Exhibit 10(bb)
1996 AMENDED AND RESTATED
$91,936,418.54 CREDIT FACILITY
TO
CULP, INC.
BY
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
AND
WACHOVIA BANK OF NORTH CAROLINA, N.A.
April 1, 1996
TABLE OF CONTENTS
Page
SECTION 1. Definitions.................................................................................2
SECTION 2. Commitment and Security....................................................................13
2.1. Commitment.................................................................................13
2.2. Security...................................................................................14
SECTION 3. Loans Evidenced by Term Notes..............................................................14
3.1. Term Loans.................................................................................14
3.2. Term Notes.................................................................................14
3.3. Repayment of Term Loans....................................................................14
3.4. Optional and Mandatory Prepayment of Term Loans............................................15
SECTION 4. Loans Evidenced by Revolving Credit Notes..................................................16
4.1 Revolving Loans............................................................................16
4.2. Payments of Interest and Principal.........................................................17
4.3. Termination or Reduction of Revolving Credit
Commitments................................................................................18
4.4. Bankers' Acceptances.......................................................................19
4.5. Letters of Credit..........................................................................21
SECTION 5. The Notes..................................................................................26
5.1. Computation of Interest....................................................................26
5.2. Payments...................................................................................26
5.3. Facility Fee...............................................................................27
5.4. Default Rate of Interest...................................................................27
5.5. Late Charge................................................................................27
SECTION 6. Use of Proceeds............................................................................27
SECTION 7. Representations and Warranties.............................................................28
7.1. Incorporation..............................................................................28
7.2. Power and Authority........................................................................28
7.4. Title to Assets............................................................................29
7.6. Contingent Liabilities.....................................................................29
7.7. Taxes......................................................................................30
7.8. Contract or Restriction Affecting Borrower.................................................30
7.9. [INTENTIONALLY LEFT BLANK].................................................................30
7.10. Permits and Licenses.......................................................................30
7.11. Trademarks, Franchises and Licenses........................................................30
7.12. [INTENTIONALLY LEFT BLANK].................................................................30
7.13. [INTENTIONALLY LEFT BLANK].................................................................30
7.14. ERISA......................................................................................30
7.15. Environmental Matters......................................................................31
7.16. No Default.................................................................................31
SECTION 8. Conditions.................................................................................31
8.1. Conditions of Closing......................................................................31
8.2. Conditions to Each Extension of Credit.....................................................32
(i)
SECTION 9. Affirmative Covenants......................................................................32
9.1. Financial Reports and Other Data...........................................................32
9.2. Taxes and Liens............................................................................34
9.3. Business and Existence.....................................................................34
9.4. Insurance on Properties....................................................................34
9.5. Maintain Property..........................................................................35
9.6. Right of Inspection........................................................................35
9.7. [INTENTIONALLY LEFT BLANK].................................................................35
9.8. Covenant Extended to Subsidiaries..........................................................35
9.9. Borrower's Knowledge of Default............................................................35
9.10. Suits or Other Proceedings.................................................................35
9.11. Observe All Laws...........................................................................35
9.12. Compliance with Laws; Governmental Approvals...............................................35
9.13. ERISA......................................................................................36
9.14. Payment of Obligations.....................................................................36
9.15. [RESERVED].................................................................................36
9.16. Tangible Shareholders' Equity..............................................................36
9.17. [RESERVED].................................................................................37
9.18. [RESERVED].................................................................................37
9.19. Operating Cash Flow to Interest Expense....................................................37
9.20. Consolidated Funded Debt to Total Capitalization...........................................37
9.21. Environmental Provisions and Indemnity.....................................................37
9.22. [INTENTIONALLY LEFT BLANK].................................................................38
9.23. [INTENTIONALLY LEFT BLANK].................................................................38
9.24. [INTENTIONALLY LEFT BLANK].................................................................38
SECTION 10. Negative Covenants of Borrower.............................................................38
10.1. Limitations on Liens.......................................................................39
10.2. Guarantee..................................................................................39
10.3. [RESERVED].................................................................................39
10.5. Sale of Assets, Dissolution, etc...........................................................39
10.6. [INTENTIONALLY LEFT BLANK].................................................................40
10.7. Loans and Investments......................................................................40
10.8. Fiscal Year................................................................................40
10.9. [RESERVED]..............................................................................................40
10.10. Rental Obligations.........................................................................40
10.11. Prepayments................................................................................40
10.12. ...........................................................................................40
SECTION 11. Events of Default..........................................................................41
11.1. Definition.................................................................................41
11.2. Remedies...................................................................................43
SECTION 12. The Agent..................................................................................44
12.1. Appointment................................................................................44
12.2. Nature of Duties...........................................................................44
12.3. Lack of Reliance on the Agent..............................................................44
12.4. Certain Rights of the Agent................................................................45
12.5. Reliance...................................................................................45
12.6. Indemnification............................................................................45
(ii)
12.7. The Agent in its Individual Capacity.......................................................46
12.8. Holders....................................................................................46
12.9. Reimbursement..............................................................................46
12.10. Defaults...................................................................................47
12.12. Resignation or Removal of Agent............................................................47
12.13. Annual Fee.................................................................................48
SECTION 13. Miscellaneous..............................................................................48
13.1. Amendments and Waivers.....................................................................48
13.2. Ratable Sharing of Set-Offs, Payments......................................................49
13.3. Successors and Assigns.....................................................................50
13.4. Confidentiality............................................................................53
13.5. Unavailability of Adjusted LIBOR Rate......................................................53
13.6. Increased Costs............................................................................53
13.7. Headings; Table of Contents................................................................54
13.8. Lawful Charges.............................................................................54
13.9. Conflict of Terms..........................................................................54
13.10. Notices....................................................................................54
13.11. Survival of Agreements.....................................................................55
13.12. Governing Law..............................................................................55
13.13. Enforceability of Agreement................................................................55
13.14. Stamp or Other Tax.........................................................................55
13.15. Counterparts and Effectiveness.............................................................56
13.16. Fees and Expenses..........................................................................56
13.17. Liens; Set Off by Banks....................................................................56
13.18. Loan Documents.............................................................................56
13.19. Entire Agreement...........................................................................56
13.20. Survival of Certain Provisions Upon Termination............................................56
13.21. Accounting Terms and Computations..........................................................57
13.22. Obligations Several........................................................................57
SECTION 14. Pledge of Bonds............................................................................57
14.1. The Pledge.................................................................................57
14.2. Remedies Upon Default......................................................................58
14.3. Valid Perfected First Lien.................................................................59
14.4. Release of Pledged Bonds...................................................................59
(iii)
1996 AMENDED AND RESTATED CREDIT AGREEMENT
THIS 1996 AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 1,
1996 (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; a Second Amendment to
Amended and Restated Credit Agreement dated July 13, 1994; a Third Amendment to
1994 Amended and Restated Credit Agreement dated November 1, 1994; and a Fourth
Amendment to 1994 Amended and Restated Credit Agreement dated March 6,
1995.
E. The Borrower, First Union and Wachovia entered into a 1995 Amended
and Restated Credit Agreement dated July 1, 1995 (as amended and modified, the
"1995 Credit Agreement"), which 1995 Credit Agreement amended and restated the
1994 Credit Agreement, as amended, in its entirety and further amended the
Original Loan.
F. The Borrower, First Union and Wachovia desire to restate the 1995
Credit Agreement, as amended and modified, so that the parties' agreement
regarding the Borrower's indebtedness and obligations will be contained in one
restated agreement.
G. The parties intend that this Agreement shall restate, supersede and
replace in its entirety the 1995 Credit Agreement and all amendments and
modifications relating thereto. 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:
"Accepted Drafts" means such term as defined in Section 4.4.
"Accepting Bank" means such terms as defined in Section 4.4.
"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:
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Adjusted LIBOR Rate = LIBOR BASE RATE
----------------------------
1 - LIBOR RESERVE PERCENTAGE
"Agreement" means this 1996 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" or "Applicable Percentage" means (i) the marginal
rate of interest which shall be paid by Borrower in addition to the Prime Rate
or the Adjusted LIBOR Rate, as the case may be, or (ii) the applicable Letter of
Credit Fee, which in each case 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 as of the date hereof between the Borrower and
the Banks as such letter may be amended, restated, modified or supplemented from
time to time.
"BA Obligations" means, at any time, the sum of (i) the maximum
aggregate amount which is, or at any time thereafter may become, payable by an
Accepting Bank under all Accepted Drafts then outstanding, plus (ii) the
aggregate amount of reimbursement obligations owing to an Accepting Bank on a
matured Accepted Draft and not theretofore reimbursed.
"Bankers' Acceptance" means an Accepted Draft hereunder.
"Bond Documents" means the Indentures and those other documents
executed in connection with the bonds and obligations relating to the VRDN
Programs as referenced in the respective Indentures.
"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
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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 liability of such lessee in respect of such Capital Lease.
"Closing Date" means April 15, 1994.
"Commitment" or "Commitments" means, collectively, the Revolving Credit
Commitments and the LOC Commitments.
"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 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):
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(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.
"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
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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 certain of the Real Property, such reports to be in form and
substance satisfactory to the Agent.
"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 Letters of Credit" means those Letters of Credit outstanding
on the Restatement Date and identified on Exhibit 9.
"Extension of Credit" means, as to any Bank, the making of a Loan
(including a Tender Advance) by such Bank, or the issuance or acceptance of
Bankers' Acceptances by such Bank, or the issuance of, or participation in, a
Letter of Credit by such Bank.
"Federal Funds Effective Rate" means, for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve Bank of New York, as published by the Federal Reserve Bank of New York
on the next succeeding Business Day or, if such rate is not so released for any
day which is a Business Day, the arithmetic average (rounded upwards to the next
1/100th of 1%), as determined by the Agent, of the quotations for the day of
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"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 amended and restated
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.
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"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 amended and restated 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 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 ordinance and the Americans with
Disabilities Act of 1990 (Public Law 101-336, 42 U.S.C. ss.12101).
"Hazardous Substances" means petroleum, petroleum byproducts
(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,
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without limitation, substances now or hereinafter defined as "hazardous
substances", "toxic substances," "hazardous materials" or "contaminated waste"
or similar terms in the Acts.
"Indenture" means any of those trust agreements and indentures of trust
pursuant to which bonds have been issued in connection with VRDN Programs
supported by Letters of Credit issued hereunder or subject hereto, as amended
and modified from time to time.
"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.
ss.101(55).
"Issuing Bank" means either Bank, as the Borrower may request from time
to time.
"Letter of Credit" means the Existing Letters of Credit and any letter
of credit issued by the Issuing Bank pursuant to the terms hereof, as such
Letters of Credit may be amended, modified, extended, renewed or replaced from
time to time.
"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.
"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
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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.
"LOC Commitment" means the commitment of the Issuing Banks to issue
Letters of Credit and with respect to each Bank, the commitment of such Bank to
purchase participation interests in the Letters of Credit up to such Bank's LOC
Committed Amount as specified in Annex I, as such amount may be reduced from
time to time in accordance with the provisions hereof.
"LOC Commitment Percentage" means, for each Bank, the percentage
identified as its Commitment Percentage on Annex I.
"LOC Committed Amount" means, collectively, the aggregate amount of all
of the LOC Commitments of the Banks to issue and participate in Letters of
Credit as referenced in Section 4.5 and, individually, the amount of each Bank's
LOC Commitment as specified in Annex I.
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or at risk or (ii) any collateral security for such
obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by the Issuing Bank but
not theretofore reimbursed.
"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 LOC
Documents, FIRPTA Affidavit, Environmental Indemnity Agreement and Environmental
Reports 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, the Revolving Loans and Tender Advances,
collectively. "Loan" means one of the Term Loans, Revolving Loans or Tender
Advances, as appropriate.
"Net Income" means, for any period, the net income (or loss)
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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.
"Obligations" means, collectively, Loans, BA Obligations and LOC
Obligations.
"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.
"Participation Interest" means the purchase by a Bank of a
participation interest in Letters of Credit as provided in Section 4.5(c), or in
Revolving Loans as provided in Section 13.2.
"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;
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(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 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; and
(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.
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a government or
agency or political subdivision thereof.
"Pledge Obligations" means such term as defined in Section
14.1.
"Pledged Bonds" means those bonds under VRDN Programs supported by
Letters of Credit issued hereunder or subject hereto which have been purchased
with proceeds from a drawing under a Letter of Credit hereunder and not
remarketed or redeemed.
"Pledged Collateral" means such term as defined in Section
14.1.
"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
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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.
"Real Property" means any real property owned or leased by Borrower or
any of its Subsidiaries.
"Required Banks" means at any time prior to the occurrence of an Event
of Default, termination of the Commitments hereunder 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
Obligations outstanding hereunder (taking into account participation interests
therein); 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.
"Restatement Date" means the date of this Amended and Restated Credit
Agreement.
"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.
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"Revolving Loan Maturity Date" shall mean March 1, 2001.
"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.
"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.
"Tender Advance" means such term as defined in Section 4.5(c).
"Tender Drawing" means a drawing under a Letter of Credit made to
repurchase bonds upon an elective tender by a bondholder on account of an
inability or failure by the remarketing agent therefor to remarket the bonds
which are the subject of the elective tender.
"Term Loan Interest Rate" has the meaning set forth in Section 3.3
hereof.
"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.
"Total Capitalization" is defined as Consolidated Funded Debt plus
Consolidated Tangible Shareholders' Equity.
"Trustee" means those trustees under Indentures relating to bonds
issued in connection with VRDN Programs supported by Letters of Credit issued
hereunder or subject hereto.
"VRDN Program" means those variable rate demand note or bond programs
relating to industrial development revenue bonds or similar tax-advantaged
obligations of benefit to the Borrower and supported by Letters of Credit
existing or issued hereunder.
"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
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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.
"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. Each of the Banks hereby agrees to release, and hereby
does release, the liens and security interests in their favor with respect to
the Borrower's (i) equipment, inventory, accounts and fixtures as described in
and as granted pursuant to the Security Agreement dated as of April 15, 1994,
between the Borrower and the Agent for the benefit of the Banks and (ii) liens
on the Mortgaged Property, as such relate to the Term Loans and the Revolving
Loans under the 1994 Credit Agreement. Each of the Banks further agrees, as
issuer of various letters of credit issued for the account of the Borrower in
support of industrial revenue bonds or qualified tax-exempt variable demand rate
notes or similar programs, to release their liens with respect to the real and
personal property of the Borrower (other than in the bonds or variable demand
rate notes which might be repurchased with the proceeds of a draw under the
letter of credit relating thereto, which security interests shall be retained
and not released hereby) where such liens run solely in its favor as issuer of
the letter of credit and not also in favor of the bondholders or noteholders.
Each of the Banks hereby authorizes and directs the Agent to execute such
instruments of release and to take such other action as may be necessary to give
effect to the provisions of this Section 2.2.
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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 as of the date hereof is THIRTY-SIX MILLION DOLLARS
($36,000,000). 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 an amended, restated and substituted 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 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
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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 fifty-nine (59) 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 April 12, 1996, 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.
3.4. Optional and Mandatory Prepayment of Term Loans.
(a) Optional Prepayments. 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.
(b) Mandatory Prepayments. The Borrower will make prepayment
on the Term Loan and the Revolving Loans hereunder as hereafter
provided in an amount equal to 100% of the net proceeds received on the
loan, sale or placement of indebtedness permitted pursuant to Section
10.12(3). Upon the loan, sale or placement of any such indebtedness,
prepayment shall first be made on the Term Loan until the Term Loan is
paid in full, and then the Revolving Credit Commitments shall be
permanently reduced in the amount of the excess. To the extent that
outstanding Revolving Loans exceed the Revolving Credit Commitments
after giving effect
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to any such reduction in the Revolving Credit Commitments, the Borrower
will immediately make payment on the Revolving Loans in the amount of
the difference. Each such prepayment hereunder shall be made promptly
after, but in any event within three (3) Business Days of, receipt by
the Borrower of the net proceeds therefrom.
(c) Application. Any prepayments of the principal amounts of
the Term Loans shall be applied, pro rata between each of the Banks, to
the scheduled payments on the Term Loan 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
Restatement Date until the applicable Revolving Loan Termination Date. As to
each of the Revolving Credit Commitments, during the period from the Restatement
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 shall make available to the Agent, in immediately available funds, its
proportionate share of such borrowings.
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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 day of
the Fiscal Month. If the Revolving Loan Interest
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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. In any event, all Revolving Credit Commitments
will terminate on March 1, 2001, at which time the Revolving Credit Notes shall
be due and payable in full.
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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 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 4.1 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,
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and such request for a 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 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.
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(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.
4.5. Letters of Credit.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Bank may reasonably require, the Issuing Bank shall issue,
and the Banks shall participate in, Letters of Credit for the account
of the Borrower from time to time upon request from the Restatement
Date until the Revolving Loan Maturity Date in a form acceptable to the
Issuing Bank; provided, however, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed TWENTY-TWO MILLION FOUR
HUNDRED THIRTY-SIX THOUSAND FOUR HUNDRED EIGHTEEN AND 54/100 DOLLARS
($22,436,418.54) (the "LOC Committed Amount"). Letters of Credit will
be issued solely for the purpose of supporting industrial development
revenue bonds or similar tax-advantaged programs for the benefit of the
Borrower. Except as otherwise expressly agreed upon by all the Banks,
Letters of Credit shall not have an original expiry date later than the
Revolving Loan Maturity Date. Each Letter of Credit shall comply with
the related LOC Documents. The issuance and expiry date of each Letter
of Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Bank, with a copy to
the Agent, at least three (3) Business Days prior to the requested date
of issuance. The Issuing Bank will, at least quarterly and more
frequently upon request, provide to the Agent for dissemination to the
Banks a detailed report specifying the Letters of Credit which are then
issued and outstanding and any activity with respect thereto which may
have occurred since the date of the prior report, and including
therein, among other things, the account party, the beneficiary, the
face amount, expiry date as well as any payments or expirations which
may have occurred. The Issuing Bank will further provide to the Agent
promptly upon request copies of the Letters of Credit, and the Agent
shall provide to the other Banks promptly upon request copies of the
Letters of Credit.
(c) Reimbursement.
(i) Drawings other than Tender Drawings. The
Borrower hereby agrees to pay to the Issuing Bank:
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(A) except as set forth in subsection (ii)
hereof applicable to Tender Drawings that are paid from the
proceeds of a Tender Advance made pursuant to subsection (b)
hereof, immediately after (and on the same Business Day as)
any amount is drawn under a Letter of Credit, a sum (and
interest on such amount as provided in subsection (iii)
hereof) equal to the amount so drawn; and
(B) any and all expenses incurred by the
Issuing Bank in enforcing any rights under this Agreement.
(ii) Tender Drawings.
(A) In the case of a Tender Drawing, subject
to the conditions in Section 8.2 for an Extension of Credit
hereunder, then unless the Borrower shall have given notice of
its election to reimburse the Issuing Bank in immediately
available funds for the full amount of the Tender Drawing
prior to the end of the Business Day thereof, the proceeds of
the amount of each Tender Drawing (other than a Tender Drawing
upon conversion of the interest rate on the underlying bonds
to a fixed rate, and other than the portion of the Tender
Drawing representing interest accrued on the underlying bond
which shall not be subject to repayment with the proceeds of a
Tender Advance hereunder) shall, as provided in subsection (c)
hereof, constitute an advance made by the Issuing Bank to the
Borrower on the date and in the amount of such drawing, each
such advance being referred to as a "Tender Advance". Where
availability exists under the Revolving Credit Commitment, the
Issuing Bank may request a Revolving Loan advance under
Section 4.1 to repay the Tender Advance. Where the Issuing
Bank does not request a Revolving Loan advance in accordance
with the terms hereof or where availability does not exist
under the Revolving Credit Commitment or Revolving Loan
advances may not be made, the Tender Advance shall remain
outstanding in accordance with terms hereof. Any amounts drawn
to pay the portion of the purchase price of the underlying
bonds constituting accrued interest shall be reimbursed as
provided in subsection (i) hereof and shall not be reimbursed
from the proceeds of a Tender Advance.
(B) Acceptance by the Borrower of each
Tender Advance shall constitute a representation and warranty
by the Borrower as of the date thereof that the conditions of
Section 8.2 to each Extension of Credit have been satisfied.
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(iii) Unreimbursed Drawings. The Borrower shall pay
to the Issuing Bank upon demand interest at a per annum rate equal to
the Prime Rate plus two percent (2%) on any and all amounts (other than
Tender Advances referred to in subsection (ii) hereof) unpaid by the
Borrower when due hereunder (in the case of amounts in respect of
interest, to the maximum extent permitted by law) commencing the day
after such amounts first became due until payment is made. The
Borrower's reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of
set-off, counterclaim or defense to payment the Borrower may claim or
have against the Issuing Bank, the Agent, the Banks, the beneficiary of
the Letter of Credit drawn upon or any other Person, including without
limitation any defense based on any failure of the Borrower to receive
consideration or the legality, validity, regularity or unenforceability
of the Letter of Credit. The Issuing Bank will promptly notify the
other Banks of the amount of any unreimbursed drawing and each Bank
shall promptly pay to the Agent for the account of the Issuing Bank in
Dollars and in immediately available funds, the amount of such Bank's
LOC Commitment Percentage of such unreimbursed drawing. Such payment
shall be made on the day such notice is received by such Bank from the
Issuing Bank if such notice is received at or before 2:00 P.M.
(Charlotte, North Carolina time), otherwise such payment shall be made
at or before 12:00 Noon (Charlotte, North Carolina time) on the
Business Day next succeeding the day such notice is received. If such
Bank does not pay such amount to the Issuing Bank in full upon such
request, such Bank shall, on demand, pay to the Agent for the account
of the Issuing Bank interest on the unpaid amount during the period
from the date of such drawing until such Bank pays such amount to the
Issuing Bank in full at a rate per annum equal to, if paid within two
(2) Business Days of the date of drawing, the Federal Funds Rate and
thereafter at a rate equal to the Prime Rate. Each Bank's obligation to
make such payment to the Issuing Bank, and the right of the Issuing
Bank to receive the same, shall be absolute and unconditional, shall
not be affected by any circumstance whatsoever and without regard to
the termination of this Credit Agreement or the Commitments hereunder,
the existence of a Default or Event of Default or the acceleration of
the Obligations hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever.
(d) Tender Advances.
(i) The Issuing Bank hereby agrees, on the terms and
conditions of this Agreement, to make Tender Advances to the Borrower
for the purpose of paying Tender Drawings arising from time to time
during the period from the Restatement Date to the Revolving Loan
Termination Date.
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The Bank agrees that upon any Tender Drawing under a Letter of Credit
the Issuing Bank shall, without any notice or other action on the part
of the Borrower but subject to satisfaction of the conditions of
Section 8.2 hereof, make a Tender Advance in an amount equal to such
Tender Drawing, the proceeds of which shall automatically be applied by
the Issuing Bank to the payment in full of the Tender Drawing. The
Borrower hereby agrees to pay to the Issuing Bank the aggregate unpaid
principal amount of the Tender Advances together with all accrued and
unpaid interest thereon as provided in subparagraph 4.5(d)(iii) below.
The Tender Advances may, but need not, be made against and evidenced by
such promissory notes or instruments as the Issuing Bank may deem
appropriate. Where a Tender Advance is evidenced by a promissory note
or other instrument, the Borrower authorizes the Issuing Bank to
endorse on any schedule which may be attached thereto the amount of
each Tender Advance made by the Issuing Bank to the Borrower hereunder,
the date of the Tender Advance and the amount of each payment or
prepayment of principal of such Tender Advance received by the Issuing
Bank; provided, however, that any failure by the Issuing Bank to make
any such endorsement shall not limit, modify or affect the obligations
of the Borrower hereunder or under any promissory note or instrument
relating thereto in respect of such Tender Advances.
(ii) The Borrower hereby promises to pay to the
Issuing Bank interest at a rate per annum equal to the rate selected by
the Borrower and applicable to Revolving Loans under Section 4.2 hereof
for the period commencing on the date of such Tender Advance to, but
excluding, the date such Tender Advance is paid in full. Accrued
interest on each Tender Advance shall be payable (A) on the dates
provided for payment of interest on Revolving Loans in Section 4.2
hereof, (B) upon the payment or prepayment thereof, and (C) on the
Revolving Loan Termination Date.
(iii) Each Tender Advance shall be payable on the
earlier of (A) the date of remarketing of the underlying bonds relating
to such Tender Advance, or (B) the Revolving Loan Termination Date. All
Tender Advances may be prepaid in whole or in part (in multiples of
$5,000) at any time by the Borrower on one (1) Business Day's notice
stating the amount to be prepaid (which if in part shall be $5,000 or a
whole multiple thereof), and at any time on behalf of the Borrower on
one (1) Business Day's notice from the Borrower directing the Issuing
Bank to deliver a specified principal amount of pledged bonds held by
the Issuing Bank or its designated pledge agent for remarketing
pursuant to the terms of the Indenture relating thereto. Each such
notice of prepayment shall be irrevocable and shall specify the Tender
Advance to be prepaid and the amount of the Tender Advance to be
prepaid and the date of prepayment (which date
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shall be a Business Day). Upon payment to the Issuing Bank of amounts
hereunder in payment or prepayment on the Tender Advances, together
with accrued interest thereon, the Issuing Bank shall release from the
pledge and security interest relating thereto a principal amount of
Pledged Bonds (consisting of the underlying Bonds relating to such
Tender Advance) equal to the amount of such payment or prepayment.
(e) Participations. Each Bank, with respect to the Existing
Letters of Credit, hereby purchases a participation interest in such
Existing Letters of Credit and with respect to Letters of Credit issued
on or after the Restatement Date, upon issuance of a Letter of Credit,
shall be deemed to have purchased without recourse a risk participation
from the Issuing Bank in such Letter of Credit, and in each case in any
Tender Advances relating thereto and in the other obligations arising
thereunder and any collateral relating thereto, in each case in an
amount equal to its LOC Commitment Percentage of the obligations under
such Letter of Credit and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be
obligated to pay to the Issuing Bank therefor and discharge when due,
its LOC Commitment Percentage of the obligations arising under such
Letter of Credit (including, for purposes hereof, Tender Advances).
Without limiting the scope and nature of each Bank's participation in
any Letter of Credit and in Tender Advances relating thereto, to the
extent that the Issuing Bank has not been reimbursed as required
hereunder or under any such Letter of Credit (or, in the case of a
Tender Advance, in accordance with the terms hereof), each such Bank
shall pay to the Issuing Bank its LOC Commitment Percentage of such
unreimbursed drawing (or Tender Advance) in same day funds on the day
of notification by the Issuing Bank of an unreimbursed drawing pursuant
to the provisions of subsection (d) hereof. The obligation of each Bank
to so reimburse the Issuing Bank shall be absolute and unconditional
and shall not be affected by the occurrence of a Default, an Event of
Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower to
reimburse the Issuing Bank under any Letter of Credit, together with
interest as hereinafter provided.
(f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Bank may have
the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits, as published
-26-
as of the date of issue by the International Chamber of Commerce (the
"UCP"), in which case the UCP may be incorporated therein and deemed in
all respects to be a part thereof.
(h) Letter of Credit Fees.
(i) Letter of Credit Fee. In consideration of the
issuance of Letters of Credit hereunder, the Borrower agrees to pay a
fee (the "Letter of Credit Fee") equal to the Applicable Percentage per
annum on the average daily maximum amount available to be drawn under
each such Letter of Credit from the date of issuance to the date of
expiration. The Borrower agrees to pay to the Issuing Bank for its own
account, without sharing by the other Banks such additional fee, if
any, as may from time to time be agreed upon by the Borrower and the
Issuing Bank. The Letter of Credit Fee shall be payable to the Agent
annually in advance on April 1, of each year. The Agent shall pay over
to the Banks (including the Issuing Bank) their respective ratable
share of the Letter of Credit Fee promptly upon receipt.
(ii) Issuing Bank Fees. In addition to the Letter of
Credit Fees payable pursuant to subsection (i) hereof, the Borrower
agrees to pay to the Issuing Bank for its own account, without sharing
by the other Banks such additional fee, if any, as may from time to
time be agreed upon by the Borrower and the Issuing Bank and also
customary charges from time to time of the Issuing Bank, with respect
to the issuance, amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit
(collectively, the "Issuing Bank Fees").
(i) Existing Reimbursement Agreement. Reference is hereby made
to that $4,500,000 Guilford County, North Carolina, Industrial
Facilities and Pollution Control Financing Authority Industrial
Development Revenue Bonds (Culp, Inc. Project) Series 1988, to the
Existing Letter of Credit relating thereto as referenced on Exhibit 9,
and to the Reimbursement Agreement dated as of December 1, 1993 between
Wachovia Bank of North Carolina, N.A. and the Borrower, as amended (the
"Existing Reimbursement Agreement"). Plans have been made to replace
the foregoing letter of credit with a new Letter of Credit issued by
Wachovia under this Credit Agreement, but until such time as the new
Letter of Credit has been issued hereunder and the foregoing Existing
Letter of Credit has been terminated and surrendered, the Existing
Reimbursement Agreement shall remain in effect, provided, however, that
the provisions of such Reimbursement Agreement which contrast with or
are in conflict with the provisions of this Agreement shall be deemed
amended and modified to conform with the provisions of this Agreement.
-27-
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 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 April 1, 1996 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
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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.
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
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.
SECTION 7. Representations and Warranties. In order to induce each of the Banks
to enter into this Agreement and to make the Extensions of Credit herein
provided for, the Borrower, as of the date hereof, 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 Extensions of
Credit contemplated hereby) as follows:
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.
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
-29-
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 April 30, 1995, 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 28, 1996, 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 28, 1996, 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 28, 1996. 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.
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"),
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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 or the Real Property, 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 or Borrower's ability to perform its obligations under
the Loan Documents, or any Lease respecting the Real Property, 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 material 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, 1993, and adequate reserves
have been established for the payment of all such taxes for periods ended
subsequent to April 30, 1993.
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.
7.9. [INTENTIONALLY LEFT BLANK]
7.10. Permits and Licenses. Borrower has obtained, or will obtain, all
required federal, state and local permits, licenses,
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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, division, 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. [INTENTIONALLY LEFT BLANK]
7.13. [INTENTIONALLY LEFT BLANK]
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 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 illegally treat, store or dispose of Hazardous Substances, and no
Hazardous Substances are illegally 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
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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.
8.1. 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:
(a) 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.
(b) Closing Documents. Borrower shall have delivered to
the Banks on or prior to the date hereof:
(i) the executed Term Notes and Revolving Credit Notes
and executed counterparts of this Agreement;
(ii) 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
(iii) 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.
8.2. Conditions to Each Extension of Credit. The obligation of the
Banks to make any Extension of Credit hereunder is subject to satisfaction of
the following conditions on the date of the making thereof:
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(a) Representations and Warranties. The representations and
warranties made by the Borrower herein or in any certificate furnished
to the Banks in connection herewith shall be true and correct in all
material respects on and as of such date (except as to those matters
which by there terms relate to a prior period).
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit to be made thereby.
Each acceptance by the Borrower of an Extension of Credit hereunder shall be
deemed to constitute a representation and warranty by the Borrower as of the
date of the Extension of Credit that the foregoing conditions have been
satisfied.
SECTION 9. Affirmative Covenants. Borrower covenants that, so long as any
portion of the indebtedness evidenced by the Notes or any other obligation
hereunder 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
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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 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 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
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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 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, 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 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.
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.
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.
9.7. [INTENTIONALLY LEFT BLANK]
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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 thereon 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 thereon 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 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
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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. Consolidated Tangible Shareholders' Equity. Maintain Consolidated
Tangible Shareholders' Equity of not less than $53,000,000 from and after
January 28, 1996 through that date which is one day prior to the last day of the
Borrower's Fiscal Year ending in 1997 and on the last day of the Fiscal Year
ending in 1997 and 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 Tangible Shareholders' Equity of not less
than the previous period's required Consolidated Tangible 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 Tangible
Shareholders' Equity"); provided, that in the event for any Computation Date
the Borrower's Consolidated Tangible Shareholders' Equity on such Computation
Date exceeds the Required Tangible Shareholders' Equity on such Computation Date
by more than $6,000,000, the Required Tangible Shareholders' Equity shall be
increased for the period beginning on such Computation Date to that amount which
is $6,000,000 less than the Borrower's Consolidated Tangible 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 2.5 to 1.0 for each Fiscal Quarter.
9.20. Consolidated Funded Debt to Total Capitalization.
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Maintain a ratio of Consolidated (a) Funded Debt to (b) Total Capitalization
plus the amount of unamortized goodwill arising from the acquisition by Borrower
of certain assets of Rossville Companies, Inc., Chromatex, Inc. and Rossville
Velours, Inc. pursuant to a transaction that closed on November 1, 1993, not in
excess of 1 to 1.82 (55%) for each Fiscal Quarter.
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 Real Property, operate the Real Property in material
compliance with the Acts (including any required remediation with
respect to Hazardous Substances) and will insure that the Real 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 Real 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 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
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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 Real
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) 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. [INTENTIONALLY LEFT BLANK]
9.23. [INTENTIONALLY LEFT BLANK]
9.24. [INTENTIONALLY LEFT BLANK]
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 and other obligations hereunder, 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 item 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
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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 hereof and any
extensions, modifications, refinancings, refundings
or replacements thereto or thereof; and
(iii) other guaranties not exceeding $2,000,000 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, 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 mart of its properties and assets to Borrower or
another Subsidiary.
10.6. [INTENTIONALLY LEFT BLANK]
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
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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
$25,000,000 at any time outstanding, to purchase equipment to be used by
Rayonese in its operations 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 $4,000,000.
10.11. Prepayments. Retire or prepay prior to its stated maturity any
Consolidated Funded Debt (other than (i) non interestbearing purchase money
obligations payable over a period not to exceed two (2) years, given to vendors
of equipment, and (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. 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) non interest-bearing purchase money obligations payable
over a period not to exceed two (2) years given to vendors of
equipment, and
(3) unsecured indebtedness for borrowed money in an aggregate
amount of up to $50,000,000 outstanding at any time, provided that the
agreement or indenture pursuant to which such indebtedness is issued or
otherwise governed shall have been approved by the Required Banks, such
approval not to be unreasonably withheld (it being
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understood that the Required Banks will approve such debt if the terms,
covenants and conditions governing such debt are no more restrictive
than those contained in this Agreement), and provided further that (i)
upon the incurrence thereof the Borrower shall promptly make the
mandatory prepayment on the Term Loan required by Section 3.4(b) hereof
and (ii) to the extent that the net proceeds of such debt exceed the
outstanding principal balance of the Term Loan on the date such
proceeds are received by the Borrower, the aggregate Revolving Credit
Commitments of the Banks will be reduced by the amount of such excess.
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 Obligations hereunder (including the
Revolving Loans, the Term Loan, the Tender Advances, the BA Obligations
and the LOC Obligations) within 15 days of the date such payment is
due; or
(b) Payment of Interest and other amounts. The Borrower fails
to make any payment of interest on any of the Obligations hereunder
(including the Revolving Loans, the Term Loan, the Tender Advances, the
BA Obligations and the LOC Obligations) or fees or other amounts owing
hereunder 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 or any of the Bond
Documents to which the Borrower is a party 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
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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, 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
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(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; or
(k) Bond Documents. The occurrence of an event of default
under any of the Bond Documents.
11.2. Remedies. If an Event of Default occurs, the Agent shall upon the
direction of the Required Banks (subject to the provisions of Section 13.3(d)
hereof) take any or all of the following action, by notice to the Borrower:
(i) terminate the Commitments, whereupon they shall
immediately terminate;
(ii) declare the Obligations (together with accrued interest
thereon) and all other amounts due hereunder to be, and whereupon they
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;
(iii) direct the Borrower to immediately pay to the Agent cash
collateral in an amount equal to 100% of the BA Obligations and LOC
Obligations then outstanding as security for the payment thereof;
(iv) direct the Issuing Bank to (A) declare all Tender
Advances and all other amounts due in connection therewith and all
interest accrued thereon to be immediately due and payable, and upon
such declaration the same shall become and be immediately due and
payable, without presentment, protest or other notice of any kind, all
of which are hereby waived by the Borrower, (B) notify the Trustees of
such occurrence and thereby require each Trustee immediately to declare
the principal of all bonds then outstanding and the interest accrued
thereon immediately due and payable in accordance with the terms of the
respective Indenture, and (C) pursue all other remedies available to it
by contract, at law or in equity.
(v) exercise and enforce such further rights and remedies as may be
available under or in connection with this Agreement or any of the other Loan
Documents, including, without limitation, rights and remedies relating to
Pledged Bonds set out in Section 14 hereof;
provided, however, that notwithstanding the foregoing, if any
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Event of Default specified in clause (g), (h) or (i) of Section 11.1 occurs,
then without notice to the Borrower or any other act by the Agent or the Banks,
the Commitments shall automatically and immediately terminate, and the
Obligations (together with accrued interest thereon) and all other amounts due
hereunder shall be and become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
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 or other Obligation hereunder by the acceptance of
such Note or Obligation 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 or security agreement, if any.
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 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 Extensions of Credit 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
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information with respect thereto, whether coming into its possession before the
making of Extensions of Credit, 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, 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
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occurrence of an Event of Default and acceleration pursuant to Section 11.2
hereof of the Obligations 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 Obligations 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 Extensions of Credit under this Agreement, and with respect
to Extensions of Credit 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 or
holder of any Obligation 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 or other Obligation
shall be conclusive and binding on any subsequent holder, transferee, assignee
or endorsee, as the case may be, of such Note or other Obligation or of any
Notes issued in exchange therefor.
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
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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 beet
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 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
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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 annually in advance on April
1 of each year (with, in the case of such fee payable on April 1, 1996, proper
credit being given for the annual fee paid on November 15, 1995).
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 Commitment of any Bank or
subject any Bank to any additional obligation, (ii) change the principal of or
rate of interest on any Obligation or any fees hereunder, (iii) change the date
fixed for any payment of principal of or interest on any Obligation 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 Commitments or
of the aggregate unpaid principal amount of the Notes or other Obligations, 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 Obligations, or (viii) release any
guaranty given to support payment of the Obligations.
(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 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
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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 renumeration, 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 renumeration is concurrently paid, on the same
terms, ratably to each Bank. Further, the Borrower agrees that it will
not pay any fee or other remuneration to any Bank or any affiliate of a
Bank unless such fees or remuneration are shared ratably with the other
Banks hereunder, except for (i) fees and other amounts which are
specifically payable to a Bank hereunder for its own account (such as
fees and expenses payable to the Agent pursuant to 12.13 and to the
Issuing Bank pursuant to Section 4.5(g) hereof), and (ii) placement and
remarketing fees payable in connection with VRDN Programs, but only
where such fees are disclosed to the Agent and the other Banks.
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 Obligations 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 Obligations 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 Obligations 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 Obligations held by the Banks shall
be shared by the Banks pro rata (based upon all amounts due to the Banks
hereunder, including without limitation under the Notes and under Section 4.4
hereof). 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 Obligations 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
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amount of all principal and interest due with respect to the Obligations 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 Obligations 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 Obligations held by and other amounts due hereunder
shall be shared by the Banks pro rata (based upon all amounts due to the 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
Obligation 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 it
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 Obligations 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 Obligations 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
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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 or
Obligation owing to such Bank, and the Note held by such Bank, the
Commitments 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
Obligation for all purposes under this Agreement, and the Borrower and
the Agent shall continue to deal 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 Obligation 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 Obligation 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 Obligation, Note,
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
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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 Commitments 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 Commitments 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 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 Obligations 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, if any, 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
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and, obligations of the Electing Banks in proportion to their
Commitments or, if the Commitments have then been terminated, in
proportion to the outstanding principal amounts of the Obligations 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 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,
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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 Banks
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 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
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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
300 N. Greene Street
P.O. Box 21965
Greensboro, North Carolina 27420
Attention: Kent Phillips
Vice President
Telecopy No. 910/378-4043
Copy to: First Union National Bank of North
Carolina
201 South College Street
Charlotte, North Carolina 28288-0656
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.
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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 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
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and Restated Credit Agreement, which shall mean the 1995 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 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
-59-
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.
SECTION 14. Pledge of Bonds.
14.1. The Pledge. The Borrower hereby pledges, assigns, hypothecates,
transfers, and delivers to each Issuing Bank all of its right, title and
interest to, and hereby grants to each Issuing Bank a first lien on, and
security interest in, all right, title and interest of the Borrower in and to
the following (hereinafter collectively called the "Pledged Collateral"):
(i) all Pledged Bonds purchased with a drawing under
a Letter of Credit of such Issuing Bank;
(ii) all income, earnings, profits, interest, premium
or other payments in whatever form in respect of the Pledged
Bonds;
(iii) all proceeds (cash and non-cash) arising out of the
sale, exchange, collection, enforcement or other disposition of all or
any portion of the Pledged Bonds.
The Pledged Collateral shall serve as security for the payment and performance
when due of any and all duties, debts, liabilities and obligations of the
Borrower (either directly, as maker, or indirectly, as guarantor, surety,
endorser or otherwise) to the Issuing Bank, whether now or hereafter existing,
howsoever arising or incurred or evidenced under this Agreement or under the
reimbursement note or other instrument, including without limitation all LOC
Obligations and Tender Advances owing to such Issuing Bank (hereinafter
collectively called the "Pledge Obligations"). The Borrower shall deliver, or
cause to be delivered, the Pledge Bonds to the Issuing Bank or to a pledge agent
designated by the Issuing Bank immediately upon receipt thereof.
14.2. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing, the Issuing Bank, upon direction by the Agent in
accordance with Section 11.2, may without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon the Borrower or any other person
(all and each of which demands, advertisements and/or notices are hereby
expressly waived), forthwith collect, receive appropriate and realize upon the
Pledged Collateral, or any part thereof, and/or may forthwith sell, assign, give
option or options to purchase, contract to sell or otherwise dispose of and
-60-
deliver said Pledged Collateral, or any part thereof, in one or more parcels at
public or private sale or sales, at any exchange, broker's board or at any of
the Issuing Bank's offices or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk, with the right to the
Issuing Bank upon any such sale or sales, public or private, to purchase the
whole or any part of said Pledged Collateral so sold, free of any right or
equity of redemption in the Borrower, which right or equity is hereby expressly
waived or released. The Issuing Bank shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care, safekeeping or otherwise of any and all of the Pledged
Collateral or in any way relating to the rights of the Issuing Bank hereunder,
including reasonable attorney's fees and legal expenses, to the payment in whole
or in part of the Pledge Obligations in such order as the Issuing Bank may
elect, the Borrower remaining liable for any deficiency remaining unpaid after
such application, and only after so applying such net proceeds and after the
payment by the Issuing Bank of any other amount required by any provision of
law, including, without limitation, Section 9-504(1)(c) of the Uniform
Commercial Code, need the Issuing Bank account for the surplus, if any, to the
Borrower. The Borrower agrees that the Issuing Bank need not give more than ten
days notice of the time and place of any public sale or of the time after which
a private sale or other intended disposition is to take place and that such
notice is reasonable notification of such matters. No notification need be given
to the Borrower if it has signed after Default a statement renouncing or
modifying any right to notification of sale or other intended disposition. In
addition to the rights and remedies granted to the Issuing Bank in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to any of the Pledge Obligations, the Issuing Bank shall have all the
rights and remedies of a secured party under the Uniform Commercial Code in
effect in the State of North Carolina at that time.
If the Issuing Bank sells any of the Pledged Collateral pursuant to
this Section 14.2, the Issuing Bank agrees that it will reinstate the Letter of
Credit relating thereto in an amount sufficient to cover all the principal and
interest components in accordance with the terms and requirements of the Letter
of Credit and Indenture relating thereto.
14.3. Valid Perfected First Lien. The Borrower covenants that the
pledge, assignment and delivery of the Pledged Collateral hereunder will create
a valid, perfected, first priority security interest in all right, title or
interest of the Borrower in or to such Pledged Collateral, and the proceeds
thereof, subject to no prior pledge, lien, mortgage, hypothecation, security
interest, charge, option or encumbrance
-61-
or to any agreement purporting to grant to any third party a security interest
in the property or assets of the Borrower which would include the Pledged
Collateral. The Borrower covenants and agrees that it will defend the Issuing
Bank's right, title and security interest in and to the Pledged Collateral and
the proceeds thereof against the claims and demands of all persons whomsoever.
14.4. Release of Pledged Bonds. Pledged Bonds shall be released from
the security interest created hereunder upon satisfaction of the Pledge
Obligations with respect to such Pledged Bonds and receipt by the Trustee of
notification from the Issuing Bank of the reinstatement of the respective Letter
of Credit as provided in the respective Indenture.
[Remainder of Page Intentionally Left Blank]
-62-
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.
[CORPORATE SEAL] By:
President
ATTEST:
(Assistant Secretary)
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, for itself and
as Agent
By:
President
WACHOVIA BANK OF NORTH CAROLINA,
N.A.
By:
President
LETTER AGREEMENT
April 1, 1996
Re: 1996 Amended and Restated Credit Agreement dated as of April 1, 1996,
by and among Culp, Inc. ("Borrower"), a North Carolina corporation,
First Union National Bank of North Carolina ("First Union"), a national
banking association, and Wachovia Bank of North Carolina, N.A.,
("Wachovia") (First Union and Wachovia being referred to as the
"Banks") a national banking association, and First Union, as the Agent
("Agent") for the Banks
Ladies and Gentlemen:
The undersigned parties hereby acknowledge and agree that all
references to the Senior Credit Agreement contained in the Bond Documents (as
defined below) shall mean that certain 1996 Amended and Restated Credit
Agreement dated as of April 1, 1996, by and among the Borrower, the Banks and
the Agent, as amended, modified, supplemented or restated from time to time. For
purposes of this Letter Agreement, "Bond Documents" shall mean all, of the
documents, as they may be amended, modified, supplemented or restated from time
to time, executed in connection with each of the following bond transactions:
1. $7,900,000 Alamance County, North Carolina, Industrial
Revenue Bonds, Series A and B (Culp, Inc. Project)
(1988) (Liens held by First Union as Letter of Credit
Issuer).
2. $3,377,000 Chesterfield County, South Carolina,
Industrial Revenue Bonds, Series 1988 (Culp, Inc.
Project) (Liens held by First Union as Letter of Credit
Issuer).
3. $4,500,000 Guilford County, North Carolina, Industrial
Development Revenue Bonds, Series 1989 (Culp, Inc.
Project) (Liens held by Wachovia as Letter of Credit
Issuer and by First Citizens Bank & Trust Company as
Trustee).
4. $6,580,000 Anderson County, South Carolina, Industrial
Revenue Bonds, Series 1993 (Culp, Inc. Project) (Liens
held by First Union as Letter of Credit Issuer).
5. $6,000,000 Chesterfield County, South Carolina, Tax-
Exempt Adjustable Mode Industrial Development Revenue
Bonds (Culp, Inc. Project), Series 1996.
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IN WITNESS WHEREOF, the undersigned parties have hereby executed this
Letter Agreement as of the date hereof.
CULP, INC.
By:
Title:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, for itself and
as Agent
By:
Title:
WACHOVIA BANK OF NORTH CAROLINA,
N.A.
By:
Title:
Annex I
Commitment Amount Commitment Amount Commitment Amount Percentage of
Name of Banks Term Loans Revolving Loans Letters of Credit Aggregate Commitments
------------- -------------------- ----------------- ----------------- -----------------------
First Union National $21,600,000 $20,100,000 $13,461,851.12 60.0%
Bank of North Carolina
300 N. Greene Street
P.O. Box 21965
Greensboro, NC 27420
Wachovia Bank of North $14,400,000 $13,400,000 $8,974,567.42 40.0%
Carolina, N.A.
200 North Main Street
Post Office Box 631
High Point, NC 27261
$36,000,000 $33,500,000 $22,436,418.54 100.0%
Exhibit 1-A
THIRD AMENDED AND RESTATED TERM NOTE
$21,600,000 High Point, North Carolina
April 1, 1996
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-One Million Six
Hundred Thousand Dollars ($21,600,000), such principal amount to be payable in
Fifty-Nine (59) consecutive equal monthly installments of $300,000.00, payable
on the tenth Business Day of each Fiscal Month of the Borrower commencing April
12, 1996 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 the date hereof, as provided in the 1996 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 April 1, 1996 (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, and evidences the
same indebtedness as, that Second Amended and Restated First Union Term Note
dated July 1, 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 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
Exhibit 1-B
THIRD AMENDED AND RESTATED TERM NOTE
$14,400,000 High Point, North Carolina
April 1, 1996
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 FOURTEEN MILLION FOUR HUNDRED THOUSAND DOLLARS
($14,400,000), such principal amount to be payable in Fifty-Nine (59)
consecutive equal monthly installments of $200,000.00, payable on the tenth
Business Day of each Fiscal Month of the Borrower commencing April 12, 1996 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 the date
hereof, as provided in the 1996 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 April 1, 1996 (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, and evidences the same
indebtedness as, that Second Amended and Restated Wachovia Term Note dated July
1, 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 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
Exhibit 2-A
FOURTH AMENDED AND RESTATED REVOLVING CREDIT NOTE
$20,100,000 High Point, North Carolina
April 1, 1996
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 1996 Amended and Restated Credit Agreement dated as of
the date hereof 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, and
evidences the same indebtedness as, that Third Amended and Restated First Union
Revolving Credit Note dated July 1, 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.
CULP, INC.
[CORPORATE SEAL] By:
President
ATTEST:
Secretary
Exhibit 2-B
FOURTH AMENDED AND RESTATED REVOLVING CREDIT NOTE
$13,400,000 High Point, North Carolina
April 1, 1996
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 1996 Amended and Restated Credit Agreement dated as of the
date hereof 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, and
evidences the same indebtedness as, that Third Amended and Restated Wachovia
Revolving Credit Note dated July 1, 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.
CULP, INC.
[CORPORATE SEAL] By:
President
ATTEST:
Secretary
Exhibit 3
SUBSIDIARIES
1. Culp International, Inc.
2. Guilford Printers, Inc.
3. 3096726 Canada Inc.
4. Rayonese Textile Inc.
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. $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).
2. $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).
3. $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).
4. $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).
5. $6,000,000 Chesterfield County, South Carolina, Tax-Exempt
Adjustable Mode Industrial Development Revenue Bonds (Culp,
Inc. Project), Series 1996.
Exhibit 7
ASSIGNMENT AND ACCEPTANCE
Dated __________ ___, _____
Reference is made to the 1996 Amended and Restated Credit Agreement
dated as of April 1, 1996 (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 at interest (which on the Effective Date hereof
is $___________ in the Loans and, other amounts owing to the Assignor and at
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 delivered to the Agent for execution and acceptance by the Agent [and to
the Borrower for execution by the Borrower]**.
- --------
* If the Assignee is organized under the laws of a jurisdiction outside
the United States.
** Before the occurrence of an Event of Default, if the Assignee is not
a Bank prior to the Effective Date.
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]
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Agent
By:
Title:
[NAME OF BORROWER]***
- --------
** 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.
By:
Title:
Exhibit 9
Underlying VRDN Obligation Existing Letter of Credit
$7,900,000 Alamance County Industrial Wachovia Bank of North
Facilities and Pollution Control Carolina, N.A. Irrevocable
Financing Authority Industrial Letter of Credit No. LC 968-
Revenue Refunding Bonds (Culp, Inc. 068486 issued April 1, 1996 in
Project) Series A and B the initial stated amount of
$2,890,863.01
$3,377,000 Chesterfield County, South Wachovia Bank of North
Carolina Industrial Revenue Bonds Carolina, N.A. Irrevocable
(Culp, Inc. Project) Series 1988 Letter of Credit No. LC 968-
068488 issued April 1, 1996 in
the initial stated amount of
$2,363,057.53
$4,500,000 Guilford County Industrial Wachovia Bank of North
Facilities and Pollution Control Carolina, N.A. Irrevocable
Financing Authority Industrial Letter of Credit No. LC 968-
Development Revenue Bonds (Culp, Inc. 041786 issued December 1, 1993
Project) Series 1989 in the initial stated amount of
$3,978,000.00
$6,580,000 Anderson County, South Wachovia Bank of North
Carolina Industrial Revenue Bonds, Carolina, N.A. Irrevocable
(Culp, Inc. Project) Series 1993 Letter of Credit No. LC 968-
068487 issued April 1, 1996 in
the initial stated amount of
$6,984,493.00
$6,000,000 Chesterfield County, South Wachovia Bank of North
Carolina Tax-Exempt Adjustable Mode Carolina, N.A. Irrevocable
Industrial Development Revenue Bonds Letter of Credit No. LC 968-
(Culp, Inc. Project) Series 1996 068485 issued April 1, 1996 in
the initial stated amount of
$6,300,000.00