executed by DFLP in
favor of Collateral Agent with respect to DFLP's leasehold interest in
the Real Property of DFLP located in Dyer County, Tennessee and (b) any
other mortgage or deed of trust at any time executed by any Obligor in
favor of Collateral Agent to secure any of the Obligations.
"Net Amount of Eligible Accounts" shall mean the gross amount of
Eligible Accounts less (a) sales, excise or similar taxes included in
the amount thereof and (b) returns, discounts, claims, credits and
allowances of any nature at any time issued, owing, granted,
outstanding, available or claimed with respect thereto.
"Note" shall mean each Revolving Note, each Term Note, the
Settlement Note and any other promissory note executed by Borrowers at
either Agent's request to evidence any of the Obligations.
"Notice of Borrowing" shall have the meaning set forth in SECTION
6.1(A)(I) of this Agreement.
"Notice of Conversion/Continuation" shall have the meaning set
forth in SECTION 3.1(D) of this Agreement.
"Obligations" shall mean any and all Revolving Loans, all
Settlement Loans, the Term Loan, Letter of Credit Accommodations and
all other Debts and obligations of every kind, nature and description
owing by any or all Obligors to either or both Agents, any Lender
and/or any Affiliates of either or both Agents or any Lender, including
principal, interest, charges, fees, costs and expenses (including
Extraordinary Expenses), however evidenced, whether as principal,
surety, endorser, guarantor or otherwise, arising under this Agreement
or any of the other DIP Financing Documents, whether now existing or
hereafter arising, whether arising before, during or after the DIP
Term, whether direct or indirect, absolute or contingent, joint or
several, due or to become due, primary or secondary, liquidated or
unliquidated, secured or unsecured, and however acquired by either or
both Agents or any Lender.
"Obligor" shall mean any Borrower, any Guarantor, endorser,
acceptor, surety or other Person liable on or with respect to the
Obligations or who is the owner of any Property which is security for
the Obligations.
"Offshore Equipment" shall mean any Equipment not listed on the
Accuval Appraisal (excluding any Equipment acquired after the date of
the Accuval Appraisal and excluding any substitutions, replacements of
or additions to any Equipment listed on the Accuval Appraisal).
"Out-of-Formula Condition" shall mean a condition such that the
outstanding amount of the Revolving Loans and Letter of Credit
Accommodations on the date of determination thereof exceeds the lending
formula set forth in SECTION 2.1(A) hereof on such date.
"Out-of-Formula Loan" shall mean a Revolving Loan made when an
Out-of-Formula Condition exists or the portion of any Revolving Loan
which, when funded, results in an Out-of-Formula Condition.
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"Participant" shall have the meaning set forth in SECTION 12.2(A)
of this Agreement.
"Patent Security Agreements" shall mean each Patent Security
Agreement to be executed by a Borrower in favor of Collateral Agent on
or about the Closing Date and by which such Borrower shall assign to
Collateral Agent, for the benefit of Agents and for the Pro Rata
benefit of Lenders, as security for the Obligations, all of such
Borrower's right, title and interest in and to all of its patents.
"Payment Account" shall have the meaning set forth in SECTION 6.5
of this Agreement.
"Permitted Affiliate Investments" shall mean investments in, or
Capital Expenditures with respect to non-U.S. Affiliates, Foreign
Subsidiaries or joint ventures of Borrowers or Permitted Property
Transfers so long as (i) such investments, Capital Expenditures or
Permitted Property Transfers do not exceed $1,000,000 in the aggregate
during the period from January 1, 2000 through December 31, 2000, and
$1,000,000 in the aggregate during the period from January 1, 2001
through December 31, 2001, (ii) Excess Availability is at least
$2,500,000 at the time of, and after giving effect to, any such
investment, Capital Expenditure or Permitted Property Transfer, and
(iii) no Default or Event of Default exists at such time or would
result therefrom.
"Permitted Liens" shall mean those Liens permitted by SECTION 9.8
hereof.
"Permitted Property Transfers" shall mean a transfer of any
Offshore Equipment to a non-U.S. Affiliate, Foreign Subsidiary or joint
venture of a Borrower.
"Person" shall mean any individual, sole proprietorship,
partnership, corporation (including any corporation which elects
subchapter S status under the Internal Revenue Code of 1986), limited
liability company, limited liability partnership, business trust,
unincorporated association, joint stock corporation, trust, joint
venture or other entity or any government or any agency or
instrumentality or political subdivision thereof.
"Petition Date" shall mean September 25, 2000.
"Pre-Petition Agents" shall mean Fleet National Bank and Congress
in their respective capacities as collateral and administrative agent
under the Pre-Petition Loan Documents.
"Pre-Petition Debt" shall mean all Debts and other obligations of
Borrowers to Pre-Petition Agents or any Pre-Petition Lender on the
Petition Date that arise under any of the Pre-Petition Loan Documents,
whether direct or indirect, absolute or contingent or due or to become
due, including the Pre-Petition Revolver, the Pre-Petition Term Loan,
all Letter of Credit Accommodations, and all interest accruing on any
of the foregoing after the Petition Date and all legal fees and
collection expenses heretofore or hereafter incurred in collecting any
of such Debt.
"Pre-Petition Lenders" shall mean those Persons who were Lenders
under (and as defined in) the Pre-Petition Loan Agreement as of the
Petition Date.
"Pre-Petition Loan Agreement" shall mean the Loan and Security
Agreement dated August 17, 1999, among Pre-Petition Agents,
Pre-Petition Lenders and Borrowers.
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"Pre-Petition Loan Documents" shall mean the Pre-Petition Loan
Agreement and all instruments, agreements, pledges, assignments and
other documents executed in connection therewith or with reference
thereto or to evidence or secure payment of the whole or any part of
the Pre-Petition Debt.
"Pre-Petition Revolver" shall mean the "Revolving Loans" under
(and as defined in) the Pre-Petition Loan Agreement.
"Pre-Petition Term Loan" shall mean the "Term Loan" under (and as
defined in) the Pre-Petition Loan Agreement.
"Post-Petition Term Loan" shall mean the aggregate of the
Post-Petition Term Loan Advances made by Lenders to Borrowers pursuant
to SECTION 2.3 of this Agreement.
"Post-Petition Term Loan Advance" shall mean an advance made by a
Lender as part of the Post-Petition Term Loan.
"Post-Petition Term Loan Conditions" shall mean and include each
of the following conditions: (i) all conditions precedent set forth in
SECTION 4.2 of this Agreement have been satisfied, (ii) Agents have
received and recorded all Mortgages as may be required by Agents in
their sole discretion, and (iii) Agents have obtained all title
insurance reports, endorsements and policies relating to such Mortgages
as may be required by Agents in their sole discretion (with the costs
thereof to be paid by Borrowers).
"Pro Rata" shall mean a share of or in all Loans, participations
in Letter of Credit Accommodations or, in the case of Fleet Capital or
Congress, the portion of the Letter of Credit Accommodations in which
Fleet Capital or Congress does not sell a participation interest
pursuant to SECTION 2.2(E) of this Agreement, obligations to indemnify
or reimburse Fleet Capital (or in the case of the Congress Letters of
Credit, Congress) as the procurer of Letter of Credit Accommodations or
Collateral Agent, payments, proceeds, collections, Collateral and
Extraordinary Expenses, which share for any Lender on any date shall be
a percentage arrived at by dividing the amount of the Commitment of
such Lender on such date by the aggregate amount of the Commitments of
all Lenders on such date.
"Professional Expense Advances" shall mean Revolving Loans made
after the Commitment Termination Date pursuant to SECTION 2.1(E) of
this Agreement for the purpose described therein.
"Professional Expense Escrow" shall mean the escrow to be
established by Borrowers pursuant to the Financing Orders for the
deposit of Revolving Loan proceeds to be used for the purpose of paying
Professional Expenses.
"Professional Expense Reserve" shall mean, on any date of
determination thereof, an amount equal to the sum of $500,000.
"Professional Expenses" shall mean the fees and reimbursable
expenses of a Professional Person.
"Professional Person" shall mean a Person who is an attorney,
accountant, appraiser, auctioneer or other professional person and who
is retained, with Court approval, by (i) a Borrower pursuant to Section
327 of the Bankruptcy Code or (ii) a Committee pursuant to Section
1103(a) of the Code.
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"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Real Property" shall mean all now owned and hereafter acquired
real property of any Obligor, including leasehold interests, together
with all buildings, structures, and other improvements located thereon
and all licenses, easements and appurtenances relating thereto,
wherever located, including the real property and related assets more
particularly described in the Mortgages.
"Records" shall mean all of an Obligor's present and future books
of account of every kind or nature, purchase and sale agreements,
invoices, ledger cards, bills of lading and other shipping evidence,
statements, correspondence, memoranda, credit files and other data
relating to the Collateral or any account debtor, together with the
tapes, disks, diskettes and other data and software storage media and
devices, file cabinets or containers in or on which the foregoing are
stored (including any rights of Obligors with respect to the foregoing
maintained with or by any other Person).
"Reference Bank" shall mean Fleet National Bank or such other
bank as Agents may from time to time designate.
"Reorganization Plan" shall mean a plan of reorganization
proposed by an Obligor or any other Person (including Collateral Agent
or any Lender) in such Borrower's Chapter 11 Case or a consolidated
plan of reorganization proposed by all or any combination of Obligors
or any other Person (including Collateral Agent or any Lender) in the
Chapter 11 Cases.
"Required Lenders" shall mean, at any date of determination
thereof, Lenders having Commitments representing at least 66-2/3% of
the aggregate Commitments at such time; provided, however, that if any
Lender shall be in breach of any of its obligations hereunder to
Borrowers or Agents, including any breach resulting from its failure to
honor its Commitment in accordance with the terms of this Agreement,
then, for so long as such breach continues, the term "Required Lenders"
shall mean Lenders (excluding each Lender that is in breach of its
obligations under this Agreement) having Commitments representing at
least 66-2/3% of the aggregate Commitments at such time; provided
further, however, that, if the DIP Facility has been terminated, the
term "Required Lenders" shall mean Lenders (excluding each Lender that
is in breach of its obligations hereunder) holding Loans (including
Settlement Loans) representing at least 66-2/3% of the aggregate
principal amount of Loans (including Settlement Loans) outstanding at
such time.
"Restructuring Expenses" shall mean, for any fiscal period of
Borrowers, on a Consolidated basis, Borrowers' and their Consolidated
Subsidiaries' restructuring and reorganization costs for such period,
including compensation for services rendered and reimbursement of
expenses incurred by professionals retained by the Obligors and their
creditors; fees incurred in connection with the execution, delivery and
performance of this Agreement; expenses (including severance)
associated with the consolidation or closing of facilities; and
expenses associated with the Obligors' management retention program.
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"Revolving Commitment" shall mean, at any date for any Lender,
the obligation of such Lender to make Revolving Loans and to purchase
participations in Letter of Credit Accommodations pursuant to the terms
and conditions of this Agreement, which shall not exceed the principal
amount set forth opposite such Lender's name under the heading
"Revolving Commitment" on the signature pages hereof or the signature
page of the Assignment and Acceptance by which it became a Lender, as
modified from time to time pursuant to the terms of this Agreement or
to give effect to any applicable Assignment and Acceptance; and
"Revolving Commitments" means the aggregate principal amount of the
Revolving Commitments of all Lenders, the maximum amount of which shall
be $74,000,000.
"Revolving Loans" shall mean the loans now or hereafter made by
Lenders (or by Fleet Capital as Settlement Loans) to or for the benefit
of Borrowers on a revolving basis (involving advances, repayments and
readvances) as set forth in SECTION 2.1 hereof.
"Revolving Note" shall mean a Revolving Note to be executed by
Borrowers in favor of each Lender in the form of EXHIBIT A attached
hereto, which shall be in the face amount of such Lender's Revolving
Commitment and which shall evidence all Revolving Loans made by such
Lender to Borrowers pursuant to this Agreement.
"Senior Officer" shall mean any member of the board of directors,
the president, executive vice-president or the chief financial officer
of, or in-house legal counsel to, a Borrower.
"Senior Subordinated Note Indenture" shall mean the Indenture
dated as of August 27, 1997, between Dyersburg and State Street Bank
and Trust Company, as Trustee, pursuant to which the Senior
Subordinated Notes were issued.
"Senior Subordinated Notes" shall mean the Series A and Series B
$125,000,000, 9-3/4% Senior Subordinated Notes Due 2007.
"Settlement Date" shall have the meaning set forth in SECTION
6.1(C)(I) of this Agreement.
"Settlement Loan" shall have the meaning set forth in SECTION
6.1(C)(II) of this Agreement.
"Settlement Note" shall mean the Settlement Note to be executed
by Borrowers on or before the Closing Date in favor of Fleet Capital,
which shall be in the form of EXHIBIT C attached hereto and which shall
evidence all Settlement Loans made by Fleet Capital to Borrowers
pursuant to this Agreement.
"Settlement Report" shall mean a report delivered by Collateral
Agent to Lenders summarizing the amount of the outstanding Revolving
Loans as of the Settlement Date and the calculation of the Borrowing
Base as of such Settlement Date.
"Stock Pledge Agreements" shall mean each Stock Pledge Agreement
executed by a Borrower in favor of Collateral Agent and by which such
Borrower shall pledge to Collateral Agent, for the benefit of Agents
and for the Pro Rata benefit of Lenders, as security for the
Obligations, 66% of the capital stock of each Foreign Subsidiary of
such Borrower and 100% of the capital stock of each Domestic Subsidiary
of such Borrower.
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"Subordinated Debt" shall mean the Senior Subordinated Notes and
other Debt of any or all Borrowers that is fully and absolutely
subordinated in right or payment to the Obligations in a manner
satisfactory to Agents and Lenders.
"Subsequent Projections" shall mean projections which update and
revise the Initial Projections, in form and substance satisfactory to
Agents and Lenders.
"Subsidiary" shall mean any Person a majority of the Equity
Interests of which is at the time owned, directly or indirectly, by a
Borrower or by one or more other Subsidiaries or by a Borrower and one
or more other Subsidiaries.
"Taxes" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of
whatever nature, including income, receipts, excise, property, sales,
use, transfer, license, payroll, withholding, social security and
franchise taxes now or hereafter imposed or levied by the United
States, or any state, local or foreign government or by any department,
agency or other political subdivision or taxing authority thereof or
therein and all interest, penalties, additions to tax and similar
liabilities with respect thereto, but excluding, in the case of each
Lender, taxes imposed on or measured by the net income or overall gross
receipts of such Lender.
"Term Loan" shall mean, for so long as it is outstanding, the
Pre-Petition Term Loan, and, thereafter, the Post-Petition Term Loan.
"Term Loan Commitment" shall mean, at any date for any Lender,
the obligation of such Lender to make Post-Petition Term Loan Advances
pursuant to the terms and conditions of this Agreement, which shall not
exceed the principal amount set forth opposite such Lender's name under
the heading "Term Loan Commitment" on the signature pages hereof or the
signature page of any Assignment and Acceptance by which it became a
Lender, as modified from time to time pursuant to the terms of this
Agreement or to give effect to any applicable Assignment and
Acceptance; and the term "Term Loan Commitments" means the aggregate
principal amount of the Term Loan Commitments of all Lenders, the
maximum amount of which is $22,600,000.
"Term Note" shall mean, for each Lender, a Term Note dated of
even date herewith by Borrowers in favor of such Lender in the original
principal amount of such Lender's Term Loan Commitment, to be in the
form annexed hereto as EXHIBIT B.
"Trademark Security Agreement" shall mean each Trademark Security
Agreement to be executed by a Borrower in favor of Collateral Agent on
or about the Closing Date and by which such Borrower shall assign to
Collateral Agent, for the benefit of Agents and for the Pro Rata
benefit of Lenders, as security for the Obligations, all of such
Borrower's right, title and interest in and to all of its trademarks.
"Transferee" shall have the meaning set forth in SECTION 12.3(C)
of this Agreement.
"Type" shall mean any type of a Loan determined with respect to
the interest option applicable thereto, which shall be either a LIBOR
Rate Loan or a Base Rate Loan.
"UCC" shall mean the Uniform Commercial Code (or any successor
statute) as adopted and in force in the State of Georgia or, when the
laws of any other state govern the method or manner of the
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perfection or enforcement of any security interest in any of the
Collateral, the Uniform Commercial Code (or any successor statute) of
such state.
"UKIC" shall mean UKIC, Inc., a Delaware corporation.
"Upstream Payments" shall mean a distribution of cash or other
Property by a Subsidiary to a Borrower.
"Value" shall mean, as determined by Collateral Agent in good
faith, with respect to Inventory, the lower of (a) cost computed on a
first-in-first-out basis in accordance with GAAP or (b) market value.
SECTION 2. CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Subject to and upon the terms and conditions herein, each
Lender agrees, severally to the extent of its Revolving Commitment and not
jointly with the other Lenders, to make Revolving Loans to Borrowers from time
to time in amounts requested by Borrowers up to the amount equal to the sum of:
(i) eighty-five percent (85%) of the Net Amount of Eligible
Accounts plus ninety percent (90%) of Eligible Factored
Amounts, plus
(ii) the lesser of:
(A) the sum of:
(I) seventy percent (70%) of the Value of Eligible
Cotton Inventory, plus
(II) fifty percent (50%) of the Value of Eligible Raw
Materials, plus
(III) fifty percent (50%) of the Value of Eligible
Finished Goods, plus
(IV) the lesser of: (x) fifty percent (50%) of the
Value of Eligible Work-In-Process consisting of
manufactured yarn, greige cloth Inventory and
dyed greige cloth at Borrowers' Dyersburg,
Tennessee location and greige cloth Inventory at
Alamac's location plus twenty-five percent (25%)
of the Value of Eligible Alamac Stock-In-Process
and Eligible Finishing Department Inventory or
(y) $8,000,000, or
(B) $25,000,000, less
(iii) the Availability Reserve.
(b) Agents may, in their discretion from time to time (and shall
at the direction of the Required Lenders) upon not less than five (5) days prior
notice to Borrowers (unless an Event of Default exists, in which event no notice
need be given), (i) reduce the lending formula with respect to Eligible Accounts
and Eligible Factored Amounts to the extent that Agents determine (or Required
Lenders determine) in good faith that: (A) the dilution with respect to the
Accounts for any period (based on the ratio of (1) the aggregate amount of
reductions in Accounts other than as a result of payments in cash to (2) the
aggregate amount of total sales) has
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increased in any material respect or may be reasonably anticipated to increase
in any material respect above historical levels, or (B) the general
creditworthiness of account debtors has declined or (ii) reduce the lending
formula(s) with respect to Eligible Inventory to the extent that Agents
determine that: (A) the number of days of the turnover of the Inventory for any
period has changed in any material respect from historical levels or (B) the
liquidation value of the Eligible Inventory, or any category thereof, has
decreased, or (C) the nature and quality of the Inventory has deteriorated. In
determining whether to reduce the lending formula(s), Agents may consider
events, conditions, contingencies or risks which are also considered in
determining Eligible Accounts, Eligible Inventory or in establishing the
Availability Reserve.
(c) Except in Lenders' discretion, the aggregate amount of the
Revolving Loans and the Letter of Credit Accommodations outstanding at any time
shall not exceed the Maximum Revolving Credit. In the event that the outstanding
amount of any component of the Revolving Loans, or the aggregate amount of the
outstanding Revolving Loans and Letter of Credit Accommodations, exceed the
amounts available under the lending formulas, the sublimits for Letter of Credit
Accommodations set forth in SECTION 2.2(D) or the Maximum Revolving Credit, as
applicable, such event shall not limit, waive or otherwise affect any rights of
Agents or Lenders in that circumstance or on any future occasions and Borrowers
shall, upon demand by Collateral Agent, which may be made at any time or from
time to time, immediately repay to Collateral Agent, for the Pro Rata benefit of
Lenders, the entire amount of any such excess(es) for which payment is demanded.
(d) For purposes only of applying the sublimit on Revolving Loans
based on Eligible Inventory pursuant to SECTION 2.1(A)(II)(B), Collateral Agent
may treat the then undrawn amounts of outstanding Letter of Credit
Accommodations for the purpose of purchasing Eligible Inventory as Revolving
Loans to the extent Agents are in effect basing the issuance of the Letter of
Credit Accommodations on the Value of the Eligible Inventory being purchased
with such Letter of Credit Accommodations. In determining the actual amounts of
such Letter of Credit Accommodations to be so treated for purposes of the
sublimit, the outstanding Revolving Loans and the Availability Reserve shall be
attributed first to any components of the lending formulas in SECTION 2.1(A)
that are not subject to such sublimit, before being attributed to the components
of the lending formulas subject to such sublimit.
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(e) If and when requested to do so by Borrowers within 30 days
after the Commitment Termination Date, and notwithstanding any termination of
the DIP Facility, any Default or Event of Default or non-compliance with any
conditions precedent, Lenders shall fund Revolving Loans to satisfy Lenders'
obligations under the Financing Orders with respect to the Carve-Out. All such
Revolving Loans shall constitute Professional Expense Advances and when made
shall discharge Lenders obligations with respect to and shall satisfy the
Carve-Out, to the extent of such Revolving Loans. In connection with each such
Revolving Loan, the Agents shall release the Professional Expense Reserve to the
extent of the amount of such Revolving Loan. Promptly after the Commitment
Termination Date, Borrowers shall report to Agents and Lenders the balance on
hand in the Professional Expense Escrow as of the Commitment Termination Date,
shall solicit from each Professional Person a statement of all accrued and
unpaid Professional Expenses owing to such Professional Person as of the
Commitment Termination Date and shall report to Agents and Lenders in writing
the amount of Professional Expense Advances, if any, that Lenders are required
to make pursuant to the provisions of this SECTION 2.1(E). The funding of such
Revolving Loans after the Commitment Termination Date shall not operate to waive
any Default or Event of Default, reinstate any Revolving Commitment or otherwise
waive any right or remedy Agents or Lenders may have under any of the DIP
Financing Documents, and all such Professional Expense Advances shall be treated
as Revolving Loans and shall be entitled to all of the benefits and security of
the DIP Financing Documents and the Financing Orders. Balances on hand in the
Professional Expense Escrow shall be disbursed to pay Professional Expenses to
the extent permitted by the Financing Orders or specifically allowed by other
Final Orders of the Court. If any Professional Expenses that accrued prior to
the Commitment Termination Date are paid from the Professional Expense Escrow
but are subsequently disallowed by Final Order of the Court, any amounts repaid
to Borrowers shall be turned over by Borrowers to Collateral Agent for
application to any unpaid Obligations or Pre-Petition Debt outstanding and the
balance, if any, used to replenish the Professional Expense Escrow.
(f) The outstanding principal amounts with respect to the
Revolving Loans shall be repaid as follows:
(i) Any portion of the Revolving Loans consisting of the
principal amount of Base Rate Loans shall be paid by Borrowers to
Collateral Agent, for the Pro Rata benefit of Lenders (or, in the case
of Settlement Loans, for the sole benefit of Fleet Capital) unless
timely converted to a LIBOR Rate Loan in accordance with this
Agreement, immediately upon (a) each receipt by Agents, any Lender or
Borrowers of any proceeds of any of the Accounts or Inventory, to the
extent of such proceeds, (b) the Commitment Termination Date, and (c)
in the case of Settlement Loans, the earlier of Fleet Capital's demand
for payment or on each Settlement Date with respect to all Settlement
Loans outstanding on such date.
(ii) Any portion of the Revolving Loans consisting of the
principal amount of LIBOR Rate Loans shall be paid by Borrowers to
Collateral Agent, for the Pro Rata benefit of Lenders, unless converted
to a Base Rate Loan or continued as a LIBOR Rate Loan in accordance
with the terms of this Agreement, immediately upon (a) the last day of
the Interest Period applicable thereto and (b) the Commitment
Termination Date. In no event shall Borrowers be authorized to make a
voluntary prepayment with respect to any Revolving Loan outstanding as
a LIBOR Rate Loan prior to the last day of the Interest Period
applicable thereto, unless Borrowers pay to Collateral Agent, for the
Pro Rata benefit of Lenders, concurrently with any prepayment of a
LIBOR Rate Loan, any LIBOR breakage costs as a consequence of such
prepayment.
(g) Borrowers, Agents and Lenders further agree that, if
Collateral Agent shall determine, in its sole discretion, that a material
adverse change in the financial condition of any Borrower has occurred, or if a
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Default or Event of Default exists, Collateral Agent shall have the right
(exercisable at such time or times as Collateral Agent deems appropriate) to
require that separate borrowing base calculations (as set forth in SECTION
2.1(A) hereof) be made for each Borrower (as set forth in SECTION 2.1(A)), as
well as the right to limit the use of proceeds of the Revolving Loans by each
Borrower to an amount equal to such Borrower's borrowing base.
2.2 LETTER OF CREDIT ACCOMMODATIONS.
(a) Prior to the Petition Date, Congress had procured the
Congress Letters of Credit. Subject to and upon the terms and conditions
contained herein, at the request of any Borrower, Fleet Capital agrees to
procure Letter of Credit Accommodations for the account of Borrowers containing
terms and conditions acceptable to Fleet Capital and the issuer thereof. Any
payments made by Fleet Capital, with respect to Fleet Letters of Credit, or by
Congress, with respect to Congress Letters of Credit, to any issuer thereof
and/or related parties in connection with the Letter of Credit Accommodations
shall constitute additional Revolving Loans to Borrowers pursuant to this
SECTION 2.
(b) In addition to any charges, fees or expenses charged by any
issuer in connection with the Letter of Credit Accommodations, Borrowers shall
jointly and severally pay to Fleet Capital, with respect to Fleet Letters of
Credit, or to Congress, with respect to the Congress Letters of Credit, in each
case whether procured prior to or after the Petition Date, the following letter
of credit fees:
(i) for each standby or direct-pay Letter of Credit, a fee
equal to the Applicable Margin for Revolving Loans constituting LIBOR
Rate Loans on such date multiplied by the aggregate face amount of such
Letter of Credit, which fee shall be due and payable on the first
Business Day of each month, and all of which fees and charges shall be
deemed fully earned upon issuance, renewal or extension (as the case
may be) of each such Letter of Credit, and shall not be subject to
rebate or proration upon the termination of the DIP Facility for any
reason; and
(ii) for each documentary Letter of Credit, a fee equal to
1.75% per annum of the face amount of each such Letter of Credit,
payable upon the issuance of such Letter of Credit, which fees and
charges shall be fully earned upon issuance, renewal or extension (as
the case may be) of each such Letter of Credit, shall be due and
payable on the first Business Day of each month, and shall not be
subject to rebate or proration upon the termination of the DIP Facility
for any reason; and
(iii) for each Letter of Credit, a fronting fee of 1.25% of
the face amount of each Letter of Credit, payable to the issuing bank
of such Letter of Credit;
except that, Borrowers shall jointly and severally pay to Fleet Capital or to
Congress, as appropriate, such letter of credit fees, at Fleet Capital's or
Congress' option, without notice, at a rate equal to two percent (2%) per annum
in excess of the rates set forth above for: (A) the period from and after the
date of termination of the DIP Facility until Agents and Lenders have received
full and final payment of all Obligations (notwithstanding entry of a judgment
against Borrowers) and (B) the period from and after the date of the occurrence
of an Event of Default for so long as such Event of Default is continuing as
determined by Agents. Such Letter of Credit fees shall be calculated on the
basis of a three hundred sixty (360) day year and actual days elapsed and the
obligation of Borrowers to pay such fees shall survive the termination of the
DIP Facility.
(c) No Letter of Credit Accommodations shall be available unless
on the date of the proposed issuance of any Letter of Credit Accommodations, the
Revolving Loans available to Borrowers (subject to the Maximum Revolving Credit
and any Availability Reserve) are equal to or greater than: (i) if the proposed
Letter
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of Credit Accommodation is for the purpose of purchasing Eligible Inventory, the
sum of (A) the percentage equal to one hundred (100%) percent of the amount of
the proposed Letter of Credit, minus the then-applicable percentage set forth in
SECTION 2.1(A)(II)(A) above of the Value of such Eligible Inventory, plus (B)
freight, Taxes, duty and other amounts that Agents estimate must be paid in
connection with such Inventory upon arrival and for delivery to one of
Borrowers' locations for Eligible Inventory within the United States of America
and (ii) if the proposed Letter of Credit Accommodation is for any other
purpose, an amount equal to one hundred (100%) percent of the face amount
thereof and all other commitments and obligations made or incurred by Lenders
with respect thereto. Effective on the issuance of each Letter of Credit
Accommodation, an Availability Reserve shall be established in the applicable
amount set forth in SECTION 2.2(C)(I) or SECTION 2.2(C)(II).
(d) Except in Lenders' discretion, the amount of all outstanding
Letter of Credit Accommodations and all other commitments and obligations made
or incurred by any Lender in connection therewith shall not at any time exceed
$16,000,000. Any payment made by Fleet Capital, with respect to Fleet Letters of
Credit, or by Congress, with respect to the Congress Letters of Credit, in
connection with any Letter of Credit Accommodation shall be repaid by Borrowers
on Fleet Capital's or Congress' demand. At any time an Event of Default exists
or has occurred and is continuing, upon Collateral Agent's, Fleet Capital's ,
with respect to Fleet Letters of Credit, or Congress', with respect to the
Congress Letters of Credit, request, Borrowers shall either furnish cash
collateral to secure the reimbursement obligations to the issuer in connection
with any Letter of Credit Accommodations or furnish cash collateral to
Collateral Agent for the Letter of Credit Accommodations, and in either case,
the Revolving Loans otherwise available to Borrowers shall not be reduced as
provided in SECTION 2.2(C) to the extent of such cash collateral.
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(e) Immediately upon the creation of any Letter of Credit
Accommodation, each Lender (other than Fleet Capital, with respect to Fleet
Letters of Credit, and Congress, with respect to Congress Letters of Credit)
shall be deemed to have irrevocably and unconditionally purchased and received
from Fleet Capital, with respect to Fleet Letters of Credit, or Congress, with
respect to Congress Letters of Credit, without recourse or warranty, an
undivided interest and participation equal to the Pro Rata share of such Lender
(a "Participating Lender") in all Letter of Credit Accommodations and any
security therefor or guaranty pertaining thereto, but in no event greater than
an amount which, when added to such Lender's Pro Rata share of all Revolving
Loans and Letter of Credit Accommodations then outstanding, exceeds such
Lender's Revolving Commitment. If Fleet Capital, with respect to Fleet Letters
of Credit, and Congress, with respect to Congress Letters of Credit, makes any
payment with respect to a Letter of Credit Accommodation, and Borrowers do not
repay or cause to be repay the amount of such payment ON DEMAND, Fleet Capital,
with respect to Fleet Letters of Credit, and Congress, with respect to Congress
Letters of Credit, shall promptly notify Collateral Agent, which shall promptly
notify each Participating Lender, of such payment and each Participating Lender
shall promptly (and in any event within one (1) Business Day after its receipt
of notice from Collateral Agent) and unconditionally pay to Collateral Agent,
for the account of Fleet Capital, with respect to Fleet Letters of Credit, and
Congress, with respect to Congress Letters of Credit, in immediately available
funds, the amount of such Participating Lender's Pro Rata share of such payment,
and Collateral Agent shall promptly pay such amounts to Fleet Capital, with
respect to Fleet Letters of Credit, and Congress, with respect to Congress
Letters of Credit. If a Participating Lender does not make its Pro Rata share of
the amount of such payment available to Collateral Agent on a timely basis as
herein provided, such Lender agrees to pay to Collateral Agent for the account
of Fleet Capital, with respect to Fleet Letters of Credit, and Congress, with
respect to Congress Letters of Credit, forthwith ON DEMAND, such amount together
with interest thereon at the Federal Funds Rate until paid. The failure of any
Participating Lender to make available to Collateral Agent for the account of
Fleet Capital, with respect to Fleet Letters of Credit, and Congress, with
respect to Congress Letters of Credit, such Participating Lender's Pro Rata
share of the Letter of Credit Accommodations shall not relieve any other
Participating Lender of its obligation hereunder to make available to Collateral
Agent its Pro Rata share of the Letter of Credit Accommodations, but no
Participating Lender shall be responsible for the failure of any other
Participating Lender to make available to Collateral Agent its Pro Rata share of
the Letter of Credit Accommodations on the date such payment is to be made.
Whenever Fleet Capital, with respect to Fleet Letters of Credit, and Congress,
with respect to Congress Letters of Credit, receives a payment on account of the
Letter of Credit Accommodations, including any interest thereon, as to which
Collateral Agent has previously received payments from any Lender for the
account of Fleet Capital, with respect to Fleet Letters of Credit, or Congress,
with respect to Congress Letters of Credit, Fleet Capital, with respect to Fleet
Letters of Credit, or Congress, with respect to Congress Letters of Credit,
shall promptly pay to each Participating Lender, which has funded its
participating interest therein, in immediately available funds, an amount equal
to such Participating Lender's Pro Rata share thereof. The obligation of each
Participating Lender to make payments to Collateral Agent for the account of
Fleet Capital, with respect to Fleet Letters of Credit, or Congress, with
respect to Congress Letters of Credit, in connection with Fleet Capital's, with
respect to Fleet Letters of Credit, or Congress', with respect to Congress
Letters of Credit, payment under or with respect to a Letter of Credit
Accommodation shall be absolute, unconditional and irrevocable, not subject to
any counterclaim, setoff, qualification or exception whatsoever (other than for
Fleet Capital's or Congress' gross negligence or wilful misconduct), and shall
be made in accordance with the terms and conditions of this Agreement under all
circumstances and irrespective of whether or not Borrowers may assert or have
any claim for any lack of validity or unenforceability of this Agreement, the
existence of any Default or Event of Default, or the existence of any setoff or
defense any Obligor may have with respect to any of the Obligations.
(f) Borrowers shall jointly and severally indemnify, defend and
hold Agents and Lenders harmless from and against any and all losses, claims,
damages, liabilities, costs and expenses that Agents or Lenders may suffer or
incur in connection with any Letter of Credit Accommodations and any documents,
drafts
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or acceptances relating thereto, including any losses, claims, damages,
liabilities, costs and expenses due to any action taken by any issuer or
correspondent with respect to any Letter of Credit Accommodation. Borrowers
assume all risks with respect to the acts or omissions of the drawer under or
beneficiary of any Letter of Credit Accommodation and for such purposes the
drawer or beneficiary shall be deemed Borrowers' agent. Borrowers assume all
risks for, and agree to pay, all Taxes, duties and levies relating to any goods
subject to any Letter of Credit Accommodations or any documents, drafts or
acceptances thereunder. Borrowers hereby release and hold Agents and Lenders
harmless from and against any acts, waivers, errors, delays or omissions,
whether caused by Borrowers, by any issuer or correspondent or otherwise with
respect to or relating to any Letter of Credit Accommodation. The provisions of
this SECTION 2.2(F) shall survive the payment of Obligations and the termination
of the DIP Facility.
(g) Nothing contained herein shall be deemed or construed to
grant Borrowers any right or authority to pledge the credit of either Agent or
any Lender in any manner. Fleet Capital shall have no liability of any kind with
respect to any Letter of Credit Accommodation provided by an issuer other than
Fleet Capital unless Fleet Capital has duly executed and delivered to such
issuer the application or a guarantee or indemnification in writing with respect
to such Letter of Credit Accommodation. Congress shall have no liability of any
kind with respect to any Letter of Credit Accommodation provided by an issuer
other than Congress unless Congress has duly executed and delivered to such
issuer the application or a guarantee or indemnification in writing with respect
to such Letter of Credit Accommodation. Borrowers shall be bound by any
interpretation made in good faith by Fleet Capital, with respect to Fleet
Letters of Credit, or Congress, with respect to Congress Letters of Credit, or
any other issuer or correspondent under or in connection with any Letter of
Credit Accommodation or any documents, drafts or acceptances thereunder,
notwithstanding that such interpretation may be inconsistent with any
instructions of Borrowers. Fleet Capital, with respect to Fleet Letters of
Credit, and Congress, with respect to Congress Letters of Credit, shall have the
sole and exclusive right and authority to, and Borrowers shall not: (i) at any
time an Event of Default exists or has occurred and is continuing, (A) approve
or resolve any questions of non-compliance of documents, (B) give any
instructions as to acceptance or rejection of any documents or goods or (C)
execute any and all applications for steamship or airway guaranties, indemnities
or delivery orders, and (ii) at all times, (A) grant any extensions of the
maturity of, time of payment for, or time of presentation of, any drafts,
acceptances, or documents, and (B) agree to any amendments, renewals,
extensions, modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Letter of Credit Accommodations, or
documents, drafts or acceptances thereunder or any letters of credit included in
the Collateral. Fleet Capital may take such actions either in its own name or in
Borrowers' names.
(h) Any rights, remedies, duties or obligations granted or
undertaken by Borrowers to any issuer or correspondent in any application for
any Letter of Credit Accommodation, or any other agreement in favor of any
issuer or correspondent relating to any Letter of Credit Accommodation, shall be
deemed to have been granted or undertaken by Borrowers to Fleet Capital with
respect to any Fleet Letters of Credit Credit and undertaken by Borrowers to
Congress with respect to the Congress Letters of Credit. Any duties or
obligations undertaken by Fleet Capital with respect to any Fleet Letters of
Credit or undertaken by Congress with respect to the Congress Letters of Credit
to any issuer or correspondent in any application for any Letter of Credit
Accommodation, shall be deemed to have been undertaken by Borrowers to Fleet
Capital with respect to Fleet Letters of Credit and undertaken by Borrowers to
Congress with respect to the Congress Letters of Credit and to apply in all
respects to Borrowers.
(i) Neither Fleet Capital, Congress nor any of their respective
officers, directors, employees, or agents shall be liable to any Participating
Lender for any action taken or omitted to be taken under or in connection with
any Letter of Credit Accommodations except as a result of actual gross
negligence or wilful misconduct on the part of Fleet Capital or Congress.
Neither Fleet Capital nor Congress assumes any
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responsibility for any failure or delay in performance or breach by any Borrower
or any other Person of any of its obligations under any document or agreement
evidencing or relating to any of the Letter of Credit Accommodations. Neither
Fleet Capital nor Congress makes to Participating Lenders any express or implied
warranty, representation or guaranty with respect to the Collateral, or any
instruments or agreements evidencing any of the Letter of Credit Accommodations
or any Obligor. Neither Fleet Capital nor Congress shall be responsible to any
Participating Lender for any recitals, statements, information, representations
or warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of any document or agreement evidencing or
relating to any of the Letter of Credit Accommodations; the validity,
genuineness, enforceability, collectibility, value or sufficiency of any of the
Collateral or the perfection of Lien therein; or the assets, liabilities,
financial condition, results of operations, business, creditworthiness or legal
status of any Obligor. In connection with their administration of and
enforcement of rights or remedies under any of the documents or agreements
evidencing or relating to any of the Letter of Credit Accommodations, Fleet
Capital and Congress shall be entitled at, and shall be fully protected in
acting upon any certification, notice or other communication in whatever form
believed by Fleet Capital or Congress, in good faith, to be genuine and correct
and to have been signed or sent or made by a proper Person.
2.3 TERM LOAN. Subject to and upon the terms and conditions herein set
forth, each Lender severally agrees to make to Borrowers a Post-Petition Term
Loan Advance in an amount not to exceed such Lender's Term Loan Commitment. The
Post-Petition Term Loan shall be comprised of Post-Petition Term Loan Advances
that shall be funded by Lenders on the first Business Day after Agents notify
Lenders that the Post-Petition Term Loan Conditions are satisfied and in an
aggregate principal amount not to exceed the outstanding principal balance of
and accrued interest with respect to the Pre-Petition Term Loan on such date.
The proceeds of the Post-Petition Term Loan Advances shall be used by Borrowers
solely to pay in full the outstanding principal balance of and accrued interest
with respect to the Pre-Petition Term Loan. Each Post-Petition Term Loan Advance
shall be evidenced by a Term Note in the principal amount of the Term Loan
Commitment of the holder thereof, shall be repaid, together with interest and
other amounts, in accordance with this Agreement, the Term Notes and the other
DIP Financing Documents and shall be secured by all of the Collateral. The
Post-Petition Term Loan shall be repaid in monthly installments of $425,000
each, with the first installment due on the first day of the month immediately
following the funding of the Post-Petition Term Loan Advances, and continuing on
the first day of each month thereafter, with a final payment due upon the
Commitment Termination Date. The Term Loan Commitment of each Lender shall
expire on the funding by such Lender of its Post-Petition Term Loan Advance.
Borrowers shall not be entitled to reborrow any amounts repaid with respect to
the Post-Petition Term Loan Advances. All of the Post-Petition Term Loan
Advances shall initially be Base Rate Loans. Each Lender shall make its
Post-Petition Term Loan Advance available to Collateral Agent in immediately
available funds, to such account of Collateral Agent as Collateral Agent may
designate, not later than 12:00 noon on the first Business Day after Agents
notify Lenders that the Post-Petition Term Loan Conditions are satisfied.
2.4 AVAILABILITY RESERVE. All Revolving Loans otherwise available to
Borrowers pursuant to the lending formulas and subject to the Maximum Revolving
Credit and other applicable limits hereunder shall be subject to Agents'
continuing right to establish and revise the Availability Reserve.
2.5 BORROWERS' REPRESENTATIVE. Each Borrower hereby irrevocably
appoints Dyersburg, and Dyersburg agrees to act under this Agreement, as the
agent and representative of itself and each other Borrower for all purposes
under this Agreement, including requesting Borrowings, selecting whether any
Revolving Loan or portion thereof is to bear interest as a Base Rate Loan or a
LIBOR Rate Loan, and receiving account statements and other notices and
communications to Borrowers (or any of them) from Agents. Agents may rely, and
shall be fully protected in relying, on any Notice of Borrowing, Notice of
Conversion/Continuation, disbursement instructions, reports, information or any
other notice or communication made or given by
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Dyersburg, whether in its own name, on behalf of any Borrower or on behalf of
"the Borrowers," and neither Agents nor Lenders shall have any obligation to
make any inquiry or request any confirmation from or on behalf of any other
Borrower as to the binding effect on such Borrower of any such request,
instruction, report, information, notice or communication, nor shall the joint
and several character of Borrowers' liability for any of the Loans or other
Obligations be affected, provided that the provisions of this SECTION 2.5 shall
not be construed so as to preclude any Borrower from directly requesting
Borrowings or taking other actions permitted to be taken by "a Borrower"
hereunder. Lenders intend to maintain a single Loan Account in the name of
"Dyersburg Corporation" hereunder, and each Borrower expressly agrees to such
arrangement and confirms that such arrangement shall have no effect on the joint
and several character of such Borrower's liability for the Revolving Loans.
SECTION 3. INTEREST AND FEES
3.1 INTEREST.
(a) Except as otherwise provided in SECTION 3.1(G) hereof,
Borrowers shall jointly and severally pay to Lenders interest on the outstanding
principal amount of the non-contingent Obligations at the Interest Rate.
(b) Interest shall be payable by Borrowers to Collateral Agent
(for the benefit of Lenders) monthly in arrears not later than the first day of
each calendar month and shall be calculated on the basis of a three hundred
sixty (360) day year and actual days elapsed. The interest rate on
non-contingent Obligations (other than LIBOR Rate Loans) shall increase or
decrease by an amount equal to each increase or decrease in the Base Rate
effective on the first day of the month after any change in such Base Rate is
announced based on the Base Rate in effect on the last day of the month in which
any such change occurs. In no event shall charges constituting interest payable
by Borrowers to Lenders exceed the Maximum Rate. On the date hereof, the Base
Rate is nine and one-half percent (9.50%); therefore, the rate of interest in
effect hereunder on the date hereof for Revolving Loans consisting of Base Rate
Loans outstanding on the date of this Agreement, expressed in simple interest
terms, is ten and one-half percent (10.50%) per annum.
(c) Borrowers may on any Business Day, subject to the giving of a
proper Notice of Conversion/Continuation as hereinafter described, elect (i) to
continue all or any part of a LIBOR Rate Loan by selecting a new Interest Period
therefor, to commence on the last day of the immediately preceding Interest
Period, or (ii) to convert all or any part of a Loan of one Type into a Loan of
another Type; provided, however, that no outstanding Loans may be converted into
or continued as LIBOR Rate Loans when any Default or Event of Default exists.
Any conversion of a LIBOR Rate Loan into a Base Rate Loan shall be made on the
last day of the Interest Period for such LIBOR Rate Loan. Any conversion or
continuation made with respect to less than the entire outstanding balance of
the Revolving Loans or the Term Loan must be allocated among Lenders on a Pro
Rata basis, and the Interest Period for Loans converted into or continued as
LIBOR Rate Loans shall be coterminous for each Lender.
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(d) Whenever Borrowers desire to convert or continue Loans under
SECTION 3.1(C), Borrowers shall give Collateral Agent written notice (or
telephonic notice promptly confirmed in writing) substantially in the form of
EXHIBIT D, signed by an authorized officer of Borrowers or Borrowing Agent at
least two (2) Business Days before the requested conversion date, in the case of
a conversion into Base Rate Loans, and at least two (2) Business Days before the
requested conversion or continuation date, in the case of a conversion into or
continuation of LIBOR Rate Loans. Promptly after receipt of a Notice of
Conversion/Continuation, Collateral Agent shall notify each Lender in writing of
the proposed conversion or continuation. Each such Notice of
Conversion/Continuation shall be irrevocable and shall specify the aggregate
principal amount of the Loans to be converted or continued, the date of such
conversion or continuation (which shall be a Business Day) and whether the Loans
are being converted into or continued as LIBOR Rate Loans (and, if so, the
duration of the Interest Period to be applicable thereto) or Base Rate Loans.
If, upon the expiration of any Interest Period in respect of any LIBOR Rate
Loans, Borrowers shall have failed to deliver the Notice of
Conversion/Continuation, Borrowers shall be deemed to have elected to convert
such LIBOR Rate Loans to Base Rate Loans.
(e) In connection with the making or continuation of, or
conversion into, each Borrowing of LIBOR Rate Loans, Borrowers shall select an
interest period (each an "Interest Period") to be applicable to such LIBOR Rate
Loan, which interest period shall commence on the date such LIBOR Rate Loan is
made and shall end on a numerically corresponding day in the first, second or
third month thereafter; provided, however, that:
(i) the initial Interest Period for a LIBOR Rate Loan
shall commence on the date of such Borrowing (including the date of any
conversion from a Loan of another Type) and each Interest Period
occurring thereafter in respect of such Loan shall commence on the date
on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on
a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day, provided that, if any Interest Period
in respect of LIBOR Rate Loans would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(iii) any Interest Period that begins on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period shall expire on the last Business
Day of such calendar month;
(iv) no Interest Period with respect to any portion of
principal of a Loan shall extend beyond a date on which Borrowers are
required to make a scheduled payment of such portion of principal;
(v) no Interest Period shall extend beyond the last
day of the DIP Term; and
(vi) there shall be no more than six (6) Interest
Periods in effect at any one time.
(f) If Collateral Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all parties)
that on any date for determining the Adjusted LIBOR Rate for any Interest
Period, by reason of any changes arising after the date of this Agreement
affecting the London interbank market or any Lender's or Reference Bank's
position in such market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Adjusted LIBOR Rate, then, and in any such event, Collateral Agent shall
forthwith give notice (by telephone confirmed in writing) to Borrowers of such
determination. Until Collateral Agent notifies Borrowers that the circumstances
giving rise
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to the suspension described herein no longer exist, the obligation of Lenders to
make LIBOR Rate Loans shall be suspended, and such affected Loans then
outstanding shall, at the end of the then applicable Interest Period or at such
earlier time as may be required by Applicable Law, bear the same interest as
Base Rate Loans.
(g) Interest shall accrue at the Default Rate (i) with respect to
the principal amount of any portion of the Obligations (and, to the extent
permitted by Applicable Law, all past due interest) that is not paid on the due
date thereof (whether due at stated maturity, ON DEMAND, upon acceleration or
otherwise) until paid in full; (ii) with respect to the principal amount of all
of the Obligations (and, to the extent permitted by Applicable Law, all past due
interest) upon the earlier to occur of (x) Borrowers' receipt of notice from
Collateral Agent of the Required Lenders' election to charge the Default Rate
based upon the existence of any Event of Default (which notice Collateral Agent
shall send only with the consent or at the direction of the Required Lenders),
whether or not acceleration or demand for payment of the Obligations has been
made, or (y) the commencement by or against any Borrower of an insolvency
proceeding; and (iii) with respect to the principal amount of any Out-of-Formula
Loans, whether or not demand for payment thereof has been made by Collateral
Agent. To the fullest extent permitted by Applicable Law, the Default Rate shall
apply and accrue on any judgment entered with respect to any of the Obligations.
Each Borrower acknowledges that the cost and expense to Agents and each Lender
attendant upon the occurrence of an Event of Default are difficult to ascertain
or estimate and that the Default Rate is a fair and reasonable estimate to
compensate Agents and Lenders for such added cost and expense.
3.2 CLOSING FEE. Borrowers shall pay to Collateral Agent (for the Pro
Rata benefit of Lenders) a closing fee in the amount of $724,500, which shall be
fully earned as of and payable on the date hereof. Such closing fee shall not be
subject to rebate upon any prepayment of the Obligations, except to the extent
required by SECTION 3.9 of this Agreement or Applicable Law. Such closing fee
shall compensate Lenders for the costs associated with the origination,
structuring, processing, approving and closing of the transactions contemplated
in this Agreement, exclusive of any expenses for which Borrowers have agreed to
reimburse Lenders pursuant to any other provision of this Agreement or the other
DIP Financing Documents (such as attorneys' fees).
3.3 SYNDICATION FEE. Borrower shall pay to Agents, to be shared by
Agents equally, a syndication fee in the amount of $300,000, which shall be
fully earned as of and payable on the date hereof. Such syndication fee shall
not be subject to rebate upon any pre-payment of the Obligations, except to the
extent required by SECTION 3.9 of this Agreement or Applicable Law. Such
syndication fee shall compensate Agents for their services in syndicating the
DIP Facility in order to make the DIP Facility available to Borrowers in
accordance with the terms of this Agreement.
3.4 COLLATERAL AGENT FEE. Borrowers shall pay to Collateral Agent for
its benefit a monthly fee in an amount equal to $4,000 per month for each month
(or portion thereof) that this Agreement is in effect and for so long thereafter
as any of the Obligations are outstanding, which fee shall be fully earned as of
and payable in advance on the first day of each month.
3.5 ADMINISTRATIVE AGENT FEE. Borrowers shall pay to Administrative
Agent for its benefit a monthly fee in an amount equal to $1,500 per month in
respect of Administrative Agent's services for each month (or part thereof) this
Agreement is in effect and for so long thereafter as any of the Obligations are
outstanding, which fee shall be fully earned as of and payable in advance on the
date hereof and on the first day of each month hereafter.
3.6 UNUSED LINE FEE. Borrowers shall pay to Collateral Agent (for the
Pro Rata benefit of Lenders) each month an unused line fee equal to 0.50% of the
amount by which the Revolving Commitments exceed the average daily principal
balance of the outstanding Revolving Loans and Letter of Credit Accommodations
during
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the immediately preceding month (or part thereof) while this Agreement is in
effect and for so long thereafter as any of the Obligations are outstanding,
which fee shall be payable on the first day of each month, in arrears.
3.7 SUCCESS FEE. Borrowers shall pay to Collateral Agent (for the Pro
Rata benefit of Lenders), on the effective date of any Reorganization Plan that
is confirmed by the Court, a fee in the amount of 1.5% of the Facility Amount;
provided, however, that Borrowers shall not be obligated to pay such fee if
Agents (or either of them) shall organize a syndicate of lenders (to include any
of the Lenders that elect to join such syndicate) that provides financing of
Borrowers' working capital requirements on and after the effective date of such
Reorganization Plan.
3.8 CHANGES IN LAWS AND INCREASED COSTS OF REVOLVING LOANS.
(a) Notwithstanding anything to the contrary contained herein,
all LIBOR Rate Loans shall, upon notice by Collateral Agent to Borrowers,
convert to Base Rate Loans in the event that (i) any change in Applicable Law or
regulation (or the interpretation or administration thereof) shall either (A)
make it unlawful for Lenders' Reference Bank or any Participant to make or
maintain LIBOR Rate Loans or to comply with the terms hereof in connection with
the LIBOR Rate Loans, or (B) shall result in the increase in the costs to
Lenders, Reference Bank or any Participant of making or maintaining any LIBOR
Rate Loans by an amount deemed by Lenders to be material, or (C) reduce the
amounts received or receivable by Lenders in respect thereof, by an amount
deemed by any Lender to be material or (ii) the cost to Lender, Reference Bank
or any Participant of making or maintaining any LIBOR Rate Loans shall otherwise
increase by an amount deemed by Lenders to be material. Borrowers shall pay to
Collateral Agent, upon demand by Collateral Agent (or Collateral Agent may, at
its option, charge any loan account of Borrowers) any amounts required to
compensate Lenders, the Reference Bank or any Participant for any loss
(including loss of anticipated profits), cost or expense incurred by such Person
as a result of the foregoing within one hundred twenty (120) days prior to
Borrowers' receipt of notice from Collateral Agent of such cost or expense,
including any such loss, cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Person to make or
maintain the LIBOR Rate Loans or any portion thereof. A certificate of
Collateral Agent setting forth the basis for the determination of such amount
necessary to compensate Lenders as aforesaid shall be delivered to Borrowers and
shall be conclusive, absent manifest error.
(b) If any payments or prepayments in respect of the LIBOR Rate
Loans are received by Collateral Agent other than on the last day of the
applicable Interest Period (whether pursuant to acceleration, upon maturity or
otherwise), including any payments pursuant to the application of collections
under SECTION 6.10 or any other payments made with the proceeds of Collateral,
Borrowers shall pay to Collateral Agent, for the Pro Rata benefit of Lenders,
upon demand by Collateral Agent (or Collateral Agent may, at its option, charge
any loan account of Borrowers) any amounts required to compensate Lenders, the
Reference Bank or any Participant with Lenders for any additional loss
(including loss of anticipated profits), cost or expense incurred by such Person
as a result of such prepayment or payment, including any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Person to make or maintain such LIBOR Rate Loans or any portion
thereof.
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3.9 MAXIMUM INTEREST.
(a) Notwithstanding anything to the contrary contained in this
Agreement or any of the other DIP Financing Documents, in no contingency or
event whatsoever shall the aggregate of all amounts that are contracted for,
charged or received pursuant to the terms of this Agreement or any of the other
DIP Financing Documents and that are deemed interest under Applicable Law exceed
the Maximum Rate. No agreements, conditions, provisions or stipulations
contained in this Agreement or any of the other DIP Financing Documents, or any
Event of Default, or the exercise by Agents or Lenders of the right to
accelerate the payment or the maturity of all or any portion of the Obligations,
or the exercise of any option whatsoever contained in this Agreement or any of
the other DIP Financing Documents, or the prepayment by Borrowers of any of the
Obligations, or the occurrence of any event or contingency whatsoever, shall
entitle Agents or Lenders to contract for, charge or receive in any event,
interest or any charges, amounts, premiums or fees deemed interest by Applicable
Law (such interest, charges, amounts, premiums and fees referred to herein
collectively as "Interest") in excess of the Maximum Rate. In no event shall
Borrowers be obligated to pay Interest in amounts which exceed the Maximum Rate.
All agreements, conditions or stipulations, if any, which may in any event or
contingency whatsoever operate to bind, obligate or compel Borrowers to pay
Interest in amounts which exceed the Maximum Rate shall be without binding force
or effect, at law or in equity, to the extent of the excess of Interest over
such Maximum Rate.
(b) Furthermore, notwithstanding anything to the contrary
contained in this Agreement or any of the other DIP Financing Documents, in no
contingency or event whatsoever shall the aggregate of all amounts that are
contracted for, charged or received pursuant to the terms of this Agreement or
any of the other DIP Financing Documents and that are deemed loan charges under
Applicable Law exceed the maximum amounts collectible under Applicable Law. No
agreements, conditions, provision or stipulations contained in this Agreement or
any of the other DIP Financing Documents, or any Event of Default, or the
exercise by Agents or Lenders of the right to accelerate the payment or the
maturity of all or any portion of the Obligations, or the exercise of any option
whatsoever contained in this Agreement, or any of the other DIP Financing
Documents, or the prepayment by Borrowers of any of the Obligations, or the
occurrence of any event or contingency whatsoever, shall entitle Agents or
Lenders to contract for, charge or receive in any event, any loan charges in
excess of the maximum amounts collectible under Applicable Law. In no event
shall Borrowers be obligated to pay loan charges in amounts which exceed the
maximum amounts collectible under Applicable Law. All agreements, conditions or
stipulations, if any, which may in any event or contingency whatsoever operate
to bind, obligate or compel Borrowers to pay loan charges in amounts which
exceed the maximum amount collectible under Applicable Law shall be without
binding force or effect, at law or in equity, to the extent of the excess of
such loan charges over the maximum amounts collectible under Applicable Law.
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(c) In the event any Interest is charged or received in excess of
the Maximum Rate or any loan charges are collected or received in excess of the
maximum amounts collectible under Applicable Law (such excess(es) being referred
to herein individually and collectively as "Excess"), Borrowers acknowledge and
stipulate that any such charge or receipt shall be the result of an accident and
bona fide error, and that any Excess received by Lenders shall be applied,
first, to the payment of the then outstanding and unpaid principal hereunder;
second, to the payment of the other Obligations then outstanding and unpaid; and
third, returned to Borrowers, it being the intent of the parties hereto not to
enter into a usurious or otherwise illegal relationship. The right to accelerate
the maturity of any of the Obligations does not include the right to accelerate
any Interest or loan charges that have not otherwise accrued on the date of such
acceleration, and neither Agents nor Lenders intend to collect any unearned
Interest or loan charges in the event of any such acceleration. Borrowers
recognize that, with fluctuations in the rates of interest set forth in SECTION
3.1 of this Agreement, and the Maximum Rate, such an unintentional result could
inadvertently occur. All monies paid to Lenders hereunder or under any of the
other DIP Financing Documents, whether at maturity or by prepayment, shall be
subject to any rebate of unearned Interest or loan charges as and to the extent
required by Applicable Law.
(d) By the execution of this Agreement, Borrowers agree that (i)
the credit or return of any Excess shall constitute the acceptance by Borrowers
of such Excess, and (ii) Borrowers shall not seek or pursue any other remedy,
legal or equitable, against Agents or Lenders, based in whole or in part upon
contracting for, charging or receiving any Interest in excess of the Maximum
Rate or loan charges in excess of the maximum amount collectible under
Applicable Law. For the purpose of determining whether any Excess has been
contracted for, charged or received by Agents or Lenders, all Interest and loan
charges at any time contracted for, charged or received from Borrowers in
connection with this Agreement or any of the other DIP Financing Documents
shall, to the extent permitted by Applicable Law, be amortized, prorated,
allocated and spread in equal parts throughout the entire term of this
Agreement.
(e) For purposes hereof, Borrowers, Agents and Lenders shall, to
the maximum extent permitted under Applicable Law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as Interest and
(ii) exclude voluntary prepayments and the effects thereof.
(f) The provisions of this SECTION 3.8 shall be deemed to be
incorporated into each of the other DIP Financing Documents (whether or not any
provision of this Section is referred to therein). Each of the DIP Financing
Documents and communications relating to any Interest or loan charges owed by
Borrowers and all figures set forth therein shall, for the sole purpose of
computing the extent of the Obligations, be automatically recomputed by
Borrowers, and by any court considering the same, to give effect to the
adjustments or credits required by this Section.
3.10 NATURE AND EXTENT OF EACH OBLIGOR'S LIABILITY; GUARANTY OF
PAYMENT AND PERFORMANCE.
(a) Joint and Several Liability. Each Borrower shall be liable
for, on a joint and several basis, and hereby guarantees the timely payment by
all other Borrowers of, all of the Loans and other Obligations, regardless of
which Borrower actually may have received the proceeds of any Loans or other
extensions of credit hereunder or the amount of such Loans received or the
manner in which either or both Agents or any Lender accounts for such Loans or
other extensions of credit on its books and records, it being acknowledged and
agreed that Loans to any Borrower inure to the mutual benefit of all Borrowers
and that Agents and Lenders are relying on the joint and several liability of
Borrowers in extending the Loans and other financial accommodations hereunder.
Each Borrower hereby unconditionally and irrevocably agrees that upon default in
the payment when due (whether at stated maturity, by acceleration or otherwise)
of any principal of, or interest owed on, any of the Loans or other Obligations,
such Borrower shall forthwith pay the same, without notice or demand.
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(b) Guaranty. Each Obligor hereby jointly and severally, and
unconditionally, guarantees the due and punctual payment and performance by
Borrowers of all of the Obligations. Each Obligor unconditionally and
irrevocably agrees that, upon default in the payment when due (whether at stated
maturity, by acceleration or otherwise) of any principal of, or interest owed
on, any of the Revolver Loans, the Term Loan or any other Obligation, such
Obligor shall forthwith pay the same, without notice or demand. This is a
guaranty of payment and not merely of collection.
(c) Unconditional Nature of Liability. Each Guarantor's guaranty
of payment and performance of the Obligations, and each Borrower's joint and
several liability hereunder with respect to, and guaranty of, the Loans and
other Obligations shall, to the fullest extent permitted by Applicable Law, be
absolute, unconditional and continuing irrespective of (i) the validity,
enforceability, avoidance or subordination of any of the Obligations or of any
promissory note or other document evidencing all or any part of the Obligations,
(ii) the absence of any attempt to collect any of the Obligations from any other
Obligor or any Collateral or other security therefor, or the absence of any
other action to enforce the same, (iii) the waiver, consent, extension,
forbearance or granting of any indulgence by either or both Agents or any Lender
with respect to any provision of any instrument evidencing or securing the
payment of any of the Obligations, or any other agreement now or hereafter
executed by any other Borrower and delivered to either or both Agents or any
Lender, (iv) the failure by Collateral Agent to take any steps to perfect or
maintain the perfected status of its security interest in or Lien upon, or to
preserve its rights to, any of the Collateral or other security for the payment
or performance of any of the Obligations or Agents' release of any Collateral or
of Collateral Agent's Liens upon any Collateral, (v) Agents' or Lenders'
election, in any proceeding instituted under the Bankruptcy Code, for the
application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or
grant of a security interest by any other Obligor, as debtor-in-possession under
Section 364 of the Bankruptcy Code, (vii) the release or compromise, in whole or
in part, of the liability of any other Obligor for the payment of any of the
Obligations, (ix) any amendment or modification of any of the DIP Financing
Documents or waiver of any Default or Event of Default thereunder, (x) any
increase in the amount of the Obligations beyond any limits imposed herein or in
the amount of any interest, fees or other charges payable in connection
therewith, or any decrease in the same, (xi) the disallowance of all or any
portion of either or both Agents' or any Lender's claims for the repayment of
any of the Obligations under Section 502 of the Bankruptcy Code, or (viii) any
other circumstance that might constitute a legal or equitable discharge or
defense of any Obligor. After the occurrence and during the continuance of any
Event of Default, Agents may proceed directly and at once, without notice to any
other Obligor, against any or all of Obligors to collect and recover all or any
part of the Obligations, without first proceeding against any other Obligor or
against any Collateral or other security for the payment or performance of any
of the Obligations, and each Obligor waives any provision that might otherwise
require Agents or Lenders under Applicable Law to pursue or exhaust their
remedies against any Collateral or Obligor before pursuing another Obligor. Each
Obligor consents and agrees that neither Agents nor Lenders shall be under no
obligation to marshal any assets in favor of any Obligor or against or in
payment of any or all of the Obligations.
(d) No Reduction in Liability for Obligations. No payment or
payments made by an Obligor or received or collected by Agents from any
Collateral, from an Obligor or from any other Person by virtue of any action or
proceeding or any setoff or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Obligor under
this Agreement, each of whom shall remain jointly and severally liable for the
payment and performance of all Loans and other Obligations until the Obligations
are paid in full and this Agreement and the Commitments and the DIP Facility are
terminated.
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(e) Contribution. Each Borrower is unconditionally obligated to
repay the Obligations as a joint and several obligor under this Agreement. If,
as of any date, the aggregate amount of payments made by a Borrower on account
of the Obligations and proceeds of such Borrower's Collateral that are applied
to the Obligations exceeds the aggregate amount of Loan proceeds actually used
by such Borrower in its business (such excess amount being referred to as an
"Accommodation Payment"), then each of the other Borrowers (each such Borrower
being referred to as a "Contributing Borrower") shall be obligated to make
contribution to such Borrower (the "Paying Borrower") in an amount equal to (A)
the product derived by multiplying the sum of each Accommodation Payment of each
Borrower by the Allocable Percentage of the Borrower from whom contribution is
sought less (B) the amount, if any, of the then outstanding Accommodation
Payment of such Contributing Borrower (such last mentioned amount that is to be
subtracted from the aforesaid product to be increased by any amounts theretofore
paid by such Contributing Borrower by way of contribution hereunder, and to be
decreased by any amounts theretofore received by such Contributing Borrower by
way of contribution hereunder); provided, however, that a Paying Borrower's
recovery of contribution hereunder from the other Borrowers shall be limited to
that amount paid by the Paying Borrower in excess of its Allocable Percentage of
all Accommodation Payments then outstanding of all Borrowers. As used herein,
the term "Allocable Percentage" shall mean, on any date of determination
thereof, a fraction the denominator of which shall be equal to the number of
Borrowers who are parties to this Agreement on such date and the numerator of
which shall be 1; provided, however, that such percentages shall be modified in
the event that contribution from a Borrower is not possible by reason of
insolvency, bankruptcy or otherwise by reducing such Borrower's Allocable
Percentage equitably and by adjusting the Allocable Percentage of the other
Borrowers proportionately so that the Allocable Percentages of all Borrowers at
all times equals 100%.
(f) Subordination. Each Obligor hereby subordinates any claims,
including any right of payment, subrogation, contribution and indemnity, that it
may have from or against any other Obligor, and any successor or assign of any
other Obligor, including any trustee, receiver or debtor-in-possession,
howsoever arising, due or owing or whether heretofore, now or hereafter
existing, to the payment in full of all of the Obligations.
(g) Reaffirmation. Each Obligor hereby ratifies and reaffirms
each of the Pre-Petition Loan Documents and all of such Obligor's liabilities,
indebtedness and obligations to Pre-Petition Agents and Pre-Petition Lenders
thereunder.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTER OF CREDIT
ACCOMMODATIONS. Each of the following is a condition precedent to Lenders making
the initial Loans and providing the initial Letter of Credit Accommodations
hereunder:
(a) All of the DIP Financing Documents shall have been
executed in form and substance satisfactory to Agents by each of the
signatories thereto and accepted by Agents, and each Obligor shall be
in compliance with all of the terms thereof, and all representations
and warranties contained therein shall be true and correct in all
material respects;
(b) The Interim Financing Order shall have been entered,
shall be in full force and effect and shall not have been vacated,
rescinded, reversed, modified, amended or stayed in any respect (and,
if the Interim Financing Order is the subject of a pending appeal in
any respect, neither the making of an extension of credit nor the
performance of any obligation of any party hereunder or under any of
the other DIP Financing Documents shall be the subject of a presently
effective stay pending appeal);
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(c) All fees and expenses required to be paid by Borrowers
hereunder on the Closing Date shall have been paid in full;
(d) Agents shall have received satisfactory proof of
insurance by Obligors, in accordance with the terms of this Agreement,
together with loss payable endorsements in form and substance
satisfactory to Agents, naming Collateral Agent as loss payee with
respect to each policy and certified copies of each Obligor's liability
insurance policies, together with endorsements naming Collateral Agent
as an additional insured;
(e) Agents shall have received a Borrowing Base Certificate
setting forth the Revolving Loans available to Borrowers as of the date
hereof as completed in a manner satisfactory to Agents and duly
authorized, executed and delivered on behalf of Borrowers;
(f) all of the "first day orders" presented to the Court at
or about the time of the commencement of the Chapter 11 Cases
(including orders with respect to maintenance of Borrowers' cash
management system and retention of Professional Persons) shall be
satisfactory in form and substance to Agents;
(g) Agents shall have received and found satisfactory in
all respects the Initial Projections; and
(h) Agents and Lenders shall have received, in form and
substance satisfactory to Agents and Lenders, such opinion letters of
counsel to Borrowers and Guarantors with respect to the matters set
forth on EXHIBIT J attached hereto and such other matters as Agents and
Lenders may request;.
4.2 CONDITIONS PRECEDENT TO ALL LOANS AND LETTER OF CREDIT
ACCOMMODATIONS. Each of the following is an additional condition precedent to
Lenders making Loans and/or providing Letter of Credit Accommodations to
Borrowers, including the initial Loans and Letter of Credit Accommodations and
any future Loans and Letter of Credit Accommodations:
(a) all representations and warranties contained herein and
in the other DIP Financing Documents shall be true and correct in all
material respects with the same effect as though such representations
and warranties had been made on and as of the date of the making of
each such Loan or providing each such Letter of Credit Accommodation
and after giving effect thereto, except to the extent that such
representations or warranties relate solely to an earlier date and
except to the extent of changes in facts and circumstances that are
expressly permitted by Agents and Lenders hereunder;
(b) no Default or Event of Default shall exist or have
occurred and be continuing on and as of the date of the making of such
Loan or providing each such Letter of Credit Accommodation and after
giving effect thereto;
(c) no event shall have occurred after the Petition Date
and no condition shall exist that could reasonably be expected to have
a Material Adverse Effect; and
(d) if the Loan or procurement of Letter of Credit
Accommodations is to occur after October 31, 2000, the Final Financing
Order shall have been entered, shall be in full force and effect and
shall not have been vacated, reversed, modified, amended or stayed
without the prior written consent of Agents and the Required Lenders.
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SECTION 5. SECURITY INTEREST
5.1 GRANT OF SECURITY INTEREST. To secure payment and performance of
all Obligations, each Obligor hereby grants to Collateral Agent, for the benefit
of Agents and for the Pro Rata benefit of Lenders, a continuing security
interest in, a Lien upon, and a right of set off against, and hereby assigns to
Collateral Agent, for the benefit of Agents and for the Pro Rata benefit of
Lenders, as security, the following Property and interests in Property of such
Obligor (irrespective of whether the same existed on or was created or acquired
after the Petition Date) and wherever located (collectively, the "Collateral"):
(a) all Accounts;
(b) all present and future contract rights, General
Intangibles (including tax and duty refunds), registered and
unregistered patents, trademarks, service marks, copyrights, trade
names, applications for the foregoing, trade secrets, goodwill,
processes, drawings, blueprints, customer lists, licenses, whether as
licensor or licensee, choses in action and other claims and existing
and future leasehold interests in equipment, real estate and fixtures,
chattel paper, documents, instruments, securities, Investment Property,
letters of credit, bankers' acceptances and guaranties;
(c) all present and future monies, securities, credit
balances, deposits, deposit accounts and other Property of such Obligor
now or hereafter held or received by or in transit to either or both
Agents, any Lender or any of their Affiliates or at any other
depository or other institution from or for the account of any Obligor,
whether for safekeeping, pledge, custody, transmission, collection or
otherwise, and all present and future Liens, security interests,
rights, remedies, title and interest in, to and in respect of Accounts
and other Collateral, including (i) rights and remedies under or
relating to guaranties, contracts of suretyship, letters of credit, and
credit and other insurance related to the Collateral, (ii) rights of
stoppage in transit, replevin, repossession, reclamation and other
rights and remedies of an unpaid vendor, lienor or secured party, (iii)
goods described in invoices, documents, contracts or instruments with
respect to, or otherwise representing or evidencing, Accounts or other
Collateral, including returned, repossessed and reclaimed goods, and
(iv) deposits by and property of account debtors or other Persons
securing the obligations of account debtors;
(d) all Inventory;
(e) all Equipment;
(f) all Deposit Accounts;
(g) all Investment Property;
(h) all Real Property;
(i) all Records; and
(j) all products and proceeds of the foregoing, in any
form, including insurance proceeds and all claims against third parties
for loss or damage to or destruction of any or all of the foregoing.
5.2 EXCLUSION FOR CERTAIN CONTRACTS AND LEASES. Notwithstanding
anything to the contrary set forth in SECTION 5.1 above, the types or items of
Collateral described in such Section shall not include any rights or interests
in any contract, lease, permit, license, charter or license agreement covering
real or personal property,
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as such, if under the terms of such contract, lease, permit, license, charter or
license agreement, or Applicable Law with respect thereto, the valid grant of a
security interest or Lien therein to Collateral Agent is prohibited and such
prohibition has not been or is not waived or the consent of the other party to
such contract, lease, permit, license, charter or license agreement has not been
or is not otherwise obtained or under Applicable Law such prohibition cannot be
waived; provided that the foregoing exclusion shall in no way be construed (a)
to apply if any such prohibition is unenforceable under Section 9-318 of the UCC
or other Applicable Law or (b) so as to limit, impair or otherwise affect
Collateral Agent's unconditional continuing security interests in and Liens upon
any rights or interests of an Obligor in or to monies due or to become due under
any such contract, lease, permit, license, charter or license agreement
(including any Accounts).
5.3 FOREIGN SUBSIDIARY STOCK. Notwithstanding anything to the contrary
set forth in SECTION 5.1 above, the types or items of Collateral described in
such Section shall include only sixty-six percent (66%) of the stock of any
Foreign Subsidiary.
5.4 LIENS UNDER FINANCING ORDERS. The Liens and security interests
granted to Collateral Agent pursuant to the provisions of this SECTION 5 and
pursuant to any of the other DIP Financing Documents shall be in addition to all
Liens conferred upon Collateral Agent, for itself and for the Pro Rata benefit
of Lenders, pursuant to the terms of the Financing Orders.
5.5 PLEDGED COLLATERAL. To the extent any Agent or Lender is in
possession of Collateral that was originally pledged as collateral security for
the Pre-Petition Debt, such Agent or Lender shall continue to hold such
Collateral as collateral security for both for the Pre-Petition Debt and the
Obligations.
5.6 LIEN PRIORITY. The Liens and security interests granted to
Collateral Agent pursuant to the provisions of this SECTION 5 and pursuant to
any of the DIP Financing Documents shall be first priority Liens and security
interests in the Collateral subject only to the Liens indicated on Schedule 8.4
hereto and to the other Liens permitted under SECTION 9.8 hereof.
SECTION 6. LOAN ADMINISTRATION
6.1. MANNER OF BORROWING AND FUNDING REVOLVING LOANS. Borrowings under
this Agreement established pursuant to SECTION 2.1 hereof shall be made and
funded as follows:
(a) Notice of Borrowing.
(i) Whenever Borrowers desire to make a Borrowing
under SECTION 2.1 of this Agreement (other than a Borrowing resulting
from a conversion or continuation pursuant to SECTION 3.1(D)),
Borrowers shall give Collateral Agent prior written notice (or
telephonic notice promptly confirmed in writing) of such Borrowing
request (a "Notice of Borrowing"), which shall be in the form of
EXHIBIT E annexed hereto and signed by an authorized officer of
Borrowers. Such Notice of Borrowing shall be given by Borrowers no
later than 11:00 a.m. at the office of Collateral Agent designated by
Collateral Agent from time to time (a) on the Business Day of the
requested funding date of such Borrowing, in the case of Base Rate
Loans, and (b) at least two (2) Business Days prior to the requested
funding date of such Borrowing, in the case of LIBOR Rate Loans.
Notices received after 11:00 a.m. shall be deemed received on the next
Business Day. The Revolving Loans made by each Lender on the Closing
Date shall be in excess of $250,000 and shall be made as Base Rate
Loans and thereafter may be made or continued as or converted into Base
Rate Loans or LIBOR Rate Loans. Each Notice of Borrowing (or telephonic
notice thereof) shall be irrevocable and shall specify (a) the
principal
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amount of the Borrowing, (b) the date of Borrowing (which shall be a
Business Day), (c) whether the Borrowing is to consist of Base Rate
Loans or LIBOR Rate Loans, (d) in the case of LIBOR Rate Loans, the
duration of the Interest Period to be applicable thereto, and (e) the
account of Borrowers to which the proceeds of such Borrowing are to be
disbursed. Borrowers may not request any LIBOR Rate Loans if a Default
or Event of Default exists.
(ii) Unless payment is otherwise timely made by
Borrowers, the becoming due of any amount required to be paid under
this Agreement or any of the other DIP Financing Documents with respect
to the Obligations (whether as principal, accrued interest, fees or
other charges, including the repayment of any Letter of Credit
Accommodations) shall be deemed irrevocably to be a request (without
any requirement for the submission of a Notice of Borrowing) for
Revolving Loans on the due date of, and in an aggregate amount required
to pay, such Obligations, and the proceeds of such Revolving Loans may
be disbursed by way of direct payment of the relevant Obligation and
shall bear interest as Base Rate Loans. Neither Agents nor any Lender
shall have any obligation to Borrowers to honor any deemed request for
a Revolving Loan after the Commitment Termination Date or when an
Out-of-Formula Condition exists or would result therefrom, but may do
so in their discretion and without regard to the existence of, and
without being deemed to have waived, any Default or Event of Default
and regardless of whether such Revolving Loan is funded after the
Commitment Termination Date.
(iii) As an accommodation to Borrowers, Agents and
Lenders may permit telephonic requests for Borrowings and electronic
transmittal of instructions, authorizations, agreements or reports to
Agents by Borrowers; provided, however, that Borrowers shall confirm
each such telephonic request for a Borrowing of LIBOR Rate Loans by
delivery of the required Notice of Borrowing to Collateral Agent by
facsimile transmission promptly, but in no event later than 5:00 p.m.
on the same day. Unless Borrowers specifically direct Agents and
Lenders in writing not to accept or act upon telephonic or electronic
communications from Borrowers, neither Agents nor any Lender shall have
any liability to Borrowers for any loss or damage suffered by Borrowers
as a result of the Collateral Agent's or any Lender's honoring of any
requests, execution of any instructions, authorizations or agreements
or reliance on any reports communicated to it telephonically or
electronically and purporting to have been sent to Agents or Lenders by
Borrowers and neither Agents nor any Lender shall have any duty to
verify the origin of any such communication or the identity or
authority of the Person sending it.
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(b) Funds by Lenders. Subject to its receipt of notice from
Collateral Agent of a Notice of Borrowing as provided in SECTION 6.1(D) (except
in the case of a deemed request by Borrowers for a Revolving Loan as provided in
SECTIONS 6.1(A)(II) or 6.1(A)(III) hereof, in which event no Notice of Borrowing
need be submitted), each Lender shall timely honor its Revolving Commitment by
funding its Pro Rata share of each Borrowing of Revolving Loans that is properly
requested by Borrowers and that Borrowers is entitled to receive under the Loan
Agreement. Collateral Agent shall notify Lenders of each Notice of Borrowing by
12:00 noon on the proposed funding date (in the case of Base Rate Loans) or by
3:00 p.m. at least two (2) Business Days before the proposed funding date (in
the case of LIBOR Rate Loans). Each Lender shall deposit with Collateral Agent
an amount equal to its Pro Rata share of the Borrowing requested by Borrowers at
Collateral Agent's designated bank in immediately available funds not later than
1:00 p.m. on the date of funding of such Borrowing, unless Collateral Agent's
notice to Lenders is received after 12:00 noon on the proposed funding date of a
Base Rate Loan, in which event Lenders shall deposit with Collateral Agent their
respective Pro Rata shares of the requested Borrowing on or before 11:00 a.m. of
the next Business Day. Subject to its receipt of such amounts from Lenders,
Collateral Agent shall make the proceeds of the Revolving Loans received by it
available to Borrowers by disbursing such proceeds in accordance with Borrowers'
disbursement instructions set forth in the applicable Notice of Borrowing.
Unless Collateral Agent shall have been notified in writing by a Lender prior to
the proposed time of funding that such Lender does not intend to deposit with
Collateral Agent an amount equal such Lender's Pro Rata share of the requested
Borrowing, Collateral Agent may assume that such Lender has deposited or
promptly will deposit its share with Collateral Agent and Collateral Agent may
in its discretion disburse a corresponding amount to Borrowers on the applicable
funding date. If a Lender's Pro Rata share of such Borrowing is not in fact
deposited with Collateral Agent, then, if Collateral Agent has disbursed to
Borrowers an amount corresponding to such share, then such Lender agrees to pay,
and in addition Borrowers agree to repay, to Collateral Agent forthwith ON
DEMAND such corresponding amount, together with interest thereon, for each day
from the date such amount is disbursed by Collateral Agent to or for the benefit
of Borrowers until the date such amount is paid or repaid to Collateral Agent,
(a) in the case of Borrowers, at the interest rate applicable to such Borrowing
and (b) in the case of such Lender, at the Federal Funds Rate. If such Lender
repays to Collateral Agent such corresponding amount, such amount so repaid
shall constitute a Revolving Loan, and if both such Lender and Borrowers shall
have repaid such corresponding amount, Collateral Agent shall promptly return to
Borrowers such corresponding amount in same day funds.
(c) Settlement and Settlement Loans.
(i) In order to facilitate the administration of the
Revolving Loans under this Agreement, Lenders agree (which agreement
shall not be for the benefit of or enforceable by Borrowers) that
settlement among them with respect to the Revolving Loans may take
place on a periodic basis on dates determined from time to time by
Agents (each a "Settlement Date"), which may occur before or after the
occurrence or during the continuance of a Default or Event of Default
and whether or not all of the conditions set forth in SECTION 4 of this
Agreement have been met. On each Settlement Date, payment shall be made
by or to each Lender in the manner provided herein and in accordance
with the Settlement Report delivered by Collateral Agent to Lenders
with respect to such Settlement Date so that, as of each Settlement
Date and after giving effect to the transaction to take place on such
Settlement Date, each Lender shall hold its Pro Rata share of all
Revolving Loans and participations in Letter of Credit Accommodations
then outstanding.
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(ii) Between Settlement Dates, Collateral Agent may
request Fleet Capital to advance, and Fleet Capital may, but shall in
no event be obligated to, advance to Borrowers out of Fleet Capital's
own funds the entire principal amount of any Borrowing of Revolving
Loans that are Base Rate Loans requested or deemed requested pursuant
to this Agreement (any such Revolving Loan funded exclusively by Fleet
Capital being referred to as a "Settlement Loan"). Each Settlement Loan
shall constitute a Revolving Loan hereunder and shall be subject to all
of the terms, conditions and security applicable to other Revolving
Loans, except that all payments thereon shall be payable to Fleet
Capital solely for its own account. The obligation of Borrowers to
repay such Settlement Loans to Fleet Capital shall be evidenced by the
Settlement Note. Collateral Agent shall not request Fleet Capital to
make any Settlement Loan if (A) Collateral Agent shall have received
written notice from any Lender that one or more of the applicable
conditions precedent set forth in SECTION 4 hereof will not be
satisfied on the requested funding date for the applicable Borrowing or
(B) the Excess Availability on the funding date would be less than
$5,000,000 after giving effect to such funding or would cause the then
outstanding principal balance of all Settlement Loans to exceed
$7,500,000. Fleet Capital shall not be required to determine whether
the applicable conditions precedent set forth in SECTION 4 hereof have
been satisfied or the requested Borrowing would exceed the amount of
Excess Availability on the funding date applicable thereto prior to
making, in its sole discretion, any Settlement Loan. On each Settlement
Date, or, if earlier, upon demand by Collateral Agent for payment
thereof, the then outstanding Settlement Loans shall be immediately due
and payable. As provided in SECTION 3.1.1(II), Borrowers shall be
deemed to have requested (without the necessity of submitting any
Notice of Borrowing) Revolving Loans to be made on each Settlement Date
in the amount of all outstanding Settlement Loans and to have
Collateral Agent to cause the proceeds of such Revolving Loans to be
applied to the repayment of such Settlement Loans and interest accrued
thereon. Collateral Agent shall notify the Lenders of the outstanding
balance of Revolving Loans prior to 11:00 a.m. on each Settlement Date
and each Lender (other than Fleet Capital) shall deposit with
Collateral Agent (without setoff, counterclaim or reduction of any
kind) an amount equal to its Pro Rata share of the amount of Revolving
Loans deemed requested in immediately available funds not later than
12:00 noon on such Settlement Date, and without regard to whether any
of the conditions precedent set forth in SECTION 4 hereof are satisfied
or the Commitment Termination Date has occurred. If any Settlement Loan
is not repaid on the due date thereof, then on the second Business Day
after Fleet Capital's request each Lender (other than Fleet Capital)
shall purchase a participating interest in such Settlement Loan in an
amount equal to its Pro Rata share of such Settlement Loan by
transferring to Fleet Capital, in immediately available funds, the
amount of such participation. The proceeds of Settlement Loans may be
used solely for purposes for which Revolving Loans generally may be
used in accordance with this Agreement. If any amounts received by
Fleet Capital in respect of any Settlement Loans are later required to
be returned or repaid by Fleet Capital to Borrowers or any other
Obligor or their respective representatives or successors-in-interest,
whether by court order, settlement or otherwise, the other Lenders
shall, upon demand by Fleet Capital with notice to Collateral Agent,
pay to Collateral Agent for the account of Fleet Capital, an amount
equal to each other Lender's Pro Rata share of all such amounts
required to be returned by Fleet Capital.
(d) Disbursement Authorization. Borrowers hereby irrevocably
authorize Collateral Agent to disburse the proceeds of each Revolving Loan
requested, or deemed to be requested pursuant to SECTION 6.1(A)(I) or SECTION
6.1(A)(II), as follows: (i) the proceeds of each Revolving Loan requested under
SECTION 6.1(A)(I) shall be disbursed by Collateral Agent in accordance with the
terms of the written disbursement letter from Borrowers in the case of the
initial Borrowing, and, in the case of each subsequent Borrowing, by wire
transfer to such bank account as may be agreed upon by Borrowers and Collateral
Agent from time to time or elsewhere if pursuant to a written direction from
Borrowers; and (ii) the proceeds of each Revolving Loan requested under
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SECTION 6.1(A)(II) shall be disbursed by Collateral Agent by way of direct
payment of the relevant interest or other Obligation.
6.2. DEFAULTING LENDERS. If any Lender shall, at any time, fail to make
any payment to either Collateral Agent, Congress or Fleet Capital that is
required hereunder, Collateral Agent may, but shall not be required to, retain
payments that would otherwise be made to such defaulting Lender hereunder and
apply such payments to such defaulting Lender's defaulted obligations hereunder,
at such time, and in such order, as Collateral Agent may elect in its sole
discretion. With respect to the payment of any funds from Collateral Agent to a
Lender or from a Lender to Collateral Agent, the party failing to make the full
payment when due pursuant to the terms hereof shall, upon demand by the other
party, pay such amount together with interest on such amount at the Federal
Funds Rate. The failure of any Lender to fund its portion of any Revolving Loan
shall not relieve any other Lender of its obligation, if any, to fund its
portion of the Revolving Loan on the date of Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make any Revolving Loan to be
made by such Lender on the date of any Borrowing. Solely as among the Lenders
and solely for purposes of voting or consenting to matters with respect to any
of the DIP Financing Documents, Collateral or any Obligations and determining a
defaulting Lender's Pro Rata share of payments and proceeds of Collateral
pending such defaulting Lender's cure of its defaults hereunder, a defaulting
Lender shall not be deemed to be a "Lender" and such Lender's Revolving
Commitment shall be deemed to be zero (0). The provisions of this SECTION 6.2
shall be solely for the benefit of Agents and Lenders and may not be enforced by
Borrowers.
6.3. SPECIAL PROVISIONS GOVERNING LIBOR RATE LOANS.
(a) Number of LIBOR Rate Loans. In no event may the number of
LIBOR Rate Loans outstanding at any time to any Lender exceed 6.
(b) Minimum Amounts. Each election of LIBOR Rate Loans pursuant
to SECTION 6.1(A), and each continuation of or conversion to LIBOR Rate Loans
pursuant to SECTION 3.1 hereof, shall be in a minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount.
(c) LIBOR Lending Office. Each Lender's initial LIBOR Lending
Office is set forth opposite its name on the signature pages hereof. Each Lender
shall have the right at any time and from time to time to designate a different
office of itself or of any Affiliate as such Lender's LIBOR Lending Office, and
to transfer any outstanding LIBOR Rate Loans to such LIBOR Lending Office. No
such designation or transfer shall result in any liability on the part of
Borrowers for increased costs or expenses resulting solely from such designation
or transfer (except any such transfer that is made by a Lender pursuant to
SECTION 3.7 hereof, or otherwise for the purpose of complying with Applicable
Law). Increased costs for expenses resulting from a change in Applicable Law
occurring subsequent to any such designation or transfer shall be deemed not to
result solely from such designation or transfer.
6.4. LOAN ACCOUNTS; THE REGISTER; ACCOUNT STATED.
(a) Each Lender shall maintain in accordance with its usual and
customary practices an account or accounts (a "Loan Account") evidencing the
Debt of Borrowers to such Lender resulting from each Loan owing to such Lender
from time to time, including the amount of principal and interest payable to
such Lender from time to time hereunder and under each Note payable to such
Lender.
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(b) Collateral Agent shall maintain a register (the "Register")
which shall include a master account and a subsidiary account for each Lender
and in which accounts (taken together) shall be recorded (i) the date and amount
of each Borrowing made hereunder, the Type of each Loan comprising such
Borrowing and any Interest Period applicable thereto, (ii) the effective date
and amount of each Assignment and Acceptance delivered to and accepted by it and
the parties thereto, (iii) the amount of any principal or interest due and
payable or to become due and payable from Borrowers to each Lender hereunder or
under the Notes, and (iv) the amount of any sum received by Collateral Agent
from Borrowers or any other Obligor and each Lender's share thereof. The
Register shall be available for inspection by Borrowers or any Lender at the
offices of Collateral Agent at any reasonable time and from time to time upon
reasonable prior notice. Any failure of Collateral Agent to record in the
Register or any error in doing so shall not limit or otherwise affect the
obligation of Borrowers hereunder (or under any Note) to pay any amount owing
with respect to the Loans or provide the basis for any claim against Collateral
Agent.
(c) The entries made in the Register and each Loan Account shall
constitute rebuttable presumptive evidence of the information contained therein;
provided, however, that if a copy of information contained in the Register or
any Loan Account is provided to any Person, or any Person inspects the Register
or any Loan Account, at any time or from time to time, then the information
contained in the Register or the Loan Account, as applicable shall be conclusive
and binding on such Person for all purposes absent manifest error, unless such
Person notifies Collateral Agent in writing within thirty (30) days after such
Person's receipt of such copy or such Person's inspection of the Register or
Revolving Loan Account of its intention to dispute the information contained
therein.
6.5 COLLECTION OF ACCOUNTS.
(a) Borrowers have established, and shall continue to establish
and maintain, at their expense, such blocked accounts or lockbox and related
blocked accounts (in either case, "Blocked Accounts"), as Collateral Agent may
specify, with such banks as are acceptable to Agents, into which Borrowers shall
promptly deposit and direct its account debtors to directly remit all payments
on Accounts and all payments constituting proceeds of Inventory or other
Collateral in the identical form in which such payments are made, whether by
cash, check or other manner. The banks at which the Blocked Accounts are
established have entered into, or shall enter into agreements, in form and
substance satisfactory to Collateral Agent, providing that all items received or
deposited in the Blocked Accounts are the Property of Collateral Agent, that the
depository bank has no Lien upon, or right to setoff against, the Blocked
Accounts, the items received for deposit therein, or the funds from time to time
on deposit therein and that the depository bank will wire, or otherwise
transfer, in immediately available funds, on a daily basis, all funds received
or deposited into the Blocked Accounts to such bank account of Collateral Agent
as Collateral Agent may from time to time designate for such purpose ("Payment
Account"). Borrowers agree that all payments made to such Blocked Accounts or
other funds received and collected by Collateral Agent, whether on the Accounts
or as proceeds of Inventory or other Collateral or otherwise shall be the
Property of Collateral Agent held for the benefit of Agents and Lenders.
(b) For purposes of calculating the amount of the Loans available
to Borrowers, such payments will be applied (conditional upon final collection)
to the Obligations on the Business Day of receipt by Collateral Agent of
immediately available funds in the Payment Account provided such payments and
notice thereof are received in accordance with Collateral Agent's usual and
customary practices as in effect from time to time and within sufficient time to
credit Borrowers' loan account on such day, and if not, then on the next
Business Day. For the purposes of calculating interest on the Obligations, such
payments or other funds received will be applied (conditional upon final
collection) to the Obligations one (1) Business Day following the date of
receipt of immediately available funds by Collateral Agent in the Payment
Account provided such payments or other funds
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and notice thereof are received in accordance with Collateral Agent's usual and
customary practices as in effect from time to time and within sufficient time to
credit Borrowers' Revolving Loan Account on such day, and if not, then on the
next Business Day.
(c) Borrowers and all of their Affiliates, Subsidiaries,
shareholders, directors, employees or agents shall, acting as trustee for
Collateral Agent, receive, as the Property of Agents and Lenders, any monies,
checks, notes, drafts or any other payment relating to and/or proceeds of
Accounts or other Collateral which come into their possession or under their
control and immediately upon receipt thereof, shall deposit or cause the same to
be deposited in the Blocked Accounts, or remit the same or cause the same to be
remitted, in kind, to Collateral Agent. In no event shall the same be commingled
with Borrowers' own funds. Borrowers agree to reimburse Collateral Agent ON
DEMAND for any amounts owed or paid to any bank at which a Blocked Account is
established or any other bank or Person involved in the transfer of funds to or
from the Blocked Accounts arising out of Collateral Agent's payments to or
indemnification of such bank or person. The obligation of Borrowers to reimburse
Collateral Agent for such amounts pursuant to this SECTION 6.5 shall survive the
termination of the DIP Facility.
6.6 PAYMENTS. All Obligations shall be payable to the Payment Account
as provided in SECTION 6.5 or such other place as Collateral Agent may designate
from time to time. Except as otherwise expressly provided in SECTIONS 6.7 and
6.10 of this Agreement, Collateral Agent may apply payments received or
collected from Borrowers or for the account of Borrowers (including the monetary
proceeds of collections or of realization upon any Collateral) to such of the
Obligations, whether or not then due, in such order and manner as Collateral
Agent determines. At Collateral Agent's option, all principal, interest, fees,
costs, expenses and other charges provided for in this Agreement or the other
DIP Financing Documents may be charged directly to the loan account(s) of
Borrowers. As an administrative convenience to Borrowers and to ensure the
timely payment of interest owing by Borrowers each month hereunder or under any
of the other DIP Financing Documents, Borrowers hereby request and authorize
Collateral Agent, in its discretion, to make a Revolving Loan the proceeds of
which shall be applied to the payment of the interest accrued on the principal
amount of the Obligations during the immediately preceding month as and when
such interest becomes due and payable by Borrowers to Collateral Agent in
accordance with this Agreement and the other DIP Financing Documents. Borrowers
shall make all payments to Collateral Agent on the Obligations free and clear
of, and without deduction or withholding for or on account of, any setoff,
counterclaim, defense, Taxes, restrictions or conditions of any kind. If after
receipt of any payment of, or proceeds of Collateral applied to the payment of,
any of the Obligations, Collateral Agent is required to surrender or return such
payment or proceeds to any Person for any reason, then the Obligations intended
to be satisfied by such payment or proceeds shall be reinstated and continue and
this Agreement shall continue in full force and effect as if such payment or
proceeds had not been received by Collateral Agent. Borrowers shall be liable to
pay to Collateral Agent, and does hereby indemnify and hold Collateral Agent
harmless for, the amount of any payments or proceeds surrendered or returned.
This SECTION 6.6 shall remain effective notwithstanding any contrary action
which may be taken by Collateral Agent in reliance upon such payment or
proceeds. If an Out-of-Formula Condition exists, Borrowers shall, on Collateral
Agent's demand, repay the amount of the Revolving Loans so as to eliminate such
Out-of-Formula Condition. This SECTION 6.6 shall survive the payment of the
Obligations and the termination of the DIP Facility.
6.7 PREPAYMENTS.
(a) Borrowers shall be jointly and severally obligated to prepay
the entire unpaid principal balance of the Term Loan, and all accrued but unpaid
interest thereon, upon the Commitment Termination Date. If any Borrower shall
(subject to Court approval and the consent of Agents) sell or otherwise dispose
of any Equipment or Real Property, then the net proceeds derived from any such
sale or other disposition shall,
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notwithstanding anything to the contrary contained in the Pre-Petition Loan
Agreement, be applied to the Loans, as a mandatory prepayment thereof, without
penalty or premium (except for LIBOR breakage costs, if any) first to
installments of principal with respect to the Term Loan in inverse order of
maturity and then to the Revolving Loans; provided, however, that any proceeds
arising from the sale of Equipment that is not included in Accuval Appraisal and
the sale of Real Property in Trenton, Tennessee and Hamilton, North Carolina
shall be applied first to Revolving Loans and then to the principal installments
due with respect to the Term Loan in inverse order of maturity.
(b) Each mandatory prepayment pursuant to this SECTION 6.7 shall
be applied first to Base Rate Loans to the full extent thereof before
application to any LIBOR Rate Loans; provided, however, that, so long as no
Default or Event of Default exists, in lieu of application of such prepayment to
LIBOR Rate Loans prior to the expiration of the respective Interest Periods
applicable thereto and any resulting requirement to pay the charges provided for
in SECTION 6.7(A) hereof, Borrowers, at their option, may deposit with
Collateral Agent cash funds equal to such prepayments to be held by Collateral
Agent in the Cash Collateral Account for application to the Term Loan on the
sooner to occur of the expiration of the Interest Period applicable thereto or
the Commitment Termination Date. Each such prepayment shall be distributed by
Collateral Agent to each Lender on a Pro Rata basis and may be applied by
Lenders to the installments of principal due under the Notes in the inverse
order of their maturities until payment thereof in full.
(c) Borrowers may, at their option, prepay any portion of the
Term Loan consisting of Base Rate Loans in whole at any time or in part from
time to time, in amounts aggregating $1,000,000 or any greater integral multiple
of $100,000, by paying the principal amount to be prepaid together with interest
accrued or unpaid thereon to the date of prepayment and any applicable
prepayment premium set forth below. Any portion of the Term Loan consisting of
LIBOR Rate Loans may be prepaid, at Borrowers' option, at any time in whole or
from time to time in part, in amounts aggregating $1,000,000 or any greater
integral multiple thereof, by paying the principal amount to be prepaid,
interest accrued and unpaid thereon to the date of prepayment, all charges
pursuant to SECTION 3.8(B) hereof if such prepayment is made on a date other
than the last day of an applicable Interest Period, and any applicable
prepayment premium as hereinafter set forth in this SECTION 6.7(C). Each such
optional prepayment may be applied to prepay the Term Loan on a Pro Rata basis
and shall be applied against scheduled amortization payments in the inverse
order of the occurrence thereof. Borrowers shall give written notice (or
telephonic notice confirmed in writing) to Collateral Agent of any intended
prepayment (i) not less than one (1) Business Day prior to any prepayment of
Base Rate Loans and not less than two (2) Business Days prior to any prepayment
of LIBOR Rate Loans. Such notice, once given, shall be irrevocable and, upon
receipt of any such notice of optional prepayment, Collateral Agent shall
promptly notify each Lender of the contents thereof and of such Lender's share
of the prepayment.
6.8 TELEPHONE AUTHORIZATIONS. Lenders are authorized to make the Loans
and provide the Letter of Credit Accommodations based upon telephonic or other
instructions received from anyone purporting to be an officer of Borrowers or
other authorized Person or, at the discretion of Lenders, if such Loans are
necessary to satisfy any Obligations. All requests for Loans or Letter of Credit
Accommodations hereunder shall specify the date on which the requested advance
is to be made or Letter of Credit Accommodations established (which day shall be
a Business Day) and the amount of the requested Loan. Requests received after
11:00 a.m., on any day shall be deemed to have been made as of the opening of
business on the immediately following Business Day. All Revolving Loans and
Letter of Credit Accommodations under this Agreement shall be conclusively
presumed to have been made to, and at the request of and for the benefit of,
Borrowers when deposited to the credit of any Borrower or otherwise disbursed or
established in accordance with the instructions of Borrowers or in accordance
with the terms and conditions of this Agreement.
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6.9 USE OF PROCEEDS. The proceeds of the Loans shall be used by
Borrowers during the pendency of the Chapter 11 Cases exclusively for one or
more of the following purposes (without duplication): (i) to the payment of all
or any part of the Pre-Petition Debt, to the extent authorized by the Court and
the extent that Agents elect to apply any such proceeds to any Pre-Petition
Debt; (ii) to pay expenditures in the ordinary course of business during the
Interim Period to the extent permitted by the Interim Financing Order and, after
the Interim Period, to pay any expenses incurred in the ordinary course of
business of Borrowers or, with Agents' and Lenders' consent after the occurrence
of an Event of Default, to fund the costs of an orderly liquidation of the
Collateral to the extent consented to by Agents and Lenders; (iii) to pay fees
required to be paid to the office of the United States Trustee; (iv) to pay, or
to fund deposits to the Professional Expense Escrow pursuant to the Financing
Orders for the payment of, Professional Expenses of Professional Persons subject
to allowance by Final Order of the Court and Borrowers' receipt of an itemized
billing and expense statement from such Professional Person; (v) to pay any of
the Obligations; (vi) to the extent permitted by SECTION 9.10 hereof, to make
loans or advances to one or more Guarantors for use by such Guarantors as
working capital in the ordinary course of their respective businesses; and (vii)
to pay other expenses authorized by Final Order of the Court. Notwithstanding
anything to the contrary contained herein, in no event shall proceeds of Loans
be used to pay Professional Expenses incurred in connection with the assertion
of or joinder in any claim, counterclaim, action, contested matter, objection,
defense or other proceeding, the purpose of which is to seek or the result of
which would be to obtain any order, judgment, declaration, or similar relief (a)
invalidating, setting aside, avoiding or subordinating, in whole or in part, any
of the Pre-Petition Debt or Obligations or Liens and security interests in any
of the Collateral granted to Collateral Agent under this Agreement or the
Financing Orders or under any of the Pre-Petition Loan Documents; (b) declaring
any of the DIP Financing Documents or Pre-Petition Loan Documents to be invalid,
not binding or unenforceable in any respect; (c) preventing, enjoining,
hindering or otherwise delaying Collateral Agent's or any Lender's enforcement
of any of the DIP Financing Documents or Pre-Petition Loan Documents or any
realization upon any Collateral (unless such enforcement or realization is in
direct violation of an explicit provision in any of the Financing Orders); (d)
declaring any Liens granted or purported to be granted under any of the DIP
Financing Documents or Pre-Petition Loan Documents to have a priority other than
the priority set forth therein; (e) objecting to the amount or method of
calculation by Collateral Agent or Lenders of the Pre-Petition Debt or any of
the Obligations or any accounting rendered by Collateral Agent or Lenders with
respect to any of those obligations; or (f) seeking to use the cash proceeds of
Collateral without the prior written consent of Agents and the Required Lenders.
Nothing in this SECTION 6.9 shall be construed to waive any Agent's or Lender's
rights to object to any requests, motions, applications made in or filed with
the Court, including any applications for interim or final allowances of
Professional Expenses. The proceeds of the Post-Petition Term Loan shall be used
exclusively for the purpose of paying the principal balance of and accrued
interest with respect to the Pre-Petition Term Loan.
6.10 AGENTS' ALLOCATION OF PAYMENTS AND COLLECTIONS. Except to the
extent otherwise expressly provided in SECTION 6.7 of this Agreement, all monies
to be applied to the Obligations, whether such monies represent voluntary
payments by one or more Obligors or are received pursuant to demand for payment
or realized from any disposition of Collateral, shall be allocated among Agents
and such of the Lenders as are entitled thereto (and, with respect to monies
allocated to Lenders, on a Pro Rata basis unless otherwise provided herein): (i)
first, to Collateral Agent to pay principal and accrued interest on any portion
of the Revolving Loans which Collateral Agent may have advanced on behalf of any
Lender and for which Collateral Agent has not been reimbursed by such Lender or
Borrowers; (ii) second, to Fleet Capital to pay the principal and accrued
interest on any portion of the Settlement Loans outstanding, to be shared with
Lenders that have acquired a participating interest in such Settlement Loans;
(iii) third, to Fleet Capital (as procurer of Letters of Credit other than the
Congress Letters of Credit) and Congress (as procurer of the Congress Letters of
Credit) to pay the principal amount of and any accrued interest on any payment
made by Fleet Capital or Congress under any Letter of Credit Accommodation to
the extent that Fleet Capital or Congress has not been reimbursed and has not
received from
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each Participating Lender a participation payment as required by SECTION 2.2
hereof; (iv) fourth, to Agents and Fleet Capital to pay the amount of
Extraordinary Expenses that have not been reimbursed to Agents or Fleet Capital
by Borrowers or Lenders, together with interest accrued thereon at the rate
applicable to Revolving Loans that are Base Rate Loans; (v) fifth, to Agents to
pay any Indemnified Amount that has not been paid to Agents by Obligors or
Lenders, together with interest accrued thereon at the rate applicable to
Revolving Loans that are Base Rate Loans; (vi) sixth, to Agents to pay any fees
due and payable to Agents; (vii) seventh, to Lenders for any Indemnified Amount
that they have paid to Agents and any Extraordinary Expenses that they have
reimbursed to Agents, to the extent that Lenders have not been reimbursed from
Obligors therefor; (viii) eighth, to Fleet Capital (for its benefit and the Pro
Rata benefit of the Participating Lenders) and Congress (for its benefit and the
Pro Rata benefit of the Participating Lenders) to pay principal and interest on
their participations in the Letter of Credit Accommodations outstanding (or, to
the extent any of the Letter of Credit Accommodations are contingent and an
Event of Default then exists, deposited in the Cash Collateral Account to
provide security for the payment of the Letter of Credit Accommodations); and
(ix) ninth, to Lenders in payment of the unpaid principal and accrued interest
in respect of the Loans and any other Obligations then outstanding to be shared
among Lenders on a ratable basis, or on such other basis as may be agreed upon
in writing by Lenders (which agreement or agreements may be entered into without
notice to or the consent or approval of Borrowers). The allocations set forth in
this SECTION 6.10 are solely to determine the rights and priorities of Agents
and Lenders as among themselves and may be changed by Agents and Lenders without
notice to or the consent or approval of Borrowers or any other Person.
Notwithstanding anything herein to the contrary, Collateral Agent may, as and to
the extent provided in the Financing Orders, apply any proceeds of Collateral in
existence on the Petition Date to the Pre-Petition Debt before application of
same to any of the Obligations.
6.11 GROSS UP FOR TAXES. If Borrowers shall be required by Applicable
Law to withhold or deduct any Taxes from or in respect of any sum payable under
this Agreement or any of the other DIP Financing Documents, (a) the sum payable
to Agents or such Lender shall be increased as may be necessary so that, after
making all required withholding or deductions, Agents or such Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such withholding or deductions been made, (b) Borrowers shall make such
withholding or deductions, and (c) Borrowers shall pay the full amount withheld
or deducted to the relevant taxation authority or other authority in accordance
with Applicable Law.
6.12 WITHHOLDING TAX EXEMPTION. At least five (5) Business Days prior
to the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under the laws of
the United States or any state thereof agrees that it will deliver to Borrowers
and Collateral Agent two (2) duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8EC1, certifying in either case that such
Lender is entitled to receive payment under this Agreement and its Notes without
deduction or withholding of any United States federal income taxes. Each Lender
which so delivers a Form W-8BEN or W-8EC1 further undertakes to deliver to
Borrowers and Collateral Agent two (2) additional copies of such form (or a
successor form) on or before the date that such form expires (currently, three
(3) successive calendar years for Form W-8BEN and one calendar year for Form
W-8EC1) or becomes obsolete or after the occurrence of any event requiring a
change in the most form so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by Borrowers or
Collateral Agent, in each case, certifying that such Lender is entitled to
receive payments under this Agreement and its Notes without deduction or
withholding of any United States federal income taxes, unless an event
(including any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required that renders all
such forms inapplicable or that would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender advises
Borrowers and Collateral Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income taxes.
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SECTION 7. COLLATERAL REPORTING AND COVENANTS
7.1 COLLATERAL REPORTING.
(a) Borrowers shall provide Agents with the following documents in a
form satisfactory to Agents and Lenders:
(i) on a daily basis, a Borrowing Base Certificate setting forth
Borrowers' calculation of the Revolving Loans and Letter of Credit
Accommodations available to Borrowers pursuant to the terms and conditions
contained herein as of the Business Day 2 Business Days prior to the date
thereof as to the Accounts and as of the close of business on the immediately
preceding Saturday as to Inventory, duly completed and executed by the chief
financial officer or other appropriate financial officer acceptable to Agents,
together with all schedules required pursuant to the terms of the Borrowing Base
Certificate duly completed, including, without limiting any other rights of
Agents and Lenders, a daily schedule of Accounts, collections received and
credits issued, and a daily inventory report;
(ii) on a monthly basis or more frequently as Agents may request,
(A) perpetual inventory reports, (B) inventory reports by category and (C)
agings of accounts payable;
(iii) upon Agents' request, (A) copies of customer statements and
credit memos, remittances advices and reports, and copies of deposit slips and
bank statements, (B) copies of shipping and delivery documents, and (C) copies
of purchase orders, invoices and delivery of documents for Inventory and
Equipment acquired by Borrowers;
(iv) agings of accounts receivable on a monthly basis or more
frequently as Agents may request; and
(v) such other reports as to the Collateral as Agents shall
request from time to time.
(b) Nothing contained in any Borrowing Base Certificate shall be deemed
to limit, impair or otherwise affect the rights of Agents and Lenders contained
herein and in the event of any conflict or inconsistency between the calculation
of the Revolving Loans and Letter of Credit Accommodations available to
Borrowers as set forth in any Borrowing Base Certificate and as determined by
Agents, the determination of Agents shall govern and be conclusive and binding
upon Borrowers. Without limiting the foregoing, Borrowers shall furnish to
Agents and Lenders any information which Agents and Lenders may reasonably
request regarding the determination and calculation of any of the amounts set
forth in the Borrowing Base Certificate. If any Borrower's records or reports of
the Collateral are prepared or maintained by an accounting service, contractor,
shipper or other agent, such Borrower hereby irrevocably authorizes such
service, contractor, shipper or agent to deliver such records, reports and
related documents to Agents and to follow Agents' instructions with respect to
further services at any time that an Event of Default exists or has occurred and
is continuing.
7.2 ACCOUNTS COVENANTS.
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(a) Borrowers shall notify Agents promptly of: (i) any material
delay in any Borrower's performance of any of its obligations to any account
debtor or the assertion of any claims, offsets, defenses or counterclaims by any
account debtor, or any disputes with account debtors, or any settlement,
adjustment or compromise thereof, (ii) all material adverse information relating
to the financial condition of any account debtor and (iii) any event or
circumstance which, to any Borrower's knowledge would cause Agents to consider
any then existing Accounts as no longer constituting Eligible Accounts. No
credit, discount, allowance or extension or agreement for any of the foregoing
shall be granted to any account debtor without Agents' consent, except in the
ordinary course of Borrowers' business in accordance with practices and policies
previously disclosed in writing to Agents. So long as no Event of Default exists
or has occurred and is continuing, Borrowers shall settle, adjust or compromise
any claim, offset, counterclaim or dispute with any account debtor. At any time
that an Event of Default exists or has occurred and is continuing, Agents shall,
at their option, have the exclusive right to settle, adjust or compromise any
claim, offset, counterclaim or dispute with account debtors or grant any
credits, discounts or allowances.
(b) Without limiting the obligation of Borrowers to deliver any
other information to Agents, Borrowers shall promptly report to Agents any
return of Inventory by any one account debtor if the Inventory so returned in
such case has a value in excess of $250,000. At any time that Inventory is
returned, reclaimed or repossessed, the Account (or portion thereof) which arose
from the sale of such returned, reclaimed or repossessed Inventory shall not be
deemed an Eligible Account. In the event any account debtor returns Inventory
when an Event of Default exists or has occurred and is continuing, Borrowers
shall, upon Agents' request, (i) hold the returned Inventory in trust for
Agents, (ii) segregate all returned Inventory from all of its other Property,
(iii) dispose of the returned Inventory solely according to Agents'
instructions, and (iv) not issue any credits, discounts or allowances with
respect thereto without Agents' prior written consent.
(c) With respect to each Account: (i) the amounts shown on any
invoice delivered to Agents or schedule thereof delivered to Agents shall be
true and complete, (ii) no payments shall be made thereon except payments
immediately delivered to Agents pursuant to the terms of this Agreement, (iii)
no credit, discount, allowance or extension or agreement for any of the
foregoing shall be granted to any account debtor except as reported to Agents in
accordance with this Agreement and except for credits, discounts, allowances or
extensions made or given in the ordinary course of Borrowers' business in
accordance with practices and policies previously disclosed to Agents, (iv)
there shall be no setoffs, deductions, contras, defenses, counterclaims or
disputes existing or asserted with respect thereto except as reported to Agents
in accordance with the terms of this Agreement, (v) none of the transactions
giving rise thereto will violate any Applicable Law, all documentation relating
thereto will be legally sufficient under all Applicable Law, and all such
documentation will be legally enforceable in accordance with its terms.
(d) Collateral Agent shall have the right at any time or times,
in Collateral Agent's name or in the name of a nominee of Collateral Agent, to
verify the validity, amount or any other matter relating to any Account or other
Collateral, by mail, telephone, facsimile transmission or otherwise.
(e) Obligors shall deliver or cause to be delivered to Collateral
Agent, with appropriate endorsement and assignment, with full recourse to
Borrowers, all chattel paper and instruments which any Obligor now owns or may
at any time acquire immediately upon any Borrower's receipt thereof, except as
Collateral Agent may otherwise agree.
(f) Agents may, at any time or times that an Event of Default
exists or has occurred and is continuing, (i) notify any or all account debtors
that the Accounts have been assigned to Collateral Agent and that Collateral
Agent has a security interest therein and Agents may direct any or all accounts
debtors to make
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payment of Accounts directly to Collateral Agent, (ii) extend the time of
payment of, compromise, settle or adjust for cash, credit, return of merchandise
or otherwise, and upon any terms or conditions, any and all Accounts or other
obligations included in the Collateral and thereby discharge or release the
account debtor or any other party or parties in any way liable for payment
thereof without affecting any of the Obligations, (iii) demand, collect or
enforce payment of any Accounts or such other obligations, but without any duty
to do so, and neither Agents nor Lenders shall be liable for any failure to
collect or enforce the payment thereof nor for the negligence of its agents or
attorneys with respect thereto and (iv) take whatever other action Agents may
deem necessary or desirable for the protection of their interests. At any time
that an Event of Default exists or has occurred and is continuing, at Agents'
request, all invoices and statements sent to any account debtor shall state that
the Accounts and such other obligations have been assigned to Collateral Agent
and are payable directly and only to Collateral Agent and Borrowers shall
deliver to Collateral Agent such originals of documents evidencing the sale and
delivery of goods or the performance of services giving rise to any Accounts as
Agents may require.
7.3 INVENTORY COVENANTS. With respect to the Inventory: (a) Borrowers
shall at all times maintain Inventory records reasonably satisfactory to Agents,
keeping correct and accurate records itemizing and describing the kind, type,
quality and quantity of Inventory, Borrowers' cost therefor and daily
withdrawals therefrom and additions thereto; (b) Borrowers shall conduct a
physical count of the Inventory at least once each year, but at any time or
times as Agents may request on or after an Event of Default, and promptly
following such physical inventory shall supply Agents with a report in the form
and with such specificity as may be reasonably satisfactory to Agents concerning
such physical count; (c) Obligors shall not remove any Inventory from the
locations set forth or permitted herein, without the prior written consent of
Agents, except for sales of Inventory in the ordinary course of Obligors'
business and except to move Inventory directly from one location set forth or
permitted herein to another such location; (d) upon either Agent's request,
Borrowers shall, at their expense, no more than once in any twelve (12) month
period, but at any time or times as either Agent may request on or after an
Event of Default, deliver or cause to be delivered to Agents written reports or
appraisals as to the Inventory in form, scope and methodology acceptable to
Agents and by an appraiser acceptable to Agents, addressed to Agents or upon
which Agents are expressly permitted to rely; (e) Obligors shall produce, use,
store and maintain the Inventory with all reasonable care and caution and in
accordance with applicable standards of any insurance and in conformity with
Applicable Law (including the requirements of the Federal Fair Labor Standards
Act of 1938); (f) Obligors assume all responsibility and liability arising from
or relating to the production, use, sale or other disposition of the Inventory;
(g) Borrowers shall not sell Inventory to any customer on approval, or any other
basis which entitles the customer to return or may obligate Borrowers to
repurchase such Inventory; (h) Obligors shall keep the Inventory in good and
marketable condition; and (i) Borrowers shall not, without prior written notice
to Agents, acquire or accept any Inventory on consignment or approval.
7.4 EQUIPMENT COVENANTS. With respect to the Equipment: (a) Borrowers
shall, at their expense, at any time or times as Agents may request on or after
an Event of Default, deliver or cause to be delivered to Agents written reports
or appraisals as to the Equipment in form, scope and methodology acceptable to
Agents and by an appraiser acceptable to Agents; (b) Obligors shall keep the
Equipment in good order, repair, running and marketable condition (ordinary wear
and tear excepted); (c) Obligors shall use the Equipment with all reasonable
care and caution and in accordance with applicable standards of any insurance
and in conformity with all applicable laws; (d) the Equipment is and shall be
used in Borrowers' business and not for personal, family, household or farming
use; (e) Obligors shall not remove any Equipment from the locations set forth or
permitted herein, except (i) to the extent necessary to have any Equipment
repaired or maintained in the ordinary course of the business of Obligors, (ii)
to move Equipment directly from one location set forth or permitted herein to
another such location, (iii) for dispositions of Equipment expressly authorized
herein, and (iv) for the movement of motor vehicles used by or for the benefit
of Obligors in the ordinary course of business; (f) the Equipment is now and
shall remain personal property and Obligors shall not permit any of the
Equipment to be or become a
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part of or affixed to real property; and (g) Obligors assume all responsibility
and liability arising from the use of the Equipment.
7.5 POWER OF ATTORNEY. Each Obligor hereby irrevocably designates and
appoints Collateral Agent (and all persons designated by Collateral Agent) as
such Obligor's true and lawful attorney-in-fact, and authorizes Collateral
Agent, in Obligors' or Collateral Agent 's name, to: (a) at any time a Default
or Event of Default exists or has occurred and is continuing (i) demand payment
on Accounts or other proceeds of Inventory or other Collateral, (ii) enforce
payment of Accounts by legal proceedings or otherwise, (iii) exercise all of
such Obligor's rights and remedies to collect any Account or other Collateral,
(iv) sell or assign any Account upon such terms, for such amount and at such
time or times as Collateral Agent deems advisable, (v) settle, adjust,
compromise, extend or renew an Account, (vi) discharge and release any Account,
(vii) prepare, file and sign such Obligor's name on any proof of claim in
bankruptcy or other similar document against an account debtor, and (viii)
notify the post office authorities to change the address for delivery of
Obligors' mail to an address designated by Collateral Agent , and open and
dispose of all mail addressed to Obligors; and (b) at any time to (i) take
control in any manner of any item of payment or proceeds thereof, (ii) have
access to any lockbox or postal box into which any Obligor's mail is deposited,
(iii) endorse any Obligor's name upon any items of payment or proceeds thereof
and deposit the same in Collateral Agent's account for application to the
Obligations, (iv) endorse any Obligor's name upon any chattel paper, document,
instrument, invoice, or similar document or agreement relating to any Account or
any goods pertaining thereto or any other Collateral, (v) sign any Obligor's
name on any verification of Accounts and notices thereof to account debtors and
(vi) execute in any Obligor's name and file any UCC financing statements or
amendments thereto. Each Obligor hereby releases Collateral Agent and its
officers, employees and designees from any liabilities arising from any act or
acts under this power of attorney and in furtherance thereof, whether of
omission or commission, except as a result of Collateral Agent's own gross
negligence or wilful misconduct as determined pursuant to a final non-appealable
order of a court of competent jurisdiction.
7.6 RIGHT TO CURE. Each Agent may, at its option, (a) cure any default
by Obligors under any agreement with a third party or pay or bond on appeal any
judgment entered against Obligors, (b) discharge taxes, Liens, or other
encumbrances at any time levied on or existing with respect to the Collateral
and (c) pay any amount, incur any expense or perform any act which, in such
Agent's judgment, is necessary or appropriate to preserve, protect, insure or
maintain the Collateral and the rights of Agents and Lenders with respect
thereto. Such Agent may add any amounts so expended to the Obligations and
charge Borrowers' account therefor, such amounts to be repayable by Borrowers ON
DEMAND. Agents shall be under no obligation to effect such cure, payment or
bonding and shall not, by doing so, be deemed to have assumed any obligation or
liability of Obligors. Any payment made or other action taken by Agents under
this Section shall be without prejudice to any right to assert an Event of
Default hereunder and to proceed accordingly.
7.7 ACCESS TO PREMISES. From time to time as requested by Agents, at
the cost and expense of Borrowers, (a) Agents and Lenders or Agents' or Lenders'
designees shall have complete access to all of Obligors' premises during normal
business hours and after notice to Obligors, or at any time and without notice
to Obligors if an Event of Default exists or has occurred and is continuing, for
the purposes of inspecting, verifying and auditing the Collateral and all of
Obligors' books and records, including the Records, and (b) Obligors shall
promptly furnish to Agents and Lenders such copies of such books and records or
extracts therefrom as Agents and Lenders may request, and (c) Agents and Lenders
may use during normal business hours such of Obligors' personnel, equipment,
supplies and premises as may be reasonably necessary for the foregoing and if an
Event of Default exists or has occurred and is continuing for the collection of
Accounts and realization of other Collateral. Borrowers shall reimburse Agents
and Lenders ON DEMAND for all costs and expenses reasonably incurred by Agents
and Lenders in connection with any of the foregoing.
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SECTION 8. REPRESENTATIONS AND WARRANTIES
Each Obligor hereby represents and warrants to Agents and Lenders the
following (which shall survive the execution and delivery of this Agreement),
the truth and accuracy of which are a continuing condition of the making of
Loans and providing Letter of Credit Accommodations by Lenders to Borrowers:
8.1 CORPORATE EXISTENCE, POWER AND AUTHORITY; SUBSIDIARIES. Each
Obligor is a corporation or limited partnership duly organized and in good
standing under the laws of its state of incorporation or organization and is
duly qualified as a foreign corporation or limited partnership and in good
standing in all states or other jurisdictions where the nature and extent of the
business transacted by it or the ownership of assets makes such qualification
necessary, except for those jurisdictions in which the failure to so qualify
would not have a Material Adverse Effect. Subject to entry of the Interim
Financing Order, the execution, delivery and performance of this Agreement, the
other DIP Financing Documents and the transactions contemplated hereunder and
thereunder are all within each Obligor's powers, have been duly authorized and
are not in contravention of law or the terms of such Obligor's certificate of
incorporation, by-laws, or other organizational documentation, or any indenture,
agreement or undertaking to which such Obligor is a party or by which such
Obligor or its Property is bound. This Agreement and the other DIP Financing
Documents constitute legal, valid and binding obligations of Obligors
enforceable in accordance with their respective terms. No Obligor has any
Subsidiaries except as set forth on the Information Certificates.
8.2 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. All financial
statements relating to Obligors which have been or may hereafter be delivered by
Obligors to Agents have been prepared in accordance with GAAP and fairly present
the financial condition and the results of operation of Obligors as at the dates
and for the periods set forth therein. Except as disclosed in any interim
financial statements furnished by Obligors to Agents prior to the date of this
Agreement and for the commencement of the Chapter 11 Cases and the adverse
financial situation of the Obligors developing during the seven month period
immediately preceding such Chapter 11 Cases, there has been no change in the
assets, liabilities, Properties and condition, financial or otherwise, of any
Obligor, since the date of the most recent audited financial statements
furnished by Obligors to Agents prior to the date of this Agreement that might
have a Material Adverse Effect.
8.3 CHIEF EXECUTIVE OFFICE; COLLATERAL LOCATIONS. The chief executive
office of Obligors and Obligors' Records concerning Accounts are located only at
the address set forth below and their only other places of business and the only
other locations of Collateral, if any, are the addresses set forth in the
Information Certificates, subject to the right of Obligors to establish new
locations in accordance with SECTION 9.2 below. The Information Certificates
correctly identifies any of such locations that are not owned by Obligors and
sets forth the owners and/or operators thereof and to the best of each Obligor's
knowledge, the holders of any mortgages on such locations.
8.4 PRIORITY OF LIENS; TITLE TO PROPERTIES. Upon entry of the Interim
Financing Order, the security interests and Liens granted under this Agreement
and the other DIP Financing Documents constitute valid and perfected first
priority Liens and security interests in and upon the Collateral subject only to
the Liens indicated on SCHEDULE 8.4 hereto and the other Liens permitted under
SECTION 9.8 hereof. Each Obligor has good and marketable title to all of its
properties and assets subject to no Liens of any kind, except for Permitted
Liens.
8.5 TAX RETURNS. Each Obligor has filed, or caused to be filed, in a
timely manner all tax returns, reports and declarations which are required to be
filed by it (without requests for extension except as previously disclosed in
writing to Lenders). All information in such tax returns, reports and
declarations is complete and
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accurate in all material respects. Each Obligor has paid or caused to be paid
all Taxes due and payable or claimed due and payable in any assessment received
by it, except Taxes the validity of which are being contested in good faith by
appropriate proceedings diligently pursued and available to such Obligor and
with respect to which adequate reserves have been set aside on its books.
Adequate provision has been made for the payment of all accrued and unpaid Taxes
whether or not yet due and payable and whether or not disputed.
8.6 LITIGATION. Except the Chapter 11 Cases and as set forth on the
Information Certificates, there is no present investigation by any governmental
agency pending, or to the best of any Obligor's knowledge threatened, against or
affecting any Obligor, its assets or business and there is no action, suit,
proceeding or claim by any Person pending, or to the best of any Obligor's
knowledge threatened, against any Obligor or its assets or goodwill, or against
or affecting any transactions contemplated by this Agreement, which if adversely
determined against such Obligor would have a Material Adverse Effect.
8.7 COMPLIANCE WITH OTHER AGREEMENTS AND APPLICABLE LAWS. No Obligor is
in default in any material respect under, or in violation in any material
respect of any of the terms of, any agreement, contract, instrument, lease or
other commitment to which it is a party or by which it or any of its assets are
bound, except for any default or violation resulting from the commencement of
the Chapter 11 Cases and the events leading thereto, and each Obligor is in
compliance in all material respects with all applicable provisions of all
Applicable Law.
8.8 EMPLOYEE BENEFITS.
(a) Borrowers have not engaged in any transaction in connection
with which Borrowers or any of its ERISA Affiliates could be subject to either a
civil penalty assessed pursuant to Section 4971, Section 502(i) of ERISA or a
tax imposed by Section 4975 of the Code, including any accumulated funding
deficiency described in SECTION 8.8(C) hereof and any deficiency with respect to
vested accrued benefits described in SECTION 8.8(D) hereof.
(b) Except for annual premiums due after the date hereof, no
liability to the Pension Benefit Guaranty Corporation has been or is expected by
Borrowers to be incurred with respect to any employee benefit plan of Borrowers
or any of their ERISA Affiliates. There has been no reportable event (within the
meaning of Section 4043(b) of ERISA) or any other event or condition with
respect to any employee pension benefit plan of Borrowers or any of their ERISA
Affiliates which presents a material risk of termination of any such plan by the
Pension Benefit Guaranty Corporation.
(c) Full payment has been made of all amounts which any Borrower
or any of its ERISA Affiliates is required under Section 302 of ERISA and
Section 412 of the Code to have paid under the terms of each employee benefit
plan as contributions to such plan as of the last day of the most recent fiscal
year of such plan ended prior to the date hereof, and no accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, exists with respect to any employee benefit plan,
including any penalty or tax described in SECTION 8.8(A) hereof and any
deficiency with respect to vested accrued benefits described in SECTION 8.8(D)
hereof.
(d) As of January 1, 2000, the current value of all vested
accrued benefits under all employee benefit plans maintained by Borrowers that
are subject to Title IV of ERISA did not exceed the current value of the assets
of such plans allocable to such vested accrued benefits, including any penalty
or tax described in SECTION 8.8(A) hereof and any accumulated funding deficiency
described in SECTION 8.8(C) hereof. The terms "current value" and "accrued
benefit" have the meanings specified in ERISA.
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(e) No Borrower or any of its ERISA Affiliates is or has ever
been obligated to contribute to any "multiemployer plan" (as such term is
defined in Section 4001(a)(3) of ERISA) that is subject to Title IV of ERISA.
8.9 ENVIRONMENTAL COMPLIANCE.
(a) Except as set forth on SCHEDULE 8.9 to the Pre-Petition Loan
Agreement, no Borrower has generated, used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous Materials, on or
off its premises (whether or not owned by it) in any manner which, at any time,
violates any applicable Environmental Law or any license, permit, certificate,
approval or similar authorization thereunder and the operations of each Borrower
complies in all material respects with all Environmental Laws and all licenses,
permits, certificates, approvals and similar authorizations thereunder.
(b) Except as set forth on SCHEDULE 8.9 to the Pre-Petition Loan
Agreement, there has been no investigation, proceeding, complaint, order,
directive, claim, citation or notice by any governmental authority or any other
Person nor is any pending or to the best of each Borrower's knowledge
threatened, with respect to any non-compliance with or violation of the
requirements of any Environmental Law by Borrowers or the release, spill or
discharge, threatened or actual, of any Hazardous Material or the generation,
use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials or any other environmental, health or safety
matter, which affects Borrowers or their business, operations or assets or, to
Borrowers' knowledge, any properties at which Borrowers have transported, stored
or disposed of any Hazardous Materials.
(c) No Borrower has any material liability (contingent or
otherwise) in connection with a release, spill or discharge, threatened or
actual, of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials.
(d) Each Borrower has all material licenses, permits,
certificates, approvals or similar authorizations required to be obtained or
filed in connection with the operations of Borrowers under any Environmental Law
and all of such licenses, permits, certificates, approvals or similar
authorizations are valid and in full force and effect.
8.10 BANK ACCOUNTS. All of the deposit accounts, investment accounts or
other accounts in the name of or used by any Borrower maintained at any bank or
other financial institution are set forth on SCHEDULE 8.10 to the Pre-Petition
Loan Agreement, subject to the right of Borrowers to establish new accounts in
accordance with SECTION 9.13 below.
8.11 ACCURACY AND COMPLETENESS OF INFORMATION. All information
furnished by or on behalf of any Obligor in writing to Lenders in connection
with this Agreement or any of the other DIP Financing Documents or any
transaction contemplated hereby or thereby, including all information on the
Information Certificates is true and correct in all material respects on the
date as of which such information is dated or certified and does not omit any
material fact necessary in order to make such information not misleading. No
event or circumstance has occurred which has had or could reasonably be expected
to have a Material Adverse Effect, which has not been fully and accurately
disclosed to Agents and Lenders in writing.
8.12 SURVIVAL OF WARRANTIES; CUMULATIVE. All representations and
warranties contained in this Agreement or any of the other DIP Financing
Documents shall survive the execution and delivery of this
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Agreement and shall be deemed to have been made again to Lenders on the date of
each additional borrowing or other credit accommodation hereunder and shall be
conclusively presumed to have been relied on by Lenders regardless of any
investigation made or information possessed by Lenders. The representations and
warranties set forth herein shall be cumulative and in addition to any other
representations or warranties which any Obligor shall now or hereafter give, or
cause to be given, to Agents or Lenders.
8.13 NOT A REGULATED ENTITY. No Obligor is (i) an "investment company"
or a "person directly or indirectly controlled by or acting on behalf of an
investment company" within the meaning of the Investment Company Act of 1940;
(ii) a "holding company," or a "subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935;
or (iii) subject to regulation under the Federal Power Act, the Interstate
Commerce Act, any public utilities code or any other Applicable Law regarding
its authority to incur Debt.
8.14 MARGIN STOCK. Neither Borrower nor any of the Subsidiaries is
engaged, principally or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
9.1 MAINTENANCE OF EXISTENCE. Each Obligor shall at all times preserve,
renew and keep in full, force and effect its corporate or partnership existence
and rights and franchises with respect thereto and maintain in full force and
effect all permits, licenses, trademarks, tradenames, approvals, authorizations,
leases and contracts necessary to carry on the business as presently or proposed
to be conducted. Each Obligor shall give Agents thirty (30) days prior written
notice of any proposed change in its corporate or partnership name, which notice
shall set forth the new name and each Obligor shall deliver to Agents a copy of
the amendment to the Certificate of Incorporation or Certificate of Limited
Partnership of such Obligor providing for the name change certified by the
Secretary of State of the jurisdiction of incorporation of such Obligor as soon
as it is available.
9.2 NEW COLLATERAL LOCATIONS. Any Obligor may open a new location within
the continental United States provided such Obligor (a) gives Agents and Lenders
thirty (30) days prior written notice of the intended opening of any such new
location and (b) executes and delivers, or causes to be executed and delivered,
to Agents such agreements, documents, and instruments as Agents may deem
reasonably necessary or desirable to protect Agents' interests in the Collateral
at such location, including UCC financing statements.
9.3 COMPLIANCE WITH LAWS, REGULATIONS, ETC. Obligors shall, at all
times, comply in all material respects with all laws, rules, regulations,
licenses, permits, approvals and orders applicable to it and duly observe all
requirements of any Federal, State or local governmental authority, including
the Employee Retirement Security Act of 1974, the Occupational Safety and Health
Act of 1970, the Fair Labor Standards Act of 1938, and all statutes, rules,
regulations, orders, permits and stipulations relating to environmental
pollution and employee health and safety, including all of the Environmental
Laws.
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9.4 PAYMENT OF TAXES AND CLAIMS. Except to the extent prohibited by the
Bankruptcy Code, each Obligor shall duly pay and discharge all Taxes,
contributions and governmental charges upon or against it or its properties or
assets, except for Taxes the validity of which are being contested in good faith
by appropriate proceedings diligently pursued and available to such Obligor and
with respect to which adequate reserves have been set aside on its books.
Borrowers shall be liable for any Tax or penalties imposed on Agents and Lenders
as a result of the financing arrangements provided for herein and Borrowers
jointly and severally agree to indemnify and hold Agents and Lenders harmless
with respect to the foregoing, and to repay to Agents and Lenders ON DEMAND the
amount thereof, and until paid by Borrowers such amount shall be added and
deemed part of the Revolving Loans, provided, that, nothing contained herein
shall be construed to require Borrowers to pay any income, excise or franchise
Taxes attributable to the income of any Agent or Lender from any amounts charged
or paid hereunder to any Agent or Lender. The foregoing indemnity shall survive
the payment of the Obligations and the termination of the DIP Facility.
9.5 INSURANCE. Obligors shall, at all times, maintain with financially
sound and reputable insurers insurance with respect to the Collateral against
loss or damage and all other insurance of the kinds and in the amounts
customarily insured against or carried by corporations of established reputation
engaged in the same or similar businesses and similarly situated. Said policies
of insurance shall be satisfactory to Agents as to form, amount and insurer.
Obligors shall furnish certificates, policies or endorsements to Collateral
Agent as Agents shall require as proof of such insurance, and, if Obligors fail
to do so, Collateral Agent is authorized, but not required, to obtain such
insurance at the expense of Obligors. All policies shall provide for at least
thirty (30) days prior written notice to Collateral Agent of any cancellation or
reduction of coverage and that Collateral Agent may act as attorney for Obligors
in obtaining, and at any time an Event of Default exists or has occurred and is
continuing, adjusting, settling, amending and canceling such insurance. Obligors
shall cause Collateral Agent to be named as a loss payee and an additional
insured (but without any liability for any premiums) under such insurance
policies and Obligors shall obtain non-contributory lender's loss payable
endorsements to all insurance policies in form and substance satisfactory to
Agents. Such lender's loss payable endorsements shall specify that the proceeds
of such insurance shall be payable to Collateral Agent as its interests may
appear and further specify that Collateral Agent shall be paid regardless of any
act or omission by Obligors or any of their affiliates. At their option, Agents
and Lenders may apply any insurance proceeds received by Agents and Lenders at
any time to the cost of repairs or replacement of Collateral and/or to payment
of the Obligations, whether or not then due, in any order and in such manner as
Agents and Lenders may determine or hold such proceeds as cash collateral for
the Obligations.
9.6 FINANCIAL STATEMENTS AND OTHER INFORMATION.
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(a) Borrowers shall keep proper books and records in which true
and complete entries shall be made of all dealings or transactions of or in
relation to the Collateral and the business of Borrowers and their Subsidiaries
(if any) in accordance with GAAP and Borrowers shall furnish or cause to be
furnished to Agents and Lenders: (i) within thirty (30) days after the end of
each fiscal month, monthly unaudited consolidated financial statements, and, if
Borrowers have any Subsidiaries, unaudited consolidating financial statements
(including in each case balance sheets, statements of income and loss,
statements of cash flow, and statements of shareholders' equity), all in
reasonable detail, fairly presenting the financial position and the results of
the operations of Borrowers and their Subsidiaries as of the end of and through
such fiscal month, (ii) within ninety (90) days after the end of each fiscal
year, audited consolidated financial statements and, if Borrowers have any
Subsidiaries, audited consolidating financial statements of Borrowers and their
Subsidiaries (including in each case balance sheets, statements of income and
loss, statements of cash flow and statements of shareholders' equity), and the
accompanying notes thereto, all in reasonable detail, fairly presenting the
financial position and the results of the operations of Borrowers and their
Subsidiaries as of the end of and for such fiscal year, together with the
unqualified opinion of independent certified public accountants, which
accountants shall be an independent accounting firm selected by Borrowers and
reasonably acceptable to Agents, that such financial statements have been
prepared in accordance with GAAP, and present fairly the results of operations
and financial condition of Borrowers and their Subsidiaries as of the end of and
for the fiscal year then ended, and (iii) on a weekly basis, cash flow
projections calculated for a rolling thirteen (13) week period.
(b) Borrowers shall furnish or cause to be furnished to Agents and
the Lenders the Subsequent Projections within forty-five (45) days after the end
of each Fiscal Quarter (beginning with the Fiscal Quarter ending December 31,
2000), and at any time that the information contained in the Initial Projections
or the most recent Subsequent Projection becomes outdated or materially
misleading.
(c) Borrowers shall promptly notify Agents and Lenders in writing
of the details of (i) any loss, damage, investigation, action, suit, proceeding
or claim relating to the Collateral or any other Property which is security for
the Obligations or which would have a Material Adverse Effect and (ii) the
occurrence of any Default or Event of Default.
(d) Borrowers shall promptly after the sending or filing thereof
furnish or cause to be furnished to Agents and Lenders copies of all reports
which Borrowers sends to its stockholders generally and copies of all reports
and registration statements which Borrowers files with the Securities and
Exchange Commission, any national securities exchange or the National
Association of Securities Dealers, Inc.
(e) Borrowers shall furnish or cause to be furnished to Agents and
Lenders such additional budgets, forecasts, projections and other information
respecting the Collateral and the business of Borrowers, as Collateral Agent and
Lenders may, from time to time, reasonably request. Agents and Lenders are
hereby authorized to deliver a copy of any financial statement or any other
information relating to the business of Borrowers to any court or other
government agency or to any participant or assignee or prospective participant
or assignee. Each Borrower hereby irrevocably authorizes and directs all
accountants or auditors to deliver to Agents and Lenders, at Borrowers' expense,
copies of the financial statements of such Borrower and any reports or
management letters prepared by such accountants or auditors on behalf of
Borrowers and to disclose to Agents and Lenders such information as they may
have regarding the business of Borrowers. Any documents, schedules, invoices or
other papers delivered to Agents or Lenders may be destroyed or otherwise
disposed of by Agents and Lenders one (1) year after the same are delivered to
Collateral Agent and Lenders, except as otherwise designated by Borrowers to
Agents and Lenders in writing.
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(f) Borrowers shall promptly notify Agents in writing in the event
that at any time after the delivery of a Borrowing Base Certificate by Borrowers
to Agents but prior to the delivery of the next Borrowing Base Certificate to be
delivered by Borrowers to Collateral Agent in accordance with the terms hereof:
(i) the amount of Revolving Loans and Letter of Credit Accommodations available
to Borrowers pursuant to the terms and conditions contained herein (calculated
without regard to the then outstanding Revolving Loans and Letter of Credit
Accommodations) is less than ninety (90%) percent of the amount of Revolving
Loans and Letter of Credit Accommodations available to Borrowers pursuant to the
terms and conditions contained herein (calculated without regard to the then
outstanding Revolving Loans and Letter of Credit Accommodations) as set forth in
the most recent Borrowing Base Certificate previously delivered by Borrowers to
Agents pursuant to SECTION 7.1 hereof, (ii) the Revolving Loans and/or Letter of
Credit Accommodations outstanding at such time exceed the amount of the
Revolving Loans and Letter of Credit Accommodations then available to Borrowers
under the terms hereof as a result of any decrease in the amount of Revolving
Loans and Letter of Credit Accommodations then available and the amount of such
excess, or (iii) Excess Availability is less than $5,000,000.
9.7 SALE OF ASSETS, CONSOLIDATION, MERGER, DISSOLUTION, ETC. No Obligor
shall, directly or indirectly,
(a) merge into or with or consolidate with any other Person
or permit any other Person to merge into or with or consolidate with it;
(b) sell, assign, lease, transfer, abandon or otherwise
dispose of any stock or Debt to any other Person or any of its assets to
any other Person, except, for so long as no Event of Default exists or
would result therefrom, (i) sales of Inventory in the ordinary course of
business, (ii) sales of Collateral to the extent approved by the Court
and on terms consented to by the Agents, (iii) sales of Accounts to a
Factor pursuant to a Factoring Agreement so long as each of the Factor
Eligibility Conditions is satisfied, (iv) to the extent approved by the
Court (if necessary), the disposition of worn-out or obsolete Equipment
or disposition of Equipment no longer economically operational to the
business of any Obligor so long as the proceeds thereof are delivered to
Collateral Agent for application to the Obligations, (v) to the extent
approved by the Court (if necessary), the sale or disposition of
Borrowers' Real Property located in Trenton, Tennessee or Hamilton,
North Carolina, and any Equipment located on such Real Property that was
not included in the Accuval appraisal dated June 18, 1999, so long as
the proceeds thereof are delivered to Collateral Agent for application
to the Revolving Loans, (vi) transfers of Properties among Borrowers and
Guarantors upon fifteen (15) days prior written notice to Agents, or
(vii) the rejection, pursuant to Section 365 of the Bankruptcy Code, of
unexpired leases and executory contracts; or
(c) except for the Subsidiaries listed on SCHEDULE 9.7 to
the Pre-Petition Loan Agreement, form or acquire any Subsidiaries, or
(d) wind up, liquidate or dissolve, or
(e) agree to do any of the foregoing.
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9.8 ENCUMBRANCES. No Obligor shall create, incur, assume or suffer to
exist any security interest, Lien or other encumbrance of any nature whatsoever
on any of its assets or properties, including the Collateral, except: (a) Liens
and security interests in favor of Collateral Agent or Pre-Petition Agents; (b)
Liens in existence on the Petition Date that were not created or suffered to
exist in violation of the Pre-Petition Loan Documents; (c) Liens securing the
payment of Taxes, either not yet overdue or the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to such Obligor and with respect to which adequate reserves have been
set aside on its books; (c) non-consensual statutory Liens (other than Liens
securing the payment of Taxes) arising in the ordinary course of such Obligor's
business to the extent: (i) such Liens secure Debt which is not overdue or (ii)
such Liens secure Debt relating to claims or liabilities which are fully insured
and being defended at the sole cost and expense and at the sole risk of the
insurer or being contested in good faith by appropriate proceedings diligently
pursued and available to such Obligor, in each case prior to the commencement of
foreclosure or other similar proceedings and with respect to which adequate
reserves have been set aside on its books; (d) zoning restrictions, easements,
licenses, covenants and other restrictions affecting the use of Real Property
which do not interfere in any material respect with the use of such Real
Property or ordinary conduct of the business of such Obligor as presently
conducted thereon or materially impair the value of the Real Property which may
be subject thereto; (e) Liens securing any Offshore Equipment that has been
released by Collateral Agent in connection with a Permitted Property Transfer,
to the extent that such Lien is limited to such released Offshore Equipment
only; and (f) Liens on Equipment purchased in accordance with Permitted
Affiliate Investments.
9.9 INDEBTEDNESS. No Obligor shall incur, create, assume, become or be
liable in any manner with respect to, or permit to exist, any Debt, except: (a)
Debt in existence on the Petition Date to the extent not incurred in violation
of the Pre-Petition Loan Documents; (b) the Obligations; (c) trade obligations
and normal accruals in the ordinary course of business not yet due and payable,
or with respect to which such Obligor is contesting in good faith the amount or
validity thereof by appropriate proceedings diligently pursued and available to
such Obligor, and with respect to which adequate reserves have been set aside on
its books; (d) purchase money debt (including capital leases) to the extent not
incurred or secured by Liens (including capital leases) in violation of any
other provision of this Agreement; (e) Debt owing from an Obligor to another
Obligor; (f) Debt incurred in connection with cotton hedges in the ordinary
course of such Obligor's business; (g) Debt arising from interest rate swap
agreements or other interest rate protection agreements between such Obligor and
any Lender; (h) Debt for money borrowed that is owed by a Foreign Subsidiary,
non-U.S. Affiliate or joint venture of a Obligor so long as the Debt does not
exceed the value of any Offshore Equipment that has been released by Collateral
Agent in connection with a Permitted Property Transfer, such Debt is secured
only by a Lien on such released Offshore Equipment and the other terms of such
Debt are acceptable in all respects to Agents; provided, that, (i) such Obligor
may only make regularly scheduled payments of principal and interest in respect
of such Debt in accordance with the terms of the agreement or instrument
evidencing or giving rise to such Debt as in effect on the date hereof, (ii)
such Obligor shall not, directly or indirectly, (A) amend, modify, alter or
change the terms of such Debt or any agreement, document or instrument related
thereto as in effect on the date hereof without the prior written consent of
Agents, or (B) redeem, retire, defease, purchase or otherwise acquire such Debt,
or set aside or otherwise deposit or invest any sums for such purpose, and (iii)
Obligors shall furnish to Agents all notices or demands in connection with such
Debt either received by Obligors or on their behalf, promptly after the receipt
thereof, or sent by Obligors or on their behalf, concurrently with the sending
thereof, as the case may be.
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9.10 LOANS, INVESTMENTS, GUARANTEES, ETC. No Obligor shall, directly or
indirectly, make any loans or advance money or Property to any Person, or invest
in (by capital contribution, dividend or otherwise) or purchase or repurchase
the stock or Debt or all or a substantial part of the assets or Property of any
Person, or guarantee, assume, endorse, or otherwise become responsible for
(directly or indirectly) the Debt, performance, obligations or dividends of any
Person or agree to do any of the foregoing, except, so long as no Event of
Default exists or would result therefrom: (a) Permitted Affiliate Investments;
(b) the endorsement of instruments for collection or deposit in the ordinary
course of business; (c) investments in: (i) short-term direct obligations of the
United States Government, (ii) negotiable certificates of deposit issued by any
bank satisfactory to Agents, payable to the order of such Obligor or to bearer
and delivered to Agents, (iii) commercial paper rated A1 or P1; provided, that,
as to any of the foregoing, unless waived in writing by Agents, such Obligor
shall take such actions as are deemed necessary by Agents to perfect the
security interest of Collateral Agent in such investments; (d) employee loans or
advances for travel and moving expenses in the ordinary course of business; (e)
investments in employee benefit plans of Obligors that are consistent with
historical investment practices of Obligors in such plans; (f) investments in
Subsidiaries that are Obligors and any loans to or investments in or from any
Obligor in connection with an integrated cash management system among Borrowers
and their Consolidated Subsidiaries; and (g) the loans, advances and guarantees
set forth on SCHEDULE 9.10 hereto; provided that, as to such loans, advances and
guarantees, (i) such Obligor shall not, directly or indirectly, (A) amend,
modify, alter or change the terms of such loans, advances or guarantees or any
agreement, document or instrument related thereto, or (B) as to such guarantees,
redeem, retire, defease, purchase or otherwise acquire the obligations arising
pursuant to such guarantees, or set aside or otherwise deposit or invest any
sums for such purpose, and (ii) such Obligor shall furnish to Agents all notices
or demands in connection with such loans, advances or guarantees or other Debt
subject to such guarantees either received by such Obligor or on its behalf,
promptly after the receipt thereof, or sent by such Obligor or on its behalf,
concurrently with the sending thereof, as the case may be.
9.11 DIVIDENDS AND REDEMPTIONS. No Obligor shall, directly or
indirectly, declare or pay any dividends on account of any shares of class of
capital stock of such Obligor now or hereafter outstanding, or set aside or
otherwise deposit or invest any sums for such purpose, or redeem, retire,
defease, purchase or otherwise acquire any shares of any class of capital stock
(or set aside or otherwise deposit or invest any sums for such purpose) for any
consideration other than common stock or apply or set apart any sum, or make any
other distribution (by reduction of capital or otherwise) in respect of any such
shares or agree to do any of the foregoing, except Upstream Payments.
9.12 TRANSACTIONS WITH AFFILIATES. No Obligor shall, directly or
indirectly, (a) purchase, acquire or lease any Property from, or sell, transfer
or lease any Property to, any officer, director, agent or other Person
Affiliated with such Obligor, except in the ordinary course of and pursuant to
the reasonable requirements of such Obligor's business and upon fair and
reasonable terms no less favorable to such Obligor than such Obligor would
obtain in a comparable arm's length transaction with an unaffiliated Person or
(b) make any payments of management, consulting or other fees for management or
similar services, or of any Debt owing to any officer, employee, shareholder,
director or other Person Affiliated with such Obligor except reasonable
compensation to officers, employees and directors for services rendered to such
Obligor in the ordinary course of business.
9.13 ADDITIONAL BANK ACCOUNTS. No Obligor shall, directly or indirectly,
open, establish or maintain any deposit account, investment account or any other
account with any bank or other financial institution, other than the Blocked
Accounts and the accounts set forth in SCHEDULE 8.10 hereto, except: (a) as to
any new or additional Blocked Accounts and other such new or additional accounts
which contain any Collateral or proceeds thereof, with the prior written consent
of Agents and subject to such conditions thereto as Agents may establish
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and (b) as to any accounts used by Obligors to make payments of payroll, taxes
or other obligations to third parties, after prior written notice to Agents.
9.14 COMPLIANCE WITH ERISA.
(a) No Borrower shall, with respect to any "employee benefit
plans" maintained by such Borrower or any of its ERISA Affiliates: (i) terminate
any of such employee benefit plans so as to incur any liability to the Pension
Benefit Guaranty Corporation established pursuant to ERISA, (ii) engage in any
prohibited transaction involving any of such employee benefit plans or any trust
created thereunder that would subject such Obligor or such ERISA Affiliate to a
Tax or penalty or other liability on prohibited transactions imposed under
Section 4975 of the Code or ERISA, (iii) fail to pay to any such employee
benefit plan any contribution which it is obligated to pay under Section 302 of
ERISA, Section 412 of the Code or the terms of such plan, (iv) allow or suffer
to exist any accumulated funding deficiency, whether or not waived, with respect
to any such employee benefit plan, (v) allow or suffer to exist any occurrence
of a reportable event or any other event or condition which presents a material
risk of termination by the Pension Benefit Guaranty Corporation of any such
employee benefit plan that is a single employer plan, which termination could
result in any liability to the Pension Benefit Guaranty Corporation or (vi)
incur any withdrawal liability with respect to any multiemployer pension plan.
(b) As used in this SECTION 9.14, the terms "employee benefit
plans", "accumulated funding deficiency" and "reportable event" shall have the
respective meanings assigned to them in ERISA, and the term "prohibited
transaction" shall have the meaning assigned to it in Section 4975 of the Code
and ERISA.
9.15 CONSOLIDATED EBITDA. Borrowers shall maintain Consolidated EBITDA
of at least the amounts set forth below for the periods applicable thereto:
Period Amount
------ ------
October 1, 2000 through October 28, 2000 $500,000
October 1, 2000 through November 25, 2000 $1,393,000
October 1, 2000 through December 30, 2000 $2,350,000
October 1, 2000 through January 27, 2001 $3,722,000
October 1, 2000 through February 24, 2001 $5,152,000
October 1, 2000 through March 31, 2001 $6,866,000
9.16 AFTER ACQUIRED REAL PROPERTY. If any Obligor hereafter acquires any
Real Property, fixtures or any other Property that is of the kind or nature
described in the Mortgages and such Real Property, fixtures or other Property at
any one location has a fair market value in an amount equal to or greater than
$100,000 (or if a Default or Event of Default exists, then regardless of the
fair market value of such assets), without limiting any other rights of Agents
or Lenders, or duties or obligations of Obligors, upon either Agent's request,
Obligors shall execute and deliver to Collateral Agent a mortgage, deed of trust
or deed to secure Debt, as Agents may determine, in form and substance
substantially similar to the Mortgages and as to any provisions relating to
specific state laws satisfactory to Agents and in form appropriate for recording
in the real estate records of the
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jurisdiction in which such Real Property or other Property is located granting
to Collateral Agent a first and only lien and mortgage on and security interest
in such Real Property, fixtures or other Property (except as Obligors would
otherwise be permitted to incur hereunder or under the Mortgages or as otherwise
consented to in writing by Agents) and such other agreements, documents and
instruments as Agents may require in connection therewith.
9.17 COSTS AND EXPENSES. Borrowers shall jointly and severally pay to
Agents and Lenders ON DEMAND all costs, expenses, filing fees and Taxes paid or
payable in connection with the preparation, negotiation, execution, delivery,
recording, administration, collection, liquidation, enforcement and defense of
the Obligations, Agents' and Lenders' rights in the Collateral, this Agreement,
the other DIP Financing Documents and all other documents related hereto or
thereto, including any amendments, supplements or consents which may hereafter
be contemplated (whether or not executed) or entered into in respect hereof and
thereof, including: (a) all costs and expenses of filing or recording (including
UCC financing statement filing taxes and fees, documentary Taxes, intangibles
Taxes and mortgage recording Taxes and fees, if applicable); (b) costs and
expenses and fees for insurance premiums, environmental audits, surveys,
assessments, engineering reports and inspections, appraisal fees and search
fees; (c) costs and expenses of remitting loan proceeds, collecting checks and
other items of payment, and establishing and maintaining the Blocked Accounts,
together with Agents' and Lenders' customary charges and fees with respect
thereto; (d) charges, fees or expenses charged by any bank or issuer in
connection with the Letter of Credit Accommodations; (e) costs and expenses of
preserving and protecting the Collateral; (f) costs and expenses paid or
incurred in connection with obtaining payment of the Obligations, enforcing the
security interests and Liens of Collateral Agent, selling or otherwise realizing
upon the Collateral, and otherwise enforcing the provisions of this Agreement
and the other DIP Financing Documents or defending any claims made or threatened
against any Agent or Lender arising out of the transactions contemplated hereby
and thereby (including preparations for and consultations concerning any such
matters); (g) all out-of-pocket expenses and costs heretofore and from time to
time hereafter incurred by any Agent or Lender during the course of periodic
field examinations of the Collateral and Borrowers' operations, plus a per diem
charge at the rate of $650 per person per day for Agents' and Lenders' examiners
in the field and office; and (h) the fees and disbursements of counsel
(including legal assistants) to Agents and Lenders and any Participant in
connection with any of the foregoing.
9.18 EXCESS AVAILABILITY. Borrowers shall maintain Excess Availability
at all times after the Closing Date of at least $2,500,000.
9.19 OBLIGATIONS CONSTITUTE SENIOR DEBT. Borrowers acknowledge and agree
that it is the intent of the parties hereto that the Obligations constitute
"Designated Senior Debt" and "Senior Debt" under (and as defined in) the Senior
Subordinated Note Indenture.
9.20 PAYMENT OF CLAIMS. Obligors shall not make any payment of principal
or interest on account of any Claim against Obligors that arose prior to the
Petition Date, other than the Pre-Petition Debt to Pre-Petition Agents and
Pre-Petition Lenders and rent under leases in existence on the Petition Debt and
other than as authorized by the Court after notice and a hearing with respect to
Claims of employees of Obligors for wages, salary or employee benefits and
related taxes and as authorized by the Court pursuant to the "first day orders"
described in SECTION 4.1(J) hereof.
9.21 FISCAL YEAR. Borrowers shall not establish a fiscal year different
from the fiscal year in effect on the Closing Date.
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9.22 UPSTREAM PAYMENTS. Borrowers shall not create or suffer to exist
any encumbrance or restriction on the ability of a Subsidiary to make any
Upstream Payment, except for encumbrances or restrictions (i) pursuant to the
DIP Financing Documents and (ii) existing under Applicable Law.
9.23 FILING OF MOTIONS AND APPLICATIONS. No Obligor shall apply to the
Court for authority to (i) take any action that is prohibited by the terms of
any of the DIP Financing Documents, (ii) refrain from taking any action that is
required to be taken by the terms of any of the DIP Financing Documents or the
Financing Orders or (iii) permit any Debt or Claim to be pari passu with or
senior to any of the Obligations.
9.24 NOTICES. Notify Agents and Lenders in writing, promptly after any
Obligor's obtaining knowledge thereof, of the termination or breach of any
material contract; the occurrence of any Default or Event of Default; any
Obligor's violation (or asserted violation) of any Applicable Law (including the
Bankruptcy Code or any Environmental Law); any claim that any Obligor may make
under any policy of insurance with respect to the Collateral; any pleading filed
with the Court seeking from stay or conversion or dismissal of any of the
Chapter 11 Cases; and any proposed sale of any of the Collateral (including with
such notice copies of drafts of all instruments and agreements applicable to any
such sale), which shall specify the identity of the proposed purchaser, the
terms of the proposed sale and the expected date of closing, subject to Court
approval. Obligors shall provide, or shall cause their counsel in the Chapter 11
Cases to provide, each Agent's and Lender's counsel with copies of all
pleadings, motions, reports, applications and other papers filed by Obligors
with the Court as well as copies of all billing and expense statements received
from any Professional Person. Obligors shall include counsel for Agents on any
"Special Notice List" or other similar list of parties to be served with papers
in the Chapter 11 Cases.
9.25 FURTHER ASSURANCES. At the request of either Agent at any time and
from time to time, Obligors shall, at its expense, duly execute and deliver, or
cause to be duly executed and delivered, such further agreements, documents and
instruments, and do or cause to be done such further acts as may be necessary or
proper to evidence, perfect, maintain and enforce the Liens and the priority
thereof in the Collateral and to otherwise effectuate the provisions or purposes
of this Agreement or any of the other DIP Financing Documents. Agents may at any
time and from time to time request a certificate from an officer of Borrowers
representing that all conditions precedent to the making of Loans and providing
Letter of Credit Accommodations contained herein are satisfied. In the event of
such request by Agents, Lenders may, at their option, cease to make any further
Loans or provide any further Letter of Credit Accommodations until Agents have
received such certificate and, in addition, Agents have determined that such
conditions are satisfied. Where permitted by law, Obligors hereby authorize
Collateral Agent to execute and file one or more UCC financing statements signed
only by Collateral Agent.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
10.1 EVENTS OF DEFAULT. The occurrence or existence of any one or more
of the following events are referred to herein individually as an "Event of
Default," and collectively as "Events of Default":
(a) Borrowers shall fail to pay any of the Obligations as
and when due and payable (whether due at stated maturity, ON DEMAND,
upon acceleration or otherwise);
(b) Obligors shall fail or neglect to perform, keep or
observe any covenant contained in SECTIONS 6.5, 6.9, 7.2, 7.3, 7.4, 7.7,
8.9, 9.2, 9.3, 9.4, 9.5, 9.6 through 9.14, 9.15, 9.16, 9.18, 9.20 or
9.22 through 9.24 hereof on the date that Obligors are required to
perform, keep or observe such covenant;
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(c) any Obligor shall fail or neglect to perform, keep or
observe any covenant contained in SECTION 7.1 hereof and the breach of
such covenant is not cured to Agents' satisfaction within 1 Business Day
after the sooner to occur of any Senior Officer's receipt of notice of
such breach from either Agent or the date on which such failure or
neglect first becomes known to any Senior Officer; provided, however,
that such notice and opportunity to cure shall not apply in the case of
any failure to perform, keep or observe such covenant which is a willful
and knowing breach by Obligors; provided further, however, that
Borrowers shall not be entitled to obtain any Loans or Letter of Credit
Accommodations on any day for which they have not provided a Borrowing
Base Certificate as required by SECTION 7.1 hereof;
(d) any Obligor shall fail or neglect to perform, keep or
observe any covenant contained in this Agreement or in any of the other
DIP Financing Documents (other than a covenant that is dealt with
specifically elsewhere in SECTION 10.1 hereof) and the breach of such
other covenant is not cured to Agents' satisfaction within 15 days after
the sooner to occur of any Senior Officer's receipt of notice of such
breach from either Agent or the date on which such failure or neglect
first becomes known to any Senior Officer; provided, however, that such
notice and opportunity to cure shall not apply in the case of any
failure to perform, keep or observe any covenant which is not capable of
being cured at all or within such 15-day period (or to the extent
provided above, 15-day period) or which is a willful and knowing breach
by Obligors;
(e) any representation, warranty or statement of fact made
by Obligor to either or both Agents or any Lender in this Agreement, the
other DIP Financing Documents or any other agreement, schedule,
confirmatory assignment or otherwise shall when made or deemed made be
false or misleading in any material respect;
(f) any Guarantor revokes, terminates or fails to perform
its guaranty obligations set forth in this Agreement;
(g) any judgment for the payment of money is rendered
against any Borrower or other Obligor in excess of $250,000 in any one
case or in excess of $1,000,000 in the aggregate and shall remain
undischarged or unvacated for a period in excess of thirty (30) days or
execution shall at any time not be effectively stayed, or any judgment
other than for the payment of money, or injunction, attachment,
garnishment or execution is rendered against any Borrower or other
Obligor or any of their assets;
(h) any Borrower or other Obligor, which is a partnership,
limited liability company, limited liability partnership or a
corporation, dissolves or suspends or discontinues doing business,
except as otherwise permitted herein;
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(i) Obligors shall fail to comply with any of the provisions
of the Financing Orders; a trustee shall be appointed in any Chapter 11
Case; an examiner shall be appointed in any Chapter 11 Case with
enlarged powers (powers beyond those set forth in Section 1106(a)(3) and
(4) of the Bankruptcy Code) under Section 1106(b) of the Bankruptcy
Code; any Chapter 11 Case shall be dismissed or converted to a case
under Chapter 7; any Obligor or any Affiliate of an Obligor shall obtain
Court approval of a disclosure statement for a Reorganization Plan other
than an Acceptable Plan or a Confirmation Order shall be entered with
respect to a Reorganization Plan proposed by a Person other than
Obligors if such Reorganization Plan is not an Acceptable Plan; there
shall be filed by any Obligor any motion to sell all or a substantial
part of the Collateral on terms that are not acceptable to Agents in
their sole discretion; any substantial part of any Obligor's assets,
other than the Collateral, shall be sold by such Obligor and, as a
consequence of such sale, any Obligor is not able to continue its
business operations in substantially the same manner as was conducted by
it prior to such sale; any Obligor shall file any motion to alter,
amend, vacate, supplement, modify, or reconsider, in any respect, either
of the Financing Orders or, without each Agents' prior written consent,
either of the Financing Orders is amended, vacated, stayed, reversed or
otherwise modified; the Court shall enter an order granting to any
Person other than Collateral Agent relief from the automatic stay to
foreclose upon a Lien with respect to any Property of Obligors that has
an aggregate book value in excess of $100,000 or with respect to any of
the Collateral (without regard to its value), unless such relief has
been consented to by Borrowers, is based upon a Permitted Lien with
priority over the Liens of Agents and Lenders, and will not have a
Material Adverse Effect; an order shall be entered for the substantive
consolidation of the Estate of any Borrower with any other Person;
Borrowers shall not have sufficient Availability on any date to pay, or
shall otherwise fail to pay as and when due and payable, all
administrative costs or expenses incurred by it in the Chapter 11 Cases
that are due and payable on such date; any Obligor shall file a motion
or other request with the Court seeking authority to use any cash
proceeds of the Collateral or to obtain any financing under Section
364(d) of the Bankruptcy Code secured by a priming Lien, or Lien of
equal priority with Agents' Liens, upon any Collateral, in each case
without Agents' prior written consent; Obligors shall challenge the
validity, perfection or priority of any Liens of Collateral Agent
securing the Pre-Petition Debt or the validity or enforceability of
any of the Pre-Petition Loan Documents; or, without Agents' consent,
any Obligor shall discontinue all or any material part of its business
operations or commence an orderly wind-down or liquidation of any
material part of the Collateral;
(j) any covenant, agreement or obligation of Obligors
contained in or evidenced by any of the DIP Financing Documents shall
cease to be enforceable or shall be determined to be unenforceable in
accordance with its terms; Obligors shall deny or disaffirm its
obligations under any of the DIP Financing Documents or Liens granted in
connection therewith; or the Liens granted in any of the Collateral
shall be determined to be voidable, invalid or subordinated or shall be
determined, with respect to any material part of the Collateral, to be
unperfected or not to have the priority contemplated by this Agreement;
(k) there shall be a material adverse change in the business
or assets or prospects of Obligors taken as a whole after the date
hereof; or
(l) there shall occur or exist an event of default under any
of the other DIP Financing Documents.
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10.2 REMEDIES.
(a) At any time an Event of Default exists or has occurred and is
continuing, but subject at all times to any limitations in the Financing Orders,
Agents and Lenders shall have all rights and remedies available under the
Pre-Petition Loan Documents to enforce collection of any Pre-Petition Debt then
outstanding as well as the rights and remedies provided in this Agreement, the
other DIP Financing Documents, the Financing Orders, the UCC and other
Applicable Law to enforce collection of the Obligations, all of which rights and
remedies may be exercised without notice to or consent by any Borrower or other
Obligor, except as such notice or consent is expressly provided for hereunder or
required by Applicable Law. All rights, remedies and powers granted to Agents
and Lenders hereunder, under any of the other DIP Financing Documents, the
Pre-Petition Loan Documents, the Financing Orders, the UCC or other Applicable
Law, are cumulative, not exclusive and enforceable, in Agents' and Lenders'
discretion, alternatively, successively, or concurrently on any one or more
occasions, and shall include the right to apply to a court of equity for an
injunction to restrain a breach or threatened breach by Obligors of this
Agreement or any of the other DIP Financing Documents. Agents and Lenders may,
at any time or times, proceed directly against any or all Borrowers or other
Obligor to collect the principal balance of the Pre-Petition Debt or Obligations
and all interest accrued thereon without prior recourse to any Collateral.
(b) Without limiting the foregoing, at any time an Event of
Default exists or has occurred and is continuing, either or both of Agents may,
in their discretion (and shall if requested to do so by Required Lenders) and
without limitation, (i) terminate the DIP Facility pursuant to SECTION 14(A)
hereof and the Commitments, (ii) accelerate the payment of the principal balance
of the Obligations and all interest accrued thereon and demand immediate payment
thereof to Collateral Agent for the Pro Rata benefit of Lenders, (ii) with or
without judicial process or the aid or assistance of others, enter upon any
premises on or in which any of the Collateral may be located and take possession
of the Collateral or complete processing, manufacturing and repair of all or any
portion of the Collateral, (iii) require Obligors, at Borrowers' expense, to
assemble and make available to Collateral Agent any part or all of the
Collateral at any place and time designated by Collateral Agent, (iv) collect,
foreclose, receive, appropriate, setoff and realize upon any and all Collateral,
(v) remove any or all of the Collateral from any premises on or in which the
same may be located for the purpose of effecting the sale, foreclosure or other
disposition thereof or for any other purpose, (vi) sell, lease, transfer,
assign, deliver or otherwise dispose of any and all Collateral (including
entering into contracts with respect thereto, public or private sales at any
exchange, broker's board, at any office of Collateral Agent or elsewhere) at
such prices or terms as Agents may deem reasonable, for cash, upon credit or for
future delivery, with Collateral Agent having the right to purchase the whole or
any part of the Collateral at any such public sale, all of the foregoing being
free from any right or equity of redemption of Obligors, which right or equity
of redemption is hereby expressly waived and released by each Obligor, (vii)
exercise all of Agents' rights and remedies under the Mortgages with respect to
any Real Esate, and/or (viii) terminate the DIP Facility. If any of the
Collateral is sold or leased by Collateral Agent upon credit terms or for future
delivery, the Obligations shall not be reduced as a result thereof until payment
therefor is finally collected by Collateral Agent. If notice of disposition of
Collateral is required by law, five (5) days prior notice by Collateral Agent to
Borrowers designating the time and place of any public sale or the time after
which any private sale or other intended disposition of Collateral is to be
made, shall be deemed to be reasonable notice thereof and Obligors waive any
other notice. In the event Collateral Agent institutes an action to recover any
Collateral or seeks recovery of any Collateral by way of prejudgment remedy,
Obligors waive the posting of any bond which might otherwise be required.
(c) Collateral Agent may apply the cash proceeds of Collateral
actually received by Collateral Agent from any sale, lease, foreclosure or other
disposition of the Collateral to payment of the Obligations, in whole or in part
and in such order as Agents and Lenders may elect, whether or not then due.
Borrowers shall
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remain liable to Agents and Lenders for the payment of any deficiency with
interest at the highest rate provided for herein and all costs and expenses of
collection or enforcement, including reasonable attorneys' fees and legal
expenses.
(d) Without limiting the foregoing, upon the occurrence of a
Default or Event of Default, Agents and Lenders may, at their option, without
notice, (i) cease making Loans or arranging for Letter of Credit Accommodations
or reduce the lending formulas or amounts of Revolving Loans and Letter of
Credit Accommodations available to Borrowers and/or (ii) terminate any provision
of this Agreement providing for any future Loans or Letter of Credit
Accommodations to be made by Agents and Lenders to Borrowers.
(e) Each Agent is hereby irrevocably granted a license or other
right to use, without charge, each Obligor's labels, patents, copyrights, rights
of use of any name, trade secrets, tradenames, trademarks and advertising
matter, or any Property of a similar nature, as it pertains to the Collateral,
in advertising for sale and selling any Collateral and Obligor's rights under
all licenses and all franchise agreements shall inure to Agents' and Lenders'
benefit. Any proceeds realized from the sale of any Collateral, to the extent
the same are not applied to the Pre-Petition Debt, may be applied to the
Obligations, after allowing 2 Business Days for collection, to principal,
interest, fees and expenses (including Extraordinary Expenses) in such order and
manner as Agent and Lenders, in their sole discretion, may determine, provided
that, as among Agent and Lenders, all payments and proceeds shall be allocated
as provided in Section 6.10 of this Agreement.
SECTION 11. AGENTS
11.1 APPOINTMENT, AUTHORITY AND DUTIES OF AGENTS.
(a) Each Lender hereby irrevocably appoints and designates
Congress to serve as Administrative Agent on the terms and subject to the
conditions set forth herein and hereby appoints and designates Fleet National
Bank to serve as Collateral Agent on the terms and subject to the conditions set
forth herein. Each Agent may, and each Lender by its acceptance of a Note shall
be deemed irrevocably to have authorized each Agent to, enter into all DIP
Financing Documents to which such Collateral Agent is to be a party on the
Closing Date and all amendments thereto and all other DIP Financing Documents
thereafter executed by any Obligor, and to exercise such rights and powers under
this Agreement and the other DIP Financing Documents as are specifically
delegated to such Agent by the terms hereof and thereof, together with such
other rights and powers as are reasonably incidental thereto. Each Lender agrees
that any action taken by either or both Agents or the Required Lenders in
accordance with the provisions of this Agreement or the other DIP Financing
Documents, and the exercise by either or both Agents or the Required Lenders of
any of the powers set forth herein or therein, together with such other powers
as are reasonably incidental thereto, shall be authorized and binding upon all
Lenders.
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(b) Collateral Agent shall have the sole and exclusive right and
authority (subject to the direction of the Required Lenders) to (i) act as the
disbursing and collecting agent for Lenders with respect to all payments and
collections arising in connection with this Agreement and the other DIP
Financing Documents; (ii) execute and deliver as Collateral Agent each DIP
Financing Document to which it is a party and accept delivery of each such
agreement delivered by Borrowers or any other Obligor; (iii) act as collateral
agent for Lenders for purposes of the perfection of all security interests and
Liens created by this Agreement or the other DIP Financing Documents with
respect to all material items of the Collateral and, subject to the direction of
the Required Lenders, for all other purposes stated therein, provided, that
Collateral Agent hereby appoints, authorizes and directs each Lender to act as a
collateral sub-agent for Collateral Agent and the other Lenders for purposes of
the perfection of all security interests and Liens with respect to Borrowers'
Deposit Accounts maintained with, and all cash and cash equivalents held by,
such Lender; (iv) subject to the direction of the Required Lenders, manage,
supervise or otherwise deal with the Collateral; and (v) except as may be
otherwise specifically restricted by the terms of this Agreement and subject to
the direction of the Required Lenders, exercise all remedies given to Collateral
Agent with respect to any of the Collateral under the DIP Financing Documents
relating thereto, Applicable Law or otherwise.
(c) The duties of each Agent shall be ministerial and
administrative in nature, and neither Agent shall have by reason of this
Agreement or any other DIP Financing Document a fiduciary relationship with any
Lender (or any Lender's Participants). Unless and until its authority to do so
is revoked in writing by the Required Lenders, Agents alone shall be authorized
to determine whether any Accounts or Inventory constitute Eligible Accounts or
Eligible Inventory (basing such determination in each case upon the meanings set
forth herein), or whether to impose, release, increase or decrease any reserve,
and to exercise its own credit judgment in connection therewith, which
determinations and judgments, if exercised in good faith, shall exonerate each
Agent from any liability to Lenders or any other Person for any errors in
judgment.
(d) Neither Agent (which term, as used in this sentence, shall
include reference to each Agent's Affiliates and to the officers, directors,
employees and agents of each Agent's Affiliates) shall: (a) have any duties or
responsibilities except those expressly set forth in this Agreement and the
other DIP Financing Documents or (b) be required to take, initiate or conduct
any litigation, foreclosure or collection proceedings hereunder or under any of
the other DIP Financing Documents except to the extent directed to do so by the
Required Lenders during the continuance of any Event of Default. The conferral
upon Agents of any right hereunder shall not imply a duty on such Agent's part
to exercise any such right unless instructed to do so by the Required Lenders in
accordance with this Agreement.
(e) Each Agent may perform any of its duties by or through its
agents and employees and may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Borrowers shall promptly
(and in any event, ON DEMAND) reimburse each Agent for all reasonable expenses
(including all Extraordinary Expenses) incurred by such Agent pursuant to any of
the provisions hereof or of any of the other DIP Financing Documents or in the
execution of any of such Agent's duties hereby or thereby created or in the
exercise of any right or power herein or therein imposed or conferred upon it or
Lenders (excluding, however, general overhead expenses), and each Lender agrees
promptly to pay to such Agent, ON DEMAND, such Lender's Pro Rata share of any
such reimbursement for expenses (including Extraordinary Expenses) that is not
timely made by Borrowers to such Agent.
(f) The rights, remedies, powers and privileges conferred upon
Agents hereunder and under the other DIP Financing Documents may be exercised by
Agents without the necessity of the joinder of any other parties unless
otherwise required by Applicable Law. If Agents shall request instructions from
the Required
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Lenders with respect to any act or action (including the failure to act) in
connection with this Agreement or any of the other DIP Financing Documents,
Agents shall be entitled to refrain from such act or taking such action unless
and until Agents shall have received instructions from the Required Lenders; and
Agents shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against an Agent as a result of such Agent acting or refraining from
acting hereunder or under any of the DIP Financing Documents pursuant to or in
accordance with the instructions of the Required Lenders except for such Agent's
own gross negligence or willful misconduct in connection with any action taken
by it. Notwithstanding anything to the contrary contained in this Agreement,
neither Agent shall be required to take any action that is in its opinion
contrary to Applicable Law or the terms of any of the DIP Financing Documents or
that would in its reasonable opinion subject it or any of its officers,
employees or directors to personal liability; provided, however, that if an
Agent shall fail or refuse to take action that is not contrary to Applicable Law
or to any of the terms of any of the DIP Financing Documents even if such action
in such Agent's opinion would subject it to potential liability, the Required
Lenders may remove such Agent and appoint a successor Agent in the same manner
and with the same effects as is provided in this Agreement with respect to such
Agent's resignation.
(g) Each Agent shall promptly, upon receipt thereof, forward to
each Lender (i) copies of any significant written notices, reports, certificates
and other information received by such Agent from any Obligor (but only if and
to the extent such Obligor is not required by the terms of the DIP Financing
Documents to supply such information directly to Lenders) and (ii) copies of the
results of any field audits by such Agent with respect to Borrowers. No Agent
shall have any liability to any Lender for any errors in or omissions from any
field audit or other examination of Borrowers or the Collateral, unless such
error or omission was the direct result of such Agent's willful misconduct.
11.2 AGREEMENTS REGARDING COLLATERAL. Lenders hereby irrevocably
authorize Collateral Agent, at its option and in its discretion, to release any
Lien upon any Collateral (i) upon the termination of the DIP Facility and
payment or satisfaction of all of the Obligations or (ii) constituting Equipment
sold or disposed of in accordance with the terms of this Agreement if Borrowers
certifies to Agents that the disposition is made in compliance with the terms of
this Agreement (and Collateral Agent may rely conclusively on any such
certificate, without further inquiry). Except as expressly authorized or
required by this Agreement or Applicable Law, Collateral Agent shall not execute
any release or termination of any Lien upon any of the Collateral without the
prior written authorization of all Lenders. Neither Agent shall have any
obligation whatsoever to any of the Lenders to assure that any of the Collateral
exists or is owned by Obligors or is cared for, protected or insured or has been
encumbered, or that Collateral Agent's Liens have been properly or sufficiently
or lawfully created, perfected, protected or enforced or entitled to any
particular priority or to exercise at any duty of care with respect to any of
the Collateral.
11.3 RELIANCE BY AGENTS. Each Agent shall be entitled to rely, and
shall be fully protected in so relying, upon any certification, notice or other
communication (whether given by telephone, telex, telegram, telecopier message
or cable) believed by it to be genuine and correct and to have been signed, sent
or made by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts selected
by such Agent. As to any matters not expressly provided for by this Agreement or
any of the other DIP Financing Documents, such Agent shall in all cases be fully
protected in acting or refraining from acting hereunder and thereunder in
accordance with the instructions of the Required Lenders, and such instructions
of the Required Lenders and any action taken or failure to act pursuant thereto
shall be binding upon Lenders.
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11.4 ACTION UPON DEFAULT. Neither Agent shall be deemed to have
knowledge of the occurrence of a Default or an Event of Default unless it has
received written notice from a Lender or Borrowers specifying the occurrence and
nature of such Default or Event of Default. If an Agent shall receive such a
notice of a Default or an Event of Default or shall otherwise acquire actual
knowledge of any Default or Event of Default, such Agent shall promptly notify
Lenders in writing and such Agent shall take such action and assert such rights
under this Agreement and the other DIP Financing Documents, or shall refrain
from taking such action and asserting such rights, as the Required Lenders shall
direct from time to time. If any Lender shall receive a notice of a Default or
an Event of Default or shall otherwise acquire actual knowledge of any Default
or Event of Default, such Lender shall promptly notify Agents and the other
Lenders in writing. As provided in SECTION 11.3 hereof, neither Agent shall be
subject to any liability by reason of acting or refraining to act pursuant to
any request of the Required Lenders except for its own willful misconduct or
gross negligence in connection with any action taken by it. Before directing an
Agent to take or refrain from taking any action or asserting any rights or
remedies under this Agreement and the other DIP Financing Documents on account
of any Event of Default, the Required Lenders shall consult with and seek the
advice of (but without having to obtain the consent of) each other Lender, and
promptly after directing such Agent to take or refrain from taking any such
action or asserting any such rights, the Required Lenders will so advise each
other Lender of the action taken or refrained from being taken and, upon request
of any Lender, will supply information concerning actions taken or not taken. In
no event shall the Required Lenders, without the prior written consent of each
Lender, direct either Agent to accelerate and demand payment of the Loans held
by one Lender without accelerating and demanding payment of all other Loans or
to terminate the Commitments of one or more Lenders without terminating the
Commitments of all Lenders. Each Lender agrees that, except as otherwise
provided in any of the DIP Financing Documents, it will not take any legal
action or institute any action or proceeding against any Obligor with respect to
any of the Obligations or Collateral or accelerate or otherwise enforce its
portion of the Obligations unless consented to in writing by Agents and the
Required Lenders. Without limiting the generality of the foregoing, none of
Lenders may exercise any right that it might otherwise have under Applicable Law
to credit bid at foreclosure sales, UCC sales or other similar sales or
dispositions of any of the Collateral except as authorized by the Required
Lenders. Notwithstanding anything to the contrary set forth in this SECTION 11.4
or elsewhere in this Agreement, each Lender shall be authorized to take such
action to preserve or enforce its rights against any Obligor where a deadline or
limitation period is otherwise applicable and would, absent the taken of
specified action, bar the enforcement of Obligations held by such Lender against
such Obligor, including the filing of proofs of claim in any case under the
Bankruptcy Code or in any other insolvency proceeding. Notwithstanding anything
to the contrary contained in this SECTION 11.4 or elsewhere in this Agreement,
each Lender shall be authorized to take such action to preserve or enforce its
rights against any Obligor where a deadline or limitation period is otherwise
applicable and would, absent the taking of specified action, bar the enforcement
of Obligations held by such Lender against such Obligor, including the filing of
proofs of claim in any insolvency proceeding.
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11.5 RATABLE SHARING. If any Lender shall obtain any payment or
reduction (including any amounts received as adequate protection of a bank
account deposit treated as cash collateral under the Bankruptcy Code) of any
Obligation of Borrowers hereunder (whether voluntary, involuntary, through the
exercise of any right of set-off or otherwise) in excess of its Pro Rata share
of payments or reductions on account of such Obligations obtained by all of the
Lenders, such Lender shall forthwith (i) notify the other Lenders and Agents of
such receipt and (ii) purchase from the other Lenders such participations in the
affected Obligations as shall be necessary to cause such purchasing Lenders to
share the excess payment or reduction, net of costs incurred in connection
therewith, on a Pro Rata basis, provided that if all or any portion of such
excess payment or reduction is thereafter recovered from such purchasing Lenders
or additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or such additional costs,
but without interest. Borrowers agree that any Lender so purchasing a
participation from another Lender pursuant to this SECTION 11.5 may, to the
fullest extent permitted by Applicable Law, exercise all of its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of Borrowers in the amount of
such participation.
11.6 INDEMNIFICATION OF AGENTS.
(a) Each Lender agrees to indemnify and defend the Agent
Indemnitees (to the extent not reimbursed by Borrowers under this Agreement, but
without limiting the indemnification obligation of Borrowers under this
Agreement), on a Pro Rata basis, and to hold each of the Agent Indemnitees
harmless from and against, any and all Claims which may be imposed on, incurred
by or asserted against any of the Agent Indemnitees in any way related to or
arising out of this Agreement or any of the other DIP Financing Documents or any
other document contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including the costs and expenses
which Borrowers are obligated to pay under SECTION 13.5 hereof or amounts Agent
may be called upon to pay in connection with any lockbox or Blocked Account
arrangement contemplated hereby) or the enforcement of any of the terms hereof
or thereof or of any such other documents, provided that no Lender shall be
liable to any Agent Indemnitee for any of the foregoing to the extent that they
result solely from the willful misconduct or gross negligence of such Agent
Indemnitee.
(b) Without limiting the generality of the foregoing provisions
of this SECTION 11.6, if an Agent should be sued by any receiver, trustee in
bankruptcy, debtor-in-possession or other Person on account of any alleged
preference or fraudulent transfer received or alleged to have been received from
Borrowers or any other Obligor as the result of any transaction under the DIP
Financing Documents, then in such event any monies paid by such Agent in
settlement or satisfaction of such suit, together with all Extraordinary
Expenses incurred by such Agent in the defense of same, shall be promptly
reimbursed to such Agent by Lenders to the extent of each Lender's Pro Rata
share.
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(c) Without limiting the generality of the foregoing provisions
of this SECTION 11.6, if at any time (whether prior to or after the Commitment
Termination Date) any action or proceeding shall be brought against any of the
Agent Indemnitees by an Obligor or by any other Person claiming by, through or
under an Obligor, to recover damages for any act taken or omitted by an Agent
under any of the DIP Financing Documents or in the performance of any rights,
powers or remedies of such Agent against any Obligor, any account debtor, the
Collateral or with respect to any Loans, or to obtain any other relief of any
kind on account of any transaction involving any Agent Indemnitees under or in
relation to any of the DIP Financing Documents, each Lender agrees to indemnify,
defend and hold the Agent Indemnitees harmless with respect thereto and to pay
to the Agent Indemnitees such Lender's Pro Rata share of such amount as any of
the Agent Indemnitees shall be required to pay by reason of a judgment, decree,
or other order entered in such action or proceeding or by reason of any
compromise or settlement agreed to by the Agent Indemnitees, including all
interest and costs assessed against any of the Agent Indemnitees in defending or
compromising such action, together with attorneys' fees and other legal expenses
paid or incurred by the Agent Indemnitees in connection therewith; provided,
however, that no Lender shall be liable to any Agent Indemnitee for any of the
foregoing to the extent that they arise solely from the willful misconduct or
gross negligence of such Agent Indemnitee. In Agents' discretion, Agents may
also reserve for or satisfy any such judgment, decree or order from proceeds of
Collateral prior to any distributions therefrom to or for the account of
Lenders.
11.7 LIMITATION ON RESPONSIBILITIES OF AGENTS. Each Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it shall
have received further assurances to its satisfaction from Lenders of their
indemnification obligations under SECTION 11.6 hereof against any and all Claims
which may be incurred by such Agent by reason of taking or continuing to take
any such action. Neither Agent shall be liable to Lenders (or any Lender's
Participants) for any action taken or omitted to be taken under or in connection
with this Agreement or the other DIP Financing Documents except as a result of
actual gross negligence or willful misconduct on the part of such Agent. Neither
Agent assumes any responsibility for any failure or delay in performance or
breach by any Obligor or any Lender of its obligations under this Agreement or
any of the other DIP Financing Documents. Neither Agent makes to Lenders, and no
Lender makes to either or both Agents or the other Lenders, any express or
implied warranty, representation or guarantee with respect to the Loans, the
Collateral, the DIP Financing Documents or any Obligor. Neither Agent nor any of
their respective agents, attorneys or employees shall be responsible to Lenders,
and no Lender nor any of its agents, attorneys or employees shall be responsible
to Agents or the other Lenders, for: (i) any recitals, statements, information,
representations or warranties contained in any of the DIP Financing Documents or
in any certificate or other document furnished pursuant to the terms hereof;
(ii) the execution, validity, genuineness, effectiveness or enforceability of
any of the DIP Financing Documents; (iii) the validity, genuineness,
enforceability, collectibility, value, sufficiency or existence of any
Collateral, or the perfection or priority of any Lien therein; or (iv) the
assets, liabilities, financial condition, results of operations, business,
creditworthiness or legal status of any Obligor or any account debtor. Neither
Agent shall have any obligation to any Lender to ascertain or inquire into the
existence of any Default or Event of Default, the observance or performance by
any Obligor of any of the duties or agreements of such Obligor under any of the
DIP Financing Documents or the satisfaction of any conditions precedent
contained in any of the DIP Financing Documents. Agents may consult with and
employ legal counsel, accountants and other experts and shall be entitled to act
upon, and shall be fully protected in any action taken in good faith reliance
upon, any advice given by such experts.
11.8 SUCCESSOR AGENTS AND CO-AGENTS.
(a) Subject to the appointment and acceptance of a successor
agent as provided below, an Agent may resign at any time by giving at least 30
days written notice thereof to the other Agent, each Lender and Borrowers. Upon
receipt of any notice such resignation, the Required Lenders, after prior
consultation with (but
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without having to obtain consent of) each Lender, shall have the right to
appoint a successor Agent which shall be (i) a Lender, (ii) a United States
based Affiliate of a Lender, or (iii) a commercial bank that is organized under
the laws of the United States or of any State thereof and has a combined capital
surplus of at least $100,000,000 (or an asset based lending affiliate of any
such bank) and is reasonably acceptable to Borrowers (and for purposes hereof,
any successor to Congress or Fleet National Bank shall be deemed acceptable to
Borrowers). Upon the acceptance by a successor Agent of an appointment as an
Agent hereunder, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
without further act, deed or conveyance, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this SECTION 11 (including the
provisions of SECTION 11.6 hereof) shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent. Notwithstanding anything to the contrary contained in this Agreement, any
successor by merger or acquisition of the stock or assets of Congress or Fleet
National Bank shall continue to be Administrative Agent or Collateral Agent,
respectively, hereunder unless such successor shall resign in accordance with
the provisions hereof.
(b) It is the purpose of this Agreement that there shall be no
violation of any Applicable Law denying or restricting the right of financial
institutions to transact business as agent or otherwise in any jurisdiction. It
is recognized that, in case of litigation under any of the DIP Financing
Documents, or in case an Agent deems that by reason of present or future laws of
any jurisdiction such Agent might be prohibited from exercising any of the
powers, rights or remedies granted to such Agent or Lenders hereunder or under
any of the DIP Financing Documents or from holding title to or a Lien upon any
Collateral or from taking any other action which may be necessary hereunder or
under any of the DIP Financing Documents, such Agent may appoint an additional
Person as a separate collateral agent or co-collateral agent which is not so
prohibited from taking any of such actions or exercising any of such powers,
rights or remedies. If an Agent shall appoint an additional Person as a separate
collateral agent or co-collateral agent as provided above, each and every
remedy, power, right, claim, demand or cause of action intended by any of the
DIP Financing Documents to be exercised by or vested in or conveyed to such
Agent with respect thereto shall be exercisable by and vested in such separate
collateral agent or co-collateral agent, but only to the extent necessary to
enable such separate collateral agent or co-collateral agent to exercise such
powers, rights and remedies, and every covenant and obligation necessary to the
exercise thereof by such separate collateral agent or co-collateral agent shall
run to and be enforceable by either of them. Should any instrument from Lenders
be required by the separate collateral agent or co-collateral agent so appointed
by an Agent in order more fully and certainly to vest in and confirm to him or
it such rights, powers, duties and obligations, any and all of such instruments
shall, on request, be executed, acknowledged and delivered by Lenders whether or
not a Default or Event of Default then exists. In case any separate collateral
agent or co-collateral agent, or a successor to either, shall die, become
incapable of acting, resign or be removed, all the estates, properties, rights,
powers, duties and obligations of such separate collateral agent or
co-collateral agent, so far as permitted by Applicable Law, shall vest in and be
exercised by the Collateral Agent until the appointment of a new collateral
agent or successor to such separate collateral agent or co-collateral agent.
11.9 CONSENTS, AMENDMENTS AND WAIVERS.
(a) No amendment or modification of any provision of this
Agreement shall be effective without the prior written agreement of the Required
Lenders and Borrowers, and no waiver of any Default or Event of Default shall be
effective without the prior written consent of the Required Lenders; provided,
however, that, (i) without the prior written consent of Collateral Agent, no
amendment or waiver shall be effective with respect to any provision in any of
the DIP Financing Documents (including this SECTION 11), to the extent such
provision relates to the rights, duties or immunities of Collateral Agent; (ii)
without the prior written consent of Administrative Agent, no amendment or
waiver shall be effective with respect to any provision in any of the DIP
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Financing Documents (including this SECTION 11), to the extent such provision
relates to the rights, duties or immunities of Administrative Agent; (iii)
without the prior written consent of Fleet Capital and Congress, no waiver or
amendment with respect to the provisions of Section 2.2 OR 6.1(C) shall be
effective, and without the prior written consent of Fleet Capital, no waiver or
amendment of SECTION 6.1(C) shall be effective; (iv) without the prior consent
of all Lenders, no waiver of any Default or Event of Default shall be effective
if the Default or Event of Default relates to Obligors' failure to observe or
perform any covenant that may not be amended without the unanimous written
consent of Lenders as hereinafter set forth in this SECTION 11.9; and (v) the
written agreement of all Lenders (except defaulting Lenders as provided in
SECTION 6.2 of this Agreement) shall be required to effectuate any amendment,
modification or waiver that would (a) alter the provisions of SECTIONS 2.1(A),
3.1(F), 6.9, 10, 11 or 14, the definitions of "Availability Reserve," and the
other defined terms used in such definitions, "Pro Rata," "Required Lenders" or
any provision of this Agreement obligating Agents to take certain actions at the
direction of the Required Lenders, or any provision of any of the DIP Financing
Documents regarding the Pro Rata treatment or obligations of Lenders; (b)
increase or otherwise modify any provision of any Lender's Commitment (other
than to reduce proportionately each Lender's Commitment in connection with any
overall reduction in the amount of this Agreement); (c) alter or amend (other
than to increase) the rate of interest payable in respect of the Loans (except
as may be expressly authorized by the DIP Financing Documents or as may be
necessary, in Collateral Agent's judgement, to comply with Applicable Law); (d)
waive or agree to defer collection of any fee, termination charge or other
charge provided for under any of the DIP Financing Documents or the unused line
fee in SECTION 3 hereof; (e) subordinate the payment of any of the Obligations
to any other debt or the priority of any Liens granted to Collateral Agent under
any of the DIP Financing Documents to Liens granted to any other Person, except
as currently provided in or contemplated by the DIP Financing Documents in
connection with Borrowers' incurrence of permitted purchase money debt, and
except for Liens granted by an Obligor to financial institutions with respect to
amounts on deposit with such financial institutions to cover returned items,
processing and analysis charges and other charges in the ordinary course of
business that relate to deposit accounts with such financial institutions; (f)
alter the time or amount of repayment of any of the Loans or waive any Event of
Default resulting from nonpayment of the Loans on the due date thereof (or
within any applicable period of grace); (g) forgive any of the Obligations,
except any portion of the Obligations held by a Lender who consents in writing
to such forgiveness; or (h) release any Obligor from liability for any of the
Obligations. No Lender shall be authorized to amend or modify any Note held by
it, unless such amendment or modification is consented to in writing by all
Lenders; provided, however, that the foregoing shall not be construed to
prohibit an amendment or modification to any provision of this Agreement that
may be effected pursuant to this SECTION 11.9 by agreement of Borrowers and the
Required Lenders even though such an amendment or modification results in an
amendment or modification of the Notes by virtue of the incorporation by
reference in each of the Notes of this Agreement. The making of any Loans
hereunder by any Lender during the existence of a Default or Event of Default
shall not be deemed to constitute a waiver of such Default or Event of Default.
Any waiver or consent granted by Lenders hereunder shall be effective only if in
writing and then only in the specific instance and for the specific purpose for
which it was given.
(b) In connection with any proposed amendment to any of the DIP
Financing Documents or waiver of any of the terms thereof or any Default or
Event of Default thereunder, Borrowers shall not solicit, request or negotiate
for or with respect to any such proposed amendment or waiver of any of the
provisions of this Agreement or any of the other DIP Financing Documents unless
each Lender shall be informed thereof by Borrowers and shall be afforded an
opportunity of considering the same and supplied by Borrowers with sufficient
information to enable it to make an informed decision with respect thereto.
Borrowers will not, directly or indirectly, pay or cause to be paid any
remuneration or other thing of value, whether by way of supplemental or
additional interest, fee or otherwise, to any Lender (in its capacity as a
Lender hereunder) as consideration for or as an inducement to the consent to or
agreement by such Lender with any waiver or amendment of any of the
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terms and provisions of this Agreement or any of the other DIP Financing
Documents unless such remuneration or thing of value is concurrently paid, on
the same terms, on a Pro Rata basis to all Lenders.
11.10 DUE DILIGENCE AND NON-RELIANCE. Each Lender hereby acknowledges
and represents that it has, independently and without reliance upon Agents or
the other Lenders, and based upon such documents, information and analysis as it
has deemed appropriate, made its own credit analysis of each Obligor and its own
decision to enter into this Agreement and to fund the Loans to be made by it
hereunder and to purchase participations in the Letter of Credit Accommodations
pursuant to SECTION 2.2 hereof, and each Lender has made such inquiries
concerning the DIP Financing Documents, the Collateral and each Obligor as such
Lender feels necessary and appropriate, and has taken such care on its own
behalf as would have been the case had it entered into the other DIP Financing
Documents without the intervention or participation of the other Lenders or
Agents. Each Lender hereby further acknowledges and represents that the other
Lenders and Agents have not made any representations or warranties to it
concerning any Obligor, any of the Collateral or the legality, validity,
sufficiency or enforceability of any of the DIP Financing Documents. Each Lender
also hereby acknowledges that it will, independently and without reliance upon
the other Lenders or Agents, and based upon such financial statements, documents
and information as it deems appropriate at the time, continue to make and rely
upon its own credit decisions in making Loans and in taking or refraining to
take any other action under this Agreement or any of the other DIP Financing
Documents. Except for notices, reports and other information expressly required
to be furnished to Lenders by Collateral Agent hereunder, neither Agent shall
have any duty or responsibility to provide any Lender with any notices, reports
or certificates furnished to such Agent by any Obligor or any credit or other
information concerning the affairs, financial condition, business or Properties
of any Obligor (or any of its Affiliates) which may come into possession of such
Agent or any of such Agent's Affiliates.
11.11 REPRESENTATIONS AND WARRANTIES OF LENDERS. By its execution of
this Agreement, each Lender hereby represents and warrants to Borrowers, Agents
and the other Lenders that it has the power to enter into and perform its
obligations under this Agreement and the other DIP Financing Documents, and that
it has taken all necessary and appropriate action to authorize its execution and
performance of this Agreement and the other DIP Financing Documents to which it
is a party, each of which will be binding upon it and the obligations imposed
upon it herein or therein will be enforceable against it in accordance with the
respective terms of such documents.
11.12 REQUIRED LENDERS. As to any provisions of this Agreement or the
other DIP Financing Documents under which action may or is required to be taken
upon direction or approval of the Required Lenders, the direction or approval of
the Required Lenders shall be binding upon each Lender to the same extent and
with the same effect as if each Lender had joined therein. Notwithstanding
anything to the contrary contained in this Agreement, Borrowers shall not be
deemed to be a beneficiary of, or be entitled to enforce, sue upon or assert as
a defense to any of the Obligations, any provisions of this Agreement that
requires either or both Agents or any Lender to act, or conditions their
authority to act, upon the direction or consent of the Required Lenders; and any
action taken by an Agent or any Lender that requires the consent or direction of
the Required Lenders as a condition to taking such action shall, insofar as
Borrowers are concerned, be presumed to have been taken with the requisite
consent or direction of the Required Lenders.
11.13 SEVERAL OBLIGATIONS. The obligations and commitments of each
Lender under this Agreement and the other DIP Financing Documents are several
and neither Agents nor any Lender shall be responsible for the performance by
the other Lenders of its obligations or commitments hereunder or thereunder.
Notwithstanding any liability of Lenders stated to be joint and several to third
Persons under any of the DIP Financing Documents, such liability shall be
shared, as among Lenders, Pro Rata according to the respective Revolving
Commitments of Lenders.
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11.14 AGENTS IN THEIR INDIVIDUAL CAPACITIES. With respect to its
obligation to lend under this Agreement, the Revolving Loans made by it and each
Note issued to it, each Agent shall have the same rights and powers hereunder
and under the other DIP Financing Documents as any other Lender or holder of a
Note and may exercise the same as though it were not performing the duties
specified herein; and the terms "Lenders," "Required Lenders," or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its capacity as a Lender. Agents and their respective Affiliates may each
accept deposits, maintain deposits or credit balances for, invest in, lend money
to, act as trustee under indentures of, serve as financial advisor to, and
generally engage in any kind of business with Borrowers or any other Obligor, or
any Affiliate of Borrowers or any other Obligor, as if it were any other bank
and without any duty to account therefor to the other Lenders.
11.15 NO THIRD-PARTY BENEFICIARIES. Except as expressly provided in
SECTION 11.17 hereof, this Section 11 is not intended to confer any rights or
benefits upon Obligors or any other Person except Lenders and Agents, and no
Person (including Obligors) other than Lenders and Agents shall have any right
to enforce any of the provisions of this SECTION 11. As between Obligors and
Agents, any action that Agents may take or purport to take on behalf of Lenders
under any of the DIP Financing Documents shall be conclusively presumed to have
been authorized and approved by Lenders as herein provided.
11.16 NOTICE OF TRANSFER. Agents may deem and treat a Lender party to
this Agreement as the owner of such Lender's portion of the Revolving Loans for
all purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Lender has been received by Agents.
11.17 REPLACEMENT OF CERTAIN LENDERS. If a Lender ("Affected Lender")
shall have (i) failed to fund its Pro Rata share of any Revolving Loan requested
by Borrowers which such Lender is obligated to fund under the terms of this
Agreement and which such failure has not been cured, (ii) requested compensation
from Borrowers under SECTION 3.6 and 6.11 to recover increased costs or Taxes
incurred by such Lender (or its parent or holding company) which are not being
incurred generally by the other Lenders (or their respective parents or holding
companies), or (iii) delivered a notice hereunder claiming that such Lender is
unable to extend LIBOR Rate Loans to Borrowers for reasons not generally
applicable to the other Lenders, then, in any such case and in addition to any
other rights and remedies that Agents, any other Lender or Borrowers may have
against such Affected Lender, Borrowers or either Agent may make written demand
on such Affected Lender (with a copy to Agents in the case of a demand by
Borrowers and a copy to Borrowers in the case of a demand by Agents) for the
Affected Lender to assign, and such Affected Lender shall assign pursuant to one
or more duly executed Assignment and Acceptances within five (5) Business Days
after the date of such demand, to one or more Lenders willing to accept such
assignment or assignments, or to one or more Eligible Assignees designated by
either Agent, all of such Affected Lender's rights and obligations under this
Agreement (including its Revolving Commitments and all Revolving Loans owing to
it) in accordance with SECTION 12 hereof. Collateral Agent is hereby irrevocably
authorized to execute one or more Assignment and Acceptances as attorney-in-fact
for any Affected Lender which fails or refuses to execute and deliver the same
within five (5) Business Days after the date of such demand. The Affected Lender
shall be entitled to receive, in cash and concurrently with execution and
delivery of each such Assignment and Acceptance, all amounts owed to the
Affected Lender hereunder or under any other DIP Financing Document, including
the aggregate outstanding principal amount of the Revolving Loans owed to such
Lender, together with accrued interest thereon through the date of such
assignment. Upon the replacement of any Affected Lender pursuant to this SECTION
11.17, such Affected Lender shall cease to have any participation in,
entitlement to, or other right to share in the Liens of Collateral Agent in any
Collateral and such Affected Lender shall have no further liability to
Collateral Agent, any Lender or any other Person under any of the DIP Financing
Documents (except as provided in SECTION 11.6 hereof as to events or
transactions
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which occur prior to the replacement of such Affected Lender), including any
commitment to make Loans or purchase participations in Letter of Credit
Accommodations.
11.18 REMITTANCE OF PAYMENTS AND COLLECTIONS.
(a) All payments by any Lender to an Agent shall be made not
later than the time set forth elsewhere in this Agreement on the Business Day
such payment is due; provided, however, that if such payment is due ON DEMAND by
such Agent and such demand is made on the paying Lender after 11:00 a.m. on such
Business Day, then payment shall be made by 11:00 a.m. on the next Business Day.
Payment by an Agent to any Lender shall be made by wire transfer, promptly
following such Agent's receipt of funds for the account of such Lender and in
the type of funds received by such Agent; provided, however, that if Collateral
Agent receives such funds at or prior to 1:00 p.m., such Agent shall pay such
funds to such Lender by 2:00 p.m. on such Business Day, but if such Agent
receives such funds after 1:00 p.m., such Agent shall pay such funds to such
Lender by 2:00 p.m. on the next Business Day.
(b) With respect to the payment of any funds from an Agent to a
Lender or from a Lender to an Agent, the party failing to make full payment when
due pursuant to the terms hereof shall, ON DEMAND by the other party, pay such
amount together with interest thereon at the Federal Funds Rate. In no event
shall Borrowers be entitled to receive any credit for any interest paid by an
Agent to any Lender, or by any Lender to an Agent, at the Federal Funds Rate as
provided herein.
(c) If an Agent pays any amount to a Lender in the belief or
expectation that a related payment has been or will be received by such Agent
from an Obligor and such related payment is not received by such Agent, then
such Agent shall be entitled to recover such amount from each Lender that
receives such amount. If an Agent determines at any time that any amount
received by it under this Agreement or any of the other DIP Financing Documents
must be returned to an Obligor or paid to any other Person pursuant to any
Applicable Law, court order or otherwise, then, notwithstanding any other term
or condition of this Agreement or any of the other DIP Financing Documents, such
Agent shall not be required to distribute such amount to any Lender.
SECTION 12. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
12.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of Borrowers, Agents and Lenders and their respective
successors and assigns (which, in the case of an Agent, shall include any
successor Agent appointed pursuant to SECTION 11 hereof), except that (i)
Borrowers shall not have the right to assign their rights or delegate
performance of any of their obligations under any of the DIP Financing Documents
and (ii) any assignment by any Lender must be made in compliance with SECTION 12
hereof. Collateral Agent may treat the payee of any Note as the owner thereof
for all purposes hereof unless and until such payee complies with SECTION 12 in
the case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with Collateral Agent. Any assignee or
transferee of a Note agrees by acceptance thereof to be bound by all the terms
and provisions of the DIP Financing Documents. Any request, authority or consent
of any Person, who at the time of making such request or giving such authority
or consent is the holder of a Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
12.2 PARTICIPATIONS.
(a) Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with Applicable Law, at any
time sell to one or more banks or other financial institutions (each a
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"Participant") participating interest in any of the Obligations owing to such
Lender, any Commitment of such Lender or any other interest of such Lender under
any of the DIP Financing Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
DIP Financing Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the holder of any Note for all purposes under the DIP
Financing Documents, all amounts payable by Borrowers under this Agreement and
any of the Notes shall be determined as if such Lender had not sold such
participating interests, and Borrowers and Agents shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under the DIP Financing Documents. If a Lender sells a participation
to a Person other than an Affiliate of such Lender, then such Lender shall give
prompt written notice thereof to Borrowers, the Agents and the other Lenders.
(b) Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the DIP Financing Documents other than an amendment,
modification or waiver with respect to any Loans or Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the stated interest rate or the stated rates at which fees are payable
with respect to any such Loan or Commitment, postpones the Commitment
Termination Date, or any date fixed for any regularly scheduled payment of
interest or fees on such Loan or Commitment, or releases from liability or any
Obligor or releases any substantial portion of the Collateral other than as
authorized by this Agreement.
(c) Benefit of Set-Off. Borrowers agree that each Participant
shall be deemed to have the right of set-off provided in SECTION 11.4 hereof in
respect of its participating interest in amounts owing under the DIP Financing
Documents to the same extent and subject to the same requirements under this
Agreement (including SECTION 12.5) as if the amount of its participating
interest were owing directly to it as a Lender under the DIP Financing
Documents, provided that each Lender shall retain the right of set-off provided
in SECTION 11.4 hereof with respect to the amount of participating interests
sold to each Participant. Lenders agree to share with each Participant, and each
Participant by exercising the right of set-off provided in SECTION 11.4 agrees
to share with each Lender, any amount received pursuant to the exercise of its
right of set-off, such amounts to be shared in accordance with SECTION 12.5
hereof as if each Participant were a Lender.
12.3 ASSIGNMENTS.
(a) Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with Applicable Law, at any time assign to any
Eligible Assignee all or any part of its rights and obligations under the DIP
Financing Documents, so long as (i) each assignment is of a constant, and not a
varying, ratable percentage of all of the transferor Lender's rights and
obligations under the DIP Financing Documents with respect to the Loans and the
Letter of Credit Accommodations and, in the case of a partial assignment, is in
a minimum principal amount of $3,000,000 and integral multiples of $100,000 in
excess of that amount; (ii) except in the case of an assignment in whole of a
Lender's rights and obligations under the DIP Financing Documents or an
assignment by one original signatory to this Agreement to another such
signatory, immediately after giving effect to any assignment, the aggregate
amount of this Agreement retained by the transferor Lender shall in no event be
less than $10,000,000; and (iii) the parties to each such assignment shall
execute and deliver to Collateral Agent, for its acceptance and recording, an
Assignment and Acceptance. No assignment shall become effective until such time
as notice thereof is given to Borrowers and Agents in substantially the form of
EXHIBIT H attached hereto. Nothing contained herein shall limit in any way the
right of Lenders to assign (i) to any Eligible Assignee all of their rights and
obligations under the DIP Financing Documents or (ii) all or any portion of the
Loans owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors and any
Operating Circular
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issued by such Federal Reserve Bank, provided that in the case of this clause
(ii) any payment in respect of such assigned Loans made by Borrowers to the
assigning Lender in accordance with the terms of this Agreement shall satisfy
Borrowers' obligations hereunder in respect of such assigned Loans to the extent
of such payment, but no such assignment shall release the assigning Lender from
its obligations hereunder.
(b) Effect; Effective Date. Upon (i) delivery to Collateral Agent
of a notice of assignment substantially in the form attached as EXHIBIT H
hereto, together with any consents required by SECTION 12.3(A), and (ii) payment
of a $5,000 fee to the Collateral Agent for processing any assignment to an
Eligible Assignee that is not an Affiliate of the transferor Lender, such
assignment shall become effective on the effective date specified in such notice
of assignment. On and after the effective date of such assignment, such Eligible
Assignee shall for all purposes be a Lender party to this Agreement and any
other DIP Financing Document executed by the Lenders and shall have all the
rights and obligations of the Lenders under the DIP Financing Documents to the
same extent as if it were an original party thereto, and no further consent or
action by Borrowers, Lenders or Agents shall be required to release the
transferor Lender with respect to the Commitment (or portion thereof) of such
Lender and Obligations assigned to such Eligible Assignee. Upon the consummation
of any assignment to an Eligible Assignee pursuant to this SECTION 12.3, the
transferor Lender, Agents and Borrowers shall make appropriate arrangements so
that replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Eligible Assignee, in each
case in principal amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
(c) Dissemination of Information. Borrowers authorize each Lender
and each Agent to disclose to any Participant, any Eligible Assignee or any
other Person acquiring an interest in the DIP Financing Documents by operation
of law (each a "Transferee"), and any prospective Transferee, any and all
information in such Agent's or such Lender's possession concerning Borrowers,
the Subsidiaries or the Collateral, subject to appropriate confidentiality
undertakings on the part of such Transferee.
12.4 TAX TREATMENT. If any interest in any DIP Financing Document is
transferred to any Transferee that is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of SECTION 6.12 hereof.
12.5 PARTICIPANT'S SECURITY INTEREST. If a Participant shall at any
time participate with Lenders in the Loans, Letter of Credit Accommodations or
other Obligations, each Borrower hereby grants to such Participant and such
Participant shall have and is hereby given, a continuing Lien on and security
interest in any money, securities and other Property of Obligors in the custody
or possession of the Participant, including the right of setoff, to the extent
of the Participant's participation in the Obligations, and such Participant
shall be deemed to have the same right of setoff to the extent of its
participation in the Obligations, as it would have if it were a direct lender.
SECTION 13. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS;
GOVERNING LAW
13.1 GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS; JURY TRIAL
WAIVER.
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(a) The validity, interpretation and enforcement of this
Agreement and the other DIP Financing Documents and any dispute arising out of
the relationship between the parties hereto, whether in contract, tort, equity
or otherwise, shall be governed by the internal laws of the State of Georgia
(without giving effect to principles of conflicts of law); provided, however,
that if any of the Collateral shall be located in any jurisdiction other than
Georgia, the laws of such jurisdiction shall govern the method, manner and
procedure for foreclosure of Collateral Agent's Lien upon such Collateral and
the enforcement of Collateral Agent's other remedies of such Collateral to the
extent that the laws of such jurisdiction are different from or inconsistent
with the laws of the State of Georgia. Notwithstanding the foregoing provision
for the notice and sale of Collateral under the law of the situs, it is the
parties' intention that Georgia law control the obligations of Obligors under
the DIP Financing Documents and the enforcement of the same such that, for
example, each Borrower agrees and acknowledges that pursuant to Georgia law it
shall be liable for a deficiency judgment notwithstanding the sale of Real
Property collateral under a power of sale and further that Lenders or Agents
may, at their election, seek a money judgment under the DIP Financing Documents
without first exhausting all Collateral securing the Obligations thereunder.
(b) Obligors, Agents and Lenders irrevocably consent and submit
to the non-exclusive jurisdiction of the Superior Court of Cobb County, Georgia
and the United States District Court for the Northern District of Georgia,
Atlanta Division, and waive any objection based on venue or forum non conveniens
with respect to any action instituted therein arising under this Agreement or
any of the other DIP Financing Documents or in any way connected with or related
or incidental to the dealings of the parties hereto in respect of this Agreement
or any of the other DIP Financing Documents or the transactions related hereto
or thereto, in each case whether now existing or hereafter arising, and whether
in contract, tort, equity or otherwise, and agree that any dispute with respect
to any such matters shall be heard only in the courts described above (except
that Lenders shall have the right to bring any action or proceeding against
Obligors or their Property in the courts of any other jurisdiction which Lenders
deem necessary or appropriate in order to realize on the Collateral or to
otherwise enforce their rights against Obligors or their Property).
(c) Each Obligor hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth on
the signature pages hereof and service so made shall be deemed to be completed
five (5) days after the same shall have been so deposited in the U.S. mails, or,
at Collateral Agent's option, by service upon Obligors in any other manner
provided under the rules of any such courts. Within thirty (30) days after such
service, Obligors shall appear in answer to such process, failing which Obligors
shall be deemed in default and judgment may be entered by Collateral Agent
against Obligors for the amount of the claim and other relief requested.
(D) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
OBLIGOR, AGENTS AND LENDERS EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR ANY
OF THE OTHER DIP FINANCING DOCUMENTS OR (II) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
AGREEMENT OR ANY OF THE OTHER DIP FINANCING DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. OBLIGORS, AGENTS
AND LENDERS EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT
OBLIGORS, AGENTS OR LENDERS MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS
AGREEMENT WITH ANY
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COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
(e) Neither Agents nor any Lender shall have any liability to any
Obligor (whether in tort, contract, equity or otherwise) for losses suffered by
any Obligor in connection with, arising out of, or in any way related to the
transactions or relationships contemplated by this Agreement, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Agents and Lenders
that the losses were the result of acts or omissions constituting gross
negligence or willful misconduct. In any such litigation, Agents and Lenders
shall be entitled to the benefit of the rebuttable presumption that it acted in
good faith and with the exercise of ordinary care in the performance by it of
the terms of this Agreement.
13.2 WAIVER OF NOTICES. Each Obligor hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations or the Collateral, and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on Obligors which Agents or Lenders may elect to give shall entitle
Obligors to any other or further notice or demand in the same, similar or other
circumstances. Without limiting the generality of the foregoing, each Obligor
waives (a) notice prior to Agents' or Lenders' taking possession or control of
any of the Collateral or any bond or security that might be required by any
court prior to allowing Agents or Lenders to exercise any of Agents' or Lenders'
remedies, including the issuance of an immediate writ of possession, and (b) the
benefit of all valuation, appraisement and exemption laws.
13.3 AMENDMENTS AND WAIVERS. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Agent and Lenders (or, where otherwise expressly allowed by SECTION 11 hereof,
the Required Lenders in lieu of Agents and Lenders), and as to amendments, as
also signed by an authorized officer of Obligors. Agents and Lenders shall not,
by any act, delay, omission or otherwise be deemed to have expressly or
impliedly waived any of its rights, powers and/or remedies unless such waiver
shall be in writing and signed by an authorized officer of Agents and Lenders.
Any such waiver shall be enforceable only to the extent specifically set forth
therein. A waiver by Agents and Lenders of any right, power and/or remedy on any
one occasion shall not be construed as a bar to or waiver of any such right,
power and/or remedy which Agents and Lenders would otherwise have on any future
occasion, whether similar in kind or otherwise. Notwithstanding the foregoing,
no consent, written or otherwise, of any Obligor shall be necessary or required
in connection with any amendment of any of the provisions of SECTION 11 (other
than SECTIONS 11.17, 11.1(E) and 11.9) or any other provision of this Agreement
that effects only the rights, duties and responsibilities of Lenders and Agents
as among themselves so long as no such amendment imposes any additional
obligations on Obligors.
13.4 WAIVER OF COUNTERCLAIMS. Each Obligor waives all rights to
interpose any claims, deductions, setoffs or counterclaims of any nature (other
than compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.
13.5 INDEMNIFICATION.
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(a) Borrowers shall jointly and severally indemnify, defend and
hold Agents and Lenders, and their respective directors, agents, employees and
counsel, harmless from and against any and all losses, claims, damages,
liabilities, costs or expenses imposed on, incurred by or asserted against any
of them in connection with any litigation, investigation, claim or proceeding
commenced or threatened related to the negotiation, preparation, execution,
delivery, enforcement, performance or administration of this Agreement, any
other DIP Financing Documents, or any undertaking or proceeding related to any
of the transactions contemplated hereby or any act, omission, event or
transaction related or attendant thereto, including amounts paid in settlement,
court costs, and the fees and expenses of counsel. To the extent that the
undertaking to indemnify, defend, pay and hold harmless set forth in this
Section may be unenforceable because it violates any Applicable Law or public
policy, Borrowers shall pay the maximum portion that they are permitted to pay
under Applicable Law to Agents and Lenders in satisfaction of indemnified
matters under this Section. The foregoing indemnity shall survive the payment of
the Obligations and the termination of the DIP Facility and is in addition to
all other indemnities set forth herein and in any of the other DIP Financing
Documents.
(b) If at any time any Agent or (with the consent of Agents) any
Lender shall agree to indemnify any Person (including Reference Bank) against
losses or damages that such Person may suffer or incur in its dealings or
transactions with any Obligor, or shall guarantee any liability or obligation of
any Obligor to such Person, or otherwise shall provide assurances of any
Obligor's payment or performance under any agreement with such Person with
respect to Cash Management Agreements, Letters of Credit, landlord agreements,
mortgagee agreements or any other agreements relating to either the Collateral
or any Agent's or Lender's exercise of remedies hereunder, including
indemnities, guaranties or other assurances of payment or performance given by
any Agent or Lender, then the Contingent Obligation of any Agent or Lender
providing any such indemnity, guaranty or other assurance of payment or
performance, together with any payment made or liability incurred by any Agent
or Lender in connection therewith, shall constitute Obligations that are secured
by the Collateral and Borrowers shall repay, ON DEMAND, any amount so paid or
any liability incurred by any Agent or Lender in connection with any such
indemnity, guaranty or assurance. Nothing herein shall be construed to impose
upon any Agent or Lender any obligation to provide any such indemnity, guaranty
or assurance. The foregoing agreement of Borrowers shall apply whether or not
such indemnity, guaranty or assurance is in writing or oral and regardless of
Borrowers' knowledge of the existence thereof, and shall be in addition to any
of the provision of the DIP Financing Documents regarding reimbursement by
Borrowers of costs, expenses or liabilities suffered or incurred by any Agent or
Lender.
SECTION 14. DIP TERM; MISCELLANEOUS
14.1 TERM.
(a) This Agreement and the other DIP Financing Documents shall
become effective as of the date set forth on the first page hereof and shall
continue in full force and effect for a term ending on the last day of the DIP
Term; provided, that, the DIP Term may be extended with the written consent of
Borrowers, Agents and Lenders. Notwithstanding the foregoing, the DIP Facility
may be terminated by Agents and Lenders immediately, without notice, upon or
after the occurrence of an Event of Default. Upon the effective date of
termination of the DIP Facility, the Commitments shall terminate and Borrowers
shall jointly and severally pay to Agents and Lenders, in full, all outstanding
and unpaid Obligations and shall furnish cash collateral to Agents and Lenders
in such amounts as Agents and Lenders determine are reasonably necessary to
secure Agents and Lenders from loss, cost, damage or expense, including
attorneys' fees and legal expenses, in connection with all Obligations and
Pre-Petition Debt constituting Contingent Obligations, including issued and
outstanding Letter of Credit Accommodations and checks or other payments
provisionally credited to the Obligations and/or as to which Lenders have not
yet received final and indefeasible payment. Such payments in respect of the
Obligations, Pre-
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Petition Debt and cash collateral shall be remitted by wire transfer in Federal
funds to such bank account of Agents and Lenders, as Agents and Lenders may, in
its discretion, designate in writing to Borrowers for such purpose. Interest
shall be due until and including the next Business Day, if the amounts so paid
by Borrowers to the bank account designated by Agents and Lenders are received
in such bank account later than 12:00 noon. Any Revolving Loans (including
Professional Expense Advances) made after the date of termination of the DIP
Facility or the Commitments shall not operate to reinstate the DIP Facility or
such Commitments.
(b) No termination of the DIP Facility shall relieve or discharge
Obligors of their respective duties, obligations and covenants under this
Agreement or the other DIP Financing Documents until all Obligations have been
fully and finally discharged and paid, and Collateral Agent's continuing
security interest in the Collateral and the rights and remedies of Lenders
hereunder, under the other DIP Financing Documents and Applicable Law, shall
remain in effect until all such Obligations have been fully and finally
discharged and paid.
14.2 NOTICES. All notices, requests and demands hereunder shall be in
writing and (a) made to Agents and Lenders at their addresses set forth below
and to Borrowers at their chief executive office set forth below, or to such
other address as either party may designate by written notice to the other in
accordance with this provision, and (b) deemed to have been given or made: if
delivered in person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of
receipt; if by nationally recognized overnight courier service with instructions
to deliver the next Business Day, one (1) Business Day after sending; and if by
certified mail, return receipt requested, five (5) days after mailing.
14.3 PARTIAL INVALIDITY. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by Applicable Law.
14.4 SUCCESSORS. This Agreement, the other DIP Financing Documents and
any other document referred to herein or therein shall be binding upon and inure
to the benefit of and be enforceable by Agents, Lenders, Borrowers and their
respective successors and assigns, except that Obligors may not assign their
rights or obligations under this Agreement, the other DIP Financing Documents
and any other document referred to herein or therein without the prior written
consent of Agents and Lenders.
14.5 ENTIRE AGREEMENT. This Agreement, the other DIP Financing
Documents, any supplements hereto or thereto, and any instruments or documents
delivered or to be delivered in connection herewith or therewith represents the
entire agreement and understanding concerning the subject matter hereof and
thereof between the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject
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matter hereof, whether oral or written. In the event of any inconsistency
between the terms of this Agreement and any schedule or exhibit hereto, the
terms of this Agreement shall govern.
IN WITNESS WHEREOF, Agents, Lenders, Borrowers and Guarantors have
caused these presents to be duly executed on the day and year first above
written.
BORROWERS:
ATTEST: DYERSBURG CORPORATION
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
DYERSBURG FABRICS LIMITED
ATTEST: PARTNERSHIP, I
By: DYERSBURG FABRICS INC., its sole General
Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
[Signatures continued on following page]
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ATTEST: DYERSBURG FABRICS INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: UNITED KNITTING, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: IQUE, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
[Signatures continued on following page]
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ATTEST: UNITED KNITTING LIMITED PARTNERSHIP, I
By: UNITED KNITTING, INC., its sole General
Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: IQUE LIMITED PARTNERSHIP, I
By: IQUE, INC., its sole General Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: ALAMAC KNIT FABRICS, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
[Signatures continued on following page]
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ATTEST: AIH INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, Vice President- WILLIAM S. SHROPSHIRE, JR.
Finance/Assistant Secretary Executive Vice President/Chief
Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
GUARANTORS:
ATTEST: DFIC, INC.
By: By:
------------------------------ ----------------------------------------
PAUL L. HALLOCK, Vice President- WILLIAM S. SHROPSHIRE, JR.
Finance/Assistant Secretary Executive Vice President/Chief Financial
Officer, Treasurer and Secretary
Chief Executive Office
15720 John J. Delaney Drive
Suite 445
Charlotte, North Carolina 28277
ATTEST: IQUEIC, INC.
By: By:
------------------------------ ----------------------------------------
PAUL L. HALLOCK, Vice President- WILLIAM S. SHROPSHIRE, JR.
Finance/Assistant Secretary Executive Vice President/Chief
Financial Officer, Treasurer and
Secretary
Chief Executive Office
15720 John J. Delaney Drive
Suite 445
Charlotte, North Carolina 28277
[Signatures continued on the following page]
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ATTEST: UKIC, INC.
By: By:
------------------------------ ----------------------------------------
PAUL L. HALLOCK, Vice President- WILLIAM S. SHROPSHIRE, JR.
Finance/Assistant Secretary Executive Vice President/Chief Financial
Officer, Treasurer and Secretary
Chief Executive Office
15720 John J. Delaney Drive
Suite 445
Charlotte, North Carolina 28277
ATTEST: ALAMAC ENTERPRISES INC.
By: By:
------------------------------ ----------------------------------------
PAUL L. HALLOCK, Vice President- WILLIAM S. SHROPSHIRE, JR.
Finance/Assistant Secretary Executive Vice President/Chief Financial
Officer, Treasurer and Secretary
Chief Executive Office
15720 John J. Delaney Drive
Suite 445
Charlotte, North Carolina 28277
ATTEST ALAMAC KNIT FABRICS LLC
BY: ALAMAC KNIT FABRICS, INC., its sole
member
By: By:
------------------------------ ----------------------------------------
PAUL L. HALLOCK, Vice President- WILLIAM S. SHROPSHIRE, JR.
Finance/Assistant Secretary Executive Vice President/Chief Financial
Officer, Treasurer and Secretary
Chief Executive Office
15720 John J. Delaney Drive
Suite 445
Charlotte, North Carolina 28277
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ADMINISTRATIVE AGENT:
CONGRESS FINANCIAL CORPORATION
(SOUTHERN), as Administrative Agent
By:
----------------------------------------
Title:
-------------------------------------
Address:
200 Galleria Parkway
Suite 1500
Atlanta, Georgia 30339
Attention: Office Head
Telecopier No.: (770) 956-8120
COLLATERAL AGENT:
FLEET NATIONAL BANK,
as Collateral Agent
By:
----------------------------------------
Title:
-------------------------------------
Address:
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attention: Mr. David Rich
Telecopier No.: (770) 393-4166
[Signatures continued on following page]
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LENDERS:
CONGRESS FINANCIAL CORPORATION
(SOUTHERN), a Lender
Revolving Commitment: $20,181,818 By:
Term Loan Commitment: $6,163,637 ----------------------------------------
Title:
--------------------------------------
LIBOR Lending Office:
200 Galleria Parkway
Suite 1500
Atlanta, Georgia 30339
Attention: Office Head
Telecopier No.: (770) 956-8120
FLEET CAPITAL CORPORATION, a Lender
Revolving Commitment: $20,181,818 By:
Term Loan Commitment: $6,163,637 ----------------------------------------
Title:
--------------------------------------
LIBOR Lending Office:
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attention: Mr. David Rich
Telecopier No.: (770) 393-4166
GENERAL ELECTRIC
CAPITAL CORPORATION, a Lender
Revolving Commitment: $13,454,546 By:
Term Loan Commitment: $4,109,090 ----------------------------------------
Title:
--------------------------------------
LIBOR Lending Office:
3379 Peachtree Road
Suite 600
Atlanta, Georgia 30326
Attention: Mr. Steven Wagnblas
Telecopier No.: (404) 262-9032
[Signatures continued on following page]
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THE CIT GROUP/COMMERCIAL
SERVICES, INC., a Lender
Revolving Commitment: $10,090,909 By:
Term Loan Commitment: $3,081,818 ----------------------------------------
Title:
--------------------------------------
LIBOR Lending Office:
301 S. Tryon Street
Suite 2500
Charlotte, North Carolina 28202
Attention: Mr. John Suchaniak
Telecopier No.: (704) 339-2910
MELLON BANK, N.A., a Lender
Revolving Commitment: $10,090,909 By:
Term Loan Commitment: $3,081,818 ----------------------------------------
Title:
--------------------------------------
LIBOR Lending Office:
3060 Peachtree Road
Suite 890
Atlanta, Georgia 30305
Attention: Mr. Patrick Aarons
Telecopier No.: (404) 365-8677
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EXHIBIT A
FORM OF REVOLVING NOTE
September 25, 2000
U.S. $__________.__ Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, DYERSBURG CORPORATION, a Tennessee
corporation, DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited
partnership, DYERSBURG FABRICS INC., a Tennessee corporation, UNITED KNITTING,
INC., a Tennessee corporation, UNITED KNITTING LIMITED PARTNERSHIP, I, a
Tennessee limited partnership, IQUE, INC., a Tennessee corporation, IQUE LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, ALAMAC KNIT FABRICS, INC., a
Delaware corporation, and AIH INC., a Delaware corporation (the foregoing
individually referred to hereinafter as a "Borrower" and collectively as
"Borrowers"), hereby unconditionally jointly and severally promise to pay to the
order of ________________ (herein, together with any subsequent holder hereof,
called the "Holder") the principal sum of $_______________ or such lesser sum as
may constitute Holder's Pro Rata share of the outstanding principal amount of
all Revolving Loans pursuant to the terms of the Loan Agreement (as defined
below) on the date on which such outstanding principal amounts become due and
payable pursuant to SECTION 2.1 of the Loan Agreement, in strict accordance with
the terms thereof. Borrowers likewise unconditionally jointly and severally
promise to pay to Holder interest from and after the date hereof on Holder's Pro
Rata share of the outstanding principal amount of Revolving Loans at such
interest rates, payable at such times, and computed in such manner as are
specified in SECTION 3.1 of the Loan Agreement, in strict accordance with the
terms thereof.
This Revolving Note ("Note") is issued pursuant to, and is one of the
"Revolving Notes" referred to in, the Post-Petition Loan and Security Agreement
dated September 25, 2000 (as the same may be amended from time to time, the
"Loan Agreement"), among Borrowers, Guarantors, Congress Financial Corporation
(Southern), as administrative agent for the financial institutions from time to
time parties thereto as lenders ("Lenders"), Fleet National Bank ("Collateral
Agent"), as collateral agent for Lenders and such Lenders, and Holder is and
shall be entitled to all benefits thereof and of all DIP Financing Documents
executed and delivered in connection therewith. All capitalized terms used
herein, unless otherwise defined herein, shall have the meanings ascribed to
such terms in the Loan Agreement.
The repayment of the principal balance of this Note is subject to the
provisions of SECTION 2.1 of the Loan Agreement. The entire unpaid principal
balance and all accrued interest on this Note shall be due and payable
immediately upon the termination of the DIP Facility as set forth in the Loan
Agreement.
All payments of principal and interest shall be made in Dollars in
immediately available funds as specified in the Loan Agreement.
Upon or after the occurrence of an Event of Default and for so long as
such Event of Default exists, the principal balance and all accrued interest of
this Note may be declared due and payable in the manner and with the effect
provided in the Loan Agreement, and the unpaid principal balance hereof shall
bear interest at the Default Rate as and when provided in the Loan Agreement.
Borrowers jointly and severally agree to pay, and save Holder harmless against
any liability for the payment of, all costs and expenses, including, but not
limited to, reasonable attorneys' fees, if this Note is collected by or through
an attorney-at-law.
All principal amounts of Revolving Loans made by Holder to Borrowers
pursuant to the Loan Agreement, and all accrued and unpaid interest thereon,
shall be deemed outstanding under this Note and shall continue to be owing by
Borrowers until paid in accordance with the terms of this Note and the Loan
Agreement.
106
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Holder for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto; and, in the event of any such
payment inadvertently paid by Borrowers or inadvertently received by Holder,
such excess sum shall be, at Borrowers' option, returned to Borrowers forthwith
or credited as a payment of principal, but shall not be applied to the payment
of interest. It is the intent hereof that Borrowers not pay or contract to pay,
and that Holder not receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by Borrowers
under Applicable Law.
Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, each Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under Applicable Law, but if any
provision of this Note shall be prohibited or invalid under Applicable Law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Holder in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Holder
of any right or remedy preclude any other right or remedy. Agents, at their
option, may enforce their rights against any Collateral securing this Note
without Agents or Holder enforcing their rights against any Borrower, any
Guarantor of the Debt evidenced hereby or any other Property or Debt due or to
become due to any Borrower. Each Borrower agrees that, without releasing or
impairing such Borrower's liability hereunder, Holder or Agents may at any time
release, surrender, substitute or exchange any Collateral securing this Note and
may at any time release any party primarily or secondarily liable for the Debt
evidenced by this Note.
The rights of Holder and obligations of Borrowers hereunder shall be
construed in accordance with and governed by the laws (without giving effect to
the conflict of law principles thereof) of the State of Georgia. This Note is
intended to take effect as an instrument under seal under Georgia law.
IN WITNESS WHEREOF, Borrowers have caused this Note to be executed
under seal and delivered by their duly authorized officers on the date first
above written.
ATTEST: DYERSBURG CORPORATION
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
DYERSBURG FABRICS LIMITED
-2-
107
ATTEST: PARTNERSHIP, I
By: DYERSBURG FABRICS INC., its sole General
Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: DYERSBURG FABRICS INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
-3-
108
ATTEST: UNITED KNITTING, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: IQUE, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: UNITED KNITTING LIMITED PARTNERSHIP, I
By: UNITED KNITTING, INC., its sole General
Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
-4-
109
ATTEST: IQUE LIMITED PARTNERSHIP, I
By: IQUE, INC., its sole General Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: ALAMAC KNIT FABRICS, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: AIH INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
-5-
110
EXHIBIT B
FORM OF TERM NOTE
U.S. $______________ September 25, 2000
Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, DYERSBURG CORPORATION, a Tennessee
corporation, DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited
partnership, DYERSBURG FABRICS INC., a Tennessee corporation, UNITED KNITTING,
INC., a Tennessee corporation, UNITED KNITTING LIMITED PARTNERSHIP, I, a
Tennessee limited partnership, IQUE, INC., a Tennessee corporation, IQUE LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, ALAMAC KNIT FABRICS, INC., a
Delaware corporation, and AIH INC., a Delaware corporation (the foregoing
individually referred to hereinafter as a "Borrower" and collectively as
"Borrowers"), hereby promise to jointly and severally pay to the order of
_______________________________ (herein, together with any subsequent holder
hereof, called the "Holder"), the principal sum of $_________, or so much
thereof as represents Holder's Pro Rata share of the outstanding principal
amount of all Term Loan Advances pursuant to the terms of the Loan Agreement (as
defined below), on the dates on which such outstanding principal amounts become
due and payable pursuant to SECTION 2.3 of the Loan Agreement, in strict
accordance with the terms thereof. Borrowers likewise unconditionally jointly
and severally promise to pay to Holder interest from and after the date hereof
on the unpaid principal balance hereof at such interest rates, payable at such
times and computed in such manner as are specified in SECTION 3.1 of the Loan
Agreement, in strict accordance with the terms thereof.
This Term Note ("Note") is issued pursuant to, and is one of the "Term
Notes" referred to in, the Post-Petition Loan and Security Agreement, dated
September 25, 2000 (as the same may be amended from time to time, the "Loan
Agreement"), among Borrowers, Guarantors, Congress Financial Corporation
(Southern), as administrative agent for itself and the other financial
institutions from time to time parties thereto ("Lenders"), Fleet National Bank
("Collateral Agent"), as collateral agent for the Lenders and such Lenders, and
Holder is and shall be entitled to all benefits thereof and of all DIP Financing
Documents executed and delivered in connection therewith. All capitalized terms
used herein, unless otherwise defined herein, shall have the meanings ascribed
to such terms in the Loan Agreement.
This Note is subject to mandatory prepayment in accordance with the
provisions of SECTION 6.7 of the Loan Agreement and to prepayment premiums in
accordance with the provisions of SECTION 6.7 of the Loan Agreement.
Notwithstanding anything to the contrary contained herein, the entire unpaid
principal balance of and accrued interest on this Note shall be due and payable
immediately upon the termination of the DIP Facility as set forth in SECTION 14
of the Loan Agreement.
All payments of principal and interest shall be made in Dollars and in
immediately available funds to Collateral Agent for Holder's benefit as
specified in the Loan Agreement.
Upon or after the occurrence of an Event of Default and for so long as
such Event of Default exists, the principal balance and all accrued interest of
this Note may be declared (or shall become) due and payable in the manner and
with the effect provided in the Loan Agreement, and the unpaid principal balance
hereof shall bear interest at the Default Rate as and when provided in SECTION
3.1 of the Loan Agreement.
Borrowers jointly and severally agree to pay, and save Holder harmless
against any liability for the payment of, all costs and expenses, including, but
not limited to, reasonable attorneys' fees, if this Note is collected by or
through an attorney-at-law.
-6-
111
All principal amounts of Term Loans made by Holder to Borrowers
pursuant to the Loan Agreement, and all accrued and unpaid interest thereon,
shall be deemed outstanding under this Note and shall continue to be owing by
Borrowers until paid in accordance with the terms of this Note and the Loan
Agreement.
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Holder for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto; and, in the event of any such
payment inadvertently paid by Borrowers or inadvertently received by Holder,
such excess sum shall be, at Borrowers' option, returned to Borrowers forthwith
or credited as a payment of principal, but shall not be applied to the payment
of interest. It is the intent hereof that Borrowers not pay or contract to pay,
and that Holder not receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by Borrowers
under Applicable Law.
Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, each Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under Applicable Law, but if any
provision of this Note shall be prohibited or invalid under Applicable Law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Holder in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Holder
of any right or remedy preclude any other right or remedy. Agents, at their
option, may enforce its rights against any Collateral securing this Note without
enforcing its rights against any Borrower, any Guarantor of the indebtedness
evidenced hereby or any other property or indebtedness due or to become due to
any Borrower. Each Borrower agrees that, without releasing or impairing such
Borrower's liability hereunder, Holder or Agents may at any time release,
surrender, substitute or exchange any Collateral securing this Note and may at
any time release any party primarily or secondarily liable for the indebtedness
evidenced by this Note.
-7-
112
The rights and obligations of Holder and Borrowers hereunder shall be
construed in accordance with and governed by the laws (without giving effect to
the conflict of law principles thereof) of the State of Georgia. This Note is
intended to take effect as an instrument under seal under Georgia law.
IN WITNESS WHEREOF, Borrowers have caused this Note to be executed
under seal and delivered by their duly authorized officers, on the date first
above written.
BORROWERS:
ATTEST: DYERSBURG CORPORATION
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
DYERSBURG FABRICS LIMITED
ATTEST: PARTNERSHIP, I
By: DYERSBURG FABRICS INC., its sole General
Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: DYERSBURG FABRICS INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
-8-
113
ATTEST: UNITED KNITTING, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: IQUE, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: UNITED KNITTING LIMITED PARTNERSHIP, I
By: UNITED KNITTING, INC., its sole General
Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: IQUE LIMITED PARTNERSHIP, I
By: IQUE, INC., its sole General Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
-9-
114
ATTEST: ALAMAC KNIT FABRICS, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: AIH INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
-10-
115
EXHIBIT C
FORM OF SETTLEMENT NOTE
September 25, 2000
U.S. $__________.__ Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, DYERSBURG CORPORATION, a Tennessee
corporation, DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited
partnership, DYERSBURG FABRICS INC., a Tennessee corporation, UNITED KNITTING,
INC., a Tennessee corporation, UNITED KNITTING LIMITED PARTNERSHIP, I, a
Tennessee limited partnership, IQUE, INC., a Tennessee corporation, IQUE LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, ALAMAC KNIT FABRICS, INC., a
Delaware corporation, and AIH INC., a Delaware corporation (the foregoing
individually referred to hereinafter as a "Borrower" and collectively as
"Borrowers"), hereby unconditionally jointly and severally promise to pay to the
order of ______________________________ (herein, together with any subsequent
holder hereof, called "Holder") the principal sum of $_______________ or such
lesser sum as may constitute the outstanding principal amount of all Settlement
Loans pursuant to the terms of the Loan Agreement (as defined below) on the date
on which such outstanding principal amounts become due and payable pursuant to
the Loan Agreement, in strict accordance with the terms thereof. Borrowers
likewise unconditionally jointly and severally promise to pay to Holder interest
from and after the date hereof on the outstanding principal amount of Settlement
Loans at such interest rates, payable at such times, and computed in such manner
as are specified in SECTION 3.1 of the Loan Agreement, in strict accordance with
the terms thereof.
This Settlement Note ("Note") is issued pursuant to, and is the
"Settlement Note" referred to in, the Post-Petition Loan and Security Agreement
dated September 25, 2000 (as the same may be amended from time to time, the
"Loan Agreement"), among Borrowers, Guarantors, Congress Financial Corporation
(Southern), as administrative agent for the financial institutions from time to
time parties thereto as lenders ("Lenders"), Fleet National Bank ("Collateral
Agent"), as collateral agent for Lenders and such Lenders, and Holder is and
shall be entitled to all benefits thereof and of all DIP Financing Documents
executed and delivered in connection therewith. All capitalized terms used
herein, unless otherwise defined herein, shall have the meanings ascribed to
such terms in the Loan Agreement.
The repayment of the principal balance of this Note shall be made in
the manner and to the extent stated in SECTION 6.1 of the Loan Agreement. The
entire unpaid principal balance and all accrued interest on this Note shall be
due and payable immediately upon the Commitment Termination Date.
All payments of principal and interest shall be made in Dollars in
immediately available funds as specified in the Loan Agreement.
Upon or after the occurrence of an Event of Default and for so long as
such Event of Default exists, the principal balance and all accrued interest of
this Note may be declared due and payable in the manner and with the effect
provided in the Loan Agreement, and the unpaid principal balance hereof shall
bear interest at the Default Rate as and when provided in SECTION 3.1 of the
Loan Agreement. Borrowers jointly and severally agree to pay, and save Holder
harmless against any liability for the payment of, all costs and expenses,
including, but not limited to, reasonable attorneys' fees, if this Note is
collected by or through an attorney-at-law.
116
All principal amounts of Settlement Loans made by Holder to Borrowers
pursuant to the Loan Agreement, and all accrued and unpaid interest thereon,
shall be deemed outstanding under this Note and shall continue to be owing by
Borrowers until paid in accordance with the terms of this Note and the Loan
Agreement.
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Holder for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto; and, in the event of any such
payment inadvertently paid by Borrowers or inadvertently received by Holder,
such excess sum shall be, at Borrowers' option, returned to Borrowers forthwith
or credited as a payment of principal, but shall not be applied to the payment
of interest. It is the intent hereof that Borrowers not pay or contract to pay,
and that Holder not receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by Borrowers
under Applicable Law.
Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, Borrowers, for themselves and their legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under Applicable Law, but if any
provision of this Note shall be prohibited or invalid under Applicable Law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Holder in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Holder
of any right or remedy preclude any other right or remedy. Agents may, at their
option, enforce their rights against any Collateral securing this Note without
enforcing its rights against Borrowers, any Guarantor of the Debt evidenced
hereby or any other Property or Debt due or to become due to Borrowers.
Borrowers agree that, without releasing or impairing Borrowers' liability
hereunder, Agents or Holder may at any time release, surrender, substitute or
exchange any Collateral securing this Note and may at any time release any party
primarily or secondarily liable for the Debt evidenced by this Note.
-2-
117
The rights of Holder and obligations of Borrowers hereunder shall be
construed in accordance with and governed by the laws (without giving effect to
the conflict of law principles thereof) of the State of Georgia. This Note is
intended to take effect as an instrument under seal under Georgia law.
IN WITNESS WHEREOF, Borrowers have caused this Note to be executed
under seal and delivered by their duly authorized officers on the date first
above written.
BORROWERS:
ATTEST: DYERSBURG CORPORATION
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
DYERSBURG FABRICS LIMITED
ATTEST: PARTNERSHIP, I
By: DYERSBURG FABRICS INC., its sole General
Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: DYERSBURG FABRICS INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
-3-
118
ATTEST: UNITED KNITTING, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: IQUE, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: UNITED KNITTING LIMITED PARTNERSHIP, I
By: UNITED KNITTING, INC., its sole General
Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
-4-
119
ATTEST: IQUE LIMITED PARTNERSHIP, I
By: IQUE, INC., its sole General Partner
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: ALAMAC KNIT FABRICS, INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
ATTEST: AIH INC.
By:
- --------------------------------- ----------------------------------------
PAUL L. HALLOCK, WILLIAM S. SHROPSHIRE, JR.
Vice President-Finance/Assistant Executive Vice President/Chief
Secretary Financial Officer/Secretary/Treasurer
Address:
[CORPORATE SEAL] 15720 John J. Delaney Drive, Suite 445
Charlotte, North Carolina 28277-2747
Attention: President
Telecopier No.: (704) 341-4868
-5-
120
EXHIBIT D
FORM OF NOTICE OF CONVERSION/CONTINUATION
Date ______________,______
Congress Financial Corporation (Southern), as Administrative Agent
200 Galleria Parkway
Suite 1500
Atlanta, Georgia 30339
Attention: Office Head
Fleet National Bank, as Collateral Agent
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attention: Mr. David Rich
Re: Post-Petition Loan and Security Agreement dated September 25,
2000, by and among Dyersburg Corporation, Dyersburg Fabrics
Limited Partnership, I, Dyersburg Fabrics Inc., United Knitting,
Inc., United Knitting Limited Partnership, I, IQUE, Inc., IQUE
Limited Partnership, I, Alamac Knit Fabrics, Inc., AIH Inc., the
Guarantors (as defined therein), Congress Financial Corporation
(Southern), as administrative agent for certain Lenders from time
to time parties thereto, Fleet National Bank, as collateral agent
for the Lenders, and such Lenders (as at any time amended, the
"Loan Agreement")
Gentlemen:
This Notice of Conversion/Continuation is delivered to you pursuant to
SECTION 3.1(C) of the Loan Agreement. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings attributable thereto in
the Loan Agreement. Borrowers hereby give notice of their request as follows:
Check as applicable:
[ ] A conversion of Loans from one Type to another, as follows:
(i) The requested date of the proposed conversion is
______________, 20__ (the "Conversion Date");
(ii) The Type of Loans to be converted pursuant hereto are
presently __________________ [SELECT EITHER LIBOR
RATE LOANS OR BASE RATE LOANS] in the principal
amount of $_____________ outstanding as of the
Conversion Date;
(iii) The portion of the aforesaid Loans to be converted on
the Conversion Date is $_____________ (the
"Conversion Amount");
(iv) The Conversion Amount is to be converted into a
____________ [select either a LIBOR Rate Loan or a
Base Rate Loan] (the "Converted Loan") on the
Conversion Date.
121
(v) [In the event Borrowers selects a LIBOR Rate Loan:]
Borrowers hereby request that the Interest Period for
such Converted Loan be for a duration of _____
[insert length of Interest Period].
[ ] A continuation of LIBOR Rate Loans for new Interest Period, as
follows:
(i) The requested date of the proposed continuation is
_______________, 20__ (the "Continuation Date");
(ii) The aggregate amount of the LIBOR Rate Loans subject
to such continuation is $__________________;
(iii) The duration of the selected Interest Period for the
LIBOR Rate Loans which are the subject of such
continuation is: _____________ [select duration of
applicable Interest Period];
Borrowers hereby ratify and reaffirm all of their respective
liabilities and obligations under the DIP Financing Documents and certify that
no Default or Event of Default exists on the date hereof.
Borrowers have caused this Notice of Conversion/Continuation to be
executed and delivered by their duly authorized officer, this _______ day of
______________, 20__.
DYERSBURG CORPORATION, as agent for the
Borrowers
By:
----------------------------------------
Title:
-------------------------------------
-2-
122
EXHIBIT E
FORM OF NOTICE OF BORROWING
Date ______________, ______
Congress Financial Corporation (Southern), as Administrative Agent
200 Galleria Parkway
Suite 1500
Atlanta, Georgia 30339
Attention: Office Head
Fleet National Bank, as Collateral Agent
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attention: Mr. David Rich
Re: Post-Petition Loan and Security Agreement dated September 25,
2000, by and among Dyersburg Corporation, Dyersburg Fabrics Inc.,
United Knitting, Inc., IQUE, Inc., Alamac Knit Fabrics, Inc., AIH
Inc., the Guarantors (as defined therein) Congress Financial
Corporation (Southern), as administrative agent for certain
Lenders from time to time parties thereto, Fleet National Bank,
as collateral agent for the Lenders, and such Lenders (as at any
time amended, the "Loan Agreement")
This Notice of Borrowing is delivered to you pursuant to SECTION 6.1(A)
of the Loan Agreement. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings attributable thereto in the Loan Agreement.
Borrowers hereby request a Revolving Loan in the aggregate principal amount of
$______________ to be made on _____________, _____, and to consist of:
Check as applicable: [ ] Base Rate Loans in the aggregate principal
amount of $_____________
[ ] LIBOR Rate Loans in the aggregate principal
amount of $___________, with Interest Periods as
follows:
(i) As to $_____________, an Interest
Period of ______ month(s);
(ii) As to $_____________, an Interest
Period of ______ months;
(iii) As to $_____________, an Interest
Period of ______ months.
Borrowers hereby ratify and reaffirm all of their respective
liabilities and obligations under the DIP Financing Documents, and Borrowers
hereby certify that no Default or Event of Default exists on the date hereof.
123
Borrowers have caused this Notice of Borrowing to be executed and
delivered by their duly authorized officer, this ______ day of _____________,
_____.
DYERSBURG CORPORATION, as agent for the
Borrowers
By:
----------------------------------------
Title:
-------------------------------------
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EXHIBIT F
COMPLIANCE CERTIFICATE
[Letterhead of Borrowers]
__________________, 20__
Congress Financial Corporation (Southern), as Administrative Agent
200 Galleria Parkway
Suite 1500
Atlanta, Georgia 30339
Attention: Office Head
Fleet National Bank, as Collateral Agent
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attention: Mr. David Rich
The undersigned, the chief financial officer of Dyersburg Corporation,
Dyersburg Fabrics Limited Partnership, I, Dyersburg Fabrics Inc., United
Knitting, Inc., United Knitting Limited Partnership, I, IQUE, Inc., IQUE Limited
Partnership, I, Alamac Knit Fabrics, Inc. and AIH Inc. ("Borrowers"), gives this
certificate to Agents in accordance with the requirements of SECTION 9.6 of that
certain Post-Petition Loan and Security Agreement dated September 25, 2000,
among Borrowers, Guarantors, Agents and the Lenders referenced therein ("Loan
Agreement"). Capitalized terms used in this Certificate, unless otherwise
defined herein, shall have the meanings ascribed to them in the Loan Agreement.
1. Based upon my review of the balance sheets and statements
of income of Borrowers and their Subsidiaries for the [FISCAL YEAR] [QUARTERLY
PERIOD] ending __________________, 20__, copies of which are attached hereto, I
hereby certify that:
(a) Consolidated Minimum EBITDA is $___________;
(b) Excess Availability is $____________;
(c) Capital Expenditures during the period and for the
Fiscal Year to date total $_________ for
Borrowers.
125
2. No Default exists on the date hereof, other than:
__________________________________________________________________ [if none, so
state]; and
3. No Event of Default exists on the date hereof, other than
______________________________________________________________ [if none, so
state].
4. As of the date hereof, Borrowers are current in their
payment of all accrued rent and other charges to Persons who own or lease any
premises where any of the Collateral is located, and there are no pending
disputes or claims regarding any Borrower's failure to pay or delay in payment
of any such rent or other charges.
Very truly yours,
--------------------------------------------
Chief Financial Officer
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EXHIBIT G
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated as of ______, 20__
Reference is made to the Post-Petition Loan and Security Agreement
dated September 25, 2000 (at any time amended, the "Loan Agreement"), among
DYERSBURG CORPORATION, a Tennessee corporation, DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, DYERSBURG FABRICS INC., a
Tennessee corporation, UNITED KNITTING, INC., a Tennessee corporation, UNITED
KNITTING LIMITED PARTNERSHIP, I, a Tennessee limited partnership, IQUE, INC., a
Tennessee corporation, IQUE LIMITED PARTNERSHIP, I, a Tennessee limited
partnership, ALAMAC KNIT FABRICS, INC., a Delaware corporation, and AIH INC., a
Delaware corporation (the foregoing individually referred to hereinafter as
"Borrower" and collectively referred to hereinafter as "Borrowers"), the
Guarantors (as defined in the Loan Agreement), CONGRESS FINANCIAL CORPORATION
(SOUTHERN), in its capacity as administrative agent ("Administrative Agent") for
the financial institutions from time to time party to the Loan Agreement
("Lenders"), FLEET NATIONAL BANK, in its capacity as collateral agent
("Collateral Agent") for the Lenders and __________. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Loan Agreement.
______________________________________ (the "Assignor") and
______________________________________ (the "Assignee") agree as follows:
1. (A) Assignor hereby assigns to Assignee and Assignee hereby
purchases and assumes from Assignor (i) a principal amount of $________ of the
outstanding Revolving Loans held by Assignor [and $___________ of participations
of Assignor in Letter of Credit Accommodations] (which amounts, according to the
records of Agent, represent _______% of the total principal amount of
outstanding Revolving Loans [and Letter of Credit Accommodations]) and (ii) a
principal amount of $________ of Assignor's Revolving Commitment (which amount
includes Assignor's outstanding Revolving Loans being assigned to Assignee
pursuant to clause (i) above and which, according to the records of Agent,
represents (____%) of the total Revolving Commitments of Lenders under the Loan
Agreement); (B) Assignor hereby assigns to Assignee and Assignee hereby
purchases and assumes from Assignor (i) a principal amount of $________ of the
outstanding Term Loan and (ii) a principal amount of $_________ of Assignor's
Term Loan Commitment (which amount includes Assignor's outstanding Term Loan
Advance being assigned to Assignee pursuant to clause (i) above and which,
according to the records of Agent, represents ________% of the total Term Loan
Commitments of the Lenders under the Loan Agreement) (the items described in (A)
and (B) above being herein collectively referred to as the "Assigned
Interests"), together with an interest in the DIP Financing Documents
corresponding to the Assigned Interest. This Agreement shall be effective from
the date (the "Assignment Effective Date") on which Assignor receives both (x)
the principal amount of the Assigned Interest in the Loans on the Assignment
Effective Date, if any, and (y) a copy of this Agreement duly executed by
Assignee. From and after the Assignment Effective Date, Assignee hereby
expressly assumes, and undertakes to perform, all of Assignor's obligations in
respect of Assignor's Commitments to the extent, and only to the extent, of
Assignee's Assigned Interest, and all principal, interest, fees and other
amounts which would otherwise be payable to or for Assignor's account in
127
respect of the Assigned Interest shall be payable to or for Assignee's account,
to the extent such amounts have accrued subsequent to the Assignment Effective
Date.
2. Assignor (i) represents that as of the date hereof, the aggregate of
its Commitments under the Loan Agreement (without giving effect to assignments
thereof, which have not yet become effective) is $__________, and the
outstanding balance of its Loans [and participations in Letter of Credit
Accommodations] (unreduced by any assignments thereof, which have not yet become
effective) is $__________; (ii) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any other instrument or document furnished pursuant thereto, other
than that Assignor is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of Borrowers, the performance or
observance by Borrowers of any of their obligations under the Loan Agreement or
any of the DIP Financing Documents[; AND (IV) ATTACHES THE NOTES HELD BY IT AND
REQUESTS THAT COLLATERAL AGENT EXCHANGE SUCH NOTES FOR NEW NOTES PAYABLE TO
ASSIGNEE AND THE ASSIGNOR IN THE PRINCIPAL AMOUNTS SET FORTH ON SCHEDULE A
HERETO].
3. Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Loan Agreement, together with copies of the most recent financial
statements delivered pursuant to SECTION 9.6 thereof, and copies of such other
DIP Financing Documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(iii) agrees that it shall, independently and without reliance upon the Assignor
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Agreement; (iv) confirms that it is eligible to become an
Assignee; (v) appoints and authorizes Collateral Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Agreement as are
delegated to Collateral Agent by the terms thereof, together with such powers as
are incidental thereto; (vi) agrees that it will strictly observe and perform
all the obligations that are required to be performed by it as a "Lender" under
the terms of the Loan Agreement and the other DIP Financing Documents; and (vii)
agrees that it will keep confidential all information with respect to Borrowers
furnished to them by Borrowers or the Assignor to the extent provided in the
Loan Agreement.
4. Assignor acknowledges and agrees that it will not sell or otherwise
dispose of the Assigned Interest or any portion thereof, or grant any
participation therein, in a manner which, or take any action in connection
therewith which, would violate the terms of any of the DIP Financing Documents.
5. This Agreement and all rights and obligations shall be interpreted
in accordance with and governed by the laws of the State of Georgia. If any
provision hereof would be invalid under Applicable Law, then such provision
shall be deemed to be modified to the extent necessary to render it valid while
most nearly preserving its original intent; no provision hereof shall be
affected by another provision's being held invalid.
6. Each notice or other communication hereunder shall be in writing,
shall be sent by messenger, by telescope or facsimile transmission or by
first-class mail, shall be deemed given when sent and shall be sent as follows:
If to Assignee, to the following address (or to such other address as
Assignee may designate from time to time):
--------------------------
--------------------------
--------------------------
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128
If to Assignor, to the following address (or to such other address as
Assignor may designate from time to time):
--------------------------
--------------------------
--------------------------
Payments hereunder shall be made by wire transfer of immediately
available Dollars as follows:
If to Assignee, to the following account (or to such other account as
Assignee may designate from time to time):
---------------------------
ABA No.
--------------------
---------------------------
Account No.
----------------
Reference:
----------------
If to Assignor, to the following account (or to such other account as
Assignor may designate from time to time):
---------------------------
---------------------------
---------------------------
ABA No.
--------------------
For Account of:
------------
Reference:
----------------
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed and delivered by their respective duly authorized
officers, as of the date first above written.
--------------------------------------------
("Assignor")
By:
----------------------------------------
Title:
---------------------------------
--------------------------------------------
("Assignee")
By:
----------------------------------------
Title:
---------------------------------
129
EXHIBIT H
FORM OF NOTICE
Reference is made to (i) the Post-Petition Loan and Security Agreement
dated September 25, 2000 (as at any time amended, the "Loan Agreement") among
DYERSBURG CORPORATION, a Tennessee corporation, DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, DYERSBURG FABRICS INC., a
Tennessee corporation, UNITED KNITTING, INC., a Tennessee corporation, UNITED
KNITTING LIMITED PARTNERSHIP, I, a Tennessee limited partnership, IQUE, INC., a
Tennessee corporation, IQUE LIMITED PARTNERSHIP, I, a Tennessee limited
partnership, ALAMAC KNIT FABRICS, INC., a Delaware corporation, and AIH INC., a
Delaware corporation (the foregoing individually referred to hereinafter as
"Borrower" and collectively referred to hereinafter as "Borrowers"), the
Guarantors (as defined in the Loan Agreement), CONGRESS FINANCIAL CORPORATION
(SOUTHERN) in its capacity as administrative agent ("Administrative Agent") for
the financial institutions from time to time party to the Loan Agreement
("Lenders"), Fleet National Bank, in its capacity as collateral agent
("Collateral Agent") for the Lenders and ___________, and (ii) the Assignment
and Acceptance dated as of ____________, 20__ (the "Assignment Agreement")
between __________________ (the "Assignor") and ____________________ (the
"Assignee"). Except as otherwise defined herein, capitalized terms used herein
which are defined in the Loan Agreement are used herein with the respective
meanings specified therein.
The Assignor hereby notifies Borrowers and Collateral Agent of
Assignor's intent to assign to Assignee pursuant to the Assignment Agreement a
principal amount of (i) $________ of the outstanding Revolving Loans [and
participations in Letter of Credit Accommodations] held by Assignor, (ii)
$___________ of Assignor's Revolving Commitment (which amount includes the
Assignor's outstanding Revolving Loans being assigned to Assignee pursuant to
clause (i) above), (iii) $_______________ of the outstanding Term Loan Advance
held by Assignor, and (iv) $_____________ of Assignor's Term Loan Commitment
(which amount includes Assignor's outstanding portion of the Term Loan Advance
being assigned to Assignee pursuant to clause (iii) above),together with an
interest in the DIP Financing Documents corresponding to the interest in the
Loans and Commitments so assigned. Pursuant to the Assignment Agreement,
Assignee has expressly assumed all of Assignor's obligations under the Loan
Agreement to the extent of the Assigned Interest (as defined in the Assignment
Agreement).
For purposes of the Loan Agreement, Agent shall deem Assignor's share
of the Revolving Commitment and Term Loan Commitment to be reduced by $_________
and $_________, respectively, and Assignee's share of the Revolving Commitment
and Term Loan Commitment to be increased by $_________ and $___________,
respectively.
The address of the Assignee to which notices, information and payments
are to be sent under the terms of the Loan Agreement is:
--------------------------
--------------------------
--------------------------
--------------------------
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130
Assignees LIBOR Lending Office address is as follows:
--------------------------
--------------------------
--------------------------
--------------------------
This Notice is being delivered to the Borrowers and Collateral Agent
pursuant to SECTION 13.3 of the Loan Agreement. Please acknowledge your receipt
of this Notice by executing and returning to Assignee and Assignor a copy of
this Notice.
IN WITNESS WHEREOF, the undersigned have caused the execution of this
Notice, as of _________________, 20__.
--------------------------------------------
("Assignor")
By:
----------------------------------------
Title:
----------------------------
--------------------------------------------
("Assignee")
By:
----------------------------------------
Title:
----------------------------
ACKNOWLEDGED AND AGREED TO
AS OF THE DATE SET FORTH ABOVE:
[BORROWERS]
By:
----------------------------------------
Title:
---------------------------------
CONGRESS FINANCIAL
CORPORATION (SOUTHERN), as Administrative Agent
By:
----------------------------------------
Title:
---------------------------------
FLEET NATIONAL BANK, as Collateral Agent
By:
----------------------------------------
Title:
---------------------------------
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EXHIBIT I
BORROWING BASE CERTIFICATE
DYERSBURG CORPORATION
DAILY BORROWING BASE CERTIFICATE
(to be submitted daily and at month-end)
1. Accounts Receivable Balance as of ______________(date)
a. Receivable Balance from previous certificate $___________________
b. Plus: Gross Sales $_________________
Other Debits and Chargebacks * $_________________
c. Total Additions $___________________
d. Less: Collections $_________________
Credit Memos $_________________
Other Credits * $_________________
e. Total Reductions $___________________
2. New Accounts Receivable as of this certificate $___________________
3. Less: Ineligible Accounts Receivable per Aging dated __________ $___________________
(per attached exclusion form)
4. Eligible Accounts Receivable (Line 2 - Line 3) $___________________
5. Advance Rate X 85%
6. Accounts Receivable Availability (Line 4 x Line 5) $___________________
7. Inventory Availability (From Inventory Designation) $___________________
(Inventory Availability not to Exceed $25 Million)
8. Total Collateral Availability (Line 6 + Line 7) $___________________
Less:
9. Minimum Availability Reserve $___________________
10. Total Availability (Line 8 - Line 9) $___________________
11A. Outstanding Revolving Loan Balance $___________________
132
B. Outstanding Letters of Credit $___________________
(Not to Exceed $16 Million)
C. Total Outstanding (Not to Exceed $74 Million)
$___________________
12. Net Availability (Line 10 - Line 11C) $___________________
LOAN RECONCILIATION
13. Current Balance Forward $___________________
Increases to Loan:
14. Loan Advances Requested $___________________
15. Other: explain ____________ $___________________
16. Total Loan Increases (Line 14 + Line 15) $___________________
Decreases to Loan:
17. Payments Initiated via Lockbox $___________________
18. Other Payments Reducing Accounts Receivable $___________________
19. Total A/R Effecting Payments (Line 17 + 18) $___________________
(Must Agree With Line 1D [Collections] - If Not, Please Provide
Detailed Explanation)
19. Other: explain $___________________
20. Total Loan Outstanding $___________________
* If In Excess of $5,000 Explain
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133
For value received the undersigned hereby pledges, sells, assigns and transfers
to Fleet National Bank (herein called "Lenders") the claims or accounts
receivable described and set forth on this statement or in the statements
attached hereto, together with all monies now due or to become due thereon, all
guaranties and security therefor, and all right, title and interest of the
undersigned in the merchandise giving rise thereto, including the right of
stoppage in transit, with full power to collect and/or compromise the same or
otherwise deal with the same in its own name or otherwise as though it were
absolute owner thereof for all purposes. Said claims, accounts, money,
merchandise and security are assigned as collateral security for INDEBTEDNESS
and liabilities of the undersigned to its Lender as more fully provided and
pursuant to a plan set forth in a loan agreement dated _________ between the
undersigned and its lender and with and subject to all the covenants, terms and
provisions thereof.
Client # By:
----------- ----------------------------------------
Authorized Official
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134
DYERSBURG CORPORATION
MONTH END EXCLUSIONS TO ACCOUNTS RECEIVABLE
AS OF :____________________(DATE) AGING
ACCOUNTS RECEIVABLE OVER 60 DAYS FROM DUE DATE BUT IN NO EVENT GREATER THAN
120 DAYS PAST INVOICE DATE: $____________
RE-AGED CREDITS: CREDIT BALANCES ADDED BACK OVER 60 DAYS PAST DUE $____________
AFFILIATES (A), SUBSIDIARIES (S), INTERCOMPANY (I) OR OFFICER/EMPLOYEE ACCOUNTS (O), IF ANY:
Name: A/R Balance (within 60 days of due date )
DM Apparel $______________
United Knitting $______________
Dyersburg Apparel $______________
Dyersburg Fabric $______________
Alamac $______________
TOTAL AFFILIATES, SUBSIDIARIES, INTERCOMPANY OR OFFICER/EMPLOYEE ACCOUNTS: $____________
CONTRA ACCOUNTS: A/R Balance (Amt. Amount of Exclusion
Vendor/Manufacturer Rep. A/P Balance within 60 days past due) (Lesser of A/P or A/R)
- --------------------- $------------- $-------------- $----------------
- --------------------- $------------- $-------------- $----------------
- --------------------- $------------- $-------------- $----------------
TOTAL AMOUNT OF CONTRA ACCOUNTS: $___________
ACCOUNTS SUBJECT TO "CROSS AGING RULE" (IF BALANCE OF OVER 60 DAYS FROM DUE DATE
IS 50% OR GREATER OF TOTAL BALANCE OF ACCOUNT, THEN DEDUCT AMOUNT WITHIN 60 DAYS
OF DUE DATE):
Name Amount within 60 days from due date
- ------------------------ $-------------
- ------------------------ $-------------
- ------------------------ $-------------
TOTAL AMOUNT OF ACCOUNTS SUBJECT TO "CROSS AGING RULE": $___________
ACCOUNTS SUBJECT TO "CONCENTRATION RULE" (IF AGGREGATE BALANCE OF ANY ACCOUNT DEBTOR EXCEEDS
20% OF "ACCEPTABLE ACCOUNTS", THEN DEDUCT AMOUNT OVER 20%):
Name Amount
- ------------------------ $-------------
- ------------------------ $-------------
TOTAL AMOUNT OF ACCOUNTS SUBJECT TO "CONCENTRATION RULE": $___________
CHARGEBACKS LESS THAN 60 DAYS PAST DUE: $___________
SAMPLES LESS THAN 60 DAYS PAST DUE: $___________
RETURNS RESERVE LESS THAN 60 DAYS PAST DUE: $___________
FOREIGN ACCOUNTS NOT BACKED BY LETTERS OF CREDIT:
135
See attached. $_____________
________________________ $______________
TOTAL FOREIGN ACCOUNTS NOT BACKED BY LETTERS OF CREDIT: $___________
FEDERAL GOVERNMENT
________________________ $_____________
________________________ $_____________
TOTAL FEDERAL GOVERNMENT: $___________
OTHER EXCLUSIONS AS PER LOAN AGREEMENT:
________________________ $_____________
________________________ $_____________
TOTAL OTHER EXCLUSIONS: $__________
TOTAL EXCLUSIONS (INELIGIBLE ACCOUNTS RECEIVABLE): $___________
BY:______________________________________
Authorized Official
CLIENT # _____________
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136
DESIGNATION OF MERCHANDISE
(to be submitted on a weekly basis)
_______________________ 20_____
The undersigned hereby designates and pledges all merchandise, supplies,
materials, and goods in process, including any of such described below or in
Exhibit A attached hereto as Merchandise of the undersigned to be subject to a
lien of Fleet National Bank, 300 Galleria Parkway, Suite 800, Atlanta, Georgia,
pursuant to the loan agreement with the undersigned dated
______________________________ and pursuant to applicable provisions of law.
ADVANCE
DYERSBURG ALAMAC UNITED TOTAL RATE AVAILABILITY
--------- ------ ------ ----- ---- ------------
RAW MATERIAL
RAW COTTON $________ $________ $________ $________
LESS:
VALUATION RESERVE $________ $________ $________ $________
SUBTOTAL: COTTON $________ $________ $________ $________ 70% $________
OTHER RAW MATERIAL $________ $________ $________ $________
LESS INELIGIBLES:
DYES & CHEMICALS $________ $________ $________ $________
SUPPLIES $________ $________ $________ $________
OBSOLESCENCE RESERVE $________ $________ $________ $________
SUBTOTAL OTHER RAW $________ $________ $________ $________ 60% $________
(SYNTHETICS AND YARN)
WORK IN PROCESS $________ $________ $________ $________
LESS INELIGIBLES:
$________ $________ $________ $________
OUTSIDE PROCESSORS $________ $________ $________ $________
IN PROCESS ABSORPTION $_________ $_________ $_________ $_________
- - - -
OBSOLETE GREIGE $_________ $_________ $_________ $_________
- - - -
SUBTOTAL OTHER WIP $_________ $_________ $_________ 50% $_________
- - -
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137
SUBTOTAL ALAMAC WIP $_________ $_________ 25% $_________
- -
LOWER OF TOTAL AVAIL
WIP OR $8 MILLION $_________
FINISHED GOODS $_________ $_________ $_________ $_________
- - - -
LESS INELIGIBLES:
REVALUATION RESERVE $_________ $_________ $_________ $_________
- - - -
OBSOLESCENCE RESERVE $_________ $_________ $_________ $_________
- - - -
SECONDS INVENTORY $_________ $_________ $_________ $_________
- - - -
IRREGULAR INVENTORY $_________ $_________ $_________ $_________
- - - -
OBSOLETE INVENTORY $_________ $_________ $_________ $_________
- - - -
FINISHED GOODS
ABSORPTION $_________ $_________ $_________ $_________
- - - -
SUBTOTAL FINISHED GOODS
$_________ $_________ $_________ $_________ 60% $_________
- - - -
TOTAL $_________ $_________ $_________ $_________ $_________
- - - -
NAME OF BORROWER: DYERSBURG CORPORATION CLIENT #_____________________
BY:
---------------------------------
Authorized Official
This Designation is designed for use by each of the lenders named above and
relates to transactions under the loan agreement between the within named
borrower and the particular lender.
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138
MONTHLY RECONCILIATION REPORT
ACCOUNTS RECEIVABLE RECONCILIATION AS OF __________________ (DATE)
ACCOUNTS RECEIVABLE BALANCE AS OF PREVIOUS MONTHS AGING REPORTS: $____________
PLUS: Gross Sales for the month or period $_______________
Other Debits to Accounts Receivable * $_______________
TOTAL ADDITIONS TO ACCOUNTS RECEIVABLE: $____________
LESS: Cash Collections for the month or period $______________
Credit Memos $______________
Other Credits to Accounts Receivable * $______________
TOTAL REDUCTIONS TO ACCOUNTS RECEIVABLE: $____________
TOTAL BALANCE OF THIS AGING REPORT AS OF _______________ (DATE): $____________
ACCOUNTS RECEIVABLE BALANCE AS PER LENDERS MONTH END STATEMENT: $____________
DIFFERENCE (EXPLAIN ON ATTACHED RECONCILIATION REPORT IN DETAIL): $____________
* IF IN EXCESS OF $5,000.00 EXPLAIN
COMPANY: DYERSBURG CORPORATION
BY:
-------------------------------
Authorized Official
CLIENT #
139
RECONCILIATION OF LENDERS MONTH END STATEMENT TO AGING REPORT
ACCOUNTS RECEIVABLE BALANCE PER LENDERS MONTH END STATEMENT $_____________
IN TRANSIT ITEMS:
Sales: $_______________ $_______________
$_______________ $_______________
$_______________ $_______________
$_______________ $_______________
TOTAL SALES: + $_____________
Other Debits: $_______________ $_______________
$_______________ $_______________
TOTAL OTHER DEBITS: + $_____________
Cash Collections: $_______________ $_______________
$_______________ $_______________
$_______________ $_______________
$_______________ $_______________
$_______________ $_______________
TOTAL CASH COLLECTIONS: - $_____________
Credit Memos: $_______________ $_______________
$_______________ $_______________
$_______________ $_______________
TOTAL CREDIT MEMOS: - $_____________
Other Credits: $_______________ $_______________
$_______________ $_______________
$_______________ $_______________
TOTAL OTHER CREDITS: - $_____________
CORRECTIONS & ADJUSTMENTS TO LENDERS MONTH END STATEMENT: __________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
BALANCE MUST AGREE WITH BALANCE OF AGING REPORT BEING SUBMITTED: $_____________
COMPANY: DYERSBURG CORPORATION
BY:
-------------------------------
Authorized Official
140
EXHIBIT J
OPINION LETTER REQUIREMENTS
With respect to each Obligor, Obligors' counsel's opinion letter should
address the following in a manner satisfactory to Agents:
1. That each Obligor is a validly existing entity in good standing
under the laws of its jurisdiction of formation.
2. That each Obligor has all necessary corporate power and authority
(x) to own its property and assets and carry on its business as
presently conducted and (y) to executed, deliver and perform its
obligations under each of the DIP Financing Documents to which it
is a party.
3. That the execution, delivery and performance by each Obligor of
its obligations under the DIP Financing Documents to which it is
a party have been duly authorized by all necessary corporate
action and do not violate any of its organizational documents.
4. The DIP Financing Documents have been duly executed and
delivered by each of the Obligors.
5. Other than actions and approvals required in the Chapter 11
cases, including entry of the Interim Financing Order, no
authorizations or approvals of, and no filings with, any
governmental or regulatory authority or agency are necessary
under any Applicable Law for the execution, delivery or
performance by any Obligor of any of the DIP Financing Documents
to which it is a party.
6. The Interim Financing Order was entered and, according to the
docket sheet, has not been appealed or stayed and no request for
rehearing has been filed in the office of the Clerk of the
Bankruptcy Court with respect to such order.