$125,000,000
CREDIT AGREEMENT
dated as of
April 23, 1997
among
CULP, INC.
The Banks Listed Herein
WACHOVIA BANK OF GEORGIA, N.A.,
as Agent
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Documentation Agent
TABLE OF CONTENTS
CREDIT AGREEMENT
Page
ARTICLE I
DEFINITIONS......................................................... 1
SECTION 1.01. Definitions.................................................... 1
SECTION 1.02. Accounting Terms and Determinations............................ 17
SECTION 1.03. References..................................................... 17
SECTION 1.04. Use of Defined Terms........................................... 17
SECTION 1.05. Terminology; Headings.......................................... 17
ARTICLE II
THE CREDITS......................................................... 18
SECTION 2.01. Commitments to Lend Syndicated Loans........................... 18
SECTION 2.02. Method of Borrowing............................................ 19
SECTION 2.03. Money Market Loans............................................. 22
SECTION 2.04. Notes.......................................................... 26
SECTION 2.05. Maturity of Loans.............................................. 26
SECTION 2.06. Interest Rates................................................. 27
SECTION 2.07. Fees........................................................... 30
SECTION 2.08. Optional Termination or Reduction of
Commitments............................................ 31
SECTION 2.09. Mandatory Reduction and Termination of
Commitments............................................ 31
SECTION 2.10. Optional Prepayments........................................... 32
SECTION 2.11. Mandatory Prepayments.......................................... 32
SECTION 2.12. General Provisions as to Payments.............................. 33
SECTION 2.13. Computation of Interest and Fees............................... 35
ARTICLE III
CONDITIONS TO BORROWINGS............................................... 36
SECTION 3.01. Conditions to First Borrowing.................................. 36
SECTION 3.02. Conditions to All Borrowings................................... 37
ARTICLE IV
REPRESENTATIONS AND WARRANTIES............................. 38
SECTION 4.01. Corporate Existence and Power.................................. 38
SECTION 4.02. Corporate and Governmental Authorization;
No Contravention....................................... 39
SECTION 4.03. Binding Effect................................................. 39
SECTION 4.04. Financial Information.......................................... 39
SECTION 4.05. No Litigation.................................................. 39
SECTION 4.06. Compliance with ERISA.......................................... 40
SECTION 4.07. Compliance with Laws; Payment of Taxes......................... 40
SECTION 4.08. Subsidiaries................................................... 40
SECTION 4.09. Investment Company Act......................................... 41
SECTION 4.10. Public Utility Holding Company Act............................. 41
SECTION 4.11. Ownership of Property; Liens................................... 41
SECTION 4.12. No Default..................................................... 41
SECTION 4.13. Full Disclosure................................................ 41
SECTION 4.14. Environmental Matters.......................................... 41
SECTION 4.15. Capital Stock.................................................. 42
SECTION 4.16. Margin Stock................................................... 42
SECTION 4.17. Insolvency..................................................... 42
SECTION 4.18. Insurance...................................................... 43
SECTION 5.01. Information.................................................... 43
SECTION 5.02. Inspection of Property, Books and Records...................... 45
SECTION 5.03. Maintenance of Existence....................................... 46
SECTION 5.04. Dissolution.................................................... 46
SECTION 5.05. Consolidations, Mergers and Sales of Assets.................... 46
SECTION 5.06. Use of Proceeds................................................ 46
SECTION 5.07. Compliance with Laws; Payment of Taxes......................... 47
SECTION 5.08. Insurance...................................................... 47
SECTION 5.09. Change in Fiscal Year.......................................... 47
SECTION 5.10. Maintenance of Property........................................ 47
SECTION 5.11. Environmental Notices.......................................... 48
SECTION 5.12. Environmental Matters.......................................... 48
SECTION 5.13. Environmental Release.......................................... 48
SECTION 5.14. Transactions with Affiliates................................... 48
SECTION 5.15. Loans or Advances.............................................. 48
SECTION 5.16. Investments.................................................... 49
SECTION 5.17. Priority Debt.................................................. 49
SECTION 5.18. Restrictions on Ability of Subsidiaries
to Pay Dividends....................................... 51
SECTION 5.19. Interest Coverage.............................................. 51
SECTION 5.20. Ratio of Total Debt to Total Capitalization.................... 51
SECTION 5.21. Debt/EBITDA Ratio.............................................. 51
SECTION 5.22. Acquisitions................................................... 51
ARTICLE VI
DEFAULTS........................................................... 51
SECTION 6.01. Events of Default.............................................. 51
SECTION 6.02. Notice of Default.............................................. 54
ARTICLE VII
THE AGENT.......................................................... 55
SECTION 7.01. Appointment; Powers and Immunities............................. 55
SECTION 7.02. Reliance by Agent.............................................. 56
SECTION 7.03. Defaults....................................................... 56
SECTION 7.04. Rights of Agent as a Bank and its Affiliates................... 56
SECTION 7.05. Indemnification................................................ 57
SECTION 7.06 CONSEQUENTIAL DAMAGES.......................................... 57
SECTION 7.07. Payee of Note Treated as Owner................................. 57
SECTION 7.08. Nonreliance on Agent and Other Banks........................... 58
SECTION 7.09. Failure to Act................................................. 58
SECTION 7.10. Resignation or Removal of Agent................................ 58
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION............................. 59
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair................................... 59
SECTION 8.02. Illegality..................................................... 59
SECTION 8.03. Increased Cost and Reduced Return.............................. 60
SECTION 8.04. Base Rate Loans or Other Fixed Rate Loans
Substituted for Affected Fixed Rate Loans.............. 62
SECTION 8.05. Compensation................................................... 62
SECTION 8.06. Failure to Pay in Foreign Currency............................. 63
SECTION 8.07. Judgment Currency.............................................. 63
ARTICLE IX
MISCELLANEOUS....................................................... 64
SECTION 9.01. Notices........................................................ 64
SECTION 9.02. No Waivers..................................................... 64
SECTION 9.03. Expenses; Documentary Taxes.................................... 64
SECTION 9.04. Indemnification................................................ 65
SECTION 9.05 Setoff; Sharing of Setoffs..................................... 65
SECTION 9.06. Amendments and Waivers......................................... 66
SECTION 9.07. No Margin Stock Collateral..................................... 67
SECTION 9.08. Successors and Assigns......................................... 67
SECTION 9.09. Confidentiality................................................ 70
SECTION 9.10. Representation by Banks........................................ 71
SECTION 9.11. Obligations Several............................................ 71
SECTION 9.12. Georgia Law.................................................... 71
SECTION 9.13. Severability................................................... 71
SECTION 9.14. Interest....................................................... 71
SECTION 9.15. Interpretation................................................. 72
SECTION 9.16. Waiver of Jury Trial; Consent to
Jurisdiction........................................... 72
SECTION 9.17. Counterparts................................................... 73
SECTION 9.18. Source of Funds -- ERISA....................................... 73
SECTION 9.19. Replacement of Banks........................................... 73
EXHIBIT A-1 Form of Syndicated Dollar Loan Note
EXHIBIT A-2 Form of Foreign Currency Loan Note
EXHIBIT A-3 Form of Money Market Loan Note
EXHIBIT B Form of Opinion of Counsel for the Borrower
EXHIBIT C Form of Opinion of Special Counsel for the Agent
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Notice of Borrowing
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Closing Certificate
EXHIBIT H Form of Officer's Certificate
EXHIBIT I Form of Money Market Quote Request
EXHIBIT J Form of Money Market Quote
Schedule 4.08 Subsidiaries
Schedule 5.15 Loans and Advances existing on the Closing Date
Schedule 5.16 Investments existing on the Closing Date
Schedule 5.17 Debt of Subsidiaries existing on the Closing Date
CREDIT AGREEMENT
AGREEMENT dated as of April 23, 1997 among CULP, INC., the BANKS listed
on the signature pages hereof, WACHOVIA BANK OF GEORGIA, N.A., as Agent and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Documentation Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section 1.01
shall, for all purposes of this Agreement and any amendment hereto (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings set forth herein:
"Acquisition" means the acquisition by the Borrower or any of its
Subsidiaries of all or substantially all of the assets or stock of any Person.
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.06(c).
"Affiliate" of any relevant Person means (i) any Person that directly,
or indirectly through one or more intermediaries, controls the relevant Person
(a "Controlling Person"), (ii) any Person (other than the relevant Person or a
Subsidiary of the relevant Person) which is controlled by or is under common
control with a Controlling Person, or (iii) any Person (other than a Subsidiary
of the relevant Person) of which the relevant Person owns, directly or
indirectly, 20% or more of the common stock or equivalent equity interests. As
used herein, the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means Wachovia Bank of Georgia, N.A., a national banking
association organized under the laws of the United States of America, in its
capacity as agent for the Banks hereunder, and its successors and permitted
assigns in such capacity.
"Agent's Letter Agreement" means that certain letter agreement, dated
as of December 13, 1996, between the Borrower and the Agent relating to the
structure of the Loans, and certain fees from time to time payable by the
Borrower to the Agent, together with all amendments and supplements thereto.
"Agreement" means this Credit Agreement, together with all amendments
and supplements hereto.
"Applicable Margin" has the meaning set forth in Section 2.06(a).
"Assignee" has the meaning set forth in Section 9.08(c).
"Assignment and Acceptance" means an Assignment and Acceptance executed
in accordance with Section 9.08(c) in the form attached hereto as Exhibit D.
"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages hereof as having a
Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate per
annum equal to the higher as of such day of (i) the Prime Rate, and (ii)
one-half of one percent above the Federal Funds Rate. For purposes of
determining the Base Rate or the Federal Funds Rate for any day, changes in the
Prime Rate shall be effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to bear interest at a
rate based upon the Base Rate, and is to be made as a Base Rate Loan pursuant to
the applicable Notice of Borrowing, Section 2.02(f), or Article VIII, as
applicable.
"Restricted Investments" means "restricted investments" consisting of
bond proceeds held in escrow by the bond trustee in connection with industrial
development revenue bonds.
"Borrower" means Culp, Inc., a North Carolina corporation, and its
successors and permitted assigns.
"Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower (i) at the same time by all of the
2
Banks, in the case of a Syndicated Borrowing, or (ii) separately by one or more
Banks, in the case of a Money Market Borrowing, in each case pursuant to Article
II. A Borrowing is a "Base Rate Borrowing" if such Loans are Base Rate Loans or
a "Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans. A Syndicated
Borrowing is a "Syndicated Dollar Borrowing" if it is a Base Rate Borrowing or a
Euro-Dollar Borrowing and a "Foreign Currency Borrowing" if such Loans are
Foreign Currency Loans. A Borrowing is a "Money Market Borrowing" if such Loans
are made pursuant to Section 2.03 or a "Syndicated Borrowing" if such Loans are
made pursuant to Section 2.01.
"Capital Stock" means any nonredeemable capital stock of the Borrower
or any Consolidated Subsidiary (to the extent issued to a Person other than the
Borrower), whether common or preferred.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. ss. 9601 et. seq. and its implementing regulations
and amendments.
"CERCLIS" means the Comprehensive Environmental Response Compensation
and Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section 8.02.
"Chattanooga Sale/Leaseback Transaction" means a transaction whereby
the Borrower would: (i) convey to The Industrial Development Board of the City
of Chattanooga (the "Issuer) certain items of machinery, equipment and related
personal property owned (or to be owned) by the Borrower in connection with the
business currently conducted at its Rossville, Georgia plant (the "Project");
(ii) lease back the Project from the Issuer for payments in a nominal amount in
lieu of ad valorem taxes for a period ending December 31, 2000; (iii) have the
right to terminate the lease at any time upon written notice; (iv) have the
option to purchase the Project upon any lease termination (whether at maturity
or upon early termination by the Borrower) for a purchase price of $1; and (v)
limit the Project to assets with a cost basis not to exceed $20,000,000 in the
aggregate.
"Closing Certificate" has the meaning set forth in Section 3.01(e).
3
"Closing Date" means April 23, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code.
"Commitment" means, with respect to each Bank, (i) the amount set forth
opposite the name of such Bank on the signature pages hereof, and (ii) as to any
Bank which enters into any Assignment and Acceptance (whether as transferor Bank
or as Assignee thereunder), the amount of such Bank's Commitment after giving
effect to such Assignment and Acceptance, in each case as such amount may be
reduced from time to time pursuant to Sections 2.08 and 2.09.
"Commitment Reduction Date" means each of April 23, 1998, April 23,
1999, April 23, 2000 and April 23, 2001.
"Compliance Certificate" has the meaning set forth in Section 5.01(c).
"Consolidated Net Interest Expense" for any period means interest,
whether expensed or capitalized, in respect of Debt of the Borrower or any of
its Consolidated Subsidiaries outstanding during such period, net of any
interest income attributable to Restricted Investments.
"Consolidated Net Income" means, for any period, the Net Income of the
Borrower and its Consolidated Subsidiaries determined on a consolidated basis,
but excluding (i) extraordinary items and other non-recurring items and (ii) any
equity interests of the Borrower or any Subsidiary in the unremitted earnings of
any Person that is not a Subsidiary.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be consolidated
with those of the Borrower in its consolidated financial statements as of such
date.
"Consolidated Total Assets" means, at any time, the total assets of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis,
as set forth or reflected on the most recent consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries, prepared in accordance with GAAP.
4
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Culp Family" means Robert G. Culp, III, his spouse, his mother, his
siblings, his lineal descendants, and any trusts established for the benefit of
any of them.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all obligations of such Person to reimburse any bank or other Person in
respect of amounts payable under a banker's acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation),
(vii) all obligations of such Person to reimburse any bank or other Person in
respect of amounts paid or to be paid under a letter of credit or similar
instrument, (viii) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person, (ix) all obligations
of such Person with respect to interest rate protection agreements, foreign
currency exchange agreements or other hedging arrangements (valued as the
termination value thereof computed in accordance with a method approved by the
International Swap Dealers Association and agreed to by such Person in the
applicable hedging agreement, if any), and (x) all Debt of others Guaranteed by
such Person.
"Debt/EBITDA Ratio" means at any time the ratio of (i) Total Debt to
(ii) EBITDA.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day, the sum of
2% plus the then highest interest rate (including the Applicable Margin) which
may be applicable to any Loans
5
hereunder (irrespective of whether any such type of Loans are actually
outstanding hereunder).
"Dollar Equivalent" means the Dollar equivalent of the amount of a
Foreign Currency Loan, determined by the Agent on the basis of its spot rate for
the purchase of the appropriate Foreign Currency with Dollars.
"Dollars" or "$" means dollars in lawful currency of the United States
of America.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Georgia are authorized by law to close.
"EBIT" means at any time the sum of the following, determined on a
consolidated basis for the Borrower and its Consolidated Subsidiaries, at the
end of each Fiscal Quarter, for the Fiscal Quarter just ended and the 3
immediately preceding Fiscal Quarters: (i) Consolidated Net Income; plus (ii)
Consolidated Net Interest Expense; plus (iii) taxes on income.
"EBITDA" means at any time the sum of the following, determined on a
consolidated basis for the Borrower and its Consolidated Subsidiaries, at the
end of each Fiscal Quarter, for the Fiscal Quarter just ended and the 3
immediately preceding Fiscal Quarters (and with respect to any Acquisition which
is made during such 4 Fiscal Quarter Period, the Consolidated Subsidiary
acquired in such Acquisition shall be included as if it had been a Consolidated
Subsidiary prior to the commencement of such 4 Fiscal Quarter Period): (i) EBIT;
plus (ii) depreciation; plus (iii) amortization; plus (iv) other non-cash
charges.
"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of the Borrower or any Subsidiary required by any Environmental
Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or
orders arising from or in any way associated with any Environmental
Requirements, whether or not
6
entered upon consent or written agreements with an Environmental Authority or
other entity arising from or in any way associated with any Environmental
Requirement, whether or not incorporated in a judgment, decree or order.
"Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
"Environmental Notices" means notice from any Environmental Authority
or by any other person or entity, of possible or alleged noncompliance with or
liability under any Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental Authority or
from any other person or entity for correction of any, violation of any
Environmental Requirement or any investigations concerning any violation of any
Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under
any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to the Borrower, any Subsidiary
or the Properties, including but not limited to any such requirement under
CERCLA or similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Euro-Dollar Loan" means a Loan which bears or is to bear interest at a
rate based upon the London Interbank Offered
7
Rate, and to be made as a Euro-Dollar Loan pursuant to the applicable Notice of
Borrowing.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.06(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Domestic Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate charged to the Agent on such day on such
transactions, as determined by the Agent.
"Fiscal Month" means any fiscal month of the Borrower.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower, ending on the
Sunday closest to April 30 of each year.
"Fixed Rate Borrowing" means a Euro-Dollar Borrowing, a Money Market
Borrowing or a Foreign Currency Borrowing, or any or all of them, as the context
shall require.
"Fixed Rate Loans" means Euro-Dollar Loans, Money Market Loans, Foreign
Currency Loans or any or all of them, as the context shall require.
"Foreign Currencies" means, individually and collectively, as the
context shall require, each of the following, if offered and subject to
availability: (i) British pounds sterling, French francs, Canadian dollars,
Federal Republic of Germany deutschemarks, Italian lira and Japanese yen;
8
and (ii) at the option of the Banks, any other currency which is freely
transferable and convertible into Dollars; provided, however, that no such other
currency under this clause (ii) shall be included as a Foreign Currency
hereunder, or included in a Notice of Borrowing, unless (x) a Borrower has first
submitted a request to the Agent and the Banks that it be so included, and (y)
the Agent and the Banks, in their sole discretion, have agreed to such request.
"Foreign Currency Borrowing" has the meaning set forth in the
definition of "Borrowing".
"Foreign Currency Business Day" shall mean any Domestic Business Day,
excluding one on which trading is not carried on by and between banks in
deposits of the applicable Foreign Currency in the applicable interbank market
for such Foreign Currency.
"Foreign Currency Loan" means a Loan to be made in a Foreign Currency
pursuant to the applicable Notice of Borrowing.
"Foreign Currency Loan Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A-2, evidencing the obligation of the
Borrower to repay the Foreign Currency Loans, together with all amendments,
consolidations, modifications, renewals and supplements thereto.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for purposes of determining compliance with the
terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in
9
whole or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. ss. 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or in
any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including, crude oil or any fraction thereof
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation or (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.
"IBOR" has the meaning set forth in Section 2.05(e).
"Interest Period" means: (1) with respect to each Euro-Dollar Borrowing
and Foreign Currency Borrowing, subject to paragraph (c) below, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the first, second, third or sixth month thereafter, as the
Borrower may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day or Foreign Currency Business
Day, as the case may be, shall be extended to the next succeeding
Euro-Dollar Business Day or Foreign Currency Business Day, as the case
may be, unless such Euro-Dollar Business Day or Foreign Currency
Business Day, as the case may be, falls in another calendar month, in
which case such Interest Period shall, subject to paragraph (c) below
end on the next preceding Euro-Dollar Business Day or Foreign Currency
Business Day, as the case may be;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day or Foreign Currency Business Day, as the case may be, of a
calendar month (or on a day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall
end on the last
10
Euro-Dollar Business Day or Foreign Currency Business Day, as the case
may be, of the appropriate subsequent calendar month; and
(c) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
(2) With respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Domestic Business Day shall be extended to the next
succeeding Domestic Business Day; and
(b) no Interest Period which begins before the Termination
Date and would otherwise end after the Termination Date may be
selected.
(3) With respect to each Money Market Borrowing, the period commencing on the
date of such Borrowing and ending on the Stated Maturity Date or such other date
or dates as may be specified in the applicable Money Market Quote; provided
that:
(a) any Interest Period (subject to clause (b) below) which
would otherwise end on a day which is not a Domestic Business Day shall
be extended to the next succeeding Domestic Business Day; and
(b) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise; provided, however, that the term Investment shall not
include an Acquisition.
"Joint Venture" means any Person in which the Borrower and one or more
other Persons makes an Investment for a limited purpose operation and which does
not constitute a Subsidiary.
11
"Lending Office" means, as to each Bank, its office located at its
address set forth on the signature pages hereof (or identified on the signature
pages hereof as its Lending Office) or such other office as such Bank may
hereafter designate as its Lending Office by notice to the Borrower and the
Agent. Each Bank may designate a Lending Office for Syndicated Dollar Loans and
a different Lending Office for Foreign Currency Loans, and the term "Lending
Office" shall in such case mean either such Lending Office, as the context shall
require.
"Lien" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge, security interest, security title,
preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan" means a Base Rate Loan, Euro-Dollar Loan, Money Market Loan,
Syndicated Dollar Loan, Foreign Currency Loan or Syndicated Loan, and "Loans"
means Base Rate Loans, Euro-Dollar Loans, Money Market Loans, Syndicated Dollar
Loans, Foreign Currency Loans, Syndicated Loans or any or all of them, as the
context shall require.
"Loan Documents" means this Agreement, the Notes, any other document
evidencing, relating to or securing the Loans, and any other document or
instrument delivered from time to time in connection with this Agreement, the
Notes or the Loans, as such documents and instruments may be amended or
supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in Section
2.06(c).
"Margin Stock" means "margin stock" as defined in Regulations G, T, U
or X.
12
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business or properties of the Borrower and its
Consolidated Subsidiaries taken as a whole, (b) the rights and remedies of the
Agent or the Banks under the Loan Documents, or the ability of the Borrower to
perform its obligations under the Loan Documents to which it is a party, as
applicable, or (c) the legality, validity or enforceability of any Loan
Document.
"Money Market Borrowing Date" has the meaning specified in Section
2.03.
"Money Market Loan" means a Loan which bears or is to bear interest at
a rate determined pursuant to Section 2.03 and to be made as a Money Market Loan
pursuant thereto.
"Money Market Loan Notes" means the promissory notes of the Borrower,
substantially in the form of Exhibit A-3, evidencing the obligation of the
Borrower to repay the Money Market Loans, together with all amendments,
consolidations, modifications, renewals and supplements thereto.
"Money Market Quote" has the meaning specified in Section 2.03.
"Money Market Quote Request" has the meaning specified in Section
2.03(b).
"Money Market Rate" has the meaning specified in Section
2.03(c)(ii)(C).
"Moody's" means Moody's Investor Service, Inc.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
13
"Notes" means the Syndicated Dollar Loan Notes, the Money Market Loan
Notes, the Foreign Currency Loan Notes, or any or all of them, as the context
shall require.
"Notice of Borrowing" has the meaning set forth in Section 2.02(a).
"Officer's Certificate" has the meaning set forth in Section 3.01(f).
"Participant" has the meaning set forth in Section 9.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Performance Pricing Determination Date" has the meaning set forth in
Section 2.06(a).
"Person" means an individual, a corporation, a partnership, limited
liability corporation, an unincorporated association, a trust or any other
entity or organization, including, but not limited to, a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Prime Rate" refers to that interest rate so denominated and set by WBG
from time to time as an interest rate basis for borrowings. The Prime Rate is
but one of several interest rate bases used by WBG. WBG lends at interest rates
above and below the Prime Rate.
"Properties" means all real property owned, leased or otherwise used or
occupied by the Borrower or any Subsidiary, wherever located.
14
"Redeemable Preferred Stock" of any Person means any preferred stock
issued by such Person which is at any time prior to the Termination Date either
(i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.
"Refunding Loan" means a new Syndicated Loan made on the day on which
an outstanding Syndicated Loan is maturing or a Base Rate Borrowing is being
converted to a Fixed Rate Borrowing, if and to the extent that the proceeds
thereof are used entirely for the purpose of paying such maturing Loan or Loan
being converted, excluding any difference between the amount of such maturing
Loan or Loan being converted and any greater amount being borrowed on such day
and actually either being made available to the Borrower pursuant to Section
2.02(c) or remitted to the Agent as provided in Section 2.12, in each case as
contemplated in Section 2.02(d).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Required Banks" means at any time Banks having at least 66 2/3% of the
aggregate amount of the Commitments or, if
15
the Commitments are no longer in effect, Banks holding at least 66 2/3% of the
aggregate outstanding principal amount of the sum of the (i) Syndicated Loans
and (ii) Money Market Loans.
"Reuters Screen" shall mean, when used in connection with any
designated page and the London Interbank Offered Rate or IBOR, the display page
so designated on the Reuter Monitor Money Rates Service (or such other page as
may replace that page on that service for the purpose of displaying rates
comparable to the London Interbank Offered Rate or IBOR).
"S&P" means Standard & Poor's Rating Group, a division of McGraw-Hill,
Inc.
"Special Purchase Money Liens" means Liens which: (i) are incurred in
connection with the purchase of looms; (ii) secure Debt consisting only of the
deferred purchase price of such looms, and no other Debt, which deferred
purchase price Debt (x) is non-interest bearing and (y) is payable in no more
than 2 years from the date of purchase; and (iii) encumber only on the looms so
purchased, and not on any other assets.
"Stated Maturity Date" means, with respect to any Money Market Loan,
the Stated Maturity Date therefor specified by the Bank in the applicable Money
Market Quote.
"Stockholders' Equity" means, at any time, the shareholders' equity of
the Borrower and its Consolidated Subsidiaries, as set forth or reflected on the
most recent consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable
Preferred Stock of the Borrower or any of its Consolidated Subsidiaries.
Shareholders' equity generally would include, but not be limited to (i) the par
or stated value of all outstanding Capital Stock, (ii) capital surplus, (iii)
retained earnings, and (iv) various deductions such as (A) purchases of treasury
stock, (B) valuation allowances, (C) receivables due from an employee stock
ownership plan, (D) employee stock ownership plan debt guarantees, and (E)
translation adjustments for foreign currency transactions.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
16
"Syndicated Dollar Loan Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit "A-1", evidencing the obligation of the
Borrower to repay the Syndicated Dollar Loans, together with all amendments,
consolidations, modifications, renewals, and supplements thereto.
"Syndicated Dollar Loan" means a Loan made in Dollars, which shall be
either a Base Rate Loan or a Euro-Dollar Loan.
"Syndicated Loans" means Syndicated Dollar Loans and Foreign Currency
Loans.
"Taxes" has the meaning set forth in Section 2.12(c).
"Telerate" means, when used in connection with any designated page and
IBOR, the display page so designated on the Dow Jones Telerate Service (or such
other page as may replace that page on that service for the purpose of
displaying rates comparable to IBOR).
"Termination Date" means whichever is applicable of (i) April 22, 2002,
(ii) the date the Commitments are terminated pursuant to Section 6.01 following
the occurrence of an Event of Default, or (iii) the date the Borrower terminates
the Commitments entirely pursuant to Section 2.08.
"Third Parties" means all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Borrower's business and on a temporary basis.
"Total Debt" means at any date, without duplication, the sum of the
following, determined on a consolidated basis for the Borrower and its
Consolidated Subsidiaries: (i) all obligations for borrowed money; (ii) all
obligations as lessee under capital leases; (iii) all obligations with respect
to industrial revenue bonds (or letters of credit issued as an enhancement
thereto), excluding, however, Restricted Investments; and (iv) all Debt of the
types described in clauses (i), (ii) and (iii) of others Guaranteed by the
Borrower or any Consolidated Subsidiary.
"Total Capitalization" means at any date the sum of: (i) Stockholders'
Equity; plus (ii) Total Debt.
17
"Transferee" has the meaning set forth in Section 9.08(d).
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the PBGC
or the Plan under Title IV of ERISA.
"Unused Commitment" means at any date, with respect to any Bank, an
amount equal to its Commitment less the aggregate outstanding principal amount
of its Syndicated Dollar Loans and Foreign Currency Loans, but not its Money
Market Loans.
"WBG" means Wachovia Bank of Georgia, N.A., a national banking
association, and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks unless with respect to any such change concurred in by the
Borrower's independent public accountants or required by GAAP, in determining
compliance with any of the provisions of this Agreement or any of the other Loan
Documents: (i) the Borrower shall have objected to determining such compliance
on such basis at the time of delivery of such financial statements, or (ii) the
Required Banks shall so object in writing within 30 days after the delivery of
such financial statements, in either of which events such calculations shall be
made on a basis consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have been made (which,
if
18
objection is made in respect of the first financial statements delivered
under Section 5.01 hereof, shall mean the financial statements referred to in
Section 4.04).
SECTION 1.03. References. Unless otherwise indicated, references in
this Agreement to "Articles", "Exhibits", "Schedules", "Sections" and other
Subdivisions are references to articles, exhibits, schedules, sections and other
subdivisions hereof.
SECTION 1.04. Use of Defined Terms. All terms defined in this Agreement
shall have the same defined meanings when used in any Exhibits or Schedules
hereto and in any of the other Loan Documents, unless otherwise defined therein
or unless the context shall require otherwise.
SECTION 1.05. Terminology; Headings. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural, and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend Syndicated Loans. Each Bank severally
agrees, on the terms and conditions set forth herein, to make Loans (which may
be, at the option of the Borrower and subject to the terms and conditions
hereof, Foreign Currency Loans or Syndicated Dollar Loans, and Syndicated Dollar
Loans may be Base Rate Loans or Euro-Dollar Loans) to the Borrower from time to
time before the Termination Date; provided that,
(i) immediately after each such Loan is made, the sum of the
aggregate outstanding principal amount of the Syndicated Dollar Loans
and the Dollar Equivalent of the aggregate principal amount of the
Foreign Currency Loans by such Bank shall not exceed the amount of its
Commitment, and
(ii) the aggregate outstanding principal amount of all
Syndicated Dollar Loans and Money Market Loans of all Banks and the
Dollar Equivalent of the aggregate principal amount
19
of the Foreign Currency Loans of all Banks shall not exceed the
aggregate amount of all of the Commitments.
The Dollar Equivalent of each Foreign Currency Loan on the date each Foreign
Currency Loan is disbursed pursuant hereto shall be deemed to be the amount of
such Foreign Currency Loan outstanding for the purpose of calculating the
aggregate outstanding principal amount of the Foreign Currency Loans for
purposes of clause (ii) of Section 2.01 and clause (ii) of Section 2.03(a);
provided, however, that if at the time of receipt of any Notice of Borrowing or
Money Market Quote Request, the aggregate outstanding principal amount of all
Syndicated Dollar Loans and Money Market Loans of all Banks and the Dollar
Equivalent of the aggregate principal amount of the Foreign Currency Loans of
all Banks is equal to or greater than 50% of the aggregate amount of all of the
Commitments, then the Dollar Equivalent of each Foreign Currency Loan shall be
calculated as of such date, rather than as of the date such Foreign Currency
Loans were disbursed, and in the event that, as a result of such calculation,
the aggregate outstanding principal amount of all Syndicated Dollar Loans and
Money Market Loans of all Banks and the Dollar Equivalent of the aggregate
principal amount of the Foreign Currency Loans of all Banks exceeds the
aggregate amount of all of the Commitments, then (i) no additional Borrowings
shall be permitted and (ii) the Foreign Currency Loans shall be subject to
mandatory repayment pursuant to the provisions of Section 2.11(b). Each (x) Base
Rate Borrowing under this Section shall be in an aggregate principal amount of
$1,000,000 or any larger integral multiple of $500,000, and (ii) Euro-Dollar
Borrowing or Foreign Currency Borrowing under this Section shall be in an
aggregate principal amount of $ 5,000,000 (or the Dollar Equivalent thereof in
any Foreign Currency) or any larger integral multiple of $1,000,000 (or the
Dollar Equivalent thereof in any Foreign Currency) (except that any such
Syndicated Borrowing may be in the aggregate amount of the Unused Commitments)
and shall be made from the several Banks ratably in proportion to their
respective Commitments. Within the foregoing limits, the Borrower may borrow
under this Section, repay or, to the extent permitted by Section 2.10, prepay
Syndicated Loans and reborrow under this Section at any time before the
Termination Date. Notwithstanding the foregoing, if there shall occur on or
prior to the date of any Foreign Currency Loan any change in national or
international financial, political or economic conditions or currency exchange
rates or exchange controls which would in the reasonable opinion of the Agent
make it impracticable to make such Foreign Currency Loan, then the Agent
20
shall forthwith give notice thereof to the Borrower and the Banks, and such
Foreign Currency Loan shall be made on such date as Base Rate Loans, unless the
Borrower notifies the Agent at least two Domestic Business Days before such date
that it elects not to borrow on such date.
SECTION 2.02. Method of Borrowing. (a) The Borrower shall give the
Agent notice (a "Notice of Borrowing"), which shall be substantially in the form
of Exhibit E, prior to 11:00 A.M. (Atlanta, Georgia time) for Dollar Borrowings,
and 9:30 A.M. (Atlanta, Georgia time) for Foreign Currency Borrowings, on the
same Domestic Business Day for each Base Rate Borrowing, at least 3 Euro-Dollar
Business Days before each Euro-Dollar Borrowing, and at least 3 Foreign Currency
Business Days before each Foreign Currency Borrowing, specifying:
(i) the date of such Syndicated Borrowing, which shall be a
Domestic Business Day in the case of a Base Rate Borrowing, a
Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing, or a
Foreign Currency Business Day in the case of a Foreign Currency
Borrowing,
(ii) the aggregate amount of such Syndicated Borrowing,
(iii) whether the Syndicated Loans comprising such Borrowing
are to be Base Rate Loans, Euro-Dollar Loans or Foreign Currency Loans,
and if such Loans are to be Foreign Currency Loans, specifying the
Foreign Currency, and
(iv) in the case of a Fixed Rate Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period; provided, that if one or more
Commitment Reduction Dates are scheduled to occur during the Interest
Period so selected, and as a result thereof (but for this proviso) the
Borrower shall become obligated to prepay or repay all or any portion
of the Loans on any of such Commitment Reduction Dates pursuant to
Section 2.10, then a portion of such Fixed Rate Borrowing which is
equal to the amount of the Loans that would otherwise be so prepaid or
repaid on any of such Commitment Reduction Dates either (A) shall have
applicable thereto an Interest Period or Interest
21
Periods, as selected by the Borrower, ending on or before the
Commitment Reduction Date on which Loans corresponding in amount to
such portion would otherwise be prepaid or repaid, or (B) shall instead
be made as a Base Rate Borrowing.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's ratable share of
such Borrowing and such Notice of Borrowing, once received by the Agent, shall
not thereafter be revocable by the Borrower.
(c) Not later than 11:00 A.M. (Atlanta, Georgia time) on the date of
each Syndicated Borrowing, each Bank shall (except as provided in paragraph (d)
of this Section) make available its ratable share of such Syndicated Borrowing,
in Federal or other funds immediately available in Atlanta, Georgia, to the
Agent at its address referred to in Section 9.01, which funds shall be in
Dollars, if such Borrowing is a Dollar Borrowing, and in the applicable Foreign
Currency, if such Borrowing is a Foreign Currency Borrowing, determined pursuant
to Section 9.01. Unless the Agent determines that any applicable condition
specified in Article III has not been satisfied, the Agent will make the funds
so received from the Banks available to the Borrower at the Agent's aforesaid
address. Unless the Agent receives notice from a Bank, at the Agent's address
referred to in or specified pursuant to Section 9.01, no later than 4:00 P.M.
(local time at such address) on the Domestic Business Day before the date of a
Syndicated Borrowing stating that such Bank will not make a Syndicated Loan in
connection with such Syndicated Borrowing, the Agent shall be entitled to assume
that such Bank will make a Syndicated Loan in connection with such Syndicated
Borrowing and, in reliance on such assumption, the Agent may (but shall not be
obligated to) make available such Bank's ratable share of such Syndicated
Borrowing to the Borrower for the account of such Bank. If the Agent makes such
Bank's ratable share available to the Borrower and such Bank does not in fact
make its ratable share of such Syndicated Borrowing available on such date, the
Agent shall be entitled to recover such Bank's ratable share from such Bank or
the Borrower (and for such purpose shall be entitled to charge such amount to
any account of the Borrower maintained with the Agent), together with interest
thereon for each day during the period from the date of such Syndicated
Borrowing until such sum shall be paid in full at a rate per annum equal to the
rate at which the Agent determines that it obtained (or could have obtained)
overnight Federal funds to cover such amount for
22
each such day during such period, provided that (i) any such payment by the
Borrower of such Bank's ratable share and interest thereon shall be without
prejudice to any rights that the Borrower may have against such Bank and (ii)
until such Bank has paid its ratable share of such Syndicated Borrowing,
together with interest pursuant to the foregoing, it will have no interest in or
rights with respect to such Syndicated Borrowing for any purpose hereunder. If
the Agent does not exercise its option to advance funds for the account of such
Bank, it shall forthwith notify the Borrower of such decision.
(d) If any Bank makes a new Syndicated Loan hereunder on a day on which
the Borrower is to repay all or any part of an outstanding Syndicated Loan from
such Bank, such Bank shall apply the proceeds of its new Syndicated Loan to make
such repayment as a Refunding Loan and only an amount equal to the difference
(if any) between the amount being borrowed and the amount of such Refunding Loan
shall be made available by such Bank to the Agent as provided in paragraph (c)
of this Section, or remitted by the Borrower to the Agent as provided in Section
2.12, as the case may be; provided, however, that if the Syndicated Loan which
is to be repaid is a Foreign Currency Loan, the foregoing provisions shall apply
only if the new Syndicated Loan is to be made in the same Foreign Currency.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Fixed Rate Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not have
been cured or waived, and all Refunding Loans shall be made as Base Rate Loans
(but shall bear interest at the Default Rate, if applicable).
(f) In the event that a Notice of Borrowing fails to specify whether
the Syndicated Loans comprising such Borrowing are to be Base Rate Loans,
Euro-Dollar Loans or Foreign Currency Loans, such Syndicated Loans shall be made
as Base Rate Loans. If the Borrower is otherwise entitled under this Agreement
to repay any Syndicated Loans maturing at the end of an Interest Period
applicable thereto with the proceeds of a new Syndicated Borrowing, and the
Borrower fails to repay such Syndicated Loans using its own moneys and fails to
give a Notice of Borrowing in connection with such new Borrowing, a new
Syndicated Borrowing shall be deemed to be made on the date such Syndicated
Loans mature in an amount equal to the principal amount of the Syndicated Loans
so maturing, and the Syndicated Loans comprising such new Syndicated Borrowing
shall be Base Rate Loans, which
23
shall be in the Dollar Equivalent of such maturing Loans, if such maturing Loans
were Foreign Currency Loans.
(g) Notwithstanding anything to the contrary contained herein, there
shall not be more than 8 Fixed Rate Borrowings outstanding at any given time.
SECTION 2.03. Money Market Loans. (a) In addition to making Syndicated
Borrowings, the Borrower may, as set forth in this Section 2.03, request the
Banks to make offers to make Money Market Borrowings available to the Borrower.
The Banks may, but shall have no obligation to, make such offers and the
Borrower may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section 2.03, provided that:
(i) the number of interest rates applicable to Money Market
Loans which may be outstanding at any given time is subject to the
provisions of Section 2.02(g);
(ii) the aggregate principal amount of all Money Market Loans,
together with the aggregate principal amount of all Syndicated Loans,
at any one time outstanding shall not exceed the aggregate amount of
the Commitments of all of the Banks at such time; and
(iii) the Money Market Loans of any Bank will be deemed to be
usage of the Commitments for the purpose of calculating availability
pursuant to Section 2.01(ii) and 2.03(a)(ii), but will not reduce such
Bank's obligation to lend its pro rata share of the remaining Unused
Commitment.
(b) When the Borrower wishes to request offers to make Money Market
Loans, it shall give the Agent (which shall promptly notify the Banks) notice
substantially in the form of Exhibit I hereto (a "Money Market Quote Request")
so as to be received no later than 10:00 A.M. (Atlanta, Georgia time) at least 1
Domestic Business Day prior to the date of the Money Market Borrowing proposed
therein (or such other time and date as the Borrower and the Agent, with the
consent of the Required Banks, may agree), specifying:
(i) the proposed date of such Money Market Borrowing, which
shall be a Euro-Dollar Business Day (the "Money Market Borrowing
Date");
24
(ii) the maturity date (or dates) (each a "Stated Maturity
Date") for repayment of each Money Market Loan to be made as part of
such Money Market Borrowing (which Stated Maturity Date shall be that
date occurring not less than 7 days but not more than 180 days from the
date of such Money Market Borrowing); provided that the Stated Maturity
Date for any Money Market Loan may not extend beyond the Termination
Date (as in effect on the date of such Money Market Quote Request); and
(iii) the aggregate amount of principal to be requested by the
Borrower as a result of such Money Market Borrowing, which shall be at
least $5,000,000 (and in larger integral multiples of $1,000,000) but
shall not cause the limits specified in Section 2.03(a) to be violated.
The Borrower may request offers to make Money Market Loans having up to
2 different Stated Maturity Dates in a single Money Market Quote
Request; provided that the request for each separate Stated Maturity
Date shall be deemed to be a separate Money Market Quote Request for a
separate Money Market Borrowing. Except as otherwise provided in the
immediately preceding sentence, after the first Money Market Quote
Request has been given hereunder, no Money Market Quote Request shall
be given until at least 5 Domestic Business Days after all prior Money
Market Quote Requests have been fully processed by the Agent, the Banks
and the Borrower pursuant to this Section 2.03.
(c) (i) Each Bank may, but shall have no obligation to, submit a
response containing an offer to make a Money Market Loan substantially in the
form of Exhibit J hereto (a "Money Market Quote") in response to any Money
Market Quote Request; provided that, if the Borrower's request under Section
2.03(b) specified more than 1 Stated Maturity Date, such Bank may, but shall
have no obligation to, make a single submission containing a separate offer for
each such Stated Maturity Date and each such separate offer shall be deemed to
be a separate Money Market Quote. Each Money Market Quote must be submitted to
the Agent not later than 10:00 A.M. (Atlanta, Georgia time) on the Money Market
Borrowing Date; provided that any Money Market Quote submitted by WBG may be
submitted, and may only be submitted, if WBG notifies the Borrower of the terms
of the offer contained therein not later than 9:45 A.M. (Atlanta, Georgia time)
on the Money Market Borrowing Date (or 15 minutes prior to the time that the
other
25
Banks are required to have submitted their respective Money Market Quotes).
Subject to Section 6.01, any Money Market Quote so made shall be irrevocable
except with the written consent of the Agent given on the instructions of the
Borrower.
(ii) Each Money Market Quote shall specify:
(A) the proposed Money Market Borrowing Date and the
Stated Maturity Date therefor;
(B) the principal amounts of the Money Market Loan which
the quoting Bank is willing to make for the applicable Money
Market Quote, which principal amounts (x) may be greater than
or less than the Commitment of the quoting Bank, (y) shall be
at least $5,000,000 or a larger integral multiple of
$1,000,000, and (z) may not exceed the principal amount of the
Money Market Borrowing for which offers were requested;
(C) the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/100th of 1%) offered for each such
Money Market Loan (such amounts being hereinafter referred to
as the "Money Market Rate"); and
(D) the identity of the quoting Bank.
Unless otherwise agreed by the Agent and the Borrower, no Money Market Quote
shall contain qualifying, conditional or similar language or propose terms other
than or in addition to those set forth in the applicable Money Market Quote
Request (other than setting forth the principal amounts of the Money Market Loan
which the quoting Bank is willing to make for the applicable Interest Period)
and, in particular, no Money Market Quote may be conditioned upon acceptance by
the Borrower of all (or some specified minimum) of the principal amount of the
Money Market Loan for which such Money Market Quote is being made.
(d) The Agent shall as promptly as practicable after the Money Market
Quote is submitted (but in any event not later than 10:30 A.M. (Atlanta, Georgia
time)) on the Money Market Borrowing Date, notify the Borrower of the terms (i)
of any Money Market Quote submitted by a Bank that is in accordance with Section
2.03(c) and (ii) of any Money Market Quote that amends, modifies or is otherwise
inconsistent with a previous Money Market Quote submitted by such Bank with
respect to the same
26
Money Market Quote Request. Any such subsequent Money Market Quote shall be
disregarded by the Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote. The
Agent's notice to the Borrower shall specify (A) the principal amounts of the
Money Market Borrowing for which offers have been received and (B) the
respective principal amounts and Money Market Rates so offered by each Bank
(identifying the Bank that made each Money Market Quote).
(e) Not later than 11:00 A.M. (Atlanta, Georgia time) on the Money
Market Borrowing Date, the Borrower shall notify the Agent of its acceptance or
nonacceptance of the offers so notified to it pursuant to Section 2.03(d) and
the Agent shall promptly notify each Bank which submitted an offer. In the case
of acceptance, such notice shall specify the aggregate principal amount of
offers (for each Stated Maturity Date) that are accepted. The Borrower may
accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the related
Money Market Quote Request;
(ii) the aggregate principal amount of each Money Market Loan
comprising a Money Market Borrowing shall be at least $5,000,000 (and
in larger integral multiples of $1,000,000) but shall not cause the
limits specified in Section 2.03(a) to be violated;
(iii) acceptance of offers may only be made in ascending order
of Money Market Rates; and
(iv) the Borrower may not accept any offer where the Agent has
advised the Borrower that such offer fails to comply with Section
2.03(c)(ii) or otherwise fails to comply with the requirements of this
Agreement (including without limitation, Section 2.03(a)).
If offers are made by 2 or more Banks with the same Money Market Rates for a
greater aggregate principal amount than the amount in respect of which offers
are accepted for the related Stated Maturity Date, the principal amount of Money
Market Loans in respect of which such offers are accepted shall be allocated by
the Borrower among such Banks as nearly as possible in proportion to the
aggregate principal amount of such offers. Determinations
27
by the Borrower of the amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
(f) Any Bank whose offer to make any Money Market Loan has been
accepted shall, not later than 12:00 P.M. (Atlanta, Georgia time) on the Money
Market Borrowing Date, make the amount of such Money Market Loan allocated to it
available to the Agent at its address referred to in Section 9.01 in immediately
available funds. The amount so received by the Agent shall, subject to the terms
and conditions of this Agreement, be made available to the Borrower on such date
by depositing the same, in immediately available funds, not later than 4:00 P.M.
(Atlanta, Georgia time), in an account of the Borrower maintained with WBG.
(g) After any Money Market Loan has been funded, the Agent shall notify
the Banks of the aggregate principal amount of the Money Market Quotes received
and the highest and lowest rates included in such Money Market Quotes.
SECTION 2.04. Notes. (a) The Syndicated Loans of each Bank shall be
evidenced by a single Syndicated Dollar Loan Note in an amount equal to the
original principal amount of such Bank's Commitment and a single Foreign
Currency Loan Note, each payable to the order of such Bank for the account of
its Lending Office.
(b) The Money Market Loans made by any Bank to the Borrower shall be
evidenced by a single Money Market Loan Note payable to the order of such Bank
for the account of its Lending Office in an amount equal to the original
principal amount of the aggregate Commitments.
(c) Upon receipt of each Bank's Notes pursuant to Section 3.01, the
Agent shall deliver such Notes to such Bank. Each Bank shall record, and prior
to any transfer of its Notes shall endorse on the schedules forming a part
thereof appropriate notations to evidence, the date, amount and maturity of, and
effective interest rate for, each Loan made by it, the date and amount of each
payment of principal made by the Borrower with respect thereto, whether such
Loan is a Base Rate Loan, Euro-Dollar Loan or Foreign Currency Loan, and if a
Foreign Currency Loan, a specification of the Foreign Currency, and such
schedules of each such Bank's Notes shall constitute rebuttable presumptive
evidence of the principal amounts owing and unpaid on such Bank's Notes;
provided that the failure of any Bank to make, or any error in making, any such
recordation or endorsement shall
28
not affect the obligation of the Borrower hereunder or under the Notes or the
ability of any Bank to assign its Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Notes and to attach to and make a
part of any Note a continuation of any such schedule as and when required.
SECTION 2.05. Maturity of Loans. (a) Each Loan included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
(b) Notwithstanding the foregoing, the outstanding principal amount of
the Loans, if any, together with all accrued but unpaid interest thereon, if
any, shall be due and payable on the Termination Date.
SECTION 2.06. Interest Rates. (a) "Applicable Margin" means:
(i) for the period commencing on the Closing Date to and
including the first Performance Pricing Determination Date, (x) for any
Base Rate Loan, 0.00%, and (y) for any Euro-Dollar Loan or Foreign
Currency Loan, 0.275%; and
(ii) from and after the first Performance Pricing
Determination Date, (x) for any Base Rate Loan, 0.00% and (y) for each
Euro-Dollar Loan, the percentage determined on each Performance Pricing
Determination Date by reference to the table set forth below as to such
type of Loan and the Debt/EBITDA Ratio for the quarterly or annual
period ending immediately prior to such Performance Pricing
Determination Date.
29
Debt/EBITDA Ratio Applicable
----------------- -----------------
Margin < 1.0 to 1.0 0.25%
> 1.0 to 1.0 but
<= 2.0 to 1.0 0.275%
> 2.0 to 1.0 but
<= 2.5 to 1.0 0.30%
> 2.5 to 1.0 but
<= 3.0 to 1.0 0.3625%
> 3.0 to 1.0 0.55%
In determining interest for purposes of this Section 2.06 and fees for
purposes of Section 2.07, the Borrower and the Banks shall refer to the
Borrower's most recent consolidated quarterly and annual (as the case may be)
financial statements delivered pursuant to Section 5.01(a) or (b), as the case
may be. If such financial statements require a change in interest pursuant to
this Section 2.06 or fees pursuant to Section 2.07, the Borrower shall deliver
to the Agent, along with such financial statements, a notice to that effect,
which notice shall set forth in reasonable detail the calculations supporting
the required change. The "Performance Pricing Determination Date" is the date
which is the last date on which such financial statements are permitted to be
delivered pursuant to Section 5.01(a) or (b), as applicable. Any such required
change in interest and fees shall become effective on such Performance Pricing
Determination Date, and shall be in effect until the next Performance Pricing
Determination Date, provided that: (x) for Fixed Rate Loans, changes in interest
shall only be effective for Interest Periods commencing on or after the
Performance Pricing Determination Date; and (y) no fees or interest shall be
decreased pursuant to this Section 2.06 or Section 2.07 if a Default is in
existence on the Performance Pricing Determination Date.
(b) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such day plus the
Applicable Margin. Such interest shall be payable for each Interest Period on
the last day thereof. Any overdue principal of and, to the extent
30
permitted by applicable law, overdue interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the Default Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin plus the applicable Adjusted
London Interbank Offered Rate for such Interest Period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than 3 months, at intervals of 3 months after the first day
thereof. Any overdue principal of and, to the extent permitted by law, overdue
interest on any Euro-Dollar Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upwards,
if necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Euro-Dollar Loan
means for the Interest Period of such Euro-Dollar Loan, the rate per annum
determined on the basis of the offered rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such Euro-Dollar Loan offered for
a term comparable to such Interest Period, which rates appear on the Telerate
Page 3750 effective as of 11:00 A.M., London time, 2 Euro-Dollar Business Days
prior to the first day of such Interest Period, provided that if no such offered
rates appear on such page, the "London Interbank Offered Rate" for such Interest
Period will be the arithmetic average (rounded upward, if necessary, to the next
higher 1/100th of 1%) of rates quoted by not less than 2 major banks in New York
City, selected by the Agent, at approximately 10:00 A.M., New York City time, 2
Euro-Dollar Business Days prior to the first day of such Interest Period, for
deposits in Dollars offered to leading European banks for a period comparable to
such Interest Period in an amount comparable to the principal amount of such
Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum
31
reserve requirement for a member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(d) Each Money Market Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Money Market Loan is
made until it becomes due, at a rate per annum equal to the applicable Money
Market Rate set forth in the relevant Money Market Quote. Such interest shall be
payable on the Stated Maturity Date thereof, and, if the Stated Maturity Date
occurs more than 90 days after the date of the relevant Money Market Loan, at
intervals of 90 days after the first day thereof. Any overdue principal of and,
to the extent permitted by law, overdue interest on any Money Market Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the Default Rate.
(e) Each Foreign Currency Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin plus the applicable Adjusted
IBOR Rate for such Interest Period. Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than 3 months, at intervals of 3 months after the first day thereof. Any overdue
principal of and, to the extent permitted by law, overdue interest on any
Foreign Currency Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the Default Rate.
"Adjusted IBOR Rate" means, with respect to each Interest Period for a
Foreign Currency Loan, the sum of (i) the rate obtained by dividing (A) IBOR for
such Interest Period by (B) a percentage equal to 1 minus the then stated
maximum rate (stated as a decimal) of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) applicable to any member bank of the Federal Reserve System as defined
in Regulation D (or against any successor category of liabilities as defined in
Regulation D), plus (ii) if the relevant Foreign Currency Loan is in British
32
pounds sterling, a percentage sufficient to compensate the Banks for the cost of
complying with any reserves, liquidity and/or special deposit requirements of
the Bank of England directly or indirectly affecting the maintenance or funding
of such Foreign Currency Loan.
"IBOR" means, for any Interest Period, with respect to Foreign Currency
Loans, the offered rate for deposits in the applicable Foreign Currency, for a
period comparable to the Interest Period and in an amount comparable to the
amount of such Foreign Currency Loan appearing on Telerate Page 3750, or, if it
is unavailable on Telerate, on the Reuters Screen Page FRBD, FRBE, FRBF or FRBG,
as applicable, or, if it is unavailable on either Telerate or the Reuters
Screen, then such rate shall be determined by the Agent from any other interest
rate reporting service of recognized standing designated in writing by the Agent
to the Borrower, as of 11:00 A.M. (London, England time) on the day that is two
Business Days prior to the first day of the Interest Period.
(f) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
Banks by telecopier of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) After the occurrence and during the continuance of an Event of
Default, the principal amount of the Loans (and, to the extent permitted by
applicable law, all accrued interest thereon) may, at the election of the
Required Banks, bear interest at the Default Rate.
SECTION 2.07. Fees. (a) The Borrower shall pay to the Agent, for the
ratable account of each Bank, a facility fee, calculated in the manner provided
in the last paragraph of Section 2.06(a)(ii), on the aggregate amount of such
Bank's Commitment (without taking into account the amount of the outstanding
Loans made by such Bank), at a rate per annum equal to: (i) for the period
commencing on the Closing Date to and including the first Performance Pricing
Determination Date, 0.125%; and (ii) from and after the first Performance
Pricing Determination Date, the percentage determined on each Performance
Pricing Determination Date by reference to the table set forth below and the
Debt/EBITDA Ratio for the quarterly or annual period ending immediately prior to
such Performance Pricing Determination Date:
33
Debt/EBITDA Ratio Facility Fee
< 1.0 to 1.0 0.10%
> 1.0 to 1.0 but
<= 2.0 to 1.0 0.125%
> 2.0 to 1.0 but
<= 2.5 to 1.0 0.15%
> 2.5 to 1.0 but
<= 3.0 to 1.0 0.1875%
> 3.0 to 1.0 0.25%
Such facility fees shall accrue from and including the Closing Date to (but
excluding the Termination Date) and shall be payable on each March 31, June 30,
September 30 and December 31 and on the Termination Date.
(c) The Borrower shall pay to the Agent, for the account and sole
benefit of the Agent, such fees and other amounts at such times as set forth in
the Agent's Letter Agreement.
SECTION 2.08. Optional Termination or Reduction of Commitments. The
Borrower may, upon at least 3 Domestic Business Days' notice to the Agent,
terminate at any time, or proportionately reduce the Unused Commitments from
time to time by an aggregate amount of at least $5,000,000 or any larger
integral multiple of $1,000,000. If the Commitments are terminated in their
entirety, all accrued fees (as provided under Section 2.07) shall be due and
payable on the effective date of such termination.
SECTION 2.09. Mandatory Reduction and Termination of Commitments. (a)
The Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
(b) The aggregate amount of the Commitments shall be reduced by
$5,000,000 on each Commitment Reduction Date. Each such reduction shall be
applied to reduce the Commitments of the several Banks ratably. No optional
reduction of the Commitments
34
pursuant to Section 2.08 shall reduce the amount of any subsequent mandatory
reduction pursuant to this Section 2.09(b).
SECTION 2.10. Optional Prepayments. (a) The Borrower may, upon at least
1 Domestic Business Day's notice to the Agent, prepay any Base Rate Borrowing in
whole at any time, or from time to time in part in amounts aggregating at least
$1,000,000 or any larger integral multiple of $500,000, by paying the principal
amount to be prepaid together with accrued interest thereon to the date of
prepayment. Each such optional prepayment shall be applied to prepay ratably the
Base Rate Loans of the several Banks included in such Base Rate Borrowing.
(b) Except as provided in Section 8.02, the Borrower may not prepay all
or any portion of the principal amount of any Fixed Rate Loan prior to the
maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section
2.10, the Agent shall promptly notify each Bank of the contents thereof and of
such Bank's ratable share of such prepayment and such notice, once received by
the Agent, shall not thereafter be revocable by the Borrower.
SECTION 2.11. Mandatory Prepayments. (a) On each date on which the
Commitments are reduced pursuant to Section 2.08 or Section 2.09, the Borrower
shall repay or prepay such principal amount of the outstanding Loans, if any
(together with interest accrued thereon and any amount due under Section
8.05(a)), as may be necessary so that after such payment the aggregate unpaid
principal amount of the Loans does not exceed the aggregate amount of the
Commitments as then reduced.
(b) If the Agent determines at any time (either on its own initiative
or at the instance of any Bank) that the aggregate principal amount of the
Foreign Currency Loans outstanding (after converting each Foreign Currency Loan
to its Dollar Equivalent on the date of calculation) at any time exceeds 105% of
the aggregate amount of all of the Commitments less the outstanding aggregate
amount of all Syndicated Dollar Loans, then upon 5 Foreign Currency Business
Days' written notice from the Agent, the Borrower shall prepay an aggregate
principal amount of Foreign Currency Loans sufficient to bring the aggregate of
the Foreign Currency Loans outstanding within the aggregate amount of all of the
Commitments less the outstanding aggregate amount of all Syndicated Dollar
Loans. Nothing in the foregoing shall
35
require the Agent to make any such calculation unless expressly requested to do
so by the Required Banks.
(c) Each such payment or prepayment under paragraph (a) or (b) above
shall be applied ratably to the Loans of the Banks outstanding on the date of
payment or prepayment in the following order of priority:(i) first, to Base Rate
Loans; (ii) secondly, to Euro-Dollar Loans; and (iii) lastly, to Money Market
Loans.
SECTION 2.12. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 11:00 A.M. (Atlanta, Georgia time) on the date when
due, in Federal or other funds (subject to paragraph (c) below with respect to
Foreign Currency Loans) immediately available in Atlanta, Georgia, to the Agent
at its address referred to in Section 9.01. The Agent will promptly distribute
to each Bank its ratable share of each such payment received by the Agent for
the account of the Banks.
(b) Whenever any payment of principal of, or interest on, the Base Rate
Loans or Money Market Loans or of fees hereunder shall be due on a day which is
not a Domestic Business Day, the date for payment thereof shall be extended to
the next succeeding Domestic Business Day. Whenever any payment of principal of
or interest on, the Euro-Dollar Loans or the Foreign Currency Loans shall be due
on a day which is not a Euro-Dollar Business Day or Foreign Currency Business
Day, as the case may be, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day or Foreign Currency Business Day, as
the case may be, unless such Euro-Dollar Business Day or Foreign Currency
Business Day, as the case may be, falls in another calendar month, in which case
the date for payment thereof shall be the next preceding Euro-Dollar Business
Day or Foreign Currency Business Day, as the case may be.
(c) All payments of principal and interest with respect to Foreign
Currency Loans shall be made in the Foreign Currency in which the related
Foreign Currency Loan was made.
(d) All payments of principal, interest and fees and all other amounts
to be made by a Borrower pursuant to this Agreement with respect to any Loan or
fee relating thereto shall be paid without deduction for, and free from, any
tax, imposts, levies, duties, deductions, or withholdings of any nature now or
at anytime hereafter imposed by any governmental authority or by
36
any taxing authority thereof or therein excluding in the case of each Bank,
taxes imposed on or measured by its net income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Bank is organized or any
political subdivision thereof and, in the case of each Bank, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction of such
Bank's applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, imposts, levies, duties, deductions or withholdings of any
nature being "Taxes"). In the event that the Borrower is required by applicable
law to make any such withholding or deduction of Taxes with respect to any Loan
or fee or other amount, the Borrower shall pay such deduction or withholding to
the applicable taxing authority, shall promptly furnish to any Bank in respect
of which such deduction or withholding is made all receipts and other documents
evidencing such payment and shall pay to such Bank additional amounts as may be
necessary in order that the amount received by such Bank after the required
withholding or other payment shall equal the amount such Bank would have
received had no such withholding or other payment been made. If no withholding
or deduction of Taxes are payable in respect to any Loan or fee relating
thereto, the Borrower shall furnish any Bank, at such Bank's request, a
certificate from each applicable taxing authority or an opinion of counsel
acceptable to such Bank, in either case stating that such payments are exempt
from or not subject to withholding or deduction of Taxes. If the Borrower fails
to provide such original or certified copy of a receipt evidencing payment of
Taxes or certificate(s) or opinion of counsel of exemption, the Borrower agrees
to compensate such Bank for, and indemnify them with respect to, the tax
consequences of the Borrower's failure to provide evidence of tax payments or
tax exemption.
Each Bank which is not organized under the laws of the United States or
any state thereof agrees, as soon as practicable after receipt by it of a
request by the Borrower to do so, to file all appropriate forms and take other
appropriate action to obtain a certificate or other appropriate document from
the appropriate governmental authority in the jurisdiction imposing the relevant
Taxes, establishing that it is entitled to receive payments of principal and
interest under this Agreement and the Notes without deduction and free from
withholding of any Taxes imposed by such jurisdiction; provided, that, if it is
unable, for any reason, to establish such exemption, or to file such forms and,
in any event, during such period of time as such request for exemption is
pending, the Borrower shall nonetheless
37
remain obligated under the terms of the immediately preceding paragraph.
In the event any Bank receives a refund of any Taxes paid by the
Borrower pursuant to this Section 2.12(d), it will pay to the Borrower the
amount of such refund promptly upon receipt thereof; provided, however, if at
any time thereafter it is required to return such refund, the Borrower shall
promptly repay to it the amount of such refund.
If any Bank determines that it is entitled to a reduction in (and not a
complete exemption from) the applicable withholding Tax, such Bank shall notify
the Borrower and the Agent, and the Borrower and the Agent may withhold from any
interest payment to such Bank an amount equivalent to the applicable reduction
in withholding Tax. If any of the forms or other documentation required above
are not delivered to the Agent as therein required, then the Borrower and the
Agent may withhold from any interest payment to such Bank not providing such
forms or other documentation an amount equivalent to the applicable withholding
Tax.
Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower and the Banks
contained in this Section 2.12(d) shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations required by such
provisions (i) shall be made based upon the circumstances of such Participant,
Assignee or other Transferee, and (ii) constitute a continuing agreement and
shall survive the termination of this Agreement and the payment in full or
cancellation of the Notes.
Any of the Agent or any Bank claiming any additional amounts payable
pursuant to this Section 2.12(d) shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document
reasonably requested by the Borrower or to change the jurisdiction of its
applicable Lending Office if the making of such filing or change would avoid the
need for or reduce the amount of any such additional amounts that may thereafter
accrue or avoid the circumstances giving rise to such exercise and would not, in
the reasonable determination of the Agent or such Bank, as the case may be,
result in any additional costs, expenses or risks or be otherwise
disadvantageous to it. Each of the Agent and each Bank agrees to use reasonable
efforts to notify the Borrower as
38
promptly as practicable upon its becoming aware that circumstances exist that
would cause the Borrower to become obligated to pay additional amounts to the
Agent or such Bank pursuant to this Section 2.12(d).
SECTION 2.13. Computation of Interest and Fees. Interest on Base Rate
Loans and Money Market Loans shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed (including the first day but
excluding the last day). Interest on Euro-Dollar Loans and on Foreign Currency
Loans shall be computed on the basis of a year of 360 days (except for any
Foreign Currency Loans outstanding in British pounds sterling or in Canadian
dollars (or, if selected as a Foreign Currency pursuant to clause (ii) of the
definition of "Foreign Currency," in Australian dollars, Belgian francs, Irish
punts or New Zealand dollars), which shall be computed on the basis o f a year
of 365 or 366 days, as the case may be) and paid for the actual number of days
elapsed, calculated as to each Interest Period from and including the first day
thereof to but excluding the last day thereof. Facility fees and any other fees
payable hereunder shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding the
last day).
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing. The obligation of each
Bank to make a Loan on the occasion of the first Borrowing is subject to the
satisfaction of the conditions set forth in Section 3.02 and receipt by the
Agent of the following (as to the documents described in paragraphs (a),(c), (d)
and (e) below (in sufficient number of counterparts for delivery of a
counterpart to each Bank and retention of one counterpart by the Agent):
(a) from each of the parties hereto of either (i) a duly
executed counterpart of this Agreement signed by such party or (ii) a
facsimile transmission of such executed counterpart with the original
to be sent to the Agent by overnight courier;
(b) a duly executed Syndicated Dollar Loan Note, a duly
executed
39
Foreign Currency Loan Note and a duly executed Money Market Loan Note
for the account of each Bank complying with the provisions of Section
2.04;
(c) an opinion (together with any opinions of local counsel
relied on therein) of Robinson, Bradshaw & Hinson, counsel for the
Borrower, dated as of the Closing Date, substantially in the form of
Exhibit B and covering such additional matters relating to the
transactions contemplated hereby as the Agent or any Bank may
reasonably request;
(d) an opinion of Jones, Day, Reavis & Pogue, special counsel
for the Agent, dated as of the Closing Date, substantially in the form
of Exhibit C and covering such additional matters relating to the
transactions contemplated hereby as the Agent may reasonably request;
(e) a certificate (the "Closing Certificate") substantially in
the form of Exhibit G, dated as of the Closing Date, signed by a
principal financial officer of the Borrower, to the effect that (i) no
Default has occurred and is continuing on the date of the first
Borrowing and (ii) the representations and warranties of the Borrower
contained in Article IV are true on and as of the date of the first
Borrowing hereunder;
(f) A certificate of the Borrower, signed by the Secretary or
an Assistant Secretary of the Borrower substantially in the form of
Exhibit H (the "Officer's Certificate"), certifying as to the names,
true signatures and incumbency of the officer or officers of the
Borrower authorized to execute and deliver the Loan Documents, and
certified copies of the following items: (i) the Borrower's Certificate
of Incorporation, (ii) the Borrower's Bylaws, (iii) a certificate of
the Secretary of State of the State of North Carolina as to the
existence of the Borrower as a North Carolina corporation, and (iv) the
action taken by the Board of Directors of the Borrower authorizing the
Borrower's execution, delivery and performance of this Agreement, the
Notes and the other Loan Documents to which the Borrower is a party;
(g) receipt of the fees and other amounts payable to the Agent
on the Closing Date pursuant to the Agent's Letter Agreement.
40
In addition, if the Borrower desires funding of a Fixed Rate Loan on the Closing
Date, the Agent shall have received, by Friday, April 18, 1997, a funding
indemnification letter satisfactory to it, pursuant to which (i) the Agent and
the Borrower shall have agreed upon the interest rate, amount of Borrowing and
Interest Period for such Fixed Rate Loan, and (ii) the Borrower shall indemnify
the Banks from any loss or expense arising from the failure to close on the
anticipated Closing Date identified in such letter or the failure to borrow such
Fixed Rate Loan on such date.
SECTION 3.02. Conditions to All Borrowings. The obligation of each Bank
to make a Syndicated Loan on the occasion of each Borrowing is subject to the
satisfaction of the following conditions except as expressly provided in the
last sentence of this Section 3.02:
(a) receipt by the Agent of a Notice of Borrowing or
notification pursuant to Section 2.03(e) of acceptance of one or more
Money Market Quotes, as applicable.
(b) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the
Borrower contained in Article IV of this Agreement shall be true on and
as of the date of such Borrowing (except for representations and
warranties which are made only as of a stated prior date); and
(d) the fact that, immediately after such Borrowing, the
conditions set forth in clauses (i) and (ii) of Section 2.01 shall have
been satisfied.
Each Syndicated Borrowing and each Money Market Borrowing hereunder shall be
deemed to be a representation and warranty by the Borrower on the date of such
Borrowing as to the truth and accuracy of the facts specified in paragraphs (b),
(c) and (d) of this Section; provided that (i) if such Borrowing is a Syndicated
Borrowing which consists solely of a Refunding Loan, such Borrowing shall not be
deemed to be such a representation and warranty and (ii) as to the
representations contained in clause (iv) of Section 4.02, the Borrower shall be
deemed to represent and warrant only that such representations are true and
correct in all material respects.
41
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such qualification
is necessary, except for any jurisdictions in which the failure to become
qualified does not have and would not reasonably be expected to cause a Material
Adverse Effect, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, except where the failure to have such licenses, authorizations,
consents and approvals does not have and would not reasonably be expected to
cause a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement, the Notes and the other Loan Documents (i) are within the Borrower's
corporate powers, (ii) have been duly authorized by all necessary corporate
action on the part of the Borrower, (iii) require no action by or in respect of
or filing with, any governmental body, agency or official, (iv) do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or any of its Subsidiaries, and (v) do not result in
the creation or imposition of any Lien on any asset of the Borrower or any of
its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower enforceable in accordance with its terms, and
the Notes and the other Loan Documents, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
the Borrower enforceable in accordance with their respective terms, provided
that the enforceability hereof and thereof is subject in each case to general
principles of equity
42
and to bankruptcy, insolvency and similar laws affecting the enforcement of
creditors' rights generally.
SECTION 4.04. Financial Information. (a) The consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of April 28, 1996 and the
related consolidated statements of income, shareholders' equity and cash flows
for the Fiscal Year then ended, reported on by KPMG Peat Marwick LLP, copies of
which have been delivered to the Agent, and the unaudited consolidated financial
statements of the Borrower for the interim period ended January 26, 1997, copies
of which have been delivered to the Agent, fairly present, in conformity with
GAAP, the consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such dates and their consolidated results of operations and
cash flows for such periods stated.
(b) Since April 28, 1996 there has been no event, act, condition or
occurrence having a Material Adverse Effect.
SECTION 4.05. No Litigation. There is no action, suit or proceeding
pending, or to the knowledge of the Borrower threatened, against or affecting
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could have or reasonably be expected
to cause a Material Adverse Effect or which in any manner draws into question
the validity of or could impair the ability of the Borrower to perform its
obligations under, this Agreement, the Notes or any of the other Loan Documents.
SECTION 4.06. Compliance with ERISA. (a) The Borrower and each member
of the Controlled Group have fulfilled their obligations under the minimum
funding standards of ERISA and the Code with respect to each Plan and are in
compliance in all material respects with the presently applicable provisions of
ERISA and the Code, and have not incurred any liability to the PBGC or a Plan
under Title IV of ERISA.
(b) Neither the Borrower nor any member of the Controlled Group is or
ever has been obligated to contribute to any Multiemployer Plan.
SECTION 4.07. Compliance with Laws; Payment of Taxes. The Borrower and
its Subsidiaries are in compliance with all applicable laws, regulations and
similar requirements of governmental authorities, except where such compliance
is being contested in good faith through appropriate proceedings and
43
except for any noncompliance that does not have and would not reasonably be
expected to cause a Material Adverse Effect. There have been filed on behalf of
the Borrower and its Subsidiaries all Federal, state and local income, excise,
property and other tax returns which are required to be filed by them and all
taxes due pursuant to such returns or pursuant to any assessment received by or
on behalf of the Borrower or any Subsidiary have been paid, except where for
taxes which are being contested in good faith through appropriate proceedings
and except for any failure to file which does not have and would not reasonably
be expected to cause a Material Adverse Effect. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of taxes
or other governmental charges are, in the opinion of the Borrower, adequate.
United States income tax returns of the Borrower and its Subsidiaries have been
examined and closed through the Fiscal Year ended May 2, 1993.
SECTION 4.08. Subsidiaries. Each of the Borrower's Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, is duly qualified to transact business in
every jurisdiction where, by the nature of its business, such qualification is
necessary, except for any jurisdictions in which the failure to become qualified
does not have and would not reasonably be expected to cause a Material Adverse
Effect, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted. The Borrower has no Subsidiaries except for those Subsidiaries listed
on Schedule 4.08 (and any new Subsidiaries created or acquired after the Closing
Date as to which the Agent has been notified in writing) which accurately sets
forth each such Subsidiary's complete name and jurisdiction of incorporation.
SECTION 4.09. Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.4
SECTION 4.10. Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
44
SECTION 4.11. Ownership of Property; Liens. Each of the Borrower and
its Consolidated Subsidiaries has title to its properties sufficient for the
conduct of its business, and none of such property is subject to any Lien except
as permitted in Section 5.17.
SECTION 4.12. No Default. Neither the Borrower nor any of its
Consolidated Subsidiaries is in default under or with respect to any agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound which has or would reasonably be expected to cause a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
SECTION 4.13. Full Disclosure. All factual information heretofore
furnished in writing by the Borrower to the Agent or any Bank for purposes of or
in connection with this Agreement or any transaction contemplated hereby is, and
all such factual information hereafter furnished in writing by the Borrower to
the Agent or any Bank will be, true, accurate and complete in every material
respect or based on reasonable estimates on the date as of which such
information is stated or certified. The Borrower has disclosed to the Banks in
writing any and all facts which have or would reasonably be expected to cause a
Material Adverse Effect.
SECTION 4.14. Environmental Matters. (a) Neither the Borrower nor any
Subsidiary is subject to any Environmental Liability which has or would
reasonably be expected to cause a Material Adverse Effect and neither the
Borrower nor any Subsidiary has been notified that it has been designated as a
potentially responsible party under CERCLA or under any state statute similar to
CERCLA. None of the Properties has been identified on any current or proposed
National Priorities List under 40 C.F.R. ss. 300. There has been no
identification of any of the Properties on any CERCLIS list or any list arising
from a state statute similar to CERCLA which has or would reasonably be expected
to cause a Material Adverse Effect.
(b) No Hazardous Materials have been or are being used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed of,
managed or otherwise handled at, or shipped or transported to or from the
Properties or are otherwise present at, on, in or under the Properties, or, to
the best of the knowledge of the Borrower, at or from any adjacent
45
site or facility that has or would reasonably be expected to cause a Material
Adverse Effect.
(c) The Borrower, and each of its Subsidiaries and Affiliates, has
procured all Environmental Authorizations necessary for the conduct of its
business, and is in compliance with all Environmental Requirements in connection
with the operation of the Properties and the Borrower's, and each of its
Subsidiary's and Affiliate's, respective businesses, except for any
non-procurement or noncompliance that does not have and would not reasonably be
expected to cause a Material Adverse Effect.
SECTION 4.15. Capital Stock. All Capital Stock, debentures, bonds,
notes and all other securities of the Borrower and its Subsidiaries presently
issued and outstanding are validly and properly issued in accordance with all
applicable laws, including but not limited to, the "Blue Sky" laws of all
applicable states and the federal securities laws. The issued shares of Capital
Stock of the Borrower's Wholly Owned Subsidiaries are owned by the Borrower free
and clear of any Lien or adverse claim. At least a majority of the issued shares
of capital stock of each of the Borrower's other Subsidiaries (other than Wholly
Owned Subsidiaries) is owned by the Borrower free and clear of any Lien or
adverse claim.
SECTION 4.16. Margin Stock. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Loan will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock, or be used for any purpose which violates, or which is inconsistent with,
the provisions of Regulation G, T, U or X.
SECTION 4.17. Insolvency. After giving effect to the execution and
delivery of the Loan Documents and the making of the Loans under this Agreement:
(i) the Borrower will not (x) be "insolvent," within the meaning of such term as
used in O.C.G.A. ss. 18-2-22 or as defined in ss. 101 of the "Bankruptcy Code",
or Section 2 of either the "UFTA" or the "UFCA", or as defined or used in any
"Other Applicable Law" (as those terms are defined below), or (y) be unable to
pay its debts generally as such debts become due within the meaning of Section
548 of the Bankruptcy Code, Section 4 of the UFTA or Section 6 of the UFCA, or
(z) have an unreasonably small capital to engage in any business or transaction,
whether current or contemplated, within the meaning
46
of Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section 5 of the
UFCA; and (ii) the obligations of the Borrower under the Loan Documents and with
respect to the Loans will not be rendered avoidable under any Other Applicable
Law. For purposes of this Section 4.17, "Bankruptcy Code" means Title 11 of the
United States Code, "UFTA" means the Uniform Fraudulent Transfer Act, "UFCA"
means the Uniform Fraudulent Conveyance Act, and "Other Applicable Law" means
any other applicable state law pertaining to fraudulent transfers or acts
voidable by creditors, in each case as such law may be amended from time to
time.
SECTION 4.18. Insurance. The Borrower and each of its Subsidiaries has
(either in the name of the Borrower or in such Subsidiary's own name), with
financially sound and reputable insurance companies, insurance in at least such
amounts and against at least such risks (including on all its property, and
public liability and worker's compensation) as are usually insured against in
the same general area by companies of established repute engaged in the same or
similar business.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable hereunder or under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a consolidated (and consolidating, if
requested by the Agent) balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the
related consolidated (and consolidating, if requested by the Agent)
statements of income, shareholders' equity and cash flows for such
Fiscal Year, setting forth in each case in comparative form the figures
for the previous fiscal year, all certified by KPMG Peat Marwick LLP or
other independent public accountants of nationally recognized standing,
with such certification to be free of exceptions and qualifications not
acceptable to the Required Banks;
47
(b) as soon as available and in any event within 45 days after
the end of each of the first 3 Fiscal Quarters of each Fiscal Year, a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries (broken down by business unit, if requested by the Agent)
as of the end of such Fiscal Quarter and the related consolidated
statement of income and statement of cash flows (broken down by
business unit, if requested by the Agent) for such Fiscal Quarter and
for the portion of the Fiscal Year ended at the end of such Fiscal
Quarter, setting forth in each case in comparative form the figures for
the corresponding Fiscal Quarter and the corresponding portion of the
previous Fiscal Year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, GAAP and consistency by
the chief financial officer or the chief accounting officer of the
Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b) above, a certificate,
substantially in the form of Exhibit F (a "Compliance Certificate"), of
the chief financial officer or the chief accounting officer of the
Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.05, 5.15, 5.16, 5.17, 5.19, 5.20 and 5.21 on
the date of such financial statements and (ii) stating whether any
Default exists on the date of such certificate and, if any Default then
exists, setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of annual
financial statements referred to in paragraph (a) above, a statement of
the firm of independent public accountants which reported on such
statements to the effect that nothing has come to their attention to
cause them to believe that any Default existed under Sections 5.05,
5.15, 5.16, 5.19, 5.20 and 5.21 on the date of such financial
statements;
(e) within 5 Domestic Business Days after the Borrower becomes
aware of the occurrence of any Default or event which has or would
reasonably be expected to cause a Material Adverse Effect, a
certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth the details thereof and the
action
48
which the Borrower is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent or any filings
under Section 16 of the Securities and Exchange Act) and annual,
quarterly or monthly reports which the Borrower shall have filed with
the Securities and Exchange Commission;
(h) if and when any member of the Controlled Group (i) gives
or is required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability
under Title IV of ERISA, a copy of such notice; or (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate
or appoint a trustee to administer any Plan, a copy of such notice; and
(i) from time to time such additional information regarding
the financial position or business of the Borrower and its Subsidiaries
as the Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Inspection of Property, Books and Records. The Borrower
will (i) keep, and cause each Subsidiary to keep, proper books of record and
account in which full, true and correct entries in conformity with GAAP shall be
made of all dealings and transactions in relation to its business and
activities; and (ii) subject to the next succeeding sentence, permit, and cause
each Subsidiary to permit, representatives of any Bank at such Bank's expense
prior to the occurrence of a Default and at the Borrower's expense after the
occurrence of a Default to visit and inspect any of their respective properties,
to examine and make abstracts from any of their respective books
49
and records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants. The
Borrower agrees to cooperate and assist in such visits and inspections, in each
case at such reasonable times and on reasonable notice and as often as may
reasonably be desired.
SECTION 5.03. Maintenance of Existence. The Borrower shall, and shall
cause each Subsidiary to, maintain its corporate existence and carry on its
business in substantially the same manner and in substantially the same fields
as such business is now carried on and maintained.
SECTION 5.04. Dissolution. Neither the Borrower nor any of its
Subsidiaries shall suffer or permit dissolution or liquidation either in whole
or in part or redeem or retire any shares of its own stock or that of any
Subsidiary, except through corporate reorganization to the extent permitted by
Section 5.05, and except that Guilford Printers, Inc. a non-material Subsidiary,
may be dissolved at the option of the Borrower.
SECTION 5.05. Consolidations, Mergers and Sales of Assets. The Borrower
will not, nor will it permit any Subsidiary to, consolidate or merge with or
into, or sell, lease or otherwise transfer all or any substantial part of its
assets to, any other Person, or discontinue or eliminate any business line or
segment, provided that: (a) the Borrower may merge with another Person if (i)
such Person was organized under the laws of the United States of America or one
of its states (ii) the Borrower is the corporation surviving such merger and
(iii) immediately after giving effect to such merger, no Default shall have
occurred and be continuing; (b) Subsidiaries of the Borrower may merge with one
another; and (c) the foregoing limitation on the sale, lease or other transfer
of assets and on the discontinuation or elimination of a business line or
segment shall not prohibit (i) the consummation of the Chattanooga
Sale/Leaseback Transaction, or (ii) in addition to the Chattanooga
Sale/Leaseback Transaction, during any Fiscal Quarter, a transfer of assets or
the discontinuance or elimination of a business line or segment (in a single
transaction or in a series of related transactions) unless the aggregate assets
to be so transferred or utilized in a business line or segment to be so
discontinued, when combined with all other assets transferred, and all other
assets utilized in all other business lines or segments discontinued (other than
the Chattanooga Sale/Leaseback Transaction), during such Fiscal
50
Quarter and the immediately preceding 3 Fiscal Quarters, contributed more than
10% of EBITDA during the 4 Fiscal Quarters immediately preceding such Fiscal
Quarter.
SECTION 5.06. Use of Proceeds. The proceeds of the Loans may be used
for general corporate purposes and payment of Debt in existence on the Closing
Date. No portion of the proceeds of the Loans will be used by the Borrower or
any Subsidiary (i) in connection with, whether directly or indirectly, any
tender offer for, or other acquisition of, stock of any corporation with a view
towards obtaining control of such other corporation, unless such tender offer or
other acquisition is to be made on a negotiated basis with the approval of the
Board of Directors of the Person to be acquired, and the provisions of Section
5.16 would not be violated, (ii) directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any Margin
Stock, or (iii) for any purpose in violation of any applicable law or
regulation.
SECTION 5.07. Compliance with Laws; Payment of Taxes. The Borrower
will, and will cause each of its Subsidiaries and each member of the Controlled
Group to, comply with applicable laws (including but not limited to ERISA),
regulations and similar requirements of governmental authorities (including but
not limited to PBGC), except where the necessity of such compliance is being
contested in good faith through appropriate proceedings diligently pursued and
except for any noncompliance that does not have and would not reasonably be
expected to cause a Material Adverse Effect. The Borrower will, and will cause
each of its Subsidiaries to, pay promptly when due all taxes, assessments,
governmental charges, claims for labor, supplies, rent and other obligations
which, if unpaid, might become a lien against the property of the Borrower or
any Subsidiary, except liabilities being contested in good faith and against
which, if requested by the Agent, the Borrower will set up reserves in
accordance with GAAP and except for any noncompliance that does not have and
would not reasonably be expected to cause a Material Adverse Effect.
SECTION 5.08. Insurance. The Borrower will maintain, and will cause
each of its Subsidiaries to maintain (either in the name of the Borrower or in
such Subsidiary's own name), with financially sound and reputable insurance
companies, insurance on all its property in at least such amounts and against at
least such risks (including on all its property, and public liability and
worker's compensation) as are usually insured against in the
51
same general area by companies of established repute engaged in the same or
similar business.
SECTION 5.09. Change in Fiscal Year. The Borrower will not change its
Fiscal Year without the consent of the Required Banks.
SECTION 5.10. Maintenance of Property. The Borrower shall, and shall
cause each Subsidiary to, maintain all of its properties and assets in
reasonably good condition, repair and working order, ordinary wear and tear
excepted.
SECTION 5.11. Environmental Notices. The Borrower shall furnish to the
Banks and the Agent prompt written notice of all Environmental Liabilities,
pending, threatened or anticipated Environmental Proceedings, Environmental
Notices, Environmental Judgments and Orders, and Environmental Releases at, on,
in, under or in any way affecting the Properties, and all facts, events, or
conditions that could lead to any of the foregoing, except for any such matters
that does not have and would not reasonably be expected to cause a Material
Adverse Effect.
SECTION 5.12. Environmental Matters. The Borrower and its Subsidiaries
will not, and will use reasonable efforts to cause any Third Party to not, use,
produce, manufacture, process, treat, recycle, generate, store, dispose of,
manage at, or otherwise handle, or ship or transport to or from the Properties
any Hazardous Materials except for any such matters that does not have and would
not reasonably be expected to cause a Material Adverse Effect.
SECTION 5.13. Environmental Release. The Borrower agrees that upon the
occurrence of an Environmental Release at or on any of the Properties that does
not have and would not reasonably be expected to cause a Material Adverse
Effect, it will investigate the extent of, and take appropriate remedial action
to eliminate, such Environmental Release.
SECTION 5.14. Transactions with Affiliates. Neither the Borrower nor
any of its Subsidiaries shall enter into, or be a party to, any transaction with
any Affiliate of the Borrower or such Subsidiary (which Affiliate is not the
Borrower or a Wholly Owned Subsidiary), except as permitted by law and pursuant
to reasonable terms which are fully disclosed to the Agent and the Banks, and
are no less favorable to Borrower or such Subsidiary
52
than would be obtained in a comparable arm's length transaction with a Person
which is not an Affiliate.
SECTION 5.15. Loans or Advances. Neither the Borrower nor any of its
Subsidiaries shall make loans or advances to any Person except as permitted by
Section 5.16 and except: (i) loans and advances made prior to the Closing Date
and listed on Schedule 5.15, (ii) loans or advances to employees not exceeding
$5,000,000 in the aggregate principal amount outstanding at any time, in each
case made in the ordinary course of business and consistent with practices
existing on January 26, 1997; (iii) deposits required by government agencies or
public utilities; (iv) loans and advances made after the Closing Date to
Rayonese Textile Inc. in an amount which, together with Investments in Rayonese
Textile Inc. made after the Closing Date and permitted by clause (vii) of
Section 5.16, does not exceed $25,000,000; and (v) other loans and advances in
an amount which, together with Investments permitted by clause (viii) of Section
5.16, does not exceed 10% of Stockholders' Equity; provided that after giving
effect to the making of any loans, advances or deposits permitted by this
Section, and no Default shall be in existence or be created thereby.
SECTION 5.16. Investments. Neither the Borrower nor any of its
Subsidiaries shall make Investments in any Person except as permitted by Section
5.15 and Investments in existence on the Closing Date and listed on Schedule
5.16 and except Investments in (i) direct obligations of the United States
Government maturing within one year, (ii) certificates of deposit issued by a
commercial bank whose credit is satisfactory to the Agent, (iii) commercial
paper rated A1 or the equivalent thereof by S&P or P1 or the equivalent thereof
by Moody's and in either case maturing within 6 months after the date of
acquisition, (iv) tender bonds the payment of the principal of and interest on
which is fully supported by a letter of credit issued by a United States bank
whose long-term certificates of deposit are rated at least AA or the equivalent
thereof by S&P and Aa or the equivalent thereof by Moody's, (v) Investments
pursuant to its deferred compensation plan, funded with life insurance through a
Rabbi Trust; (vi) investments in Joint Ventures in an aggregate amount not
exceeding $25,000,000; (vii) Investments made after the Closing Date 3096726
Canada Inc. and/or in Rayonese Textile Inc. in an aggregate amount which,
together with loans and advances to 3096726 Canada Inc. and/or Rayonese Textile
Inc. and permitted by clause (iv) of Section 5.16, do not exceed $25,000,000;
and/or (viii) other Investments in an amount which,
53
together with loans and advances permitted by clause (v) of Section 5.15, does
not exceed 10% of Stockholders' Equity; provided, however, immediately after
giving effect to the making of any Investment, no Default shall have occurred
and be continuing.
SECTION 5.17. Priority Debt. Neither the Borrower nor any Consolidated
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, and the Borrower shall not permit any
Subsidiary to incur any Debt, other than Debt of Subsidiaries existing on the
Closing Date and listed on Schedule 5.17, except:
(a) Liens existing on the Closing Date securing Debt
outstanding on the date of this Agreement in an aggregate principal
amount not exceeding $11,000,000;
(b) any Lien existing on any specific fixed asset of any
corporation at the time such corporation becomes a Consolidated
Subsidiary and not created in contemplation of such event;
(c) any Lien on any specific fixed asset securing Debt
incurred or assumed for the purpose of financing all or any part of the
cost of acquiring or constructing such asset, provided that such Lien
attaches to such asset concurrently with or within 18 months after the
acquisition or completion of construction thereof;
(d) any Lien on any specific fixed asset of any corporation
existing at the time such corporation is merged or consolidated with or
into the Borrower or a Consolidated Subsidiary and not created in
contemplation of such event;
(e) any Lien existing on any specific fixed asset prior to the
acquisition thereof by the Borrower or a Consolidated Subsidiary and
not created in contemplation of such acquisition;
(f) Liens securing Debt owing by any Subsidiary to the
Borrower;
(g) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing paragraphs of this Section, provided that (i) such
Debt is not secured by any
54
additional assets, and (ii) the amount of such Debt secured by any such
Lien is not increased;
(h) Liens incidental to the conduct of its business or the
ownership of its assets which (i) do not secure Debt and (ii) do not in
the aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its business;
(i) any Lien on Margin Stock;
(j) Debt owing to the Borrower or another Subsidiary;
(k) Special Purchase Money Liens;
(l) Liens not otherwise permitted by the foregoing paragraphs
of this Section securing Debt (other than indebtedness represented by
the Notes), and Debt of Subsidiaries not otherwise permitted by
paragraph (j), in an aggregate principal amount at any time outstanding
not to exceed 8% of Stockholders' Equity.
Provided the sum of (A) the aggregate amount of Debt secured by Liens permitted
by the foregoing paragraphs (a) through (h) and (l), plus (B) Debt of
Subsidiaries permitted by paragraph (l), shall not at any time exceed an
aggregate amount equal to 15% of Stockholders' Equity.
SECTION 5.18. Restrictions on Ability of Subsidiaries to Pay Dividends.
The Borrower shall not permit any Subsidiary to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (i) pay any dividends or
make any other distributions on its Capital Stock or any other interest (other
than dividends paid or payable in the form of additional Capital Stock) or (ii)
make or repay any loans or advances to the Borrower or the parent of such
Subsidiary.
SECTION 5.19. Interest Coverage. At the end of each Fiscal Quarter,
commencing with the Fiscal Quarter ending January 26, 1997, the ratio of EBIT to
Consolidated Net Interest Expense shall not have been less than 2.25 to 1.0.
SECTION 5.20. Ratio of Total Debt to Total Capitalization. The ratio of
Total Debt to Total Capitalization will not at the end of each Fiscal Month
exceed 0.60 to 1.00.
55
SECTION 5.21. Debt/EBITDA Ratio. The Debt/EBITDA Ratio will at the end
of each Fiscal Month be less than 3.5 to 1.00.
SECTION 5.22. Acquisitions. Neither the Borrower nor any Subsidiary
shall make any Acquisitions after the Closing Date, unless (i) the Acquisition
is of stock or assets of a Person in substantially similar lines of business to
that of the Borrower and its Subsidiaries and (ii) in an aggregate amount which
does not exceed $50,000,000.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of
any Loan or shall fail to pay any interest on any Loan within 5
Domestic Business Days after such interest shall become due, or shall
fail to pay any fee or other amount payable hereunder within 5 Domestic
Business Days after such fee or other amount becomes due; or
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.01(e), 5.02(ii), 5.03 to 5.06, inclusive,
Sections 5.15, 5.16 or 5.18 through 5.22 inclusive; or
(c) the Borrower shall fail to observe or perform any covenant
or agreement contained or incorporated by reference in this Agreement
(other than those covered by paragraph (a) or (b) above) and such
failure shall not have been cured within 30 days after the earlier to
occur of (i) written notice thereof has been given to the Borrower by
the Agent at the request of any Bank or (ii) the Borrower otherwise
becomes aware of any such failure; or
(d) any representation or warranty made by the Borrower in
Article IV of this Agreement or any representation, warranty,
certification or statement made in any certificate, financial statement
or other document delivered pursuant to this Agreement shall prove to
have
56
been incorrect or misleading in any material respect when made (or
deemed made); or
(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of Debt in an aggregate principal amount outstanding
of $5,000,000 or more (other than the Notes) when due or within any
applicable grace period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt in an aggregate principal amount
outstanding of $5,000,000 or more of the Borrower or any Subsidiary
(including, without limitation, any required mandatory prepayment or
"put" of such Debt to the Borrower or any Subsidiary) or enables (or,
with the giving of notice or lapse of time or both, would enable) the
holders of such Debt or Commitment or any Person acting on such
holders' behalf to accelerate the maturity thereof or terminate any
such commitment (including, without limitation, any required mandatory
prepayment or "put" of such Debt to the Borrower or any Subsidiary); or
(g) the Borrower or any Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally, or shall admit in
writing its inability, to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the
57
Borrower or any Subsidiary under the federal bankruptcy laws as now or
hereafter in effect; or
(i) the Borrower or any member of the Controlled Group shall
fail to pay when due any material amount which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or
notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Borrower, any member of the Controlled Group,
any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or Plans or
a proceeding shall be instituted by a fiduciary of any such Plan or
Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any such Plan or Plans must be terminated; or
the Borrower or any other member of the Controlled Group shall enter
into, contribute or be obligated to contribute to, terminate or incur
any withdrawal liability with respect to, a Multiemployer Plan; or
(j) one or more judgments or orders for the payment of money
in an aggregate amount in excess of $5,000,000 shall be rendered
against the Borrower or any Subsidiary and such judgment or order shall
continue unsatisfied and unstayed for a period of 30 days; or
(k) a federal tax lien shall be filed against the Borrower or
any Subsidiary under Section 6323 of the Code or a lien of the PBGC
shall be filed against the Borrower or any Subsidiary under Section
4068 of ERISA and in either case such lien is for an amount of
$1,000,000 or more and remains undischarged for a period of 25 days
after the date of filing; or
(l) (i) Except for the Culp Family, any Person or two or more
Persons acting in concert shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or more of
the outstanding shares of the voting stock of the Borrower; or (ii) as
of any date a majority of the Board of Directors of the Borrower
consists of individuals who were not either (A)
58
directors of the Borrower as of the corresponding date of the previous
year, (B) selected or nominated to become directors by the Board of
Directors of the Borrower of which a majority consisted of individuals
described in clause (A), or (C) selected or nominated to become
directors by the Board of Directors of the Borrower of which a majority
consisted of individuals described in clause (A) and individuals
described in clause (B).
then, and in every such event: (i) any Bank may terminate its obligation to fund
a Money Market Loan in connection with any relevant Money Market Quote; and (ii)
the Agent shall, if requested by the Required Banks, by notice to the Borrower
(x) terminate the Commitments and they shall thereupon terminate, and/or (y)
declare the Notes (together with accrued interest thereon), and all other
amounts payable hereunder and under the other Loan Documents, to be, and the
Notes (together with accrued interest thereon), and all other amounts payable
hereunder and under the other Loan Documents shall thereupon become, immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower together with interest at
the Default Rate accruing on the principal amount thereof from and after the
date of such Event of Default; provided that if any Event of Default specified
in paragraph (g) or (h) above occurs with respect to the Borrower, without any
notice to the Borrower or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Notes (together with accrued
interest thereon) and all other amounts payable hereunder and under the other
Loan Documents shall automatically and without notice become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower together with interest thereon at the
Default Rate accruing on the principal amount thereof from and after the date of
such Event of Default. Notwithstanding the foregoing, the Agent shall have
available to it all other remedies at law or equity, and shall exercise any one
or all of them at the request of the Required Banks.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
Borrower of any Default under Section 6.01(c) promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
59
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment; Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent: (a) shall have no duties or
responsibilities except as expressly set forth in this Agreement and the other
Loan Documents, and shall not by reason of this Agreement or any other Loan
Document be a trustee for any Bank; (b) shall not be responsible to the Banks
for any recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or in any certificate or other document
referred to or provided for in, or received by any Bank under, this Agreement or
any other Loan Document, or for the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
any other document referred to or provided for herein or therein or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by the Required Banks, and then only on terms and conditions
satisfactory to the Agent, and (d) shall not be responsible for any action taken
or omitted to be taken by it hereunder or under any other Loan Document or any
other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or wilful
misconduct. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The provisions of this
Article VII are solely for the benefit of the Agent and the Banks, and the
Borrower shall not have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and under the other Loan Documents, the Agent shall act solely as agent of the
Banks and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower. The duties
of the Agent shall be ministerial and administrative in nature, and the Agent
shall not have by reason of this Agreement or any other Loan Document a
fiduciary relationship in respect of any Bank.
60
SECTION 7.02. Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telecopier, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks in any action taken or
failure to act pursuant thereto shall be binding on all of the Banks.
SECTION 7.03. Defaults. The Agent shall not be deemed to have knowledge
of the occurrence of a Default or an Event of Default (other than the nonpayment
of principal of or interest on the Loans) 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 nonpayment of principal of or interest on the
Loans whether or not it has received any notice of the occurrence of such
nonpayment. The Agent shall (subject to Section 9.06) take such action hereunder
with respect to such Default or Event of Default as shall be directed by the
Required Banks, provided that, unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
SECTION 7.04. Rights of Agent as a Bank and its Affiliates. With
respect to the Loans made by the Agent and any Affiliate of the Agent, the Agent
in its capacity as a Bank hereunder and any Affiliate of the Agent or such
Affiliate (collectively, "Wachovia"), Wachovia in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include
Wachovia in its individual capacity and any Affiliate of the Agent in its
individual
61
capacity. The Agent and any Affiliate of the Agent may (without having to
account therefor to any Bank) accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with the Borrower (and
any of the Borrower's Affiliates) as if the Bank were not acting as the Agent,
and the Agent and any Affiliate of the Agent may accept fees and other
consideration from the Borrower (in addition to any agency fees and arrangement
fees heretofore agreed to between the Borrower and the Agent) for services in
connection with this Agreement or any other Loan Document or otherwise without
having to account for the same to the Banks.
SECTION 7.05. Indemnification. Each Bank severally agrees to indemnify
the Agent, to the extent the Agent shall not have been reimbursed by the
Borrower, ratably in accordance with its Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided, however that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or wilful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
SECTION 7.06 CONSEQUENTIAL DAMAGES. THE AGENT SHALL NOT BE RESPONSIBLE
OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANY
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 7.07. Payee of Note Treated as Owner. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice
62
of the assignment or transfer thereof shall have been filed with the Agent and
the provisions of Section 9.08(c) have been satisfied. Any requests, authority
or consent of any Person who at the time of making such request or giving such
authority or consent is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee or assignee of that Note or of any Note or
Notes issued in exchange therefor or replacement thereof.
SECTION 7.08. Nonreliance on Agent and Other Banks. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself (or any Bank) informed
as to the performance or observance by the Borrower of this Agreement or any of
the other Loan Documents or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrower or any
other Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder or under
the other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of the Borrower or any other Person (or any of
their Affiliates) which may come into the possession of the Agent.
SECTION 7.09. 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 7.05 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.
SECTION 7.10. 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
63
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,
which, if no Event of Default is in existence, has been approved by the Borrower
(which approval shall not be unreasonably withheld or delayed). 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 and, if no Event of Default is in existence, with
the consent of the Borrower (which shall not be unreasonably withheld or
delayed), appoint a successor Agent. Any successor Agent shall be a bank which
has a combined capital and surplus of at least $500,000,000. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
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.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period:
(a) the Agent reasonably determines that deposits in Dollars
(in the applicable amounts) are not being offered in the relevant
market for such Interest Period, or
(b) the Required Banks advise the Agent that the London
Interbank Offered Rate or IBOR, as the case may be, as reasonably
determined by the Agent will not adequately and fairly reflect the cost
to such Banks of funding the relevant type of Fixed Rate Loans for such
Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that
64
the circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make the type of Fixed Rate Loans specified in such
notice shall be suspended. Unless the Borrower notifies the Agent at least 2
Domestic Business Days before the date of any Borrowing of such type of Fixed
Rate Loans for which a Notice of Borrowing has previously been given that it
elects not to borrow on such date, such Borrowing shall instead be made as a
Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the date hereof, the adoption of
any applicable law, rule or regulation, or any change therein or any existing or
future law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof (any such
agency being referred to as an "Authority" and any such event being referred to
as a "Change of Law"), or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority shall make it unlawful or impossible for any Bank (or its Lending
Office) to make, maintain or fund its Euro-Dollar Loans or Foreign Currency
Loans and such Bank shall so notify the Agent, the Agent shall forthwith give
notice thereof to the other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank to make Euro-Dollar
Loans or Foreign Currency Loans, as the case may be, shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
or Foreign Currency Loans, as the case may be, to maturity and shall so specify
in such notice, the Borrower shall immediately prepay in full the then
outstanding principal amount of each Euro-Dollar Loan or Foreign Currency Loans,
as the case may be, of such Bank, together with accrued interest thereon any
amount due such Bank pursuant to Section 8.05(a). Concurrently with prepaying
each such Euro-Dollar Loan or Foreign Currency Loans, as the case may be, the
Borrower shall borrow a Base Rate Loan in an equal principal amount from such
Bank (on which interest and principal shall be payable contemporaneously with
the related Euro-Dollar Loans or Foreign Currency Loans, as the case may be, of
the other Banks), and such Bank shall make such a Base Rate Loan.
65
SECTION 8.03. Increased Cost and Reduced Return. (a) If after the date
hereof, a Change of Law or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority:
(i) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding (A) with respect to any Euro-Dollar Loan
any such requirement included in an applicable Euro-Dollar Reserve
Percentage and (B) with respect to any Foreign Currency Loan any such
requirement included in the applicable Adjusted IBOR Rate) against
assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Lending Office); or
(ii) shall impose on any Bank (or its Lending Office) or on
the United States market for certificates of deposit or the London
interbank market any other condition affecting its Fixed Rate Loans,
its Notes or its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any Authority, has or would have the effect of reducing the rate of return on
such Bank's capital as a consequence of its obligations hereunder to a level
below that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such
66
Bank to be material, then from time to time, within 15 days after demand by such
Bank, the Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error and provided that it is rendered in good faith. In determining
such amount, such Bank may use any reasonable averaging and attribution methods.
(d) The provisions of this Section 8.03 (i) shall be applicable with
respect to any Participant, Assignee or other Transferee, and any calculations
required by such provisions shall be made based upon the circumstances of such
Participant, Assignee or other Transferee and (ii) shall constitute a continuing
agreement and shall survive the termination of this Agreement and the payment in
full or cancellation of the Notes.
SECTION 8.04. Base Rate Loans or Other Fixed Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any Bank to make or maintain
any type of Fixed Rate Loans has been suspended pursuant to Section 8.02 or (ii)
any Bank has demanded compensation under Section 8.03, and the Borrower shall,
by at least 5 Euro-Dollar Business Days' or Foreign Currency Business Days, as
applicable, prior notice to such Bank through the Agent, have elected that the
provisions of this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as
Euro-Dollar Loans or Foreign Currency Loans, as the case may be, shall
be made instead either (A) as Base Rate Loans, (B) if such suspension
or demand for compensation relates to Euro-Dollar Loans, but not
Foreign Currency Loans, as Foreign Currency Loans, or (C) if such
demand for compensation relates to Foreign Currency Loans, but not
67
Euro-Dollar Loans, as Euro-Dollar Loans, as the Borrower may elect in
the notice to such Bank through the Agent referred to hereinabove (in
all cases interest and principal on such Loans shall be payable
contemporaneously with the related Fixed Rate Loans of the other
Banks), and
(b) after each of its Euro-Dollar Loans or Foreign Currency
Loans, as the case may be, has been repaid, all payments of principal
which would otherwise be applied to repay such Fixed Rate Loans shall
be applied to repay its Base Rate Loans instead.
SECTION 8.05. Compensation. Upon the request of any Bank, delivered to
the Borrower and the Agent, the Borrower shall pay to such Bank such amount or
amounts as shall compensate such Bank for any loss, cost or expense incurred by
such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.10, 2.11, 6.01,
8.02 or otherwise) of a Fixed Rate Loan on a date other than the last day of an
Interest Period for such Fixed Rate Loan; or
(b) any failure by the Borrower to prepay a Fixed Rate Loan on the date
for such prepayment specified in the relevant notice of prepayment hereunder (if
the Agent, acting at the direction of the Required Banks, has agreed to permit
any such prepayment); or
(c) any failure by the Borrower to borrow a Fixed Rate Loan on the date
for the Fixed Rate Borrowing of which such Fixed Rate Loan is a part specified
in the applicable Notice of Borrowing delivered pursuant to Section 2.02 or
notification of acceptance of Money Market Quotes pursuant to Section 2.03(e);
or
(d) any failure by the Borrower to pay a Foreign Currency Loan in the
applicable Foreign Currency;
such compensation to include, without limitation, as applicable: (A) an amount
equal to the excess, if any, of (x) the amount of interest which would have
accrued on the amount so paid or prepaid or not prepaid or borrowed for the
period from the date of such payment, prepayment or failure to prepay or borrow
to the last day of the then current Interest Period for such Fixed Rate Loan
(or, in the case of a failure to prepay or borrow, the Interest Period for such
Fixed Rate Loan which would have
68
commenced on the date of such failure to prepay or borrow) at the applicable
rate of interest for such Fixed Rate Loan provided for herein over (y) the
amount of interest (as reasonably determined by such Bank) such Bank would have
paid on (i) deposits in Dollars of comparable amounts having terms comparable to
such period placed with it by leading banks in the London interbank market (if
such Fixed Rate Loan is a Euro-Dollar Loan), or (ii) any deposit in a Foreign
Currency of comparable amounts having terms comparable to such period placed
with it by lending banks in the applicable interbank market for such Foreign
Currency (if such Fixed Rate Loan is a Foreign Currency Loan); or (B) any such
loss, cost or expense incurred by such Bank in liquidating or closing out any
foreign currency contract undertaken by such Bank in funding or maintaining such
Fixed Rate Loan (if such Fixed Rate Loan is a Foreign Currency Loan).
SECTION 8.06. Failure to Pay in Foreign Currency. If the Borrower is
unable for any reason to effect payment in a Foreign Currency as required by
this Agreement or if the Borrower shall default in the Foreign Currency, each
Bank may, through the Agent, require such payment to be made in Dollars in the
Dollar Equivalent amount of such payment. In any case in which the Borrower
shall make such payment in Dollars, the Borrower agrees to hold the Banks
harmless from any loss incurred by the Banks arising from any change in the
value of Dollars in relation to such Foreign Currency between the date such
payment became due and the date of payment thereof.
SECTION 8.07. Judgment Currency. If for the purpose of obtaining
judgment in any court or enforcing any such judgment it is necessary to convert
any amount due in any Foreign Currency into any other currency, the rate of
exchange used shall be the Agent's spot rate of exchange for the purchase of the
Foreign Currency with such other currency at the close of business on the
Foreign Currency Business Day preceding the date on which judgment is given or
any order for payment is made. The obligation of the relevant Borrower in
respect of any amount due from it hereunder shall, notwithstanding any judgment
or order for a liquidated sum or sums in respect of amounts due hereunder or
under any judgment or order in any other currency or otherwise be discharged
only to the extent that on the Foreign Currency Business Day following receipt
by the Agent of any payment in a currency other than the relevant Foreign
Currency the Agent is able (in accordance with normal banking procedures) to
purchase the relevant Foreign Currency with such other currency. If the amount
of the relevant Foreign Currency that the Agent is able to
69
purchase with such other currency is less than the amount due in the relevant
Foreign Currency, notwithstanding any judgment or order, the Borrower shall
indemnify the Banks for the shortfall.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telecopier or
similar writing) and shall be given to such party at its address or telecopier
number set forth on the signature pages hereof or such other address or
telecopier number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section and the appropriate confirmation is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (iii)
if given by any other means, when delivered at the address specified in this
Section.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any Bank
in exercising any right, power or privilege hereunder or under any Note or other
Loan Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes. The Borrower shall pay (i)
all reasonable out-of-pocket expenses of the Agent, including fees and
disbursements of special counsel for the Agent, in connection with the
preparation of this Agreement and the other Loan Documents, any waiver or
consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder and (ii) if a Default occurs,
all reasonable out-of-pocket expenses incurred by the Agent and the Banks,
including fees and disbursements of counsel, in connection with such Default and
collection and other enforcement proceedings resulting therefrom, including
reasonable out-of-pocket expenses incurred in enforcing this Agreement and the
other Loan Documents. The Borrower shall
70
indemnify the Agent and each Bank against any transfer taxes, documentary taxes,
assessments or charges made by any Authority by reason of the execution and
delivery of this Agreement or the other Loan Documents.
SECTION 9.04. Indemnification. The Borrower shall indemnify the Agent,
the Banks and each Affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become subject,
insofar as such losses, liabilities, claims or damages arise out of or result
from any actual or proposed use by the Borrower of the proceeds of any extension
of credit by any Bank hereunder or breach by the Borrower of this Agreement or
any other Loan Document or from any investigation, litigation (including,
without limitation, any actions taken by the Agent or any of the Banks to
enforce this Agreement or any of the other Loan Documents) or other proceeding
(including, without limitation, any threatened investigation or proceeding)
relating to the foregoing, and the Borrower shall reimburse the Agent and each
Bank, and each Affiliate thereof and their respective directors, officers,
employees and agents, upon demand for any expenses (including, without
limitation, reasonable legal fees) incurred in connection with any such
investigation or proceeding; but excluding any such losses, liabilities, claims,
damages or expenses incurred by reason of the gross negligence or wilful
misconduct of the Person to be indemnified.
SECTION 9.05 Setoff; Sharing of SetoffsSetoff; Sharing of
Setoffs. (a) The Borrower hereby grants to the Agent and each Bank a lien for
all indebtedness and obligations owing to them from the Borrower upon all
deposits or deposit accounts, of any kind, or any interest in any deposits or
deposit accounts thereof, now or hereafter pledged, mortgaged, transferred or
assigned to the Agent or any such Bank or otherwise in the possession or control
of the Agent or any such Bank for any purpose for the account or benefit of the
Borrower and including any balance of any deposit account or of any credit of
the Borrower with the Agent or any such Bank, whether now existing or hereafter
established hereby authorizing the Agent and each Bank at any time or times
during the existence of an Event of Default with or without prior notice to
apply such balances or any part thereof to such of the indebtedness and
obligations owing by the Borrower to the Banks and/or the Agent then past due
and in such amounts as they may elect, and whether or not the collateral, if
any, or the responsibility of other Persons primarily, secondarily or otherwise
liable may be deemed
71
adequate. For the purposes of this paragraph, all remittances and property shall
be deemed to be in the possession of the Agent or any such Bank as soon as the
same may be put in transit to it by mail or carrier or by other bailee.
(b) Each Bank agrees that if it shall, by exercising any right of
setoff or counterclaim or resort to collateral security or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest owing
with respect to the Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of all principal
and interest owing with respect to the Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks owing to such other Banks,
and such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the Banks
owing to such other Banks shall be shared by the Banks pro rata; provided that
(i) nothing in this Section shall impair the right of any Bank to exercise any
right of setoff 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, and (ii) if all or any portion of such payment
received by the purchasing Bank is thereafter recovered from such purchasing
Bank, such purchase from each 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) of 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, whether or not acquired pursuant
to the foregoing arrangements, may exercise rights of setoff or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.
SECTION 9.06. 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
72
are affected thereby, by the Agent); provided that, no such amendment or waiver
shall, unless signed by all 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 Loan or any fees (other than fees payable to the Agent)
hereunder, (iii) change the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder, (iv) change the amount of principal,
interest or fees due on any date fixed for the payment thereof, (v) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Notes, or the percentage of Banks, which shall be required for the Banks or any
of them to take any action under this Section or any other provision of this
Agreement, (vi) change the manner of application of any payments made under this
Agreement or the Notes, (vii) release or substitute all or any substantial part
of the collateral (if any) held as security for the Loans, or (viii) release any
Guarantee given to support payment of the Loans.
(b) The Borrower will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement except through the Agent or 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 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
requisite percentage of Banks. The Borrower will not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any Bank (in its capacity as such) as
consideration for or as an inducement to the entering into by such Bank of any
waiver or amendment of any of the terms and provisions of this Agreement unless
such remuneration is concurrently paid, on the same terms, ratably to all such
Banks.
SECTION 9.07. No Margin Stock Collateral. Each of the Banks represents
to the Agent and each of the other Banks that it in good faith is not, directly
or indirectly (by negative pledge or otherwise), relying upon any Margin Stock
as collateral in the extension or maintenance of the credit provided for in this
Agreement.
73
SECTION 9.08. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any Note
held by such Bank, any Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a participating interest
to a Participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the related
loan or loans, (ii) the change of the amount of any principal, interest or fees
due on any date fixed for the payment thereof with respect to the related loan
or loans, (iii) the change of the principal of the related loan or loans, (iv)
any change in the rate at which either interest is payable thereon or (if the
Participant is entitled to any part thereof) fee is payable hereunder from the
rate at which the Participant is entitled to receive interest or fee (as the
case may be) in respect of such participation, (v) the release or substitution
of all or any substantial part of the collateral (if any) held as security for
the Loans, or (vi) the release of any Guarantee given to support payment of the
Loans. Each Bank selling a participating interest in any Loan, Note, Commitment
or other interest under this Agreement, other than a Money Market Loan or Money
Market Loan Note or participating interest therein, shall, within 10 Domestic
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. The Borrower agrees that each
Participant shall be entitled to the benefits of Article VIII with respect to
its participation in Loans outstanding from time to time.
74
(c) Any Bank may at any time assign to one or more banks or financial
institutions (each an "Assignee") all, or in the case of its Syndicated Loans
and Commitments, a proportionate part of all its Syndicated Loans and
Commitments, of its rights and obligations under this Agreement, the Notes and
the other Loan Documents, and such Assignee shall assume all such rights and
obligations, pursuant to an Assignment and Acceptance, executed by such
Assignee, such transferor Bank and the Agent (and, in the case of an Assignee
that is not then a Bank, subject to clauses (iii) below, by the Borrower);
provided that (i) no interest may be sold by a Bank pursuant to this paragraph
(c) unless the Assignee shall agree to assume ratably equivalent portions of the
transferor Bank's Commitment, (ii) if a Bank is assigning only a portion of its
Commitment, then, the amount of the Commitment being assigned (determined as of
the effective date of the assignment) shall be in an amount not less than
$10,000,000, (iii) except during the continuance of a Default, no interest may
be sold by a Bank pursuant to this paragraph (c) to any Assignee that is not
then a Bank (or an Affiliate of a Bank) without the consent of the Borrower and
the Agent, which consent shall not be unreasonably withheld, and (iv) a Bank may
not have more than 2 Assignees that are not then Banks at any one time. 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,
(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, and (D)
payment of a processing and recordation fee of $2,500 to the Agent, such
Assignee shall for all purposes be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank under this Agreement to the same extent
as if it were an original party hereto with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by the Borrower, the Banks or the Agent shall be required. Upon the
consummation of any transfer to an Assignee pursuant to this paragraph (c), the
transferor Bank, the Agent and the Borrower shall make appropriate arrangements
so that, if required, a new Note is issued each of such Assignee and such
transferor Bank and such transferor Bank.
(d) Subject to the provisions of Section 9.09, the Borrower authorizes
each Bank to disclose to any Participant, Assignee or other transferee (each a
"Transferee") and any
75
prospective Transferee any and all financial 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.
(e) No Transferee shall be entitled to receive any greater payment
under Section 2.12(d) or Section 8.03 than the transferor Bank would have been
entitled to receive with respect to the rights transferred, unless such transfer
is made with the Borrower's prior written consent or by reason of the provisions
of Section 8.02 or 8.03 requiring such Bank to designate a different Lending
Office under certain circumstances or at a time when the circumstances giving
rise to such greater payment did not exist.
(f) Anything in this Section 9.08 to the contrary notwithstanding, any
Bank may assign and pledge all or any portion of the Loans and/or obligations
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Loans and/or
obligations made by the Borrower to the assigning and/or pledging Bank in
accordance with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect of such assigned Loans and/or obligations to
the extent of such payment. No such assignment shall release the assigning
and/or pledging Bank from its obligations hereunder.
SECTION 9.09. Confidentiality. Each Bank agrees to exercise
commercially reasonable 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 any 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, any Bank or their
respective Affiliates may be a party, (vi) to the extent
76
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 9.09; provided that should disclosure of any such confidential
information be required by virtue of clause (ii) of the immediately preceding
sentence, to the extent permitted by law, any relevant Bank shall promptly
notify the Borrower of same so as to allow the Borrower to seek a protective
order or to take any other appropriate action; provided, further, that, no Bank
shall be required to delay compliance with any directive to disclose any such
information so as to allow the Borrower to effect any such action.
SECTION 9.10. Representation by Banks. Each Bank hereby represents that
it is a commercial lender or financial institution which makes loans in the
ordinary course of its business and that it will make its Loans hereunder for
its own account in the ordinary course of such business; provided, however that,
subject to Section 9.08, the disposition of the Note or Notes held by that Bank
shall at all times be within its exclusive control.
SECTION 9.11. Obligations Several. The obligations of each Bank
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document and
it shall not be necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
SECTION 9.12. Georgia Law. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of Georgia.
SECTION 9.13. Severability. In case any one or more of the provisions
contained in this Agreement, the Notes or any of the other Loan Documents should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and
77
therein shall not in any way be affected or impaired thereby and shall be
enforced to the greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of interest, and
all charges, amounts or fees contracted for, charged or collected pursuant to
this Agreement, the Notes or the other Loan Documents and deemed to be interest
under applicable law (collectively, "Interest") exceed the highest rate of
interest allowed by applicable law (the "Maximum Rate"), and in the event any
such payment is inadvertently received by any Bank, then the excess sum (the
"Excess") shall be credited as a payment of principal, unless the Borrower shall
notify such Bank in writing that it elects to have the Excess returned
forthwith. It is the express intent hereof that the Borrower not pay and the
Banks not receive, directly or indirectly in any manner whatsoever, interest in
excess of that which may legally be paid by the Borrower under applicable law.
The right to accelerate maturity of any of the Loans does not include the right
to accelerate any interest that has not otherwise accrued on the date of such
acceleration, and the Agent and the Banks do not intend to collect any unearned
interest in the event of any such acceleration. All monies paid to the Agent or
the Banks hereunder or under any of the Notes or the other Loan Documents,
whether at maturity or by prepayment, shall be subject to rebate of unearned
interest as and to the extent required by applicable law. By the execution of
this Agreement, the Borrower covenants, to the fullest extent permitted by law,
that (i) the credit or return of any Excess shall constitute the acceptance by
the Borrower of such Excess, and (ii) the Borrower shall not seek or pursue any
other remedy, legal or equitable , against the Agent or any Bank, based in whole
or in part upon contracting for charging or receiving any Interest in excess of
the Maximum Rate. For the purpose of determining whether or not any Excess has
been contracted for, charged or received by the Agent or any Bank, all interest
at any time contracted for, charged or received from the Borrower in connection
with this Agreement, the Notes or any of the other Loan Documents shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
in equal parts throughout the full term of the Commitments. The Borrower, the
Agent and each Bank shall, to the maximum extent permitted under applicable law,
(i) characterize any non-principal payment as an expense, fee or premium rather
than as Interest and (ii) exclude voluntary prepayments and the effects thereof.
The provisions of this Section shall be deemed to be incorporated into each Note
and each of the other Loan Documents (whether or not any provision of this
Section is
78
referred to therein). All such Loan Documents and communications relating to any
Interest owed by the Borrower and all figures set forth therein shall, for the
sole purpose of computing the extent of obligations hereunder and under the
Notes and the other Loan Documents be automatically recomputed by the Borrower,
and by any court considering the same, to give effect to the adjustments or
credits required by this Section.
SECTION 9.15. Interpretation. No provision of this Agreement or any of
the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction. The
Borrower (a) and each of the Banks and the Agent irrevocably waives, to the
fullest extent permitted by law, any and all right to trial by jury in any legal
proceeding arising out of this Agreement, any of the other Loan Documents, or
any of the transactions contemplated hereby or thereby, (b) submits to the
nonexclusive personal jurisdiction in the State of Georgia, the courts thereof
and the United States District Courts sitting therein, for the enforcement of
this Agreement, the Notes and the other Loan Documents, (c) waives any and all
personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or venue
within the State of Georgia for the purpose of litigation to enforce this
Agreement, the Notes or the other Loan Documents, and (d) agrees that service of
process may be made upon it in the manner prescribed in Section 9.01 for the
giving of notice to the Borrower. Nothing herein contained, however, shall
prevent the Agent from bringing any action or exercising any rights against any
security and against the Borrower personally, and against any assets of the
Borrower, within any other state or jurisdiction.
SECTION 9.17. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 9.18. Source of Funds -- ERISA. Each of the Banks hereby
severally (and not jointly) represents to the Borrower that no part of the funds
to be used by such Bank to fund the Loans hereunder from time to time
constitutes (i) assets
79
allocated to any separate account maintained by such Bank in which any employee
benefit plan (or its related trust) has any interest nor (ii) any other assets
of any employee benefit plan. As used in this Section, the terms "employee
benefit plan" and "separate account" shall have the respective meanings assigned
to such terms in Section 3 of ERISA.
SECTION 9.19. Replacement of Banks. The Borrower may, at any time and
so long as no Default or Event of Default has then occurred and is continuing,
replace any Bank that has requested additional amounts from the Borrower under
Section 2.12(d) or 8.03, or who has caused a suspension of its obligation to
make Euro-Dollar Loans or Foreign Currency Loans pursuant to Section 8.02, by
written notice to such Bank and the Agent given not more than thirty (30) days
after any such event and identifying one or more Persons each of which shall be
reasonably acceptable to the Agent (each, a "Replacement Bank," and
collectively, the "Replacement Banks") to replace such Bank (the "Replaced
Bank"), provided that (i) the notice from the Borrower to the Replaced Bank and
the Agent provided for hereinabove shall specify an effective date for such
replacement (the "Replacement Effective Date"), which shall be at least 5
Business Days after such notice is give, (ii) as of the relevant Replacement
Effect Date, each Replacement Bank shall enter into an Assignment and Acceptance
with the Replaced Bank pursuant to Section 9.08 pursuant to which such
Replacement Banks collectively shall acquire, in such proportion among them as
they may agree with the Borrower and the Agent, all (but not less than all) of
the Commitments and outstanding Loans of the Replaced Bank, and, in connection
therewith, shall pay to the Replaced Bank, as the purchase price in respect
thereof, an amount equal to the sum as of the Replacement Effective Date
(without duplication) of (y) the unpaid principal amount of, and all accrued but
unpaid interest on all outstanding Loans of the Replaced Bank and (z) the
Replaced Bank's ratable share of all accrued but unpaid fees owing to the
Replaced Bank hereunder, and (iii) all other obligations of the Borrower owing
to the Replaced Bank under this Agreement (other than those specifically
described in clause (ii) above in respect of which the assignment purchase price
has been, or is concurrently being, paid), as a result of the actions required
to be taken under this Section, shall be paid in full by the Borrower to the
Replaced Bank on or prior to the Replacement Effective Date.
80
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, under seal, by their respective authorized officers as of the day
and year first above written.
CULP, INC. (SEAL)
By:_______________________________
Title:
Culp, Inc.
101 South Main Street
High Point, North Carolina
27261-2686
Attention: Franklin N. Saxon
Vice President and
Chief Financial Officer]
Telecopier number: 910-887-7089
Confirmation number: 910-888-6266
WACHOVIA BANK OF GEORGIA, N.A.,
as Agent (SEAL)
By:____________________________
Title:
Lending Office
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Telecopier number: 404-332-4005
Confirmation number: 404-332-6971
81
COMMITMENTS WACHOVIA BANK OF NORTH
CAROLINA, N.A.,
as a Bank (SEAL)
$42,000,000
By:_________________________________
Title:
Lending Office
Wachovia Bank of North
Carolina, N.A.
200 North Main Street
High Point, North Carolina 27261
Attention: Peter T. Callahan
Telecopier number: 910-887-7550
Confirmation number: 910-887-7641
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Documentation
Agent (SEAL)
$38,000,000 By:_________________________________
Title:
Lending Office
First Union National Bank of
North Carolina
150 Fayetteville Street Mall
6th Floor
Raleigh, North Carolina 27601
Attention: Mendal Lay
Telecopier number: 919-829-6067
Confirmation number: 919-829-6064
82
$15,000,000 SUNTRUST BANK, ATLANTA (SEAL)
By:_________________________________
Title:
By:_________________________________
Title:
Lending Office
SunTrust Bank, Atlanta
25 Park Place
23rd Floor
Atlanta, Georgia 30303
Attention: Jeff Drucker
Telecopier number: 404-588-8833
Confirmation number: 404-230-1403
$15,000,000 COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEEN (SEAL)
By:_________________________________
Title:
By:_________________________________
Title:
Lending Office
Rabobank Nederland, New York Branch
245 Park Avenue
New York, New York 10167
Attention: Customer Service
Department
Telecopier number: 212-916-7930
Confirmation number: 212-916-7928
with a copy to:
Rabobank Nederland
One Atlantic Center, Suite 3450
Atlanta, Georgia 30309-3400
Attention: Theodore W. Cox
Telecopier number: 404-877-9150
83
Confirmation number: 404-877-9109
84
$15,000,000 ABN AMRO BANK, N.V., ATLANTA
AGENCY (SEAL)
By:_____________________________
Title:
By:_____________________________
Title:
Lending Office
ABN AMRO Bank, N.V., Atlanta Agency
One Ravinia Drive, Suite 1200
Atlanta, Georgia 30346
Attention: Mark Clegg
Telecopier number: 770-399-7397
Confirmation number: 770-399-7399
TOTAL COMMITMENTS:
$125,000,000
85
EXHIBIT A-1
FORM OF SYNDICATED DOLLAR LOAN NOTE
Atlanta, Georgia
April 23, 1997
For value received, CULP, INC., a North Carolina corporation (the
"Borrower"), promises to pay to the order of __________________________________,
a ____________________ (the "Bank"), for the account of its Lending Office, the
principal sum of ___________________________________ AND NO/100 DOLLARS
($____________), or such lesser amount as shall equal the unpaid principal
amount of each Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below, on the dates and in the amounts provided in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of this Syndicated Dollar Loan Note on the dates and at the rate or rates
provided for Syndicated Dollar Loans in the Credit Agreement. Interest on any
overdue principal of and, to the extent permitted by law, overdue interest on
the principal amount hereof shall bear interest at the Default Rate, as provided
for in the Credit Agreement. All such payments of principal and interest shall
be made in lawful money of the United States in Federal or other immediately
available funds at the office of Wachovia Bank of Georgia, N.A., 191 Peachtree
Street, N.E., Atlanta, Georgia 30303-1757, or such other address as may be
specified from time to time pursuant to the Credit Agreement.
All Loans made by the Bank, the respective maturities thereof, the
interest rates from time to time applicable thereto, and all repayments of the
principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
the failure of the Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Credit Agreement.
This Syndicated Dollar Loan Note is one of the Syndicated Dollar Loan
Notes referred to in the Credit Agreement dated as of April 23, 1997 among the
Borrower, the Banks listed on the signature pages thereof, Wachovia Bank of
Georgia, N.A.,
86
as Agent and First Union National Bank of North Carolina, as Documentation Agent
(as the same may be amended and modified from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
optional and mandatory prepayment and the repayment hereof and the acceleration
of the maturity hereof, as well as the obligation of the Borrower to pay all
costs of collection, including reasonable attorneys fees, in the event this
Syndicated Loan Note is collected by law or through an attorney at law.
The Borrower hereby waives presentment, demand, protest, notice of
demand, protest and nonpayment and any other notice required by law relative
hereto, except to the extent as otherwise may be expressly provided for in the
Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Syndicated Dollar Loan
Note to be duly executed, under seal, by its duly authorized officer as of the
day and year first above written.
CULP, INC. (SEAL)
By:__________________________
Title:
87
Syndicated Dollar Loan Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
88
Base Rate Amount Amount of
or Euro- of Principal Maturity Notation
Date Dollar Loan Loan Repaid Date Made By
89
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
90
EXHIBIT A-2
FORM OF FOREIGN CURRENCY LOAN NOTE
Atlanta, Georgia
April 23, 1997
For value received, CULP, INC., a North Carolina corporation (the
"Borrower"), promises to pay to the order of _________________________________,
a ____________________ (the "Bank"), for the account of its Lending Office, the
outstanding principal amount of the Foreign Currency Loans made by the Bank to
the Borrower as Foreign Currency Loans pursuant to the Credit Agreement referred
to below, on the dates and in the amounts provided in the Credit Agreement. The
Borrower promises to pay interest on the unpaid principal amount of this Note on
the dates and at the rate or rates provided for Foreign Currency Loans in the
Credit Agreement. Interest on any overdue principal of and, to the extent
permitted by law, overdue interest on the principal amount hereof shall bear
interest at the Default Rate, as provided for in the Credit Agreement. All such
payments of principal and interest shall be made in lawful money of the
applicable Foreign Currency in immediately available funds at the office of
Wachovia Bank of Georgia, N.A., 191 Peachtree Street, N.E., Atlanta, Georgia
30303-1757, or such other address as may be specified from time to time pursuant
to the Credit Agreement.
All Foreign Currency Loans made by the Bank, the respective maturities
thereof, the interest rates from time to time applicable thereto, and all
repayments of the principal thereof shall be recorded by the Bank and, prior to
any transfer hereof, endorsed by the Bank on the schedule attached hereto, or on
a continuation of such schedule attached to and made a part hereof; provided
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This Note is one of the Foreign Currency Loan Notes referred to in the
Credit Agreement dated as of April 23, 1997 among the Borrower, the Banks listed
on the signature pages thereof, Wachovia Bank of Georgia, N.A., as Agent and
First Union National Bank of North Carolina, as Documentation Agent (as the same
may be amended and modified from time to time, the "Credit
91
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
optional and mandatory prepayment and the repayment hereof and the acceleration
of the maturity hereof, as well as the obligation of the Borrower to pay all
costs of collection, including reasonable attorneys fees, in the event this
Syndicated Loan Note is collected by law or through an attorney at law.
The Borrower hereby waives presentment, demand, protest, notice of
demand, protest and nonpayment and any other notice required by law relative
hereto, except to the extent as otherwise may be expressly provided for in the
Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Foreign Currency Loan
Note to be duly executed, under seal, by its duly authorized officer as of the
day and year first above written.
CULP, INC. (SEAL)
By:__________________________
Title:
92
Foreign Currency Loan Note (cont'd)
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF CULP, INC.
DATED April 23, 1997
Principal
Amount of Maturity Principal
Loan and of Interest Amount Unpaid
Date Currency Period Paid Balance
- ------------------------------------------------------------
93
EXHIBIT A-3
MONEY MARKET LOAN NOTE
As of April 23, 1997
For value received, CULP, INC., a North Carolina corporation (the
"Borrower"), promises to pay to the order of , a _______________ (the "Bank"),
for the account of its Lending Office, the principal sum of ONE HUNDRED
TWENTY-FIVE MILLION AND NO/100 DOLLARS ($125,000,000) or such lesser amount as
shall equal the unpaid principal amount of each Money Market Loan made by the
Bank to the Borrower pursuant to the Credit Agreement referred to below, on the
dates and in the amounts provided in the Credit Agreement. The Borrower promises
to pay interest on the unpaid principal amount of this Money Market Loan Note on
the dates and at the rate or rates provided for in the Credit Agreement referred
to below. Interest on any overdue principal of and, to the extent permitted by
law, overdue interest on the principal amount hereof shall bear interest at the
Default Rate, as provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Wachovia Bank of
Georgia, N.A., 191 Peachtree Street, N.E., Atlanta, Georgia 30303-1757, or such
other address as may be specified from time to time pursuant to the Credit
Agreement.
All Money Market Loans made by the Bank, the respective maturities
thereof, the interest rates from time to time applicable thereto, and all
repayments of the principal thereof shall be recorded by the Bank and, prior to
any transfer hereof, endorsed by the Bank on the schedule attached hereto, or on
a continuation of such schedule attached to and made a part hereof; provided
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This Money Market Loan Note is one of the Money Market Loan Notes
referred to in the Credit Agreement dated as of April 23, 1997 among the
Borrower, the Banks listed on the signature pages thereof, Wachovia Bank of
Georgia, N.A., as Agent and First Union National Bank of North Carolina, as
Documentation Agent (as the same may be amended and modified from time to time,
the
94
"Credit Agreement"). Terms defined in the Credit Agreement are used herein with
the same meanings. Reference is made to the Credit Agreement for provisions for
the optional and mandatory prepayment and the repayment hereof and the
acceleration of the maturity hereof, as well as the obligation of the Borrower
to pay all costs of collection, including reasonable attorneys fees, in the
event this Syndicated Loan Note is collected by law or through an attorney at
law.
The Borrower hereby waives presentment, demand, protest, notice of
demand, protest and nonpayment and any other notice required by law relative
hereto, except to the extent as otherwise may be expressly provided for in the
Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Money Market Loan Note
to be duly executed, under seal, by its duly authorized officer as of the day
and year first above written.
CULP, INC. (SEAL)
By:__________________________
Title:
95
Money Market Loan Note (cont'd)
MONEY MARKET LOANS AND PAYMENTS OF PRINCIPAL
- -------------------------------------------------------------------------------
Amount Amount of Stated
Interest of Principal Maturity Notation
Date Rate Loan Repaid Date Made By
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
96
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
97
EXHIBIT B
OPINION OF
COUNSEL FOR THE BORROWER
[Dated as provided in Section 3.01 of the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn: Syndications Group
Dear Sirs:
We have acted as counsel for Culp, Inc., a North Carolina corporation
(the "Borrower") in connection with the Credit Agreement (the "Credit
Agreement") dated as of April 23, 1997, among the Borrower, the banks listed on
the signature pages thereof, Wachovia Bank of Georgia, N.A., as Agent and First
Union National Bank of North Carolina, as Documentation Agent. Terms defined in
the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion. We have assumed for purposes of our opinions set forth
below that the execution and delivery of the Credit Agreement by each Bank and
by the Agent have been duly authorized by each Bank and by the Agent.
98
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of North Carolina and has all corporate
powers required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes (i) are within the Borrower's corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii) require
no action by or in respect of, or filing with, any governmental body, agency or
official, (iv) do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any agreement, judgment, injunction, order, decree
or other instrument which to our knowledge is binding upon the Borrower and (v)
to our knowledge, except as provided in the Credit Agreement, do not result in
the creation or imposition of any Lien on any asset of the Borrower or any of
its Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower, enforceable against the Borrower in accordance with its terms, and
the Notes constitute valid and binding obligations of the Borrower, enforceable
in accordance with their respective terms, except as such enforceability may be
limited by: (i) bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity.
4. To our knowledge, there is no action, suit or proceeding pending, or
threatened, against or affecting the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole, or which in any manner questions the validity or
enforceability of the Credit Agreement or any Note.
5. Each of the Borrower's Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations,
99
consents and approvals required to carry on its business as now conducted.
6. Neither the Borrower nor any of its Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
7. Neither the Borrower nor any of its Subsidiaries is a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
8. We are qualified to practice in the State of North Carolina and do
not purport to be experts on any laws other than the laws of the United States
and the State of North Carolina and this opinion is rendered only with respect
to such laws. We have made no independent investigation of the laws of any other
jurisdiction.
This opinion is delivered to you in connection with the transaction
referenced above and may only be relied upon by you, any Assignee, Participant
or other Transferee under the Credit Agreement, and Jones, Day, Reavis & Pogue
without our prior written consent.
Very truly yours,
100
EXHIBIT C
OPINION OF
JONES, DAY, REAVIS & POGUE, SPECIAL COUNSEL
FOR THE AGENT
[Dated as provided in Section 3.01 of the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn: Syndications Group
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of April 23, 1997, among Culp, Inc., a North
Carolina corporation (the "Borrower"), the banks listed on the signature pages
thereof (the "Banks"), Wachovia Bank of Georgia, N.A., as Agent (the "Agent")
and First Union National Bank of North Carolina, as Documentation Agent, and
have acted as special counsel for the Agent for the purpose of rendering this
opinion pursuant to Section 3.01(d) of the Credit Agreement. Terms defined in
the Credit Agreement are used herein as therein defined.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
which Interpretive Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
101
Upon the basis of the foregoing, and assuming the due authorization,
execution and delivery of the Credit Agreement and each of the Notes by or on
behalf of the Borrower, we are of the opinion that the Credit Agreement
constitutes a valid and binding agreement of the Borrower and each Note
constitutes valid and binding obligations of the Borrower, in each case
enforceable in accordance with its terms except as: (i) the enforceability
thereof may be affected by bankruptcy, insolvency, reorganization, fraudulent
conveyance, voidable preference, moratorium or similar laws applicable to
creditors' rights or the collection of debtors' obligations generally; (ii)
rights of acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability; and (iii) the enforceability
of certain of the remedial, waiver and other provisions of the Credit Agreement
and the Notes may be further limited by the laws of the State of Georgia;
provided, however, such additional laws do not, in our opinion, substantially
interfere with the practical realization of the benefits expressed in the Credit
Agreement and the Notes, except for the economic consequences of any procedural
delay which may result from such laws.
In giving the foregoing opinion, we express no opinion as to the effect
(if any) of any law of any jurisdiction except the State of Georgia. We express
no opinion as to the effect of the compliance or noncompliance of the Agent or
any of the Banks with any state or federal laws or regulations applicable to the
Agent or any of the Banks by reason of the legal or regulatory status or the
nature of the business of the Agent or any of the Banks.
This opinion is delivered to you in connection with the transaction
referenced above and may only be relied upon by you and any Assignee,
Participant or other Transferee under the Credit Agreement without our prior
written consent.
Very truly yours,
102
EXHIBIT D
ASSIGNMENT AND ACCEPTANCE
Dated ______________ __, ____
Reference is made to the Credit Agreement dated as of April 23, 1997
(together with all amendments and modifications thereto, the "Credit Agreement")
among Culp, Inc., a North Carolina corporation (the "Borrower"), the Banks (as
defined in the Credit Agreement), Wachovia Bank of Georgia, N.A., as Agent (the
"Agent") and First Union National Bank of North Carolina, as Documentation
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, without recourse to
the Assignor, 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 Commitment and a interest (which on the Effective
Date hereof is $__________________)) in the Syndicated Loans [and Money Market
Loans] owing to the Assignor and a % interest in the Note[s] held by the
Assignor (which on the Effective Date hereof is $__________).
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement 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 Commitment (without giving effect to assignments
thereof which have not yet become effective) is $__________ and the aggregate
outstanding principal amount of Syndicated Loans [and Money Market Loans] owing
to it (without giving effect to assignments thereof which have not yet become
effective) is $ _________;
103
(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
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 [(x)] a new Syndicated Dollar Loan Note dated
_________, ____ in the principal amount of $__________ , a new Foreign Currency
Loan Note dated __________________, ____ in the principal amount of $__________
and a new Money Market Loan Note in the principal amount of $___________, each
payable to the order of the Assignee [and (y) a new Syndicated Dollar Loan Note
dated __________________, ____ in the principal amount of $__________ , a new
Foreign Currency Loan Note dated __________________, ____ in the principal
amount of $__________ and a new Money Market Loan Note in the principal amount
of $___________, each payable to the order of the Assignor].
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 4.04(a) thereof (or any more recent financial statements of the Borrower
delivered pursuant to Section 5.01(a) or (b) 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 obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank; (vi) specifies as its
Lending Office (and 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
(viii) makes the representation and warranty contained in Section 9.18 of the
Credit Agreement [, and (ix) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
104
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.
5. Upon such execution and acceptance by the Agent [and execution by
the Borrower] [IF REQUIRED BY THE CREDIT AGREEMENT], 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 Sections 8.03, 9.03 and 9.04 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] [IF REQUIRED BY THE CREDIT AGREEMENT], 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 Georgia.
[NAME OF ASSIGNOR]
By:_____________________________
Title:
[NAME OF ASSIGNEE]
105
By:_____________________________
Title:
Lending Office:
[Address]
WACHOVIA BANK OF GEORGIA, N.A.,
As Agent
By:_____________________________
Title:
[NAME OF BORROWER]
IF REQUIRED BY THE CREDIT AGREEMENT.
By:_____________________________
Title:
106
EXHIBIT E
NOTICE OF BORROWING
______________________________, ____
Wachovia Bank of Georgia, N.A., as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Credit Agreement (as amended and modified from time to time,
the "Credit Agreement") dated as of April 23, 1997 by and
among Culp, Inc., the Banks from time to time parties thereto,
Wachovia Bank of Georgia, N.A., as Agent and First Union
National Bank of North Carolina, as Documentation Agent.
Gentlemen:
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings attributable thereto in the Credit Agreement.
This Notice of Borrowing is delivered to you pursuant to Section 2.02
of the Credit Agreement.
The Borrower hereby requests a [Euro-Dollar Borrowing] [Base Rate
Borrowing] [Foreign Currency Borrowing in][SPECIFY FOREIGN CURRENCY] in the
aggregate principal amount of [the Dollar Equivalent of] $__________ to be made
on _________, ____, and for interest to accrue thereon at the rate established
by the Credit Agreement for [Euro-Dollar Loans] [Base Rate Loans] [Foreign
Currency Loans]. The duration of the Interest Period with respect thereto shall
be [1 month] [2 months] [3 months] [6 months] [30 days] [60 days] [90 days] [120
days].
The Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized officer this _____ day of _____________, _____.
CULP, INC.
107
By:_________________________
Title:
108
EXHIBIT F
COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement dated as of April 23, 1997
(as modified and supplemented and in effect from time to time, the "Credit
Agreement") among Culp, Inc., as Borrower, the Banks from time to time parties
thereto, Wachovia Bank of Georgia, N.A., as Agent and First Union National Bank
of North Carolina, as Documentation Agent. Capitalized terms used herein shall
have the meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 5.01(c) of the Credit Agreement, ________________,
the duly authorized ____________________ of Culp, Inc., hereby certifies to the
Agent and the Banks that the information contained in the Compliance Check List
attached hereto is true, accurate and complete as of ________________, ____, and
that no Default is in existence on and as of the date hereof.
CULP, INC.
By:__________________________
Title:
109
CULP, INC.
COMPLIANCE CHECK LIST
_____________________
__________________, ____
1. Consolidations, Mergers and Sales of Assets. (Section 5.05.)
The Borrower will not, nor will it permit any Subsidiary to,
consolidate or merge with or into, or sell, lease or otherwise transfer
all or any substantial part of its assets to, any other Person, or
discontinue or eliminate any business line or segment, provided that
(a) the Borrower may merge with another Person if (i) such Person was
organized under the laws of the United States of America or one of its
states, (ii) the Borrower is the corporation surviving such merger and
(iii) immediately after giving effect to such merger, no Default shall
have occurred and be continuing, (b) Subsidiaries of the Borrower may
merge with one another, and (c) the foregoing limitation on the sale,
lease or other transfer of assets and on the discontinuation or
elimination of a business line or segment shall not prohibit, during
any Fiscal Quarter, a transfer of assets or the discontinuance or
elimination of a business line or segment (in a single transaction or
in a series of related transactions) unless the aggregate assets to be
so transferred or utilized in a business line or segment to be so
discontinued, when combined with all other assets transferred, and all
other assets utilized in all other business lines or segments
discontinued, during such Fiscal Quarter and the immediately preceding
3 Fiscal Quarters, contributed more than 10% of EBITDA during the 4
Fiscal Quarters immediately preceding such Fiscal Quarter.
(a) Value of assets transferred or business
lines or segments discontinued $_____________
(b) EBITDA - Schedule 1 $_____________
(c) 10% of (b) $_____________
Limitation (a) not to exceed (c)
2. Loans and Advances (Section 5.15)
110
Neither the Borrower nor any of its Subsidiaries shall make loans or
advances to any Person except as permitted by Section 5.16 and except:
(i) loans and advances made prior to the Closing Date and listed on
Schedule 5.15, (ii) loans or advances to employees not exceeding
$5,000,000 in the aggregate principal amount outstanding at any time,
in each case made in the ordinary course of business and consistent
with practices existing on January 26, 1997; (iii) deposits required by
government agencies or public utilities; (iv) loans and advances made
after the Closing Date to 3096726 Canada Inc. and/or Rayonese Textile
Inc. in an aggregate amount which, together with Investments in 3096726
Canada Inc. and/ or Rayonese Textile Inc. made after the Closing Date
and permitted by clause (vii) of Section 5.16, does not exceed
$25,000,000; and (v) other loans and advances in an amount which,
together with Investments permitted by clause (viii) of Section 5.16,
does not exceed 10% of Stockholders' Equity; provided that after giving
effect to the making of any loans, advances or deposits permitted by
this Section, and no Default shall be in existence or be created
thereby.
(a) To Employees $_____________
Limitation $5,000,000
(b) Loans and advances to 3096726 Canada Inc. and/or Rayonese Textile
Inc.-- See Paragraph 3(d) below
(c) Other Loans and advances-- See Paragraph 3(i) below
3. Investments (Section 5.16)
Neither the Borrower nor any of its Subsidiaries shall make Investments
in any Person except as permitted by Section 5.15 and Investments in
existence on the Closing Date and listed on Schedule 5.16 and except
Investments in (i) direct obligations of the United States Government
maturing within one year, (ii) certificates of deposit issued by a
commercial bank whose credit is satisfactory to the Agent, (iii)
commercial paper rated A1 or the equivalent thereof by S&P or P1 or the
equivalent thereof by Moody's and in either case maturing within 6
months after the date of acquisition, (iv) tender bonds the payment of
the principal of and interest on which is fully supported by a letter
of credit issued by a United States bank whose long-term certificates
of deposit are rated at least AA or the equivalent thereof by S&P and
Aa or the
111
equivalent thereof by Moody's, (v) Investments pursuant to its deferred
compensation plan, funded with life insurance through a Rabbi Trust;
(vi) investments in Joint Ventures in an aggregate amount not exceeding
$25,000,000; (vii) Investments made after the Closing Date in 3096726
Canada Inc. and/or Rayonese Textile Inc. in an aggregate amount which,
together with loans and advances to 3096726 Canada Inc. and/or Rayonese
Textile Inc. and permitted by clause (iv) of Section 5.16, do not
exceed $25,000,000; and/or (viii) other Investments in an amount which,
together with loans and advances permitted by clause (v) of Section
5.15, does not exceed 10% of Stockholders' Equity; provided, however,
immediately after giving effect to the making of any Investment, no
Default shall have occurred and be continuing.
(a) Investments in Joint Ventures $___________
Limitation $25,000,000
(b) Loans and advances after the Closing Date
to 3096726 Canada Inc. and/or $___________
Rayonese Textile Inc.
(c) Investments after the Closing Date
in 3096726 Canada Inc. and/or $___________
Rayonese Textile Inc.
(d) Sum of (b) and (c) $___________
Limitation: (d) may not exceed $25,000,000
(e) Loans and advances not permitted by
clauses (i) through (iv), inclusive,
of ss. 5.15 $___________
(f) Investments not permitted by
clauses (i) through (vii), inclusive,
of ss. 5.16 $___________
(g) Sum of (e) and (f) $___________
(h) Stockholders' Equity $___________
(i) 10% of (h) $___________
Limitation: (g) may not exceed (i)
112
4. Priority Debt (Section 5.17)
None of the Borrowers' nor any Consolidated Subsidiary's property is
subject to any Lien securing Debt, except for:
Description of Lien and Property Amount of Debt
subject to same Secured
a. ___________________________ $_____________
b. ___________________________ $_____________
c. ___________________________ $_____________
d. ___________________________ $_____________
e. ___________________________ $_____________
f. ___________________________ $_____________
Total $
=============
(a) Liens not permitted by Sections 5.17(a)
through (h), inclusive $_____________
(b) Debt of Subsidiaries not permitted by
Section 5.17(j) $_____________
(c) Sum of (a) and (b) $_____________
(d) Stockholders' Equity $_____________]
(e) Debt secured by Liens permitted by
Sections 5.17(a) through (h), inclusive $_____________
(f) Sum of (c) and (e) $_____________
(g) 8% of (c) $_____________
(h) 15% of (f) $_____________
Limitations: (c) may not exceed (g)
(f) may not exceed (h)
5. Interest Coverage (Section 5.19)
113
At the end of each Fiscal Quarter, commencing with the Fiscal Quarter
ending January 26, 1997, the ratio of EBIT to Consolidated Net Interest
Expense shall not have been less than 2.25 to 1.0.
(a) EBIT - Schedule 1 $_____________
(b) Consolidated Net Interest Expense
- Schedule 1 $_____________
(c) Actual ratio of (a) to (b) ____ to 1.0
Minimum ratio 2.25 to 1.0
6. Ratio of Total Debt to Total Capitalization (Section 5.20)
The ratio of Total Debt to Total Capitalization will not at the end of
each Fiscal Month exceed 0.60 to 1.00.
(a) Total Debt $_____________
(b) Stockholders' Equity $_____________
(c) Total Capitalization (sum of (a) and (b) $_____________
(d) Actual ratio of (a) to (c) ____ to 1.0
Maximum ratio 0.60 to 1.0
7. Debt/EBITDA Ratio (Section 5.21)
The Debt/EBITDA Ratio will at the end of each Fiscal Month be less than
3.5 to 1.00.
(a) Total Debt $_____________
(b) EBITDA - Schedule 1 $_____________
(c) Actual ratio of (a) to (b) ____ to 1.0
Maximum ratio < 3.5 to 1.0
114
Schedule 1
EBIT/EBITDA
I. EBIT:
(a) Consolidated Net Income for:
quarter $_____________
--- ----
quarter $_____________
--- ----
quarter $_____________
--- ----
quarter $_____________
--- ----
Total $_____________
(b) Consolidated Net Interest Expense (1) for:
quarter $_____________
--- ----
quarter $_____________
--- ----
quarter $_____________
--- ----
quarter $_____________
--- ----
Total $_____________
(c) Income taxes for:
quarter $_____________
--- ----
quarter $_____________
--- ----
quarter $_____________
--- ----
quarter $_____________
--- ----
Total $_____________
TOTAL EBIT (sum of (a) through (c)) $_____________
II. EBITDA
(a) EBIT (from Part I) $_____________
(b) Depreciation expense for:
quarter $_____________
--- ----
quarter $_____________
--- ----
___________________________
(1) Exclude Restricted Investments
115
quarter $_____________
--- ----
quarter $_____________
--- ----
Total $_____________
116
(c) Amortization expense for:
quarter $_____________
--- ----
quarter $_____________
--- ----
quarter $_____________
--- ----
quarter $_____________
--- ----
Total $_____________
(d) Other Non-cash charges for:
quarter $_____________
--- ----
quarter $_____________
--- ----
quarter $_____________
--- ----
quarter $_____________
--- ----
Total $_____________
TOTAL EBITDA (sum of (a) through (d)) $_____________
117
EXHIBIT G
CULP, INC.
CLOSING CERTIFICATE
Reference is made to the Credit Agreement (the "Credit Agreement")
dated as of April 23, 1997, among Culp, Inc., the Banks listed therein, Wachovia
Bank of Georgia, N.A., as Agent and First Union National Bank of North Carolina,
as Documentation Agent. Capitalized terms used herein have the meanings ascribed
thereto in the Credit Agreement.
Pursuant to Section 3.01(e) of the Credit Agreement, __________________
________________________, the duly authorized _________________________ of Culp,
Inc., hereby certifies to the Agent and the Banks that (i) no Default has
occurred and is continuing as of the date hereof, and (ii) the representations
and warranties contained in Article IV of the Credit Agreement are true on and
as of the date hereof.
Certified as of April 23, 1997.
By:_____________________________
Printed Name:________________
Title:_______________________
118
EXHIBIT H
CULP, INC.
SECRETARY'S CERTIFICATE
The undersigned, ____________________________, _______________________
_________________, Secretary of Culp, Inc., a North Carolina corporation (the
"Borrower"), hereby certifies that [s]he has been duly elected, qualified and is
acting in such capacity and that, as such, [s]he is familiar with the facts
herein certified and is duly authorized to certify the same, and hereby further
certifies, in connection with the Credit Agreement dated as of April 23, 1997
among the Borrower, Wachovia Bank of Georgia, N.A. as Agent, First Union
National Bank of North Carolina, as Documentation Agent and the Banks listed on
the signature pages thereof, that:
1. Attached hereto as Exhibit A is a complete and correct copy of the
Certificate of Incorporation of the Borrower as in full force and effect on the
date hereof as certified by the Secretary of State of the State of North
Carolina, the Borrower's state of incorporation.
2. Attached hereto as Exhibit B is a complete and correct copy of the
Bylaws of the Borrower as in full force and effect on the date hereof.
3. Attached hereto as Exhibit C is a complete and correct copy of the
resolutions duly adopted by the Board of Directors of the Borrower on
__________________, ____ 1997 approving, and authorizing the execution and
delivery of, the Credit Agreement, the Notes and the other Loan Documents (as
such terms are defined in the Credit Agreement) to which the Borrower is a
party. Such resolutions have not been repealed or amended and are in full force
and effect, and no other resolutions or consents have been adopted by the Board
of Directors of the Borrower in connection therewith.
4. ____________________________, who is __________________ of the
Borrower signed the Credit Agreement, the Notes and the other Loan Documents to
which the Borrower is a party, was duly elected, qualified and acting as such at
the time [s]he signed the Credit Agreement, the Notes and other Loan Documents
to which the Borrower is a party, and [his/her] signature appearing on the
Credit Agreement, the Notes and the other Loan Documents to which the Borrower
is a party is [his/her] genuine signature.
119
IN WITNESS WHEREOF, the undersigned has hereunto set [his/her] hand as of April
23, 1997.
____________________________________
120
EXHIBIT I
MONEY MARKET QUOTE REQUEST
[Date]
Wachovia Bank of Georgia, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Money Market Quote Request
This Money Market Quote Request is given in accordance with Section
2.03 of the Credit Agreement (as amended or modified from time to time, the
"Credit Agreement") dated as of April 23, 1997, among Culp, Inc., the Banks from
time to time parties thereto, Wachovia Bank of Georgia, N.A., as Agent and First
Union National Bank of North Carolina, as Documentation Agent. Terms defined in
the Credit Agreement are used herein as defined therein.
The Borrower hereby requests that the Agent obtain quotes for a Money
Market Borrowing based upon the following:
1. The proposed date of the Money Market Borrowing shall be
______________, 19_____ (the "Money Market Borrowing Date").(1)*
2. The aggregate amount of the Money Market Borrowing shall be
$_______________.(2)
3. The Stated Maturity Date(s) applicable to the Money Market Borrowing
shall be ______ days.(3)
121
________________________
* All numbered footnotes appear on the last page of this Exhibit I.
122
Very truly yours,
CULP, INC.
By:___________________________
Title:
(1) The date must be a Euro-Dollar Business Day.
(2) The amount of the Money Market Borrowing is subject to Section 2.03(a) and
(b).
(3) The Stated Maturity Dates are subject to Section 2.03(b)(iii). The Borrower
may request that up to 2 different Stated Maturity Dates be applicable to
any Money Market Borrowing, provided that (i) each such Stated Maturity
Date shall be deemed to be a separate Money Market Quote Request and (ii)
the Borrower shall specify the amounts of such Money Market Borrowing to be
subject to each such different Stated Maturity Date.
123
EXHIBIT I
MONEY MARKET QUOTE
Wachovia Bank of Georgia, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Money Market Quote to Culp, Inc.
This Money Market Quote is given in accordance with Section 2.03(c)(ii)
of the Credit Agreement (as amended or modified from time to time, the "Credit
Agreement") dated as of April 23, 1997, among Culp, Inc. (the "Borrower"), the
Banks from time to time parties thereto, Wachovia Bank of Georgia, N.A., as
Agent and First Union National Bank of North Carolina, as Documentation Agent.
Terms defined in the Credit Agreement are used herein as defined therein.
In response to the Borrower's Money Market Quote Request dated
_______________, ____, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Date of Money Market Borrowing:1*
4. We hereby offer to make Money Market Loan(s) in the following
maximum principal amounts for the following Interest Periods and at the
following rates:
Maximum Stated
Principal Maturity
Amount(2) Date(3) Rate Per Annum(4)
- --------- -------- -----------------
124
______________________
* All numbered footnotes appear on the last page of this Exhibit J.
125
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit Agreement,
irrevocably obligate(s) us to make the Money Market Loan(s) for which any
offer(s) [is] [are] accepted, in whole or in part (subject to the last sentence
of Section 2.03(c)(i) of the Credit Agreement).
126
Very truly yours,
[Name of Bank]
Dated: By:______________________________
___________________________ Authorized Officer
127
_______________________
(1) As specified in the related Money Market Quote Request.
(2) The principal amount bid for each Stated Maturity Date may not exceed the
principal amount requested. Money Market Quotes must be made for at least
$5,000,000 or a larger integral multiple of $1.000,000.
(3) The Stated Maturity Dates are subject to Section 2.03(b)(iii).
(4) Subject to Section 2.03(c)(ii)(C).
128
Schedule 4.08
Subsidiaries
Name Jurisdiction of Incorporation
Guilford Printers, Inc. North Carolina(2)
Culp International, Inc. Virgin Islands
3096726 Canada Inc. Federal Laws of Canada
Rayonese Textile Inc. Federal Laws of Canada
__________________________
(2) Administratively dissolved by the North Carolina Secretary of State,
effective December 12, 1993
129
Schedule 5.15
Loans and Advances existing on the Closing Date
NONE.
130
Schedule 5.16
Investments existing on the Closing Date
1. The Restricted Investments in existence from time to time.
2. The Borrower's Investments in Subsidiaries.
131
Schedule 5.17
Debt of Subsidiaries existing on the Closing Date
Indebtedness of Rayonese Textile, Inc. (the outstanding principal amount of
which is approximately CN $ 754,000 as of the Closing Date) represented by that
certain Canada-Quebec Subsidiary Agreement on Industrial Development between
Rayonese Textile Inc. and Industry Canada.
132