EXHIBIT 10.39
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This Amended and Restated Loan and Security Agreement is made as of the
9th day of September, 2003, between TROPICAL SPORTSWEAR INT'L CORPORATION, a
Florida corporation ("Borrower"), and FLEET CAPITAL CORPORATION, a Rhode Island
corporation ("Lender").
W I T N E S S E T H:
WHEREAS, Borrower and Bank of America, N.A. (formerly known as
NationsBank, N.A.), a national banking association ("Bank of America"),
heretofore executed and delivered a Loan Agreement dated as of May 28, 1999 (as
amended and in effect on the date hereof, the "Existing Loan Agreement"),
pursuant to which Bank of America made available to Borrower a term loan in the
original aggregate principal amount of $15,500,000, of which $7,000,000 remains
unpaid on the date hereof (such unpaid principal amount, the "Existing Term
Loan");
WHEREAS, pursuant to an Assignment of Mortgage and Related Documents
dated as of September 9, 2003 (the "Loan Assignment"), Bank of America has on
the date hereof assigned and transferred to Lender all of its right, title and
interest in and to the Existing Loan Agreement and each other instrument,
agreement and other document evidencing, governing, securing or relating to the
Existing Term Loan (together with the Existing Loan Agreement, collectively, the
"Existing Loan Documents");
WHEREAS, pursuant to an Assignment Agreement dated as of September 9,
2003 (the "Swap Assignment," and together with the Loan Assignment, the
"Assignments"), Bank of America has on the date hereof assigned and transferred
to Lender or an Affiliate of Lender all of its right, title and interest in and
to the International SWAP Dealers Association, Inc. Master Agreement dated May
28, 1999, executed by Borrower and Bank of America (together with all exhibits,
schedules and addenda attached thereto, the "Swap Contract"); and
WHEREAS, at the request of Borrower, Lender has agreed to amend the
Existing Loan Agreement to, among other things, eliminate certain financial
covenants and provide for an additional term loan, and for the convenience of
the parties and without any intention of effecting a repayment or a novation of
the Existing Term Loan, to effect such modifications and other changes by
amending and restating the Existing Loan Agreement in its entirety as
hereinafter set forth, upon and subject to all of the terms and conditions
hereof.
NOW, THEREFORE, in consideration of the Existing Loan Agreement and the
Existing Term Loan, the mutual undertakings hereinafter set forth and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree that the existing Loan Agreement
is amended and restated in its entirety to read as follows:
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SECTION 1
DEFINITIONS
Section 1.1 Definitions. All capitalized terms used in this
Agreement, unless otherwise defined herein, shall have the meanings ascribed to
such terms in the Revolving Loan Agreement (as hereinafter defined). In
addition, for the purposes of this Agreement, the following terms shall have the
following meanings:
"Account" shall have the meaning ascribed to "account" in the UCC and
shall include any and all rights of Borrower to payment for goods sold or leased
or for services rendered that are not evidenced by an Instrument or Chattel
Paper, whether or not they have been earned by performance.
"Account Debtor" shall mean a Person who is or becomes obligated under
or on account of an Account.
"Accounts Collateral" shall mean all Accounts of Borrower and all
right, title and interest of Borrower in or to any returned Goods the sale or
other disposition of which gave rise to an Account, together with all rights,
titles, securities and guarantees with respect to any Account, including any
rights to stoppage in transit, replevin, reclamation and resales, and all
related security or Liens, whether voluntary or involuntary, in each case
whether now existing or owned or hereafter created, arising or acquired.
"Adjusted LIBOR Rate" with respect to each Interest Period for a LIBOR
Loan, shall mean an interest rate per annum (rounded upward to the next 1/16th
of one percent) equal to the quotient of (a) the LIBOR Rate in effect for such
Interest Period divided by (b) a percentage expressed as a decimal) equal to
100% minus Statutory Reserves.
"Agreement" shall mean this Amended and Restated Loan and Security Agreement,
including all Schedules, Exhibits and other attachments hereto, and all
amendments, modifications and supplements hereto and thereto.
"Applicable Margin" shall mean (a) as to Base Rate Loans, 1.50%, and
(b) as to LIBOR Loans, 4.00%.
"Assignments" shall have the meaning ascribed to it in the Recitals to
this Agreement.
"Bank" shall mean Fleet National Bank.
"Base Rate" shall mean the rate of interest announced or quoted by Bank
from time to time as its prime rate. The prime rate announced by Bank is a
reference rate and does not necessarily represent the lowest or best rate
charged by Bank. Bank may make loans or other extensions of credit at, above or
below its announced prime rate. If the prime rate is discontinued by Bank as a
standard, a comparable reference rate designated by Bank as a substitute
therefor shall be the Base Rate.
"Base Rate Loan" shall mean any portion of the Term Loan bearing
interest at a rate
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determined by reference to the Base Rate.
"Board of Governors" shall mean the Board of Governors of the Federal
Reserve Board.
"Business Day" shall mean any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of Georgia or is a day
on which banking institutions located in such state are closed; provided,
however, that when used with reference to a LIBOR Loan (including the making,
continuing, prepaying or repaying of any LIBOR Loan), the term "Business Day"
shall also exclude any day on which banks are not open for dealings in U.S.
Dollar deposits on the London interbank market.
"Capital Expenditures" shall mean all expenditures of Borrower and its
Consolidated Subsidiaries which, in accordance with GAAP, would be classified as
capital expenditures.
"Capital Leases" shall mean leases that are treated, under GAAP, as
installment purchases of capital assets rather than operating leases.
"Chattel Paper" shall have the meaning given to "chattel paper" in the
UCC.
"Closing Date" shall mean the date on which all of the conditions
precedent in Section 3 hereof are satisfied.
"Collateral" shall mean all of the Property and interests in Property
described in Section 6 hereof; all Property described in any of the other Loan
Documents as security for the payment or performance of any of the Obligations;
and all other Property and interests in Property that now or hereafter secure
(or are intended to secure) the payment and performance of any of the
Obligations.
"Compliance Certificate" shall mean a Compliance Certificate to be
provided by Borrower to Lender in accordance with, and in the form annexed as
EXHIBIT C to, this Agreement.
"Consolidated Subsidiary" shall mean at any date any Subsidiary of
Borrower or other entity, the accounts of which are Consolidated with those of
Borrower in its Consolidated financial statements as of such date.
"Commitment Termination Date" shall have the meaning ascribed to it in
the Revolving Loan Agreement.
"Default" shall mean an event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, become an Event
of Default.
"Default Rate" shall mean on any date a rate per annum that is equal to
(i) in the case of each Loan outstanding on such date, 2% in excess of the rate
otherwise applicable to such Loan on such date, and (ii) in the case of any of
the other Obligations outstanding on such date, 2% plus the Applicable Margin
for LIBOR Rate Loans in effect on such date.
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"Deposit Accounts" shall mean all of a Person's demand, time, savings,
passbook, money market or other depository accounts, and all certificates of
deposit, maintained by such Person with any bank, savings and loan association,
credit union or other depository institution.
"Document" shall have the meaning given to" document" in the UCC.
"Environmental Agreement" shall mean the Agreement Regarding
Environmental Matters to be executed by Borrower in favor of Lender on or about
the Closing Date and by which Borrower shall, among other things, indemnify
Lender from liability for Borrower's failure to comply with any Environmental
Laws.
"Equipment" shall mean all of Borrower's machinery, apparatus,
equipment, fittings, furniture, fixtures, motor vehicles and other tangible
personal Property (other than Inventory) of every kind and description, whether
now owned or hereafter acquired by Borrower and wherever located, and all parts,
accessories and special tools therefor, all accessions thereto, and all
substitutions and replacements thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and all rules and regulations from time to time promulgated
thereunder.
"Eurocurrency Liabilities" shall have the meaning ascribed to it in
Regulation D.
"Event of Default" means any of the events specified in Section 8.1,
provided that any requirement for notice or lapse of time or any other condition
enumerated in Section 8.1 has been satisfied.
"Existing Mortgage" shall mean the Amended and Restated Real Estate
Mortgage dated May 29, 1999, made by Borrower in favor of Bank of America, by
which Borrower granted and conveyed to Bank of America Liens upon the Real
Estate owned by Borrower and located at 0000 Xxxx Xxxxxx Xxxxxx and 4902 West
Waters Avenue, Tampa, Hillsborough County, Florida., as security for the payment
of the Obligations.
"Existing Loan Agreement" shall have the meaning ascribed to it in the
Recitals to this Agreement.
"Existing Loan Documents" shall have the meaning ascribed to it in the
Recitals to this Agreement.
"Existing Term Loan" shall have the meaning ascribed to it in the
Recitals to this Agreement.
"Existing Title Policy" shall have the meaning ascribed to it in
Section 3.12 hereof.
"Extraordinary Expenses" shall mean all costs, expenses, fees
(including fees incurred to Lender Professionals) or advances that Lender may
suffer or incur, whether prior to or after the occurrence of an Event of
Default, and whether prior to, after or during the pendency of
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an Insolvency Proceeding of an Obligor, on account of or in connection with (i)
the audit, inspection, repossession, storage, repair, appraisal, insuring,
completion of the manufacture of, preparing for sale, advertising for sale,
selling, collecting or otherwise preserving or realizing upon any Collateral;
(ii) the defense of Lender's Lien upon any Collateral or the priority thereof or
any adverse claim with respect to the Term Loan, the Loan Documents or the
Collateral asserted by any Obligor, any receiver or trustee for any Obligor or
any creditor or representative of creditors of any Obligor; (iii) the settlement
or satisfaction of any Liens upon any Collateral (whether or not such Liens are
Permitted Liens); (iv) the collection or enforcement of any of the Obligations;
(v) the negotiation, documentation, and closing of any restructuring or
forbearance agreement with respect to the Loan Documents or Obligations; or (vi)
the enforcement of any of the provisions of any of the Loan Documents. Such
costs, expenses and advances may include transfer fees, taxes, storage fees,
insurance costs, permit fees, utility reservation and standby fees, legal fees,
appraisal fees, brokers' fees and commissions, auctioneers' fees and
commissions, accountants' fees, environmental study fees, wages and salaries
paid to employees of Borrower or independent contractors in liquidating any
Collateral, travel expenses, all other fees and expenses payable or reimbursable
by Borrower or any other Obligor under any of the Loan Documents, and all other
fees and expenses associated with the enforcement of rights or remedies under
any of the Loan Documents, but excluding compensation paid to employees
(including inside legal counsel who are employees) of Lender.
"Fiscal Quarter" shall mean each consecutive period of 13 weeks
beginning on the first day of a Fiscal Year (and, in the case of any Fiscal Year
of 53 weeks, the 14-week period occurring during such period).
"Fiscal Year" shall mean the Fiscal Year of Borrower for accounting and
tax purposes, which ends on the Saturday nearest September 30 of each year.
"General Intangibles" shall mean all general intangibles of Borrower,
whether now owned or hereafter created or acquired by Borrower, including all
choses in action, causes of action, company or other business records,
inventions, blueprints, designs, patents, patent applications, trademarks,
trademark applications, trade names, trade secrets, service marks, goodwill,
brand names, copyrights, registrations, licenses, franchises, customer lists,
permits, tax refund claims, computer programs, operational manuals, internet
addresses and domain names, insurance refunds and premium rebates, all claims
under guaranties, security interests or other security held by or granted to
Borrower to secure payment of any of any of Borrower's Accounts by an Account
Debtor, all rights to indemnification and all other intangible property of
Borrower of every kind and nature (other than Accounts).
"Goods" shall have the meaning given to "goods" in the UCC.
"Guarantor" shall mean each of Tropical Sportswear Company, Inc., a
Delaware corporation, Savane International Corp., a Texas corporation, and
Apparel Network Corporation, a Florida corporation, and each other Person who at
any time guarantees payment or performance of the whole or any part of the
Obligations.
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"Guaranty" shall mean each Guaranty Agreement dated on or about the
Closing Date, made by a Guarantor in favor of Lender and each guaranty now or
hereafter executed by a Guarantor in favor of Lender with respect to all or any
part of the Obligations.
"Indemnified Claim" shall mean any and all claims, demands,
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
awards, remedial response costs, expenses or disbursements of any kind or nature
whatsoever (including reasonable attorneys', accountants', consultants' or
paralegals' fees and expenses), whether arising under or in connection with the
Loan Documents, any Applicable Law (including any Environmental Laws) or
otherwise, that may now or hereafter be suffered or incurred by any Indemnitee
and whether suffered or incurred in or as a result of any investigation,
litigation, arbitration or other judicial or non-judicial proceeding or any
appeals related thereto.
"Indemnitees" shall mean Lender and each of its Affiliates, officers,
directors, employees, agents, attorneys and shareholders.
"Interest" shall have the meaning ascribed to it in Section 2.15
hereof.
"Interest Period" shall have the meaning ascribed to it in Section 2.7
hereof.
"Instrument" shall have the meaning ascribed to the term "instrument"
in the UCC.
"Inventory" shall have the meaning ascribed to the term "inventory" in
the UCC and shall include all goods intended for sale or lease by Borrower, or
for display or demonstration; all work in process, all raw materials and other
materials and supplies of every nature and description used or which might be
used in connection with the manufacture, printing, packing, shipping,
advertising, selling, leasing or furnishing such goods or otherwise used or
consumed in Borrower's business (but excluding Equipment).
"Investment Property" shall have the meaning given to "investment
property" in the UCC and shall include all Securities (whether certificated or
uncertificated), security entitlements, securities accounts, commodity contracts
and commodity accounts.
"Lender Professionals" shall mean attorneys, accountants, appraisers,
business valuation experts, environmental engineers or consultants, turnaround
consultants and other professionals or experts retained by Lender.
"Letter-of-Credit Right" shall mean a right of Borrower to payment or
performance under a letter of credit (whether the letter of credit is written or
electronic), whether or not Borrower has demanded or is at the time entitled to
demand payment or performance.
"LIBOR Loan" shall mean any portion of the Term Loan bearing interest
at a rate determined by reference to the Adjusted LIBOR Rate.
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"LIBOR Rate" with respect to an Interest Period, shall mean the rate
per annum reported to Lender by Bank as the rate at which deposits of U.S.
Dollars approximately equal in principal amount to or comparable to the amount
of the LIBOR Loan to which such Interest Period relates and for a term
comparable to such Interest Period are offered to Bank by prime banks in the
London interbank foreign currency deposits market at approximately 11:00 a.m.,
London time, 2 Business Days prior to the commencement of such Interest Period.
Each determination by Lender of any LIBOR Rate shall, in the absence of any
manifest error, be conclusive.
"Loan" shall mean each Base Rate Loan and LIBOR Loan comprising the
Term Loan.
"Loan Documents" shall mean this Agreement, the Term Note, the Notice
of Future Advance, Mortgage Modification and Spreading Agreement, the Mortgage,
each Guaranty, such Uniform Commercial Code financing statements as Lender deems
necessary or appropriate, the Environmental Agreement and any and all other
agreements, instruments and documents now or hereafter executed by Borrower, any
Obligor or any other Person and delivered to Lender in respect of the
transactions contemplated by this Agreement and the other Loan Documents,
including all other instruments and agreements now or at any time hereafter
securing the whole or any part of the Obligations.
"Material Adverse Effect" shall mean the effect of any event,
condition, action, omission or circumstance, which, alone or when taken together
with other events, conditions, actions, omissions or circumstances occurring or
existing concurrently therewith, (i) has a material adverse effect upon the
business, operations, Properties or condition (financial or otherwise) of any
Obligor; (ii) has or could be reasonably expected to have any material adverse
effect whatsoever upon the validity or enforceability of the Agreement or any of
the other Loan Documents; (iii) has any material adverse effect upon the value
of the whole or any material part of the Collateral, the Liens of Lender with
respect to the Collateral or the priority of any such Liens; (iv) materially
impairs the ability of any other Obligor to perform its obligations under this
Agreement or any of the other Loan Documents, including repayment of any of the
Obligations when due; or (v) materially impairs the ability of Lender to enforce
or collect the Obligations or realize upon any of the Collateral in accordance
with the Loan Documents and Applicable Law.
"Maturity Date" shall mean June 6, 2006.
"Mortgage" shall mean the Amended and Restated Florida Mortgage,
Fixture Filing, Security Agreement and Assignment of Rents and Leases to be
executed by Borrower in favor of Lender on or about the Closing Date and by
which the Existing Mortgage shall be modified to, among other things, provide
for a Lien on the Tropical Headquarters and reflect the effectiveness of the
Loan Assignment and the making of the New Term Loan hereunder.
"Mortgaged Properties" shall mean, collectively, the Real Estate
encumbered by the Mortgage and the other Loan Documents.
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"New Term Loan" shall have the meaning ascribed to it in Section 2.1
hereof.
"Notice of Conversion/Continuation" shall have the meaning ascribed to
it in Section 2.6(ii) hereof.
"Obligations" shall mean, in each case whether now in existence or
hereafter arising, (i) the principal of, and interest and premium, if any, on,
the Term Loan; and (ii) all other Debts, covenants, duties and obligations
(including Contingent Obligations) now or at any time or times hereafter owing
by any Obligor to Lender under or pursuant to this Agreement or any of the other
Loan Documents, whether evidenced by any note or other writing, whether arising
from any extension of credit, opening of a letter of credit, acceptance, loan,
guaranty, indemnification or otherwise and whether direct or indirect, absolute
or contingent, due or to become due, primary or secondary, or joint or several,
including all interest, charges, expenses, fees or other sums (including
Extraordinary Expenses) chargeable to any or all Obligors hereunder or under any
of the other Loan Documents.
"Obligor" shall mean Borrower and each Guarantor, and any other Person
that is at any time liable for the payment of the whole or any part of the
Obligations or that has granted in favor of Lender a Lien upon any of such
Person's assets to secure payment of any of the Obligations.
"Permitted Liens" shall mean all Liens that are Permitted Liens under
(and as defined in) the Revolving Loan Agreement as in effect on the Closing
Date.
"Projections" shall mean Borrower's and its Subsidiaries' forecasted
Consolidated balance sheets, profit and loss statements and cash flow
statements, all prepared on a consistent basis with Borrower's and its
Subsidiaries' historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.
"Real Estate" shall mean all right, title and interest of Borrower
(whether as owner, lessor or lessee) at any time or times held by Borrower in
any real Property, any buildings, structures, parking areas or other
improvements thereon, any fixtures attached thereto and any easements
appurtenant thereto.
"Regulation D" shall mean Regulation D of the Board of Governors.
"Revolver Lenders" shall have the meaning ascribed to it in the
definition of "Revolving Loan Agreement."
"Revolving Loan Agreement" shall mean the Amended and Restated Loan and
Security Agreement dated June 6, 2003, by and among Borrower, certain of
Borrower's Subsidiaries, the various financial institutions party thereto from
time to time (the "Revolver Lenders") and Fleet Capital Corporation, in its
capacity as collateral and administrative agent for the Revolver Lenders.
"Statutory Reserves" shall mean, on any date, the percentage (expressed
as a decimal)
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established by the Board of Governors which is the then stated maximum rate for
all reserves (including, any emergency, supplemental or other marginal reserve
requirements) applicable to any member bank of the Federal Reserve System in
respect to Eurocurrency Liabilities (or any successor category of liabilities
under Regulation D). Such reserve percentage shall include, without limitation,
those imposed pursuant to said Regulation D. The Statutory Reserve shall be
adjusted automatically on and as of the effective date of any change in such
percentage.
"Swap Contract" shall have the meaning ascribed to it in the Recitals
to this Agreement.
"Swap Obligation" shall mean the aggregate present value of future
Obligations under the Swap Contract on the Closing Date.
"Taxes" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including income, receipts, excise, property, sales, use, transfer,
license, payroll, withholding, social security and franchise taxes now or
hereafter imposed or levied by the United States or any other Governmental
Authority and all interest, penalties, additions to tax and similar liabilities
with respect thereto, but excluding taxes imposed on or measured by the net
income or overall gross receipts of Lender.
"Term Loan" shall mean, collectively, (i) the Existing Term Loan and
(ii) the New Term Loan.
"Term Note" shall mean the Amended and Restated Renewal and Increase
Term Note made by Borrower to the order of Lender evidencing the obligation of
Borrower to pay the aggregate unpaid principal amount of the Term Loan (and any
promissory note or notes that may be issued from time to time in substitution,
renewal, extension, replacement or exchange therefor), substantially in the form
of EXHIBIT A hereto, with all blanks properly completed, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or refinanced.
"Tropical Headquarters" shall mean the Real Estate owned by Borrower
and located at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxxxxx.
Section 1.2 Rules of Construction. The rules of construction set
forth in Appendix A to the Revolving Loan Agreement under the headings
"Accounting Terms," "Other Terms" and "Certain Matters of Construction" shall be
incorporated herein by reference, mutatis mutandis, as if fully set forth
herein.
SECTION 2.
TERM LOAN; GENERAL LOAN PROVISIONS
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Section 2.1 Existing Term Loan; Manner of Borrowing and
Disbursing New Term Loan. Subject to and upon the terms and conditions set forth
in the Existing Loan Agreement, Bank of America made the Existing Term Loan
available to Borrower. The Existing Term Loan has been assigned by Bank of
America to Lender pursuant to the Loan Assignment. The aggregate principal
amount of the Existing Term Loan on the Closing Date is $7,000,000. Subject to
and upon the terms and conditions of, and in reliance upon the representations
and warranties made under, this Agreement, Lender agrees to make a Base Rate
Loan to Borrower on the Closing Date in a principal amount equal to the lesser
of (i) $1,500,000 or (ii) the Swap Obligation (the "New Term Loan"). Upon
satisfaction of the applicable conditions set forth in Section 3 hereof, Lender
shall make the proceeds of the New Term Loan available to Borrower on the
Closing Date. The proceeds of the New Term Loan shall be used by Borrower solely
to repay the Swap Obligation. Borrower shall not be entitled to reborrow any
amounts repaid with respect to the Term Loan.
Section 2.2. Term Note. The obligation of Borrower to repay the
Term Loan shall also be evidenced by the Term Note. The Term Note shall be dated
the Closing Date and duly executed and delivered by Borrower.
Section 2.3 Repayment of Principal of Term Loan. The principal
amount of the Term Loan is due and payable, and shall be repaid in full by
Borrower, in consecutive quarterly installments of $200,000 each, payable on the
first day of each calendar quarter, commencing on October 1, 2003; provided that
the unpaid principal balance of the Term Loan is due and payable, and shall be
repaid in full by Borrower, on the Maturity Date or, if sooner, on the
Commitment Termination Date.
Section 2.4 Payment of Interest on Term Loan. Interest accrued on
the Term Loan shall be due and payable on (i) the first calendar day of each
month for the immediately preceding month, computed through the last calendar
day of the preceding month, with respect to any portion of the Term Loan bearing
interest as a Base Rate Loan, (ii) the last day of the applicable Interest
Period and, if the applicable Interest Period is longer than 30 days, on the
last day of each month ending during such Interest Period, with respect to any
portion of the Term Loan bearing interest as a LIBOR Loan, (iii) the date of any
prepayment of the Term Loan and (iv) on the Commitment Termination Date. With
respect to any Base Rate Loan converted into a LIBOR Loan pursuant to Section
2.6 on a day when interest would not otherwise have been payable with respect to
such Base Rate Loan, accrued interest to the date of such conversion on the
amount of such Base Rate Loan so converted shall be paid on the conversion date.
Section 2.5 Rates of Interest. Borrower agrees to pay interest in
respect of all unpaid principal amounts outstanding with respect to the Term
Loan from the respective dates such principal amounts are advanced until paid
(whether at stated maturity, on acceleration, or otherwise) at a rate per annum
equal to the applicable rate indicated below:
(i) for any portion of the Term Loan made or
outstanding in whole or in part as Base Rate Loans, the Applicable
Margin for such Loans plus the Base Rate in effect from time to time;
or
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(ii) for any portion of the Term Loan made or
outstanding in whole or in part as LIBOR Loans, the Applicable Margin
for such Loans plus the Adjusted LIBOR Rate for the applicable Interest
Period selected by Borrower in conformity with this Agreement.
Upon determining the Adjusted LIBOR Rate for any Interest
Period requested by Borrower, Lender shall promptly notify Borrower thereof by
telephone and, if so requested by Borrower, confirm the same in writing. Such
determination shall, absent manifest error, be final, conclusive and binding on
all parties and for all purposes. The applicable rate of interest for any
portion of the Term Loan bearing interest based upon the Base Rate shall be
increased or decreased, as the case may be, by an amount equal to any increase
or decrease in the Base Rate, with such adjustments to be effective as of the
opening of business on the day that any such change in the Base Rate becomes
effective. Interest on each Loan shall accrue from and including the date on
which such Loan is made, converted to a Loan of another Type or continued as a
LIBOR Loan to (but excluding) the date of any repayment thereof; provided,
however, that, if a Loan is repaid on the same day made, one day's interest
shall be paid on such Loan. The Base Rate on the date hereof is 4.00% per annum
and, therefore, the rate of interest in effect hereunder on the date hereof,
expressed in simple interest terms, is 5.50% per annum with respect to any
portion of the Term Loan bearing interest as a Base Rate Loan.
Section 2.6 Conversions and Continuations.
(i) Borrower may on any Business Day after the
Closing Date, subject to the giving of a proper Notice of
Conversion/Continuation as hereinafter described, elect (A) to continue
all or any part of a LIBOR Loan by selecting a new Interest Period
therefor, to commence on the last day of the immediately preceding
Interest Period, or (B) to convert all or any part of a Loan of one
Type into a Loan of another Type; provided, however, that no
outstanding Loans may be converted into or continued as LIBOR Loans
when any Default or Event of Default exists. Any conversion of a LIBOR
Loan into a Base Rate Loan shall be made on the last day of the
Interest Period for such LIBOR Loan.
(ii) Whenever Borrower desires to convert or continue
Loans under Section 2.6(i), Borrower shall give Lender written notice
(or telephonic notice promptly confirmed in writing) substantially in
the form of EXHIBIT B, signed by an authorized officer of Borrower, at
least 1 Business Day before the requested conversion date, in the case
of a conversion into Base Rate Loans, and at least 3 Business Days
before the requested conversion or continuation date, in the case of a
conversion into or continuation of LIBOR Loans. Each such notice (a
"Notice of Conversion/Continuation") shall be irrevocable and shall
specify the aggregate principal amount of the Loans to be converted or
continued, the date of such conversion or continuation (which shall be
a Business Day) and whether the Loans are being converted into or
continued as LIBOR Loans (and, if so, the duration of the Interest
Period to be applicable thereto and, in the absence of any
specification by Borrower of the Interest Period, an Interest Period of
one month will be deemed to be specified) or Base Rate Loans. If, upon
the expiration of any Interest Period in respect of any LIBOR Loans,
Borrower shall have failed to deliver the Notice of
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Conversion/Continuation, Borrower shall be deemed to have elected to
convert such LIBOR Loans to Base Rate Loans.
Section 2.7. Interest Periods. In connection with the making,
continuation of, or conversion into, a LIBOR Loan, Borrower shall select an
interest period (each an "Interest Period") to be applicable to such LIBOR Loan,
which interest period shall commence on the date such LIBOR Loan is converted
from a Loan of another Type or continued as a LIBOR Loan, and shall end on a
numerically corresponding day in the first, second, third or sixth month
thereafter; provided, however, that:
(i) the initial Interest Period for a LIBOR Loan
shall commence on the date such Loan is made, converted from a Loan of
another Type or continued as a LIBOR Loan, and each Interest Period
occurring thereafter in respect of such Loan shall commence on the date
on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on
a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day, provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iii) any Interest Period that begins on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period shall expire on the last Business
Day of such calendar month;
(iv) no Interest Period with respect to any portion
of principal of a LIBOR Loan shall extend beyond a date on which
Borrower is required to make a scheduled payment of such portion of
principal; and
(v) no Interest Period shall extend beyond the
Maturity Date.
Section 2.8 Interest Rate Not Ascertainable. If Lender shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that on any date for determining the
Adjusted LIBOR Rate for any Interest Period, by reason of any changes arising
after the date of this Agreement affecting the London interbank market or
Lender's or Bank's position in such market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in the
definition of Adjusted LIBOR Rate, then, and in any such event, Lender shall
forthwith give notice (by telephone confirmed in writing) to Borrower of such
determination. Until Lender notifies Borrower that the circumstances giving rise
to the suspension described herein no longer exist, the obligation of Lenders to
make LIBOR Loans shall be suspended, and such affected Loans then outstanding
shall, at the end of the then applicable Interest Period or at such earlier time
as may be required by Applicable Law, bear the same interest as Base Rate Loans.
Section 2.9 Default Rate of Interest. Upon (i) the occurrence and
during the
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continuation of an Event of Default, if so elected by Lender in its discretion,
or (ii) the commencement by or against Borrower of an Insolvency Proceeding, in
each case whether or not Lender elects to accelerate the maturity or demand
payment of any of the Obligations, all of the Obligations (and, to the extent
permitted by Applicable Law, all past due interest) shall bear interest at the
Default Rate. To the fullest extent permitted by Applicable Law, the Default
Rate shall apply and accrue on any judgment entered with respect to any of the
Obligations and to the unpaid principal amount of the Obligations during any
Insolvency Proceeding of Borrower. Borrower acknowledges that the cost and
expense to Lender attendant upon the occurrence of an Event of Default are
difficult to ascertain or estimate and that the Default Rate is a fair and
reasonable estimate to compensate Lender for such added cost and expense.
Interest accrued at the Default Rate shall be due and payable ON DEMAND.
Section 2.10. Computation of Interest and Fees. All fees and other
charges provided for in this Agreement that are calculated as a per annum
percentage of any amount and all interest shall be calculated daily and shall be
computed on the actual number of days elapsed over a year of 360 days.
Section 2.11 Illegality. Notwithstanding anything to the contrary
contained elsewhere in this Agreement, if (i) any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration thereof shall make it unlawful for Lender to
make or maintain a LIBOR Loan or to give effect to its obligations as
contemplated hereby with respect to a LIBOR Loan or (ii) at any time Lender
determines that the making or continuance of or the conversion of a Loan of
another Type into any LIBOR Loan has become impracticable as a result of a
contingency occurring after the date hereof which adversely affects the London
interbank market or the position of Lender in such market, then Lender shall
give after such determination Borrower notice thereof and may thereafter (1)
declare that LIBOR Loans will not thereafter be made by Lender, whereupon any
request by Borrower for a LIBOR Loan shall be deemed a request for a Base Rate
Loan unless Lender's declaration shall be subsequently withdrawn (which
declaration shall be withdrawn promptly after the cessation of the circumstances
described in clause (i) or (ii) above); and (2) require that all outstanding
LIBOR Loans be converted to Base Rate Loans, under the circumstances of clause
(i) or (ii) of this Section 2.11 insofar as Lender determines the continuance of
LIBOR Loans to be impracticable, in which event all such LIBOR Loans shall be
converted automatically to Base Rate Loans as of the date of Borrower's receipt
of the aforesaid notice from Lender.
Section 2.12 Increased Costs. If, by reason of (a) the
introduction after the date hereof of or any change (including any change by way
of imposition or increase of Statutory Reserves or other reserve requirements)
in or in the interpretation of any law or regulation, or (b) the compliance with
any guideline or request from any central bank or other Governmental Authority
or quasi-Governmental Authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
(i) Lender shall be subject after the date hereof to
any Tax, duty or other charge with respect to any LIBOR Loan or its
obligation to make or maintain LIBOR Loans, or a change shall result in
the basis of taxation of payment to Lender of the
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principal of or interest on its LIBOR Loans or its obligation to make
LIBOR Loans (except for changes in the rate of Tax on the overall net
income or gross receipts of Lender imposed by the jurisdiction in which
Lender's principal executive office is located); or
(ii) any reserve (including any imposed by the Board
of Governors), special deposits or similar requirement against assets
of, deposits with or for the account of, or credit extended by, Lender
shall be imposed or deemed applicable or any other condition affecting
its LIBOR Loans or its obligation to make or maintain LIBOR Loans shall
be imposed on Lender or the London interbank market;
and as a result thereof there shall be any increase in the cost to Lender of
agreeing to make or making, funding or maintaining LIBOR Loans (except to the
extent already included in the determination of the applicable Adjusted LIBOR
Rate for LIBOR Loans), or there shall be a reduction in the amount received or
receivable by Lender, then Lender shall, promptly after determining the
existence or amount of any such increased costs for which Lender seeks payment
hereunder, give Borrower notice thereof and Borrower shall from time to time,
upon written notice from and demand by Lender, pay to Lender, within 5 Business
Days after the date specified in such notice and demand, an additional amount
sufficient to indemnify Lender against such increased costs. A certificate as to
the amount of such increased cost, submitted to Borrower by Lender, shall be
final, conclusive and binding for all purposes, absent manifest error.
At any time that, because of the circumstances described hereinabove in this
Section 2.12 or any other circumstances arising after the date of this Agreement
affecting Lender or the London interbank market or Lender's or Bank's position
in such market, the Adjusted LIBOR Rate, as determined by Lender, will not
adequately and fairly reflect the cost to Lender of making or maintaining LIBOR
Loans, then, and in any such event:
(i) Lender shall forthwith give notice (by telephone
confirmed in writing) to Borrower of such event;
(ii) Borrower's right to request and Lender's
obligation to make LIBOR Loans shall be immediately suspended and
Borrower's right to continue a LIBOR Loan as such beyond the then
applicable Interest Period shall also be suspended, until each
condition giving rise to such suspension no longer exists; and
(iii) Lender shall make a Base Rate Loan as part of
the requested Borrowing of LIBOR Loans, which Base Rate Loan shall, for
all purposes, be considered part of such Borrowing.
For purposes of this Section 2.12, all references to Lender shall be deemed to
include any bank holding company or bank parent of Lender.
2.13 Capital Adequacy. If Lender determines that after the date hereof (a)
the adoption of any Applicable Law regarding capital requirements for banks or
bank holding companies or the
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subsidiaries thereof, (b) any change in the interpretation or administration of
any such Applicable Law by any Governmental Authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
(c) compliance by Lender or its holding company with any request or directive of
any such Governmental Authority, central bank or comparable agency regarding
capital adequacy (whether or not having the force of law), has the effect of
reducing the return on Lender's capital to a level below that which Lender could
have achieved (taking into consideration Lender's and its holding company's
policies with respect to capital adequacy immediately before such adoption,
change or compliance and assuming that Lender's capital was fully utilized prior
to such adoption, change or compliance) but for such adoption, change or
compliance as a consequence of Lender's commitment to make the Loans pursuant
hereto by any amount deemed by Lender to be material:
(i) Lender shall promptly, after its receipt of a
certificate from Lender setting forth Lender's determination of such
occurrence, give notice thereof to Borrower; and
(ii) Borrower shall pay to Lender, as an additional
fee from time to time, ON DEMAND, such amount as Lender certifies to be
the amount reasonably calculated to compensate Lender for such
reduction.
A certificate of Lender claiming entitlement to compensation as set forth above
will be conclusive in the absence of manifest error. Such certificate will set
forth the nature of the occurrence giving rise to such compensation, the
additional amount or amounts to be paid to Lender (including the basis for
Lender's determination of such amount), and the method by which such amounts
were determined. In determining such amount, Lender may use any reasonable
averaging and attribution method. For purposes of this Section 2.13, all
references to a Lender shall be deemed to include any bank holding company or
bank parent of Lender.
Section 2.14 Funding Losses. If for any reason (other than due to a default
by Lender or as a result of Lender's refusal to honor a LIBOR Loan request due
to circumstances described in Section 2.11 or 2.12 hereof) a conversion to or
continuation of LIBOR Loans does not occur on the date specified therefor in a
Notice of Conversion/Continuation (whether or not withdrawn), or if any
repayment (including any conversions pursuant to Section 2.6 hereof) of any of
its LIBOR Loans occurs on a date that is not the last day of an Interest Period
applicable thereto, or if for any reason Borrower defaults in its obligation to
repay LIBOR Loans when required by the terms of this Agreement, then Borrower
shall pay to Lender, within 10 days after Lender's demand therefor, an amount
(if a positive number) computed pursuant to the following formula:
L = (R - T) x P x D
---------------
360
where
L = amount payable
R = interest rate applicable to the LIBOR Loan not
converted or continued or prepaid
T = effective interest rate per annum at which any readily
marketable bond or other obligations of the United
States,
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selected at Lender's sole discretion, maturing on or
nearest the last day of the then applicable or
requested Interest Period for such LIBOR Loan and in
approximately the same amount as such LIBOR Loan, can
be purchased by Lender on the day of such payment of
principal or failure to borrow
P = the amount of principal paid or the amount of the
LIBOR Loan to have been continued or converted
D = the number of days remaining in the Interest Period as
of the date of such prepayment or the number of
days in the requested Interest Period
Borrower shall pay such amount upon presentation by Lender of a statement
setting forth the amount and Lender's calculation thereof pursuant hereto, which
statement shall be deemed true and correct absent manifest error. For purposes
of this Section 2.14, all references to a Lender shall be deemed to include any
bank holding company or bank parent of Lender.
Section 2.15 Maximum Interest. Regardless of any provision contained in any
of the Loan Documents, in no contingency or event whatsoever shall the aggregate
of all amounts that are contracted for, charged or received by Lender pursuant
to the terms of this Agreement or any of the other Loan Documents and that are
deemed interest under Applicable Law exceed the highest rate permissible under
any Applicable Law. No agreements, conditions, provisions or stipulations
contained in this Agreement or any of the other Loan Documents or the exercise
by Lender of the right to accelerate the payment or the maturity of all or any
portion of the Obligations, or the exercise of any option whatsoever contained
in any of the Loan Documents, or the prepayment by Borrower of any of the
Obligations, or the occurrence of any contingency whatsoever, shall entitle
Lender to charge or receive in any event, interest or any charges, amounts,
premiums or fees deemed interest by Applicable Law (such interest, charges,
amounts, premiums and fees referred to herein collectively as "Interest") in
excess of the Maximum Rate and in no event shall Borrower be obligated to pay
Interest exceeding such Maximum Rate, and all agreements, conditions or
stipulations, if any, which may in any event or contingency whatsoever operate
to bind, obligate or compel Borrower to pay Interest exceeding the Maximum Rate
shall be without binding force or effect, at law or in equity, to the extent
only of the excess of Interest over such Maximum Rate. If any Interest is
charged or received in excess of the Maximum Rate ("Excess"), Borrower
acknowledges and stipulates that any such charge or receipt shall be the result
of an accident and bona fide error, and such Excess, to the extent received,
shall be applied first to reduce the principal Obligations and the balance, if
any, returned to Borrower, it being the intent of the parties hereto not to
enter into a usurious or otherwise illegal relationship. The right to accelerate
the maturity of any of the Obligations does not include the right to accelerate
any Interest that has not otherwise accrued on the date of such acceleration,
and Lender do not intend to collect any unearned Interest in the event of any
such acceleration. Borrower recognizes that, with fluctuations in the rates of
interest set forth in Section 2.4 of this Agreement or in the Note, and the
Maximum Rate, such an unintentional result could inadvertently occur. All monies
paid to Lender hereunder or under any of the other Loan Documents, whether at
maturity or by prepayment, shall be subject to any rebate of
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unearned Interest as and to the extent required by Applicable Law. By the
execution of this Agreement, Borrower covenants that (i) the credit or return of
any Excess shall constitute the acceptance by Borrower of such Excess, and (ii)
Borrower shall not seek or pursue any other remedy, legal or equitable, against
Lender 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 Lender or any
Lender, all Interest at any time contracted for, charged or received from
Borrower in connection with any of the 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 Obligations. Borrower and Lenders
shall, to the maximum extent permitted under Applicable Law, (i) characterize
any non-principal payment as an expense, fee or premium rather than as Interest
and (ii) exclude voluntary prepayments and the effects thereof. The provisions
of this Section 2.15 shall be deemed to be incorporated into every Loan Document
(whether or not any provision of this Section is referred to therein). All such
Loan Documents and communications relating to any Interest owed by Borrower and
all figures set forth therein shall, for the sole purpose of computing the
extent of Obligations, be automatically recomputed by Borrower, and by any court
considering the same, to give effect to the adjustments or credits required by
this Section 2.15.
Section 2.16 Special Provisions Governing LIBOR Loans.
(i) Number of LIBOR Loans. In no event may the number
of LIBOR Loans outstanding at any time to Lender exceed 3.
(ii) Minimum Amounts. Each continuation of or
conversion to LIBOR Loans pursuant to Section 2.6 hereof, shall be in a
minimum amount of $1,000,000 and integral multiples of $100,000 in
excess of that amount.
(iii) LIBOR Lending Office. Lender's initial LIBOR
Lending Office is set forth opposite its name on the signature pages
hereof. Lender shall have the right at any time and from time to time
to designate a different office of itself or of any Affiliate as
Lender's LIBOR Lending Office, and to transfer any outstanding LIBOR
Loans to such LIBOR Lending Office. No such designation or transfer
shall result in any liability on the part of Borrower for increased
costs or expenses resulting solely from such designation or transfer
except any such transfer that is made by Lender pursuant to Section
2.11 or 2.12 hereof, or otherwise for the purpose of complying with
Applicable Law. Increased costs for expenses resulting from a change in
Applicable Law occurring subsequent to any such designation or transfer
shall be deemed not to result solely from such designation or transfer.
(iv) Funding of LIBOR Loans. Lender may, if it so
elects, fulfill its obligation to make, continue or convert LIBOR Loans
hereunder by causing one of its foreign branches or Affiliates (or an
international banking facility created by Lender) to make or maintain
such LIBOR Loans; provided, however, that such LIBOR Loans shall
nonetheless be deemed to have been made and to be held by Lender, and
the obligation of Borrower to repay such LIBOR Loans shall nevertheless
be to Lender for the account of
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such foreign branch, Affiliate or international banking facility. The
calculation of all amounts payable to Lender under Sections 2.12 and
2.14 shall be made as if Lender had actually funded or committed to
fund its LIBOR Loan through the purchase of an underlying deposit in an
amount equal to the amount of such LIBOR Loan and having a maturity
comparable to the relevant Interest Period for such LIBOR Loans;
provided, however, Lender may fund its LIBOR Loans in any manner it
deems fit and the foregoing presumption shall be utilized only for the
calculation of amounts payable under Section 2.12 and 2.14.
SECTION 2.17 GENERAL PAYMENT PROVISIONS. ALL PAYMENTS (INCLUDING
ALL PREPAYMENTS) OF PRINCIPAL OF AND INTEREST ON THE TERM LOAN AND OF THE OTHER
OBLIGATIONS THAT ARE PAYABLE TO LENDER SHALL BE MADE TO LENDER AT THE OFFICE
DESIGNATED BY LENDER FROM TIME TO TIME, IN DOLLARS, WITHOUT ANY OFFSET OR
COUNTERCLAIM AND FREE AND CLEAR OF (AND WITHOUT DEDUCTION FOR) ANY PRESENT OR
FUTURE TAXES, AND IN IMMEDIATELY AVAILABLE FUNDS NOT LATER THAN 12:00 NOON ON
THE DUE DATE (AND PAYMENT MADE AFTER SUCH TIME ON THE DUE DATE TO BE DEEMED TO
HAVE BEEN MADE ON THE NEXT SUCCEEDING BUSINESS DAY). IF ANY PAYMENT UNDER THIS
AGREEMENT OR THE TERM NOTE SHALL BE SPECIFIED TO BE MADE ON A DAY WHICH IS NOT A
BUSINESS DAY, IT SHALL BE MADE ON THE NEXT SUCCEEDING DAY WHICH IS A BUSINESS
DAY AND SUCH EXTENSION OF TIME SHALL IN SUCH CASE BE INCLUDED IN COMPUTING
INTEREST, IF ANY, IN CONNECTION WITH SUCH PAYMENT.
Section 2.18 Optional Prepayments of the Term Loan. Borrower may,
at its option, prepay any portion of the Term Loan consisting of Base Rate Loans
in whole at any time or in part from time to time, in amounts aggregating
$250,000 or any greater integral multiple of $250,000, by paying the principal
amount to be prepaid together with interest accrued or unpaid thereon to the
date of prepayment. Any portion of the Term Loan consisting of LIBOR Loans may
be prepaid, at Borrower's option, at any time in whole or from time to time in
part, in amounts aggregating $1,000,000 or any greater integral multiple of
$250,000, together with any applicable charges pursuant to Section 2.14.
Borrower shall give written notice (or telephonic notice promptly confirmed in
writing) to Lender of any intended prepayment not less than 1 Business Day prior
to any prepayment of Base Rate Loans and not less than 2 Business Days prior to
any prepayment of LIBOR Loans. Such notice, once given, shall be irrevocable.
Section 2.19 Application of Prepayments. Each prepayment of the
Term Loan shall be applied first to accrued but unpaid interest and the balance
to installments of principal in the inverse order of their maturities, until the
Term Loan is paid in full. Lender shall apply the portion of a prepayment that
is to be applied to principal installments first to outstanding Base Rate Loans
and then to any outstanding LIBOR Loans with the shortest Interest Periods
remaining; but if application to any LIBOR Loans would cause the same to be paid
prior to the end of an applicable Interest Period, then, by prior written notice
to Lender, Borrower may elect as to such LIBOR Loan to deliver cash to Lender in
the amount of the required prepayment, to be held by Lender as Cash Collateral
until the end of the applicable Interest Period, at which time Lender shall
apply such Cash Collateral to such LIBOR Loans.
Section 2.20 Payment of Other Obligations. The balance of the Obligations
requiring the payment of money shall be repaid by Borrower to Lender as provided
in the Loan Documents, or,
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if no date of payment is otherwise specified in the Loan Documents, ON DEMAND.
Section 2.21 Application of Payments and Collateral Proceeds. Except to the
extent that the manner of application to the Obligations of payments or proceeds
of Collateral is expressly governed by other provisions of this Agreement,
Borrower irrevocably waives the right to direct the application of any and all
payments and Collateral proceeds at any time or times hereafter received by
Lender from or on behalf of Borrower, and Borrower does hereby irrevocably agree
that Lender shall have the continuing exclusive right to apply and reapply any
and all such payments and Collateral proceeds received at any time or times
hereafter by Lender or its agent against the Obligations, in such manner as
Lender may deem advisable, notwithstanding any entry by Lender upon any of its
books and records.
BORROWER SHALL REMAIN JOINTLY AND SEVERALLY LIABLE FOR AND WILL PAY, ON DEMAND,
ANY DEFICIENCY REMAINING IN RESPECT OF THE OBLIGATIONS, TOGETHER WITH INTEREST
THEREON AT A RATE PER ANNUM EQUAL TO THE HIGHEST RATE THEN PAYABLE HEREUNDER ON
SUCH OBLIGATIONS, WHICH INTEREST SHALL CONSTITUTE PART OF THE OBLIGATIONS.
Section 2.22 Marshaling; Payments Set Aside. Lender shall not be under any
obligation to marshal any assets in favor of Borrower or any other Obligor or
against or in payment of any or all of the Obligations. To the extent that
Borrower makes a payment or payments to Lender or any of such Persons receives
payment from the proceeds of any Collateral or exercises its right of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other Person, then to the extent of any loss by Lender, the Obligations or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment or proceeds had not been made or received and any such enforcement or
setoff had not occurred. The provisions of the immediately preceding sentence of
this Section 2.22 shall survive any termination of this Agreement and payment in
full of the Obligations.
Section 2.23 Closing Fee. On the Closing Date, Borrower shall pay
to Lender a closing fee in an amount equal to the sum of (i) 2% of the Term
Loan, minus (ii) $50,000, in consideration of the Loan Assignment and the making
of the New Term Loan hereunder.
SECTION 3.
CONDITIONS PRECEDENT
The obligation of Lender to make available the New Term Loan on the
Closing Date is subject to satisfaction of each of the following conditions
precedent:
Section 3.1 Loan Documents. Each of the Loan Documents, in form
and substance satisfactory to Lender and, in the case of the Mortgage, in proper
form for recording in
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the applicable jurisdiction, shall have been duly executed and delivered to
Lender by each of the signatories thereto and accepted by Lender and each
Obligor shall be in compliance with all of the terms thereof.
Section 3.2 Evidence of Perfection and Priority of Liens. Lender
shall have received copies of all filing receipts or acknowledgments issued by
any Governmental Authority to evidence any filing or recordation necessary to
perfect the Liens of Lender in the Collateral and evidence in form satisfactory
to Lender that such Liens constitute valid and perfected security interests and
Liens, and that there are no other Liens upon any Collateral except for
Permitted Liens.
Section 3.3 Organization Documents and Resolutions. Lender shall
have received copies of the Organization Documents of each Obligor, and all
amendments thereto, certified by the Secretary of State or other appropriate
officials of the jurisdiction of each Obligor's state of organization and all
action, including shareholder approval, if necessary, taken by each Obligor
and/or their respective shareholders or other interest holders to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents to which each is a party.
Section 3.4 Good Standing Certificates. Lender shall have
received good standing certificates for each Obligor, issued by the Secretary of
State or other appropriate official of such Obligor's jurisdiction of
organization and each jurisdiction where the conduct of such Obligor's business
activities or ownership of its Property necessitates qualification.
Section 3.5 Opinion Letter. Lender shall have received a signed,
written opinion of Akerman, Senterfitt & Xxxxxx, P.A., counsel to the Obligors,
opining as to such matters in connection with the transactions contemplated by
this Agreement as Lender or its counsel may reasonably request.
Section 3.6 Insurance. Lender shall have received certified
copies of the property and casualty insurance policies of Borrower with respect
to the Collateral, or certificates of insurance with respect to such policies in
form acceptable to Lender, and loss payable endorsements on Lender's standard
form of loss payee endorsement naming Lender as loss payee with respect to each
such policy and certified copies of Borrower's liability insurance policies,
including product liability policies, together with endorsements naming Lender
as an additional insured, all as required by the Loan Documents.
Section 3.7 No Labor Disputes. Lender shall have received
assurances satisfactory to it that there are no threats of strikes or work
stoppages by any employees, or organization of employees, of any Obligor which
Lender reasonably determines may have a Material Adverse Effect.
Section 3.8 Compliance with Laws and Other Agreements. Lender
shall have determined or received assurances satisfactory to it that none of the
Loan Documents or any of the transactions contemplated thereby violate any
Applicable Law, court order or agreement binding upon any Obligor.
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Section 3.9 No Material Adverse Change. No material adverse
change in the financial condition of any Obligor or in the quality, quantity or
value of any Collateral shall have occurred since July 26, 2003.
Section 3.10 Payment of Fees, Taxes and Expenses. Borrower shall
have paid, or made provision for the payment on the Closing Date of, all fees
and expenses to be paid hereunder to Lender on the Closing Date and all
recording fees, documentary stamp and intangibles taxes and other charges and
expenses payable in connection with the execution, delivery or recordation of
any Loan Document.
Section 3.11 Assignments. All of the conditions precedent to the
effectiveness of the Assignments shall have been satisfied or waived in writing
by Bank of America and Lender.
Section 3.12 New Title Policy; Endorsements to Existing Title
Insurance Policy. Lender shall have received, at its option, either (a) an
unconditional commitment for the issuance of a mortgagee title insurance policy
with respect to the Mortgaged Properties, with all requirements and conditions
to the issuance of the final policy deleted or marked satisfied, issued by a
title insurance company satisfactory to Lender, in an amount equal to not less
than the fair market value of the Mortgaged Properties, insuring that the
Mortgage creates a valid first lien on the Mortgaged Properties, with no survey
or other exceptions which Lender shall not have approved in writing, or (b) an
unconditional commitment for the issuance of one or more endorsements to the
mortgagee title insurance policy issued to Bank of America with respect to the
Mortgaged Properties (other than the Tropical Headquarters) in connection with
the Existing Loan Agreement (the "Existing Title Policy"), with all requirements
and conditions to the issuance of the final endorsement or endorsements deleted
or marked satisfied, issued by a title insurance company satisfactory to Lender,
which title policy as so endorsed shall (i) be in an amount not less than the
value of the Mortgaged Properties, (ii) insure that the Loan Assignment is
effective to assign the Existing Mortgage to Lender, (iii) insure that the
Mortgage creates in favor of Lender a valid lien on the Mortgaged Properties,
(iv) reflect Lender as the named insured, (v) bring the effective date of the
Existing Title Policy forward to the Closing Date and (vi) otherwise provide
assurances satisfactory to Lender that the coverages provided under the Existing
Title Policy inure to Lender's benefit, with no survey or other exceptions which
Lender shall not have approved in writing.
Section 3.13 Other Real Estate Items. Lender shall have received
such materials and information concerning the Mortgaged Properties as Lender may
require, including, without limitation, (i) true and accurate surveys
satisfactory to Lender of each of the Mortgaged Properties, certified to Lender
(or, in the case of surveys previously delivered to Bank of America under the
Existing Loan Agreement, to Bank of America, its successors and assigns) and
showing the location of any special flood hazard areas thereon in compliance
with FEMA requirements, (ii) certificates of occupancy covering each of the
Mortgaged Properties, (iii) owner's affidavits or indemnities acceptable to the
title insurance company as to such matters relating to any of the Mortgaged
Properties as Lender or the title insurance company may request, and (iv) copies
of environmental assessments, if any, previously delivered to Tropical.
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Section 3.14 Appraisals. Lender shall have received written
reports of appraisals of the Mortgaged Properties prepared as of a recent date
by Remarketing Consultants, Inc., in form and scope satisfactory to Lender,
reflecting fair market values of the Mortgaged Properties of not less than
$35,700,000 in the aggregate.
Section 3.15 Amendment to Revolving Loan Agreement and Waiver. All
of the conditions precedent to the effectiveness of an amendment to the
Revolving Loan Agreement and a waiver of each Event of Default under the
Revolving Loan Agreement existing on the Closing Date, each in form and
substance satisfactory to Lender, shall have been satisfied or waived by the
Revolving Lenders (other than the effectiveness of this Agreement).
Section 3.16 No Default or Event of Default. No Default or Event
of Default shall exist at the time of, or would result from, the effectiveness
of this Agreement and the funding of the New Term Loan.
Section 3.17 No Litigation. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of, or which is related to or arises
out of the Loan Documents or the consummation of the transactions contemplated
thereby.
Section 3.18 No Material Adverse Effect. No event shall have
occurred and no condition shall exist which has or may be reasonably likely to
have a Material Adverse Effect.
Section 3.19 Limited Waiver of Conditions Precedent. If Lender shall make
the New Term Loan at a time when any of the foregoing conditions precedent are
not satisfied (regardless of whether the failure of satisfaction of any such
conditions precedent was known or unknown to Lender), the funding of such Loan
shall not operate as a waiver of any Default or Event of Default as a
consequence of the failure of any such conditions to be satisfied, unless Lender
in writing waives the satisfaction of any condition precedent, in which event
such waiver shall only be applicable for the specific instance given and only to
the extent and for the period of time expressly stated in such written waiver.
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SECTION 4.
FINANCIAL STATEMENTS AND AFFIRMATIVE COVENANTS
Borrower covenants and agrees that from the date hereof and until the
Obligations are paid in full:
Section 4.1 Financial and Collateral Reporting Under Revolving
Loan Agreement. Borrower will furnish to Lender all financial statements,
certificates, reports and schedules when and as required to be delivered by
Borrower under the Revolving Loan Agreement as in effect on the Closing Date,
including any such certificates, reports and schedules concerning the whole or
any part of the Collateral.
Section 4.2 Books of Account; Financial Statements and Other
Information. Borrower will keep adequate records and books of account with
respect to its business activities in which proper entries are made in
accordance with GAAP reflecting all its financial transactions; and cause to be
prepared and to be furnished to Lender the following (all to be prepared in
accordance with GAAP applied on a consistent basis, unless Borrower's certified
public accountants concur in any change therein, such change is disclosed to
Lender and is consistent with GAAP).
(a) as soon as available, and in any event within 90 days
after the close of each Fiscal Year, unqualified audited balance sheets
of Borrower and its Subsidiaries as of the end of such Fiscal Year and
the related statements of income, shareholders' equity and cash flow,
on a Consolidated and consolidating basis, certified without material
qualification by a firm of independent certified public accountants of
recognized national standing selected by Borrower but reasonably
acceptable to Lender (except for a qualification for a change in
accounting principles with which the accountant concurs), and setting
forth in each case in comparative form the corresponding Consolidated
and consolidating figures for the preceding Fiscal Year;
(b) as soon as available, and in any event within 45 days
after the end of each month (but within 60 days after the last month in
a Fiscal Year), an unaudited interim balance sheet of Borrower and its
Subsidiaries as of the end of such month and the related unaudited
statements of income and cash flow for such month and for the portion
of Borrower's Fiscal Year then elapsed, on a Consolidated and
consolidating basis, certified by the principal financial officer or
the Executive Vice President of Finance and Administration of Borrower
as prepared in accordance with GAAP and fairly presenting the
Consolidated financial position and results of operations of Borrower
and its Subsidiaries for each month and year-to-date period subject
only to changes from audit and year-end adjustments and except that
such statements need not contain notes;
(c) promptly after sending or filing thereof, as the case may
be, copies of any proxy statements, financial statements or reports
which Borrower has made generally
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available to its shareholders and copies of any regular, periodic and
special reports or registration statements which Borrower files with
the Securities and Exchange Commission or any governmental authority
which may be substantial therefor, or any national securities exchange;
(d) promptly after the filing thereof, copies of any annual
report to be filed in accordance with ERISA in connection with each
Plan; and
(e) such other data and information (financial and otherwise)
as Lender, from time to time, may reasonably request, bearing upon or
related to the Mortgaged Properties or Borrower's and any of its
Subsidiaries' financial condition or results of operations.
Concurrently with the delivery of the financial statements described in Section
4.2(a), Borrower shall deliver to Lender a copy of the accountants' letter to
Borrower's management that is prepared in connection with such financial
statements. Concurrently with the delivery of the financial statements described
in Section 4.2(b), Borrower shall cause to be prepared and furnished to Lender a
Compliance Certificate executed by the chief financial officer of Borrower.
Section 4.3 Projections. No later than 30 days prior to the end
of each Fiscal Year, Borrower will deliver to Lender Projections for the
forthcoming 3 Fiscal Years, year by year, and for the forthcoming Fiscal Year,
quarter by quarter.
Section 4.4 Right of Inspection. Whenever Lender, in its
reasonable discretion, deems it necessary, Borrower will permit Lender or any
agent designated by Lender to visit and inspect the Mortgaged Properties and to
inspect and make excerpts of Borrower's accounting records, all at such
reasonable times and as often as Lender may reasonably request.
Section 4.5 Insurance. Borrower will maintain all insurance
coverages on the Mortgaged Properties required by the Mortgage. Borrower will
provide Lender annually a Certificate of Insurance naming Lender as the "loss
payee," specifying the types and amounts of insurance in force and the insurers
of each risk covered by such insurance, and maintain the same throughout the
term of this Agreement.
Section 4.6 Payment of Obligations, Taxes, Etc. Borrower will:
(a) pay and discharge all Obligations as and when due and payable; (b) pay and
discharge promptly all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income and profits, or upon the Mortgaged
Properties and any of other property, real, personal or mixed, or upon any part
thereof, owned by Borrower before the same shall become in default; and (c) pay
and discharge all lawful claims for labor, materials and supplies or otherwise
which, if unpaid, might become a lien or charge upon such properties or any part
thereof; provided, however, that Borrower will not be required to pay and
discharge any such tax, assessment, charge, levy or claim referred to in clauses
(b) or (c) above so long as the validity thereof shall be diligently and
continuously contested in good faith by appropriate proceedings with respect to
any such tax, assessment, charge, levy or claim so contested.
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Section 4.7 Maintenance of Existence; Rights. Borrower will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, franchises, rights and privileges as a corporation under
the laws of Florida and will do or cause to be done all things necessary to
preserve and keep in full force and effect its right to own property and operate
all aspects of its business in a manner not less favorable to it than those now
in existence. Borrower will comply with all material requirements applicable to
it under the laws or regulations of the United States, of any state or states
and of any other governmental authority.
Section 4.8 Use of Proceeds. The funds borrowed under the Note
will be used only for valid corporate purposes and specifically for the purposes
herein set forth. In no event may any Loan proceeds be used by Borrower to make
a contribution to the equity of any Subsidiary, to purchase or to carry, or to
reduce, retire or refinance any Debt incurred to purchase or carry, any Margin
Stock or for any related purpose that violates the provisions of Regulations T,
U or X of the Board of Governors.
Section 4.9 Further Assurances. If at any time Lender reasonably
believes that any portion of the Obligations is not properly secured or will or
may not be properly secured by the Loan Documents as a first priority lien upon
or security interest in the Mortgaged Properties or any other Collateral to
Lender's satisfaction, then Borrower shall, within three (3) days after written
notice of such request from Lender, take all actions and do all things and
matters necessary to assure to the reasonable satisfaction of Lender that all of
the Obligations then existing or thereafter to be created are properly secured
or will be secured as contemplated by this Agreement or any other Loan Document.
Section 4.10 Maintenance of Mortgaged Properties. Borrower will
maintain the Mortgaged Properties in good working order and make all normal and
customary repairs and replacements of the same.
Section 4.11 Litigation Notice. Borrower will deliver to Lender
prompt written notice of any action, suit or proceeding at law or in equity or
by or before any governmental instrumentality or other agency which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
Section 4.12 Transfer of Cash Management. Borrower will transfer,
and will cause its Subsidiaries to transfer, within 90 days after the Closing
Date, all of their respective deposit accounts and system of cash management
(other than a deposit account maintained with a local depository bank in the
name of Apparel Network Corporation and a deposit account maintained with a
local depository bank in the name of Borrower, into which no proceeds of
Accounts or other Collateral shall be deposited) from Borrower's and its
Subsidiaries' existing banks to Bank.
Section 4.13 Termination of and Payment of Obligations Under Swap
Contract. On the Closing Date, Borrower will terminate, and pay to Bank all of
Borrower's Obligations outstanding under, the Swap Contract.
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SECTION 5.
NEGATIVE COVENANTS
Borrower covenants and agrees that from the date hereof until the
Obligations are paid in full:
Section 5.1 Fundamental Changes. Borrower will not merge,
reorganize, consolidate or amalgamate with any Person, except for mergers or
consolidations of any Subsidiary with and into Borrower, liquidate, wind up its
affairs or dissolve itself, sell, lease, transfer or otherwise dispose of all or
a substantial part of its properties, shares or assets to, or acquire all or a
substantial part of the properties, shares or assets of, any other Person, in
each case whether in a single transaction or in a series of related
transactions, change its name, conduct business under any new fictitious name or
change its FEIN.
Section 5.2 Nature of Business. Borrower will not change the
nature of its primary business from that of a manufacturer and wholesale
distributor of apparel.
SECTION 6.
COLLATERAL
Section 6.1 Grant of Security Interest. To secure the prompt
payment and performance of all of the Obligations, Borrower hereby grants to
Lender a continuing security interest in and Lien upon all personal property of
Borrower, whether now owned or existing or hereafter created, acquired or
arising and wheresoever located:
(i) all Accounts Collateral;
(ii) all Goods, including all Inventory and Equipment;
(iii) all Instruments;
(iv) all Chattel Paper;
(v) all Documents;
(vi) all General Intangibles;
(vii) all Deposit Accounts;
(viii) all Investment Property (but excluding any portion
thereof that constitutes Margin Stock unless otherwise expressly
provided in any Loan Document);
(ix) all Letter-of-Credit Rights;
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(x) all monies now or at any time or times hereafter in
the possession or under the control of Lender or a bailee or Affiliate
of Lender, including any cash collateral;
(xi) all accessions to, substitutions for and all
replacements, products and cash and non-cash proceeds of (i) through
(x) above, including proceeds of and unearned premiums with respect to
insurance policies insuring any of the Collateral and claims against
any Person for loss of, damage to or destruction of any of the
Collateral; and
(xii) all books and records (including customer lists,
files, correspondence, tapes, computer programs, print-outs, and other
computer materials and records) of Borrower pertaining to any of (i)
through (xi) above.
Section 6.2 Lien on Deposit Accounts. As additional security for
the payment and performance of the Obligations, Borrower hereby grants to Lender
a continuing security interest in and Lien upon, and hereby collaterally assigns
to Lender, all of Borrower's right, title and interest in and to each Deposit
Account of Borrower and in and to any deposits or other sums at any time
credited to each such Deposit Account, including any sums in any blocked account
or any special lockbox account and in the accounts in which sums are deposited.
In connection with the foregoing, Borrower hereby authorizes and directs each
such bank or other depository to pay or deliver to Lender upon its written
demand therefor made at any time upon the occurrence and during the continuation
of an Event of Default and without further notice to Borrower (such notice being
hereby expressly waived), all balances in each Deposit Account maintained by
Borrower with such depository for application to the Obligations then
outstanding, and the rights given Lender in this Section 6.2 shall be cumulative
with and in addition to Lender's other rights and remedies in regard to the
foregoing Property as proceeds of Collateral. Borrower hereby irrevocably
appoints Lender as Borrower's attorney-in-fact to collect any and all such
balances to the extent any such payment is not made to Lender by such bank or
other depository after demand thereon is made by Lender pursuant hereto.
Section 6.3 Other Collateral. In addition to the items of
Property referred to in Section 6.1 above, the Obligations shall also be secured
by the Cash Collateral to the extent provided herein and all of the other items
of Property from time to time described in any of the Loan Documents as security
for any of the Obligations.
Section 6.4 No Assumption of Liability. The security interest
granted pursuant to this Agreement is granted as security only and shall not
subject Lender to, or in any way alter or modify, any obligation of liability of
Borrower with respect to or arising out of the Collateral.
Section 6.5 Lien Perfection; Further Assurances. Promptly after
Lender's request therefor, Borrower shall execute or cause to be executed and
deliver to Lender such instruments, assignments, title certificates or other
documents as are necessary under the UCC or other Applicable Law (including any
motor vehicle certificates of title act) to perfect (or continue the perfection
of) Lender's Lien upon the Collateral and shall take such other action as may be
requested by Lender to give effect to or carry out the intent and purposes of
this Agreement.
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Unless prohibited by Applicable Law, Borrower hereby irrevocably authorizes
Lender to execute and file in any jurisdiction any financing statement or
amendment thereto on Borrower's behalf, including financing statements that
indicate the Collateral (i) as all assets or all personal property of Borrower
or words to similar effect or (ii) as being of equal or lesser scope, or with
greater or lesser detail, than as set forth in this Section 6. Borrower also
hereby ratifies its authorization for Lender to have filed in any jurisdiction
any like financing statement or amendment thereto if filed prior to the date
hereof. The parties agree that a carbon, photographic or other reproduction of
this Agreement shall be sufficient as a financing statement and may be filed in
any appropriate office in lieu thereof.
Section 6.6 Foreign Subsidiary Stock. Notwithstanding anything to
the contrary set forth in Section 6.1 above, the types or items of Collateral
described in such Section shall include only sixty-six percent (66%) of the
stock of any Foreign Subsidiary.
Section 6.7 Insurance of Collateral; Condemnation Proceeds.
Borrower shall maintain and pay for insurance upon all Collateral, wherever
located, covering casualty, hazard, public liability, theft, malicious mischief,
and such other risks in such amounts and with such insurance companies as are
reasonably satisfactory to Lender. All proceeds payable under each such policy
shall be payable to Lender for application to the Obligations. Borrower shall
deliver the originals or certified copies of such policies to Lender with
satisfactory lender's loss payable endorsements reasonably satisfactory to
Lender naming Lender as loss payee, assignee or additional insured, as
appropriate. Each policy of insurance or endorsement shall contain a clause
requiring the insurer to give not less than 30 days prior written notice to
Lender in the event of cancellation of the policy for any reason whatsoever and
a clause specifying that the interest of Lender shall not be impaired or
invalidated by any act or neglect of Borrower or the owner of the Property or by
the occupation of the premises for purposes more hazardous than are permitted by
said policy. If Borrower fails to provide and pay for such insurance, Lender
may, at its option, but shall not be required to, procure the same and charge
Borrower therefor. Borrower agrees to deliver to Lender, promptly as rendered,
true copies of all reports made in any reporting forms to insurance companies.
For so long as no Event of Default exists, Borrower shall have the right to
settle, adjust and compromise any claim with respect to any insurance maintained
by Borrower provided that all proceeds thereof are applied in the manner
specified in this Agreement, and Lender agrees promptly to provide any necessary
endorsement to any checks or drafts issued in payment of any such claim. At any
time that an Event of Default exists, only Lender shall be authorized to settle,
adjust and compromise such claims, and Lender shall have all rights and remedies
with respect to such policies of insurance as are provided for in this Agreement
and the other Loan Documents.
Section 6.8 Protection of Collateral. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining and shipping any
Collateral, all Taxes imposed under any Applicable Law on any of the Collateral
or in respect of the sale thereof, and all other payments required to be made by
Lender to any Person to realize upon any Collateral shall be borne and paid by
Borrower. Lender shall not be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto (except
for reasonable care in the custody thereof while any Collateral is in Lender's
actual possession) or for any diminution in the value
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thereof, or for any act or default of any warehouseman, carrier, forwarding
agency, or other Person whomsoever, but the same shall be at Borrower' sole
risk.
Section 6.9 Defense of Title to Collateral. Borrower shall at all
times defend its title to the Collateral and Lender's Liens therein against all
Persons and all claims and demands whatsoever other than Permitted Liens.
SECTION 7.
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this Agreement and make available the
New Term Loan, Borrower warrants and represents to Lender that:
Section 7.1 Organization and Qualification. Borrower and each of
its Subsidiaries is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization. Borrower and
each of its Subsidiaries is duly qualified and is authorized to do business and
is in good standing as a foreign corporation in each state or jurisdiction in
which the failure of Borrower or any of such Subsidiaries to be so qualified
would have a Material Adverse Effect.
Section 7.2 Power and Authority. Borrower and each of its
Subsidiaries is duly authorized and empowered to enter into, execute, deliver
and perform this Agreement and each of the other Loan Documents to which it is a
party. The execution, delivery and performance of this Agreement and each of the
other Loan Documents have been duly authorized by all necessary action and do
not and will not (i) require any consent or approval of any of the holders of
the Equity Interests of Borrower or any of its Subsidiaries; (ii) contravene the
Organization Documents of Borrower or any of its Subsidiaries; (iii) violate, or
cause Borrower or any of its Subsidiaries to be in default under, any provision
of any Applicable Law, order, writ, judgment, injunction, decree, determination
or award in effect having applicability to Borrower or any of its Subsidiaries;
(iv) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which
Borrower or any of its Subsidiaries is a party or by which it or its Properties
may be bound or affected that involves a dollar amount of $1,000,000 or more; or
(v) result in, or require, the creation or imposition of any Lien (other than
Permitted Liens) upon or with respect to any of the Properties now owned or
hereafter acquired by Borrower or any of its Subsidiaries.
Section 7.3 Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement will be, a
legal, valid and binding obligation of Borrower and each of its Subsidiaries
signatories thereto enforceable against them in accordance with the respective
terms of such Loan Documents, except as the enforceability thereof may be
limited by bankruptcy, insolvency or other similar laws of general application
affecting the enforcement of creditors' rights.
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Section 7.4 Title to Properties; Priority of Liens. Borrower and
each of its Subsidiaries has good and marketable title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its real
Property, and good title to all of its personal Property, in each case free and
clear of all Liens except Permitted Liens. Borrower has paid or discharged, and
has caused each of its Subsidiaries to pay and discharge, all lawful claims
which, if unpaid, might become a Lien against any Properties of Borrower or any
such Subsidiary that is not a Permitted Lien. The Liens granted to Lender
pursuant to this Agreement and the other Loan Documents are first priority
Liens, subject only to those Permitted Liens which are expressly permitted by
the terms of this Agreement to have priority over the Liens of Lender.
Section 7.5 Financial Statements; Fiscal Year. The Consolidated
and consolidating balance sheets of Borrower and such other Persons described
therein (including the accounts of all Subsidiaries of Borrower for the
respective periods during which a Subsidiary relationship existed) as of July
26, 2003, and the related statements of income, changes in stockholder's equity,
and changes in financial position for the periods ended on such dates, have been
prepared in accordance with GAAP, and present fairly the financial positions of
Borrower and such Persons at such dates and the results of Borrower's operations
for such periods. Since July 26, 2003, there has been no material change in the
condition, financial or otherwise, of Borrower and such other Persons as shown
on the Consolidated balance sheet as of such date and no material change in the
aggregate value of Equipment owned by Borrower or such other Persons, except for
a possible valuation adjustment on certain real property, fixtures and Equipment
with respect to the Tropical Headquarters, none of which transactions or
changes, individually or in the aggregate has been materially adverse.
Section 7.6 Full Disclosure. The financial statements referred to
in Section 7.5 hereof do not contain any untrue statement of a material fact and
neither this Agreement nor any other written statement contains or omits any
material fact necessary to make the statements contained herein or therein not
materially misleading. There is no fact or circumstances in existence on the
date hereof which Borrower has failed to disclose to Lender in writing that may
reasonably be expected to have a Material Adverse Effect.
Section 7.7 Solvent Financial Condition. Borrower and each of its
Subsidiaries is now Solvent and, after giving effect to the Loans to be made
hereunder and the consummation of the other transactions described in the Loan
Documents, Borrower and each of its Subsidiaries will be Solvent.
Section 7.8 Taxes. Borrower and each of its Subsidiaries has
filed all federal, state and local tax returns and other reports it is required
by law to file and has paid, or made provision for the payment of, all Taxes
upon it, its income and Properties as and when such Taxes are due and payable,
except to the extent being Properly Contested. The provision for Taxes on the
books of Borrower and each of its Subsidiaries are adequate for all years not
closed by applicable statutes, and for its current Fiscal Year.
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Section 7.9 Brokers. There are no claims against Borrower for
brokerage commissions, finder's fees or investment banking fees in connection
with the transactions contemplated by this Agreement or any of the other Loan
Documents.
Section 7.10 Governmental Approvals. Borrower and each of its
Subsidiaries has, and is in good standing with respect to, all Governmental
Approvals necessary to continue to conduct its business as heretofore or
proposed to be conducted by it and to own or lease and operate its Properties as
now owned or leased by it, except for Governmental Approvals the failure to
possess which could not be reasonably expected to have a Material Adverse
Effect.
Section 7.11 Compliance with Laws. Borrower and each of its
Subsidiaries has duly complied with, and its Properties, business operations and
leaseholds are in compliance in all material respects with, the provisions of
all Applicable Law, including the Xxxxxxxx-Xxxxx Act (except to the extent that
any such noncompliance with Applicable Law could not reasonably be expected to
have a Material Adverse Effect) and there have been no citations, notices or
orders of noncompliance issued to Borrower or any of its Subsidiaries under any
such law, rule or regulation.
Section 7.12 Burdensome Contracts. None of Borrower nor any of its
Subsidiaries is a party or subject to any contract, agreement, or charter or
other corporate restriction, which has or could be reasonably expected to have a
Material Adverse Effect. No Borrower nor any of its Subsidiaries is a party or
subject to any Restrictive Agreement which prohibits the execution or delivery
of any of the Loan Documents by any Obligor or the performance by any Obligor of
its obligations under any of the Loan Documents to which it is a party, in
accordance with the terms of such Loan Documents.
Section 7.13 Litigation. There are no actions, suits, proceedings
or investigations pending or, to the knowledge of Borrower, threatened, on the
date hereof against or affecting Borrower or any of its Subsidiaries, or the
business, operations, Properties, prospects, profits or condition of Borrower or
any of its Subsidiaries, (i) which relate to any of the Loan Documents or any of
the transactions contemplated thereby or (ii) which, if determined adversely to
Borrower or any of its Subsidiaries, could reasonably be expected to have a
Material Adverse Effect. To the knowledge of Borrower, neither Borrower nor any
of its Subsidiaries is in default on the date hereof with respect to any order,
writ, injunction, judgment, decree or rule of any court, Governmental Authority
or arbitration board or tribunal.
Section 7.14 No Defaults. No event has occurred and no condition
exists which would, upon or after the execution and delivery of this Agreement
or Borrower's performance hereunder, constitute a Default or an Event of
Default. None of Borrower nor any of its Subsidiaries is in default, and no
event has occurred and no condition exists which constitutes or which with the
passage of time or the giving of notice or both would constitute a default,
under any Material Contract or in the payment of any Debt of Borrower or a
Subsidiary to any Person for Money Borrowed.
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Section 7.15 Pension Plans. Except as disclosed in the Revolving
Loan Agreement, neither Borrower nor any of its Subsidiaries has any Plan on the
date hereof. Borrower and each of its Subsidiaries is in full compliance with
the requirements of ERISA and the regulations promulgated thereunder with
respect to each Plan, except to the extent such non-compliance could not
reasonably be expected to have or result in a Material Adverse Effect in
connection with any Plan. No fact or situation that is reasonably likely to
result in a material adverse change in the financial condition of Borrower or
any of its Subsidiaries exists in connection with any Plan. None of Borrower nor
any of its Subsidiaries has any withdrawal liability in connection with a
Multi-employer Plan.
Section 7.16 Trade Relations. There exists no actual or threatened
termination, cancellation or limitation of, or any materially adverse
modification or change in, the business relationship between Borrower and any
customer or any group of customers whose purchases individually or in the
aggregate are material to the business of Borrower, or with any material
supplier or group of suppliers, and there exists no condition or state of facts
or circumstances which is reasonably likely to have a Material Adverse Effect or
prevent Borrower from conducting such business after the consummation of the
transactions contemplated by this Agreement in substantially the same manner in
which it has heretofore been conducted.
Section 7.17 Labor Relations. Except as disclosed in the Revolving
Loan Agreement, neither Borrower nor any of its Subsidiaries is on the date
hereof a party to or bound by any collective bargaining agreement, management
agreement or consulting agreement. On the date hereof, there are no material
grievances, disputes or controversies with any union or any other organization
of Borrower's or any Subsidiary's employees, or, to Borrower's knowledge, any
threats of strikes, work stoppages or any asserted pending demands for
collective bargaining by any union or organization.
Section 7.18 Not a Regulated Entity. No Obligor is (i) an
"investment company" or a "person directly or indirectly controlled by or acting
on behalf of an investment company" within the meaning of the Investment Company
Act of 1940; (ii) a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935; or (iii) subject to regulation under the Federal Power Act, the
Interstate Commerce Act, any public utilities code or any other Applicable Law
regarding its authority to incur Debt.
Section 7.19 Margin Stock. No Borrower nor any of its Subsidiaries
is engaged, principally or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying any Margin Stock.
Section 7.20 Reaffirmation of Representations and Warranties.
Each representation and warranty contained in this Agreement and the
other Loan Documents shall be deemed to be reaffirmed by Borrower on each day
that any Obligations are outstanding, except for changes in the nature of
Borrower's or, if applicable, any of its
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Subsidiaries' business or operations that may occur after the date hereof in the
Ordinary Course of Business so long as Lender has consented to such changes or
such changes are not violative of any provision of this Agreement.
Notwithstanding the foregoing, representations and warranties which by their
terms are applicable only to a specific date shall be deemed made only at and as
of such date.
SECTION 8.
EVENTS OF DEFAULT
Section 8.1 Events of Default. The occurrence or existence of one or more of the
following events or conditions shall constitute an "Event of Default" (each of
which Events of Default shall be deemed to exist unless and until waived by
Lender in accordance with the provisions of this Agreement):
(a) Default in Payment. The failure to pay (i) the outstanding
principal amount of the Term Note, plus unpaid accrued interest, on the Maturity
Date (or, if sooner, on the Commitment Termination Date), (ii) any installment
of principal and/or interest required by the Term Note within ten (10) days
after the date the same was due, without notice or demand, or (iii) the failure
to pay any other amounts due under the Term Note, this Agreement or the other
Loan Documents within ten (10) days after written demand therefor from Lender to
Borrower.
(b) Default Under Loan Agreement. Borrower shall fail to observe
or perform any covenant contained in this Agreement (other than as specifically
provided for otherwise in this Section 8.1) for a period of 30 days after
written notice thereof has been given to Borrower by Lender.
(c) Misrepresentations. Any representation or warranty made by
Borrower herein or in any writing furnished in connection with or pursuant to
this Agreement or any of the other Loan Documents shall at any time prove to
have been false or misleading in any material respect on the date upon which
made or deemed reaffirmed.
(d) Default Under Other Loan Documents. The occurrence of any
default as specified in any of the other Loan Documents and such default shall
not have been remedied within the grace period, if any, provided in such Loan
Document.
(e) Default Under the Revolving Loan Agreement. An "Event of
Default" (as defined in the Revolving Loan Agreement) shall occur under the
Revolving Loan Agreement.
(f) Default Under the Swap Contract or Other Obligations to
Lender. An Event of Default shall occur under the Swap Contract or any other
Obligations owed to Lender or any Affiliate of Lender (including Bank) by
Borrower.
(g) Liquidation; Dissolution; Voluntary Bankruptcy. The
liquidation or
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dissolution of Borrower, or the filing by Borrower of a voluntary petition or an
answer seeking reorganization, arrangement, readjustment of its debts or for any
other relief under the Bankruptcy Code or under any other insolvency act or law,
state or federal, now or hereafter existing, or any other action of Borrower
indicating its consent to, approval of or acquiescence in, any such petition or
preceding; the application by Borrower for, or the appointment by consent or
acquiescence of Borrower of a receiver, a trustee or a custodian of Borrower for
all or a substantial part of its property; the making by Borrower of any
assignment for the benefit of creditors; the inability of Borrower, or the
admission by Borrower in writing of its inability, to pay its debts as they
mature; or Borrower taking any corporate action to authorize any of the
foregoing.
(h) Involuntary Bankruptcy. The filing of an involuntary petition
against Borrower in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under the Bankruptcy Code or
under any other insolvency act or law, state or federal, now or hereafter
existing; or the involuntary appointment of a receiver, a trustee or a custodian
of Borrower for all or a substantial part of its property; or the issuance of a
warrant of attachment, execution or similar process against any substantial part
of the property of Borrower, and the continuance of any such events for sixty
(60) days undismissed or undischarged.
(i) Adjudication of Bankruptcy. The adjudication of Borrower as
bankrupt or insolvent.
(j) Order of Dissolution. The entering of any order in any
proceedings against Borrower decreeing the dissolution, divestiture or split-up
of Borrower, and such order remains in effect for more than sixty (60) days.
(k) Reports and Certificates. Any report, certificate, financial
statement or other instrument delivered to Lender by Borrower, or on behalf of
Borrower (provided Borrower has actual knowledge of the false or misleading
nature of the document), pursuant to the terms of this Agreement or the Loan
Documents shall at any time prove to be false or misleading in any material
respect when made or delivered.
(l) Illegality of Agreement or the Note. This Agreement or the
Term Note shall have been held by any court of competent jurisdiction, or by any
competent regulatory authority, to be illegal, invalid, prohibited or
unenforceable in whole or in material part.
(m) Attachment. Except as expressly provided otherwise hereunder,
an attachment or any other lien (mechanic's or otherwise) against the Mortgaged
Properties shall be issued or entered and shall remain undischarged or unbonded
for thirty (30) days after the filing thereof.
(n) Levy Upon Property. Levy is made under any process on, or a
receiver be appointed for the Mortgaged Properties or any other property, of
Borrower.
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(o) Challenge to Loan Documents. Any Obligor or any of its
Affiliates shall challenge or contest in any action, suit or proceeding the
validity or enforceability of any of the Loan Documents, the legality or
enforceability of any of the Obligations or the perfection or priority of any
Lien granted to Lender, or any of the Loan Documents ceases to be in full force
or effect for any reason other than a full or partial waiver or release by
Lender in accordance with the terms thereof.
(p) Repudiation of or Default Under Guaranty. Any Guarantor shall
revoke or attempt to revoke the Guaranty signed by such Guarantor, shall
repudiate such Guarantor's liability thereunder, or shall be in default under
the terms thereof, or shall fail to confirm in writing, promptly after receipt
of Lender's written request therefor, such Guarantor's ongoing liability under
the Guaranty in accordance with the terms thereof.
Section 8.2 Remedies
(a) Acceleration and Set-off. Upon the occurrence of any Event of
Default, and at any time thereafter as long as the Event of Default is
continuing, Lender may, upon five (5) days written notice, declare the entire
principal of and all accrued interest on the Term Loan and all other Obligations
owing under the Loan Documents, and all other indebtedness of Borrower to
Lender, whether Borrower's liability for payment thereof is primary or
secondary, direct or indirect, sole, joint, several or joint and several, or
whether the indebtedness is matured or unmatured, due or to become due, fixed,
absolute or contingent, to be immediately due and payable (without presentment,
demand, protest or other notice of any kind, all of which are expressly waived),
whereupon the same shall be and become immediately due and payable, and Lender
may proceed to collect the same by foreclosure of the Mortgage and by exercise
of all rights and remedies afforded to a secured party under the Uniform
Commercial Code, at law, or as otherwise provided in the Mortgage, the other
Loan Documents and/or other instruments or agreements signed by Borrower.
(b) Cumulative Remedies. All rights, remedies or recourse of
Lender under this Agreement, the Term Note, or any other Loan Document, at law,
in equity or otherwise, are cumulative, and exercisable concurrently, and may be
pursued singularly, successively or together and may be exercised as often as
occasion therefore shall arise. No act of commission or omission by Lender,
including, but not limited to, any failure to exercise, or any delay,
forbearance or indulgence in the exercise of, any right, remedy or recourse
hereunder or under any other Loan Document shall be deemed a waiver, release or
modification of that or any other right, remedy or recourse, and no single or
partial exercise of any right, remedy or recourse shall preclude Lender from any
other or future exercise of the right, remedy or recourse or the exercise of any
other right, remedy or recourse. No waiver or release of any such rights,
remedies and recourse shall be effective against Lender unless in writing and
manually signed by an authorized officer on Lender's behalf, and then only to
the extent recited therein. A waiver, release or modification with reference to
any one event shall not be construed as continuing or constituting a course of
dealing, nor shall it be construed as a bar to, or as a waiver, release or
modification of, any subsequent right, remedy or recourse as to a subsequent
event.
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(c) No Liability. Whether or not Lender elects to employ any or
all remedies available to it in the event of an occurrence of a Default or an
Event of Default, Lender shall not be liable for the payment of any expenses
incurred in connection with the exercise of any remedy available to Lender or
for the performance or non-performance of any obligation of Borrower.
SECTION 9.
MISCELLANEOUS
Section 9.1 Power of Attorney. Borrower hereby irrevocably
designates, makes, constitutes and appoints Lender (and all
Persons designated by Lender) as Borrower's true and lawful
attorney (and agent-in-fact) and Lender, or Lender's designee,
may, without notice to Borrower and in either Borrower's or
Lender's name, but at the cost and expense of Borrower:
(a) At such time or times as Lender or said designee, in its sole
discretion, may determine, endorse Borrower's name on any proceeds of Collateral
which come into the possession of Lender or under Lender's control.
(b) At any time that an Event of Default exists: (i) settle,
adjust, compromise, discharge or release any of the Collateral or any legal
proceedings brought to collect any of the Collateral; (ii) sell or assign any of
the Collateral upon such terms, for such amounts and at such time or times as
Lender deems advisable; (iii) take control, in any manner, of any item of
payment or proceeds relating to any Collateral; (iv) prepare, file and sign
Borrower's name to any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with any of the Collateral; (v) receive, open and
dispose of all mail addressed to Borrower and to notify postal authorities to
change the address for delivery thereof to such address as Lender may designate;
(vi) endorse the name of Borrower upon any of the items of payment or proceeds
relating to any Collateral and deposit the same to the account of Lender on
account of the Obligations; (vii) endorse the name of Borrower upon any chattel
paper, document, instrument, invoice, freight xxxx, xxxx of lading or similar
document or agreement relating to any Collateral; (viii) use the information
recorded on or contained in any data processing equipment and computer hardware
and software relating to any Collateral; (ix) make and adjust claims under
policies of insurance; (x) sign the name of Borrower on any notices of Liens,
claims of mechanic's Liens or assignments or releases of mechanic's Liens
securing any Collateral; (xi) take all action as may be necessary to obtain the
payment of any letter of credit or banker's acceptance of which Borrower is a
beneficiary; and (xii) do all other acts and things necessary, in Lender's
determination, to fulfill Borrower's obligations under this Agreement.
Section 9.2 General Indemnity. Borrower hereby agrees to
indemnify and defend the Indemnitees against and to hold the
Indemnitees harmless from any Indemnified Claim that may be
instituted or asserted against or incurred by any of the
Indemnitees and that either (i) arises out of or relates to
this Agreement or any of the other Loan Documents (including
any transactions entered into pursuant to any of the Loan
Documents, Lender's Lien upon the Collateral, or the
performance by Lender of its
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duties or the exercise of any of its rights or remedies under
this Agreement or any of the other Loan Documents) or (ii)
results from Borrower's failure to observe, perform or
discharge any of Borrower's covenants or duties hereunder.
Without limiting the generality of the foregoing, this
indemnity shall extend to any Indemnified Claims instituted or
asserted against or incurred by any of the Indemnitees by any
Person under any Environmental Laws or similar laws by reason
of Borrower's or any other Person's failure to comply with
laws applicable to solid or hazardous waste materials or other
toxic substances. Additionally, if any Taxes (excluding Taxes
imposed upon or measured solely by the net income of Lender,
but including any intangibles tax, stamp tax, recording tax or
franchise tax) shall be payable by Lender or any Obligor on
account of the execution or delivery of this Agreement, or the
execution, delivery, issuance or recording of any of the other
Loan Documents, or the creation or repayment of any of the
Obligations hereunder, by reason of any Applicable Law now or
hereafter in effect, Borrower will pay (or will promptly
reimburse Lender for the payment of) all such Taxes, including
any interest and penalties thereon, and will indemnify and
hold Indemnitees harmless from and against all liability in
connection therewith. The foregoing indemnities shall not
apply to Indemnified Claims incurred by any of the Indemnitees
as a direct and proximate result of their own gross negligence
or willful misconduct.
Section 9.3 Survival of All Indemnities. Notwithstanding
anything to the contrary in this Agreement or any of the other
Loan Documents, the obligation of Borrower with respect to
each indemnity given by it in this Agreement shall survive the
payment in full of the Obligations.
Section 9.4 Modification of Agreement. This Agreement may not be
modified, altered or amended, except by an agreement in
writing signed by Borrower and Lender.
Section 9.5 Severability. Wherever possible, each provision of
this Agreement shall be interpreted in such manner as to be
effective and valid under Applicable Law, but if any provision
of this Agreement shall be prohibited by or invalid under
Applicable Law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining
provisions of this Agreement.
Section 9.6 Cumulative Effect; Conflict of Terms. The provisions
of the other Loan Documents are hereby made cumulative with
the provisions of this Agreement. Without limiting the
generality of the foregoing, the parties acknowledge that this
Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the
same or similar matters and that such limitations, tests and
measures are cumulative and each must be performed, except as
may be expressly stated to the contrary in this Agreement.
Except as otherwise provided in any of the other Loan
Documents by specific reference to the applicable provision of
this Agreement, if any provision contained in this Agreement
is in direct conflict with,
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or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall
govern and control.
Section 9.7 Execution in Counterparts. This Agreement and any
amendments hereto may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the
same instrument.
Section 9.8 Consent. Whenever Lender's consent is required to be
obtained under this Agreement or any of the other Loan
Documents as a condition to any action, inaction, condition or
event, Lender shall be authorized to give or withhold its
consent in its sole and absolute discretion and to condition
its consent upon the giving of additional collateral security
for the Obligations, the payment of money or any other matter.
Section 9.9 Notices. All notices, requests and demands to or
upon a party hereto shall be in writing and shall be sent by
certified or registered mail, return receipt requested,
personal delivery against receipt or by telecopier or other
facsimile transmission and shall be deemed to have been
validly served, given or delivered when delivered against
receipt or, in the case of facsimile transmission, when
received (if on a Business Day and, if not received on a
Business Day, then on the next Business Day after receipt) at
the office where the noticed party's telecopier is located, in
each case addressed to the noticed party at the address shown
for such party on the signature page hereof. Notwithstanding
the foregoing, no notice to or upon Lender shall be effective
until after actually received by the individual to whose
attention at Lender such notice is required to be sent. Any
written notice, request or demand that is not sent in
conformity with the provisions hereof shall nevertheless be
effective on the date that such notice, request or demand is
actually received by the individual to whose attention at the
noticed party such notice, request or demand is required to be
sent.
Section 9.10 Performance of Borrower's Obligations. If Borrower
shall fail to discharge any covenant, duty or obligation
hereunder or under any of the other Loan Documents, Lender
may, in its sole discretion at any time or from time to time,
for Borrower's account and at Borrower's expense, pay any
amount or do any act required of Borrower hereunder or under
any of the other Loan Documents or otherwise lawfully
requested by Lender to (i) enforce any of the Loan Documents
or collect any of the Obligations, (ii) preserve, protect,
insure or maintain or realize upon any of the Collateral, or
(iii) preserve, defend, protect or maintain the validity or
priority of Lender's Liens in any of the Collateral, including
the payment of any judgment against Borrower, any insurance
premium or any Lien upon or with respect to any of the
Collateral (whether or not a Permitted Lien). All payments
that Lender may make under this Section 9.10 and all
out-of-pocket costs and expenses (including Extraordinary
Expenses) that Lender pays or incurs in connection with any
action
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taken by it hereunder shall be reimbursed to Lender by
Borrower on demand with interest from the date such payment is
made or such costs or expenses are incurred to the date of
payment thereof at the Default Rate applicable for Base Rate
Loans. Any payment made or other action taken by Lender under
this Section 9.10 shall be without prejudice to any right to
assert, and without waiver of, an Event of Default hereunder
and to without prejudice to Lender's right proceed thereafter
as provided herein or in any of the other Loan Documents.
Section 9.11 Credit Inquiries. Borrower hereby authorizes and
permits Lender (but Lender shall have no obligation) to
respond to usual and customary credit inquiries from third
parties concerning Borrower or any of its Subsidiaries.
Section 9.12 Time of Essence. Time is of the essence of this
Agreement and the other Loan Documents.
Section 9.13 Indulgences Not Waivers. Lender's failure at any
time or times hereafter, to require strict performance by
Borrower of any provision of this Agreement shall not waive,
affect or diminish any right of Lender thereafter to demand
strict compliance and performance therewith.
Section 9.14 Entire Agreement; Exhibits and Schedules. This
Agreement and the other Loan Documents, together with all
other instruments, agreements and certificates executed by the
parties in connection therewith or with reference thereto,
embody the entire understanding and agreement between the
parties hereto and thereto with respect to the subject matter
hereof and thereof and supersede all prior agreements,
understandings and inducements, whether express or implied,
oral or written. Each Exhibit and Schedule attached hereto is
incorporated into this Agreement and by this reference made a
part hereof.
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,
drafted or dictated such provision.
Section 9.16 Advertising and Publicity. With the prior consent of
Borrower (which shall not be unreasonably withheld or
delayed), Lender may issue and disseminate to the public (by
advertisement or otherwise) information describing the credit
accommodations made available by Lender pursuant to this
Agreement, including the name and address of Borrower, the
amount and security for the credit accommodations and the
general nature of Borrower's business, provided that detail
regarding terms (such as interest rate) may be provided only
to industry publications, such as the "LPC Gold Sheets."
Section 9.17 Confidentiality. Lender agrees to exercise
reasonable efforts (and, in any event, with at least the same
degree of care as it ordinarily exercises with
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respect to confidential information of its other customers) to
keep any confidential information that is delivered or made
available by Borrower to it and that is marked confidential,
including information made available to Lender in connection
with a visit or investigation by any Person contemplated in
Section 4.4 hereof, confidential from any Person other than
their respective Affiliates and individuals employed or
retained by Lender who are or are expected to become engaged
in evaluating, approving, structuring, administering or
otherwise giving professional advice with respect to the Term
Loan or any of the Collateral, including any of their
respective legal counsel, auditors or other professional
advisors; provided, however, that nothing herein shall prevent
Lender from disclosing such confidential information (i) to
any party to this Agreement from time to time or any
participant herein, (ii) pursuant the order of any court or
administrative agency, (iii) upon the request or demand of any
regulatory agency or authority having jurisdiction over
Lender, (iv) which has been publicly disclosed other than by
an act or omission of Lender except as permitted herein or
which becomes available to Lender on a nonconfidential basis
from a source other than Obligors, (v) to the extent
reasonably required in connection with any litigation (with
respect to any of the Loan Documents or any of the
transactions contemplated thereby) to which Lender or any of
its Affiliates may be a party, (vi) to the extent reasonably
required in connection with the exercise of any remedies
hereunder, (vii) to any Lender Professionals, (viii) to any
actual or proposed participant, assignee, counterparty or
advisors to any swap or derivative transactions relating to
Obligors and the Obligations, or any other transferee of all
or part of a Lender's rights hereunder so long as such Person
has agreed in writing to be bound by the provisions of this
Section 9.17, (viii) to the National Association of Insurance
Commissioners or any similar organization or to any nationally
recognized rating agency that requires access to information
about Lender's portfolio in connection with ratings issued
with respect to Lender, (ix) to the extent reasonably required
by Applicable Law (including the Xxxxxxxx-Xxxxx Act) or (x)
with the consent of Borrower. Notwithstanding anything herein
to the contrary contained above, the information subject to
this Section 9.17 shall not include, and Lender may disclose,
without limitation of any kind, any information with respect
to the "tax treatment" and "tax structure" (in each case,
within the meaning of Treasury Regulation Section 1.6011-4) of
the transactions contemplated hereby and all materials of any
kind (including opinions or other tax analyses) that are
provided to Lender relating to such tax treatment and tax
structure; provided that with respect to any document or
similar item that in either case contains information
concerning the tax treatment or tax structure of the
transactions contemplated hereby as well as other information,
this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or
tax structure of the transactions contemplated hereby.
Section 9.18 Governing Law; Consent to Forum. This Agreement has
been negotiated, executed and delivered at and shall be deemed
to have been made in Atlanta, Georgia. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Georgia; provided, however, that, if any of the
Collateral
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shall be located in any jurisdiction other than Georgia, the
laws of such jurisdiction shall govern the method, manner and
procedure for foreclosure of Lender's Lien upon such
Collateral and the enforcement of Lender's other remedies in
respect of such Collateral to the extent that the laws of such
jurisdiction are different from or inconsistent with the laws
of the State of Georgia. As part of the consideration for new
value received, and regardless of any present or future
domicile or principal place of business of Borrower or Lender,
Borrower hereby consents and agrees that the Superior Court of
Xxxx County, Georgia, or, at Lender's option, the United
States District Court for the Northern District of Georgia,
Atlanta Division, shall have jurisdiction to hear and
determine any claims or disputes among any or all Borrower and
Lender pertaining to this Agreement or to any matter arising
out of or related to this Agreement. Borrower expressly
submits and consents in advance to such jurisdiction in any
action or suit commenced in any such Court, and Borrower
hereby waives any objection that Borrower may have based upon
lack of personal jurisdiction, improper venue or forum non
conveniens and hereby consents to the granting of such legal
or equitable relief as is deemed appropriate by such Court.
Borrower hereby waives personal service of the summons,
complaint and other process issued in any such action or suit
and agrees that service of such summons, complaint and other
process may be made by certified mail addressed to Borrower at
the address set forth in this Agreement and that service so
made shall be deemed completed upon the earlier of Borrower's
actual receipt thereof or 3 days after deposit in the U.S.
mails, proper postage prepaid. Nothing in this Agreement shall
be deemed or operate to affect the right of Lender to serve
legal process in any other manner permitted by law, or to
preclude the enforcement by Lender of any judgment or order
obtained in such forum or the taking of any action under this
Agreement to enforce same in any other appropriate forum or
jurisdiction.
Section 9.19 Waivers by Borrower. To the fullest extent permitted
by Applicable Law, Borrower waives (i) the right to trial by
jury (which Lender hereby also waives) in any action, suit,
proceeding or counterclaim of any kind arising out of or
related to any of the Loan Documents, the Obligations or the
Collateral; (ii) presentment, demand and protest and notice of
presentment, protest, default, non payment, maturity, release,
compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by
Lender on which Borrower may in any way be liable and hereby
ratifies and confirms whatever Lender may do in this regard;
(iii) notice prior to taking possession or control of the
Collateral or any bond or security which might be required by
any court prior to allowing Lender to exercise any of Lender's
remedies; (iv) the benefit of all valuation, appraisement and
exemption laws; (v) any claim against Lender on any theory of
liability, for special, indirect, consequential, or punitive
damages (as opposed to direct or actual damages) arising out
of, in connection with, or as a result of, any of the Loan
Documents, any transaction thereunder or the use of the
proceeds of the Term Loan; and (vi) notice of acceptance
hereof. Borrower acknowledges that the foregoing waivers are a
material
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inducement to Lender's entering into this Agreement and that
Lender is relying upon the foregoing waivers in its future
dealings with Borrower. Borrower warrants and represents that
it has reviewed the foregoing waivers with its legal counsel
and has knowingly and voluntarily waived its jury trial rights
following consultation with legal counsel. In the event of
litigation, this Agreement may be filed as a written consent
to a trial by the Court.
Section 9.20 Reimbursement Obligations. Borrower shall reimburse
Lender for all legal, accounting, appraisal and other fees and expenses incurred
by Lender in connection with (i) the negotiation and preparation of any of the
Loan Documents, any amendment or modification thereto, any waiver of any Default
or Event of Default thereunder, or any restructuring or forbearance with respect
thereto; (ii) the administration of the Loan Documents and the transactions
contemplated thereby, to the extent that such fees and expenses are expressly
provided for in this Agreement or any of the other Loan Documents; (iii) action
taken to perfect or maintain the perfection or priority of any of Lender's Liens
with respect to any of the Collateral; (iv) any inspection of or audits
conducted with respect to Borrower's books and records or any of the Collateral;
(v) any effort to verify, protect, preserve, or restore any of the Collateral or
to collect, sell, liquidate or otherwise dispose of or realize upon any of the
Collateral; (vi) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by or against Lender, any Obligor or any other Person) in
any way arising out of or relating to any of the Collateral (or the validity,
perfection or priority of any of Lender's Liens thereon), any of the Loan
Documents or the validity, allowance or amount of any of the Obligations; (vii)
the protection or enforcement or any rights or remedies of Lender in any
Insolvency Proceeding; and (viii) any other action taken by Lender to enforce
any of the rights or remedies of Lender against any Obligor to enforce
collection of any of the Obligations or payments with respect to any of the
Collateral. All amounts chargeable to Borrower under this Section 9.20 shall
constitute Obligations that are secured by all of the Collateral and shall be
payable on demand to Lender. Borrower shall also reimburse Lender for expenses
incurred by Lender in its administration of any of the Collateral to the extent
and in the manner provided in herein or in any of the other Loan Documents. The
foregoing shall be in addition to, and shall not be construed to limit, any
other provision of any of the Loan Documents regarding the reimbursement by
Borrower of costs, expenses or liabilities suffered or incurred by Lender or any
Lender.
Section 9.21 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, except that Borrower shall have no right to
assign its rights or delegate performance of any of its obligations under any of
the Loan Documents. Any assignee or transferee of the Term Note agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the holder of the
Term Note, shall be conclusive and binding on any subsequent holder, transferee
or assignee of the Term Note or of any note or notes issued in exchange
therefor.
Section 9.22 Audit and Appraisal Fees. Borrower shall be obligated
to reimburse Lender for all reasonable costs and expenses incurred by Lender in
connection with audits and appraisals
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of any Obligor's books and records and such other matters pertaining to any
Obligor or any Collateral as Lender shall deem appropriate. Borrower shall
reimburse Lender for all reasonable costs and expenses incurred by Lender in
connection with appraisals of any Collateral as Lender shall deem appropriate
and shall pay to Lender its standard per diem audit fee (currently $850 per day)
for each day that an employee or agent of Lender shall be engaged in an
examination or review of Borrower's books and records.
Section 9.23 Limited Waiver. Effective on the Closing Date, Lender
hereby waives compliance and the effects of noncompliance by Borrower with the
provisions of Sections 4.12.1, 4.12.3 and 4.12.3 of the Existing Loan Agreement
as of June 28, 2003.
Section 9.24 Amendment and Restatement. This Agreement amends and
restates the Existing Loan Agreement, and is not intended to
be or operate as a novation or an accord and satisfaction of
the Existing Loan Agreement or the obligations or indebtedness
evidenced or secured thereby or provided for thereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed in Atlanta,
Georgia, on the day and year specified at the beginning of this Agreement.
ATTEST: TROPICAL SPORTSWEAR INT'L CORPORATION
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
--------------------- ------------------
XXXXX X. XXXXXXXX, Secretary XXXXX X. XXXXX, Executive Vice
President, Chief Financial Officer and
[CORPORATE SEAL] Treasurer
Address:
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
LENDER:
FLEET CAPITAL CORPORATION
By: /s/ Xxxxxxxxx Xxxxxx
--------------------
Title: Senior Vice President
Address and LIBOR Lending Office:
000 Xxxxxxxx Xxxxxxx, X.X., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Office Head
Telecopier No.: (000) 000-0000
44
EXHIBIT A
FORM OF TERM NOTE
AMENDED AND RESTATED RENEWAL AND INCREASE TERM NOTE
U.S. $8,000,000 September 9, 0000
Xxxxxxx, Xxxxxxx
FOR VALUE RECEIVED, the undersigned, TROPICAL SPORTSWEAR INT'L
CORPORATION, a Florida corporation (herein called the "Borrower"), hereby
promises to pay to the order of FLEET CAPITAL CORPORATION, a Rhode Island
corporation (herein, together with any subsequent holder hereof, called the
"Holder"), the principal sum of EIGHT MILLION AND 00/100 DOLLARS ($8,000,000),
in such amounts and on such dates specified in SECTION 2.3 of the Loan
Agreement, in strict accordance with the terms thereof. Borrower likewise
unconditionally promises to pay to Holder interest from and after the date
hereof on the unpaid principal balance hereof at such interest rates, payable at
such times and computed in such manner as are specified in SECTIONS 2.4, 2.5 and
2.10 of the Loan Agreement, in strict accordance with the terms thereof.
This Term Note ("Note") is issued pursuant to, and is the "Term Note"
referred to in, the Amended and Restated Loan and Security Agreement, dated
September 9, 2003 (as at any time amended, the "Loan Agreement"), between
Borrower and Holder, and Holder is and shall be entitled to all benefits thereof
and of all Loan Documents executed and delivered in connection therewith. All
capitalized terms used herein, unless otherwise defined herein, shall have the
meanings ascribed to such terms in the Loan Agreement.
This Note is subject to optional prepayment in accordance with the
provisions of SECTION 2.18 of the Loan Agreement. Notwithstanding anything to
the contrary contained herein, the entire unpaid principal balance of and
accrued interest on this Note shall be due and payable immediately on the
Commitment Termination Date.
All payments of principal and interest shall be made in U.S. Dollars
and in immediately available funds to Holder at the office designated by Holder
from time to time.
Upon or after the occurrence of an Event of Default, the principal
balance and all accrued interest of this Note may be declared (or shall become)
due and payable in the manner and with the effect provided in the Loan
Agreement. If this Note is collected by or through an attorney at law, then
Borrower shall be obligated to pay, in addition the principal balance and
accrued interest hereof, reasonable attorneys' fees, expenses and court costs.
From and after the occurrence of an Event of Default, the outstanding principal
amount hereof shall bear interest at the Default Rate.
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Holder for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto; and, in the event of any such
payment inadvertently paid by Borrower or inadvertently received by Holder, such
excess sum shall be, at Borrower's option, returned to Borrower forthwith or
credited as a payment of principal, but shall not be applied to the payment of
interest. It is the intent hereof that Borrower not pay or contract to pay, and
that Holder not receive or contract to receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be paid by Borrower
under Applicable Law.
Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, Borrower, for itself and its legal representatives, successors
and assigns, expressly waives presentment, demand, protest, notice of dishonor,
notice of non-payment, notice of maturity, notice of protest, presentment for
the purpose of accelerating maturity, diligence in collection, and the benefit
of any exemption or insolvency laws.
Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under Applicable Law, but if any
provision of this Note shall be prohibited or invalid under Applicable Law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Holder in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Holder
of any right or remedy preclude any other or further exercise of such right or
remedy or the exercise of any other right or remedy. Holder, at its option, may
enforce its rights against any collateral securing this Note without enforcing
its rights against Borrower, any Guarantor of the indebtedness evidenced hereby
or any other property or indebtedness due or to become due to Borrower. Borrower
agrees that, without releasing or impairing Borrower's liability hereunder,
Holder may at any time release, surrender, substitute or exchange any collateral
securing this Note and may at any time release any party primarily or
secondarily liable for the indebtedness evidenced by this Note.
This Note renews, amends, restates and increases the outstanding
principal amount of that certain Renewal and Replacement Promissory Note dated
May 18, 1999, made by Borrower to the order of Bank of America, N.A. (formerly
known as NationsBank, N.A.) in the original principal amount of $15,500,000 (the
"Prior Note"), which Prior Note has been endorsed and assigned to Holder on the
date hereof and is attached hereto. The increase amount in excess of the
outstanding principal balance immediately prior to the execution and delivery
hereof is $1,000,000. Nothing contained herein or in the Prior Note shall
constitute a novation or an accord and satisfaction.
The rights of Holder and obligations of Borrower hereunder shall be
construed in accordance with and governed by the laws (without giving effect to
the conflict of law principles thereof) of the State of Georgia. This Note is
intended to take effect as an instrument under seal under Georgia law.
2
IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered by its duly authorized officer, on the date first above written.
TROPICAL SPORTSWEAR INT'L CORPORATION
By: /s/ Xxxxx X. Xxxxx
-------------------
XXXXX X. XXXXX, Executive Vice
President, Chief Financial Officer and
Treasurer
(CORPORATE SEAL)
Florida Documentary Stamp Taxes in the amount of $____________________ have been
paid in connection with the recording of the Notice of Future Advance, Mortgage
Modification and Spreading Agreement, which modifies the Mortgage that secures
this Note.
EXHIBIT B
FORM OF NOTICE OF CONVERSION/CONTINUATION
Date ______________,______
Fleet Capital Corporation
000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Loan Administration Officer
Re: Amended and Restated Loan and Security Agreement dated as of
September 9, 2003 (as at any time amended, the "Loan
Agreement"), by and between Tropical Sportswear Int'l
Corporation, a Florida corporation ("Borrower"), and Fleet
Capital Corporation, a Rhode Island corporation ("Lender")
Ladies and Gentlemen:
This Notice of Conversion/Continuation is delivered to you pursuant to Section
2.6 of the Loan Agreement. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings attributable thereto in the Loan Agreement.
Borrower hereby gives notice of its request as follows:
Check as applicable:
3
: A conversion of Loans from one Type to another, as follows:
(i) The requested date of the proposed conversion is
______________, 20__ (the "Conversion Date");
(ii) The Type of Loans to be converted pursuant hereto are
presently __________________ [select either LIBOR
Loans or Base Rate Loans] in the principal amount of
$_____________ outstanding as of the Conversion Date;
(iii) The portion of the aforesaid Loans to be converted on
the Conversion Date is $_____________ (the
"Conversion Amount");
(iv) The Conversion Amount is to be converted into a
____________ [select either a LIBOR Loan or a Base
Rate LOAN] (the "Converted Loan") on the Conversion
Date.
(v) [In the event Borrower selects a LIBOR Loan:]
Borrower hereby requests that the Interest Period for
such Converted Loan be for a duration of _____
[insert length of Interest Period].
: A continuation of LIBOR Loans for new Interest Period, as follows:
(i) The requested date of the proposed continuation is
_______________, 20__ (the "Continuation Date");
(ii) The aggregate amount of the LIBOR Loans subject to
such continuation is $__________________;
(iii) The duration of the selected Interest Period for the
LIBOR Loans which are the subject of such
continuation is: _____________ [select duration of
applicable Interest Period];
Borrower hereby ratifies and reaffirms all of its liabilities and obligations
under the Loan Documents and certifies that no Default or Event of Default
exists on the date hereof.
Borrower has caused this Notice of Conversion/Continuation to be executed and
delivered by its duly authorized representative, this _______ day of
______________, 20__.
TROPICAL SPORTSWEAR INT'L CORPORATION
By:________________________________
Title:_____________________________
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