1995 AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
CULP, INC.
AND
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
AND
WACHOVIA BANK
OF NORTH CAROLINA, N.A.
$44,000,000 TERM LOAN
$33,500,000 REVOLVING LOAN
JULY 1, 1995
1995 AMENDED AND RESTATED CREDIT AGREEMENT
THIS 1995 AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of the 1st day of July, 1995 (the "Credit
Agreement" or "Agreement"), is made by and among CULP, INC.,
a North Carolina corporation (herein called the "Borrower"),
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national
banking association ("First Union"), WACHOVIA BANK OF NORTH
CAROLINA, N.A., a national banking association ("Wachovia")
(First Union and Wachovia being referred to collectively
herein as the "Banks"), and FIRST UNION, acting in the
manner and to the extent described in Section 12 hereof (in
such capacity, the "Agent").
RECITALS
A. The Borrower and First Union were parties to
a 1988 Credit Agreement, dated as of November 11, 1988 (the
"1988 Credit Agreement"), pursuant to which First Union
extended certain loans to the Borrower (collectively
referred to as the "Original Loan").
B. Subsequently, the Borrower and First Union
executed the following amendments to the 1988 Credit
Agreement (whereby the Original Loan was amended): an
Amendment to 1988 Credit Agreement, dated as of October 30,
1989; a Second Amendment to 1988 Credit Agreement, dated as
of January 26, 1990; a Third Amendment to 1988 Credit
Agreement, dated as of February 6, 1990; a Fourth Amendment
to 1988 Credit Agreement, dated as of November 27, 1990; a
Fifth Amendment to 1988 Credit Agreement, dated as of August
19, 1991; a Sixth Amendment to 1988 Credit Agreement, dated
as of October 24, 1991 and Amendment A to the Credit
Agreement dated September 1, 1992.
C. The Borrower, First Union and Wachovia
entered into a 1993 Amended and Restated Credit Agreement
dated January 28, 1993 (the "1993 Credit Agreement"), which
1993 Credit Agreement amended and restated the 1988 Credit
Agreement, as amended, in its entirety and further amended
the Original Loan. The 1993 Credit Agreement was amended by
a First Amendment to 1993 Amended and Restated Credit
Agreement dated August 3, 1993, and a Second Amendment to
1993 Amended and Restated Credit Agreement dated November 1,
1993.
D. The Borrower, First Union and Wachovia
entered into a 1994 Amended and Restated Credit Agreement
dated April 15, 1994 (the "1994 Credit Agreement"), which
1994 Credit Agreement amended and restated the 1993 Credit
Agreement, as amended, in its entirety and further amended
the Original Loan. The 1994 Credit Agreement has been
amended by a First Amendment to 1994 Amended and Restated
Credit Agreement dated April 30, 1994 (the "First
Amendment"); a Second Amendment to Amended and Restated
Credit Agreement dated July 13, 1994 (the "Second
Amendment"); a Third Amendment to 1994 Amended and Restated
Credit Agreement dated November 1, 1994 (the
"Third Amendment"); and a Fourth Amendment to 1994 Amended and
Restated Credit Agreement dated March 6, 1995 (the "Fourth
Amendment," and together with the First, Second and Third
Amendments, the "Amendments").
E. The Borrower, First Union and Wachovia desire
to restate the 1994 Credit Agreement, as amended by the
Amendments so that the parties' agreement regarding the
Borrower's indebtedness will be contained in one restated
agreement.
F. The parties intend that this Agreement shall
restate, supersede and replace in its entirety the 1994
Credit Agreement and all Amendments. This Agreement is not
intended to and does not represent the making of new loans
from the Banks to the Borrower, is not a novation, and the
loans described hereunder shall continue to be secured by
and enjoy the benefits of all of the Loan Documents not
amended or replaced hereby or hereunder.
STATEMENT OF AGREEMENT
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrower, each of the Banks and the
Agent hereby agree as follows:
SECTION 1. Definitions. For purposes of this Agreement,
the following terms shall have the following meanings:
"Acts" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Sec. 9601 et seq.; the Toxic Substances
Control Act, 15 U.S.C. Sec. 2601 et seq.; the Resource
Conservation and Recovery Act, 42 U.S.C. Sec. 6901 et seq.;
the Clean Air Act, 42 U.S.C. Sec. 7401 et seq.; the Federal
Water Pollution Control Act, 33 U.S.C. Sec. 201 et seq.; the
Emergency Planning and Community Right-to-Know Act, 42
U.S.C. Sec. 11001 et seq.; and all other federal, state or
local laws or rules and the regulations adopted and
publications promulgated pursuant thereto, all as amended
from time to time, regulating environmental matters.
"Adjusted LIBOR Rate" means a rate per annum
(rounded upwards, if necessary, to the next higher 1/100 of
1%) determined pursuant to the following formula:
Adjusted LIBOR Rate = LIBOR BASE RATE
1 - LIBOR RESERVE PERCENTAGE
"Agreement" means this 1995 Credit Agreement
between the Borrower, the Banks and the Agent, as it may be
amended, modified, supplemented or restated from time to
time.
"Applicable Margin" means the marginal rate of
interest which shall be paid by Borrower after October 31,
1994, in addition to the Prime Rate or the Adjusted LIBOR
Rate, as the case may be,
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which coincides to the ratio of Consolidated Funded Debt to
Operating Cash Flow for Borrower (calculated quarterly with respect
to the immediately preceding four calendar quarters), as
specifically set forth in a separate letter agreement dated
November 1, 1994 between the Borrower and the Banks as such letter
may be amended, restated, modified or supplemented from time to
time.
"Borrower's Affidavit" means an affidavit dated as
of April 15, 1994 in form and content acceptable to the
Agent whereby the Borrower certified certain facts relative
to the Mortgaged Properties.
"Business Day" means a banking business day of
both Banks in High Point, North Carolina.
"Canada" means 3096726 Canada Inc., a Canadian
corporation and a wholly-owned Subsidiary of the Borrower.
"Capital Asset" means any asset that would, in
accordance with generally accepted accounting principles in
the United States, be required to be classified and
accounted for as a capital asset.
"Capital Expenditures" means, for any period, the
aggregate cost (including repairs, replacements and
improvements), less the amount of trade-in allowances
included in such cost, of all Capital Assets acquired by the
Borrower and any Subsidiary during such period, plus all
Capital Lease Obligations of the Borrower and any Subsidiary
incurred during the relevant period.
"Capital Lease" means, as to the Borrower and its
Subsidiaries, any lease of any property (whether real,
personal or mixed) that would, in accordance with generally
accepted accounting principles in the United States, be
required to be classified and accounted for as a capital
lease on a balance sheet of the lessee.
"Capital Lease Obligations" means, with respect to
any Capital Lease, the amount of the obligation of the
lessee thereunder that would, in accordance with generally
accepted accounting principles in the United States, appear
on a balance sheet as a liability of such lessee in respect
of such Capital Lease.
"Closing Date" means April 15, 1994.
"Consolidated Adjusted Current Liabilities" means
the amount of all liabilities of the Borrower and its
Subsidiaries which by their terms are payable within one
year (including all indebtedness payable on demand or
maturing not more than one year from the date of computation
and the current portion of long term debt, but excluding the
outstanding principal amount of the Revolving Credit Notes,
except to the extent that such outstanding principal amount
exceeds the amount of the Revolving Credit Commitments as
they will stand one year in the future), all
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determined in accordance with generally accepted accounting
principles in the United States.
"Consolidated Current Assets" means cash and all
other assets or resources of the Borrower and its
Subsidiaries which are expected to be realized in cash, sold
in the ordinary course of business, or consumed within one
year, all determined in accordance with generally accepted
accounting principles in the United States.
"Consolidated Funded Debt" means all indebtedness
for money borrowed of the Borrower and its Subsidiaries,
whether direct or contingent, as determined in accordance
with generally acceptable accounting principles in the
United States, including (without limitation) Capital Lease
Obligations, the deferred purchase price of any property or
asset or indebtedness evidenced by a promissory note, bond,
guaranty or similar written obligation for the payment of
money (including, but not limited to, conditional sales or
similar title retention agreements); minus amounts of
restricted investments relating to industrial revenue bond
financing ("IRB").
"Consolidated Tangible Shareholders' Equity" of
the Borrower and its Subsidiaries shall mean at any time as
of which the amount thereof is to be determined, the sum of
the following in respect of the Borrower and its
Subsidiaries (on a consolidated basis and excluding
intercompany items):
(i) the amount of issued and outstanding share
capital, plus
(ii) the amount of additional paid-in capital,
retained earnings (or, in the case of a
deficit, minus the amount of such deficit),
minus
(iii) the sum of the following (without duplication
or deductions in respect of items already
deducted in arriving at surplus and retained
earnings): (a) all reserves, except legal
reserves and other contingency reserves
(i.e., reserves not allocated by specific
purposes and not deducted from assets) which
are properly treated as appropriations or
surplus or retained earnings; (b) the book
value of all assets which would be treated as
intangibles under generally accepted
accounting principles in the United States
including, without limitation, capitalized
expenses, goodwill, trademarks, trade names,
franchises, copyrights, patents and
unamortized debt discount and expense; and
(c) any treasury stock; plus
(iv) the amount of unamortized goodwill arising
from the acquisition by Borrower of certain
of the assets of Rossville Companies, Inc.,
Chromatex, Inc. and
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Rossville Velours, Inc. pursuant to a transaction
which closed on November 1, 1993.
"Consolidated Shareholders' Equity" of the
Borrower and its Subsidiaries shall mean at any time as of
which the amount thereof is to be determined, the sum of the
following in respect of the Borrower and its Subsidiaries
(on a consolidated basis and excluding intercompany items):
(v) the amount of issued and outstanding share
capital, plus
(vi) the amount of additional paid-in capital,
retained earnings (or, in the case of a
deficit, minus the amount of such deficit).
"Consolidated Total Liabilities" means the sum of
the aggregate amount of all liabilities of the Borrower and
its Subsidiaries, all determined in accordance with
generally accepted accounting principles in the United
States plus all guaranties of the obligations of third
parties other than Subsidiaries; provided, however, that for
the purposes of this definition, the amount of the
Consolidated Funded Debt of the Borrower and its
Subsidiaries relating to industrial revenue bond financing,
and the amount of all guaranties of the Borrower and its
Subsidiaries in connection with such financing, shall be
deemed reduced by the amount of any unspent project funds
held in trust for use in any industrial revenue bond
project.
"Current Maturities" means, at any time, the
aggregate amount of all payments coming due and payable by
the Borrower within the next twelve months in respect of
indebtedness that by its terms matures more than one year
from the date of creation thereof.
"Default" means any occurrence, event, condition
or omission that, with the giving of notice or the passage
of time, or both, would constitute an Event of Default if
the Borrower did not correct the same within the permitted
time period, if any.
"Environmental Indemnity Agreement" means that
certain Certificate and Agreement Regarding Environmental
Matters dated as of April 15, 1994, among the Borrower, the
Agent and the Banks, as amended, modified, restated or
replaced from time to time.
"Environmental Reports" means written reports as
delivered to the Banks prior to the Closing Date, relating
to environmental matters, including, without limitation,
full information as to the presence of Hazardous Substances,
with respect to each of the Mortgage Properties, such
reports to be in form and substance satisfactory to the
Agent.
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"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
"Event of Default" shall have the meaning
specified in Section 11.1 hereof.
"Existing Mortgage" means any mortgage or deed of
trust which exists with respect to any of the Real Property
of Borrower.
"FIRPTA Affidavit" means the affidavit of
Borrower, satisfactory to the Banks, that Borrower is not a
"foreign person" as contemplated by Section 1445 of the
Internal Revenue Code of 1986.
"First Union Revolving Credit Commitment" means
the commitment of First Union to make revolving loans to the
Borrower pursuant to Section 4 hereof.
"First Union Revolving Credit Note" means the
promissory note evidencing the First Union Revolving Loan,
substantially in the form of Exhibit 2-A hereto, with
appropriate insertions of amount and date as such promissory
note may be amended, restated, modified or supplemented from
time to time.
"First Union Revolving Loan" means the Revolving
Loan made by First Union to the Borrower pursuant to Section
4 hereof.
"First Union Term Loan" means the Term Loan of the
principal amount indicated on Annex 1 hereto from First
Union to the Borrower pursuant to Section 3 hereof.
"First Union Term Note" means the promissory note
evidencing the First Union Term Loan, substantially in the
form of Exhibit 1-A hereto, with appropriate insertions of
amount and date as such promissory note may be amended,
restated, modified or supplemented from time to time.
"Fiscal Month" means a fiscal month of the
Borrower, which is a 4- or 5-week period. The first Fiscal
Month of each Fiscal Quarter is a 5-week period and the
other two Fiscal Months in each Fiscal Quarter are 4-week
periods.
"Fiscal Quarter" means a fiscal quarter of the
Borrower which is a 13-week period, the first of which
begins on the first day of the Borrower's fiscal year.
"Fiscal Year" means the fiscal year of the
Borrower, which ends on the Sunday closest to April 30 of
each calendar year.
"Governmental Authorities" means collectively, the
United States of America, the State of North Carolina, the
State of South Carolina and any other political subdivision,
agency, commission, bureau, court or any public or quasi-
public instrumentality
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exercising jurisdiction over Borrower or any portion of the
Mortgaged Property.
"Governmental Requirements" means all laws,
ordinances, decisions, judgements, decrees, rules, orders,
writs, injunctions, permits, and regulations of any
Governmental Authority applicable to, or the decisions or
orders of any courts having jurisdiction over, Borrower or
any portion of the Mortgaged Property, now or hereinafter in
force, including but not limited to all land use, zoning,
subdivision, building, setback, health, traffic, flood
control, fire safety, Hazardous Substances, underground
storage tanks, handicap and other applicable codes, rules,
regulations and ordinances and the Americans with
Disabilities Act of 1990 (Public Law 101-336, 42 U.S.C.
(section mark)12101).
"Hazardous Substances" means petroleum, petroleum
by-products (including, but not limited to, crude oil,
diesel oil, fuel oil, gasoline, lubrication oil, oil refuse,
oil mixed with other waste, oil sludge, and all other liquid
hydrocarbons, regardless of specific gravity), natural or
synthetic gas products and/or any hazardous, dangerous or
toxic substance, material, waste, pollutant or contaminate
defined as such in (or for the purposes of) the Acts. The
term Hazardous Substances shall include, without limitation,
substances now or hereinafter defined as "hazardous
substances", "toxic substances," "hazardous materials" or
"contaminated waste" or similar terms in the Acts.
"Improvements" means the "Improvements" as defined
in any and all of the Mortgages.
"Interest Expense" means, with respect to the
Borrower and its Subsidiaries on a consolidated basis for
any period, the sum of gross interest expense of the
Borrower and its Subsidiaries for such period determined on
a consolidated basis in accordance with generally accepted
accounting principles in the United States, plus capitalized
interest of the Borrower and its Subsidiaries on a
consolidated basis.
"Interest Rate Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest
rate collar agreement, currency hedge agreement or other
similar agreement or arrangement designed to protect the
Borrower against fluctuations in interest rates or currency
exchange rates, including, without limitation, any "swap
agreement" as defined in 11 U.S.C. (section mark) 101(55).
"LIBOR Base Rate" means that rate per annum at
which, in the good faith opinion of the Agent, United States
Dollars in the amount of the principal balance of the
applicable outstanding indebtedness and for a maturity equal
to one Fiscal Month are currently being offered on the
London Interbank market to major top credit quality banks,
for immediate settlement, at 11:00 a.m. London time.
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"LIBOR Rate Loan" means a loan bearing interest
based upon the Adjusted LIBOR Rate.
"LIBOR Reserve Percentage" means the daily reserve
percentage required of national banks on "Eurocurrency
liabilities" pursuant to Regulation D of the Board of
Governors of the Federal Reserve System. For purposes of
calculation of the LIBOR Reserve Percentage, the reserve
requirement shall be as set forth in Regulation D without
benefit of or credit for prorations, exemptions or offsets
under Regulation D and further, without regard to whether
the applicable Bank elects to actually fund the loan with
"Eurocurrency liabilities." The Agent may elect from time to
time, to waive application of the LIBOR Reserve Percentage
on specified maturities with the approval of each Bank.
"Lien Waiver" shall mean, with respect to any Real
Property, the affidavit of Borrower in form and content
satisfactory to Title Insurer certifying that there exist no
mechanics' or materialmen's liens on such Real Property, or
any conditions which could give rise to any such liens.
"Loan Documents" means this Agreement, the Notes
and all other documents, agreements or instruments which
evidence or secure the Loans or which are exhibits to this
Agreement, including, but not limited to, the Mortgages, the
Mortgagee Consent, Title Policies, Surveys, Lien Waivers,
Borrower's Affidavit, FIRPTA Affidavit, Environmental
Indemnity Agreement, Environmental Reports, Security
Agreement, and UCC Financing Statements, delivered to the
Agent and the Banks in connection with the 1994 Credit
Agreement. In addition, "Loan Documents" shall refer to any
Interest Rate Agreement that may exist between the Borrower
and any of the Banks.
"Loans" means the Term Loans and the Revolving
Loans, collectively. "Loan" means one of the Term Loans or
Revolving Loans, as appropriate.
"Mortgage" means any Deed of Trust and Security
Agreement or Mortgage and Security Agreement dated as of
April 15, 1994, from Borrower for the benefit of the Agent
for the Banks, together with any future modifications
thereof.
"Mortgagee Consent" means a certificate in
writing, satisfactory to the Banks, given by any mortgagee
of Borrower, consenting to the subordinate lien of a
Mortgage and confirming certain facts with respect to the
Mortgage.
"Mortgagee Subordination" means an instrument in
writing in recordable form, satisfactory to the Banks,
subordinating the lien of an Existing Mortgage to the lien
of the Mortgage encumbering the same Mortgaged Property.
"Mortgaged Property" means the Real Property
conveyed or encumbered by any Mortgage.
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"Net Income" means, for any period, the net income
(or loss) of the Borrower and its Subsidiaries on a
consolidated basis for such period, determined in accordance
with generally accepted accounting principles in the United
States.
"Notes" means the collective reference to the
Revolving Credit Notes and the Term Notes.
"Operating Cash Flow" (or "EBITDA") means, for any
period of four consecutive quarters, Net Income for such
period plus the sum of the following consolidated expenses
of the Borrower and its Subsidiaries for such period, to the
extent included in the calculation of such Net Income: (i)
depreciation expense, (ii) amortization of intangible
assets, (iii) Interest Expense for such period and (iv)
income taxes for such period, all determined in accordance
with generally accepted accounting principles in the United
States.
"Permitted Encumbrances" shall mean and include:
(a) those liens and encumbrances listed on
Exhibit 4 hereof;
(b) liens granted to financial institutions in
connection with the Borrower's tax exempt bond financing
arrangements listed on Exhibit 6 attached hereto and any
extensions, modifications, refinancings, refundings or
replacements thereto or thereof;
(c) (i) liens securing non interest-bearing
purchase money obligations payable over a term of no more
than two (2) years given to vendors of equipment and (ii)
other liens securing purchase-money obligations not
exceeding $1,000,000 in the aggregate at any one time;
(d) liens on the accounts receivable, general
intangibles, documents, contract rights, instruments,
chattel paper and cash and noncash proceeds thereof,
including returned, rejected or repossessed goods related
thereto and billed and held inventory, of the Borrower or
its Subsidiaries granted in connection with factoring
arrangements; provided, however, that all such factoring
arrangements shall be without recourse and the Borrower
shall not incur any Consolidated Funded Debt in connection
therewith;
(e) liens granted from time to time pursuant to
the prior written consent of the Banks;
(f) liens for taxes, assessments or similar
governmental charges not in default or being contested in
good faith;
(g) worker's, mechanic's and materialmen's liens
and similar liens incurred in the ordinary course of
business remaining undischarged for not longer than 45 days
from the attachment thereof, and easements which are not
substantial in character and
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do not materially detract from the value or interfere with the
intended use of the properties subject thereto and affected
thereby;
(h) attachments remaining undischarged for not
longer than 10 days from the making thereof;
(i) liens in respect of final judgments or awards
remaining undischarged for not longer than 10 days from the
making thereof, unless execution on such judgment shall have
been stayed pending appeal;
(j) liens in respect of pledges or deposits under
worker's compensation laws, unemployment insurance or
similar legislation and in respect of pledges or deposits to
secure bids, tenders, contracts (other than contracts for
the payment of money), leases or statutory obligations, or
in connection with surety, appeal and similar bonds
incidental to the conduct of litigation; and
(k) liens on the assets of Canada or Rayonese
granted to the former shareholders of Rayonese securing the
Rayonese Note.
"Person" means an individual, partnership,
corporation, trust, unincorporated organization,
association, joint venture or a government or agency or
political subdivision thereof.
"Prime Rate" shall be that rate announced by First
Union from time to time as its Prime Rate (which is one of
several interest rates used by First Union) as that rate may
change from time to time, with said changes to occur at the
opening of business on the date the Prime Rate changes.
First Union lends at rates both above and below the Prime
Rate and such rate is not represented or intended to be the
lowest or most favorable rate of interest offered by First
Union.
"Prime Rate Loan" means a loan bearing interest
based upon the Prime Rate.
"Rayonese" means Rayonese Textile Inc., a Canadian
corporation.
"Rayonese Acquisition" means the acquisition of
the stock of Rayonese by Canada pursuant to the Share
Purchase Agreement dated as of December 22, 1994 between
Canada and certain shareholders of Rayonese.
"Rayonese Note" means the promissory note or notes
evidencing indebtedness of Canada to the former shareholders
of Rayonese in partial payment for the stock of Rayonese
purchased by Canada in the Rayonese Acquisition.
"Real Property" means any real property owned or
leased by Borrower or any of its Subsidiaries.
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"Required Banks" means at any time prior to the
occurrence of an Event of Default and acceleration pursuant
to Section 11.2 hereof, Persons having at least 60% of the
aggregate Revolving Credit Commitments, and at any time
thereafter Persons holding 60% of the principal amounts
outstanding under the Notes and under this Agreement
(including Section 4.4 hereof); provided that for so long as
First Union or Wachovia shall not have assigned all or any
of its rights and obligations under this Agreement and the
Notes pursuant to Section 13.3(c) hereof, "Required Banks"
shall mean such Bank (Wachovia and/or First Union) and the
foregoing requisite Persons.
"Revolving Credit Commitments" means the aggregate
of the First Union Revolving Credit Commitment and the
Wachovia Revolving Credit Commitment, collectively.
"Revolving Credit Commitment" means either the First Union
Revolving Credit Commitment or the Wachovia Revolving Credit
Commitment, individually, as appropriate.
"Revolving Credit Notes" means the First Union
Revolving Credit Note and the Wachovia Revolving Credit
Note, collectively. "Revolving Credit Note" means either
the First Union Revolving Credit Note or the Wachovia
Revolving Credit Note, individually, as appropriate.
"Revolving Loans" means the First Union Revolving
Loan and the Wachovia Revolving Loan, collectively.
"Revolving Loan" means either the First Union Revolving Loan
or the Wachovia Revolving Loan, individually, as
appropriate.
"Revolving Loan Interest Rate" has the meaning set
forth in Section 4.2 hereof.
"Revolving Loan Termination Date" means, as to
either of the Revolving Credit Commitments, the date on
which the termination of all or a portion of such Revolving
Credit Commitment, pursuant to Section 4.3 hereof, becomes
effective.
"Revolving Loan Maturity Date" shall mean March 1,
1999.
"Security Agreement" means that certain Security
Agreement dated as of April 15, 1994, between the Borrower
and the Agent for the benefit of the Banks, as amended,
modified, restated or replaced from time to time.
"Subsidiary" or "Subsidiaries" means any
corporation of which more than 50% of voting stock at any
time is owned or controlled directly or indirectly by the
Borrower.
"Survey" means any survey of Mortgaged Property as
described in Section 9.23 hereof.
"Term Loan Interest Rate" has the meaning set
forth in Section 3.3 hereof.
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"Term Loans" means the First Union Term Loan and
the Wachovia Term Loan, collectively. "Term Loan" means
either the First Union Term Loan or the Wachovia Term Loan,
individually, as appropriate.
"Term Loan Maturity Date" shall mean March 1,
2001.
"Term Notes" means the First Union Term Note and
the Wachovia Term Note, collectively. "Term Note" means
either the First Union Term Note or the Wachovia Term Note,
individually, as appropriate.
"Title Insurer" means any of Lawyers Title
Insurance Corporation, Chicago Title Insurance Company and
Old Republic National Title Insurance Company.
"Title Policy" means a loan title insurance policy
with respect to any one of the Mortgaged Properties issued
by a Title Insurer, which shall be an ALTA 1970 form of
policy, if available, together with such endorsements as the
Banks shall require.
"Total Capitalization" is defined as Consolidated
Funded Debt plus Consolidated Tangible Shareholders' Equity.
"UCC Financing Statements" shall mean those UCC-1
Financing Statements showing Borrower as debtor and Agent,
on behalf of Banks, as secured party, which are required to
be filed in order to perfect the security interest granted
by Borrower to Agent pursuant to the Security Agreement.
"Wachovia Revolving Credit Commitment" means the
commitment of Wachovia to make revolving loans to the
Borrower pursuant to Section 4 hereof.
"Wachovia Revolving Credit Note" means the
promissory note evidencing the Wachovia Revolving Loan,
substantially in the form of Exhibit 2-B hereto, with
appropriate insertions of amount and date as such promissory
note may be amended, restated, modified or supplemented from
time to time.
"Wachovia Revolving Loan" means the revolving
credit loan made by Wachovia to the Borrower pursuant to
Section 4 hereof.
"Wachovia Term Loan" means the term loan of the
principal amount indicated on Annex I hereto from Wachovia
to the Borrower pursuant to Section 2 hereof.
"Wachovia Term Note" means the promissory note
evidencing the Wachovia Term Loan, substantially in the form
of Exhibit 1-B hereto, with appropriate insertions of amount
and date as such promissory note may be amended, restated,
modified or supplemented from time to time.
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"Working Capital" means Consolidated Current
Assets less Consolidated Adjusted Current Liabilities.
SECTION 2. Commitment and Security.
2.1. Commitment. Each of the Banks severally
agrees, upon the terms and conditions of this Agreement, to
make Loans to the Borrower for the period and in the amounts
herein set forth, so long as no Default or Event of Default
exists under this Agreement.
2.2. Security. As security for the Loans made by
the Banks upon the terms and conditions of this Agreement,
the Borrower hereby confirms that, pursuant to the Loan
Documents, it has granted to the Agent on behalf of and for
the ratable benefit of the Banks (i) a first security
interest in the Borrower's equipment, inventory (excluding
raw materials), accounts and fixtures (as each such term is
defined in the Uniform Commercial Code as adopted and in
effect from time to time in the State of North Carolina and
the State of South Carolina), as described in and pursuant
to the Security Agreement and (ii) a first lien on the
Mortgaged Property, in each case subject only to Permitted
Encumbrances.
SECTION 3. Loans Evidenced by Term Notes.
3.1. Term Loans. Each Bank hereby severally
agrees, on the terms and conditions of this Agreement and in
reliance upon the representations and warranties made
hereunder, to make a Term Loan to the Borrower in the
principal amount indicated on Annex I attached hereto. The
aggregate principal amount of the Term Loans is Forty-four
Million Dollars ($44,000,000). The Term Loans shall be
evidenced by the Term Notes, and the proceeds of the Term
Loans have been advanced to the Borrower by the Banks.
3.2. Term Notes. On the date hereof, the Borrower
shall execute and deliver to each Bank a Term Note payable
to the order of such Bank for the full amount of such Bank's
Term Loan.
3.3. Repayment of Term Loans. Each of the Term
Loans shall bear interest at the Borrower's option at a rate
per annum equal to (i) the Prime Rate or (ii) the Adjusted
LIBOR Rate, in either case plus the Applicable Margin.
The rate selected by the Borrower as provided in
this Section 3.3 is sometimes herein referred to as the
"Term Loan Interest Rate."
Interest accruing with respect to the Term Loans
shall be paid each Fiscal Month of the Borrower to the Agent
for the ratable benefit of the Banks. The Agent shall
exercise its best efforts to submit an invoice to the
Borrower for a Fiscal Month's interest payment by the fourth
Business Day of the next succeeding month; provided,
however, that no failure on the part of the Agent to so
deliver such invoice by such date will relieve the Borrower
of its
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obligation to make such interest payment for such
Fiscal Month. Each such invoice shall state the amount
payable to each of the Banks under such invoice. The amount
so accruing will be payable on the tenth Business Day of
each Fiscal Month, following the date hereof, and continuing
until payment in full of the Term Notes. The Agent is
hereby authorized by the Borrower (but only on or after the
tenth Business Day of such Fiscal Month of the Borrower) to
debit an account of the Borrower (for the benefit of the
Banks) with either of the Banks as designated by the
Borrower in an amount equal to the amount then due and
payable under this Section 3.3 by the Borrower to the Banks
for such Fiscal Month. No late charge will be assessed
against the Borrower with respect to any payment due
hereunder until after the fifteenth day after the due date
therefor.
From time to time, the Borrower will select the
applicable Term Loan Interest Rate based on quotes from the
Agent. The Adjusted LIBOR Rate will be a fixed rate for one
Fiscal Month. This rate option may be designated as of the
first Business Day of a Fiscal Month, and such rates shall
be effective as of the first day of the Fiscal Month and
shall be in effect through the final day of the Fiscal
Month. If the Term Loan Interest Rate is being calculated
based on the Prime Rate, the rate shall adjust daily as
changes occur in the Prime Rate.
On or before 11:00 a.m. (Charlotte, North Carolina
time) on the first Business Day of each Fiscal Month at the
Borrower's request, the Agent shall notify the Borrower of
the Term Loan Interest Rate options, and the Borrower may
before 12:00 noon on such day designate to the Agent the
applicable Term Loan Interest Rate which shall apply for
such Fiscal Month. If the Borrower fails to designate an
applicable Term Loan Interest Rate by 12:00 noon on such
date, each of the Term Notes will bear interest for such
Fiscal Month at the lower of the Term Loan Rate options on
such date.
The aggregate principal amount of the Term Loans
shall be due and payable and shall be repaid by the Borrower
to the Agent for the ratable benefit of the Banks in
seventy-five (75) consecutive monthly installments, each in
the amount of Five Hundred Thousand Dollars ($500,000.00),
each such payment being due and payable on the tenth
Business Day of each Fiscal Month for which such payment is
due, commencing on December 14, 1994, and one installment in
the amount of Six Million Five Hundred Thousand Dollars
($6,500,000.00), due and payable on March 1, 2001. The
final maturity date of each of the Term Notes is March 1,
2001.
If a Bank gives notice of termination of its
Revolving Credit Commitment pursuant to Section 4.3 hereof,
then upon the Revolving Loan Termination Date that occurs
thirteen months following such notice, the interest rate
payable on such Bank's Term Note shall be permanently
adjusted to the Prime Rate plus any Applicable Margin,
subject to the provisions of Section 5.4 hereof.
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3.4. Optional Prepayment of Term Loans. The
Borrower shall have the right at any time, or from time to
time, upon at least one (1) days' prior notice to the Agent,
to prepay to the Agent the Term Loans in whole or in part,
without premium or penalty; provided, however, that (i) each
partial prepayment of the Term Loans shall be in the
aggregate principal amount of at least $100,000; (ii)
interest on the amount prepaid, accrued to the date of
prepayment, shall be paid on such date of prepayment; and
(iii) each such prepayment shall be applied, pro rata, to
the First Union Term Note and to the Wachovia Term Note.
Any prepayments of the principal amount of the
Term Loans shall be applied, pro rata between each of the
Banks, to the scheduled payments on the Term Loans in the
inverse order of maturity.
SECTION 4. Loans Evidenced by Revolving Credit Notes.
4.1. Revolving Loans. Each of the Banks severally
agrees, upon the terms and conditions set forth herein, and
only so long as no Default or Event of Default exists
hereunder, to make loans to the Borrower under the Revolving
Credit Notes on a pro rata basis up to the amount of such
Bank's Revolving Credit Commitment (as specified on Annex I
hereto) during the period from the Closing Date until the
applicable Revolving Loan Termination Date. As to each of
the Revolving Credit Commitments, during the period from the
Closing Date to the Revolving Loan Termination Date
applicable to such Revolving Loan, the Borrower may use such
Revolving Loan by borrowing, paying or repaying the
principal amount thereof, and reborrowing, paying or
repaying the principal amount thereof, all in accordance
with the terms and conditions of this Agreement; provided,
however, that the outstanding principal amount of the
Revolving Credit Notes shall not at any time exceed the
aggregate amount of the Revolving Credit Commitments less
the amount of Accepted Drafts (as hereinafter defined) then
outstanding; and provided, further, that the amount advanced
by a Bank pursuant to this Section 4.1 shall not exceed such
Bank's Revolving Credit Commitment at any time. The
Revolving Credit Notes, when duly executed and delivered by
the Borrower, shall represent the obligations of the
Borrower to pay the amounts of the Revolving Loans or the
aggregate unpaid principal amount of all Revolving Loans
made by the Banks, and interest due thereon. Borrowings
under the Revolving Loans may be made on any Business Day
(but not more frequently than three times during each
calendar week) and are to be made in amounts of not less
than $400,000 and in integral amounts of $100,000. The
Borrower shall make requests for advances under the
Revolving Loans by giving the Agent oral or written notice
of the amount of such desired borrowing and the date the
funds are to be received by the Borrower on or before 10:30
a.m. of the date such funds are to be received. The Agent
shall promptly advise each Bank of the information contained
in such notice and its proportionate share of such
borrowing. No later than 12:00 noon on the date specified
in such notice, each Bank
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shall make available to the Agent, in immediately available funds,
its proportionate share of such borrowings.
4.2. Payments of Interest and Principal. Loans
made under the Revolving Credit Notes shall bear interest at
the Borrower's option at a rate per annum equal to: (i) the
Prime Rate or (ii) the Adjusted LIBOR Rate, in either case
plus the Applicable Margin.
The rate selected by the Borrower as provided in
this Section 4.2 is sometimes herein referred to as the
"Revolving Loan Interest Rate."
Interest accruing with respect to the Revolving
Loans shall be paid each Fiscal Month of the Borrower to the
Agent for the ratable benefit of the Banks. The Agent shall
exercise its best efforts to submit an invoice to the
Borrower for a Fiscal Month's interest payment by the fourth
Business Day of the next succeeding month (but after the end
of the Borrower's previous Fiscal Month); provided, however,
that no failure on the part of the Agent to so deliver such
invoice by such date will relieve the Borrower of its
obligation to make such interest payment for such Fiscal
Month. Each such invoice shall state the amount payable to
each of the Banks under such invoice. The amount so
accruing will be payable on the tenth Business Day of each
Fiscal Month, commencing on the first such interest payment
date following the date of the first Revolving Loan, and
continuing until payment in full of the Revolving Credit
Notes. The Agent is hereby authorized by the Borrower (but
only on or after the tenth Business Day of such Fiscal Month
of the Borrower) to debit an account of the Borrower (for
the benefit of the Banks) with either of the Banks as
designated by the Borrower in an amount equal to the amount
then due and payable under this Section 4.2 by the Borrower
to the Banks for such Fiscal Month. No late charge will be
assessed against the Borrower with respect to any payment
due hereunder until after the fifteenth day after the due
date therefor. Borrower shall immediately pay to the Agent,
for the pro rata benefit of the Banks, on the date the
Revolving Credit Notes become due and payable, the entire
outstanding principal amount of the Revolving Loans,
together with the accrued interest thereon through and
including such date. The Borrower may make payments of
principal on the Revolving Loans at any time and from time
to time, provided that such payments must be in amounts of
not less than $100,000 and in integral amounts of $100,000,
and provided further that the Borrower may not make either a
borrowing under Section 4.1 hereof or a payment of principal
pursuant to this Section 4.2 more often than three times
during any calendar week.
From time to time Borrower will select the
applicable Revolving Loan Interest Rate based on quotes from
the Agent. The Adjusted LIBOR Rate will be a fixed rate for
one Fiscal Month. This rate option may be designated as of
the first Business Day of a Fiscal Month and such rates
shall be effective as of the first day of the Fiscal Month
and shall be in effect through the final
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day of the Fiscal Month. If the Revolving Loan Interest Rate is
being calculated based on the Prime Rate, the rate shall adjust
daily as changes occur in the Prime Rate.
On or before 11:00 a.m. (Charlotte, North Carolina
time) on the first Business Day of each Fiscal Month at the
Borrower's request, the Agent shall notify the Borrower of
the Revolving Loan Interest Rate options, and the Borrower
may before 12:00 noon on such day designate to the Agent the
applicable Revolving Loan Interest Rate which shall apply to
such Fiscal Month. If the Borrower fails to designate an
applicable Revolving Loan Interest Rate by 12:00 noon on
such date, the Revolving Credit Notes will bear interest for
such Fiscal Month at the lower of the Revolving Loan Rate
options on such date.
4.3. Termination or Reduction of Revolving Credit
Commitments. Borrower shall have the right, upon written
notice (effective upon receipt) to the Agent and each of the
Banks, to terminate, or from time to time, to reduce, the
Revolving Credit Commitments without premium or penalty,
except as provided below. Any such reduction in the
Revolving Credit Commitments shall in turn reduce, pro rata,
the amount of the First Union Revolving Credit Commitment
and the Wachovia Revolving Credit Commitment. Each partial
reduction of the Revolving Credit Commitments shall be in an
aggregate amount equal to $1,000,000 or any integral
multiple thereof. Each such reduction shall be accompanied
by prepayment of the Revolving Credit Notes (each such
payment being applied, pro rata, to the First Union
Revolving Credit Note and the Wachovia Revolving Credit
Note), together with accrued interest thereon, to the extent
that the aggregate principal amount thereof then outstanding
exceeds the Revolving Credit Commitments as so reduced. Any
such prepayments shall be made to the Agent, for the ratable
benefit of the Banks.
Either of the Banks shall have the right to
terminate its Revolving Credit Commitment upon thirteen (13)
months' notice to the Borrower, the other Bank and the Agent
(after which 13-month period the terminating Bank's
Revolving Credit Note shall be due and payable in full);
provided, however, that each Bank hereby agrees for the
benefit of the other Bank that it will not exercise such
right without affording the other Bank not less than ten
(10) days' prior written notice of its intention to exercise
such right. In any event, all Revolving Credit Commitments
will terminate on March 1, 1999, at which time the Revolving
Credit Notes shall be due and payable in full.
4.4. Bankers' Acceptances.
(a) Drafts. Subject to the terms and conditions
hereof and in its sole discretion, either Bank may accept
(in which case such Bank shall be referred to herein as an
"Accepting Bank"), for the account of the Borrower and at
the Borrower's request and without regard to the amount of
the Accepting Bank's Revolving Credit Commitment, such
drafts as the Borrower may from time to
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time designate (such drafts, upon being accepted by either such
Bank, are referred to herein as "Accepted Drafts"); provided,
however, that the Borrower shall not request either Bank to accept
a draft if (i) the amount of such draft is less than $1,000,000 or
is not in an integral multiple of $1,000,000; (ii) upon such Bank's
acceptance of such draft the aggregate stated amount of outstanding
Accepted Drafts would exceed the lesser of $33,500,000 or the then
aggregate amount of the Revolving Credit Commitments; (iii) upon
the Bank's acceptance of such draft the sum of the outstanding
aggregate principal amount of the Revolving Loans plus the
aggregate stated amount of outstanding Accepted Drafts would exceed
the lesser of $33,500,000 or the then aggregate amount of the
Revolving Credit Commitments; (iv) the date the draft is to mature
is later than either (A) a Revolving Loan Termination Date on which
all of such Bank's Revolving Loans will terminate or (B) ninety
(90) days after the date the draft is presented to such Bank for
acceptance; or (v) a Default or an Event of Default has occurred
and is continuing. All such drafts requested pursuant to this
Section 4.4 shall be substantially in the customary form of the
Accepting Bank. The Accepting Bank shall promptly, upon the
acceptance of a draft, notify the Agent and the other Bank of such
Accepted Draft, specifying the date, amount and maturity thereof.
The Accepting Bank shall also notify the Agent and the other Bank
at such time as such Accepted Draft has matured and been paid in
full by the Borrower.
(b) Request for a Draft. Whenever the Borrower
desires the acceptance of a draft it shall, in addition to
providing such documents as the Accepting Bank may require,
including a detailed statement describing the transaction,
if any, to be financed by the draft, deliver the draft and
accompanying information to the Accepting Bank no later than
11:00 A.M. (Charlotte, North Carolina time) at least two (2)
Business Days in advance of the proposed date of acceptance.
(c) Repayment. The Borrower shall pay to the
Accepting Bank, in United States currency same-day-available
funds, the amount of each Accepted Draft on or prior to its
date of maturity. In the event that the Borrower fails to
make timely such payment, the Accepting Bank may, on the
Borrower's behalf, request a Loan under the Revolving Loans
in the amount of such Accepted Draft by notice to the Agent,
and such request for Loan by the Accepting Bank shall be
deemed to have been made by the Borrower pursuant to Section
4.1 hereof, whereupon the Banks shall, subject to the
conditions set forth in this Agreement, honor such request
and disburse such Loan to the Accepting Bank for and on
behalf of the Borrower. For purposes of the immediately
preceding sentence, however, the failure of the Borrower to
pay to the Accepting Bank the amount of the Accepted Draft
on or prior to its date of maturity shall not be considered
a Default or Event of Default. The Borrower hereby
irrevocably appoints such Accepting Bank as its attorney-in-
fact for and on behalf of the Borrower to request such Loan.
The power-of-attorney granted by this Section is coupled
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with an interest and is irrevocable as long as the Revolving
Credit Commitments are outstanding.
(d) Acceptance Rate. The Borrower agrees to pay
the Accepting Bank, on demand, interest in respect of each
Accepted Draft at a rate equal to the rate for bankers'
acceptances of a term of 30, 60 or 90 days and of the
proposed draft amount quoted by the Accepting Bank to the
Borrower at the time of acceptance of the Accepted Draft and
all reasonable out-of-pocket expenses incurred by such Bank
in connection with the Accepted Draft. Because the Accepting
Bank's rate for bankers' acceptances is subject to frequent
change, any quotation of such a rate by the Accepting Bank
to the Borrower shall not be valid if the Borrower does not
present the Accepting Bank with a draft for acceptance
immediately upon such quotation.
(e) Compliance with Laws. The Borrower agrees to
comply with all requirements of law in connection with the
transaction financed by an Accepted Draft and shall perform
such transaction in accordance with the description of the
transaction, if any, submitted by the Borrower to the
Accepting Bank upon the Borrower's request for acceptance of
a draft.
(f) Termination of Revolving Credit Commitment.
Notwithstanding anything to the contrary herein, upon the
acceleration of any of the Borrower's obligations hereunder
after an Event of Default or upon the termination of a
Revolving Credit Commitment hereunder, an amount equal to
the aggregate amount of the outstanding Accepted Drafts
shall, at the Accepting Bank's option and without demand
upon or further notice to the Borrower, be deemed (as
between such Bank and the Borrower) to have been paid or
disbursed by the Bank under the Accepted Drafts
(notwithstanding that such amounts may not in fact have been
so paid or disbursed), and a Loan to the Borrower in the
amount of such Accepted Drafts to have been made and
accepted, which Loan shall be due and payable as provided
herein.
(g) Notwithstanding the foregoing, the Bankers'
Acceptances option described in this Section 4.4 shall be
available to the Borrower only in the event that, and so
long as, the ratio of Consolidated Funded Debt to Operating
Cash Flow shall be no greater than 2.25 to 1.0.
SECTION 5. The Notes.
5.1. Computation of Interest. Interest on each of
the Revolving Credit Notes and the Term Notes (the "Notes")
shall be computed on the actual number of days elapsed,
based on a year of 360 days.
5.2. Payments. All payments (including
prepayments) made by the Borrower on account of principal,
interest and fees shall be made at the office of the Agent
referred to in Section 13.10 hereof, for the benefit of the
Banks as appropriate, prior to 11:00
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a.m., Charlotte, North Carolina time on the date of payment in
immediately available funds and, when due or upon instruction from
the Borrower, may be made by debit to the Borrower's account with
the Agent (for the benefit of the Banks) or with either Bank as
contemplated herein. Promptly upon receipt of any such payments
the Agent shall remit each Bank's pro rata portion thereof to such
Bank in immediately available funds or credit such amounts to an
account which such Bank then maintains with the Agent.
5.3. Facility Fee. The Borrower shall pay a
facility fee equal to $100,500 (0.30%) per annum in respect
of the Revolving Credit Commitments. Such fee shall be paid
annually to the Agent for the ratable benefit of the Banks
(based upon the Revolving Credit Commitments of each Bank),
the first such annual payment being due on the Closing Date
and subsequent annual payments being due on the anniversary
dates thereof. The Agent shall submit an invoice to the
Borrower with respect to each annual payment due hereunder,
and each such invoice shall state the amount payable to each
of the Banks under such invoice. In the event of the
termination of the Revolving Credit Commitments pursuant to
the second paragraph of Section 4.3 hereof, such fee shall
be payable only with respect to that portion of a twelve-
month period during which the Revolving Credit Commitments
are in effect, and each Bank shall refund to the Borrower
such Bank's pro rata share of any such excess facility fee
payment. In the event of a reduction in the Revolving
Credit Commitments at the election of the Borrower pursuant
to the first paragraph of Section 4.3 hereof, no part of the
facility fee paid by the Borrower for the year in which the
notice of such a reduction is given shall be refunded, but
the amount of the facility fee shall be adjusted as of the
next anniversary date of the Closing Date after such
reduction to an amount that bears the same proportion
(0.30%) to the total Revolving Credit Commitments following
such reduction as $100,500 bears to the total Revolving
Credit Commitments as of the date hereof.
5.4. Default Rate of Interest. Upon the
occurrence of and during the continuance of an Event of
Default, the principal amount outstanding under the Notes
shall, at the option of the Required Banks (but only upon
and after written notice to the Borrower of the Required
Bank's exercise of their rights under this Section 5.4),
bear interest at a rate per annum equal to the Prime Rate
plus 2% (the "Default Rate"). Upon the occurrence and
during the continuance of an Event of Default by reason of
the failure by the Borrower to pay to the Accepting Bank any
amounts due the Accepting Bank pursuant to Section 4.4(c)
hereof, such amounts shall bear interest from the date due
until paid at the rate per annum equal to the Default Rate.
5.5. Late Charge. A late charge of four percent
(4%) of each payment past due for more than fifteen (15)
days shall be added to the amount due with respect to such
payment.
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SECTION 6. Use of Proceeds. The proceeds of the Revolving
Loans shall be used by the Borrower for Capital
Expenditures, for normal working capital requirements, to
finance the Rayonese Acquisition (including the possible
prepayment of the Rayonese Note in accordance with its
terms) and to repay from time to time Accepted Drafts. The
proceeds of the Term Loans, other than the proceeds made
available by the Banks pursuant to the Third Amendment,
shall be used by the Borrower to refinance and restructure
existing indebtedness of the Borrower to First Union and
Wachovia and for ongoing corporate purposes, and the
additional Term Loan proceeds made available by the Banks
pursuant to the Third Amendment shall be used, at such time
or times as the Borrower may determine, to prepay in whole
or in part certain subordinated indebtedness evidenced by a
promissory note dated November 1, 1993 in the principal
amount of $9,632,724 from the Borrower to Rossville
Investments, Inc.
SECTION 7. Representations and Warranties. In order to
induce each of the Banks to enter into this Agreement and to
make the Loans herein provided for, the Borrower, as of the
Closing Date, represents and warrants to the Banks (which
representations and warranties shall survive the delivery of
the documents mentioned herein and the making of the initial
Loans contemplated hereby) as follows, and the Borrower
further represents and warrants that the following
representations and warranties are true and correct in all
material respects as of the date hereof, except (a) to the
extent that such representations and warranties relate
solely to or are specifically expressed as of a particular
date or period which has passed or expired as of the date
hereof, (b) as may have been disclosed in writing by the
Borrower to the Banks prior to the date hereof, and (c) any
changes in the nature of the Borrower's business that have
occurred since the date of the 1994 Credit Agreement that
would render any such representation or warranty inaccurate
or incomplete, so long as such changes (i) have occurred in
the ordinary course of the Borrower's business and have not
had, and will not have, a material adverse effect on the
business, prospects or condition (financial or otherwise) of
the Borrower, (ii) have been consented to in writing by the
Banks, or (iii) are expressly permitted by this Agreement.
7.1. Incorporation. Borrower and each Subsidiary
are corporations duly organized, existing and in good
standing under the laws of their respective jurisdictions of
incorporation, and have the corporate power to own their
respective properties and to carry on their respective
businesses as now being conducted, and, to the best of their
knowledge, are duly qualified as foreign corporations to do
business in every jurisdiction in which the nature of their
respective businesses makes such qualification necessary
(except such jurisdictions, if any, in which the failure to
be so qualified will not have a material adverse effect on
their respective businesses) and are in good standing in
such jurisdictions. Exhibit 3 contains a complete list of
all of the Borrower's Subsidiaries and all of the Borrower's
investments in other Persons.
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7.2. Power and Authority. Borrower is duly
authorized under all applicable provisions of law to execute
and deliver this Agreement, the Notes and the other Loan
Documents and to execute, deliver and perform under this
Agreement, and all corporate action on its part required for
the lawful execution, delivery and performance thereof has
been duly taken; and this Agreement, the Notes and the other
Loan Documents upon due execution and delivery thereof, will
be the valid and enforceable instruments and obligations of
Borrower in accordance with their terms. Neither the
execution of this Agreement nor the creation or issuance of
the Notes or the other Loan Documents, nor the fulfillment
of or compliance with their provisions and terms, will
conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a violation of or
default under any applicable law, regulation, writ or decree
or the articles of incorporation or bylaws of Borrower or
any subsidiary, or any agreement or instrument to which
Borrower or any Subsidiary is now a party, or create any
lien, charge or encumbrance upon any of the property or
assets of Borrower or any Subsidiary except for the liens
created pursuant to the Loan Documents.
7.3. Financial Condition. The consolidated
balance sheet of Borrower and its Subsidiaries for the
Fiscal Year ended as of May 2, 1993, and the related
consolidated statements of income and retained earnings and
consolidated statements of cash flow for the year then
ended, certified by independent public accountants, copies
of which have been furnished to the Banks, are correct,
complete and fairly present the financial condition of
Borrower and its Subsidiaries as at the date of said balance
sheet and the results of their operations for such period.
The interim consolidated balance sheet and interim
consolidated statement of income and retained earnings and
statements of cash flow as of or for the period ended
January 30, 1994, prepared by the chief financial officer of
the Borrower, copies of which have been furnished to the
Banks, are true and correct and present fairly, subject to
normal recurring year-end adjustments, the financial
condition of Borrower and its Subsidiaries as of such date
and the results of their operations for such period. The
Borrower and its Subsidiaries do not have any material
direct or contingent liabilities as of the date of this
Agreement which are not provided for or reflected in the
consolidated balance sheets dated January 30, 1994, or
referred to in notes thereto or set forth in Exhibit 4
hereto. All such financial statements have been prepared in
accordance with generally accepted accounting principles in
the United States applied on a consistent basis throughout
the period involved. There has been no material adverse
change in the business, properties, or condition, financial
or otherwise, of Borrower or any Subsidiary since January
30, 1994. No statement contained in this Agreement or in
any schedule or exhibit hereto or in any certificate
delivered (or to be delivered) pursuant hereto contains (or
will contain) any material misstatement of fact or omit (or
will omit) to state a material fact or any fact necessary to
make the statement contained therein not materially
misleading.
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7.4. Title to Assets. Borrower and its
Subsidiaries have good and marketable title to their
respective properties and assets, both real and personal
property, including the properties and assets reflected in
the financial statements and notes thereto described in
Section 7.3 (the "Financial Statements"), except for such
assets as have been disposed of since the date of the
Financial Statements in the ordinary course of business or
as are no longer useful in the conduct of their respective
businesses, and all such properties and assets are free and
clear of all liens, mortgages, pledges, encumbrances or
charges of any kind except for Permitted Encumbrances.
7.5. Absence of Pending Actions. There are no
suits or proceedings pending before any court, quasi-
judicial or administrative body or regulatory agency or, to
the knowledge of Borrower, threatened against or affecting
Borrower, the Real Property or the Improvements, or
involving the validity or enforceability of the Loan
Documents or relating to Borrower's actual use of the Real
Property or involving any risk of a judgment or a liability
the likely outcome of which would have a material adverse
effect on the financial condition, business or properties of
Borrower, the validity or lien priority of any Mortgage or
Borrower's ability to perform its obligations under the Loan
Documents, or any Lease respecting the Real Property or the
Improvements, except as described in Exhibit 4 hereto.
7.6. Contingent Liabilities. The Borrower and its
Subsidiaries have not guaranteed any obligations of others
and are not, to the best of their knowledge, contingently
liable in any manner, direct or indirect, except as
otherwise permitted under Section 10.2 hereof or as
disclosed in the Financial Statements or Exhibit 4 hereto.
7.7. Taxes. Borrower and its Subsidiaries have
filed all tax returns required to be filed by them and all
taxes due with respect thereto have been paid, and, except
as described in Exhibit 4 hereto, no controversy in respect
of additional taxes, state, federal or foreign, of Borrower
or its Subsidiaries is pending, or, to the knowledge of
Borrower, threatened. The federal and state income taxes of
Borrower and its Subsidiaries have been examined and
reported on or closed by applicable statutes for all Fiscal
Years to and including the Fiscal Year ending April 30,
1990, and adequate reserves have been established for the
payment of all such taxes for periods ended subsequent to
April 30, 1990.
7.8. Contract or Restriction Affecting Borrower.
Neither the Borrower nor its Subsidiaries are parties to,
nor are legally bound by any contract or agreement, or
subject to any charter or other corporate restrictions, or
subject to the renegotiation of any contract which does or
may materially and adversely affect the business, properties
or condition, financial or otherwise, of Borrower or its
Subsidiaries, except as disclosed or reflected in the
Financial Statements or on Exhibit 4.
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7.9. Absence of Liens for Labor or Materials. To
the best of Borrower's knowledge, except with respect to
improvements currently being constructed on the Mortgaged
Properties located in Anderson County, South Carolina and
Alamance County, North Carolina, there are no unpaid bills
for labor, materials, supplies or services furnished or to
be furnished on or in connection with the Mortgaged Property
for which lien waivers or satisfactory lien subordinations
have not been obtained and delivered to the Banks and Title
Insurer and which could result in a lien superior to the
lien of any Mortgage.
7.10. Permits and Licenses. Borrower has
obtained, or will obtain, all required federal, state and
local permits, licenses, approvals and authorizations,
including those required by the Federal Environmental
Protection Agency and any state or local authority charged
with the enforcement or regulation of environmental and land
use matters, and has complied in all material respects, or
will comply in all material respects, with all building,
safety, subdivision, zoning, land use and other requirements
of any state, municipal or other governmental authority,
pertaining to the construction or operation of the
Improvements.
7.11. Trademarks, Franchises and Licenses.
Borrower and its Subsidiaries own, possess, or have the
right to use all necessary patents, licenses, franchises,
trademarks, trademark rights, trade names, trade name rights
and copyrights to conduct their respective businesses as now
conducted, without known conflict with any patent, license,
franchise, trademark, trade name, or copyright of any other
Person.
7.12. Adequate Access. The Mortgaged Property has
adequate rights of access to public ways, as shown in the
Surveys furnished to the Banks.
7.13. Parking. To the best of Borrower's
knowledge, parking sufficient to satisfy zoning requirements
for the utilization of the Mortgaged Property as intended is
available to the Mortgaged Property by permanent easement or
otherwise and is encumbered by a Mortgage.
7.14. ERISA. Borrower and each Subsidiary are in
compliance in all material respects with all material
requirements of ERISA applicable to it, and no Reportable
Event (as defined in ERISA) has occurred and is continuing
with respect to any Plan (as defined in ERISA).
7.15. Environmental Matters. Except as set forth
in Exhibit 4,
(a) the Real Property of Borrower and each
Subsidiary is in compliance in all material respects with
all Acts that are applicable to the Borrower, and the
Borrower and each Subsidiary have obtained and currently
maintain all licenses, permits and
-24-
approvals required with respect to Hazardous Substances and are in
compliance in all material respects with all such licenses, permits
and approvals;
(b) as of this date, none of the Real Property
has been used to treat, store or dispose of Hazardous
Substances, and no Hazardous Substances are located on, in
or under any of the Real Property or used or emitted in
connection therewith, except to the extent that Borrower has
fully disclosed to the Banks in writing the existence,
extent and nature of any such Hazardous Substances on, in or
under any of the Real Property or used or emitted in
connection therewith;
(c) to the best of Borrower's knowledge and
belief, no portion of any of the Real Property is part of a
flood plain or flood hazard area or protected wetlands,
except to the extent that Borrower has fully disclosed to
the Banks in writing the existence, extent and nature of
such flood plain, flood hazard area or wetlands; and
(d) Borrower has notified the Banks of
Borrower's receipt of any citations, orders, notices,
consent agreements, lawsuits, claims, or similar
communication from a Governmental Authority or third party
alleging a violation of any Acts (including allegations of a
violation of the common law).
7.16. No Default. Neither the Borrower nor any
Subsidiary is in default in the performance, observance or
fulfillment of any of its material obligations, covenants or
conditions contained in any agreement or instrument to which
it is a party.
SECTION 8. Conditions of Closing. The obligation of the
Banks to make the Loans herein provided for is subject to
the continuing accuracy of all representations and
warranties of the Borrower herein (except to the extent such
representations and warranties shall become inaccurate
solely as a result of subsequent occurrences permitted under
this Agreement or otherwise disclosed to the Banks) and the
performance of all agreements by Borrower contained herein,
including the following:
8.1. Legal Opinions. On the date hereof, and
to the extent required by the Banks upon any further closing
hereunder, the Banks shall have received the favorable
opinion of Robinson, Bradshaw & Hinson, P.A., counsel for
Borrower, addressed to the Banks, in form and substance
satisfactory to the Banks.
8.2. Closing Documents. Borrower shall have
delivered to the Banks on or prior to the date hereof:
(a) the executed Term Notes and Revolving Credit
Notes and executed counterparts of this Agreement;
-25-
(b) corporate resolutions of the Board of
Directors of the Borrower, in form satisfactory to the
Banks, approving this Agreement, the Notes and the other
Loan Documents and the transactions contemplated thereby and
authorizing execution, delivery and performance thereof; and
(c) a copy of the Borrower's articles of
incorporation and bylaws certified by the Secretary or
Assistant Secretary of the Borrower to be true and correct
copies as currently in effect.
SECTION 9. Affirmative Covenants. Borrower covenants that,
so long as any portion of the indebtedness evidenced by the
Notes remains unpaid and unless the Banks otherwise consent
in writing, it will:
9.1. Financial Reports and Other Data.
(a) As soon as practicable and in any event
within 45 days after the end of each of the first three Fiscal
Quarters of Borrower, deliver to each of the Banks (i) a
consolidated and, if requested by the Banks, a consolidating
balance sheet of Borrower and its Subsidiaries as at the end of
such Fiscal Quarter, and related statements of income and retained
earnings and statements of cash flow for such Fiscal Quarter and
for the period from the beginning of the current Fiscal Year to the
end of such Fiscal Quarter, setting forth in comparative form
figures for the corresponding periods in the preceding Fiscal Year,
all in reasonable detail and certified by either the chief
executive officer or the chief financial officer of Borrower to
have been prepared in accordance with generally accepted accounting
principles in the United States applied on a consistent basis,
subject only to changes resulting from normal, recurring year-end
adjustments and (ii) a Form 10-Q as filed by the Borrower with the
Securities and Exchange Commission with respect to such Fiscal
Quarter.
(b) As soon as practicable and in any event
within 120 days after the end of each Fiscal Year, deliver
to each of the Banks (i) a consolidated and a consolidating
balance sheet of Borrower and its Subsidiaries as at the end
of such Fiscal Year, and related statements of income and
retained earnings and statements of cash flow for such
Fiscal Year, setting forth in each case in comparative form
corresponding figures from the preceding annual audit, all
in reasonable detail, and certified by and containing an
opinion, reasonably acceptable to the Banks, from a firm of
nationally recognized independent certified public
accountants, and (ii) a Form 10-K as filed by the Borrower
with the Securities and Exchange Commission with respect to
such Fiscal year.
(c) Furnish, at the reasonable request of either
of the Banks, opinions of legal counsel, independent public
accountants and officers' certificates satisfactory to such
Bank, regarding matters incident to this Agreement. Upon
delivery of the financial
-26-
statements as required in Sections 9.1(a) and (b), the Borrower
will furnish the Banks, with a certificate in the form of Exhibit 5
attached hereto as of the end of the preceding Fiscal Quarter,
signed by Borrower's chief executive officer or chief financial
officer. In addition, the Borrower shall give each of the Banks
prompt written notice of a default or failure of performance under
any material agreement or contract to which either the Borrower or
a Subsidiary is a party or by which it is bound.
(d) Promptly deliver to each of the Banks a copy
of all (i) proxy materials submitted to the shareholders of
the Borrower, (ii) reports and registration statements
(including, without limitation, forms 10-K and 10-Q as
required above) furnished to the Securities and Exchange
Commission, or any governmental authority which is
substituted therefor, or with any national securities
exchange, and (iii) all reports relating to any "Reportable
Event" as defined under ERISA.
(e) With reasonable promptness, deliver such
additional financial or other data as either of the Banks
may from time to time reasonably request. Each of the Banks
is hereby authorized (but only if required to do so) to
deliver a copy of any financial statements or other
information relating to the business operations or financial
condition of the Borrower and its Subsidiaries which may be
furnished to it or come to its attention pursuant to this
Agreement or otherwise, to any regulatory body or agency
having jurisdiction over such Bank.
9.2. Taxes and Liens. Promptly pay, or cause to
be paid, all taxes, assessments or other governmental
charges (including the Impositions as defined in the
Mortgage) which may lawfully be levied or assessed upon the
income or profits of Borrower, or any Subsidiary, or upon
any property, real, personal or mixed, belonging to Borrower
or any Subsidiary, or upon any part thereof, and also any
lawful claims for labor, material and supplies which, if
unpaid, might become a lien or charge against any such
property; provided, however, neither the Borrower nor any
Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim so long as (i) the
Borrower contests the amount to be paid; (ii) the amount
contested is $10,000 or more; (iii) the Borrower or such
Subsidiary shall first deposit with the Agent for the
benefit of the Banks or, if applicable, the Title Insurer, a
bond or other security satisfactory to the Agent on behalf
of the Banks in the amount being contested and (iv) the
Borrower shall thereafter diligently proceed to cause such
lien, encumbrance or charge to be removed and discharged.
9.3. Business and Existence. Do or cause to be
done all things necessary to preserve and to keep in full
force and effect its corporate existence; and, if the
failure to do or cause to be done so would have a material
adverse effect upon its business, do or cause to be done all
things necessary to preserve and to keep in full force and
effect its rights in any franchises, trade names,
-27-
patents, trademarks and permits; and continue to engage principally
in the business currently conducted by the Borrower.
9.4. Insurance on Properties. Keep its business
and properties insured at all times with responsible
insurance companies and carry such types and amounts of
insurance (including, without limitation, that required
under the terms of Section 1.04 of the Mortgages) as are
reasonably acceptable to the Banks and as are usually
carried by corporations engaged in the same or similar
businesses similarly situated and upon the request of either
of the Banks furnish such Bank a certificate as to such
insurance and such other information or documentation as may
be required by the Agent or the Banks under the terms of
Section 1.05 of the Mortgages.
If any Improvements (existing or proposed) on the
Mortgaged Property are or will be located in an area
identified by the U.S. Department of Housing and Urban
Development as an area having "special flood hazards",
Borrower shall also furnish flood insurance in such amounts
as may be required under applicable law and as are
reasonably satisfactory to the Agent on behalf of the Banks.
During the term of the Loans, the premium on each
insurance policy described above shall be prepaid and the
policy term renewed annually in the same form and with at
least the same coverage as the preceding year, with the
Agent on behalf of the Banks to receive evidence of renewal
satisfactory to the Agent on behalf of the Banks at least
thirty (30) days prior to expiration. Further, no such
policy shall be subject to cancellation, nonrenewal or
reduction of coverage unless the insurer has given the Banks
at least thirty (30) days' prior written notice of such
action.
All insurance proceeds (net of all expenses of
collection incurred by the Banks) under any insurance
policies which are payable with respect to the Mortgaged
Property by reason of damage, loss or destruction to any
portion of the Mortgaged Property during the term of the
Loans will be paid directly to the Banks and applied in
accordance with the terms of Section 1.06 of the Mortgages.
9.5. Maintain Property. Maintain those of its
properties necessary for the conduct of its business in good
order and repair and, from time to time, make all needful
repairs, renewals, replacements, additions and improvements
thereto.
9.6. Right of Inspection. Permit any person
designated by either Bank, at such Bank's expense, to visit
and inspect any of the properties, corporate books and
financial reports of Borrower and its Subsidiaries and to
discuss their affairs, finances and accounts with their
principal officers, all at such reasonable times and as
often as such Bank may reasonably request.
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9.7. Condemnation Proceeds. In the event that
any portion of the Mortgaged Property is taken by eminent
domain or is conveyed by a deed in lieu thereof, all
proceeds payable with respect thereto will be paid directly
to the Banks and applied in accordance with the terms of
Section 1.15 of the Mortgages.
9.8. Covenant Extended to Subsidiaries. Cause
each Subsidiary to do with respect to itself, its business
and its assets, each of the things required of Borrower in
Section 9.2 through 9.6, inclusive.
9.9. Borrower's Knowledge of Default.
Immediately give notice to each of the Banks of the
occurrence of any Default or Event of Default hereunder,
specifying the nature thereof, the period of existence
thereof and what action Borrower proposes to take with
respect thereto.
9.10. Suits or Other Proceedings. Upon Borrower's
obtaining knowledge thereof, immediately give to each of the
Banks written notice (i) of any litigation, dispute or
proceeding involving a claim for $500,000 or more,
instituted against Borrower or any Subsidiary, (ii) of all
pending litigations, disputes and proceedings instituted
against the Borrower or a Subsidiary if all such claims
aggregate $500,000 or more, or (iii) of any attachment,
levy, execution, or other process being instituted against
any assets of Borrower or any Subsidiary with respect to a
claim of $250,000 or more.
9.11. Observe All Laws. Conform to and duly
observe and cause each Subsidiary to conform to and duly
observe in all material respects all laws, regulations and
other valid requirements of any regulatory authority with
respect to the conduct of its business which are known or
should be known to the Borrower.
9.12. Compliance with Laws; Governmental
Approvals. Upon the occurrence of an Event of Default, or
if the Banks reasonably believe that Borrower is not in
material compliance with the same, and upon Banks' request,
Borrower will furnish evidence satisfactory to the Banks
that the Real Property and Improvements are currently in
compliance in all material respects and will comply in all
material respects with all Governmental Requirements and
with all covenants, conditions, easements and restrictions
to which the Real Property and Improvements are subject.
Borrower will observe, conform and comply in every material
respect with all Governmental Requirements relative to the
construction and operation of the Improvements and the
conduct of its business. The Borrower will be required to
comply with and obtain and at all times keep in full force
and effect such governmental approvals as may be necessary
to comply with the Governmental Requirements relating to the
Real Property and its occupancy.
9.13. ERISA. Comply with and cause each
Subsidiary to comply with all requirements of ERISA
applicable to it, including
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the prompt payment of all liabilities and obligations arising under
any Plan (as defined in ERISA), and furnish to each of the Banks as
soon as possible, and in any event within thirty (30) days after
the Borrower or duly appointed administrator of a Plan knows that
any Reportable Event (as defined in ERISA) with respect to such
Plan has occurred, an Officer's Certificate setting forth details
as to such Reportable Event or any action which the Borrower
proposes to take with respect thereto, together with a copy of the
notice of such Reportable Event given to the Pension Benefit
Guaranty Corporation or a statement that said notice will be filed
with the annual report to the United States Department of Labor
with respect to such Plan if such filing has been authorized.
9.14. Payment of Obligations. Pay and cause each
Subsidiary to pay, when due, all its material obligations
and liabilities, except where the same (other than
Consolidated Funded Debt) may be contested in good faith by
appropriate proceedings diligently prosecuted and
appropriate reserves for the accrual of same are maintained.
9.15. [RESERVED]
9.16. Shareholders' Equity. Maintain Consolidated
Shareholders' Equity of not less than $67,500,000 from and
after April 30, 1995 through that date which is one day
prior to the last day of the Borrower's Fiscal Year ending
in 1996; on the last day of Borrower's Fiscal Year ending in
1996 and on the last day of each subsequent Fiscal Year of
the Borrower (the "Computation Date") and continuing in each
period from the applicable Computation Date through that
date which is one day prior to the end of the next Fiscal
Year, the Borrower shall maintain Consolidated Shareholders'
Equity of not less than the previous period's required
Consolidated Shareholders' Equity plus fifty percent (50%)
of Net Income (excluding for purposes of this Section 9.16
any net loss) of the Borrower for the Fiscal Year ending on
such Computation Date (hereinafter referred to as the
"Required Shareholders' Equity"); provided, that in the
event for any Computation Date the Borrower's Consolidated
Shareholders' Equity on such Computation Date exceeds the
Required Shareholders' Equity on such Computation Date by
more than $4,000,000, the Required Shareholders' Equity
shall be increased for the period beginning on such
Computation Date to that amount which is $4,000,000 less
than the Borrower's Consolidated Shareholders' Equity on
such Computation Date.
9.17. [RESERVED]
9.18. [RESERVED]
9.19. Operating Cash Flow to Interest Expense.
Maintain a ratio of (x)Operating Cash Flow less Capital
Expenditures for such period, to (y) Interest Expense for
such period, of at least 2.0 to 1.0 for each Fiscal Quarter
from the Fiscal Quarter ending April 30, 1995 through and
including the Fiscal Quarter ending
-30-
January, 1996; 2.5 to 1.0 for each Fiscal Quarter thereafter
through and including the Fiscal Quarter ending October, 1996; and
3.0 to 1 for each Fiscal Quarter thereafter.
9.20. Consolidated Funded Debt to Total
Capitalization. Maintain a ratio of Consolidated Funded
Debt to Total Capitalization not in excess of 1 to 1.67
(60%) for each Fiscal Quarter from the Fiscal Quarter ending
April 1995 through and including the Fiscal Quarter ending
October, 1995; 1 to 1.82 (55%) for each Fiscal Quarter from
the Fiscal Quarter ending January, 1996 through and
including the Fiscal Quarter ending October, 1996; and 1 to
2.0 (50%) for each Fiscal Quarter thereafter.
9.21. Environmental Provisions and Indemnity.
(a) Borrower will promptly notify the Banks of
any change in the nature or extent of (i) any Hazardous
Substances maintained on, in or under the Real Property or
used or emitted in connection therewith and (ii) any
wetlands located on the Real Property.
(b) Borrower will at all times while Agent has
any interest in or lien on the Mortgaged Property, operate
the Mortgaged Property in material compliance with the Acts
(including any required remediation with respect to
Hazardous Substances) and will insure that the Mortgaged
Property continues to be in material compliance with all
applicable federal, state and local environmental laws,
statutes, ordinances and regulations, including but not
limited to the Acts.
(c) Borrower will notify Agent immediately upon
receipt by Borrower of any citations, orders, notices,
consent agreements, lawsuits, claims, or similar
communication from a Governmental Authority or third party
alleging a violation of any Act or a violation of the common
law as it may relate to Hazardous Substances or wetlands.
(d) Borrower will obtain and maintain all
licenses, permits and approvals required with respect to the
existence, extent and nature of any Hazardous Substances on,
in or under the Real Property or used or emitted in
connection therewith and will remain in compliance in all
material respects with all such licenses, permits and
approvals.
(e) Borrower will furnish to Agent promptly upon
receipt copies of any and all environmental assessments,
reports, studies, audits or approvals performed with respect
to the Mortgaged Property or any portion thereof.
(f) Borrower shall indemnify and hold the Agent
and each of the Banks and each of their respective
directors, officers, shareholders and employees harmless
from and against any and all damages, penalties, fines,
claims, liens, suits, liabilities, costs (including clean-up
costs) judgments and expenses (including
-31-
reasonable attorney's, consultants' or experts' fees and expenses)
of every kind and nature suffered by or asserted against either of
the Banks as a direct or indirect result of (i) any warranty,
representation, covenant or portion thereof made by Borrower in
this Section 9.21 or Section 7.15 being false or untrue in any
respect or any requirement under any Act, which requires the
elimination or removal of any Hazardous Substances by either of the
Banks, Borrower or any transferee of Borrower or such Bank, (ii)
any default by the Borrower in the observance or performance of the
covenants and agreements contained in this Section 9.21, or (iii)
as a result of any requirement under any Act or any agreement to
which Borrower is a party or by which is bound; or (iv) which are
imposed on Borrower, the Banks or any other party having an
interest in the Mortgaged Property by any court or regulatory
agency, in connection with the elimination, storage, handling,
treatment or removal of any Hazardous Substances; provided,
however, that Borrower's obligation to indemnify and hold harmless
as set forth above shall not exist with respect to any matter which
can be attributed solely to actions of the Banks or to
circumstances which come into existence after Borrower has ceased
to occupy and control any such Real Property.
(g) The Required Banks shall have the right at
any time and from time to time, if they have reasonable
belief that Borrower is not in compliance with any Act,
prior to full payment and satisfaction of the Loan Documents
to arrange for or conduct environmental inspections of the
Mortgaged Property (including, but not limited to, sampling
of materials for laboratory analysis). The cost of such
inspections shall be borne by Borrower.
(h) Borrower's obligations hereunder to the
Banks shall not be limited to any extent by the terms of the
Loan Documents and, as to any act or occurrence prior to
payment in full and satisfaction of the Loan Documents which
gives rise to liability hereunder, shall continue, survive
and remain in full force and effect notwithstanding payment
in full and satisfaction of the Loan Documents or
foreclosure under the Loan Documents, or delivery of a deed
in lieu of foreclosure.
9.22. Title Insurance. (a) On the Closing Date,
or upon recording of the respective Mortgages, Borrower will
furnish to the Agent, at Borrower's expense, a Title Policy
(or "marked-up" commitment for title insurance) with respect
to each Mortgaged Property in accordance with the Title
Commitments. Each Title Policy shall reference the
applicable Mortgage as recorded and shall insure the Bank
that such Mortgage is a valid lien on the applicable
Mortgaged Property subject only to Permitted Encumbrances.
Further, the Title Policy shall contain such title
endorsements as the Banks may reasonably require.
9.23. Survey. On the Closing Date, Borrower shall
furnish to the Banks copies of an as-built survey of each of
the
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Mortgaged Properties, each of which shall be in form and
content acceptable to the Banks and, except as otherwise
agreed by the Banks with respect to the Mortgaged Properties
located in South Carolina, sufficient to enable the
applicable Title Insurer to delete any general survey
exceptions from its Title Policy.
Upon the occurrence of any Event of Default or
upon the completion of any exterior renovations, additions
or expansions to any of the Improvements, the Agent on
behalf of the Banks may require Borrower to furnish the
Banks with a current as-built survey of the applicable
Mortgaged Property in form and content acceptable to the
Banks. The cost of such updated survey shall be borne by
Borrower. Borrower shall also furnish each Bank with copies
of any updated surveys of the Mortgaged Properties otherwise
obtained by Borrower.
9.24. Tax Roll Segregation. Borrower shall cause
the Real Property to be segregated from all other property
on the municipal tax rolls.
SECTION 10. Negative Covenants of Borrower. Borrower
covenants and agrees that from the date hereof until payment
in full of the principal and interest on the Notes, unless
each of the Banks shall otherwise have consented prior
thereto in writing, it will not, nor will it permit any
Subsidiary to, either directly or indirectly:
10.1. Limitations on Liens. Incur, create, assume
or permit to exist any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind, or permit any
Subsidiary to incur, create, assume or permit to exist any
mortgage, pledge, security interest, encumbrance, lien or
charge of any kind, upon any of its property or assets of
any character now owned or hereafter acquired including
those arising under conditional sales or other title
retention agreements except for Permitted Encumbrances and
liens arising under the Loan Documents and except for
consensual liens securing non interest-bearing purchase
money obligations, payable over a term not to exceed two (2)
years, given to vendors of equipment.
10.2. Guarantee. Guarantee, assume, endorse or
otherwise become or remain directly or contingently liable
in connection with the obligations of any other Person,
excluding any Subsidiary, or permit any Subsidiary to
guarantee, assume, endorse or otherwise become or remain
directly or contingently liable in connection with the
obligations of any other Person, excluding the Borrower,
other than:
(i) the endorsement of negotiable instruments in
the ordinary course of business for deposit
or collection;
(ii) guaranties by the Borrower or any of its
Subsidiaries of or with respect to industrial
revenue bonds and obligations listed on
Exhibit 6
-33-
hereof and any extensions, modifications,
refinancings, refundings or replacements thereto or
thereof;
(iii) guaranties by the Borrower of the Rayonese
Note;
(iv) guaranties of debts incurred by Globaltex LLC
or Globaltex S.A. de C.V. in amounts that do
not exceed $700,000 in the aggregate; and
(v) other guaranties not exceeding $750,000 in
the aggregate.
10.3. [RESERVED]
10.4. Consolidation or Merger. Enter into any
transaction of merger or consolidation except that (i)
another corporation may be merged into Borrower or a
Subsidiary provided that no Default shall exist hereunder
immediately before or following such merger, and (ii) a
Subsidiary may merge into Borrower or another Subsidiary.
10.5. Sale of Assets, Dissolution, etc. During
any Fiscal Year transfer, sell, assign, lease or otherwise
dispose of, or permit any Subsidiary to transfer, sell,
assign, lease or otherwise dispose of, more than $5,000,000
in fair market value of its properties or assets except in
the ordinary course of business, or any of its accounts
(other than the sale of accounts in connection with the non-
recourse factoring arrangements as described in Exhibit 8
hereto), notes, franchises or contract rights, or any stock
or any indebtedness of any Subsidiary or any assets or
properties necessary for the proper conduct of its business,
or change the nature of its business, or wind up, liquidate
or dissolve, or agree to do any of the foregoing, or permit
any Subsidiary to do so, except that any Subsidiary may
dissolve or transfer all or any part of its properties and
assets to Borrower or another Subsidiary.
10.6. Change in Ownership; Transfer of Mortgaged
Property and Interests in Borrower. Except for any leasing
permitted under the terms of this Agreement, neither
Borrower nor any of its Subsidiaries shall, without the
Required Banks' prior written consent, directly or
indirectly sell, transfer, convey or lease all or any part
of the Mortgaged Property or any interest therein, whether
voluntary, involuntary or by operation of law, and shall not
suffer or permit the same. Notwithstanding the preceding
sentence, a taking of a portion of the Mortgaged Property by
eminent domain (or a conveyance in lieu thereof) will not be
considered a violation of this Section so long as the
Borrower is entitled to receive the condemnation award or
proceeds under the terms of Section 1.15 of the Mortgages.
-34-
10.7. Loans and Investments. Make any investment,
loan or advance of money, credit or property to any Person
or Persons if, after giving effect to such investment, loan
or advance, the aggregate amount of all outstanding
investments, loans or advances made by the Borrower and its
Subsidiaries since the date of this Agreement and that
remain outstanding would exceed $5,000,000. The Borrower
shall make no investments in or advances to any Subsidiary;
provided, however, that the Borrower may make investments in
and advances to Canada and Rayonese in an amount not to
exceed $17,000,000, which shall be used to consummate the
Rayonese Acquisition, to pay off debt of Rayonese, to
purchase equipment to be used by Rayonese in its operations,
to prepay the Rayonese Note if required in accordance with
the terms of the Rayonese Note and to provide working
capital to Canada and Rayonese.
10.8. Fiscal Year. Change the date of its Fiscal
Year end from the Sunday closest to April 30.
10.9. [RESERVED]
10.10. Rental Obligations. Incur, create, assume
or permit to exist during any Fiscal Year, in respect of
leases of real or personal
property, rental obligations or other commitments
thereunder by Borrower and any of its Subsidiaries or make
any direct or indirect payment, whether as rent or
otherwise, for fixed or minimum rentals, percentage rentals,
property taxes, or insurance premiums, if the amount paid in
or payable with respect to any such Fiscal Year exceeds ten
percent (10%) of Consolidated Tangible Shareholders' Equity
as at the end of the preceding Fiscal Year.
10.11. Prepayments. Retire or prepay prior to its
stated maturity any Consolidated Funded Debt (other than (i)
non interest-bearing purchase money obligations payable over
a period not to exceed two (2) years, given to vendors of
equipment, (ii) certain subordinated indebtedness evidenced
by a promissory note dated December 14, 1994 in the
principal amount of $1,000,000 payable by the Borrower to
Rossville Investments, Inc., and (iii) certain indebtedness
to be evidenced by the Rayonese Note as contemplated by the
Rayonese Acquisition) having a term of repayment in excess
of one year, including any renewals, other than indebtedness
to either of the Banks arising hereunder or obligations
under industrial revenue bonds, or pay rental obligations
more than 30 days in advance of the time for payment called
for in the lease.
10.12. Other Indebtedness. Incur any additional
Consolidated Funded Debt (other than (1) indebtedness
existing as of the Closing Date and any refinancings,
refundings or extensions thereof, (2) the Rayonese Note, and
(3) non interest-bearing purchase money obligations payable
over a period not to exceed two (2) years given to vendors
of equipment) without the prior written consent of each of
the Banks, unless the proceeds of such indebtedness are
applied (i) first, to reduce or pay in full the
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amounts outstanding in inverse order of maturity under the Term
Loans, and (ii) second (provided the Term Loans have been paid in
full), to repay pro rata to the Banks the amounts outstanding under
the Revolving Credit Notes and under Section 4.4 hereof; provided,
further, that no such additional indebtedness (a) shall have a
maturity that is shorter than the maturity of the Loans
contemplated by this Agreement, or (b) shall cause any undertakings
or covenants of the Borrower in respect of such indebtedness to be
more restrictive than those undertakings and covenants set forth
herein. The amount of Revolving Credit Commitments shall also be
reduced as of the date of the repayment pursuant to this Section by
an amount equal to the repayment required pursuant to item (ii) of
this Section.
SECTION 11. Events of Default.
11.1. Definition. An "Event of Default" shall
exist if any of the following shall occur:
(a) Payment of Principal. The Borrower fails
to make any payment of principal on any of the Notes within
15 days of the date such payment is due; or
(b) Payment of Interest. The Borrower fails to
make any payment of interest on any of the Notes within 15
days of the date such payment is due; or
(c) Payment of Other Obligations. The Borrower
or any Subsidiary defaults in the payment of principal or
interest on any other Consolidated Funded Debt (other than
the indebtedness to either of the Banks arising hereunder),
or on any indebtedness incurred by reason of restrictive
investments relating to industrial revenue bond financing,
beyond any period of grace provided with respect thereto, or
in the performance of any other agreement, term or
conditions contained in any agreement under which any such
obligation is created, if the effect of such default is to
cause such obligation to become due prior to its stated
maturity; or
(d) Representation of Warranty. Any
representation made by Borrower herein, or in any schedule,
exhibit or certificate furnished in connection with or
pursuant to this Agreement shall be false, misleading or
incomplete in any material respect on the date as of which
made; or
(e) Financial Covenants. The Borrower or any
Subsidiary defaults in the performance or observance of any
agreement or covenant contained in Sections 9.15 through
9.20, and Section 10 hereof, unless such default is waived
by the Required Banks within ten (10) days after the
Borrower acquires knowledge thereof; or
(f) Other Covenants. The Borrower or any
Subsidiary defaults in the performance or observance of any
agreement,
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covenant, term or condition binding on it contained herein or in
any instrument securing or guaranteeing any of the Notes and such
default shall not have been remedied or waived by the Required
Banks within thirty (30) days (or any shorter period set forth
herein or in such agreement or document) after written notice shall
have been received by it from either of the Banks; or
(g) Liquidation or Dissolution. The
commencement of the liquidation or dissolution of the
Borrower, or suspension of the business of the Borrower or
filing by either the Borrower or a Subsidiary of a voluntary
petition in bankruptcy or a voluntary petition or an answer
seeking reorganization, arrangement, readjustment of its
debts or for any other relief under the Bankruptcy Reform
Act of 1978, as amended (the "Bankruptcy Code"), or under
any other insolvency act or law, state or Federal, now or
hereafter existing, or any other action of either Borrower
or any Subsidiary indicating its consent to, approval of, or
acquiescence in any such petition or proceeding, or the
application by either the Borrower or any Subsidiary for (or
the consent or acquiescence to) the appointment of a
receiver or a trustee of either the Borrower or any
Subsidiary or an assignment for the benefit of creditors,
the inability of either the Borrower or any Subsidiary or
the admission by either the Borrower or any Subsidiary in
writing of its inability to pay its debts as they mature; or
(h) Bankruptcy, etc. The filing of an
involuntary petition against either the Borrower or any
Subsidiary in bankruptcy or seeking reorganization,
arrangement, readjustment of its debts or for any other
relief under the Bankruptcy Code or under any other
insolvency act or law, state or Federal, now or hereafter
existing, or the involuntary appointment of a receiver or
trustee of either the Borrower or any Subsidiary or for all
or a material part of its property and the continuance of
any of such action for sixty (60) days undismissed or
undischarged; or the issuance of an order for attachment,
execution or similar process against any material part of
the property of either the Borrower or any Subsidiary and
the continuance of any such order for ten (10) days
undismissed or undischarged; or
(i) Order of Dissolution. The entry of an
order in any proceedings against the Borrower or any
Subsidiary decreeing the dissolution or split-up of the
Borrower or any Subsidiary; or
(j) Judgment. The entry of a final judgment
against the Borrower or a Subsidiary, which with other
outstanding final judgments against the Borrower or any
Subsidiary exceeds an aggregate of $25,000, if within twenty
(20) days after entry thereof such judgment shall not have
been discharged or execution thereof stayed pending appeal,
or if within ten (10) days after the expiration of any such
stay such judgment shall not have been discharged.
11.2. Remedies. If an Event of Default occurs,
the Agent shall (subject to the provisions of Section
13.3(d) hereof),
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(i) if requested by the Required Banks or,
for so long as First Union or Wachovia shall not have
assigned all or part of its rights and obligations under
this Agreement and the Notes pursuant to Section 13.3(c)
hereof, if requested by such non-assigning Bank, by notice
to the Borrower, terminate the Revolving Credit Commitments
and they shall thereupon terminate and (ii) if requested by
the Required Banks or, for so long as First Union or
Wachovia shall not have assigned all or part of its rights
and obligations under this Agreement and the Notes pursuant
to Section 13.3(c) hereof, if requested by such non-
assigning Bank, by notice to the Borrower declare the Notes
(together with accrued interest thereon) and all other
amounts due hereunder (together with accrued interest
thereon) to be, and the Notes and other amounts due
hereunder shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower,
and the Agent and the Banks shall have such further remedies
as may be provided in the Loan Documents, including, without
limitation, foreclosure upon and sale of collateral
security; provided that if any Event of Default specified in
clause (g), (h) or (i) above occurs with respect to the
Borrower, without notice to the Borrower or any other act by
the Agent or the Banks, the Revolving Credit Commitments
shall thereupon terminate and the Notes and all other
amounts due hereunder (together with accrued interest
thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower, and the
Agent and the Banks shall have such further remedies as may
be provided in the Loan Documents.
SECTION 12. The Agent.
12.1. Appointment. The Banks hereby designate
and appoint First Union as Agent to act as specified herein.
Each Bank hereby irrevocably authorizes, and each holder of
any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, the Agent to take such action on
its behalf under the provisions of this Agreement, to
exercise such powers and to perform such duties hereunder as
are specifically delegated to or required of the Agent by
the terms hereof and such other powers as are reasonably
incidental thereto. Each Bank agrees that no Bank shall
have any right individually to seek or to enforce the
provisions of any of the Loan Documents or to realize upon
the security granted by any mortgage or Security Agreement,
it being understood and agreed that such rights and remedies
may be exercised solely by the Agent for the benefit of the
Banks upon the terms of the Mortgages and the Security
Agreement.
12.2. Nature of Duties. The Agent shall not have
any duties or responsibilities except those expressly set
forth in this Agreement. Neither the Agent, nor any of its
officers, directors, employees or agents, shall be liable to
the Banks for any action taken or omitted by them as such
hereunder or in connection herewith, unless caused by their
gross negligence or willful misconduct. The duties of the
Agent shall be mechanical and
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administrative in nature; the Agent shall not have by reason of
this Agreement a fiduciary relationship in respect of any Bank; and
nothing in this Agreement, express or implied, is intended to or
shall be so construed as to impose upon the Agent any obligations
in respect of this Agreement except as expressly set forth herein.
12.3. Lack of Reliance on the Agent.
Independently and without reliance upon the Agent, each
Bank, to the extent it has deemed and shall deem
appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and
affairs of the Borrower in connection with the making and
the continuance of the Loans hereunder and the taking or not
taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Borrower and,
except as expressly provided in this Agreement, the Agent
shall have no duty or responsibility, either initially or on
a continuing basis, to provide any Bank with any credit or
other information with respect thereto, whether coming into
its possession before the making of the loans, or at any
time or times thereafter. The Agent shall not be
responsible to any Bank for any recitals, statements,
information, representations or warranties herein or in any
other Loan Documents or in any document, certificate or
other writing delivered in connection herewith or therewith
or for the execution, collectability, priority or
sufficiency of this Agreement or the financial condition of
the Borrower, or any other Person or be required to make any
inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement
or the financial condition of the Borrower, or any other
Person or the existence or possible existence of any Default
or Event of Default.
12.4. Certain Rights of the Agent. If the Agent
shall request instructions from the Banks with respect to
any act or action (including failure to act) in connection
with this Agreement, the Agent shall be entitled to refrain
from such act or taking such action unless and until the
Agent shall have received instructions from the Required
Banks; and the Agent shall incur no liability to any Person
by reason of so refraining. The Agent shall be fully
justified in failing or refusing to take any action
hereunder (i) if such action would, in the opinion of the
Agent, as the case may be, be contrary to law or the terms
of this Agreement, (ii) if it shall not receive such advice
or concurrence of the Required Banks as it deems appropriate
or (iii) if it shall not first be indemnified to its
satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action. Without limiting the
foregoing, no Bank shall have any right of action whatsoever
against the Agent (absent the Agent's gross negligence or
willful misconduct) as a result of the Agent's acting or
refraining from acting hereunder in accordance with the
instructions of the Required Banks.
12.5. Reliance. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any
note, writing,
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resolution, notice, statement, certificate, telex, teletype or
telecopier message, order or other documentary, teletransmission or
telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person. The Agent may
consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by
it in good faith in accordance with the advice of such counsel,
accountants or experts.
12.6. Indemnification. To the extent the Agent
is not reimbursed and indemnified by or on behalf of the
Borrower, the Banks will reimburse and indemnify the Agent,
in proportion to their Revolving Credit Commitments
hereunder (prior to the occurrence of an Event of Default
and acceleration pursuant to Section 11.2 hereof of the
Notes and other amounts due hereunder) and in proportion to
the principal amounts due and owing each Bank from time to
time hereunder (after the occurrence of an Event of Default
and acceleration pursuant to Section 11.2 hereof of the
Notes and other amounts due hereunder), for and against any
and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses
(including counsel fees and expenses) or disbursements of
any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in performing its
duties hereunder or in any way relating to or arising out of
this Agreement; provided, however, that no Bank shall be
liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, audits,
costs, expenses or disbursements, finally determined by a
court of competent jurisdiction and not subject to any
appeal, to be resulting from the Agent's gross negligence or
willful misconduct.
12.7. The Agent in its Individual Capacity. With
respect to its obligations to make Loans under this
Agreement, and with respect to the Loans made by it and the
Notes issued to it, the Agent shall have the same rights and
powers as any other Bank or holder of a Note and may
exercise the same as though it were not performing the
agency duties specified herein; and the term "Banks,"
"holders of Notes" or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in
its individual capacity.
12.8. Holders. The Agent may deem and treat the
payee of any Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment,
transfer or endorsement thereof, as the case may be, shall
have been filed with the Agent. Any request, authority or
consent of any Person or entity who, at the time of making
such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or endorsee, as the
case may be, of such Note or of any Notes issued in exchange
therefor.
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12.9. Reimbursement. Each of the Banks agrees to
reimburse the Agent for such Bank's pro rata share (based on
their respective Revolving Credit Commitments prior to the
occurrence of an Event of Default and acceleration pursuant
to Section 11.2 hereof of the Notes and other amounts due
hereunder, and based on the principal amounts due and owing
each Bank from time to time hereunder from and after the
occurrence of an Event of Default and acceleration pursuant
to Section 11.2 hereof of the Notes and other amounts due
hereunder) of the Agent's expenses to the extent the Agent
is not reimbursed by the Borrower upon demand. If any
amounts so paid to the Agent by the Banks are subsequently
paid to the Agent by the Borrower or by a representative or
successor in interest of the Borrower, the Agent shall
promptly upon its receipt of any such amounts distribute the
same to the Banks on the same basis as such amounts were
originally paid by the Banks to the Agent. In no event
shall the Banks be responsible for the normal overhead costs
and expenses incident to the performance by the Agent of its
agency duties hereunder.
12.10. Defaults. The Agent shall not be deemed to
have knowledge of the occurrence of a Default or an Event of
Default (other than the non-payment of principal of or
interest on the Loans or commitment or facilities fee due
hereunder) unless the Agent has received notice from a Bank
or the Borrower specifying such Default or Event of Default
and stating that such notice is a "Notice of Default." In
the event that the Agent receives such a notice of the
occurrence of a Default or an Event of Default, the Agent
shall give prompt notice thereof to the Banks. The Agent
shall give each Bank prompt notice of each non-payment of
principal of or interest on the Loans or commitment or
facilities fee due hereunder, whether or not it has received
any notice of the occurrence of such non-payment. The Agent
shall (subject to Section 13.1 hereof) take such action with
respect to such Default or Event of Default as shall be
directed by the Banks pursuant to Section 11.2, provided
that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Banks.
12.11. Failure to Act. Except for action
expressly required of the Agent hereunder or under the other
Loan Documents, the Agent shall in all cases be fully
justified in failing or refusing to act hereunder and
thereunder unless it shall receive further assurances to its
satisfaction by the Banks of their indemnification
obligations under Section 12.6 of this Agreement against any
and all liability and expense which may be incurred by the
Agent by reason of taking, continuing to take, or failing to
take any such action.
12.12. Resignation or Removal of Agent. Subject
to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by giving
notice thereof to the Banks and the Borrower and the Agent
may be removed at any time
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with or without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to
appoint a successor Agent. If no successor Agent shall have been
so appointed by the Required Banks and shall have accepted such
appointment within 30 days after the retiring Agent's notice of
resignation or the Required Banks' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent. Any successor Agent shall be a bank which has a
combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Section 12 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 the Agent hereunder.
12.13. Annual Fee. The Borrower shall pay to the
Agent a fee in the amount of $12,500 per annum, which shall
be payable (i) on November 1, 1995 and (ii) thereafter,
annually in advance of November 1 of each year.
SECTION 13. Miscellaneous.
13.1. Amendments and Waivers. (a) Any provision
of this Agreement, the Notes or any other Loan Documents may
be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of the Agent
are affected thereby, by the Agent); provided that no such
amendment or waiver shall, for so long as First Union and
Wachovia are the only Banks hereunder, be effective unless
signed by both First Union and Wachovia and in no event
shall any such amendment or waiver, unless signed by all the
Banks, (i) change the Revolving Credit Commitment of any
Bank or subject any Bank to any additional obligation,
(ii) change the principal of or rate of interest on any Loan
or any fees hereunder, (iii) change the date fixed for any
payment of principal of or interest on any Loan or any fees
hereunder, (iv) change the amount of principal, interest or
fees due on any date fixed for the payment thereof,
(v) change the percentage of the Revolving Credit
Commitments or of the aggregate unpaid principal amount of
the Notes, or the number of Banks, which shall be required
for the Banks or any of them to take any action under this
Section or any other provision of this Agreement,
(vi) change the manner of application of any payments made
under this Agreement or the Notes, (vii) release or
substitute all or any substantial part of the collateral (if
any) held as security for the Loans, or (viii) release any
guaranty given to support payment of the Loans.
(b) The Borrower will not solicit, request or
negotiate for or with respect to any proposed waiver or
amendment of any of the provisions of this Agreement unless
each Bank shall
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be informed thereof by the Borrower and shall be afforded an
opportunity of considering the same and shall be supplied by the
Borrower with sufficient information to enable it to make an
informed decision with respect thereto. Executed or true and
correct copies of any waiver or consent effected pursuant to the
provisions of this Agreement shall be delivered by the Borrower to
each Bank forthwith following the date on which the same shall have
been executed and delivered by the Bank. The Borrower will not,
directly or indirectly, pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest, fee or
otherwise, to any Bank as consideration for or as an inducement to
the entering into by such Bank of any waiver or amendment of any of
the terms and provisions of this Agreement unless such remuneration
is concurrently paid, on the same terms, ratably to each Bank.
13.2. Ratable Sharing of Set-Offs, Payments.
Each Bank agrees that if, prior to the occurrence of Event
of Default and acceleration pursuant to Section 11.2 hereof,
it shall, by exercising any right of set-off or counterclaim
or otherwise, or by receipt of any funds from the Borrower
or any other source for application to the obligations of
the Borrower under this Agreement, receive payment of a
proportion of the aggregate amount of principal and interest
due with respect to the Notes held by it hereunder which is
greater than the proportion received by the other Bank in
respect of the aggregate amount of all principal and
interest due with respect to the Notes held by such other
Bank hereunder, the Bank receiving such proportionately
greater payment shall purchase (to the extent of such
proportionately greater payment) such participations in the
Notes held by the other Bank, and such other adjustments
shall be made, as may be required, so that all such payments
of principal and interest with respect to the Notes held by
the Banks shall be shared by the Banks pro rata (based upon
the outstanding principal and interest due with respect to
each Note). Each Bank hereby agrees that if, from and after
the occurrence of an Event of Default and acceleration
pursuant to Section 11.2 hereof, it shall by exercising any
right of set-off or counterclaim or otherwise or by receipt
of any funds from the Borrower or any other source for
application to the obligations of the Borrower pursuant to
this Agreement, receive payment of a proportion of the
aggregate amount of principal and interest due with respect
to the Notes held by it and other amounts due it hereunder
(including without limitation amounts due it pursuant to
Section 4.4 hereof) which is greater than the proportion
received by the other Bank in respect of the aggregate
amount of all principal and interest due with respect to the
Notes held by such other Bank and other amounts due it
hereunder, the Bank receiving such proportionately greater
payment shall purchase (to the extent of such
proportionately greater payment) such participation in the
Notes held by and other amounts due hereunder (including
without limitation those due under Section 4.4 hereof) to
the other Bank and such other adjustments shall be made as
may be required, so that all such payments of principal and
interest to the Banks with respect to the Notes held by and
other amounts due hereunder shall be shared by the Banks pro
rata (based upon all amounts due to the
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Banks hereunder, including without limitation under the Notes and
under Section 4.4 hereof). Notwithstanding any contrary provision
of this Section, however, (i) nothing in this Section shall impair
the right of any Bank prior to the occurrence of an Event of
Default, to exercise any right of set-off or counterclaim it may
have and to apply the amount subject to such exercise to the
payment of any amounts due by the Borrower to such Bank under the
provisions of Section 4.4 hereof, (ii) nothing in this Section
shall impair the right of any Bank to exercise at any time any
right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebtedness of
the Borrower other than its indebtedness under the Notes or this
Agreement, and (iii) if all or any portion of such payment received
by the purchasing Bank is thereafter recovered from such purchasing
Bank, such purchase from the other Bank shall be rescinded and such
other Bank shall repay to the purchasing Bank the purchase price of
such participation to the extent of such recovery together with an
amount equal to such other Bank's ratable share (according to the
proportion of (x) the amount of such other Bank's required
repayment to (y) the total amount so recovered from the purchasing
Bank) any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The
Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in a Note
or other amounts due hereunder, acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if such
holder of a participation were a direct creditor of the Borrower in
the amount of such participation. Each Bank further agrees that,
after the occurrence of an Event of Default and acceleration
pursuant to Section 11.2 hereof, proceeds from any property
securing the Loans shall be applied pro rata to the indebtedness
(if any) owing to each Bank under Interest Rate Agreements between
Borrower and such Bank only at such time after all of the principal
and interest with respect to the Notes and other amounts due to
each Bank hereunder (including, without limitation, those due under
Section 4.4 hereof) shall have been paid in full.
13.3. Successors and Assigns. (a) The provisions
of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective
successors and assigns, provided that the Borrower may not
assign or otherwise transfer any of its rights under this
Agreement.
(b) Either Bank may at any time sell to one or
more Persons (each a "Participant") participating interests
in any Loan owing to such Bank, and Note held by such Bank,
the Revolving Credit Commitment of such Bank or any other
interest of such Bank hereunder. In the event of any such
sale by a Bank of a participating interest to a Participant,
such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of
any such Note for all purposes under this Agreement, and the
Borrower and the Agent shall continue to deal
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solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement. In no event shall a
Bank that sells a participation be obligated to the Participant to
take or refrain from taking any action hereunder except that such
Bank may agree that it will not (except as provided below), without
the consent of the Participant, agree to (i) the change of any date
fixed for the payment of principal of or interest on the related
Loan or Loans or for the payment of other amounts due hereunder,
(ii) the change of the amount of any principal, interest or fees
due on any date fixed for the payment thereof with respect to the
related Loan or Loans or other amounts due hereunder or (iii) any
change in the rate at which either interest is payable thereon or
(if the Participant is entitled to any part thereof) commitment or
facilities fee is payable hereunder from the rate at which the
Participant is entitled to receive interest, facilities fee or
commitment fee (as the case may be) in respect of such
participation. Each Bank selling a participating interest in any
Loan, Note, Revolving Credit Commitment or other interest under
this Agreement shall, within ten Business Days of such sale,
provide the Borrower and the Agent with written notification
stating that such sale has occurred and identifying the Participant
and the interest purchased by such Participant.
(c) Any Bank may at any time, with the prior
consent of Borrower whose consent shall not be unreasonably
withheld, assign to a bank or financial institution (an
"Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes,
and such Assignee shall assume all such rights and
obligations pursuant to an Assignment and Acceptance in the
form attached hereto as Exhibit 7, executed by such
Assignee, such transferor Bank and the Agent (and, prior to
the occurrence of an Event of Default, if the Assignee is
not then a Bank, by the Borrower); provided that (i) no
interest may be sold by a Bank pursuant to this paragraph
(c) unless the Assignee shall agree to assume ratably
equivalent portions of the transferor Bank's Revolving
Credit Commitment and (ii) no interest less than $5,000,000
may be sold by a Bank pursuant to this paragraph (c). Upon
(A) execution of the Assignment and Acceptance by such
transferor Bank, such Assignee, the Agent and (if
applicable) the Borrower, (B) delivery of an executed copy
of the Assignment and Acceptance to the Borrower and the
Agent, and (C) payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, such Assignee shall
for all purposes be a Bank party to this Agreement and shall
have the rights and obligations of a Bank under this
Agreement to the same extent as if it were an original party
thereto with a Revolving Credit Commitment as set forth in
such instrument of assumption, and the transferor Bank shall
be released from its obligations hereunder to a
corresponding extent, and no further consent or action by
the Borrower, the other Bank or the Agent shall be required.
Upon the consummation of any transfer to an Assignee
pursuant to this paragraph (c) and upon request by such
Assignee, the transferor Bank, the Agent and the Borrower
shall
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make appropriate arrangements so that, if required, a
new Note is issued to each of such Assignee and such
transferor Bank.
(d) In the event of a disagreement between the
Banks as to whether the Loans and other amounts due
hereunder should after the occurrence of an Event of Default
hereunder be accelerated by the Agent or whether the Agent
should proceed to foreclose against and sell collateral
security, pursuant to the provisions of Section 11.2 hereof,
the Bank or Banks desiring not to accelerate or to foreclose
(the "Non-Electing Bank(s)") shall have the right to acquire
all the rights and obligations under this Agreement, and the
Notes, of the other Banks(s) (the "Electing Bank(s)"). To
facilitate the right granted pursuant to this Section, the
Agent shall, upon receipt of notice from any Electing
Bank(s) requesting that it accelerate or foreclose pursuant
to Section 11.2 hereof and prior to such acceleration or
foreclosure, provide the Non-Electing Bank(s) notice
thereof, whereupon the Non-Electing Bank(s) shall have a
period of time not exceeding fifteen (15) days (except if
such Non-Electing Bank is First Union, First Union shall
have thirty (30) days) within which to elect by Notice to
the Agent and the Electing Bank(s) to purchase the rights
and obligations of the Electing Bank(s). Such purchase
shall occur on the date (which shall be a Business Day) set
forth in such notice not later than ten (10) days from the
date of such notice. Such purchase shall be evidenced by an
Assignment and Acceptance in the form of Exhibit 7. If
there are two or more Non-Electing Banks, the Non-Electing
Banks shall be entitled to purchase the rights and
obligations of the Electing Banks in proportion to their
Revolving Credit Commitments or, if the Revolving Credit
Commitments have then been terminated, in proportion to the
outstanding principal amounts of the Notes then held by such
Non-Electing Banks.
(e) Subject to the provisions of Section 13.4,
the Borrower authorizes each Bank to disclose to any
Participant, Assignee or other transferee (each a
"Transferee") and any prospective Transferee any and all
financial and other information in such Bank's possession
concerning the Borrower which has been delivered to such
Bank by the Borrower pursuant to this Agreement or which has
been delivered to such Bank by the Borrower in connection
with such Bank's credit evaluation prior to entering into
this Agreement.
13.4. Confidentiality. Each Bank agrees to
exercise its best efforts to keep any information delivered
or made available by the Borrower to it which is clearly
indicated to be confidential information, confidential from
anyone other than persons employed or retained by such Bank
who are or are expected to become engaged in evaluating,
approving, structuring or administering the Loans; provided,
however, that nothing herein shall prevent any Bank from
disclosing such information (i) to the other Bank, (ii) upon
the order of any court or administrative agency, (iii) upon
the request or demand of any regulatory agency or authority
having jurisdiction over such Bank, (iv) which has been
publicly disclosed, (v) to the extent reasonably required in
connection with any litigation to
-46-
which the Agent, either Bank or their respective affiliates may be
a party, (vi) to the extent reasonably required in connection with
the exercise of any remedy hereunder, (vii) to such Bank's legal
counsel and independent auditors and (viii) to any actual or
proposed Participant, Assignee or other Transferee of all or part
of its rights hereunder which has agreed in writing to be bound by
the provisions of this Section 13.4.
13.5. Unavailability of Adjusted LIBOR Rate. If,
with respect to any Fiscal Month in which the Agent is
requested by Borrower to provide an interest rate quote for
a Term Loan Interest Rate or Revolving Loan Interest Rate
based on the Adjusted LIBOR Rate and the Agent, in its sole
opinion, determines that such a quote cannot be made because
the LIBOR Base Rate is not available, then in that event,
the Term Loan Interest Rate and Revolving Loan Interest Rate
based on the Adjusted LIBOR Rate shall be suspended until
such time as the Agent shall have concluded that the LIBOR
Base Rate is available.
13.6. Increased Costs. If, at any time after the
date hereof, and from time to time, any Bank determines that
the adoption or modification of any applicable law, rule or
regulation regarding such Bank's required levels of
reserves, insurance or capital (including any allocation of
capital requirements or conditions), or similar
requirements, or any interpretation or administration
thereof by any governmental authority, central bank or
comparable agency charged with the interpretation,
administration or compliance of such Bank with any of such
requirements, has or would have the effect of (i) increasing
such Bank's costs relating to the Loans hereunder, or (ii)
reducing the yield or rate of return of such Bank on the
Loans hereunder, to a level below that such Bank could have
achieved but for the adoption or modification of any such
requirements, Borrower shall, within fifteen (15) days of
any request by the Agent or such Bank, pay to the Agent such
additional amounts as (in such Bank's sole judgment, after
good faith and reasonable computations, which determinations
shall be conclusive absent manifest error) will compensate
such Bank for such increase in costs or reduction in yield
or rate of return of such Bank. No failure by the Agent or
any Bank to demand payment of any additional amounts payable
hereunder shall constitute a waiver of such Bank's right to
demand payment of any amounts arising at any subsequent
time. Nothing herein contained shall be construed or so
operate as to require Borrower to pay any interest, fees,
costs or charges greater than is permitted by applicable
law.
13.7. Headings; Table of Contents. The section
and other headings contained in this Agreement and the Table
of Contents which precedes this Agreement are for reference
purposes only and shall not control or affect the
construction of this Agreement or the interpretation thereof
in any respect.
13.8. Lawful Charges. It is the intent of the
parties that the rate of interest and all other charges due
from the
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Borrower be lawful, and if, for any reason, payment
of a portion of interest or charges as required by this
Agreement or the Notes or in connection with Accepted Drafts
would exceed the limit established by applicable law, then
the obligation to pay interest or charges shall
automatically be reduced to such limit and if any amounts in
excess of such limits shall have been paid, then such
amounts shall be applied to the unpaid principal amount of
the Notes or refunded so that under no circumstances shall
interest or charges required hereunder exceed the maximum
rate allowed by law.
13.9. Conflict of Terms. The provisions of the
Notes and the other Loan Documents are incorporated in this
Agreement by this reference thereto. Except as otherwise
provided in this Agreement, if any provision contained in
this Agreement is in conflict with or inconsistent with any
provision of the Notes or the other Loan Documents, the
provision contained in this Agreement shall control.
13.10. Notices. All notices, requests and demands
to or upon the respective parties hereto shall be deemed to
have been given or made, in the case of telegraphic,
telecopy, telex or cable communication, when the same is
telegraphed, telecopied and the telecopy is confirmed by
telephone or return telecopy, telexed and confirmed by telex
answerback, or delivered to the cable company, respectively,
when sent by a reputable overnight courier, when the same is
delivered to the applicable address described below, and
when mailed, when deposited in the mail, postage prepaid,
or, in the case of telegraphic notice, when delivered to the
telegraph company, addressed as follows or to such other
address as may be hereafter designated in writing by the
respective parties hereto:
The Borrower: Culp, Inc.
101 S. Main Street
Post Office Box 2686
High Point, North Carolina 27261-2686
Attention: Franklin N. Saxon
Vice President and Chief Financial
Officer
Telecopy No. 910/887-7089
First Union
or the Agent: First Union National Bank of North
Carolina
209 North Main Street
Post Office Box 910
High Point, North Carolina 27261
Attention: Alan Pike
Vice President
Telecopy No. 910/887-5856
Copy to: First Union National Bank of North
Carolina
201 South College Street
Charlotte, North Carolina 28288-0656
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Attention: Pat McCormick
Telecopy No. 704/374-4820
Wachovia: Wachovia Bank of North Carolina
200 North Main Street
Post Office Box 631
High Point, North Carolina 27261
Attention: Pete T. Callahan
Vice President
Telecopy No. 910/887-1962
13.11. Survival of Agreements. All agreements,
representations and warranties made herein shall survive the
delivery of the Notes and the other Loan Documents.
13.12. Governing Law. This Agreement and the
Notes issued hereunder shall be governed by and construed in
accordance with the laws of the State of North Carolina.
13.13. Enforceability of Agreement. Should any
one or more of the provisions of this Agreement, the Notes
or the other Loan Documents be determined to be illegal or
unenforceable as to one or more of the parties, all other
provisions nevertheless shall remain effective and binding
on the parties hereto.
13.14. Stamp or Other Tax. Should any stamp or
excise tax become payable under the laws of the United
States or North Carolina, or a subdivision thereof or
municipality therein in respect of this Agreement or the
Notes or any modification hereof or thereof, Borrower shall
pay the same (including interest and penalties if any) and
shall hold each of the Banks harmless with respect thereto.
13.15. Counterparts and Effectiveness. This
Agreement may be executed by the parties hereto in any
number of counterparts and each counterpart shall be deemed
to be an original but all shall constitute together but one
and the same Agreement.
13.16. Fees and Expenses. Whether or not any
loans are made hereunder, the Borrower agrees to pay, or
reimburse each of the Banks, for actual out-of-pocket
expenses, including reasonable counsel fees, incurred by
such Bank in connection with the preparation, execution,
amendment, administration of this Agreement, the Notes and
the other Loan Documents, and, with respect to enforcement
of this Agreement, the Notes and the other Loan Documents,
reasonable attorneys fees.
13.17. Liens; Set Off by Banks. The Borrower
hereby grants to each Bank a continuing lien for the Notes
and all other indebtedness of Borrower to such Bank upon any
and all monies, securities and other property of Borrower
and its Subsidiaries and the proceeds thereof, now or
hereafter held or received by, or in transit to, such Bank
from or for Borrower, and also upon any and all deposits
(general or special) and credits of Borrower and its
-49-
Subsidiaries, if any, against such Bank, at any time
existing. Upon the occurrence of any Event of Default as
specified above, each such Bank is hereby authorized at any
time and from time to time, without prior notice to Borrower
and its Subsidiaries, to set off, appropriate and apply any
and all items herein referred to against all indebtedness or
obligations of Borrower to such Bank, whether under this
Agreement, the Notes or otherwise, whether now existing or
hereafter arising.
13.18. Loan Documents. Any individual or
collective reference to any of the Loan Documents in any of
the other Loan Documents to which the Borrower or any of its
Subsidiaries is a party shall mean, unless otherwise
specifically provided, such Loan Document as amended by this
Agreement, and as it is further amended, restated,
supplemented or modified from time to time and any
substitute or replacement therefor or renewals thereof,
including without limitation, all references to the 1994
Amended and Restated Credit Agreement, which shall mean the
1994 Amended and Restated Credit Agreement as amended and
restated hereby.
13.19. Entire Agreement. This Agreement
constitutes the entire Agreement between the parties
pertaining to its subject matter and supersedes all prior
and contemporaneous agreements and understandings of the
parties in connection with it, including without limitation
that certain commitment letter agreement between the
Borrower and First Union dated February 24, 1994.
13.20. Survival of Certain Provisions Upon
Termination. Upon termination of this Agreement, the
provisions of the Sections of this Agreement, together with
the definitions of the capitalized terms used therein, shall
remain in full force and effect to the extent that such
sections are incorporated by reference in any other
agreement, instrument or document between the Borrower and
the Agent or the Banks or either of them, acting in any
capacity, or between the Borrower and any third party. Upon
termination of this Agreement, the indemnity provisions of
Section 9.21 shall remain in full force and effect.
13.21. Accounting Terms and Computations.
Whenever any accounting term shall be used in this Agreement
or the character or amount of any asset or liability or item
of income or expense is required to be determined, or any
consolidation or other accounting computation is required to
be made, for purposes of this Agreement, such accounting
term, determination or computation shall, to the extent
applicable and except as otherwise specified in this
Agreement, be defined or made (as the case may be) in
accordance with those principles of accounting set forth in
pronouncements of the Financial Accounting Standards Board
or The American Institute of Certified Public Accountants or
which have other authoritative support and are applicable in
the circumstances as of the date of application, as such
principles are from time to time supplemented or amended;
provided, however, that there shall be no instance of upward
revaluation of assets; provided, further, however, that if
any change in generally accepted accounting principles from
those
-50-
applied in the preparation of the financial reports
referred to in Section 9.1(a) and (b) hereof is occasioned
by the promulgation of rules or regulations by the Financing
Accounting Standards Board, or The American Institute of
Certified Public Accountants (or successors thereto or
agencies with similar functions), the effective date of
which change is after the date of said financial statements,
and such change results in a change in the method of
calculation of financial covenants, standards or terms found
in this Agreement, the parties hereto agree to enter into
good faith negotiations in order to amend such provisions so
as to reflect, such change as if such change had not been
made; and provided, further, however, that until such time
as the parties agree upon such amendments, such financial
covenants, standards and terms shall be construed and
calculated as though such change had not taken place.
13.22. Obligations Several. The obligation of
each Bank hereunder is several, and neither the Agent nor
any Bank shall be responsible for the obligation or the
commitment of any other Bank.
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IN WITNESS WHEREOF, Borrower and each of the Banks have
caused this Agreement to be duly executed by their duly
authorized officers, all as of the day and year first above
written.
CULP, INC.
/s/ Franklin N. Saxon
[CORPORATE SEAL] By: ______________________________
Vice President
ATTEST:
/s/ Henry H. Ralston
__________________________
(Assistant Secretary)
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, for itself and
as Agent
/s/ K. Patrick McCormick
By: ______________________________
Vice President
WACHOVIA BANK OF NORTH
CAROLINA, N.A.
/s/ Pete T. Callahan
By: ______________________________
Vice President
-52-
Annex I
Commitment Amount Commitment Amount Percentage of
Name of Banks Term Loans Revolving Loans Aggregate Commitments
First Union National $26,400,000 $20,100,000 60.0%
Bank of North Carolina
209 North Main Street
High Point, NC 27260
Wachovia Bank of North $17,600,000 $13,400,000 40.0%
Carolina, N.A.
200 North Main Street
Post Office Box 631
High Point, NC 27261
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Exhibit 1-A
SECOND AMENDED AND RESTATED TERM NOTE
$26,400,000 High Point, North Carolina
__________, 1995
FOR VALUE RECEIVED, CULP, INC,, a North Carolina
corporation (herein called the "Borrower") , promises to pay
to the order of FIRST UNION NATIONAL BANK OF NORTH CAROLINA
(the "Bank"), or order, at the office of FIRST UNION
NATIONAL BANK OF NORTH CAROLINA at High Point, North
Carolina, in lawful money of the United States of America,
the principal amount of Twenty-six Million Four Hundred
Thousand Dollars ($26,400,000), such principal amount to be
payable in seventy-five (75) consecutive equal monthly
installments of $300,000.00, payable on the tenth Business
Day of each Fiscal Month of the Borrower commencing December
14, 1995 and (ii) one final installment of $3,900,000
payable on March 1, 2001, together with interest on the
unpaid principal amount, such interest payments beginning on
the tenth Business Day of the first Fiscal Month of the
Borrower following November 1, 1994, as provided in the 1995
Amended and Restated Credit Agreement between the Borrower,
the Bank (for itself and as Agent) and Wachovia Bank of
North Carolina, N.A., dated as of July 1, 1995 (as amended,
restated, modified or supplemented, the "Credit Agreement").
This Note is the First Union Term Note referred to in
the Credit Agreement and is entitled to the benefits thereof
and may be prepaid in whole or in part as provided therein.
This Note is a replacement of that First Amended and
Restated First Union Term Note dated November 1, 1994.
Capitalized terms used herein without definition have the
meanings specified in the Credit Agreement.
Upon the occurrence of any one or more of the Events
of Default specified in the Credit Agreement, or in any
other document or instrument delivered in connection
therewith, all amounts then remaining unpaid on this Note
may be declared to be immediately due and payable as
provided in the Credit Agreement.
54
In the event the indebtedness evidenced or secured
hereby be collected by or through an attorney at law after
maturity, the holder shall be entitled to collect reasonable
attorney's fees. Demand, presentment, protest, notice of
protest, and notice of dishonor are hereby waived by all
parties bound hereon.
CULP, INC.
(CORPORATE SEAL]
By:____________________________
______ President
ATTEST:
____________________
Secretary
-55-
Exhibit 1-B
SECOND AMENDED AND RESTATED TERM NOTE
$17,600,000 High Point, North Carolina
__________, 1995
FOR VALUE RECEIVED, CULP, INC,, a North Carolina
corporation (herein called the "Borrower") , promises to pay
to the order of WACHOVIA BANK OF NORTH CAROLINA, N.A. (the
"Bank"), or order, at the office of FIRST UNION NATIONAL
BANK OF NORTH CAROLINA (as the Bank's Agent and for the
benefit of the Bank) at High Point, North Carolina, in
lawful money of the United States of America, the principal
amount of Seventeen Million Six Hundred Thousand Dollars
($17,600,000), such principal amount to be payable in
seventy-five (75) consecutive equal monthly installments of
$200,000.00, payable on the tenth Business Day of each
Fiscal Month of the Borrower commencing December 14, 1995
and (ii) one final installment of $2,600,000 payable on
March 1, 2001, together with interest on the unpaid
principal amount, such interest payments beginning on the
tenth Business Day of the first Fiscal Month of the Borrower
following November 1, 1994, as provided in the 1995 Amended
and Restated Credit Agreement between the Borrower, the Bank
and First Union National Bank of North Carolina for itself
and as Agent, dated as of July 1, 1995 (as amended,
restated, modified or supplemented, the "Credit Agreement").
This Note is the Wachovia Term Note referred to in the
Credit Agreement and is entitled to the benefits thereof and
may be prepaid in whole or in part as provided therein.
This Note is a replacement of that First Amended and
Restated Wachovia Term Note dated November 1, 1994.
Capitalized terms used herein without definition have the
meanings specified in the Credit Agreement.
Upon the occurrence of any one or more of the Events
of Default specified in the Credit Agreement, or in any
other document or instrument delivered in connection
therewith, all amounts then remaining unpaid on this Note
may be declared to be immediately due and payable as
provided in the Credit Agreement.
In the event the indebtedness evidenced or secured
hereby be collected by or through an attorney at law after
maturity, the holder shall be entitled to collect reasonable
attorney's fees. Demand, presentment, protest, notice of
protest, and notice of dishonor are hereby waived by all
parties bound hereon.
CULP, INC.
(CORPORATE SEAL]
By:____________________________
______ President
ATTEST:
____________________
Secretary
-2-
Exhibit 2-A
THIRD AMENDED AND RESTATED REVOLVING CREDIT NOTE
$20,100,000 High Point, North Carolina
__________, 1995
FOR VALUE RECEIVED, CULP, INC,, a North Carolina
corporation (herein called the "Borrower") , promises to pay
to the order of FIRST UNION NATIONAL BANK OF NORTH CAROLINA
(the "Bank"), or order, on the Revolving Loan Termination
Date (as defined in the 1995 Amended and Restated Credit
Agreement dated as of July 1, 1995 between the Borrower, the
Bank (for itself and as Agent) and Wachovia Bank of North
Carolina, N.A. (as amended, restated, modified or
supplemented, the "Credit Agreement")), at the office of
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, High Point,
North Carolina, in lawful money of the United States of
America, the principal amount of Twenty Million One Hundred
Thousand and No/100 Dollars ($20,100,000). This Revolving
Credit Note shall bear interest on the outstanding principal
balance from time to time as provided in the Credit
Agreement and interest shall be payable at the times set
forth in the Credit Agreement.
Notwithstanding the foregoing, the Borrower shall be
liable for payment to the Bank only for such principal
amount of the First Union Revolving Loan (as defined in the
Credit Agreement) as is outstanding, together with interest
at the rate per annum as aforesaid on the principal amount
outstanding from the date of advance.
This Note is the First Union Revolving Credit Note
referred to in the Credit Agreement and is entitled to the
benefits thereof and may be prepaid in whole or in part as
provided therein. This Note is a replacement of that Second
Amended and Restated First Union Revolving Credit Note dated
March 6, 1995. Capitalized terms used herein without
definition have the meanings specified in the Credit
Agreement.
Upon the occurrence of any one or more of the Events of
Default specified in the Credit Agreement, or in any other
document or instrument delivered in connection therewith,
all amounts then remaining unpaid on this Note may be
declared to be immediately due and payable as provided in
the Credit Agreement.
In the event the indebtedness evidenced or secured
hereby be collected by or through an attorney at law after
maturity, the holder shall be entitled to collect reasonable
attorneys' fees. Demand, presentment, protest, notice of
protest, and notice of dishonor are hereby waived by all
parties bound hereon.
[CORPORATE SEAL] CULP, INC.
ATTEST: By: _________________________
________ President
______________________
Secretary
Exhibit 2-B
THIRD AMENDED AND RESTATED REVOLVING CREDIT NOTE
$13,400,000 High Point, North Carolina
__________, 1995
FOR VALUE RECEIVED, CULP, INC,, a North Carolina
corporation (herein called the "Borrower") , promises to pay
to the order of WACHOVIA BANK OF NORTH CAROLINA, N.A. (the
"Bank"), or order, on the Revolving Loan Termination Date
(as defined in the 1995 Amended and Restated Credit
Agreement dated as of July 1, 1995 between the Borrower, the
Bank and First Union National Bank of North Carolina (for
itself and as Agent) (as amended, restated, modified or
supplemented, the "Credit Agreement")), at the office of
FIRST UNION NATIONAL BANK OF NORTH CAROLINA (as the Bank's
Agent and for the benefit of the Bank), High Point, North
Carolina, in lawful money of the United States of America,
the principal amount of Thirteen Million Four Hundred
Thousand and No/100 Dollars ($13,400,000). This Revolving
Credit Note shall bear interest on the outstanding principal
balance from time to time as provided in the Credit
Agreement and interest shall be payable at the times set
forth in the Credit Agreement.
Notwithstanding the foregoing, the Borrower shall be
liable for payment to the Bank only for such principal
amount of the Wachovia Revolving Loan (as defined in the
Credit Agreement) as is outstanding, together with interest
at the rate per annum as aforesaid on the principal amount
outstanding from the date of advance.
This Note is the Wachovia Revolving Credit Note
referred to in the Credit Agreement and is entitled to the
benefits thereof and may be prepaid in whole or in part as
provided therein. This Note is a replacement of that Second
Amended and Restated Wachovia Revolving Credit Note dated
March 6, 1995. Capitalized terms used herein without
definition have the meanings specified in the Credit
Agreement.
Upon the occurrence of any one or more of the Events of
Default specified in the Credit Agreement, or in any other
document or instrument delivered in connection therewith,
all amounts then remaining unpaid on this Note may be
declared to be immediately due and payable as provided in
the Credit Agreement.
In the event the indebtedness evidenced or secured
hereby be collected by or through an attorney at law after
maturity, the holder shall be entitled to collect reasonable
attorneys' fees. Demand, presentment, protest, notice of
protest, and notice of dishonor are hereby waived by all
parties bound hereon.
[CORPORATE SEAL] CULP, INC.
ATTEST: By: _________________________
________President
______________________
Secretary
Exhibit 3
SUBSIDIARIES
1. Culp International, Inc.
2. Guilford Printers, Inc.
3. 3096726 Canada Inc.
4. Rayonese Textile Inc.
Exhibit 4
Existing Liens. Other than Permitted Encumbrances and
the liens previously disclosed to the Banks by the pre-
closing UCC searches which are summarized on Schedule A
attached hereto and incorporated herein by reference and
made a part hereof, the Borrower has not granted liens to
any other party. However, the Borrower may be asked from
time to time to execute UCC financing statements relating to
purchases of equipment in order for the vendor of such
equipment to perfect a purchase money security interest. As
of the Closing Date, no such purchase money security
interests have been perfected.
The following terms are listed with respect to Sections
7.3 through 7.15 of the Credit Agreement:
7.3. Financial Condition. No contingent
liabilities.
The Borrower often receives favorable purchase terms
from several vendors of equipment. As of the Closing Date,
the Borrower owes such vendors an aggregate amount of
$10,662,452 (including equipment that the Borrower has
committed to purchase, but which it has not yet received),
as more specifically described below. Amounts owed by the
Borrower relating to equipment that has been received by the
Borrower are classified in the Borrower's financial
statements as Accounts Payable. Amounts owed by the
Borrower relating to equipment that has not yet been
received by the Borrower are not reflected in the Borrower's
financial statements. The Borrower is not obligated to pay
for equipment until such equipment is delivered by the
vendor to the Borrower. The indebtedness described below
does not bear interest. Also, in some cases, promissory
notes are signed, and the vendors may file UCC financing
statements to perfect purchase money security interests.
(i) The Borrower owes American Dornier $3,260,191 relating
to the purchase of looms. The Borrower has received 26
looms and expects to receive 20 additional looms by August,
1994. Promissory notes have been signed relating to
$679,482 and $610,617. The terms of payment extend to
October, 1995.
(ii) The Borrower owes Staubli Corporation $3,738,219
relating to the purchase of electronic heads and harnesses.
The Borrower has received 24 heads and harnesses and expects
to receive 8 additional heads and harnesses by September,
1994. No promissory notes have been signed with respect to
these obligations. The payment terms extend to October, 1995.
(iii) The Borrower owes Bonas $715,518 relating to the
purchase of electronic jacquard heads. The Borrower expects
to receive 14 jacquard heads by August, 1994. A promissory
note has been signed in the principal amount of $515,180.
The payment terms extend to May, 1995.
(iv) The Borrower owes Van de Wiele $1,664,687 relating to
the purchase of 10 velvet master looms. The Borrower
expects to receive the looms in May, 1994 and June, 1994.
The Borrower has executed a promissory note, and Van de
Wiele expects to file UCC financing statements when the
equipment is delivered, although the Borrower has not signed
any financing statements yet. The payment terms extend to
May, 1995.
(v) The Borrower owes Parks & Woolson $333,837 relating to
the purchase of a finishing line. The Borrower received the
finishing line in March, 1994 and will make one lump sum
payment in May, 1994.
(vi) The Borrower owes Guilford Mills $950,000 relating to
the purchase of a Stork MBK Printer and Dryer. The Borrower
received the equipment in March, 1994. No promissory note
was executed. The payment terms call for two equal payments
of $475,000, to be paid in May, 1994 and June, 1994.
7.5. Pending Actions. From time to time the Borrower
is named as a party to proceedings that involve the Equal
Employment Opportunity Commission. The Borrower's
management does not believe that any of these proceedings
are likely to have a materially adverse effect on its
business, taken as a whole.
7.6. Contingent Liabilities. None.
7.7. Tax Controversies.
a. As previously disclosed to the Banks, Alamance County,
North Carolina recently completed a revaluation of real
property, resulting in significantly higher tax values for
the Borrower's two parcels of real property in Alamance
County (both of which are part of the Collateral and secured
by the Mortgages). The Borrower has paid a portion of the
property taxes, but has filed a protest and requested a
hearing with the Alamance County tax authorities. The
Borrower argues that the values assigned to both parcels of
its real property are too high and has resulted in excessive
taxes.
b. As previously disclosed to the Banks, the Borrower is
contesting a use tax imposed by the North Carolina
Department of Revenue on Greige paper as a raw material.
The Borrower has paid the tax and is current, but has filed
for a refund on taxes paid and has requested relief for
future payments. The Borrower argues that Greige paper is
part of its manufacturing process. Prior to its 1992 audit,
the Borrower never paid and was never required to pay a tax
on Greige paper. The protest hearing with the North
Carolina Department of Revenue is scheduled for May 10,
1994.
7.8. Contracts or Restrictions. None.
7.15. Environmental Matters. The factual
disclosures set forth below are based on oral and written
reports prepared by Leonhardt Environmental.
(a) The following plants of the Borrower contain or
have contained asbestos: Rossville, Georgia; West Hazelton,
Pennsylvania; Anderson, South Carolina; Graham, North
Carolina; Burlington, North Carolina; and Stokesdale, North
Carolina. Leonhardt Environmental reports that all asbestos
in the Borrower's facilities where asbestos has been located
has been or is in the process of being, either removed or
encapsulated in accordance with applicable law and
regulations. The Upholstery Prints plant in Burlington,
North Carolina and the Culp Weaving plant in Pageland, South
Carolina were both constructed after the 1976 ban on
asbestos and asbestos surveys have not been undertaken at
these facilities.
(b) The Borrower has never undertaken a survey or
inspection for urea formaldehyde foam insulation.
(c) Transformers containing PCBs exist on certain of
the Borrower's properties. According to Leonhardt
Environmental, however, all such transformers are properly
labeled, not leaking and in compliance with applicable law
and regulations.
(d) Other hazardous materials exist or may exist on
properties owned by the Borrower. The presence of hazardous
materials and any contamination that may have occurred as a
result of such substances is more fully disclosed in the
environmental reports that have been previously delivered to
the Banks.
(e) According to Leonhardt Environmental, all
appropriate forms and reporting have been completed for each
location. Leonhardt Environmental has not investigated
whether any of the Borrower's plants or properties are part
of a flood plain, flood hazardous area or protected wetland.
Surveys should indicate whether such properties are in flood
plains or flood hazardous areas.
(f) According to Leonhardt Environmental, all
underground and aboveground storage tanks are in compliance
with all applicable laws and regulations.
(g) Leonhardt Environmental reports that all of the
Borrower's locations possess or have applied for necessary
permits required by applicable environmental laws or
regulations and, to the best of its knowledge, that all
plants are in compliance with the provisions of such
permits, except for a necessary air permit for the finishing
frame at Chromatex in Pennsylvania. Although this permit
has been applied for, it has not yet been issued. This
permit is required due to activities or other facilities on
the Chromatex site and are not attributable to actions by
the Borrower.
(h) A Notice of Noncompliance was received at the Culp
Ticking Plant in Stokesdale, North Carolina about which the
banks have been informed and in response to which the
Borrower has undertaken investigative or corrective action.
The Borrower is currently negotiating with Fieldcrest
Cannon, the former owner of the site, concerning the
contaminate soil and groundwater at the site, and is
vigorously pursuing its rights with respect to environmental
damage attributable to Fieldcrest Cannon. Leonhardt is
aware of no other significant notices or of any lawsuits,
consent agreements, citations, orders or similar
communications.
Exhibit 5
[a form of quarterly officers certificates in form and
substance to be agreed upon by the Borrower and the Banks,
which shall be designed to set forth the calculation of
financial information required to be reported by the
Borrower to the Banks and to demonstrate the Borrower's
compliance with the financial covenants set forth in this
Agreement]
Exhibit 6
1. $5,000,000 Anderson County, South Carolina, Industrial
Revenue Bonds, Series 1985 (Culp Woven Velvets, Inc.
Project) (Liens held by First Union National Bank of
North Carolina as Trustee).
2. $1,000,000 Alamance County, North Carolina, Industrial
Revenue Bonds, Series 1986 A (Culp, Inc. Project)
(Liens held by First Union National Bank of North
Carolina as Trustee).
3. $7,900,000 Alamance County, North Carolina, Industrial
Revenue Bonds, Series A and B (Culp, Inc. Project)
(1988) (Liens held by First Union National Bank of
North Carolina as Letter of Credit Issuer).
4. $3,377,000 Chesterfield County, South Carolina,
Industrial Revenue Bonds, Series 1988 (Culp, Inc.
Project) (Liens held by First Union National Bank of
North Carolina as Letter of Credit Issuer).
5. $4,500,000 Guilford County, North Carolina, Industrial
Development Revenue Bonds, Series 1989 (Culp, Inc.
Project) (Liens held by Wachovia Bank of North
Carolina, N.A. as Letter of Credit Issuer and by First
Citizens Bank & Trust Company as Trustee).
6. $6,580,000 Anderson County, South Carolina, Industrial
Revenue Bonds, Series 1993 (Culp, Inc. Project) (Liens
held by First Union National Bank of North Carolina as
Letter of Credit Issuer).
Exhibit 7
ASSIGNMENT AND ACCEPTANCE
Dated _____________ ___, ____
Reference is made to the 1995 Amended and Restated
Credit Agreement dated as of _______________ ___, _____ (the
"Credit Agreement") among CULP, INC. a North Carolina
corporation (the
"Borrower"), the BANKS (as defined in the Credit Agreement)
and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Agent
(the "Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.
______________________________________ (the "Assignor")
and _____________________________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from
the Assignor, a ____% interest in and to all of the
Assignor's rights and obligations under the credit Agreement
as of the Effective Date (as defined below) (including,
without limitation, a ______% interest (which on the
Effective Date hereof is $___________) in the Assignor's
Revolving Credit Commitment and a _____% interest (which on
the Effective Date hereof is $_____________) in the Loans
and other amounts owing to the Assignor and a ______%
interest in the Note[s] held by the Assignor (which on the
Effective Date hereof is $___________________)).
2. The Assignor (i) makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with the Credit Agreement, any other instrument
or document furnished pursuant thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement, any other Loan Document or
any other instrument or document furnished pursuant thereto,
other than that it is the legal and beneficial owner of the
interest being assigned by it hereunder, that such interest
is free and clear of any adverse claim and that as of the
date hereof its Revolving Credit Commitment (without giving
effect to assignments thereof which have not yet become
effective) is $_____________ and the aggregate outstanding
principal amount of Loans and other amounts owing to it
(without giving effect to assignments thereof which have not
yet become effective) is $________________ (Loans of
$_______________ and other amounts [specify] of
$_____________); (ii) makes no representation or warranty
and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance
by the Borrower of any of its obligations under the Credit
Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto; and (iii) attaches
the Note[s] referred to in paragraph 1 above and requests
that the Agent exchange such Note[s] for [a new Note dated
__________________, _____ in the principal amount of
$_______________ payable to the order of the Assignee] (new
Notes as follows: a Note dated _______________, ______ in
the principal amount of $____________ payable to the order
of the Assignor and a Note dated _______________________
____ in the principal amount of $__________________ payable
to the order of the Assignee].
3. The Assignee (i) confirms that it has received a
copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 7.1 thereof (or
any more recent financial statements of the Borrower
delivered pursuant to Section 9.1 thereof) and such other
documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, the
Assignor or any other Bank and based on such documents and
information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not
taking action under the Credit Agreement; (iii) confirms
that it is a bank or financial institution; (iv) appoints
and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably
incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligation which by
the terms of the Credit Agreement are required to be
performed by it as a Bank; (vi) specifies as its address for
notices the office set forth beneath its name on the
signature pages hereof; (vii) represents and warrants that
the execution, delivery and performance of this Assignment
and Acceptance are within its corporate powers and have been
duly authorized by all necessary corporate action, and
(viii) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's
status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be
made to the Assignee under the Credit Agreement and the
Notes or such other documents as are necessary to indicate
that all such payments are subject to such taxes at a rate
*
reduced by an applicable tax treaty].
4. The Effective Date for this Assignment and
Acceptance shall be ____________________ (the "Effective
Date"). Following the execution of this Assignment and
Acceptance, it will be
*If the Assignee is organized under the laws of a
jurisdiction outside the United States.
delivered to the Agent for execution and acceptance by the Agent
[and to the Borrower for execution by the Borrower]**.
5. Upon such execution and acceptance by the Agent
[and execution by the Borrower], from and after the
Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent rights and obligations
have been transferred to it by this Assignment and
Acceptance, have the rights and obligations of a Bank
thereunder and (ii) the Assignor shall, to the extent its
rights and obligations have been transferred to the Assignee
by this Assignment and Acceptance, relinquish its rights
(other than under Section 13.14 and Section 13.16 of the
Credit Agreement) and be released from its obligations under
the Credit Agreement.
6. Upon such execution and acceptance by the Agent
[and execution by the Borrower]**, from and after the
Effective Date, the Agent shall make all payments in respect
of the interest assigned hereby to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments
in payments for periods prior to such acceptance by the
Agent directly between themselves.
7. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the laws of the State
of North Carolina.
[NAME OF ASSIGNOR]
By: _______________________________
Title:
[NAME OF ASSIGNEE]
By: _______________________________
Title:
Lending Office:
[Address]
** Before the occurrence of an Event of Default, if the
Assignee is not a Bank prior to the Effective Date.
** Before the occurrence of an Event of Default, if the
Assignee is not a Bank prior to the Effective Date.
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Agent
By: _______________________________
Title:
(Signatures continued)
[NAME OF BORROWER]***
By: _______________________________
Title:
*** Before the occurrence of an Event of Default, if the
Assignee is not a Bank prior to the Effective Date.
Exhibit 8
1. The Borrower entered into a factoring arrangement with
First Factors Corporation of High Point, North Carolina
in 1972. The agreement was revised in 1980 to include
all of the Borrower's separate divisions. The
agreement can be terminated by either party at any time
upon 30 days written notice.
2. The Borrower entered into a factoring arrangement with
Citizens and Southern Commercial Corporation ("C&S")
several years ago. NationsBank purchased C&S, and
assumed the obligations of C&S under the agreement as
NationsBank Factoring. The agreement can be terminated
by either party upon 60 days written notice.
NationsBank Factoring is used strictly for
international sales.
The Borrower reports, as of the Closing Date, that an amount
equal to approximately 8% to 9% of annual sales is factored
under the two agreements described above.
Schedule A
Updated 4/14/94
PRECLOSING UCC SEARCHES
2771.1165
DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
CALIFORNIA
CALIFORNIA SECRETARY OF STATE
Culp, Inc.
BancBoston Financial Company 01/30/87 87025629 Accounts/Contract Rights/Gen. Intang.
Culp of California, Inc.
First Factors Corporation 11/22/82 82217660 Accounts/Contract Rights
Continuation 08/31/92
Continuation 06/29/87
BancBoston Financial Company 01/30/87 87025630 Accounts/Contract Rights/Gen. Intang.
Amendment changing debtor address 10/16/87
BancBoston Financial Company 03/02/87 87051390 Accounts/Contract Rights/Gen. Intang.
Continuation 12/23/91
LA, CALIFORNIA
Clear through 04/05/94
GEORGIA
GEORGIA, COOK COUNTY
Clear through 2/17/94
MISSISSIPPI
MISSISSIPPI SECRETARY OF STATE
Culp, Inc.
BancBoston Financial Company 02/02/87 0216509 Accounts/Contract Rights/Gen. Intang.
Continuation 12/27/91 0599638
DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
First Factors Corporation 06/13/80 80061427 Accounts/Contract Rights
Continuation
Continuation 02/07/90 0453105
LEE, MS
Culp of Mississippi, A Division
of Culp, Inc.
Barclays American/Commercial, Inc. 09/10/79 79-4757 Accounts/Contract Rights/Gen. Intang.
Amendment to change debtor name to above 09/03/82
Continuation 08/23/84
Amendment to change secured party name 08/13/90
First Factors Corporation 06/15/80 80-2248 Accounts/Contract Rights
Continuation
Continuation 02/09/90
Culp, Inc. dba Culp of Mississippi
First Factors Corporation 06/16/80 80-2247 Accounts/Contract Rights
Continuation
Continuation 02/09/90 90-500
Culp of Mississippi, Inc. A
Division of Culp, Inc.
BancBoston Financial Company 02/06/87 87-539 Accounts/Contract Rights/Gen. Intang.
NORTH CAROLINA
NORTH CAROLINA SECRETARY OF STATE
Culp, Inc.
Mobilift of Burlington 12/14/93 1059190 Specific Equipment
Pitney Bowes Credit Corporation 11/15/93 1051177 Comprehensive Equipment of various cos.
Pitney Bowes Credit Corporation 11/15/93 1051178 Comprehensive Equipment of various cos.
First Union National Bank of North Carolina 12/15/89 0632222 Comprehensive
The Citizens and Southern National Bank,
as Trustee 12/15/89 0632221 Comprehensive
The Alamance County Industrial Facilities
and Pollution Control Financing Authority 06/26/86 231702 Fixtures, Machinery, Equipment &
Tangible Personal Property
-2-
DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
Assignment to First Union National Bank 06/26/86 231702
UCC-3 Continuation 04/29/91 0780653
First Factors Corporation 02/20/81 8106381 Accounts/Contract Rights
UCC-3 Continuation 09/10/85 146369
UCC-3 Continuation 10/16/90 0723722
First Factors Corporation 02/20/81 8106382 Accounts/Contract Rights
UCC-3 Continuation 09/10/85 146370
UCC-3 Continuation 10/16/90 723723
First Union National Bank of North Carolina 11/16/88 0510620 Fixtures, Machinery, Equipment
& Other Tangible Personal Property
UCC-3 Continuation 08/30/93 1029006
First Factors Corporation 06/11/80 8020958 Accounts/Contract Rights
UCC-3 Continuation 01/30/85 0087718
UCC-3 Continuation 02/09/90 0648436
REH Leasing Company 09/23/92 0926464 Specific Equipment
Assignment to Central Carolina Bank & Trust
(National Association) 09/23/92 0926464
UCC-3 Assignment to Modern Office
Machines, Inc. 03/10/93 0976248
IBM Corporation 07/16/92 0907921 Specific Equipment
IBM Corporation 07/16/92 0907920 Specific Equipment
IBM Corporation 10/18/91 0827469 Specific Equipment
IBM Corporation 10/18/91 0827468 Specific Equipment
Wachovia Bank of North Carolina,
National Association 12/02/93 1055828 Comprehensive
First-Citizens Bank & Trust
Company, as Trustee 12/02/93 1055827 Comprehensive
Southern Furniture Exposition Building, Inc. 04/29/91 0779930 Goods, Furniture, Fixtures
Citicorp Dealer Finance 10/04/93 1038851 Specific Equipment
Mobilift of Burlington Inc. 04/16/93 0988647 Specific Equipment
Citizens and Southern Commercial Corporation 10/29/90 0727133 Accounts/Contract Rights/ Gen. Intang.
Pitney Bowes Credit Corporation (Lessor) 07/30/90 0701660 Specific Equipment
Pitney Bowes Credit Corporation (Lessor) 07/30/90 0701659 Specific Equipment
-3-
DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
BancBoston Financial Company 02/02/87 0298904 Accts./Contract Rights/Gen. Intang.
UCC-3 Continuation 12/30/91 0845834
Value Fabrics, Inc. a Division
of Culp, Inc.
BancBoston Financial Company 02/02/87 0298907 Accts./Contract Rights/Gen. Intang.
UCC-3 Continuation 12/30/91 0845835
Culp Industrial Fabrics, Inc.
A Division of Culp, Inc.
BancBoston Financial Company 02/02/87 0298903 Accts./Contract Rights/Gen. Intang.
UCC-3 Continuation 12/30/91 0845838
Culp of Carolina, Inc. a
Division of Culp, Inc.
BancBoston Financial Company 02/02/87 0298902 Accts./Contract Rights/Gen. Intang.
UCC-3 Continuation 12/30/91 0845833
Culp of California, a division
of Culp, Inc.
Barclays Commercial Corporation 02/14/91 0758387 Accts./Contract Rights/Gen. Intang.
Citizens and Southern Commercial Corporation 10/29/90 0727137 Accts./Contract Rights/Gen. Intang.
Culp Finishing,
a div. of Culp, Inc.
First Factors Corporation 10/07/92 0930642 Accts./Contract Rights/Gen. Intang.
First Factors Corporation 03/14/85 0098791 Accts./Contract Rights/Gen. Intang.
UCC-3 Continuation 01/19/90 0641251
First Factors Corporation 03/14/85 0098792 Accts./Contract Rights/Gen. Intang.
UCC-3 Continuation 01/19/90 0641252
Chromatex, a division of
Culp, Inc.
First Factors Corporation 01/19/94 1069254 Accts./Contract Rights/Gen. Intang.
Rossville Mills, a division
of Culp, Inc.
First Factors Corporation 01/19/94 1069253 Accts./Contract Rights/Gen. Intang.
-4-
DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
Culp, Inc. dba Culp-Ticking Div.
First Factors Corporation 02/20/81 8106382 Comp. Accounts & Contract Rights
UCC-3 Continuation 09/10/85 146370
UCC-3 Continuation 10/16/90 0723723
Culp-Ticking Div. Culp, Inc.
First Factors Corporation 02/20/81 8106381 Comp. Accounts & Contract Rights
UCC-3 Continuation 09/10/85 146369
UCC-3 Continuation 10/16/90 0723722
Citizens and Southern Commercial Corporation 10/29/90 0727136 Accts/Contract Rights/Gen. Intang.
Culp Ticking, Inc. a Division
of Culp, Inc.
BancBoston Financial Company 02/02/87 0298906 Accts/Contract Rights/Gen. Intang.
UCC-3 Continuation 12/30/91 0845836
Culp Decorative Fabrics, Inc.
A Division of Culp, Inc.
BancBoston Financial Company 03/02/87 0307993 Accts/Contract Rights/Gen. Intang.
UCC-3 Continuation 12/3/0/91 0845839
Culp of Mississippi
Div. of Culp, Inc.
First Factors Corporation 06/11/80 8020962 Accts/Contract Rights
UCC-3 Continuation 01/30/85 0087717
UCC-3 Continuation 02/09/90 0648437
Citizens and Southern Commercial Corporation 10/29/90 0727134 Accts/Contract Rights/Gen. Intang.
Carolina Converters
Div. of Culp, Inc.
First Factors Corporation 06/11/80 8020961 Accts/Contract Rights
UCC-3 Continuation 01/30/85 0087715
UCC-3 Amendment 02/27/86 194214
UCC-3 Continuation 02/09/90 0648434
First Factors Corporation 06/11/80 8020960 Accts/Contract Rights
UCC-3 Continuation 01/30/85 0087716
UCC-3 Amendment to amend name of Debtor to
Culp Industrial Fabrics Div. of Culp, Inc. 02/27/86 194213
UCC-3 Continuation 02/09/90 0648435
-5-
DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
Culp, Inc. dba
Carolina Converters
First Factors Corporation 07/11/80 8020959 Accts/Contract Rights
UCC-3 Continuation 01/30/85 0087714
UCC-3 Amendment to change Debtor name to
Culp, Inc. dba Culp Industrial Fabrics 02/27/86 194215
UCC-3 Continuation 02/09/90 0648433
Caruso Fabrics, a div. of
Culp, Inc.
First Factors Corporation 09/26/83 8345225 Accts/Contract Rights/Gen. Intang.
UCC-3 Continuation 07/25/88 0475654
UCC-3 Continuation 07/23/93 1018252
Culp, Inc. dba
Culp Woven Velvets
Carolina Forklifts Inc. 07/23/93 1018599 Specific Equipment
Culp of Carolina, a tradestyle
of Culp, Inc.
First Factors Corporation 06/14/83 8327970 Accts/Contract Rights/Gen. Intang.
UCC-3 Continuation 03/03/88 0427178
UCC-3 Continuation 03/6/93 0978585
Value Fabrics, a tradestyle
of Culp, Inc.
First Factors Corporation 09/26/83 8345225 Accts/Contract Rights/Gen. Intang.
UCC-3 Continuation 03/03/88 0427183
UCC-3 Continuation 03/16/93 0978564
Culp of Carolina, a Division
of Culp, Inc.
Citizens and Southern Commercial Corporation 10/29/90 0727135 Accts/Contract Rights/Gen. Intang.
NC, ALAMANCE COUNTY
Culp, Inc.
First Union National Bank
of North Carolina 11/15/88 88-4841 Fixtures, Machinery, Equipment &
other tangible personal property
UCC-3 Continuation 08/13/93 93-1915
-6-
DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
Citicorp Dealer Finance 10/05/93 93-2296 Specific Equipment
Mobilift of Burlington 12/08/93 93-2847 Specific Equipment
UCC-3 Assignment to Citicorp Dealer Finance 12/08/93 93-2847
Mobilift of Burlington Inc. 04/14/93 93-0859 Specific Equipment
UCC-3 Assignment to Citicorp Dealer Finance 04/14/93 93-0859
The Alamance County Industrial Facilities
and Pollution Control Financing Authority 06/26/86 86-2579 Fixtures, Machinery, Equipment &
other tangible personal property
UCC-3 Assignment to First Union National Bank 06/26/86 86-2579
UCC-3 Continuation 04/26/91 91-0851
NORTH CAROLINA, GUILFORD COUNTY
Culp, Inc.
First Factors Corporation 06/11/80 178992 Accounts/Contract Rights
UCC-3 Continuation 01/30/85 256041
UCC-3 Continuation 02/06/90 357946
First Factors Corporation 02/20/81 190347 Accounts/Contract Rights
UCC-3 Continuation 02/20/81 269181
UCC-3 Continuation 10/12/90 370394
BancBoston Financial Company 02/12/87 296336 Accounts/Contract Rights/Gen. Intang.
UCC-3 Continuation 12/26/91 387888
First Union National Bank
of North Carolina 12/15/89 355668 Machinery, Equipment, Fixtures
as described on ex. A
The Citizens and Southern National
Bank, as Trustee 12/15/889 355669 Machinery, Equipment, Fixtures
as described on ex. A
Citizens and Southern Commercial
Corporation 10/29/90 370994 Accts/Contract Rights/Gen. Intang.
Southern Furniture Exposition Building, Inc. 04/26/91 378435 Furniture, Fixtures
REH Leasing Company 09/23/92 398583 Specific Equipment
UCC-3 Assignment to Central
Carolina Bank & Trust 09/23/92 398583
UCC-3 Assignment to Modern Office
Machines, Inc. 03/09/93 404986
Wachovia Bank of North Carolina, National Assoc. 12/01/93 415270 Comprehensive
-7-
DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
First-Citizens Bank & Trust Company, as Trustee 12/01/93 415271 Comprehensive
Value Fabrics, Inc., a Division
of Culp, Inc. and Value Fabrics, Inc.,
a Tradestyle of Culp, Inc.
BancBoston Financial Company 02/12/87 296334 Accounts/Contract Rights/Gen. Intang.
UCC-3 Continuation 12/26/91 387886
First Factors Corporation 03/03/88 227311 Accounts/Contract Rights/Gen. Intang.
UCC-3 Continuation 03/03/89 317259
UCC-3 Continuation 03/15/93 405188
Culp of Carolina, Inc. a Division
of Culp, Inc. and Culp of Carolina,
a Tradestyle of Culp, Inc.
Bancboston Financial Company 02/12/87 296337 Accounts/Contract Rights/Gen. Intang.
UCC-3 Continuation 12/26/91 387889
First Factors Corporation 06/14/83 227312 Accounts/Contract Rights/Gen. Intang.
UCC-3 Continuation 03/03/88 317220
UCC-3 Continuation 03/15/93 405189
Citizens and Southern Commercial Corporation 10/29/90 370992 Accounts/Contract Rights/Gen. Intang.
Culp Ticking, a Division of Culp, Inc.
Citizens and Southern Commercial Corporation 10/29/90 370993 Accounts/Contract Rights/Gen. Intang.
BancBoston Financial Company 02/12/87 296335 Accounts/Contract Rights/Gen. Intang.
UCC-3 Continuation 12/26/91 387887
First Factors Corporation 02/20/81 190348 Accounts/Contract Rights
UCC-3 Continuation 09/13/85 269182
UCC-3 Continuation 10/12/90 370395
Culp of California, A Division
of Culp, Inc.
Citizens and Southern Commercial Corporation 10/29/88 370995 Accounts/Contract Rights/Gen. Intang.
Barclays Commercial Corporation 02/13/91 375522 Accounts/Contract Rights/Gen. Intang.
Culp of Mississippi, a Division
of Culp, Inc.
First Factors Corporation 06/11/80 178993 Accounts/Contract Rights
UCC-3 Continuation 01/30/85 256042
UCC-3 Continuation 02/06/90 357949
-8-
DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
Citizens and Southern Commercial Corporation 10/29/90 370991 Accounts/Contract Rights/Gen. Intang.
Carolina Converters Div. of Culp, Inc.
First Factors Corporation 06/11/80 178991 Accounts/Contract Rights
UCC-3 Continuation 01/30/85 256040
UCC-3 Continuation 02/06/90 357947
Culp Finishing, a div. of Culp, Inc.
First Factors Corporation 03/13/85 257905 Accounts/Contract Rights/Gen. Intang.
UCC-3 Continuation 06/16/90 357055
Rossville Mills, a division of Culp, Inc.
First Factors Corporation 01/18/94 416970 Accounts/Contract Rights/Gen. Intang.
Caruso Fabrics, a div. of Culp, Inc.
First Factors Corporation 09/28/83 232286 Accounts/Contract Rights/Gen. Intang.
UCC-3 Continuation 07/25/88 325558
UCC-3 Continuation 07/22/93 410498
Culp Ticking-Canada, a div. of Culp, Inc.
First Factors Corporation 03/13/85 257904 Accounts/Contract Rights/Gen. Intang.
Culp, Inc. DBA Culp Woven Velvets
Carolina Forklifts Inc. 07/23/93 410838 Specific Equipment
UCC-3 Assignment to Citicorp Dealer Finance 07/23/93 410838
Chromatex, a division of Culp, Inc.
First Factors Corporation 01/18/94 416971 Accounts/Contract Rights/Gen. Intang.
PENNSYLVANIA
PENNSYLVANIA DEPARTMENT OF STATE
Chromatex, Inc., a division
of Culp, Inc.
First Factors Corporation 01/14/94 22760600 Accounts, Contract Rights,
Gen. Intangibles, etc.
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DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
SOUTH CAROLINA
SOUTH CAROLINA SECRETARY OF STATE
Culp, Inc.
First Union National Bank of
North Carolina, as Trustee 05/15/91 91-024180 Comprehensive
First Union National Bank of
North Carolina 03/02/90 90-011650 Comprehensive
First Union National Bank of
North Carolina 01/04/94 103222A Comprehensive
Culp, Inc. dba Culp Woven
Velvets
Carolina Forklifts, Inc. 08/02/93 140338A Specific Equipment
Assignment to Citicorp Dealer Finance 08/02/93 140338A
SC, ANDERSON COUNTY
Culp, Inc.
First Union National Bank
of North Carolina 03/02/90 03989 Comprehensive
First Union National Bank
of North Carolina 01/03/94 12028 Comprehensive
Culp Woven Velvets, Inc.
First Union National Bank,
as Trustee 12/23/85 85-92859 Comprehensive
Continuation ? 90-06156
First Union National Bank,
as Trustee 12/27/86 85-92883 Comprehensive
UCC-3 Amendment changing
debtor's address 03/07/?
UCC-3 Continuation 12/21/90
UCC-3 Amendment changing name
to Culp, Inc. 05/14/91
UCC-3 Amendment changing address
of debtor 03/07/
-10-
DATE FILING NO. COLLATERAL ACTION TO BE TAKEN
(see key)
SC, CHESTERFIELD COUNTY
Culp, Inc.
First Union National Bank
of North Carolina 12/28/88 000774 Comprehensive
KEY: T - Terminate
A - Assign
C - Continue
AM - Amend
PR - Partially Release
S - Subordinate
N - No Action Require
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TABLE OF CONTENTS
Page
SECTION 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
SECTION 2. Commitment and Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
2.1. Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
2.2. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
SECTION 3. Loans Evidenced by Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
3.1. Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
3.2. Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
3.3. Repayment of Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . .
13
3.4. Optional Prepayment of Term Loans . . . . . . . . . . . . . . . . . . . . . .
15
SECTION 4. Loans Evidenced by Revolving Credit Notes . . . . . . . . . . . . . . . . . . . . . .
15
4.1. Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
4.2. Payments of Interest and Principal . . . . . . . . . . . . . . . . . . . . . .
16
4.3. Termination or Reduction of Revolving Credit Commitments . . . . . . . . . . .
17
4.4. Bankers' Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
SECTION 5. The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
5.1. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . .
19
5.2. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
5.3. Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
5.4. Default Rate of Interest . . . . . . . . . . . . . . . . . . . . . . . . . .
20
5.5. Late Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
SECTION 6. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
SECTION 7. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
7.1. Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
7.2. Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
7.3. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
7.4. Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
7.5. Absence of Pending Actions . . . . . . . . . . . . . . . . . . . . . . . . .
23
7.6. Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
7.7. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
7.8. Contract or Restriction Affecting Borrower . . . . . . . . . . . . . . . . . .
24
7.9. Absence of Liens for Labor or Materials . . . . . . . . . . . . . . . . . . .
24
7.10. Permits and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
7.11. Trademarks, Franchises and Licenses . . . . . . . . . . . . . . . . . . . . .
24
7.12. Adequate Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
7.13. Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
7.14. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
7.15. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
7.16. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
SECTION 8. Conditions of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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8.1. Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
8.2. Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
SECTION 9. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
9.1. Financial Reports and Other Data . . . . . . . . . . . . . . . . . . . . . . .
26
9.2. Taxes and Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
9.3. Business and Existence . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
9.4. Insurance on Properties . . . . . . . . . . . . . . . . . . . . . . . . . .
28
9.5. Maintain Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
9.6. Right of Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
9.7. Condemnation Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
9.8. Covenant Extended to Subsidiaries . . . . . . . . . . . . . . . . . . . . . .
29
9.9. Borrower's Knowledge of Default . . . . . . . . . . . . . . . . . . . . . . .
29
9.10. Suits or Other Proceedings . . . . . . . . . . . . . . . . . . . . . . . . .
29
9.11. Observe All Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
9.12. Compliance with Laws; Governmental Approvals . . . . . . . . . . . . . . . . .
29
9.13. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
9.14. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
9.15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
9.16. Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
9.17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
9.18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
9.19. Operating Cash Flow to Interest Expense . . . . . . . . . . . . . . . . . . .
31
9.20. Consolidated Funded Debt to Total Capitalization . . . . . . . . . . . . . . .
31
9.21. Environmental Provisions and Indemnity . . . . . . . . . . . . . . . . . . . .
31
9.22. Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32
9.23. Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
9.24. Tax Roll Segregation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
SECTION 10. Negative Covenants of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
10.1. Limitations on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
10.2. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
10.3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
10.4. Consolidation or Merger . . . . . . . . . . . . . . . . . . . . . . . . . .
34
10.5. Sale of Assets, Dissolution, etc . . . . . . . . . . . . . . . . . . . . . . .
34
10.6. Change in Ownership; Transfer of Mortgaged Property and Interests in
Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
10.7. Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
10.8. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
10.9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
10.10. Rental Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
10.11. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
10.12. Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
SECTION 11. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36
11.1. Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36
11.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
SECTION 12. The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
12.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
12.2. Nature of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
12.3. Lack of Reliance on the Agent . . . . . . . . . . . . . . . . . . . . . . .
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39
12.4. Certain Rights of the Agent . . . . . . . . . . . . . . . . . . . . . . . .
39
12.5. Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
12.6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
12.7. The Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . .
40
12.8. Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
12.9. Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
12.10. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
12.11. Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
12.12. Resignation or Removal of Agent . . . . . . . . . . . . . . . . . . . . . . .
42
SECTION 13. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
13.1. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
13.2. Ratable Sharing of Set-Offs, Payments . . . . . . . . . . . . . . . . . . . .
43
13.3. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.4. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46
13.5. Unavailability of Adjusted LIBOR Rate . . . . . . . . . . . . . . . . . . . .
47
13.6. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47
13.7. Headings; Table of Contents . . . . . . . . . . . . . . . . . . . . . . . .
47
13.8. Lawful Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
13.9. Conflict of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
13.10. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
13.11. Survival of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
13.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
13.13. Enforceability of Agreement . . . . . . . . . . . . . . . . . . . . . . . .
49
13.14. Stamp or Other Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
13.15. Counterparts and Effectiveness . . . . . . . . . . . . . . . . . . . . . . .
49
13.16. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
13.17. Liens; Set Off by Banks . . . . . . . . . . . . . . . . . . . . . . . . . .
50
13.18. Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
13.19. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
13.20. Survival of Certain Provisions Upon Termination . . . . . . . . . . . . . . .
50
13.21. Accounting Terms and Computations . . . . . . . . . . . . . . . . . . . . . .
50
13.22. Obligations Several . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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