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EXHIBIT 10.1
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$350,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
PILLOWTEX CORPORATION
CERTAIN LENDERS NAMED HEREIN
AND
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE AGENT
NATIONSBANC XXXXXXXXXX SECURITIES, INC., AS ARRANGER
December 19, 1997
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TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions
Section 1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Amendments and Renewals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 1.3 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 2
Advances
Section 2.1 The Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.2 Manner of Borrowing and Disbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.5 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.6 Reduction of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.7 Non-Receipt of Funds by the Administrative Agent . . . . . . . . . . . . . . . . . . . . . 32
Section 2.8 Payment of Principal of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.9 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.10 Manner of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.11 LIBOR Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.12 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.13 Calculation of LIBOR Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.15 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to the Initial Advances and the Initial Letters of Credit . . . . . . 45
Section 3.2 Conditions Precedent to All Advances and Letters of Credit . . . . . . . . . . . . . . . . 47
Section 3.3 Conditions Precedent to Conversions and Continuations . . . . . . . . . . . . . . . . . . . 49
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ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 4.2 Survival of Representations and Warranties, etc . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE 5
General Covenants
Section 5.1 Preservation of Existence and Similar Matters . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.2 Business; Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.3 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.4 Accounting Methods and Financial Records . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.6 Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.7 Visits and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.8 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 5.9 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 5.10 Environmental Law Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 5.11 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 5.12 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE 6
Information Covenants
Section 6.1 Quarterly Financial Statements and Information . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.2 Annual Financial Statements and Information; Certificate of No Default . . . . . . . . . . 63
Section 6.3 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.4 Copies of Other Reports and Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.5 Notice of Litigation, Default and Other Matters . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.6 ERISA Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE 7
Negative Covenants
Section 7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.3 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.4 Liquidation, Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
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Section 7.5 Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.6 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.7 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.8 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.9 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.10 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.11 Maximum Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 7.12 Minimum Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 7.13 Minimum Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 7.14 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 7.15 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 7.16 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 7.17 Amendment of Organizational Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 7.18 Amendments and Waivers of Institutional Debt . . . . . . . . . . . . . . . . . . . . . . . 72
Section 7.19 Foreign Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE 8
Default
Section 8.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 8.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE 9
Changes in Circumstances
Section 9.1 LIBOR Basis Determination Inadequate . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 9.2 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 9.3 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 9.4 Effect On Base Rate Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 9.5 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 9.6 Replacement Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 9.7 Replacement by the Borrower of a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE 10
Agreement Among Lenders
Section 10.1 Agreement Among Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 10.2 Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 10.3 Benefits of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
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ARTICLE 11
Miscellaneous
Section 11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 11.3 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 11.4 Calculation by the Lenders Conclusive and Binding . . . . . . . . . . . . . . . . . . . . . 87
Section 11.5 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 11.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 11.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.9 Interest and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 11.11 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 11.12 Exception to Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 11.13 No Liability of Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 11.14 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 11.15 Amendment, Restatement, Extension, Renewal and Increase . . . . . . . . . . . . . . . . . . 93
SECTION 11.16 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 11.17 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 11.18 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
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Schedules and Exhibits
Schedule 1: Commitments and Specified Percentages
Schedule 2: LIBOR Lending Offices
Schedule 3: Existing Liens
Schedule 4: Existing Litigation
Schedule 5: Subsidiaries
Schedule 6: Existing Investments
Schedule 7: Existing Indebtedness
Schedule 8: Qualification and Good Standing
Schedule 9: Labor Relations
Schedule 10: Fieldcrest Xxxxxx Assets
Schedule 11: Existing Letters of Credit
Exhibit A: Note
Exhibit B: General Security Agreement
Exhibit C: Intellectual Property Security Agreement and Assignment
Exhibit D: Compliance Certificate
Exhibit E: Assignment Agreement
Exhibit F: Subsidiary Guaranty
Exhibit G: Notice of Borrowing
Exhibit H-1: Leasehold Deed of Trust
Exhibit H-2: Fee Simple Deed of Trust
Exhibit I-1: Landlord's Agreement
Exhibit I-2: Landlord's Waiver
Exhibit J: Swing Line Note
Exhibit K: Notice of Continuation/Conversion
Exhibit L: Intercreditor Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of December 19,
1997, among PILLOWTEX CORPORATION, a Texas corporation (the "Borrower"), the
Lenders from time to time party hereto, and NATIONSBANK OF TEXAS, N.A., a
national banking association, as administrative agent for the Lenders.
BACKGROUND
The Lenders have been requested to provide the Borrower funds to (a)
consummate the Fieldcrest Xxxxxx Transaction (as hereinafter defined), (b)
refinance a portion of the existing debt of the Borrower and Fieldcrest Xxxxxx
(as hereinafter defined) and its subsidiaries, including, but not limited to,
the debt of the Borrower outstanding pursuant to the terms of that certain
Restated Credit Agreement, dated as of November 12, 1996, among the Borrower,
the lenders party thereto, and NationsBank of Texas, N.A., as the Agent, as
amended (the "Existing Credit Agreement"), (c) pay certain fees and expenses
related to the Fieldcrest Xxxxxx Transaction, and (d) finance the ongoing
working capital and general corporate requirements of the Borrower and its
Subsidiaries (as hereinafter defined). The Lenders have agreed to provide a
portion of such financing, subject to the terms and conditions set forth below.
In consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration hereby acknowledged, the
parties hereto agree that the Existing Credit Agreement shall be amended,
restated and superseded as follows:
ARTICLE 1
Definitions
Section 1.1 Defined Terms. For purposes of this Agreement:
"Acquisition" means any transaction pursuant to which the Borrower or
any of its Subsidiaries, (a) whether by means of a capital contribution or
purchase or other acquisition of stock or other securities or other equity
participation or interest, (i) acquires more than 50% of the equity interest in
any Person pursuant to a solicitation by the Borrower or such Subsidiary of
tenders of equity securities of such Person, or through one or more negotiated
block, market, private or other transactions, or a combination of any of the
foregoing, or (ii) makes any existing corporation a Subsidiary of the Borrower
or such Subsidiary, or causes any corporation, other than a Subsidiary of the
Borrower or such Subsidiary, to be merged into the Borrower or such Subsidiary
(or agrees to be merged into any other corporation other than a wholly-owned
Subsidiary (excluding directors' qualifying shares) of the Borrower or such
Subsidiary), or
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(b) purchases all or more than 50% of the business or assets of any Person or
of any operating division, facility or group of facilities of any Person.
"Additional Costs" has the meaning specified in Section 9.5 hereof.
"Adjusted LIBOR Rate" means, for any LIBOR Advance for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100th of 1%) determined by the Administrative Agent to be equal to
the quotient obtained by dividing (a) the LIBOR Rate for such LIBOR Advance for
any Interest Period by (b) 1 minus the Reserve Requirement for such LIBOR
Advance for any Interest Period.
"Administrative Agent" means NationsBank of Texas, N.A., a national
banking association, as administrative agent for Lenders, or such successor
administrative agent appointed pursuant to Section 10.1(b) hereof.
"Administrative Agent Fee Letter" has the meaning specified in Section
2.4(b)(i) hereof.
"Advance" means any amount advanced by the Lenders to the Borrower
pursuant to Article 2 hereof on the occasion of any borrowing.
"Affiliate" means, as applied to any Person, any other Person that,
directly or indirectly, through one or more Persons, Controls or is Controlled
By or Under Common Control with, such Person, or in the case of any Lender
which is an investment fund, the investment advisor thereof and any investment
fund having the same investment advisor or an Affiliate thereof.
"Agreement" means this Amended and Restated Credit Agreement, as
amended, modified, supplemented or restated from time to time to the extent
permitted pursuant hereto and pursuant to the Intercreditor Agreement.
"Agreement Date" means the date of this Agreement.
"Applicable Base Rate Margin" means the following per annum
percentages, applicable in the following situations:
Applicability Percentage
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(a) Initial Pricing Period 0.500%
(b) Subsequent Pricing Period
(1) The Leverage Ratio is greater than or equal to 0.750%
5.50 to 1
(2) The Leverage Ratio is less than 5.50 to 1 but 0.500%
greater than or equal to 5.00 to 1
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(3) The Leverage Ratio is less than 5.00 to 1 but 0.250%
greater than or equal to 4.50 to 1
(4) The Leverage Ratio is less than 4.50 to 1 0.000%
During the Subsequent Pricing Period, the Applicable Base Rate Margin payable
by the Borrower on the Base Rate Advances outstanding hereunder shall be
subject to reduction or increase, as applicable and as set forth in the table
above, according to the performance of the Borrower as tested quarterly by
using the Leverage Ratio calculated as of the end of each fiscal quarter;
provided, that each adjustment in the Base Rate Basis as a result of a change
in the Applicable Base Rate Margin shall be effective on the date which is two
Business Days following receipt by the Administrative Agent of the financial
statements required to be delivered pursuant to Section 6.1 or 6.2 hereof, as
applicable, and the corresponding Compliance Certificate required pursuant to
Section 6.3 hereof. If such financial statements and Compliance Certificate
are not received by the Administrative Agent by the date required, the
Applicable Base Rate Margin shall be increased to the Applicable Base Rate
Margin next higher than the Applicable Base Rate Margin currently in effect
until such time as such financial statements and Compliance Certificate are
received.
"Applicable Environmental Laws" means applicable Laws pertaining to
the regulation or protection of human health or the environment, including
without limitation, CERCLA and RCRA.
"Applicable Law" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and final orders of governmental
bodies or regulatory agencies applicable to such Person and its properties,
including, without limiting the foregoing, all orders and decrees of all
Tribunals in proceedings or actions to which the Person in question is a party,
and (b) in respect of contracts relating to interest or finance charges that
are made or performed in the State of Texas, "Applicable Law" shall mean the
laws of the United States of America, including without limitation 12 USC
Sections 85 and 86(a), as amended from time to time, and any other statute of
the United States of America now or at any time hereafter prescribing the
maximum rates of interest on loans and extensions of credit, and the laws of
the State of Texas, including, without limitation, Art. 1H, if applicable, and
if Art. 1H is not applicable, Art. 1D, and any other statute of the State of
Texas prescribing maximum rates of interest and extensions of credit; provided
that the parties hereto agree that the provisions of Chapter 15, Title 79,
Revised Civil Statutes of Texas, 1925, amended, shall not apply to Advances,
this Agreement, the Notes or any other Loan Documents.
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"Applicable LIBOR Rate Margin" means the following per annum
percentages, applicable in the following situations:
Applicability Percentage
------------- ----------
(a) Initial Pricing Period 2.000%
(b) Subsequent Pricing Period
(1) The Leverage Ratio is greater than or equal to 2.250%
5.50 to 1
(2) The Leverage Ratio is less than 5.50 to 1 but 2.000%
greater than or equal to 5.00 to 1
(3) The Leverage Ratio is less than 5.00 to 1 but 1.750%
greater than or equal to 4.50 to 1
(4) The Leverage Ratio is less than 4.50 to 1 but 1.500%
greater than or equal to 4.00 to 1
(5) The Leverage Ratio is less than 4.00 to 1 but 1.250%
greater than or equal to 3.50 to 1
(6) The Leverage Ratio is less than 3.50 to 1 but 1.000%
greater than or equal to 3.00 to 1
(7) The Leverage Ratio is less than 3.00 to 1 0.750%
During the Subsequent Pricing Period, the Applicable LIBOR Rate Margin payable
by the Borrower on the LIBOR Advances outstanding hereunder shall be subject to
reduction or increase, as applicable and as set forth in the table above,
according to the performance of the Borrower as tested quarterly by using the
Leverage Ratio calculated as of the end of each fiscal quarter; provided, that
each adjustment in the LIBOR Basis as a result of a change in the Applicable
LIBOR Rate Margin shall be effective on the date which is two Business Days
following receipt by the Administrative Agent of the financial statements
required to be delivered pursuant to Section 6.1 or 6.2 hereof, as applicable,
and the corresponding Compliance Certificate required pursuant to Section 6.3
hereof. If such financial statements and Compliance Certificate are not
received by the Administrative Agent by the date required, the Applicable LIBOR
Rate Margin shall be increased to the Applicable Base Rate Margin next higher
than the Applicable Base Rate Margin currently in effect until such time as
such financial statements and Compliance Certificate are received.
"Art. 1D" means Article 5069-1D, Title 79, Revised Civil Statutes of
Texas, 1925, as amended.
"Art. 1H" means Article 5069-1H, Title 79, Revised Civil Statutes of
Texas, 1925, as amended.
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"Assignment Agreement" has the meaning specified in Section 11.6(d)
hereof.
"Authorized Signatory" means such senior personnel of the Borrower as
may be duly authorized and designated in writing by the Borrower to execute
documents, agreements and instruments on behalf of the Borrower, and to request
Advances and Letters of Credit hereunder.
"Base Rate Advance" means any Advance bearing interest at the Base
Rate Basis.
"Base Rate Basis" means, for any day, a per annum interest rate equal
to the higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on
such day plus (iii) the Applicable Base Rate Margin or (b) the sum of (i) the
Prime Rate on such day plus (ii) the Applicable Base Rate Margin. The Base
Rate Basis shall be adjusted automatically without notice as of the opening of
business on the effective date of each change in the Prime Rate or Federal
Funds Rate, as applicable, to account for such change.
"Borrower Preferred Stock" means that certain Series A Redeemable
Convertible Preferred Stock issued by the Borrower in connection with
Fieldcrest Xxxxxx Transaction.
"Bridge Notes" means those certain notes of the Borrower to be issued
in connection with the Fieldcrest Xxxxxx Transaction (but only in the event
that the aggregate principal amount of the 1997 Senior Subordinated Notes does
not equal or exceed $135,000,000) not to exceed $150,000,000.
"Business Day" means a day on which commercial banks are open (a) for
the transaction of commercial banking business in Dallas, Texas, and (b) with
respect to any LIBOR Advance, for the transaction of international commercial
banking business (including dealings in Dollar deposits) in London, England.
"Capital Expenditures" means, for any period, expenditures made by the
Borrower and its Subsidiaries to acquire or construct fixed assets, plant and
equipment (including renewals, improvements and replacements during such period
and the aggregate amount of items leased or acquired under Capitalized Lease
Obligations at the capitalized cost of the item) computed in accordance with
GAAP.
"Capitalized Lease Obligations" means that portion of any obligation
of the Borrower or any of its Subsidiaries as lessee under a lease which at the
time would be required to be capitalized on a balance sheet of the Borrower or
such Subsidiary prepared in accordance with GAAP.
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital
stock in any Person that is a corporation, and each class of partnership
interest (including, without limitation, general, limited and preference units)
in any Person that is a partnership, and each class of member interest in any
Person that is a limited liability company.
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"Cash and Cash Equivalents" means with respect to the Borrower and
each of its Subsidiaries
(a) cash,
(b) money market funds that invest only in debt securities
(including, without limitation, banker's acceptance, bearer deposit notes, loan
participations, promissory notes and medium-term notes) which
(i) for any such investment issued by a financial
institution, the issuer (A) maintains a long-term debt rating of at
least "BBB" (or its then equivalent) according to Standard & Poor's
Ratings Group, a Division of XxXxxx-Xxxx, Inc. or a Xxxxxxxx Bankwatch
rating of at least "C" and (B) has combined capital and surplus of not
less than $100,000,000, or any other financial institution if the
amount on deposit is fully insured by the Federal Deposit Insurance
Corporation, and
(ii) for any corporate issuer, such investment is rated
"P-2" (or its then equivalent) according to Xxxxx'x Investors Service,
Inc., "A-2" (or its then equivalent) according to Standard & Poor's
Ratings Group, a Division of XxXxxx-Xxxx, Inc., "F-2" (or its then
equivalent) according to Fitch's Investors Service, Inc. or "D-2" (or
its then equivalent) according to Duff & Xxxxxx, or a better rating,
or, which if unrated, are determined by the fund to be of comparable
quality to debt securities which have such ratings, and
(c) investments (directly or through a money market mutual fund) in
(i) certificates of deposit, eurodollar time deposits,
repurchase agreements, bankers' acceptances and other interest bearing
deposits or accounts with any Lender or with any United States
commercial bank having a combined capital and surplus of at least
$100,000,000, which certificates, time deposits, repurchase
agreements, bankers' acceptances, deposits and accounts mature within
one year from the date of investment,
(ii) obligations issued or unconditionally guaranteed by
the United States government, or issued by any agency or
instrumentality thereof and backed by the full faith and credit of the
United States government,
(iii) direct obligations issued by any state or political
subdivision of the United States, which have the highest rating
obtainable from Standard & Poor's Ratings Group, a Division of
XxXxxx-Xxxx, Inc. or Xxxxx'x Investors Service, Inc. on the date of
investment, and
(iv) commercial paper issued by any Lender or any
Affiliate of any Lender, and commercial paper which has one of the
highest ratings obtainable from Standard &
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13
Poor's Ratings Group, a Division of XxXxxx-Xxxx, Inc. or Xxxxx'x
Investors Service, Inc.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 as amended from time to time.
"Change of Control" means the occurrence of any of the following
events after the Agreement Date: (a) any Person or Group shall beneficially
own (as defined in Rule 13d-3 of the Securities and Exchange Commission under
the Exchange Act or any successor provision thereto) more than 50% of the
aggregate Voting Power of the Borrower (other than ownership by (A) any Person
or Group who beneficially own in excess of 10% of the aggregate Voting Power of
the Borrower on the Agreement Date or (B) Xxxxxxx X. Xxxxxx, Xx., any Person
under the Control of Xxxxxxx X. Xxxxxx, Xx., any trusts established by or for
the benefit of Xxxxxxx X. Xxxxxx, Xx. or any of his lineal descendants or any
family member of Xxxxxxx X. Xxxxxx, Xx.); (b) during any period of twenty-four
consecutive months, individuals who at the beginning of such period constituted
the Board of Directors of the Borrower (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
shareholders of the Borrower was approved by a vote of a majority of the
directors of the Borrower then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved), cease for any reason to constitute a majority of the
Board of Directors of the Borrower then in office; or (c) any "Change of
Control", "Change in Control" or similar event or circumstance, however defined
or designated, under any agreement or document governing any Institutional
Debt.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any collateral hereafter granted by any Person to
the Administrative Agent for the benefit of the Lenders to secure the
Obligations.
"Collateral Agent" means NationsBank of Texas, N.A., in its capacity
as Collateral Agent under the Intercreditor Agreement.
"Collateral Document" means any document under which Collateral is
granted and any document related thereto.
"Commercial Letter of Credit" means, any letter of credit issued by
the Issuing Bank pursuant to Section 2.15(a) hereof (or any Existing Letter of
Credit), which is drawable upon presentation of documents evidencing the sale
or shipment of goods purchased by the Borrower or any of its Subsidiaries in
the ordinary course of its business.
"Commitment" means the commitment of the Lenders, subject to the terms
and conditions hereof, to make Advances or to issue or participate in Letters
of Credit up to an aggregate principal amount of $350,000,000, as such amount
may be reduced pursuant to Section 2.6, hereof.
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14
"Commitment Fee" has the meaning specified in Section 2.4(a) hereof.
"Compliance Certificate" means a certificate, signed by an Authorized
Signatory, in substantially the form of Exhibit D, appropriately completed.
"Control" or "Controlled By" or "Under Common Control" means
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of voting securities, by
contract or otherwise, but not solely by being an officer or director of that
Person); provided, however, that in any event any Person which beneficially
owns, directly or indirectly, 10% or more (in number of votes) of the
securities having ordinary Voting Power with respect to a corporation shall be
conclusively presumed to control such corporation.
"Controlled Group" means as of the applicable date, as to any Person
not an individual, all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) which are under common
control with such Person and which, together with such Person, are treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code; provided,
however, that the Subsidiaries of the Borrower shall be deemed to be members of
the Borrower's Controlled Group.
"Creditor" means a creditor of the Borrower or any of its Subsidiaries
and shall not include any Affiliate of any such creditor.
"Debtor Relief Laws" means any applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, insolvency,
reorganization or similar debtor relief Laws affecting the rights of creditors
generally from time to time in effect.
"Deed of Trust" means any leasehold or fee simple Deed of Trust or
Mortgage, as applicable, relating to the certain property and improvements
leased or owned by the Borrower or its Domestic Subsidiaries, in substantially
the form set forth in Exhibit H-1 and Exhibit H-2, as amended, modified,
renewed, supplemented or restated from time to time.
"Default" means an Event of Default and/or any of the events specified
in Section 8.1, hereto regardless of whether there shall have occurred any
passage of time or giving of notice that would be necessary in order to
constitute such event an Event of Default.
"Default Rate" means a simple per annum interest rate equal to (a)
with respect to Base Rate Advances the lesser of (i) the Highest Lawful Rate or
(ii) the Base Rate Basis then in effect plus 2.00% or (b) with respect to LIBOR
Advances, the lesser of (i) the Highest Lawful Rate or (ii) the LIBOR Basis
then in effect plus 2.00%.
"Determining Lenders" means, on any date of determination, any
combination of Lenders whose Specified Percentages aggregate more than 50%;
provided, however, in the event that the Commitment has been terminated,
"Determining Lenders" means, on any date of determination,
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15
any combination of Lenders having more than 50% of Advances (other than Swing
Line Advances) then outstanding.
"Dividend" means, as to any Person, (a) any declaration or payment of
any dividend (other than a dividend in stock or in the right to acquire stock)
on, or the making of any distribution on account of, any Equity Interests of
such Person and (b) any purchase, redemption, or other acquisition or
retirement for value of any Capital Stock of such Person.
"Dollar" or "$" means the lawful currency of the United States of
America.
"Domestic Subsidiary" means any Subsidiary of the Borrower other than
a Foreign Subsidiary.
"Earnings from Operations" has the meaning given to such term pursuant
to GAAP.
"EBITDA" means, for any period, determined in accordance with GAAP on
a consolidated basis for the Borrower and its Subsidiaries, the sum of (a)
Earnings From Operations plus (b) depreciation, amortization and other non-cash
charges (to the extent included in determining Earnings From Operations). For
purposes hereof, EBITDA shall be adjusted on a pro forma basis to exclude from
any period under consideration personnel costs that have been eliminated
concurrent with, or during the twelve-month period subsequent to, the Agreement
Date.
"Eligible Assignee" means (a) any Lender; (b) a commercial bank
organized under the laws of the United States, or any state thereof, and having
total assets in excess of $1,000,000,000; (c) a savings and loan association or
savings bank organized under the laws of the United States, or any state
thereof, having total assets in excess of $500,000,000, and not in receivership
or conservatorship; (d) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is described in this clause; and (e) the central bank of any
country which is a member of the Organization for Economic Cooperation and
Development; (f) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other entity)
that is engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and having a combined capital and
surplus or total assets of at least $100,000,000, (g) any other entity (other
than a natural person) that is an "accredited investor" (as defined in
Regulation D under the Securities Act of 1933) which extends credit or buys
loans as one of its businesses, and (h) any other entity approved by both the
Borrower and the Administrative Agent, provided that no Affiliate of the
Borrower shall qualify as an Eligible Assignee.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulation promulgated thereunder.
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16
"ERISA Event" means, with respect to the Borrower and its
Subsidiaries, (a) a Reportable Event (other than a Reportable Event not subject
to the provision for 30-day notice to the PBGC pursuant to regulations issued
under Section 4043 of ERISA), (b) the withdrawal of any such Person or any
member of its Controlled Group from a Plan subject to Title IV of ERISA during
a plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate under
Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a
Plan by the PBGC, (e) the failure to make required contributions which could
result in the imposition of a lien under Section 412 of the Code or Section 302
of ERISA, or (f) any other event or condition which could reasonably be
expected to constitute grounds under Section 4042 (other than Section
4042(a)(3)) of ERISA for the termination by the PBGC of, or the appointment by
the appropriate United States District Court of a trustee to administer, any
Plan or the imposition of any liability under Title IV of ERISA other than PBGC
premiums due but not delinquent under Section 4007 of ERISA.
"Event of Default" means any of the events specified in Section 8.1
hereof, provided that any requirement for notice or lapse of time has been
satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Matters" has the meaning specified in Section 5.9(a) hereof.
"Existing Credit Agreement" has the meaning specified in the
Background provision of this Agreement.
"Existing Letters of Credit" means those Letters of Credit set forth
on Schedule 11 hereto.
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of Dallas on the Business Day
next succeeding such day, provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average of the quotations
for the day for such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
"Fieldcrest Xxxxxx" means Fieldcrest Xxxxxx, Inc., a Delaware
corporation, which upon completion of the Fieldcrest Xxxxxx Merger will be a
wholly-owned subsidiary of the Borrower.
"Fieldcrest Xxxxxx Merger" means the merger of Pegasus, a wholly-owned
Subsidiary of the Borrower, with and into Fieldcrest Xxxxxx with Fieldcrest
Xxxxxx as the surviving
- 10 -
17
corporation, pursuant to the terms of that certain Agreement and Plan of Merger
among the Borrower, Pegasus and Fieldcrest Xxxxxx, dated as of September 10,
1997, as amended, or modified with the consent of the Administrative Agent,
which consent shall not be unreasonably withheld.
"Fieldcrest Xxxxxx Subordinated Debentures" means those certain 6%
Convertible Subordinated Debentures of Fieldcrest Xxxxxx due 2012 in aggregate
outstanding principal amount of $116,500,000.
"Fieldcrest Xxxxxx Transaction" means, collectively, (a) the
Fieldcrest Xxxxxx Merger, (b) the issuance by the Borrower of (i) the 1997
Senior Subordinated Notes, (ii) the Bridge Notes, but only to the extent that
1997 Senior Subordinated Notes in an aggregate principal amount at least equal
to $135,000,000 are not issued by the Borrower, (iii) the Borrower Preferred
Stock, and (iv) the common Capital Stock of the Borrower for an amount not less
than the sum of (A) 20.58% of the aggregate value of all Capital Stock of
Fieldcrest Xxxxxx plus (B) 20.58% of all conversion consideration requested by
the holders of the Fieldcrest Xxxxxx Subordinated Debentures, and (c) the
refinancing of certain existing Indebtedness of Fieldcrest Xxxxxx and the
Borrower.
"Fieldcrest Xxxxxx Transaction Documents" means all agreements,
documents and instruments executed in connection with or related to the
Fieldcrest Xxxxxx Transaction.
"Financial Statements" has the meaning specified in Section 4.1(j)
hereof.
"Fiscal Month" means a period of four, five, or six weeks having seven
days in each week ending on a Saturday and that otherwise approximates a
calendar-monthly period. Reference to a Fiscal Month by the name of a calendar
month means the fiscal month that encompasses the most of that calendar month
(e.g., the Fiscal Month of January 1998 ends on January 31, 1998).
"Fiscal Quarter" means any quarter of a fiscal year ending on the last
day of a Fiscal Month (e.g., the third Fiscal Quarter in 1998 ends on September
26, 1998).
"Fiscal Year" means the Borrower's fiscal year for accounting and tax
purposes, which consists of a 52- or 53- week period beginning on the first day
after the end of the immediately preceding fiscal year and ending on the
Saturday nearest December 31 following that first day. Reference to a Fiscal
Year with a number corresponding to any calendar year means the Fiscal Year
ending on the Saturday nearest to December 31 during that calendar year (e.g.,
Fiscal Year 1999 ends on January 1, 2000).
"Fixed Charges" means, for any date of calculation, calculated for
Borrower and its Subsidiaries on a consolidated basis, the sum of, without
duplication, (a) scheduled principal payments in respect of Indebtedness, plus
(b) cash interest expense (including interest expense pursuant to Capitalized
Lease Obligations), plus (c) cash Dividends paid.
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18
"Fixed Charge Coverage Ratio" means the ratio of Pretax Cash Flow to
Fixed Charges, calculated (a) with respect to Pretax Cash Flow, for the four
consecutive Fiscal Quarters ending on the date of calculation and (b) with
respect to Fixed Charges (i) for the first three Fiscal Quarters of Fiscal Year
1998, on an annualized basis and (ii) for each Fiscal Quarter thereafter, for
the four consecutive Fiscal Quarters ending on the date of calculation.
"Foreign Subsidiary" means any Subsidiary of the Borrower which is not
organized under the laws of any state of the United States of America or the
District of Columbia.
"Form 1001" has the meaning specified in Section 2.13(e)(i)(B) hereof.
"Form 4224" has the meaning specified in Section 2.13(e)(i)(A) hereof.
"GAAP" means generally accepted accounting principles applied on a
consistent basis, set forth in the Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants, or their successors
which are applicable in the circumstances as of the date in question. The
requirement that such principles be applied on a consistent basis shall mean
that the accounting principles applied in a current period are comparable in
all material respects to those applied in a preceding period.
"General Security Agreement" means a security agreement relating to
all personal property assets of the Borrower and its Domestic Subsidiaries,
substantially in the form of Exhibit B hereto, as amended, modified, renewed,
supplemented or restated from time to time.
"Group" means any Persons acting together which would constitute a
"group" for purposes of Section 13(d) of the Exchange Act or any successor
provision thereto.
"Guarantor" means each direct and indirect Subsidiary of the Borrower,
other than any Foreign Subsidiary.
"Guaranty" or "Guaranteed", means (a) as applied to an obligation of
another Person, (i) a guaranty, direct or indirect, in any manner, of any part
or all of such obligation, and (ii) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation, including, without
limiting the foregoing, any reimbursement obligations with respect to amounts
which may be drawn by beneficiaries of outstanding letters of credit and (b) an
agreement, direct or indirect, contingent or otherwise, to maintain the net
worth, working capital, earnings or other financial performance of another
Person; provided, however, Guaranty does not mean (y) the endorsement of
instruments for collection or deposit in the ordinary course of business and
(z) customary indemnities given in connection with asset sales in the ordinary
course of business.
"Hedge Agreements" means any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, currency
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19
exchange rates, forward rates applicable to such party's assets, commodity
prices (including commodity hedging agreements), liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap, swap or collar protection agreements, and
forward rate currency or interest rate options, as the same may be amended or
modified and in effect from time to time, and any and all cancellations, buy
backs, reversals, terminations or assignments of any of the foregoing.
"Highest Lawful Rate" means at the particular time in question the
maximum rate of interest which, under Applicable Law, the Lenders are then
permitted to charge on the Obligations. If the maximum rate of interest which,
under Applicable Law, the Lenders are permitted to charge on the Obligations
shall change after the date hereof, the Highest Lawful Rate shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each change in the Highest Lawful Rate without notice
to the Borrower. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas, the applicable rate ceiling shall be (a)
the weekly rate ceiling described in and computed in accordance with the
provisions of Art. 1H, or (b) either the quarterly ceiling or the annualized
ceiling computed pursuant to Art. 5069-1D.008, Title 79, Revised Civil Statutes
of Texas, as amended; provided, however, that at any time the weekly rate
ceiling, the quarterly ceiling or the annualized ceiling shall be less than 18%
per annum or more than 24% per annum, the provisions of Art. 5069-1D.009(a) and
(b), Title 79, Revised Civil Statutes of Texas, as amended, shall control for
purposes of such determination, as applicable.
"Increased Advance Costs" has the meaning specified in Section 9.3
hereof.
"Increased Advance Costs Retroactive Effective Date" has the meaning
specified in Section 9.3 hereof.
"Increased Advance Costs Set Date" has the meaning specified in
Section 9.3 hereof.
"Increased Letter of Credit Costs" has the meaning specified in
Section 2.15(d) hereof.
"Increased Letter of Credit Costs Retroactive Effective Date" has the
meaning specified in Section 2.15(d) hereof.
"Increased Letter of Credit Costs Set Date" has the meaning specified
in Section 2.15(d) hereof.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations under conditional
sale or other title retention agreements relating to property or assets
purchased by such Person, (d) all obligations issued or assumed as the deferred
purchase price of property or services (excluding trade accounts payable in the
ordinary course of business), (e) all obligations secured by any Lien on any
property or asset owned by
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20
such Person, whether or not the obligation secured thereby shall have been
assumed, (f) to the extent not otherwise included, all Capitalized Lease
Obligations of such Person, all obligations in respect of letters of credit,
bankers' acceptances and similar instruments, and all obligations under Hedge
Agreements, (g) any "withdrawal liability" of such Person as such term is
defined under Part I of Subtitle E of Title IV or ERISA, (h) all preferred
stock issued by such Person and required by the terms thereof to be redeemed,
or for which mandatory sinking fund payments are due, by a fixed date, (i) the
principal portion of all obligations of such Person under any Synthetic Lease,
and (j) any Guaranty of such Person of any obligation of another Person
constituting obligations of a type set forth above.
"Indemnified Matters" has the meaning specified in Section 5.9(a)
hereof.
"Indemnitees" has the meaning specified in Section 5.9(a) hereof.
"Indentures" means the 1996 Senior Subordinated Notes Indenture, the
1997 Senior Subordinated Notes Indenture and any other indenture providing for
the issuance of any other Subordinated Debt.
"Initial Pricing Period" means the period from and including the
Agreement Date to and including the Rate Adjustment Date.
"Institutional Debt" means unsecured Indebtedness for borrowed money
which may be raised by the Borrower in the private placement or public debt
markets on terms reasonably satisfactory to the Determining Lenders, and shall
include Subordinated Debt, with only such changes or amendments which are not
prohibited by Section 7.18 hereof.
"Intellectual Property Security Agreement" means a security agreement
and assignment relating to all intellectual property of the Borrower and its
Domestic Subsidiaries substantially in the form of Exhibit C hereto, as
amended, modified, renewed, supplemented or restated from time to time.
"Intercreditor Agreement" means that certain Intercreditor Agreement
dated as of the Agreement Date, among the Borrower, the Administrative Agent,
the Lenders hereunder, the administrative agent under the Term Credit
Agreement, the lenders under the Term Credit Agreement, and the Collateral
Agent, in substantially the form of Exhibit L hereto, as amended, modified,
renewed, supplemented or restated from time to time to the extent permitted
pursuant thereto.
"Interest Period" means the period beginning on the day any LIBOR
Advance is made and ending one, two, three or six months thereafter (as the
Borrower shall select); provided, however, that:
(i) if any Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall be extended to
the next succeeding Business
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21
Day, unless the result of such extension would be to extend such
Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iii) there shall be outstanding at any one time no more
than eight Interest Periods in the aggregate.
"Investment" means any direct or indirect purchase or other
acquisition of, capital stock or other securities of, or beneficial interest
in, any other Person, or any direct or indirect loan, advance (other than loans
or advances to employees for moving and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital
contribution to, or investment in any other Person, including without
limitation the purchase of accounts receivable of any other Person that are not
current assets or do not arise in the ordinary course of business.
"Issuing Bank" means NationsBank of Texas, N.A., in its capacity as
issuer of the Letters of Credit, or any other Lender which agrees to issue a
Letter of Credit.
"Landlord's Agreement" means that Landlord's Agreement substantially
in the form of Exhibit I-1 hereto.
"Landlord's Waiver" means that Landlord's Waiver substantially in the
form of Exhibit I-2 hereto.
"Law" means any statute, law, ordinance, regulation, rule, order,
writ, injunction, or decree of any Tribunal.
"Lender" means each financial institution shown on the signature pages
hereof so long as such financial institution maintains a portion of the
Commitment or is owed any part of the Obligations (including the Administrative
Agent in its individual capacity), and each Eligible Assignee that hereafter
becomes a party hereto pursuant to Section 11.6 hereof, subject to the
limitations set forth therein (but not any Participant).
"L/C Cash Collateral Account" has the meaning specified in Section
2.15(g)(i) hereof.
"L/C Related Documents" has the meaning specified in Section
2.15(e)(i) hereof.
"Letter of Credit" means any Commercial Letter of Credit or Standby
Letter of Credit issued pursuant to the terms hereof (and shall include any
Existing Letter of Credit).
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22
"Letter of Credit Agreement" has the meaning specified in Section
2.15(b) hereof.
"Letter of Credit Facility" has the meaning specified in Section
2.15(a) hereof.
"Leverage Ratio" means, for any date of calculation, the ratio of
Total Debt as of the date of determination to EBITDA calculated for the four
consecutive Fiscal Quarters ending on the date of calculation. For purpose of
calculation of the Leverage Ratio only, with respect to assets not owned at all
times during the four Fiscal Quarters immediately preceding the date of
calculation of EBITDA, there shall be (i) included in EBITDA the proforma
EBITDA of any assets acquired during any such four Fiscal Quarters for the
twelve months preceding the date of calculation and (ii) excluded from EBITDA
the EBITDA of any assets disposed of during any of such Fiscal Quarters for the
twelve months preceding the date of calculation.
"LIBOR Advance" means any Advance bearing interest at the LIBOR Basis.
"LIBOR Basis" means, with respect to any LIBOR Advance, a simple per
annum interest rate equal to the lesser of (a) the Highest Lawful Rate, or (b)
the sum of the Adjusted LIBOR Rate applicable to such LIBOR Advance plus the
Applicable LIBOR Rate Margin.
"LIBOR Lending Office" means, with respect to a Lender, the office
designated as its LIBOR Lending Office on Schedule 2 attached hereto, and such
other office of the Lender or any of its Affiliates hereafter designated by
written notice to the Borrower and the Administrative Agent.
"LIBOR Rate" means, for any LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR Rate" shall mean, for any LIBOR Advance
for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"Lien" means, with respect to any property, any mortgage, lien,
pledge, collateral assignment, hypothecation, charge, security interest, title
retention agreement, levy, execution, seizure, attachment, garnishment or other
similar encumbrance of any kind in respect of such property, whether or not
xxxxxx, vested or perfected.
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation by or before any Tribunal, including, without limitation,
proceedings, claims, lawsuits, and/or
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23
investigations under or pursuant to any environmental, occupational, safety and
health, antitrust, unfair competition, securities, Tax or other Law, or under
or pursuant to any contract, agreement or other instrument.
"Loan Documents" means this Agreement, the Notes, the Security
Agreements, the Deeds of Trust, any other Collateral Document, any Subsidiary
Guaranty, the L/C Related Documents, the Underwriting Fee Letter, the
Administrative Agent Fee Letter, any Hedge Agreements entered into with any
Person that is or was a Lender or an Affiliate of a Lender at the time of
entering into such Hedge Agreements, and any other document or agreement
executed or delivered from time to time by the Borrower and any of its
Subsidiaries or any other Person in connection herewith or as security for the
Obligations.
"Material Adverse Effect" means any act or circumstance or event that
(a) could reasonably be expected to be material and adverse to the business,
financial condition or results of operations of the Borrower and its
Subsidiaries taken as a whole, or (b) in any manner whatsoever does or could
reasonably be expected to materially and adversely affect (i) the validity or
enforceability of any Loan Document, (ii) any material Collateral, (iii) the
ability of the Borrower and its Subsidiaries taken as a whole to perform their
respective Obligations under the Loan Documents, or (iv) the Rights of the
Lenders or the Administrative Agent under any of the Loan Documents.
"Maturity Date" means December 31, 2003, or the earlier date of
termination in whole of the Commitment pursuant to Section 2.6 or 8.2 hereof.
"Multiemployer Plan" means, as to any Person, at any time, a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which such Person or any member of its Controlled Group is making, or is
obligated to make contributions or has made, or been obligated to make,
contributions.
"NationsBank" means NationsBank of Texas, N.A., a national banking
association, in its capacity as a Lender.
"Necessary Authorization" means any right, franchise, license, permit,
consent, approval or authorization from, or any filing or registration with,
any Tribunal or any Person necessary to enable the Borrower or any of its
Subsidiaries to maintain and operate its business and properties.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset by or of, or the issuance of Capital Stock or
Institutional Debt to, any Person, the amount of cash received by such Person
in connection with such transaction (including cash proceeds of any property
received in consideration of any such sale, lease, transfer or other
disposition) after deducting therefrom the aggregate, without duplication, of
the following amounts to the extent properly attributable to such transaction
or to any asset that may be the subject thereof: (i) reasonable brokerage
commissions, legal fees, finder's fees, financial
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24
advisory fees, fees for solvency opinions, accounting fees, underwriting fees,
investment banking fees and other similar commissions and fees, and expenses,
in each case, to the extent paid or payable by such Person; (ii) filing,
recording or registration fees or charges or similar fees or charges paid by
such Person; (iii) taxes paid or payable by such Person or any shareholder,
partner or member of such Person to governmental taxing authorities as a result
of such sale or other disposition (after taking into account any available tax
credits or deductions or any tax sharing arrangements); (iv) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on
any Indebtedness that is secured by a Lien on the asset in question and that is
required to be repaid under the terms thereof as a result of such asset sale;
and (v) any reserve for adjustment in respect of the price of any such sale,
lease, transfer or other disposition of such asset or assets established in
accordance with GAAP.
"Net Income" means net earnings (or deficit) after taxes of the
Borrower and its Subsidiaries, on a consolidated basis, determined in
accordance with GAAP.
"Net Worth" means an amount equal to the sum of (a) the stockholders'
equity of the Borrower and its Subsidiaries, on a consolidated basis,
determined in accordance with GAAP, plus (b) the Borrower Preferred Stock.
"1996 Senior Subordinated Notes" means those Series A and Series B 10%
Senior Subordinated Notes due 2006 in the aggregate principal amount of
$125,000,000, which are subordinated to the Obligations on the terms set forth
in the 1996 Senior Subordinated Notes Indenture.
"1996 Senior Subordinated Notes Indenture" means that certain
Indenture, dated as of November 12, 1996, among the Borrower, the Subsidiaries
of the Borrower listed on a schedule thereto, and Bank One, Columbus, N.A., as
Trustee.
"1997 Senior Subordinated Notes" means those certain senior
subordinated notes of the Borrower due 2007 to be issued by the Borrower in
connection with the Fieldcrest Xxxxxx Transaction not to exceed $185,000,000,
which shall be subordinated to the Obligations on the terms set forth in the
1997 Senior Subordinated Notes Indenture.
"1997 Senior Subordinated Notes Indenture" means that certain
Indenture, dated as of December 18, 1997, among the Borrower, the Subsidiaries
of the Borrower listed on a schedule thereto, and Norwest Bank, N.A., as
trustee.
"Notes" means, collectively, the Revolving Credit Notes and the Swing
Line Note.
"Notice of Borrowing" has the meaning specified in Section 2.2(a)
hereof.
"Notice of Continuation/Conversion" has the meaning specified in
Section 2.2(d) hereof.
"Notice of Issuance" has the meaning specified in Section 2.15(b)
hereof.
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"Obligations" means (a) all obligations of any nature (whether matured
or unmatured, fixed or contingent, including the Reimbursement Obligations) of
the Borrower or any other Obligor to any Lender or the Administrative Agent or
any Affiliate of any Lender under any of the Loan Documents as they may be
amended from time to time, and (b) all obligations of the Borrower or any other
Obligor for losses, damages, expenses or any other liabilities of any kind that
any Lender, the Administrative Agent or any Affiliate of any Lender may suffer
by reason of a breach by the Borrower or any other Obligor of any obligation,
covenant or undertaking with respect to any Loan Document payable by the
Borrower or any other Obligor under any Loan Document.
"Obligor" means the Borrower and each Guarantor.
"Operating Lease" means any operating lease, as defined in the
Financial Accounting Standard Board Statement of Financial Accounting Standards
No. 13, dated November, 1976 or otherwise in accordance with GAAP.
"Other Taxes" has the meaning specified in Section 2.14(b) hereof.
"Ownership Information" has the meaning specified in Section 11.6(j)
hereof.
"Participants" has the meaning specified in Section 11.6(c) hereof.
"Participations" has the meaning specified in Section 11.6(c) hereof.
"Payment Date" means the last day of the Interest Period for any LIBOR
Advance.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Pegasus" means Pegasus Merger Sub, Inc., a Delaware corporation
which, upon the Fieldcrest Xxxxxx Merger, will be merged with and into
Fieldcrest Xxxxxx with Fieldcrest Xxxxxx as the surviving corporation.
"Permitted Liens" means, as applied to any Person:
(a) Any Lien in favor of (i) the Collateral Agent, the
Administrative Agent or the Lenders or any Affiliate of any Lender (or former
Lender or Affiliate of a Lender still party to a Hedge Agreement with the
Borrower or any of its Subsidiaries) to secure the Obligations hereunder or
(ii) the Collateral Agent, the administrative agent or the lenders (or any
affiliate thereof) under the Term Credit Agreement to secure the Obligations
(as defined in the Term Credit Agreement) thereunder;
(b) Liens for taxes, assessments, governmental charges, levies or
claims that are not yet delinquent or that are being diligently contested in
good faith by appropriate proceedings in
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26
accordance with Section 5.6 hereof and for which adequate reserves shall have
been set aside on such Person's books, but only so long as no foreclosure,
restraint, sale or similar proceedings have been commenced with respect
thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers,
landlords and materialmen and other similar Liens incurred in the ordinary
course of business or by operation of Law for sums not yet due or being
contested in good faith, if such reserve or appropriate provision, if any, as
shall be required by GAAP shall have been made therefor;
(d) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment insurance,
pensions or other social security programs or similar legislation;
(e) Easements, right-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere in any material
respect with the ordinary conduct of the business of such Person;
(f) Liens and negative pledges created to secure the purchase
price of assets acquired (or existing on property at the time such property is
acquired) by such Person or created to secure Indebtedness permitted by Section
7.1(c) or 7.1(h) hereof, which is incurred solely for the purpose of financing
the acquisition of such assets and incurred at the time of acquisition or which
exists against such assets at the time of acquisition thereof, so long as each
such Lien shall at all times be confined solely to the asset or assets so
acquired (and proceeds thereof), and refinancings thereof so long as any such
Lien remains solely on the asset or assets acquired (and the proceeds thereof)
and the amount of Indebtedness related thereto is not increased;
(g) Any Liens which are described on Schedule 3 hereto, and Liens
resulting from the refinancing of the related Indebtedness, provided that the
Indebtedness secured thereby shall not be increased and the Liens shall not
cover additional assets of the Borrower;
(h) Liens arising from filing Uniform Commercial Code financing
statements for precautionary purposes relating solely to operating leases of
personal property permitted by this Agreement under which the Borrower or any
of its Subsidiaries is a lessee;
(i) Any zoning or similar law or right reserved to or vested in
any Tribunal to control or regulate the use of any real property;
(j) Any other title or survey exception with respect to real
property assets disclosed by any preliminary title report, title commitment
report, survey or other search of title provided to the Administrative Agent in
accordance with this Agreement unless disapproved in writing by the
Administrative Agent prior to the Agreement Date;
(k) Liens incurred or deposits made to secure the performance of
bids, tenders, leases, trade contracts (other than for Indebtedness), statutory
obligations, surety and appeal
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27
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(l) Any leases or subleases currently in effect, entered into in
the ordinary course of business or entered into in compliance with the Loan
Documents; and
(m) Any replacements or renewals of Liens (but no increases in the
Indebtedness secured thereby) permitted by clauses (a)(ii), (f), (g), (h) and
(l) hereof.
"Person" means an individual, corporation, partnership, limited
liability company, trust or unincorporated organization, or a government or any
agency or political subdivision thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of
ERISA (including a Multiemployer Plan) pursuant to which any employees of the
Borrower, its Subsidiaries or any member of their Controlled Group participate.
"Pretax Cash Flow" means, for any date of calculation, calculated for
the Borrower and its Subsidiaries on a consolidated basis (including Fieldcrest
Xxxxxx and its Subsidiaries on a pro forma basis with respect to any period
prior to the Agreement Date), an amount equal to the sum of (a) EBITDA, minus
(b) Capital Expenditures, plus (c) cash proceeds received from the sale of
assets pursuant to Section 7.5(d) hereof.
"Prime Rate" means, at any time, the prime interest rate announced or
published by the Reference Lender from time to time as its reference rate for
the determination of interest rates for loans of varying maturities in United
States dollars to United States residents of varying degrees of
creditworthiness and being quoted at such time by the Reference Lender as its
"prime rate;" it being understood that such rate may not be the lowest rate of
interest charged by the Reference Lender.
"Quarterly Date" means the last day of each March, June, September and
December, beginning December 31, 1997.
"Rate Adjustment Date" means the date which is two Business Days
following the date that the Lenders receive the financial statements for the
first Fiscal Quarter for Fiscal Year 1998 required to be delivered pursuant to
Section 6.1 hereof.
"RCRA" means the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 as
amended from time to time.
"Reference Lender" means NationsBank; provided that if NationsBank
shall cease to be the Administrative Agent hereunder, NationsBank shall cease
to be the Reference Lender, and the new Administrative Agent (after
consultation with the Borrower) shall, with notice to the Borrower and the
Lenders, designate itself as the Reference Lender.
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"Register" has the meaning specified in Section 11.6(j) hereof.
"Regulatory Modification" has the meaning specified in Section 9.5
hereof.
"Regulatory Modification Retroactive Effective Date" has the meaning
specified in Section 9.5 hereof.
"Regulatory Modification Set Date" has the meaning specified in
Section 9.5 hereof.
"Reimbursement Obligations" means, in respect of any Letter of Credit
as at any date of determination, the sum of (a) the maximum aggregate amount
which is then available to be drawn under such Letter of Credit plus (b) the
aggregate amount of all drawings under such Letter of Credit not theretofore
reimbursed by the Borrower.
"Related Person" means (a) any Affiliate of the Borrower, (b) any
individual or entity who directly or indirectly holds 10% or more of any class
of Capital Stock of the Borrower, (c) any relative of such individual by blood,
marriage or adoption not more remote than first cousin and (d) any officer or
director of the Borrower.
"Release Date" means the date on which the Notes have been paid in
full, all other Obligations due and owing have been paid and performed in full,
and the Commitment has been terminated.
"Reportable Event" has the meaning set forth in Section 4043(c) of
ERISA.
"Reserve Requirement " means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks with respect to (i) any
category of liabilities which includes deposits by reference to which the
Adjusted LIBOR Rate is to be determined, or (ii) any category of extensions of
credit or other assets which include LIBOR Advances. The Adjusted LIBOR Rate
shall be adjusted automatically on and as of the effective date of any change
in the Reserve Requirement.
"Responsible Officer" means, of any Person, the President, chief
operating officer, chief executive officer, chief financial officer, chief
accounting officer or treasurer of such Person.
"Restricted Payments" means, collectively, (a) Dividends, and (b) any
(i) payment or prepayment of principal, premium (but not interest) or penalty
(but not liquidated damages in respect of the 1997 Senior Subordinated Notes)
on any Institutional Debt of the Borrower or any of its Subsidiaries or any
defeasance, redemption, purchase, repurchase or other acquisition or
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29
retirement for value, in whole or in part, of any Institutional Debt
(including, without limitation, the setting aside of assets or the deposit of
funds therefor), and (ii) prepayment of interest on any Institutional Debt.
"Revolver Availability" means an amount equal to the result of (a) the
Commitment minus (b) the sum of (i) the outstanding Revolving Credit Advances,
plus (ii) the outstanding Reimbursement Obligations, plus (iii) the outstanding
Swing Line Advances.
"Revolving Credit Advance" means an Advance made pursuant to
Section 2.1(a) hereof.
"Revolving Credit Notes" means the promissory notes of Borrower
evidencing Revolving Credit Advances hereunder, substantially in the form of
Exhibit A hereto, together with any extension, renewal, or amendment thereof,
or substitution therefor.
"Rights" means rights, remedies, powers and privileges.
"Security Agreements" mean the General Security Agreements and the
Intellectual Property Security Agreements.
"Solvent" means, with respect to any Person, that as of the date of
determination, (a) the fair saleable value of the assets of such Person is
greater than the total amount of liabilities (including contingent and
unliquidated liabilities) of such Person, (b) such Person is able to pay the
probable liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person, and (c) such Person does not have
unreasonably small capital with which to carry on its business. In computing
the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability discounted to present
value at rates believed to be reasonable by such Person.
"Special Counsel" means the law firm of Xxxxxxx, Xxxxxxx & Xxxxxxx,
P.C., or such other legal counsel as the Administrative Agent may select.
"Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on Schedule 1 hereto as its Specified Percentage, or
as adjusted or specified in any amendment to this Agreement or in any
Assignment Agreement.
"Standby Letter of Credit" means any letter of credit issued by the
Issuing Bank pursuant to Section 2.15(a) hereof (or any Existing Letter of
Credit) which is not a Commercial Letter of Credit.
"Subordinated Debt" means (a) the subordinated Indebtedness existing
on the Agreement Date, and (b) any other Indebtedness of the Borrower or any of
its Subsidiaries having maturities
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30
and terms and which is subordinated to payment of the Obligations in a manner
approved in writing by the Administrative Agent and the Determining Lenders in
their reasonable discretion, in each case with only such changes or amendments
as are not prohibited by Section 7.18 hereof.
"Subsequent Pricing Period" means the period from and including the
date which is the first day following the end of the Initial Pricing Period to
and including the Release Date.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate or other Person of which
(or in which) more than 50% of:
(a) the outstanding capital stock having Voting Power to elect a
majority of the Board of Directors of such corporation (irrespective of whether
at the time capital stock of any other class or classes of such corporation
shall or might have Voting Power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership or
joint venture,
(c) the beneficial interest of such trust or estate, or
(d) the equity interest of such other Person,
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's
Subsidiaries.
"Subsidiary Guaranty" means a guaranty, substantially in the form of
Exhibit F hereto, executed by each direct and indirect Domestic Subsidiary of
the Borrower, as amended, supplemented, modified, renewed or otherwise restated
from time to time.
"Swing Line Advance" means an Advance made pursuant to Section 2.1(b)
hereof.
"Swing Line Bank" means NationsBank of Texas, N.A. and any successor
thereto appointed in accordance with Section 10.1(b) hereof.
"Swing Line Facility" has the meaning specified in Section 2.1(b)
hereof.
"Swing Line Note" means the Swing Line Note of the Borrower payable to
the order of the Swing Line Bank, evidencing Swing Line Advances hereunder,
substantially in the form of Exhibit J hereto, together with any extension,
renewal or amendment thereof or substitution therefor.
"Synthetic Lease" means any synthetic lease, tax retention generating
lease, or off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but which is classified
as an Operating Lease pursuant to GAAP.
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31
"Taxes" has the meaning specified in Section 2.14(a) hereof.
"Term Credit Agreement" means that certain Term Credit Agreement,
dated as of the Agreement Date, among the Borrower, NationsBank of Texas, N.A.,
as administrative agent, and the lenders party thereto, as amended, modified,
supplemented or restated from time to time to the extent permitted pursuant
thereto and pursuant to the Intercreditor Agreement.
"Total Debt" means, as of any date of determination, determined for
the Borrower and its Subsidiaries on a consolidated basis, to the extent that
the following would appear as a liability upon the consolidated balance sheet
of the Borrower and its Subsidiaries in accordance with GAAP: (i) indebtedness
for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or
other similar instruments, (iii) non-contingent obligations to pay the deferred
purchase price of property or services other than trade payables incurred in
the ordinary course of business, and (iv) Capitalized Lease Obligations.
"Tribunal" means any (a) state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision, agency,
department, commission, board, bureau, or instrumentality of a governmental or
other regulatory or public body or authority or (b) private arbitration board
or panel.
"UCC" means the Uniform Commercial Code of Texas, as amended from time
to time, and the Uniform Commercial Code applicable in such other states as any
Collateral may be located.
"Underwriting Fee Letter" means that certain letter, dated September
10, 1997, from NationsBank of Texas, N.A., and NationsBanc Xxxxxxxxxx
Securities, Inc., providing an underwriting fee with respect to the Commitment.
"Unused Portion" means an amount equal to the result of (a) the
Commitment minus (b) the sum of (i) the outstanding Revolving Credit Advances
plus (ii) outstanding Reimbursement Obligations.
"Voting Power" means, with respect to any Person, the power ordinarily
(without the occurrence of a contingency) to elect the members of the board of
directors (or persons performing similar functions).
Section 1.2 Amendments and Renewals. Each definition of an
agreement in this Article 1 shall include such agreement as amended to date,
and as amended or renewed from time to time in accordance with its terms, but
only with the prior written consent of the Determining Lenders or all the
Lenders as required pursuant to Section 11.11 hereof.
Section 1.3 Construction. The terms defined in this Article 1
(except as otherwise expressly provided in this Agreement) for all purposes
shall have the meanings set forth in Section 1.1 hereof, and the singular shall
include the plural, and vice versa, unless otherwise
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32
specifically required by the context. All accounting terms used in this
Agreement which are not otherwise defined herein shall be construed in
accordance with GAAP on a consolidated basis for the Borrower and its
Subsidiaries, unless otherwise expressly stated herein.
ARTICLE 2
Advances
Section 2.1 The Advances.
(a) Revolving Credit Advances. Each Lender severally agrees, upon
the terms and subject to the conditions of this Agreement, to make Revolving
Credit Advances to the Borrower from time to time in an aggregate amount not to
exceed its Specified Percentage of the Commitment less its Specified Percentage
of the aggregate amount of all (i) Reimbursement Obligations then outstanding
(assuming compliance with all conditions to drawing) and (ii) Swing Line
Advances then outstanding, for the purposes set forth in Section 5.8 hereof.
Subject to Section 2.9 hereof, Revolving Credit Advances may be repaid and then
reborrowed. Notwithstanding any provision in any Loan Document to the
contrary, in no event shall (a) the sum of the principal amount of all
outstanding (i) Revolving Credit Advances, (ii) Reimbursement Obligations and
(iii) Swing Line Advances exceed the Commitment.
(b) Swing Line Advances. The Borrower may request the Swing Line
Bank to make, and the Swing Line Bank shall make, on the terms and conditions
hereinafter set forth, advances ("Swing Line Advances") to the Borrower from
time to time on any Business Day during the period from the Agreement Date to
the Maturity Date in an aggregate principal amount not to exceed at any time
outstanding the lesser of (a) $25,000,000 and (b) an amount equal to the
Commitment minus (i) the aggregate principal amount of Revolving Credit
Advances then outstanding and (ii) the aggregate amount of all Reimbursement
Obligations then outstanding (the "Swing Line Facility"). Each Swing Line
Advance shall be in an amount not less than $100,000. Within the limits of the
Swing Line Facility and subject to the terms hereof, Swing Line Advances may be
repaid and then reborrowed.
(c) Any Advance, other than a Swing Line Advance, shall, at the
option of the Borrower as provided in Section 2.2 hereof (and, in the case of
LIBOR Advances, subject to the provisions of Article 9 hereof), be made as a
Base Rate Advance or a LIBOR Advance; provided that there shall not be
outstanding, at any one time, more than eight LIBOR Advances.
Section 2.2 Manner of Borrowing and Disbursement.
(a) Base Rate Advances. In the case of Base Rate Advances (other
than Swing Line Advances), the Borrower, through an Authorized Signatory, shall
give the Administrative Agent prior to 11:00 a.m., Dallas, Texas time, on the
date of any proposed Base Rate Advance irrevocable written notice, or
irrevocable telephonic notice followed immediately by written
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notice, in substantially the form of Exhibit G hereto (a "Notice of Borrowing")
(provided, however, that the Borrower's failure to confirm any telephonic
notice in writing shall not invalidate any notice so given), of its intention
to borrow a Base Rate Advance hereunder. Such notice of borrowing shall
specify the requested funding date, which shall be a Business Day, and the
amount of the proposed aggregate Base Rate Advances to be made by Lenders.
(b) LIBOR Advances. In the case of LIBOR Advances, the Borrower,
through an Authorized Signatory, shall give the Administrative Agent at least
three Business Days' irrevocable written notice, or irrevocable telephonic
notice followed immediately by written notice (provided, however, that the
Borrower's failure to confirm any telephonic notice in writing shall not
invalidate any notice so given) pursuant to a Notice of Borrowing, of its
intention to borrow a LIBOR Advance hereunder. Notice shall be given to the
Administrative Agent prior to 11:00 a.m., Dallas, Texas time, in order for such
Business Day to count toward the minimum number of Business Days required.
LIBOR Advances shall in all cases be subject to Article 9 hereof. For LIBOR
Advances, the notice of borrowing shall specify the requested funding date,
which shall be a Business Day, the amount of the proposed aggregate LIBOR
Advances to be made by Lenders and the Interest Period selected by the
Borrower, provided that no such Interest Period shall extend past the Maturity
Date.
(c) Swing Line Advances. In the case of Swing Line Advances, the
Borrower, through an Authorized Signatory, shall give the Swing Line Bank and
the Administrative Agent prior to 12:00 noon, Dallas, Texas time, on the date
of any proposed Swing Line Advance irrevocable telephonic notice (provided,
however, (i) the Borrower shall deliver written notice at least once a week
confirming the telephonic notices given by the Borrower with respect to Swing
Line Advances during the immediately preceding week and (ii) that the
Borrower's failure to confirm any telephonic notice in writing shall not
invalidate any notice so given), of its intention to borrow or reborrow a Swing
Line Advance. Such notice of borrowing shall specify (i) the requested funding
date, which shall be a Business Day, (ii) the amount of the proposed Swing Line
Advance and (iii) the maturity date of the proposed Swing Line Advance (which
maturity date shall be no later than the seventh day after the requested date
of such Swing Line Advance).
(d) Continuation/Conversion. Subject to Sections 2.1 and 2.9
hereof, the Borrower shall have the option (i) to convert at any time all or
any part of the outstanding Base Rate Advances to LIBOR Advances and all or any
part of the outstanding LIBOR Advances to Base Rate Advances or (ii) upon
expiration of any Interest Period applicable to a LIBOR Advance, to continue
all or any portion of such LIBOR Advance equal to $5,000,000 and integral
multiples of $500,000 in excess of that amount as a LIBOR Advance and the
succeeding Interest Period(s) of such continued LIBOR Advance shall commence on
the last day of the Interest Period of the LIBOR Advance to be continued;
provided, however, (A) LIBOR Advances may only be converted into Base Rate
Advances on the expiration date of the Interest Period applicable thereto and
(B) notwithstanding anything in this Agreement to the contrary, no outstanding
Advance may be continued as, or converted into, a LIBOR Advance when any
Default or Event of Default has occurred and is continuing. Not later than
11:00 a.m., Dallas,
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34
Texas time on the date of any proposed continuation of or a conversion to a
Base Rate Advance and not later than 11:00 a.m., Dallas, Texas time at least
three Business Days prior to any proposed continuation of or conversion to a
LIBOR Advance, the Borrower, through an Authorized Signatory, shall give the
Administrative Agent irrevocable written notice, or irrevocable telephonic
notice followed immediately by written notice, in substantially the form of
Exhibit K hereto (a "Notice of Continuation/Conversion") (provided, however,
that the Borrower's failure to confirm any telephonic notice in writing shall
not invalidate any notice so given), stating (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount
of the Advance to be converted/continued, (iii) in the case of a conversion to,
or a continuation of, a LIBOR Advance, the requested Interest Period, and (iv)
in the case of a conversion of a Base Rate Advance to a LIBOR Advance or
continuation of a LIBOR Advance, stating that no Default or Event of Default
has occurred and is continuing. If the Borrower shall fail to give any notice
in accordance with this Section 2.2(d) prior to the expiration of any
then-relevant Interest Period with respect to any LIBOR Advance, the Borrower
shall be deemed irrevocably to have requested that such LIBOR Advance be
converted to a Base Rate Advance in the same principal amount.
(e) Minimum Amount. The aggregate amount of Base Rate Advances
(other than Swing Line Advances) to be made by the Lenders on any day shall be
in a principal amount which is at least $1,000,000 and which is an integral
multiple of $100,000; provided, however, that such amount may equal the unused
amount of the Commitment. The aggregate amount of LIBOR Advances having the
same Interest Period and to be made by the Lenders on any day shall be in a
principal amount which is at least $5,000,000 and which is an integral multiple
of $500,000.
(f) Notice and Disbursement. The Administrative Agent shall
promptly notify the Lenders of each notice (other than with respect to a Swing
Line Advance) received from the Borrower pursuant to this Section. Each Lender
shall, not later than 2:00 p.m., Dallas, Texas time, on the date of any
Advance, deliver to the Administrative Agent, at its address set forth herein,
such Lender's Specified Percentage of such Advance in immediately available
funds in accordance with the Administrative Agent's instructions. Prior to
2:30 p.m., Dallas, Texas time, on the date of any Advance hereunder, the
Administrative Agent shall, subject to satisfaction of the conditions set forth
in Article 3, disburse the amounts made available to the Administrative Agent
by the Lenders by (i) transferring such amounts by wire transfer pursuant to
the Borrower's instructions, or (ii) in the absence of such instructions,
crediting such amounts to the account of the Borrower maintained with the
Administrative Agent. All Revolving Credit Advances shall be made by each
Lender according to its Specified Percentage. Upon the request of any Lender,
the Administrative Agent shall notify such Lender of the aggregate principal
amount of Swing Line Advances outstanding at such time.
(g) The Swing Line Bank shall, not later than 2:00 p.m., Dallas,
Texas time, on the date of any Swing Line Advance, deliver to the
Administrative Agent at its address set forth herein, the amount of such Swing
Line Advance in immediately available funds in accordance with the
Administrative Agent's instructions. Prior to 2:30 p.m., Dallas, Texas time,
on the
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date of any Swing Line Advance, the Administrative Agent shall, subject to the
conditions set forth in Article 3, disburse the amount made available to the
Administrative Agent by the Swing Line Bank by (i) transferring such amounts by
wire transfer pursuant to the Borrower's instruction or (ii) in the absence of
such instructions, crediting such amounts to the account of the Borrower
maintained with the Administrative Agent. Forthwith upon demand by the Swing
Line Bank at any time, including after a Default or Event of Default, and in
any event upon the making of the direction specified by Section 8.2 to
authorize the Administrative Agent to declare the Advances due and payable
pursuant to the provisions of Section 8.2, each Lender, including the Swing
Line Bank, notwithstanding the failure of the Borrower at such time to satisfy
each condition specified in Article 3, shall make by 12:00 noon (Dallas, Texas
time) on the first Business Day following receipt by such Lender of notice from
the Swing Line Bank, a Revolving Credit Advance which is a Base Rate Advance in
an amount equal to the product of (i) the Specified Percentage of such Lender
times (ii) the aggregate outstanding principal amount of the Swing Line
Advances. The proceeds of such Revolving Credit Advances shall be applied by
the Administrative Agent to repay the outstanding Swing Line Advances.
Section 2.3 Interest.
(a) On Base Rate Advances.
(i) The Borrower shall pay interest on the outstanding
unpaid principal amount of each Base Rate Advance from the date such
Base Rate Advance is made until such Base Rate Advance is due (whether
at maturity, by reason of acceleration, by scheduled reduction, or
otherwise) and repaid at a simple interest rate per annum equal to the
Base Rate Basis for the Base Rate Advances as in effect from time to
time. If at any time the Base Rate Basis would exceed the Highest
Lawful Rate, interest payable on the Base Rate Advances shall be
limited to the Highest Lawful Rate, but the Base Rate Basis shall not
thereafter be reduced below the Highest Lawful Rate until the total
amount of interest accrued on the Base Rate Advances equals the amount
of interest that would have accrued if the Base Rate Basis had been in
effect at all times.
(ii) Subject to Section 11.9 hereof, interest on the Base
Rate Advances shall be computed on the basis of a year of 365 or 366
days, as appropriate, for the actual number of days elapsed, and shall
be payable in arrears on each Quarterly Date and on the Maturity Date.
(b) On LIBOR Advances.
(i) The Borrower shall pay interest on the outstanding
unpaid principal amount of each LIBOR Advance, from the date such
Advance is made until it is due (whether at maturity, by reason of
acceleration, by scheduled reduction, or otherwise) and repaid, at a
rate per annum equal to the LIBOR Basis for such LIBOR Advance. The
Administrative Agent, whose determination shall be controlling in the
absence of demonstrable error, shall determine the LIBOR Basis on the
second Business Day prior
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to the applicable funding, conversion or continuation date and shall
notify the Borrower and the Lenders of such LIBOR Basis. The
Administrative Agent shall, at the request of the Borrower, furnish
such information concerning the calculation of the LIBOR Basis as the
Borrower may reasonably request.
(ii) Subject to Section 11.9 hereof, interest on each
LIBOR Advance shall be computed on the basis of a 360-day year for the
actual number of days elapsed, and shall be payable in arrears on the
applicable Payment Date and on the Maturity Date; provided, however,
that if the Interest Period for such LIBOR Advance exceeds three
months, interest shall also be due and payable in arrears on each
three-month anniversary of the commencement of such Interest Period
during such Interest Period.
(c) On Swing Line Advances.
(i) The Borrower shall pay interest on the outstanding
principal amount of such Swing Line Advance, from the date of such
Swing Line Advance is made until it is due (whether at maturity, by
reason of acceleration or otherwise) and repaid, at a simple interest
rate per annum equal to the sum of (A) the Base Rate Basis in effect
from time to time minus (B) the Commitment Fee (specified as a
percentage) then in effect, but in no event higher than the Highest
Lawful Rate.
(ii) Subject to Section 11.9 hereof, interest on each
Swing Line Advance shall be computed on the basis of a year of 365 or
366 days, as applicable, for the actual number of days elapsed, and
shall be payable in arrears on the maturity date of each Swing Line
Advance and on the Maturity Date.
(d) Interest After an Event of Default. (i) Subject to Section
11.9 hereof, after an Event of Default (other than an Event of Default
specified in Section 8.1(f) or (g) hereof) and during any continuance thereof,
at the option of the Determining Lenders and after written notice to the
Borrower by the Administrative Agent, and (ii) after an Event of Default
specified in Section 8.1(f) or (g) hereof and during any continuance thereof,
automatically and without any action by the Administrative Agent or any Lender,
the Obligations shall bear interest at a rate per annum equal to the Default
Rate. Such interest shall be payable on the earlier of demand or the Maturity
Date, and shall accrue until the earlier of (i) waiver or cure of the
applicable Event of Default, (ii) agreement by the Determining Lenders to
rescind the charging of interest at the Default Rate, or (iii) payment in full
of the Obligations. The Lenders shall not be required to accelerate the
maturity of the Advances or to exercise any other rights or remedies under the
Loan Documents to charge interest at the Default Rate. The Lenders shall not
be required to give notice to the Borrower of the decision to charge interest
at the Default Rate under the first clause (ii) above.
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Section 2.4 Fees.
(a) Commitment Fee. Subject to Section 11.9 hereof, the Borrower
agrees to pay to the Administrative Agent, for the account of the Lenders
according to their Specified Percentages, a commitment fee of 0.500% per annum
(or (i) 0.375% per annum during any period during the Subsequent Pricing Period
that the Leverage Ratio is less than 4.00 to 1 but greater than or equal to
3.50 to 1 and (ii) 0.250% per annum during any period during the Subsequent
Pricing Period that the Leverage Ratio is less than 3.50 to 1) on the daily
average Unused Portion during the period commencing on the Agreement Date and
ending on the Maturity Date. Such fee shall be (i) payable in arrears on each
Quarterly Date and on the Maturity Date, (ii) fully earned when due and,
subject to Section 11.9 hereof, nonrefundable when paid and (iii) subject to
Section 11.9 hereof, computed on the basis of a 360-day year for the actual
number of days elapsed.
(b) Other Fees. Subject to Section 11.9 hereof, the Borrower
agrees to pay to the Administrative Agent, for the account of (i) the
Administrative Agent, the fees on the dates and in the amounts specified in the
letter agreement (the "Administrative Agent Fee Letter"), dated as of the
Agreement Date, between the Borrower and the Administrative Agent, and (ii)
NationsBank of Texas, N.A. and NationsBanc Xxxxxxxxxx Securities, Inc.
(formerly known as NationsBanc Capital Markets, Inc.) the fees specified in the
Underwriting Fee Letter on the Agreement Date.
Section 2.5 Prepayments.
(a) Voluntary Prepayments. Upon one Business Day's prior
telephonic notice (to be promptly followed by written notice) by an Authorized
Signatory to the Administrative Agent, Base Rate Advances may be voluntarily
prepaid without premium or penalty. Upon three Business Days' prior telephonic
notice (to be promptly followed by written notice) by an Authorized Signatory
to the Administrative Agent, LIBOR Advances may be voluntarily prepaid, without
premium or penalty, but only so long as the Borrower concurrently reimburses
the Lenders in accordance with Section 2.9 hereof. Any notice of prepayment
shall be irrevocable.
(b) Mandatory Prepayment. On or before the date of any reduction
of the Commitment, the Borrower shall first, prepay applicable outstanding
Revolving Credit Advances and second, prepay Swing Line Advances in an amount
necessary to reduce the sum of outstanding Revolving Credit Advances, Swing
Line Advances and Reimbursement Obligations to an amount less than or equal to
the Commitment as so reduced. To the extent required by the immediately
preceding sentence, the Borrower shall first prepay all Base Rate Advances and
shall thereafter prepay LIBOR Advances. To the extent that any prepayment
requires that a LIBOR Advance be repaid on a date other than the last day of
its Interest Period, the Borrower shall reimburse each Lender in accordance
with Section 2.9 hereof. To the extent that outstanding Revolving Credit
Advances and Swing Line Advances exceed the Commitment after any reduction
thereof, the Borrower shall repay any such excess amount and all accrued
interest
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attributable to such excess Revolving Credit Advances and Swing Line Advances
on the date of such reduction.
(c) Payments, Generally. Any prepayment of any Advance shall be
accompanied by interest accrued on the principal amount being prepaid. Any
voluntary partial payment of a Base Rate Advance shall be in a principal amount
which is at least $1,000,000 and which is an integral multiple of $500,000.
Any voluntary partial payment of a LIBOR Advance shall be in a principal amount
which is at least $5,000,000 and which is an integral multiple of $500,000, and
to the extent that any prepayment of a LIBOR Advance is made on a date other
than the last day of its Interest Period, the Borrower shall reimburse each
Lender in accordance with Section 2.9 hereof.
Section 2.6 Reduction of Commitment.
(a) Voluntary Reduction. The Borrower shall have the right, upon
not less than 3 Business Days' notice by an Authorized Signatory to the
Administrative Agent (if telephonic, to be confirmed by telex or in writing on
or before the date of reduction or termination), which shall promptly notify
the Lenders, to terminate or reduce the Commitment. Each partial termination
shall be in an aggregate amount which is at least $5,000,000 and which is an
integral multiple of $1,000,000, and no voluntary reduction in the Commitment
shall cause any LIBOR Advance to be repaid prior to the last day of its
Interest Period unless the Borrower shall reimburse each Lender in accordance
with Section 2.9 hereof.
(b) Mandatory Reduction. On the Maturity Date, the Commitment
shall be automatically reduced to zero.
(c) General Requirements. Upon any reduction of the Commitment
pursuant to this Section, the Borrower shall immediately make a repayment of
Revolving Credit Advances and/or Swing Line Advances in accordance with Section
2.5(b) hereof. The Borrower shall reimburse each Lender in connection with any
such payment in accordance with Section 2.9 hereof to the extent applicable.
The Borrower shall not have any right to rescind any termination or reduction.
Once reduced, the Commitment may not be increased or reinstated.
Section 2.7 Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a Lender prior to
the date of any proposed Advance (which notice shall be effective upon receipt)
that such Lender does not intend to make the proceeds of such Advance available
to the Administrative Agent, the Administrative Agent may assume that such
Lender has made such proceeds available to the Administrative Agent on such
date, and the Administrative Agent may in reliance upon such assumption (but
shall not be required to) make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such amount on demand from such Lender (or, if such Lender fails to
pay such amount forthwith upon such demand, from the Borrower) together with
interest thereon in respect of each day during the period commencing on the
date
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such amount was available to the Borrower and ending on (but excluding) the
date the Administrative Agent receives such amount from (a) the Lender, at a
per annum rate equal to the lesser of (i) the Highest Lawful Rate or (ii) the
Federal Funds Rate, or (b) the Borrower, at the per annum rate applicable at
the time to such Advance. No Lender shall be liable for any other Lender's
failure to fund an Advance hereunder. The failure or refusal by any Lender to
make available to the Administrative Agent the proceeds of any Advance shall
not relieve any Lender from its several obligation hereunder to make its
Specified Percentage of any requested Advance available to the Administrative
Agent.
Section 2.8 Payment of Principal of Advances.
(a) Revolving Credit Advances. To the extent not otherwise
required to be paid earlier as provided herein, the principal amount of the
Revolving Credit Advances shall be due and payable on the Maturity Date.
(b) Swing Line Advances. To the extent not otherwise required to
be paid earlier as provided herein, the outstanding principal amount of each
Swing Line Advance shall be due and payable on its maturity date pursuant to
Section 2.2(c)(iii) hereof.
Section 2.9 Reimbursement. Whenever any Lender shall sustain or
incur any losses or reasonable out-of- pocket expenses in connection with (a)
failure by the Borrower to borrow any LIBOR Advance after having given notice
of its intention to borrow in accordance with Section 2.2 hereof (whether by
reason of the Borrower's election not to proceed or the non-fulfillment of any
of the conditions set forth in Article 3 hereof), (b) any prepayment for any
reason of any LIBOR Advance in whole or in part (including, but not limited to,
a prepayment pursuant to Section 9.3(b) hereof) on other than the last day of
an Interest Period applicable to such LIBOR Advance or (c) any prepayment of
any of its LIBOR Advances that is not made on any date specified in a notice of
prepayment given by the Borrower, the Borrower agrees to pay to any such
Lender, within 30 days after demand by such Lender, an amount sufficient to
compensate such Lender for all such losses (excluding loss of anticipated
profits) and reasonable out-of-pocket expenses, subject to Section 11.9 hereof.
A certificate as to any amounts payable to any Lender under this Section 2.9
submitted to the Borrower by such Lender shall certify that such amounts were
actually incurred by such Lender and shall show in reasonable detail an
accounting of the amount payable and the calculations used to determine in good
faith such amount and shall be conclusive absent demonstrable error.
Section 2.10 Manner of Payment.
(a) Each payment (including prepayments) by the Borrower of the
principal of or interest on the Advances, fees, and any other amount owed under
this Agreement or any other Loan Document shall be made not later than 12:00
noon (Dallas, Texas time) on the date specified for payment under this
Agreement to the Administrative Agent at the Administrative Agent's office, in
lawful money of the United States of America constituting immediately available
funds.
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(b) If any payment under this Agreement or any other Loan Document
shall be specified to be made upon a day which is not a Business Day, it shall
be made on the next succeeding day which is a Business Day, unless, with
respect to a payment due in respect of a LIBOR Advance, such Business Day falls
in another calendar month, in which case payment shall be made on the preceding
Business Day. Any extension of time shall in such case be included in
computing interest and fees, if any, in connection with such payment.
(c) The Borrower agrees to pay principal, interest, fees and all
other amounts due under the Loan Documents without deduction for set-off or
counterclaim or any deduction whatsoever.
(d) Subject to the Intercreditor Agreement, if some but less than
all amounts due from the Borrower are received by the Administrative Agent, the
Administrative Agent shall apply such amounts in the following order of
priority; (i) to the payment of the Administrative Lender's expenses incurred
on behalf of the Lenders then due and payable, if any; (ii) to the payment of
all other fees then due and payable; (iii) to the payment of interest then due
and payable, first on the Revolving Credit Advances and, second on the Swing
Line Advances; (iv) the payment of all other amounts not otherwise referred to
in this clause (d) then due and payable under the Loan Documents; and (v) to
the payment of principal then due and payable, first on the Revolving Credit
Advances and, second on the Swing Line Advances.
(e) At all times prior to the Lenders making a Revolving Credit
Advance pursuant to Section 2.2(g) hereof, the Administrative Agent shall
distribute all payments in respect of the Swing Line Advances to the Swing Line
Bank. At such time, if any, that the Lenders make a Revolving Credit Advance
pursuant to Section 2.2(g) hereof, the Administrative Agent shall distribute
all payments in respect of the Swing Line Advances to the Lenders in accordance
with the respective Specified Percentages.
Section 2.11 LIBOR Lending Offices. Each Lender's initial LIBOR
Lending Office is set forth opposite its name in Schedule 2 attached hereto.
Each Lender shall have the right at any time and from time to time to designate
a different office of itself or of any Affiliate of such Lender as such
Lender's LIBOR Lending Office, and to transfer any outstanding LIBOR Advance to
such LIBOR Lending Office. No such designation or transfer shall result in any
liability on the part of the Borrower for increased costs or expenses resulting
solely from such designation or transfer (except any such transfer which is
made by a Lender pursuant to Section 9.2 or 9.3 hereof, or otherwise for the
purpose of complying with Applicable Law). Increased costs for expenses
resulting from a change in law occurring subsequent to any such designation or
transfer shall be deemed not to result solely from such designation or
transfer.
Section 2.12 Sharing of Payments. Subject to the Intercreditor
Agreement, if any Lender shall obtain a payment (whether voluntary or
involuntary, due to the exercise of any right of set-off, or otherwise) on
account of its Advances (other than pursuant to Sections 2.4(b), 2.14, 2.15(d),
9.3 or 9.5 hereof or in respect of Swing Line Advances) in excess of its
Specified Percentage, then such Lender shall purchase from each other Lender
such participation in the
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Advances made by such other Lender as shall be necessary to cause such
purchasing Lender to share the excess payment pro rata according to its
Specified Percentage; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section, to the
fullest extent permitted by law, may exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
Section 2.13 Calculation of LIBOR Rate. The provisions of this
Agreement relating to calculation of the LIBOR Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
hereunder that are based upon such rate, it being understood that each Lender
shall be entitled to fund and maintain its funding of all or any part of a
LIBOR Advance as it sees fit.
Section 2.14 Taxes.
(a) Any and all payments by the Borrower hereunder shall be made,
in accordance with Section 2.10 hereof, free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges
and withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender and the Administrative Agent, (i) taxes imposed on, based
upon or measured by its overall net income, net worth or capital, and franchise
taxes, doing business taxes or minimum taxes imposed on it, by the jurisdiction
under the laws of which such Lender or the Administrative Agent (as the case
may be) is organized or in which it has its applicable lending office or any
political subdivision thereof; (ii) taxes imposed by reason of failure by the
Lender or the Administrative Agent to comply with the requirements of paragraph
(e) of this Section 2.14; (iii) in the case of any Lender, any taxes in the
nature of transfer, stamp, recording or documentary taxes resulting from a
transfer (other than as a result of foreclosure) by such Lender of all or any
portion of its interest in this Agreement, the Notes or any other Loan
Documents; and (iv) taxes, levies, imposts, deductions, charges, withholdings
and liabilities which are finally judicially determined by a court of competent
jurisdiction to have arisen as a result of gross negligence or wilful
misconduct of the Administrative Agent or any Lender (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by Law
to deduct or withhold any Taxes from or in respect of any sum payable hereunder
to any Lender or the Administrative Agent, to the extent not prohibited by
Applicable Law, (x) the sum payable shall be increased as may be necessary so
that after making all required deductions for Taxes (including deductions
applicable to additional sums payable under this Section 2.14) such Lender or
the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (y) the Borrower
shall make such deductions and (z) the Borrower shall pay the full amount of
Taxes deducted to the relevant taxation authority or other authority in
accordance with Applicable Law.
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(b) In addition, the Borrower agrees to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges and
similar levies (other than those described in clauses (iii) and (iv) of the
first sentence of Section 2.14(a)) that arise from any payment made hereunder
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or any other Loan Document (hereinafter referred to as
"Other Taxes").
(c) The Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.14) paid by such Lender or the Administrative
Agent (as the case may be) and all liabilities (including penalties, additions
to tax, interest and reasonable expenses) arising therefrom or with respect
thereto whether or not such Taxes or Other Taxes were correctly or legally
asserted, other than penalties, additions to tax, interest and expenses which
are finally judicially determined by a court of competent jurisdiction to have
arisen as a result of gross negligence or wilful misconduct on the part of such
Lender or the Administrative Agent. This indemnification shall be made within
30 days from the date such Lender or the Administrative Agent (as the case may
be) makes written demand therefor.
(d) As soon as practicable after the date of any payment of Taxes,
the Borrower will furnish to the Administrative Agent the original or a
certified copy of a receipt evidencing payment thereof. For purposes of this
Section 2.14 the terms "United States" and "United States Person" shall have
the meanings set forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees
that:
(i) it shall, no later than the Agreement Date (or, in
the case of a Lender which becomes a party hereto pursuant to Section
11.6 after the Agreement Date, the date upon which such Lender becomes
a party hereto) and at such times as necessary in the reasonable
determination of the Borrower, deliver to the Borrower through the
Administrative Agent, with a copy to the Administrative Agent:
(A) if any lending office is located in the United
States, two (2) accurate and complete signed
originals of Internal Revenue Service Form 4224 or
any successor form thereto ("Form 4224"),
(B) if any lending office is located outside the United
States, two (2) accurate and complete signed
originals of Internal Revenue Service Form 1001 or
any successor form thereto ("Form 1001"),
in each case establishing that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest, fees, or
other amounts payable at such lending office or lending offices under
this Agreement or any other Loan Document free from deduction or
withholding of United States federal income tax;
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(ii) if at any time such Lender changes its lending office
or lending offices or selects an additional lending office it shall,
at the same time or reasonably promptly thereafter, but only to the
extent the forms previously delivered by it hereunder are not
effective with respect to such changed or additional lending office or
lending offices, deliver to the Borrower through the Administrative
Agent, with a copy to the Administrative Agent, in replacement for the
forms previously delivered by it hereunder:
(A) if such changed or additional lending office is
located in the United States, two (2) accurate and
complete signed originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed
originals of Form 1001,
in each case establishing that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest, fees, or
other amounts payable at such changed or additional lending office
under this Agreement or any other Loan Document free from deduction of
withholding of United States federal income tax;
(iii) it shall, before or promptly after the occurrence of
any event (including the passing of time but excluding any event
mentioned in clause (ii) above) requiring a change in the most recent
Form 4224 or Form 1001 previously delivered by such Lender and if the
delivery of the same be lawful, deliver to the Borrower through the
Administrative Agent, with a copy to the Administrative Agent, two (2)
accurate and complete original signed copies of Form 4224 or Form
1001, in each case establishing that such Lender is on the date of
delivery thereof entitled to receive payments of principal, interest,
fees, or other amounts payable under this Agreement or any other Loan
Document free from deduction or withholding of United States federal
income tax, in replacement for the forms previously delivered by such
Lender;
(iv) it shall, promptly upon the request of the Borrower
to that effect, deliver to the Borrower such other forms or similar
documentation as may be required from time to time by any applicable
law, treaty, rule or regulation in order to establish such Lender's
tax status for withholding purposes;
(v) it shall notify the Borrower promptly after any event
(including an amendment to or a change in any applicable law or
regulation or in the written interpretation thereof by any regulatory
authority or any judicial authority or by ruling applicable to such
Lender of any governmental authority charged with the interpretation
or administration of any law) shall occur that results in such Lender
no longer being capable of receiving payments under this Agreement
without any deduction or withholding of United States federal income
tax; and
(vi) if such Lender is not a "bank" or other person
described in Section 881(c)(3) of the Code and cannot deliver either
Form 4224 or Form 1001, a statement that such Lender is not a "bank"
under Section 881(c)(3)(A) of the Code and
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two original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such Lender.
(f) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.14 shall survive the payment in full of the
Obligations.
(g) Each Lender (and the Administrative Agent with respect to
payments to the Administrative Agent for its own account) agrees that (i) it
will take all reasonable actions by all usual means to maintain all exemptions,
if any, available to it from United States withholding taxes (whether available
by treaty, existing administrative waiver or by virtue of the location of any
Lender's lending office), and (ii) it will use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its lending office, if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the reasonable judgment of such Lender, be
disadvantageous to such Lender; provided, however, no Lender nor the
Administrative Agent shall be obligated by reason of this Section 2.14(g) to
(a) disclose any information regarding its tax affairs or tax computations or
reorder its tax or other affairs or tax or other planning or (b) contest the
payment of any Taxes or Other Taxes. Subject to the foregoing, to the extent
the Borrower pays sums pursuant to this Section 2.14 and the Lender or the
Administrative Agent receives a refund of any or all of such sums, the party
receiving such refund shall promptly pay over all such refunded sums to the
Borrower, provided that no Default or Event of Default is in existence at such
time. At such time, if any, that such Default or Event of Default is cured or
waived, the party receiving such refund shall promptly pay over all such
refunded sums to the Borrower.
(h) If the Borrower becomes obligated to pay additional amounts
described in this Section 2.14 to any Lender, the Borrower may designate a
financial institution reasonably acceptable to the Administrative Agent to
replace such Lender by purchasing for cash and receiving an assignment of such
Lender's pro rata share of the Commitment and the Rights of such Lender under
the Loan Documents without recourse to or warranty by, or expense to, such
Lender, for a purchase price equal to the outstanding amounts owed to such
Lender (including such additional amounts owing to such Lender pursuant to this
Section 2.14). Upon execution of an Assignment Agreement, such other financial
institution shall be deemed to be a "Lender" for all purposes of this Agreement
as set forth in Section 11.6 hereof.
Section 2.15 Letters of Credit.
(a) The Letter of Credit Facility. The Borrower may request the
Issuing Bank, on the terms and conditions hereinafter set forth, to issue, and
the Issuing Bank shall, if so requested, issue, one or more Letters of Credit
for the account of the Borrower and/or any of its Subsidiaries (provided that,
if any Letter of Credit is issued for the account of any Subsidiary, the
Borrower shall be jointly and severally liable with respect to such Letter of
Credit pursuant to the terms of the Letter of Credit Agreement (as defined
below) governing
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such Letter of Credit) from time to time on any Business Day from the date of
the initial Advance until the Maturity Date in an aggregate maximum amount
(assuming compliance with all conditions to drawing) not to exceed, at any time
outstanding, the lesser of (i) $55,000,000 (the "Letter of Credit Facility")
and (ii) an amount equal to the Commitment minus the aggregate principal amount
of Revolving Credit Advances and Swing Line Advances then outstanding. No
Letter of Credit shall have an expiration date (including all rights of
renewal) later than the earlier of (i) ten days prior to the Maturity Date or
(ii) one year after the date of issuance thereof. Immediately upon the
issuance of each Letter of Credit (or upon satisfaction of the conditions
precedent set forth in Sections 3.1 and 3.2 hereof with respect to the Existing
Letters of Credit), the Issuing Bank shall be deemed to have sold and
transferred to each Lender, and each Lender shall be deemed to have purchased
and received from the Issuing Bank, in each case irrevocably and without any
further action by any party, an undivided interest and participation in such
Letter of Credit, each drawing thereunder and the obligations of the Borrower
under this Agreement in respect thereof in an amount equal to the product of
(x) such Lender's Specified Percentage times (y) the maximum amount available
to be drawn under such Letter of Credit (assuming compliance with all
conditions to drawing). Within the limits of the Letter of Credit Facility,
and subject to the limits referred to above, the Borrower may request the
issuance of Letters of Credit under this Section 2.15(a), repay any Revolving
Credit Advances resulting from drawings thereunder pursuant to Section 2.15(c)
hereof and request the issuance of additional Letters of Credit under this
Section 2.15(a).
(b) Request for Issuance. Each Letter of Credit shall be issued
upon notice, given not later than 1:00 p.m. (Dallas, Texas time) on the third
Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Issuing Bank. Each Letter of Credit shall be
issued upon notice given in accordance with the terms of any separate agreement
between the Borrower and the Issuing Bank in form and substance reasonably
satisfactory to the Borrower and the Issuing Bank providing for the issuance of
Letters of Credit pursuant to this Agreement (a "Letter of Credit Agreement"),
provided that if any terms and conditions of such Letter of Credit Agreement
are inconsistent with or more restrictive than this Agreement, this Agreement
shall control. Each such notice of issuance of a Letter of Credit by the
Borrower (a "Notice of Issuance") shall be by telephone or telecopier,
specifying therein, in the case of a Letter of Credit, the requested (i) date
of such issuance (which shall be a Business Day), (ii) maximum amount of such
Letter of Credit, (iii) expiration date of such Letter of Credit, (iv) name and
address of the beneficiary of such Letter of Credit, and (v) form of such
Letter of Credit and specifying such other information as shall be required
pursuant to the relevant Letter of Credit Agreement. If the requested terms of
such Letter of Credit are acceptable to the Issuing Bank in its reasonable
discretion, the Issuing Bank will, upon fulfillment of the applicable
conditions set forth in Article 3 hereof, make such Letter of Credit available
to the Borrower at its office referred to in Section 11.1 hereof or as
otherwise agreed with the Borrower in connection with such issuance.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of
a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Revolving Credit Advance,
which shall bear interest at the Base Rate Basis,
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in the amount of such draft (but without any requirement for compliance with
the conditions set forth in Article 3 hereof). In the event that a drawing
under any Letter of Credit is not reimbursed by the Borrower by 12:00 noon
(Dallas, Texas time) on the first Business Day after such drawing, the Issuing
Bank shall promptly notify Administrative Agent and each other Lender. Each
such Lender shall, on the first Business Day following such notification, make
a Revolving Credit Advance, which shall bear interest at the Base Rate Basis,
and shall be used to repay the applicable portion of the Issuing Bank's Advance
with respect to such Letter of Credit, in an amount equal to the amount of its
participation in such drawing for application to reimburse the Issuing Bank
(but without any requirement for compliance with the applicable conditions set
forth in Article 3 hereof) and shall make available to the Administrative Agent
for the account of the Issuing Bank, by deposit at the Administrative Agent's
office, in same day funds, the amount of such Advance. In the event that any
Lender fails to make available to the Administrative Agent for the account of
the Issuing Bank the amount of such Advance, the Issuing Bank shall be entitled
to recover such amount on demand from such Lender together with interest
thereon at a rate per annum equal to the lesser of (i) the Highest Lawful Rate
or (ii) the Federal Funds Rate.
(d) Increased Costs. If, (i) any change or phase-in after the
Agreement Date in any Law or in the interpretation thereof by any Tribunal
charged with the administration thereof or (ii) compliance by a Lender with any
Law or any guideline or requirement from any central bank or Tribunal (whether
or not having the force of law) adopted or promulgated after the Agreement Date
(including any implementation of the Basle Accord or similar guideline or
requirement adopted, promulgated or becoming effective after the Agreement
Date) shall either (A) impose, modify or deem applicable any reserve, special
deposit or similar requirement against letters of credit or guarantees issued
by, or assets held by, or deposits in or for the account of, the Issuing Bank
or any Lender or any corporation controlling the Issuing Bank or any Lender or
(B) impose on the Issuing Bank or any Lender or any corporation controlling the
Issuing Bank or any Lender any other condition regarding this Agreement or any
Letter of Credit, and the result of any event referred to in the preceding
clause (A) or (B) shall be to increase the cost to the Issuing Bank or any
corporation controlling the Issuing Bank of issuing or maintaining any Letter
of Credit or to any Lender or any corporation controlling such Lender of
purchasing any participation therein or making any Advance pursuant to Section
2.15(c) hereof ("Increased Letter of Credit Costs"), then, within 30 days after
demand by the Issuing Bank or such Lender, the Borrower shall, subject to
Section 11.9 hereof, pay to the Issuing Bank or such Lender, from time to time
as specified by the Issuing Bank or such Lender, additional amounts that shall
be sufficient to compensate the Issuing Bank or such Lender or any corporation
controlling such Lender for such Increased Letter of Credit Costs.
Notwithstanding the foregoing, any demand for Increased Letter of Credit Costs
shall not include any Increased Letter of Credit Costs with respect to any
period more than 180 days prior to the date that the Issuing Bank or any Lender
gives notice to the Borrower of such Increased Letter of Credit Costs unless
the effective date of the condition which results in the right to receive
Increased Letter of Credit Costs is retroactive (the "Increased Letter of
Credit Costs Retroactive Effective Date"). If any Increased Letter of Credit
Costs has an Increased Letter of Credit Retroactive Effective Date and the
Issuing Bank or any Lender demands compensation within 180 days after
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the date setting the Increased Letter of Credit Costs Effective Date (the
"Increased Letter of Credit Costs Set Date"), the Issuing Bank or such Lender,
as appropriate, shall have the right to receive such Increased Letter of Credit
Costs from the Increased Letter of Credit Retroactive Effective Date. If the
Issuing Bank or a Lender does not demand such Increased Letter of Credit Costs
within 180 days after the Increased Letter of Credit Costs Set Date, the
Issuing Bank or such Lender, as appropriate, may not receive payment of
Increased Letter of Credit Costs with respect to any period more than 180 days
prior to such demand. A certificate as to the amount of such Increased Letter
of Credit Costs, submitted to the Borrower by the Issuing Bank or such Lender,
shall certify that such Increased Letter of Credit Costs were actually incurred
by the Issuing Bank or such Lender and shall show in reasonable detail an
accounting of the amount payable and the calculation used to determine in good
faith such amount and shall be conclusive absent demonstrable error. In
determining such amount, the Issuing Bank or such Lender may use any reasonable
averaging or attribution method. Nothing in this Section 2.15(d) shall provide
the Borrower or any of its Subsidiaries the right to inspect the records, files
or books of the Issuing Bank or any Lender. If the Borrower becomes obligated
to pay additional amounts described in this Section 2.15(d) to any Lender, the
Borrower may designate a financial institution reasonably acceptable to the
Administrative Agent to replace such Lender by purchasing for cash and
receiving an assignment of such Lender's pro rata share of the Commitments and
the Rights of such Lender under the Loan Documents without recourse to or
warranty by, or expenses to, such Lender, for a purchase price equal to the
outstanding amounts owing to such Lender (including such additional amounts
owing to such Lender pursuant to this Section 2.15(d)). Upon execution of an
Assignment Agreement, such other financial institution shall be deemed to be a
"Lender" for all purposes of this Agreement as set forth in Section 11.6
hereof. The obligations of the Borrower under this Section 2.15(d) shall
survive termination of this Agreement. The Issuing Bank or any Lender claiming
any additional compensation under this Section 2.15(d) shall use reasonable
efforts (consistent with legal and regulatory restrictions) to reduce or
eliminate any such additional compensation which may thereafter accrue and
which efforts would not, in the reasonable judgment of the Issuing Bank or such
Lender made in good faith, be otherwise disadvantageous to the Issuing Bank or
such Lender.
(e) Obligations Absolute. The obligations of the Borrower under
this Agreement with respect to any Letter of Credit, any Letter of Credit
Agreement and any other agreement or instrument relating to any Letter of
Credit or any Revolving Credit Advance pursuant to Section 2.15(c) hereof shall
be unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement, such Letter of Credit Agreement and such other
agreement or instrument under all circumstances, including, without limitation,
the following circumstances:
(i) any lack of validity or enforceability of this
Agreement, any other Loan Document, any Letter of Credit Agreement,
any Letter of Credit or any other agreement or instrument relating
thereto (collectively, the "L/C Related Documents");
(ii) (A) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations of
the Borrower in respect of the Letters of
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Credit or any Revolving Credit Advance pursuant to Section 2.15(c)
hereof or (B) any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary
or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Issuing
Bank, any Lender or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the L/C Related
Documents or any unrelated transaction;
(iv) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, except to the extent that any such forged,
fraudulent, invalid, insufficient, untrue or inaccurate statement was
relied upon as a result of the Issuing Bank's gross negligence or
willful misconduct;
(v) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not comply
with the terms of the Letter of Credit, except for any payment made
upon the Issuing Bank's gross negligence or willful misconduct;
(vi) any exchange, release or non-perfection of any
Collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of the
Borrower in respect of the Letters of Credit or any Revolving Credit
Advance pursuant to Section 2.15(c) hereof; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including, without
limitation, any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower or a guarantor,
other than the Issuing's Bank gross negligence or willful misconduct.
(f) Compensation for Letters of Credit.
(i) Credit Fee. Subject to Section 11.9 hereof, the
Borrower shall pay to the Administrative Agent for the account of the
Lenders according to their Specified Percentages, a per annum fee
(which shall be payable quarterly in arrears on each Quarterly Date
and on the Maturity Date) equal to (A) with respect to the Standby
Letters of Credit, the product of the Applicable LIBOR Rate Margin in
effect from time to time for Revolving Credit Advances multiplied by
the average daily amount available for drawing under all outstanding
Standby Letters of Credit and (B) with respect to Commercial Letters
of Credit, the product of 50% of the Applicable LIBOR Rate Margin in
effect from time to time for Revolving Credit Advances multiplied by
the average daily amount available for drawing under all outstanding
Commercial Letters of Credit.
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Subject to Section 11.9 hereof, such fee shall be computed on the
basis of a 360-day year for the actual number of days elapsed.
(ii) Fronting Fee. Subject to Section 11.9 hereof, the
Borrower shall pay to the Administrative Agent for the account of the
Issuing Bank a per annum fronting fee (which shall be payable
quarterly in arrears on each Quarterly Date and on the Maturity Date)
in an amount equal to the product of (A) 0.125% times (B) the average
daily amount available for drawing under all outstanding Letters of
Credit. Subject to Section 11.9 hereof, such fee shall be computed on
the basis of a 360-day year for the actual number of days elapsed.
(iii) Administrative Fee. Subject to Section 11.9 hereof,
the Borrower shall pay, with respect to each amendment, renewal or
transfer of each Letter of Credit and each drawing made thereunder,
reasonable documentary and processing charges in accordance with the
Issuing Bank's standard schedule for such charges in effect at the
time of such amendment, renewal, transfer or drawing, as the case may
be.
(g) L/C Cash Collateral Account.
(i) Upon the occurrence of an Event of Default and demand
by the Administrative Agent pursuant to Section 8.2(c) hereof (except
in the case of an Event of Default specified in Section 8.1(f) or (g)
hereof, without any demand or taking of any other action by the
Administrative Agent or any Lender), the Borrower will promptly pay to
the Administrative Agent in immediately available funds an amount
equal to the maximum amount then available to be drawn under the
Letters of Credit then outstanding. Any amounts so received by the
Administrative Agent shall be deposited by the Administrative Agent in
a deposit account maintained by the Issuing Bank (the "L/C Cash
Collateral Account").
(ii) As security for the payment of all Reimbursement
Obligations and for any other Obligations, the Borrower hereby grants,
conveys, assigns, pledges, sets over and transfers to the
Administrative Agent (for the benefit of the Issuing Bank and
Lenders), and creates in the Administrative Agent's favor (for the
benefit of the Issuing Bank and Lenders) a Lien in, all money,
instruments and securities at any time held in or acquired in
connection with the L/C Cash Collateral Account, together with all
proceeds thereof. The L/C Cash Collateral Account shall be under the
sole dominion and control of the Administrative Agent and the Borrower
shall have no right to withdraw or to cause the Administrative Agent
to withdraw any funds deposited in the L/C Cash Collateral Account
during the continuance of any Event of Default. At any time and from
time to time, upon the Administrative Agent's reasonable request, the
Borrower promptly shall execute and deliver any and all such further
instruments and documents, including UCC financing statements, as may
be necessary, appropriate or desirable in the Administrative Agent's
reasonable judgment to obtain the full benefits (including perfection
and priority) of the security interest created or intended to be
created by this paragraph (ii) and of the
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rights and powers herein granted. The Borrower shall not create or
suffer to exist any Lien on any amounts or investments held in the L/C
Cash Collateral Account other than the Lien granted under this
paragraph (ii).
(iii) The Administrative Agent shall (A) during the
continuance of an Event of Default, apply any funds in the L/C Cash
Collateral Account on account of Reimbursement Obligations when the
same become due and payable, (B) after the Maturity Date, apply any
proceeds remaining in the L/C Cash Collateral Account first to pay any
unpaid Obligations then outstanding hereunder and then to refund any
remaining amount to the Borrower.
(iv) The Borrower, no more than once in any calendar
month, may direct the Administrative Agent to invest the funds held in
the L/C Cash Collateral Account (so long as the aggregate amount of
such funds exceeds any relevant minimum investment requirement) in (A)
Cash and Cash Equivalents or direct obligations of the United States
or any agency thereof, or obligations guaranteed by the United States
or any agency thereof and (B) one or more other types of investments
permitted by the Determining Lenders, in each case with such
maturities as the Borrower, with the consent of the Determining
Lenders, may specify, pending application of such funds on account of
Reimbursement Obligations or on account of other Obligations, as the
case may be. In the absence of any such direction from the Borrower,
the Administrative Agent shall invest the funds held in the L/C Cash
Collateral Account (so long as the aggregate amount of such funds
exceeds any relevant minimum investment requirement) in one or more
types of investments with the consent of the Determining Lenders with
such maturities as the Administrative Agent, with the consent of the
Determining Lenders, may determine, pending application of such funds
on account of Reimbursement Obligations or on account of other
Obligations, as the case may be. All such investments shall be made
in the Administrative Agent's name for the account of the Lenders,
subject to the ownership interest therein of the Borrower. The
Borrower recognizes that any losses or taxes with respect to such
investments shall be borne solely by the Borrower, and the Borrower
agrees to hold the Administrative Agent and the Lenders harmless from
any and all such losses and taxes, except to the extent that such
losses or taxes are finally judicially determined by a court of
competent jurisdiction to be the result of gross negligence or willful
misconduct of the Administrative Agent. During the continuance of an
Event of Default, the Administrative Agent may liquidate any
investment held in the L/C Cash Collateral Account in order to apply
the proceeds of such investment on account of the Reimbursement
Obligations as provided in Section 2.15(g)(iii) hereof (or on account
of any other Obligation then due and payable, as the case may be)
without regard to whether such investment has matured and without
liability for any penalty or other fee incurred (with respect to which
the Borrower hereby agrees to reimburse the Administrative Agent) as a
result of such application.
(v) After the establishment of the L/C Cash Collateral
Account pursuant to Section 2.15(g)(i) hereof, the Borrower shall pay
to the Administrative Agent the fees
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customarily charged by the Issuing Bank with respect to the
maintenance of accounts similar to the L/C Cash Collateral Account.
(vi) At such time as no Event of Default is in existence,
the Administrative Agent shall return any amount remaining in the L/C
Cash Collateral Account to the Borrower.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to the Initial Advances and the
Initial Letters of Credit. The obligation of each Lender to make the initial
Advance (and participate in the Existing Letters of Credit) and the obligation
of the Issuing Bank to issue the initial Letter of Credit is subject to (i)
receipt by the Administrative Agent of the following items which are to be
delivered, in form and substance reasonably satisfactory to each Lender, with a
copy (except for the Notes and this Agreement) for each Lender, and (ii)
satisfaction of the following conditions which are to be satisfied:
(a) A loan certificate of each Obligor certifying as to the
accuracy of its representations and warranties in the Loan Documents,
certifying, in the case of any such Obligor, that no Default or Event of
Default has occurred, and including a certificate of incumbency with respect to
each Authorized Signatory, and including (i) a copy of the articles or
certificate of incorporation or other organizational documents of such Obligor,
certified to be true, complete and correct by the secretary of state of its
state of organization, (ii) a copy of a certificate of good standing and a
certificate of existence for its state of organization and, in the case of any
such Obligor, each state in which the nature of its business requires it to be
qualified to do business, (iii) a copy of such Obligor's bylaws, partnership
agreement or similar document, certified to be true, complete and correct by
its secretary or general partner, as the case may be, and (iv) a copy of
corporate or similar resolutions authorizing the execution, delivery and
performance of the Loan Documents to be executed by such Obligor;
(b) a duly executed Revolving Credit Note, payable to the order of
each Lender and in an amount for each Lender equal to its Specified Percentage
of the Commitment;
(c) UCC searches in appropriate jurisdictions where Collateral is
located;
(d) opinions of counsel to each Obligor addressed to the Lenders
and in form and substance reasonably satisfactory to the Administrative Agent
and Special Counsel, dated the Agreement Date, and covering certain of the
matters set forth in Sections 4.1(a), (b), (c), (h), (m), (n) and (p) and such
other matters incident to the transactions contemplated hereby as the
Administrative Agent or Special Counsel may reasonably request;
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(e) reimbursement for the Administrative Agent for Special
Counsel's reasonable and customary fees (on an hourly basis) and expenses
rendered through the Agreement Date;
(f) evidence that all proceedings of each Obligor taken in
connection with the transactions contemplated by this Agreement and the other
Loan Documents shall be reasonably satisfactory in form and substance to the
Administrative Agent and Special Counsel; and the Administrative Agent shall
have received copies of all documents or other evidence which the
Administrative Agent or Special Counsel may reasonably request in connection
with such transactions;
(g) any fees or any expenses required to be paid pursuant to the
Administrative Agent Fee Letter and the Underwriting Fee Letter;
(h) duly executed and completed Security Agreements, dated as of
the Agreement Date, granting a first priority Lien (subject to the
Intercreditor Agreement) in all Collateral covered thereby, together with
related financing statements, stock powers, stock certificates evidencing
ownership of (i) 100% of the issued and outstanding Capital Stock of each
Domestic Subsidiary and (ii) 65% of the issued and outstanding Capital Stock of
each direct Foreign Subsidiary, and insurance certificates listing
Administrative Agent as loss payee and additional insured and otherwise in a
form required by the Collateral Documents.
(i) simultaneously with the making of the initial Advance,
executed UCC-3 Termination Statements to be filed in appropriate jurisdictions
to terminate all Liens against assets of the Borrower and its Domestic
Subsidiaries (including Fieldcrest Xxxxxx and its Subsidiaries) other than
Permitted Liens (or written agreements from each holder of such Liens to
promptly execute such Termination Statements);
(j) all Fieldcrest Xxxxxx Transaction Documents, which shall be in
substance and form reasonably satisfactory to the Administrative Agent and
Special Counsel;
(k) Deeds of Trust executed by the Borrower and dated as of the
Agreement Date, together with surveys, environmental reports and title
insurance policies or commitments in form and substance reasonably satisfactory
to the Administrative Agent and Special Counsel;
(l) evidence satisfactory to the Administrative Agent that (i) the
Fieldcrest Xxxxxx Transaction shall have been consummated (or shall be
consummated simultaneously with the initial Advance hereunder) on terms
reasonably satisfactory to the Administrative Agent and Special Counsel, (ii)
the Borrower shall have received at least (A) $135,000,000 in gross proceeds
from the sale of the 1997 Senior Subordinated Notes and the Bridge Notes, (B)
$62,750,000 in Net Cash Proceeds from the issuance of the Borrower Preferred
Stock, and, (iii) after giving effect to the Fieldcrest Xxxxxx Transaction, the
Revolver Availability shall be at least equal to the sum of (A) $40,000,000
plus (B) an amount equal to 79.42% of all conversion consideration which may be
requested by the holders of the Fieldcrest Xxxxxx Subordinated Debentures;
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(m) a pro forma balance sheet of the Borrower and its Subsidiaries
taking into account the Fieldcrest Xxxxxx Transaction and reflecting estimated
purchase price accounting and such other information relating to the Fieldcrest
Xxxxxx Transaction as the Administrative Agent may reasonably require;
(n) after giving effect to the Fieldcrest Xxxxxx Transaction,
there shall have occurred no material adverse change in the business, assets,
operations, prospects or condition (financial or otherwise) of the Borrower and
its Subsidiaries (including Fieldcrest Xxxxxx and its Subsidiaries), taken as a
whole, since December 31, 1996;
(o) all Indebtedness of the Borrower under the Existing Credit
Agreement and all other Indebtedness by the Borrower, Fieldcrest Xxxxxx and its
Subsidiaries not otherwise permitted pursuant to Section 7.1 hereof shall have
been (or shall be consummated simultaneously with the initial Advance
hereunder) refinanced or repaid in full and all obligations of the Borrower
under the Existing Credit Agreement or such other Indebtedness shall terminate;
(p) all conditions precedent to the Term Credit Agreement shall
have been (or shall be simultaneously with the initial Advance hereunder) be
satisfied;
(q) the duly executed and completed Intercreditor Agreement;
(r) the duly executed Swing Line Note, payable to the order of the
Swing Line Bank in the amount of the Swing Line Facility; and
(s) in form and substance reasonably satisfactory to the
Administrative Agent and Special Counsel, such other documents, instruments and
certificates as the Administrative Agent or any Lender may reasonably require
in connection with the transactions contemplated hereby.
Section 3.2 Conditions Precedent to All Advances and Letters of
Credit. The obligation of each Lender to make each Advance hereunder
(including the initial Advance) and the obligation of the Issuing Bank to issue
or extend each Letter of Credit (including the initial Letter of Credit) is
subject to fulfillment of the following conditions immediately prior to or
contemporaneously with each such Advance or issuance or extension:
(a) With respect to each Advance and each issuance or extension of
a Letter of Credit, all of the representations and warranties of the Borrower
under this Agreement, which, pursuant to Section 4.2 hereof, are made at and as
of the time of each such Advance or issuance, shall be true and correct, both
before and after giving effect to the application of the proceeds of the
Advance or Letter of Credit, except as otherwise expressly provided in said
Section 4.2 hereof.
(b) The incumbency of the Authorized Signatories shall be as
stated in the certificate of incumbency delivered in the Borrower's loan
certificate pursuant to Section 3.1(a) or as subsequently modified and
reflected in a certificate of incumbency delivered to the
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Administrative Agent. The Lenders may, without waiving this condition,
consider it fulfilled and a representation by the Borrower made to such effect
if no written notice to the contrary, dated on or before the date of such
Advance or Letter of Credit, is received by the Administrative Agent from the
Borrower prior to the making of such Advance or issuance or extension of such
Letter of Credit;
(c) There shall not exist a Default or Event of Default hereunder;
(d) The aggregate Advances and Letters of Credit, after giving
effect to such proposed Advance or Letter of Credit, shall not exceed the
maximum principal amount then permitted to be outstanding hereunder;
(e) No order, judgment, injunction or decree of any Tribunal shall
purport to enjoin or restrain any Lender or the Issuing Bank from making any
Advance or issuing or extending any Letter of Credit;
(f) Except as set forth on Schedule 4 hereto, there shall be no
Litigation pending against, or, to the Borrower's knowledge, threatened against
the Borrower or any of its Subsidiaries, or in any other manner relating
directly and adversely to the Borrower or any of its Subsidiaries, or any of
their respective properties, in any court or before any arbitrator of any kind
or before or by any governmental body which could reasonably be expected to
have a Material Adverse Effect; and
(g) As of the making of such Advances or the issuance or extension
of such Letters of Credit, the Borrower shall be deemed to represent and
warrant as of such date as follows:
(i) such requested Advances or Letters of Credit are
permitted "Indebtedness" or "Debt" (as such term is defined in the
Indentures) or such other similar term howsoever defined or designated
therein;
(ii) upon the making of each requested Advance or the
issuance of each requested Letter of Credit, no Event of Default (as
defined in the Indentures) shall have occurred and be continuing at
the time of, or would occur after giving effect on a pro forma basis
to, such Advance or Letter of Credit, as applicable; and
(iii) all Advances and Reimbursement Obligations under this
Agreement are "Senior Indebtedness" (as defined in the Indentures) or
such other similar term howsoever defined or designated therein.
Notwithstanding the above, the obligation of each Lender to make a
Revolving Credit Advance pursuant to Sections 2.2(g) and 2.15(c) shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, (i) the occurrence of any Default or Event of
Default, unless the Administrative Agent or the Issuing Bank, as the case may
be, had actual knowledge of such Default or Event of Default prior to the
making of the
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Swing Line Advance or the issuance or extension of the Letter of Credit, as the
case may be, related to such Revolving Credit Advance, (ii) the failure of the
Borrower to satisfy any condition set forth in this Section 3.2, or (iii) any
other circumstance, happening or event whatsoever, except that the conditions
precedent set forth in Sections 3.1 and 3.2 with respect to the Swing Line
Advance or the Letter of Credit for which such Revolving Credit Advance is made
pursuant to Section 2.2(g) or 2.15(c) shall have been satisfied in full at the
time of the making of such Swing Line Advance or the issuance or extension of
such Letter of Credit.
Section 3.3 Conditions Precedent to Conversions and
Continuations. The obligation of the Lenders to convert any existing Base Rate
Advance into a LIBOR Advance or to continue any existing LIBOR Advance is
subject to the condition precedent that on the date of such conversion or
continuation no Default or Event of Default shall have occurred and be
continuing or would result from the making of such conversion or continuation.
The acceptance of the benefits of each such conversion and continuation shall
constitute a representation and warranty by the Borrower to each of the Lenders
that no Default or Event of Default shall have occurred and be continuing or
would result from the making of such conversion or continuation.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby
represents and warrants to each Lender as follows:
(a) Organization; Power; Qualification. As of the Agreement Date,
the respective jurisdiction of organization or incorporation of the Borrower
and its Subsidiaries and the percentage ownership by the Borrower and its
Subsidiaries of any Subsidiary listed on Schedule 5 are true and correct, after
giving effect to the Fieldcrest Xxxxxx Transaction. As of the Agreement Date
and after giving effect to the Fieldcrest Xxxxxx Transaction, Schedule 5 is a
complete and accurate listing, showing with respect to the Borrower and each
Subsidiary of the Borrower (a) its mailing address, which is its principal
place of business, (b) the classes of its Capital Stock and the number of
amount of its Capital Stock authorized and outstanding, (c) each record and
beneficial owner of outstanding Capital Stock of each Subsidiary, and (d) all
outstanding options, rights, rights of conversion, redemption, purchase or
repurchase, rights of first refusal and similar rights relating to such Capital
Stock. All of the outstanding Capital Stock of the Borrower and its
Subsidiaries is validly issued, fully paid and non-assessable. Each of the
Borrower and its Subsidiaries is a corporation or other legal Person duly
organized, validly existing and in good standing under the laws of its state of
incorporation or organization. Each of the Borrower and its Subsidiaries has
the legal power and authority to own its properties and to carry on its
business as now being and hereafter proposed to be conducted, except where the
failure to have such power and authority could not reasonably be expected to
have a Material Adverse Effect. Each of the Borrower and its Subsidiaries is
authorized to do business, duly qualified and in good standing in the
jurisdiction as set forth in Schedule 8 and no qualification
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or authorization is necessary in any other jurisdictions in which the character
of its properties or the nature of its business requires such qualification or
authorization, except where the failure to be so qualified or authorized could
not reasonably be expected to have a Material Adverse Effect.
(b) Authorization. The Borrower has legal power and has taken all
necessary legal action to authorize it to borrow and request Letters of Credit
hereunder. Each of the Borrower and its Subsidiaries has legal power and has
taken all necessary legal action to execute, deliver and perform the Loan
Documents to which it is party in accordance with the terms thereof, and to
consummate the transactions contemplated thereby. Each Loan Document has been
duly executed and delivered by the Borrower or its Subsidiary executing it.
Each of the Loan Documents to which the Borrower or any of its Subsidiaries is
a party is a legal, valid and binding obligation of the Borrower or such
Subsidiary, as applicable, enforceable in accordance with its terms, subject,
to enforcement of remedies, to the following qualifications: (i) equitable
principles generally, and (ii) Debtor Relief Laws (insofar as any such law
relates to the bankruptcy, insolvency or similar event of the Borrower or any
such Subsidiary).
(c) Compliance with Other Loan Documents and Contemplated
Transactions. The execution, delivery and performance by the Borrower and its
Subsidiaries of the Loan Documents to which they are respectively a party, and
the consummation of the transactions contemplated thereby, do not and will not
(i) require any consent or approval necessary on or prior to the Agreement Date
not already obtained, except to the extent that the failure to obtain such
consent or approval could not reasonably be expected to have a Material Adverse
Effect, (ii) violate any Applicable Law, except to the extent that any
violation could not reasonably be expected to have a Material Adverse Effect,
(iii) conflict with, result in a breach of, or constitute a default under the
certificate of incorporation or by-laws or other applicable organizational
documents of the Borrower or any of its Subsidiaries, (iv) conflict with,
result in a breach of, or constitute a default under any Necessary
Authorization, indenture, agreement or other instrument, to which the Borrower
or any of its Subsidiaries is a party or by which they or their respective
properties may be bound, the effect of which could reasonably be expected to
have a Material Adverse Effect, or (v) result in or require the creation or
imposition of any Lien (other than Liens in favor of the Collateral Agent for
the benefit of (A) the Lenders to secure the Obligations hereunder and (B) the
lenders under the Term Credit Agreement to secure the Obligations (as defined
in the Term Credit Agreement) thereunder) upon or with respect to any property
now owned or hereafter acquired by the Borrower or any of its Subsidiaries.
(d) Business. The Borrower and its Subsidiaries are engaged
primarily in the business of the manufacture, marketing, sale and distribution
of a wide variety of home textile and related products as well as businesses
and activities reasonably related thereto.
(e) Licenses, etc. All Necessary Authorizations have been duly
obtained, and are in full force and effect without any known conflict with the
rights of others and free from any unduly burdensome restrictions, except for
Necessary Authorizations, the failure of which to obtain or have in effect
could not in the aggregate reasonably be expected to result in a Material
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Adverse Effect and Necessary Authorizations that could be obtained by the
taking of ministerial action to secure the grant or transfer thereof. The
Borrower and its Subsidiaries are and will continue to be in compliance with
all provisions thereof, except to the extent that any such failure to comply
could not reasonably be expected to have a Material Adverse Effect. No
circumstance exists which could reasonably be expected to impair the utility of
the Necessary Authorization or the right to renew such Necessary Authorization
the effect of which could reasonably be expected to have a Material Adverse
Effect. No Necessary Authorization is the subject of any pending or, to the
best of the Borrower's knowledge, threatened challenge, suspension,
cancellation or revocation, the effect of which could reasonably be expected to
have a Material Adverse Effect.
(f) Compliance with Law. The Borrower and its Subsidiaries are in
compliance in all respects with all Applicable Laws, except where the failure
to so comply could not reasonably be expected to have a Material Adverse
Effect.
(g) Title to Properties. The Borrower and its Subsidiaries have
good title to, or a valid leasehold or subleasehold interest in, all of their
material assets, except for assets disposed of to the extent permitted pursuant
to Section 7.4 or 7.5 hereof. None of their assets are subject to any Liens,
except Permitted Liens. No financing statement or other Lien filing (except
relating to Permitted Liens and other Liens for which releases and UCC-3
Termination Statements have been obtained pursuant to Section 3.1(i) hereof) is
on file in any state or jurisdiction that names the Borrower or any of its
Subsidiaries as debtor or covers (or purports to cover) any assets of the
Borrower or any of its Subsidiaries, except for Indebtedness with respect to
which the requirements of Section 3.1(i) hereof have been satisfied. The
Borrower and its Subsidiaries have not signed any such financing statement or
filing, nor any security agreement authorizing any Person to file any such
financing statement or filing (except relating to Permitted Liens).
(h) Litigation. Except as reflected on Schedule 4 hereto, as of
the Agreement Date, there is no Litigation pending against, or, to the
Borrower's current actual knowledge, threatened against the Borrower or any of
its Subsidiaries, or in any other manner relating directly and adversely to the
Borrower or any of its Subsidiaries, or any of their respective properties, in
any court or before any arbitrator of any kind or before or by any governmental
body in which the amount claimed in an aggregate amount (excluding liabilities
for which credit worthy insurance companies have acknowledged coverage) exceeds
$1,000,000.
(i) Taxes. All federal, state and other tax returns of the
Borrower and its Subsidiaries required by law to be filed have been duly filed,
or extensions have been timely filed, except where the failure to so file could
not reasonably be expected to have a Material Adverse Effect or where the
obligation to so file is being diligently contested in good faith by
appropriate proceedings, and all Taxes shown to be due and payable on such
returns, have been paid, unless the same are being diligently contested in
accordance with Section 5.6 hereof. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of their Taxes are, in
the reasonable judgment of the Borrower, adequate.
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(j) Financial Statements; Material Liabilities.
(i) The Borrower has heretofore delivered to Lenders the
audited consolidated balance sheets of the Borrower and its
Subsidiaries and Fieldcrest Xxxxxx and its Subsidiaries as at December
31, 1996, and the related statements of earnings and changes in
shareholders' equity and statement of cash flows for the twelve- month
period then ended (the "Financial Statements"). The Financial
Statements were prepared in conformity with GAAP (other than as set
forth in the respective audit reports attached thereto) and fairly
present, in all material respects, the financial position of the
Borrower and its Subsidiaries and Fieldcrest Xxxxxx and its
Subsidiaries, respectively, as at the date thereof and the combined
results of operations and cash flows for the period covered thereby.
(ii) The projected financial statements of the Borrower
and its Subsidiaries (including Fieldcrest Xxxxxx and its
Subsidiaries), delivered to the Lenders prior to or on the Agreement
Date are based on good faith estimates and assumptions made by the
management of the Borrower and believed to be reasonable at the time
made, it being recognized by the Lenders that such projections as to
future events are not to be viewed as facts and that actual results
during the period or periods covered by any such projections may
differ from the projected results.
(iii) The financial statements of the Borrower and its
Subsidiaries delivered to the Lenders pursuant to Section 6.1 and 6.2
hereof fairly present in all material respects their respective
financial condition and their respective results of operations as of
the dates and for the periods shown, all in accordance with GAAP,
subject to normal year-end adjustments. The latest of such financial
statements reflects all material liabilities, direct and contingent,
of the Borrower and each Subsidiary of the Borrower that are required
to be disclosed in accordance with GAAP.
(k) No Adverse Change. Since December 31, 1996 (after giving
effect to the Fieldcrest Xxxxxx Transaction), no event or circumstance has
occurred or arisen which is reasonably likely to have a Material Adverse
Effect.
(l) ERISA. Each Plan of the Borrower and its Controlled Group
(other than any Multiemployer Plan) is in compliance in all material respects
with the applicable provisions of ERISA, the Code, and any other applicable
Law, except to the extent that failure to so comply would not reasonably be
expected to have a Material Adverse Effect. With respect to each Plan (other
than any Multiemployer Plan) of the Borrower and each member of its Controlled
Group, all reports required under ERISA or any other Applicable Law to be filed
with any Tribunal, the failure of which to file could reasonably be expected to
result in liability of the Borrower or any member of its Controlled Group in
excess of $500,000, have been duly filed. All such reports are true and
correct in all material respects as of the date given. No Plan of the Borrower
or any member of its Controlled Group has been terminated under Section 4041(c)
of ERISA nor has any accumulated funding deficiency (as defined in Section
412(a) of the Code)
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been incurred (without regard to any waiver granted under Section 412 of the
Code), nor has any funding waiver from the Internal Revenue Service been
received or requested the result of which could reasonably be expected to have
a Material Adverse Effect. None of the Borrower or any member of its
Controlled Group has failed to make any contribution or pay any amount due or
owing as required under the terms of any such Plan, or by Section 412 of the
Code or Section 302 of ERISA by the due date under Section 412 of the Code and
Section 302 of ERISA, the result of which could reasonably be expected to have
a Material Adverse Effect. There has been no ERISA Event or any event
requiring disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with
respect to any Plan or its related trust of the Borrower or any member of its
Controlled Group since the effective date of ERISA, the result of which could
reasonably be expected to have a Material Adverse Effect. The present value of
the benefit liabilities, as defined in Title IV of ERISA, of each Plan subject
to Title IV of ERISA (other than a Multiemployer Plan) of the Borrower and each
member of its Controlled Group does not exceed the present value of the assets
of each such Plan as of the most recent valuation date using each such Plan's
actuarial assumptions at such date by an amount which (i) could reasonably be
expected to have a Material Adverse Effect or (ii) if capitalized as
Indebtedness on the Financial Statements of the Borrower, would result in an
Event of Default under Section 7.11 hereof. There are no pending, or to the
Borrower's knowledge threatened, claims, lawsuits or actions (other than
routine claims for benefits in the ordinary course) asserted or instituted
against, and neither the Borrower nor any member of its Controlled Group has
knowledge of any threatened litigation or claims against, the assets of any
Plan or its related trust or against any fiduciary of a Plan with respect to
the operation of such Plan, the result of which could reasonably be expected to
have a Material Adverse Effect. None of the Borrower or, to the Borrower's
knowledge, any member of its Controlled Group has engaged in any prohibited
transactions, within the meaning of Section 406 of ERISA or Section 4975 of the
Code, in connection with any Plan the result of which could reasonably be
expected to have a Material Adverse Effect. None of the Borrower or any member
of its Controlled Group has withdrawn from any Multiemployer Plan, nor has
incurred or reasonably expects to incur (A) any liability under Title IV of
ERISA (other than premiums due under Section 4007 of ERISA to the PBGC), (B)
any withdrawal liability (and no event has occurred which with the giving of
notice under Section 4219 of ERISA would result in such liability) under
Section 4201 of ERISA as a result of a complete or partial withdrawal (within
the meaning of Section 4203 or 4205 of ERISA) from a Multiemployer Plan, or (C)
any liability under Section 4062 of ERISA to the PBGC or to a trustee appointed
under Section 4042 of ERISA, the result of which could reasonably be expected
to have a Material Adverse Effect. None of the Borrower, any member of its
Controlled Group, or any organization to which the Borrower or any member of
its Controlled Group is a successor or parent corporation within the meaning of
ERISA Section 4069(b), has engaged in a transaction within the meaning of ERISA
Section 4069, the result of which could reasonably be expected to have a
Material Adverse Effect. Any Plan that is a welfare benefit plan within the
meaning of 3(1) of ERISA maintained or contributed by the Borrower or any
member of its Controlled Group and which provides for continuing benefits or
coverage for any participant or any beneficiary of any participant after such
participant's termination of employment may be terminated by the Borrower or
any member of its Controlled Group at any time without liability other than
liability that could not reasonably be expected to have a Material
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Adverse Effect. Each of Borrower and its Controlled Group which maintains a
Plan which is a welfare benefit plan within the meaning of Section 3(1) of
ERISA has complied in all material respects with the provisions of Parts 6 and
7 of subtitle B of Title I of ERISA, as amended, and the regulations
thereunder. None of the Borrower or any member of its Controlled Group
maintains or has established a multiemployer welfare benefit arrangement within
the meaning of Section 3(40)(A) of ERISA.
(m) Compliance with Regulations G, T, U and X. The Borrower is
not 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
within the meaning of Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System. No more than 25% of the assets of the Borrower and
its Subsidiaries are margin stock. None of the Borrower and its Subsidiaries
nor any agent acting on their behalf, have taken or will take any action which
might cause the Borrower, the Lenders, this Agreement or any other Loan
Document to violate any regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect. Neither the making of any Advances,
the issuance or extension of any Letters of Credit nor the application of any
proceeds thereof will violate, or be inconsistent with, the provisions
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System.
(n) Required Consents. The Borrower and its Subsidiaries are not
required to obtain any material Necessary Authorization on or prior to the
Agreement Date that has not already been obtained from, or effect any material
filing or registration that has not already been effected with, any Tribunal in
connection with the execution and delivery of this Agreement or any other Loan
Document, or the performance thereof, in accordance with their respective
terms, including any borrowings hereunder, except (i) for the filing of
financing statements (and other similar notices) and other Collateral Documents
containing a description of the Collateral with certain Tribunals, including
the United States Patent and Trademark Office, (ii) where the failure to so
obtain such Necessary Authorization could not reasonably be expected to have a
Material Adverse Effect and (iii) where such Necessary Authorization could be
obtained by the taking of a ministerial action to secure the grant or transfer
thereof.
(o) Absence of Default. The Borrower and its Subsidiaries are in
compliance in all material respects with all of the provisions of their
certificate of incorporation, by-laws and other organizational documents, and
no event has occurred or failed to occur, which has not been remedied or
waived, the occurrence or non-occurrence of which constitutes, or which with
the passage of time or giving of notice or both would constitute, (i) an Event
of Default or (ii) a default by the Borrower or any of its Subsidiaries under
any indenture, agreement or other instrument, or any judgment, decree or order
to which the Borrower or any of its Subsidiaries or by which they or any of
their respective properties is bound, the result of which with respect to any
default set forth in clause (ii) could reasonably be expected to have a
Material Adverse Effect.
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61
(p) Governmental Regulation. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or 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, as amended. Neither the entering into or
performance by the Borrower of this Agreement nor the issuance of the Notes
violates any provision of such act or requires any consent, approval, or
authorization of, or registration with, the Securities and Exchange Commission
or any other Tribunal pursuant to any provisions of such act.
(q) Environmental Matters. The Borrower does not have any
knowledge that any hazardous substance has been placed (i) on any real property
fee title to which is now owned by the Borrower or any of its Subsidiaries or
(ii) by Borrower or any of its Subsidiaries on any real property leased by the
Borrower or any of its Subsidiaries, in either case in a manner which does not
comply with Applicable Environmental Laws, except to the extent that the
failure to so comply could not reasonably be expected to have a Material
Adverse Effect. The Borrower and its Subsidiaries are not in violation of or
subject to any existing, pending or, to the best of the Borrower's knowledge,
threatened investigation or inquiry by any Tribunal or to any remedial
obligations under any Applicable Environmental Laws, the effect of which could
reasonably be expected to have a Material Adverse Effect. The Borrower and its
Subsidiaries have not failed to obtain any permits, licenses or similar
authorizations required to be obtained by reason of any Applicable
Environmental laws with respect to any real property owned or leased by the
Borrower or any of its Subsidiaries, except to the extent that the failure to
so obtain could not reasonably be expected to have a Material Adverse Effect.
The Borrower has no current actual knowledge that any hazardous substances have
been disposed of or otherwise released (i) on or to the real property fee title
to which is owned by the Borrower or any of its Subsidiaries or (ii) by
Borrower or any of its Subsidiaries on or to any real property leased by
Borrower or any of its Subsidiaries, all within the meaning of the Applicable
Environmental Laws, the effect of which could reasonably be expected to have a
Material Adverse Effect.
(r) Certain Fees. Except for fees and expenses incurred in
connection with the Fieldcrest Xxxxxx Transaction, no broker's, finder's or
other fee or commission will be payable by the Borrower (other than under the
Underwriting Fee Letter and as set forth in Section 2.4 hereof) with respect to
the making of the Commitment or the Advances hereunder.
(s) Intellectual Property. The Borrower and its Subsidiaries have
collectively obtained or applied for or licensed or otherwise obtained the
right to use all patents, trademarks, service marks, trade names, copyrights,
and other rights, free from Liens (except Permitted Liens), that are necessary
for the operation of their business as presently conducted and as proposed to
be conducted, except to the extent that the failure to so obtain, apply,
license or obtain the right to use could not reasonably be expected to have a
Material Adverse Effect. Nothing has come to the current actual knowledge of
the Borrower or any of its Subsidiaries to the effect that (i) any process,
method, part or other material presently contemplated to be employed by the
Borrower or any of its Subsidiaries infringes any valid and enforceable patent,
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trademark, service xxxx, trade name, copyright, license or other right owned by
any other Person, or (ii) there is pending or overtly threatened any claim or
litigation against or affecting the Borrower or any of its Subsidiaries
contesting its right to sell or use any such process, method, part or other
material, which could reasonably be expected to have a Material Adverse Effect.
(t) Disclosure. All information, reports, financial statements,
exhibits and schedules furnished in writing by the Borrower or any of its
Subsidiaries to the Administrative Agent or any Lender in connection with this
Agreement or the other Loan Documents is, and all other such written
information hereafter furnished by or on behalf of the Borrower or any of its
Subsidiaries to the Administrative Agent or any Lender will be, true and
accurate in all material respects (or, in the case of projections based on
reasonable estimates and assumptions) on the date as of which such information
is dated or certified and not incomplete by omitting to state any material fact
necessary to make such information not misleading at such time in light of the
circumstances under which such information was provided. There is no fact
known to the Borrower and not known to the public generally that could
reasonably be expected to have a Material Adverse Effect, which has not been
set forth in this Agreement or in the documents, certificates and statements
furnished to the Lenders by or on behalf of the Borrower hereof in connection
with the transactions contemplated hereby or thereby.
(u) Solvency. The Borrower is, and Borrower and its Subsidiaries
on a consolidated basis are, Solvent.
(v) Labor Relations. Except as provided on Schedule 9, neither
the Borrower nor any of its Subsidiaries is a party to a collective bargaining
agreement or similar agreement, and the Borrower and each Subsidiary is in
compliance in all material respects with all Laws respecting employment and
employment practices, terms and conditions of employment, wages and hours and
other laws related to the employment of its employees, except where the failure
to comply could not reasonably be expected to result in a Material Adverse
Effect, and there are no arrears in the payment of wages, withholding or social
security taxes, unemployment insurance premiums or other similar obligations of
the Borrower or any of its Subsidiaries or for which the Borrower or any such
Subsidiary may be responsible other than in the ordinary course of business,
except for such unpaid or unwithheld arrears which could not reasonably be
expected to result in a Material Adverse Effect. There is no strike, work
stoppage or labor dispute with any union or group of employees pending or
overtly threatened involving Borrower or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
(w) Common Enterprise. The Borrower and its Subsidiaries are
engaged in the businesses set forth in Section 4.1(d) hereof. These operations
require financing on a basis such that the credit supplied can be made
available from time to time to the Borrower and various of its Subsidiaries, as
required for the continued successful operation of the Borrower and its
Subsidiaries as a whole. The Borrower and its Subsidiaries expect to derive
benefit (and the boards of directors of the Borrower and its Subsidiaries have
determined that the Borrower and its Subsidiaries may reasonably be expected to
derive benefit), directly or indirectly, from the
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63
credit extended by the Lenders hereunder, both in their separate capacities and
as members of the group of companies, since the successful operation and
condition of the Borrower and its Subsidiaries is dependent on the continued
successful performance of the functions of the group as a whole.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date and at and
as of the date of each Advance and the date of issuance or extension of each
Letter of Credit, and each shall be true and correct in all material respects
when made, except to the extent (a) previously fulfilled in accordance with the
terms hereof, (b) previously waived in writing by the Determining Lenders with
respect to any particular factual circumstance or permitted by the terms of
this Agreement or (c) such representations and warranties specifically relate
to an earlier date, in which case such representations and warranties shall
have been true and correct in all material respects on and as of such date.
All such representations and warranties shall survive, and not be waived by,
the execution hereof by any Lender, any investigation or inquiry by any Lender,
or by the making of any Advance or the issuance or extension of any Letter of
Credit under this Agreement.
ARTICLE 5
General Covenants
Prior to the Release Date:
Section 5.1 Preservation of Existence and Similar Matters. The
Borrower shall, and shall cause each of its Subsidiaries to:
(a) except as otherwise permitted pursuant to Section 7.4 hereof,
preserve and maintain, or timely obtain and thereafter preserve and maintain,
its existence, rights, franchises, licenses, authorizations, consents,
privileges and all other Necessary Authorizations from any Tribunal, the loss
of which could reasonably be expected to have a Material Adverse Effect; and
(b) except as otherwise permitted pursuant to Section 7.4 hereof,
qualify and remain qualified and authorized to do business in each jurisdiction
in which the character of its properties or the nature of its business requires
such qualification or authorization, unless the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The
Borrower and its Subsidiaries shall (a) engage primarily in the businesses set
forth in Section 4.1(d) hereof, and (b) comply in all respects with the
requirements of all Applicable Law, except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect.
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Section 5.3 Maintenance of Properties. Subject to Sections 7.4
and 7.5 hereof, the Borrower shall, and shall cause each of its Subsidiaries
to, maintain or cause to be maintained all its properties (whether owned or
held under lease) in adequate operating condition and repair for purposes of
their current use with due regard to the age thereof, taken as a whole, subject
to ordinary wear and tear, and from time to time make or cause to be made all
appropriate (in the reasonable judgment of the Borrower) repairs, renewals,
replacements, additions, betterments and improvements thereto in accordance
with past practice, except where the failure to so maintain, repair, renew,
replace or improve could not reasonably be expected to have a Material Adverse
Effect.
Section 5.4 Accounting Methods and Financial Records. The
Borrower shall, and shall cause each of its Subsidiaries to, maintain a system
of accounting established and administered in accordance with GAAP, keep
adequate records and books of account in which complete entries will be made
and all transactions reflected in accordance with GAAP, and keep accurate and
complete records of its respective assets.
Section 5.5 Insurance. The Borrower shall, and shall cause each
of its Subsidiaries to, maintain insurance from responsible companies in such
amounts and against such risks as shall be customary and usual in the industry
for companies of similar size and capability. Each insurance policy shall (a)
provide for at least 30 days' prior notice to the Administrative Agent of any
proposed termination or cancellation of such policy, whether on account of
default or otherwise and (b) otherwise contain the requirements for insurance
set forth in the Collateral Documents.
Section 5.6 Payment of Taxes and Claims. The Borrower shall, and
shall cause each of its Subsidiaries to, pay and discharge all material taxes
to which they are subject prior to the date on which penalties attach thereto,
and all lawful material claims for labor, materials and supplies which, if
unpaid, might by Law become a Lien upon any of its properties; except that no
such tax or claim need be paid which is being diligently contested in good
faith by appropriate proceedings and for which adequate reserves shall have
been set aside on the appropriate books, but only so long as any Lien related
thereto is a Permitted Lien. The Borrower shall, and shall cause each of its
Subsidiaries to, timely file all information returns (or extensions of such
filing deadlines) required by federal, state or local tax authorities, except
where the failure to so file could not reasonably be expected to have a
Material Adverse Effect or where the obligation to so file is being diligently
contested in good faith by appropriate proceedings.
Section 5.7 Visits and Inspections. The Borrower shall, and
shall cause each of its Subsidiaries to, promptly permit representatives of the
Administrative Agent or any Lender from time to time after reasonable notice by
the Administrative Agent or any Lender to (a) visit and inspect the properties
of the Borrower and its Subsidiaries as often as the Administrative Agent or
any Lender shall reasonably deem advisable, (b) review, inspect and make
extracts from and copies of the Borrower's and each such Subsidiary's books and
records, and (c) discuss with the Borrower's and each such Subsidiary's
directors, officers, employees and auditors its business,
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assets, liabilities, financial positions, results of operations and business
prospects, provided that such representatives of the Administrative Agent or
any Lender shall keep confidential all information obtained pursuant to this
Section 5.7 to the extent required by Section 11.13. The Borrower shall pay
the reasonable out-of-pocket expenses related to inspections and reviews
performed (a) at any time by the Administrative Agent, and (b) after the
occurrence and during the continuance of an Event of Default, by each Lender.
Except after the occurrence and during the continuance of an Event of Default,
all such visits and inspections shall be conducted during normal business
hours. Following the occurrence and during the continuance of an Event of
Default, such visits and inspections shall be conducted at any time requested
by the Administrative Agent or any Lender without any requirement for
reasonable notice.
Section 5.8 Use of Proceeds. The proceeds of the Advances and
the Letters of Credit shall be used by the Borrower to (a) to consummate the
Fieldcrest Xxxxxx Transaction and pay certain outstanding Indebtedness of the
Borrower and Fieldcrest Xxxxxx, (b) pay certain fees and expenses related to
the Fieldcrest Xxxxxx Transaction and this Agreement, and (c) finance the
ongoing working capital and general corporate requirements of the Borrower and
its Subsidiaries.
SECTION 5.9 INDEMNITY.
(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD
HARMLESS THE ADMINISTRATIVE AGENT, EACH LENDER, EACH OF THEIR RESPECTIVE
AFFILIATES, AND EACH OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS,
DIRECTORS, EMPLOYEES, TRUSTEES, AGENTS, ATTORNEYS AND CONSULTANTS (INCLUDING,
WITHOUT LIMITATION, THOSE RETAINED IN CONNECTION WITH THE SATISFACTION OR
ATTEMPTED SATISFACTION OF ANY OF THE CONDITIONS SET FORTH HEREIN) OF EACH OF
THE FOREGOING (COLLECTIVELY, "INDEMNITEES") FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, CLAIMS, REASONABLE COSTS, REASONABLE OUT-OF-POCKET EXPENSES AND
REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH
INDEMNITEES IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL
PROCEEDING, WHETHER OR NOT SUCH INDEMNITEES SHALL BE DESIGNATED A PARTY
THERETO), IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH INDEMNITEES
(WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL, WHETHER BASED ON ANY FEDERAL,
STATE, OR LOCAL LAWS AND REGULATIONS, UNDER COMMON LAW OR AT EQUITY, OR ON
CONTRACT, TORT OR OTHERWISE, AND WHETHER ARISING FROM OR CONNECTED WITH THE
PAST, PRESENT OR FUTURE OPERATIONS OF THE BORROWER OR ANY
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SUBSIDIARY OF THE BORROWER OR THEIR RESPECTIVE PREDECESSORS IN INTEREST, OR THE
PAST, PRESENT OR FUTURE ENVIRONMENTAL CONDITION OF PROPERTY OF THE BORROWER OR
ANY SUBSIDIARY OF THE BORROWER), RELATING TO OR ARISING OUT OF THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT,
EVENT OR TRANSACTION RELATING THERETO, INCLUDING IN CONNECTION WITH, OR AS A
RESULT, IN WHOLE OR IN PART, OF ANY ORDINARY OR MERE NEGLIGENCE OF
ADMINISTRATIVE AGENT OR ANY LENDER (OTHER THAN THOSE MATTERS RAISED EXCLUSIVELY
BY A PARTICIPANT AGAINST THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR ANY
LENDER AND NOT THE BORROWER), OR THE USE OR INTENDED USE OF THE PROCEEDS OF THE
ADVANCES OR LETTERS OF CREDIT HEREUNDER, OR IN CONNECTION WITH ANY
INVESTIGATION OF ANY POTENTIAL MATTER COVERED HEREBY, BUT EXCLUDING (i) ANY
CLAIM OR LIABILITY THAT ARISES AS THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF ANY INDEMNITEE, AS FINALLY JUDICIALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION, (ii) ANY CLAIM OR LIABILITY THAT ARISES AS THE DIRECT
RESULT OF THE OPERATION OF THE PROPERTY OF THE BORROWER OR ANY SUBSIDIARY OF
THE BORROWER BY THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR ANY OF THE
LENDERS AFTER TAKING POSSESSION THEREOF BY FORECLOSURE OR BY TRANSFER IN LIEU
OF FORECLOSURE (PROVIDED THAT SUCH CLAIM OR LIABILITY DOES NOT RELATE TO ANY
CONDITION EXISTING ON SUCH PROPERTY PRIOR TO FORECLOSURE OR TRANSFER IN LIEU OF
FORECLOSURE), AND (iii) MATTERS RAISED BY ONE LENDER AGAINST ANOTHER LENDER OR
BY ANY SHAREHOLDERS OF A LENDER AGAINST A LENDER OR ITS MANAGEMENT
(COLLECTIVELY, EXCEPT FOR THE MATTERS REFERRED TO CLAUSES (i), (ii) OR (iii)
ABOVE, "INDEMNIFIED MATTERS", AND THE MATTERS REFERRED TO IN CLAUSES (i), (ii)
OR (iii) ABOVE, COLLECTIVELY, "EXCLUDED MATTERS"). TO THE EXTENT THAT ANY
INDEMNIFIED MATTER INVOLVES ONE OR MORE INDEMNITEES, SUCH INDEMNITEES SHALL USE
THE SAME LEGAL COUNSEL UNLESS ANY INDEMNITEE IN ITS REASONABLE DISCRETION
DETERMINES THAT CONFLICTS EXIST OR MAY ARISE IN CONNECTION WITH SUCH
REPRESENTATION.
(b) WITHOUT DUPLICATION, THE BORROWER SHALL PERIODICALLY, UPON
REQUEST, REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE OUT-OF-POCKET LEGAL AND
OTHER ACTUAL REASONABLE EXPENSES (INCLUDING THE REASONABLE COST OF ANY
INVESTIGATION AND PREPARATION) INCURRED IN CONNECTION WITH ANY INDEMNIFIED
MATTER; PROVIDED THAT SUCH INDEMNITEE SHALL PROVIDE ADEQUATE DOCUMENTATION OF
SUCH EXPENSES; PROVIDED, FURTHER, THAT IF AN INDEMNITEE IS REIMBURSED HEREUNDER
FOR SUCH AMOUNT, THE AMOUNT SO PAID SHALL BE REFUNDED TO THE BORROWER IF AND TO
THE EXTENT IT IS FINALLY JUDICIALLY DETERMINED THAT THE INDEMNIFIED MATTER IN
QUESTION WAS AN EXCLUDED MATTER. THE REIMBURSEMENT AND INDEMNITY OBLIGATIONS
UNDER THIS SECTION 5.9 SHALL BE IN ADDITION TO ANY
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LIABILITY WHICH THE BORROWER MAY OTHERWISE HAVE, SHALL EXTEND UPON THE SAME
TERMS AND CONDITIONS TO EACH INDEMNITEE, AND SHALL BE BINDING UPON AND INURE TO
THE BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL REPRESENTATIVES OF
THE BORROWER, THE ADMINISTRATIVE AGENT, THE LENDERS AND ALL OTHER INDEMNITEES.
THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE
OBLIGATIONS AND SHALL CONTINUE WITH RESPECT TO ANY LENDER THAT MAY ASSIGN ALL
OF ITS RIGHTS AND OBLIGATIONS UNDER THE LOAN DOCUMENTS.
Section 5.10 Environmental Law Compliance. The use which the
Borrower or any of its Subsidiaries make of any real property which is owned or
leased by it will not result in the disposal or other release of any hazardous
substance or solid waste on or to such real property which is in violation of
Applicable Environmental Laws, the effect of which could reasonably be expected
to have a Material Adverse Effect. As used herein, the terms "hazardous
substance" and "release" as used in this Section shall have the meanings
specified in CERCLA (as defined in the definition of Applicable Environmental
Laws), and the terms "solid waste" and "disposal" shall have the meanings
specified in RCRA (as defined in the definition of Applicable Environmental
Laws); provided, however, that if CERCLA or RCRA is amended so as to broaden or
lessen the meaning of any term defined thereby, such broader or lesser meaning
shall apply subsequent to the effective date of such amendment; and provided
further, to the extent that any other law applicable to the Borrower, any
Subsidiary or any of their properties establishes a meaning for "hazardous
substance," "release," "solid waste," or "disposal" which is broader or lesser
than that specified in either CERCLA or RCRA, such broader or lesser meaning
shall apply.
Section 5.11 Further Assurances. At any time or from time to time
upon reasonable request by the Administrative Agent, the Borrower or any of its
Subsidiaries shall execute and deliver such further documents and do such other
acts and things as the Administrative Agent may reasonably request in order to
effect fully the purposes of this Agreement and the other Loan Documents and to
provide for payment of the Obligations in accordance with the terms of this
Agreement and the other Loan Documents. Without limiting the generality of the
foregoing, the Borrower agrees to (a) update and deliver to the Administrative
Agent Schedule 5 hereto (with respect to the identities, jurisdictions of
organization and ownership of the Borrower's Subsidiaries) at the time of
delivery of the financial statements set forth in Sections 6.1 and 6.2 hereof
if the information provided therein is not complete and correct, (b) update and
deliver to the Collateral Agent Schedule 2 to the Security Agreements promptly
upon discovery if the information provided therein is not complete and correct,
and (c) execute and deliver to the Collateral Agent deeds of trust or
mortgages, as appropriate, in substantially the form of Exhibit H-1 and H-2
hereto with respect to any real property hereafter acquired by the Borrower or
any Subsidiary, as applicable, together with surveys and environmental reports
in form reasonably satisfactory to the Administrative Agent and title insurance
thereon in form and amount reasonably satisfactory to the Administrative Agent,
and such board resolutions, officer's certificates, corporate and other
documents and opinions of counsel as the Administrative Agent
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shall reasonably request with respect thereto; provided this Section 5.11(c)
shall not apply to any leasehold interests unless requested by the Determining
Lenders or any leasehold interest for sales or office space only. The Borrower
shall use its reasonable best efforts to obtain Landlord's Agreements and
Landlord's Waivers with respect to such real property of the Borrower and its
Domestic Subsidiaries as the Administrative Agent shall reasonably require.
Section 5.12 Subsidiaries. At any time that any Person becomes a
Domestic Subsidiary, (a) such Subsidiary shall execute a Subsidiary Guaranty of
the Obligations and Collateral Documents granting a first priority Lien
(subject to the Intercreditor Agreement) in all unencumbered assets of such
Subsidiary required by the Determining Lenders to be pledged, except, to the
extent applicable, for Permitted Liens, to secure the Obligations, (b) 100% of
such Subsidiary's Capital Stock shall be pledged to secure the Obligations and
(c) the Lenders shall receive such board resolutions, officer's certificates,
corporate and other documents and opinions of counsel as the Administrative
Agent shall reasonably request in connection with the actions described in
clauses (a) and (b) above. At any time that any Person becomes a direct
Foreign Subsidiary, (a) 65% of such Subsidiary's Capital Stock shall be pledged
to secure the Obligations and (b) the Lenders shall receive such board
resolutions, officers' certificates, corporate and other documents and opinions
of counsel as the Administrative Agent shall reasonably request in connection
with the action described in the immediately preceding clause (a) above. All
Foreign Subsidiaries shall be direct Subsidiaries of the Borrower or of a
Domestic Subsidiary.
ARTICLE 6
Information Covenants
Prior to the Release Date, the Borrower shall furnish or cause to be
furnished to each Lender:
Section 6.1 Quarterly Financial Statements and Information.
Within 45 after the end of each Fiscal Quarter of each Fiscal Year (other than
the end of a Fiscal Quarter which coincides with the end of a Fiscal Year), the
consolidated balance sheets of the Borrower and its Subsidiaries as at the end
of such fiscal quarter and the related consolidated statements of earnings for
such fiscal quarter and for the elapsed portion of the year ended with the last
day of such fiscal quarter, and consolidated statements of cash flow for the
elapsed portion of the year ended with the last day of such fiscal quarter, all
of which shall be certified by a Responsible Officer, to, in his or her opinion
acting solely in his or her capacity as an officer of the Borrower, present
fairly in all material respects, in accordance with GAAP (except for the
absence of footnotes), the financial position and results of operations of the
Borrower and its Subsidiaries as at the end of and for such fiscal quarter, and
for the elapsed portion of the year ended with the last day of such fiscal
quarter, subject only to normal year-end adjustments.
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Section 6.2 Annual Financial Statements and Information;
Certificate of No Default.
(a) Within 120 days after the end of each Fiscal Year, a copy of
(i) the consolidated balance sheets of the Borrower and its Subsidiaries, as of
the end of the current and prior Fiscal Years and (ii) the consolidated
statements of earnings and consolidated statements of changes in shareholders'
equity and consolidated statements of cash flow as of and through the end of
such Fiscal Year, all of which are prepared in accordance with GAAP, and
certified by independent certified public accountants reasonably acceptable to
the Administrative Agent (provided, however, any big six public accounting firm
shall be acceptable to the Administrative Agent), whose opinion shall be in
scope and substance in accordance with generally accepted auditing standards
and shall be unqualified as to scope of audit and going concern.
(b) Simultaneously with the delivery of the statements required by
this Section 6.2, a letter from the Borrower's public accountants stating to
the effect that during their audit of such financial statements nothing has
come to their attention that would result in a Default or Event of Default
under this Agreement, recognizing, however, that the scope and purpose of their
audit was not to determine compliance with the terms of this Agreement or
whether a Default or Event of Default has otherwise occurred.
Section 6.3 Compliance Certificate. At the time financial
statements are furnished pursuant to Sections 6.1 and 6.2 hereof, the
Compliance Certificate, completed as provided therein.
Section 6.4 Copies of Other Reports and Notices.
(a) Promptly upon their becoming available, copies of (i) all
material final reports or letters submitted to the Borrower or any of its
Subsidiaries by accountants in connection with any annual, interim or special
audit, including without limitation any final report prepared in connection
with the annual audit referred to in Section 6.2 hereof, and any other comment
letter submitted to management in connection with any such audit, (ii) each
regular, periodic or other report and any registration statement (other than
statements on Form S-8) or prospectus (or material written communication in
respect of any thereof) filed by the Borrower or any of its Subsidiaries with
any securities exchange, with the Securities and Exchange Commission or any
successor agency, and (iii) all press releases concerning material financial
aspects of the Borrower or any of its Subsidiaries;
(b) Promptly upon the Borrower becoming aware that (i) the
holder(s) of any note(s) or other evidence of indebtedness or other security of
the Borrower or any of its Subsidiaries in excess of $1,000,000 in the
aggregate has given notice or taken any action with respect to a breach,
failure to perform, claimed default or event of default thereunder or (ii) any
event, circumstance or condition which could reasonably be expected to be
classified as a Material Adverse Effect, a written notice specifying the
details thereof (or the nature of any claimed default or event of default) and
what action is being taken or is proposed to be taken with respect thereto;
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(c) Promptly upon the Borrower becoming aware that any party to
any Capitalized Lease Obligations in excess of $1,000,000 or Operating Lease in
which the annual rentals thereunder exceed $150,000 has given notice or taken
any action with respect to a breach, failure to perform, claimed default or
event of default thereunder, a written notice specifying the details thereof
(or the nature of any claimed default or event of default) and what action is
being taken or is proposed to be taken with respect thereto;
(d) Promptly upon receipt by the Borrower thereof, information
with respect to and copies of any notices received from any Tribunal relating
to any order, ruling, law, information or policy that relates to a breach of or
noncompliance with any Law, and could reasonably be expected to result in the
payment of money by the Borrower or any of its Subsidiaries of the Borrower in
an amount of $1,000,000 or more in the aggregate or otherwise have a Material
Adverse Effect, or result in the loss or suspension of any Necessary
Authorization where such loss could reasonably be expected to have a Material
Adverse Effect; and
(e) From time to time and promptly upon each request, such
material data, certificates, reports, statements, documents or further
information regarding the assets, business, liabilities, financial position,
projections, results of operations or business prospects of the Borrower and
its Subsidiaries, as the Administrative Agent or any Lender may reasonably
request.
Section 6.5 Notice of Litigation, Default and Other Matters.
Prompt notice of the following events after the Borrower has knowledge or
notice thereof:
(a) The commencement of all Litigation and investigations by or
before any Tribunal, and all actions and proceedings in any court or before any
arbitrator involving claims for damages (including punitive damages) in excess
of $1,000,000 (after deducting the amount with respect to which creditworthy
insurance companies have acknowledged coverage), against or in any other way
relating directly to the Borrower, any of its Subsidiaries or any of their
respective properties or businesses; and
(b) Promptly upon the happening of any condition or event of which
the Borrower has current actual knowledge which constitutes a Default, a
written notice specifying the nature and period of existence thereof and what
action is being taken or is proposed to be taken with respect thereto.
Section 6.6 ERISA Reporting Requirements.
(a) Promptly and in any event (i) within 30 days after the
Borrower has current actual knowledge that any ERISA Event described in clause
(a) of the definition of ERISA Event or any event described in Section 4063(a)
of ERISA with respect to any Plan of the Borrower or any member of its
Controlled Group has occurred, and (ii) within 10 Business Days after the
Borrower or any member of its Controlled Group has current actual knowledge
that any other ERISA Event with respect to any Plan of the Borrower or any
member of its Controlled Group
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has occurred or a request for a minimum funding waiver under Section 412 of the
Code has been made with respect to any Plan of the Borrower or any member of
its Controlled Group, a written notice describing such event and describing
what action is being taken or is proposed to be taken with respect thereto,
together with a copy of any notice of such event that is given to the PBGC;
(b) Promptly and in any event within ten Business Days after
receipt thereof by the Borrower, copies of each notice received by the Borrower
or any member of its Controlled Group from the PBGC of the PBGC's intention to
terminate any Plan or to have a trustee appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing
thereof by the Borrower or any member of its Controlled Group with the United
States Department of Labor or the Internal Revenue Service, copies of each
annual report (including Schedule B thereto, if applicable) with respect to
each Plan subject to Title IV of ERISA of which Borrower or any member of its
Controlled Group is the "plan sponsor";
(d) Promptly, and in any event within 10 Business Days after
receipt thereof by the Borrower, a copy of any correspondence the Borrower or
any member of its Controlled Group receives from the Plan Sponsor (as defined
by Section 4001(a)(10) of ERISA) of any Plan concerning potential withdrawal
liability pursuant to Section 4219 or 4202 of ERISA, and a statement from the
chief financial officer of the Borrower or such member of its Controlled Group
setting forth details as to the events giving rise to such potential withdrawal
liability and the action which the Borrower or such member of its Controlled
Group is taking or proposes to take with respect thereto;
(e) Notification within 30 days of any material increases in the
benefits provided under any existing Plan which is not a Multiemployer Plan, or
the establishment of any new Plans, or the commencement of contributions to any
Plan to which the Borrower or any member of its Controlled Group was not
previously contributing, which could reasonably be expected in any such case to
result in an additional material liability to the Borrower;
(f) Notification within five Business Days after the Borrower
knows that the Borrower or any such member of its Controlled Group has filed or
intends to file a notice of intent to terminate any Plan under a distress
termination within the meaning of Section 4041(c) of ERISA and a copy of such
notice; and
(g) Within five Business Days after receipt by the Borrower of
written notice of commencement thereof, notice of all actions, suits and
proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, affecting the Borrower
or any member of its Controlled Group with respect to any Plan, except those
which, in the aggregate, if adversely determined could not reasonably be
expected to have a Material Adverse Effect.
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ARTICLE 7
Negative Covenants
Prior to the Release Date:
Section 7.1 Indebtedness. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, create, assume, incur or otherwise
become or remain obligated in respect of, or permit to be outstanding, or
suffer to exist any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Accounts payable and accrued liabilities incurred in the
ordinary course of business;
(c) Indebtedness of the Borrower and its Domestic Subsidiaries,
including in respect of Capitalized Lease Obligations, incurred to purchase, or
to finance the purchase of, assets which constitute property, plant and
equipment, not to exceed, together with Indebtedness permitted pursuant to
clause (o) of this Section 7.1, $35,000,000 in aggregate principal amount
outstanding;
(d) Institutional Debt of the Borrower; provided that (i) the Net
Cash Proceeds of such Institutional Debt are applied in accordance with Section
2.5(e) of the Term Credit Agreement to the extent required therein and (ii) the
scheduled principal payments of all Indebtedness of the Borrower and its
Subsidiaries immediately after the issuance thereof is not greater in amount
during any year in which the Obligations are scheduled to be outstanding or
earlier in amortization than immediately preceding the issuance thereof.
(e) Hedging obligations under Hedge Agreements entered into with
any Person that is a Lender or an Affiliate of a Lender at the time of entering
into such Hedge Agreement;
(f) Indebtedness existing on the Agreement Date which is described
on Schedule 7 hereto, including renewals, replacements and refinancings (but no
increases) thereof;
(g) Indebtedness in respect of endorsement of negotiable
instruments in the ordinary course of business;
(h) Indebtedness assumed in connection with Acquisitions permitted
under Section 7.6 (excluding the Fieldcrest Xxxxxx Transaction) not to exceed,
$20,000,000 in aggregate principal amount outstanding;
(i) Indebtedness owing to the Borrower or any of its Subsidiaries
by the Borrower or any of its Subsidiaries, which Indebtedness is subordinated
to the Obligations and evidenced by an entry on the financial records of the
Borrower and any such Subsidiary;
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(j) Guaranties by Subsidiaries of the Borrower of Indebtedness of
the Borrower or other Subsidiaries of the Borrower and Guaranties by the
Borrower of Indebtedness of Subsidiaries of the Borrower, in each case to the
extent such underlying Indebtedness is permitted hereunder;
(k) Indebtedness in respect of the 1997 Senior Subordinated Notes;
(l) Indebtedness in respect of the Term Credit Agreement;
(m) Indebtedness consisting of performance bonds or surety or
appeal bonds provided by the Borrower or any of its Subsidiaries in the
ordinary course of business and which do not secure other Indebtedness;
(n) Indebtedness in respect of the Borrower Preferred Stock; and
(o) Other Indebtedness of the Borrower and its Domestic
Subsidiaries not to exceed, together with Indebtedness permitted pursuant to
clause (c) of this Section 7.1, $35,000,000 in aggregate principal amount
outstanding;
provided, however, that no Indebtedness otherwise permitted pursuant to clauses
(c), (d), (h), (j), and (o) above may be incurred if, immediately before or
after giving effect to the incurrence thereof, any Event of Default shall have
occurred and be continuing.
Section 7.2 Liens. The Borrower shall not, and shall not permit
any Subsidiary of Borrower to, create, assume, incur, permit or suffer to
exist, directly or indirectly, any Lien on any of its assets, whether now owned
or hereafter acquired, except Permitted Liens. The Borrower shall not, and
shall not permit any Subsidiary to, agree with any other Person that it shall
not create, assume, incur, permit or suffer to exist or to be created, assumed,
incurred or permitted to exist, directly or indirectly, any Lien on any of its
assets other than in respect of Indebtedness permitted by Sections 7.1(c) and
(h) hereof, provided that such agreement relates only to the assets purchased
or acquired.
Section 7.3 Investments. The Borrower shall not, and shall not
permit any Subsidiary of Borrower to, make any Investment, except that the
Borrower and any Subsidiary of the Borrower may purchase or otherwise acquire
and own:
(a) Cash and Cash Equivalents;
(b) Accounts receivable that arise in the ordinary course of
business and are payable in a manner consistent with past practices;
(c) Investments in existence on the Agreement Date which are
described on Schedule 6 hereto;
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(d) Investments which are Acquisitions permitted pursuant to
Section 7.6 hereof;
(e) Investments in the form of Hedge Agreements permitted by
Section 7.1(e) hereof;
(f) Investments in (i) Domestic Subsidiaries of the Borrower (A)
which have executed a Subsidiary Guaranty and Collateral Documents granting a
first priority Lien in all unencumbered assets of such Subsidiary required by
the Determining Lenders to be pledged, to secure the Obligations, (B) 100% of
whose Capital Stock shall be pledged to secure the Obligations and (C) which
have delivered to the Lenders such board resolutions, officer's certificates,
corporate and other documents and opinions of counsel as the Administrative
Agent shall reasonably request, (ii) Foreign Subsidiaries of the Borrower 65%
of whose Capital Stock shall be pledged to secure the Obligations and (iii) the
Borrower;
(g) Investments consisting of non-cash consideration received in
connection with a sale of assets permitted by Section 7.5 hereof not to exceed
$25,000,000 in aggregate amount outstanding at any time;
(h) Investments arising from transactions by the Borrower or any
of its Subsidiaries with customers or suppliers in the ordinary course of
business, including endorsements of negotiable instruments, debt obligations
and other investments received in connection with the bankruptcy or
reorganization of customers and suppliers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers;
(i) Loans or advances to directors, officers and employees of the
Borrower or any of its Subsidiaries that do not exceed $5,000,000 in aggregate
amount outstanding at any time; and
(j) Other Investments not to exceed $25,000,000 in aggregate
amount outstanding at any time;
provided, however, that no Investment otherwise permitted by clauses (d), (g),
(i) and (j) above shall be permitted to be made if, immediately before or after
giving effect thereto, any Event of Default shall have occurred and be
continuing.
Section 7.4 Liquidation, Merger. The Borrower shall not, and
shall not permit any Subsidiary of Borrower to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up, except that (i) a Subsidiary of the Borrower
may liquidate or dissolve into the Borrower or a Subsidiary of the Borrower
which is an Obligor, (ii) a Subsidiary of the Borrower which is not an Obligor
may liquidate or dissolve into the Borrower or a Subsidiary of the Borrower,
and (iii) a Subsidiary of the Borrower may dissolve if substantially all of its
assets have been conveyed pursuant to Section 7.5(e) hereof; or
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(b) enter into any merger or consolidation unless (i) with respect
to a merger or consolidation involving the Borrower, the Borrower shall be the
surviving corporation, (ii) with respect to a merger or consolidation involving
a Subsidiary of the Borrower which is an Obligor and not the Borrower, such
Subsidiary shall be the surviving corporation, or such merger or consolidation
shall be a part of an Acquisition permitted by Section 7.6 hereof or part of a
disposition permitted by Section 7.5 hereof, (iii) such transaction shall not
be utilized to circumvent compliance with any term or provision herein and (iv)
no Default or Event of Default shall then be in existence or occur as a result
of such transaction.
Section 7.5 Sales of Assets. The Borrower shall not, and shall
not permit any of its Subsidiaries to, sell, transfer or otherwise dispose of,
any of its assets except (a) inventory in the ordinary course of business, (b)
obsolete or worn-out assets, (c) asset sales in which the Net Cash Proceeds
from the disposition thereof (to the extent not applied pursuant to clause (f)
immediately following) are reinvested, within 270 days after such disposition,
in productive tangible assets used in the business of the Borrower and its
Subsidiaries, and provided that the aggregate amount of Net Cash Proceeds
outstanding and pending reinvestment pursuant to this clause (c) shall not
exceed $5,000,000 at any time, (d) assets (i) obtained as a result of mergers,
consolidations and Acquisitions permitted under this Agreement and (ii) that
are unnecessary to the business operations of the Borrower and its
Subsidiaries, including those assets acquired in the Fieldcrest Xxxxxx
Transaction and set forth on Schedule 10 hereto, (e) sales and dispositions (i)
from any of the Borrower's Domestic Subsidiaries to the Borrower or any of its
Domestic Subsidiaries or any of the Borrower's Foreign Subsidiaries of which at
least 65% of whose Capital Stock has been pledged to secure the Obligations and
(ii) from any of its Foreign Subsidiaries to the Borrower or any of its
Subsidiaries, and (f) asset sales the Net Cash Proceeds of which are applied in
accordance with Section 2.5(b) of the Term Credit Agreement.
Section 7.6 Acquisitions. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make any Acquisitions; provided, however, if
(a) immediately prior to and after giving effect to the proposed Acquisition
there shall not exist a Default or Event of Default and (b) immediately after
giving effect to the proposed transaction the Revolver Availability shall be no
less than $40,000,000, the Borrower or any of its Subsidiaries may make
Acquisitions so long as (i) such Acquisition shall not be opposed by the board
of the directors of the Person being acquired, (ii) the Lenders shall have
received written notice thereof at least 15 Business Days prior to the date of
such Acquisition, (iii) the Administrative Agent shall have received at least
10 Business Days prior to the date of such Acquisition a Compliance Certificate
setting forth the covenant calculations both immediately prior to and after
giving effect to the proposed Acquisition, (iv) the assets, property or
business acquired shall be in the business described in Section 4.1(d) hereof
and the Administrative Agent for the benefit of the Lenders shall have a first
priority Lien (subject to the Intercreditor Agreement) in substantially all of
such assets (or, if less than substantially all of such assets, such assets
required by the Determining Lenders to be pledged), except for Permitted Liens,
(v) if such Acquisition results in a Domestic Subsidiary, (A) such Subsidiary
shall execute a Subsidiary Guaranty of the Obligations and Collateral Documents
granting a first priority Lien (subject to the Intercreditor Agreement) in
substantially all of such assets (or, if less than substantially all of such
assets, all assets required by the
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Determining Lenders to be pledged), except for Permitted Liens to secure the
Obligations, (B) 100% of such Subsidiary's Capital Stock shall be pledged to
secure the Obligations and (C) the Administrative Agent on behalf of the
Lenders shall have received such board resolutions, officer's certificates and
opinions of counsel as the Administrative Agent shall reasonably request in
connection with the actions described in clauses (A) and (B) above, and (vi) if
such Acquisition results in a direct Foreign Subsidiary, (A) 65% of such
Subsidiary's Capital Stock shall be pledged to secure the Obligations and (B)
the Administrative Agent on behalf of the Lenders shall have received such
board resolutions, officer's certificates and opinions of counsel as the
Administrative Agent shall reasonably request in connection with clause (A)
immediately preceding.
Section 7.7 Capital Expenditures. The Borrower shall not, and
shall not permit any of its Subsidiaries to, make or commit to make any Capital
Expenditures after the Agreement Date in an aggregate amount in excess of an
amount equal to the sum of (a) $175,000,000 plus (b) 3.25% of cumulative net
revenues of the Borrower and its Subsidiaries from and after the Agreement
Date.
Section 7.8 Restricted Payments. The Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly declare,
pay or make any Restricted Payments except (a) Dividends payable by a
Subsidiary to the Borrower or another Subsidiary that is an Obligor or to a
Foreign Subsidiary of the Borrower of which at least 65% of its Capital Stock
has been pledged to secure the Obligations, (b) Dividends payable by the
Borrower the aggregate amount of which during any Fiscal Year do not exceed
$10,000,000, (c) cash paid in respect of the redemption of the Fieldcrest
Xxxxxx Subordinated Debentures, (d) purchases, redemptions, retirements or
acquisitions of Indebtedness in respect of the 11-1/4% Senior Subordinated
Debentures Due 2004 of Fieldcrest Xxxxxx, (e) the refinancing of the Bridge
Notes and (f) purchases, redemptions, retirements or acquisitions of the
Borrower Preferred Stock, provided that the consideration therefor consists
solely of Net Cash Proceeds from the issuance of Capital Stock of the Borrower;
provided, however, the Borrower shall not pay or make any Restricted Payments
permitted by this Section 7.8 unless there shall exist no Default or Event of
Default prior to or after giving effect to any such proposed Restricted
Payment.
Section 7.9 Affiliate Transactions. The Borrower shall not, and
shall not permit any of its Subsidiaries to, at any time engage in any
transaction with an Affiliate (other than the Borrower or any of its
Subsidiaries) on terms materially less advantageous to the Borrower or such
Subsidiary than would be the case if such transaction had been effected with a
non-Affiliate. The Borrower shall not, and shall not permit any of its
Subsidiaries to, in any event incur or suffer to exist any Indebtedness or
Guaranty in favor of any Affiliate, unless such Affiliate shall subordinate the
payment and performance thereof to the Obligations on terms, conditions and
documentation satisfactory to the Determining Lenders.
Section 7.10 Compliance with ERISA. The Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, or permit
any member of its Controlled Group to directly or indirectly, (a) terminate any
Plan so as likely to result in liability to the Borrower
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or any member of its Controlled Group taken as a whole which could reasonably
be expected to have a Material Adverse Effect, (b) permit to exist any ERISA
Event, or any other event or condition with respect to a Plan which could
reasonably be expected to have a Material Adverse Effect, (c) make a complete
or partial withdrawal (within the meaning of Section 4201 of ERISA) from any
Multiemployer Plan which could reasonably be expected to have a Material
Adverse Effect on the Borrower or any member of its Controlled Group taken as a
whole, or (d) enter into any new Plan or modify any existing Plan so as to
increase its obligations thereunder which could reasonably be expected to have
a Material Adverse Effect.
Section 7.11 Maximum Leverage Ratio. At the end of each Fiscal
Quarter occurring during the periods indicated below, the Borrower shall not
permit the Leverage Ratio to be greater than the ratio set forth below opposite
the period in which such Fiscal Quarter occurs:
Period Ratio
------ -----
From and including the last Fiscal Quarter of Fiscal Year 1997 to but not 5.75 to 1
including the last Fiscal Quarter of Fiscal Year 1998
From and including the last Fiscal Quarter of Fiscal Year 1998 to but not 5.25 to 1
including the last Fiscal Quarter of Fiscal Year 1999
From and including the last Fiscal Quarter of Fiscal Year 1999 to but not 4.75 to 1
including the last Fiscal Quarter of Fiscal Year 2000
From and including the last Fiscal Quarter of Fiscal Year 2000 and thereafter 4.25 to 1
Section 7.12 Minimum Fixed Charge Coverage Ratio. At the end of
each Fiscal Quarter occurring during this Agreement commencing with the first
Fiscal Quarter of Fiscal Year 1998, the Borrower shall not permit the Fixed
Charge Coverage Ratio to be less than 1.10 to 1.
Section 7.13 Minimum Net Worth. The Borrower shall not permit the
Net Worth at any time to be less than the sum of (a) the amounts set forth
opposite the respective periods below, plus (b) an amount equal to the net
worth of any Person that, on or after the Agreement Date becomes a Subsidiary
of the Borrower or any of its Subsidiaries or is merged into or consolidated
with the Borrower or any of its Subsidiaries or substantially all of the assets
of which are acquired by the Borrower or any of its Subsidiaries to the extent
that the purchase price therefore is paid in Capital Stock of the Borrower or
any of its Subsidiaries, plus (c) an amount equal to 100% of any increase in
Net Worth pursuant to offerings of Capital Stock of the Borrower or any of its
Subsidiaries or pursuant to the conversion or exchange of any convertible
subordinated debt or redeemable preferred stock into Capital Stock of the
Borrower or any of its Subsidiaries (excluding in both (b) and (c) above any
such increase as a result of the Fieldcrest Xxxxxx Transaction):
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Period Amount
------ ------
From the Agreement Date to but not including the last Fiscal Quarter of $250,000,000
Fiscal Year 1998
From and including the last Fiscal Quarter of Fiscal Year of 1998 to but $260,000,000
not including the last Fiscal Quarter of Fiscal Year 1999
From and including the last Fiscal Quarter of Fiscal Year 1999 to but not $280,000,000
including the last Fiscal Quarter of Fiscal Year 2000
From and including the last Fiscal Quarter of Fiscal Year 2000 to but not $300,000,000
including the last Fiscal Quarter of Fiscal Year 2001
From and including the last Fiscal Quarter of Fiscal Year 2001 to but not $320,000,000
including the last Fiscal Quarter of Fiscal Year 2002
From and including the last Fiscal Quarter of Fiscal Year 2002 and $340,000,000
thereafter
Section 7.14 Sale or Discount of Receivables. The Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
sell, with or without recourse, for discount or otherwise, any notes or
accounts receivable.
Section 7.15 Business. Neither the Borrower nor any Subsidiary of
the Borrower shall conduct any business other than the business described in
Section 4.1(d) hereof.
Section 7.16 Fiscal Year. Neither the Borrower nor any of its
Subsidiaries shall change its Fiscal Year.
Section 7.17 Amendment of Organizational Documents. The Borrower
shall not, and shall not permit any Subsidiary of the Borrower to, amend its
articles of incorporation, bylaws or other applicable organizational documents
in any manner that could reasonably be expected to result in a Material Adverse
Effect.
Section 7.18 Amendments and Waivers of Institutional Debt. The
Borrower shall not, and shall not permit any Subsidiary to, change or amend (or
take any action or fail to take any action the result of which is an effective
amendment or change) or accept any waiver or consent with respect to, any
document, instrument or agreement relating to any Institutional Debt that would
result in (a) an increase in the principal, interest, overdue interest, fees or
other amounts payable under the Institutional Debt, (b) an acceleration in any
date fixed for payment or prepayment of principal, interest, fees or other
amounts payable under the Institutional Debt
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(including, without limitation, as a result of any redemption), (c) a reduction
in any percentage of holders of the Institutional Debt required under the terms
of the Institutional Debt to take (or refrain from taking) any action under the
Institutional Debt, (d) a change in the definition of "Change of Control" or
"Change in Control" or similar event or circumstance, however defined or
designated, as provided in the Institutional Debt which would result in such
definition being more restrictive than such definition in this Agreement, (e) a
change in any of the subordination provisions of the Institutional Debt, (f) a
change in any covenant, term or provision in the Institutional Debt which would
result in such term or provision being more restrictive than the terms of this
Agreement and the other Loan Documents or (g) a change in any term or provision
of the Institutional Debt that could have, in any material respect, an adverse
effect on the interest of the Lenders.
Section 7.19 Foreign Subsidiaries. Notwithstanding anything in
this Agreement to the contrary, the Borrower shall not, and shall not permit
any Subsidiary to, create or acquire any Foreign Subsidiary on or after the
Agreement Date.
ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event, and whether
voluntary, involuntary, or effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under any Loan Document
shall prove to have been incorrect or misleading in any material respect when
made;
(b) The Borrower shall fail to pay any (i) principal under any
Note when due; or (ii) interest under any Note or any fees payable hereunder or
any other costs, fees, expenses or other amounts payable hereunder or under any
other Loan Document within the earlier of (A) three Business Days after the
date due or (B) one Business Day after written notice thereof from the
Administrative Agent;
(c) The Borrower or any Subsidiary shall default in the
performance or observance of any agreement or covenant contained in Article 7
hereof;
(d) Any Obligor or any Foreign Subsidiary shall default in the
performance or observance of any other agreement or covenant contained in this
Agreement not specifically referred to elsewhere in this Section 8.1, and such
default shall not be cured within a period of thirty days after the earlier of
notice from the Administrative Agent thereof or actual notice thereof by a
Responsible Officer of any Obligor or such Foreign Subsidiary;
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(e) Any Obligor or any Foreign Subsidiary shall default in the
performance or observance of any agreement or covenant in any of the Loan
Documents (other than this Agreement) and such default shall not be cured
within a period of thirty days after the earlier of notice from the
Administrative Agent thereof or actual notice thereof by a Responsible Officer
of any Obligor or such Foreign Subsidiary;
(f) There shall be commenced an involuntary proceeding or an
involuntary petition shall be filed in a court having competent jurisdiction
seeking (i) relief in respect of any Obligor or any Foreign Subsidiary (other
than any Foreign Subsidiary whose aggregate book value of assets does not
exceed $1,000,000), or a substantial part of the property or the assets of such
Obligor or such Foreign Subsidiary, under Title 11 of the United States Code,
as now constituted or hereafter amended, or any other applicable Federal, state
or foreign bankruptcy law or other similar law, (ii) the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator or similar
official of any Obligor or any such Foreign Subsidiary, or of any substantial
part of their respective properties, or (iii) the winding- up or liquidation of
the affairs of any Obligor or any such Foreign Subsidiary, and any such
proceeding or petition shall continue unstayed and in effect for a period of 60
consecutive days;
(g) Any Obligor or any Foreign Subsidiary shall (i) file a
petition, answer or consent seeking relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other applicable Federal,
state or foreign bankruptcy law or other similar law, (ii) consent to the
institution of proceedings thereunder or to the filing of any such petition or
to the appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of any Obligor or
any Foreign Subsidiary or of substantially all of its properties, (iii) file an
answer admitting the material allegations filed against it in any such
proceeding, (iv) make a general assignment for the benefit of creditors, (v)
become unable, admit in writing its inability, or fail generally, to pay its
debts as they become due, or (vi) any Obligor or any Foreign Subsidiary shall
take any corporate action in furtherance of any such action;
(h) A final judgment or judgments shall be entered by any court
against any Obligor or any Foreign Subsidiary for the payment of money which
exceeds $200,000 in the aggregate, or a warrant of attachment or execution or
similar process shall be issued or levied against property of any Obligor or
any Foreign Subsidiary which, together with all other such property of the
Obligors and the Foreign Subsidiaries subject to other such process, exceeds in
value $200,000 in the aggregate, and if such judgment or award is not insured
or, within 45 days after the entry, issue or levy thereof, such judgment,
warrant or process shall not have been paid or discharged or stayed pending
appeal, or if, after the expiration of any such stay, such judgment, warrant or
process shall not have been paid or discharged;
(i) With respect to any Plan of the Borrower or any member of its
Controlled Group: (i) the Borrower, any such member, or any other
party-in-interest or disqualified person (other than any Lender) shall engage
in transactions which in the aggregate would reasonably be expected to result
in a direct or indirect liability to the Borrower or any member of its
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Controlled Group under Section 409 or 502 of ERISA or Section 4975 of the Code;
(ii) the Borrower or any member of its Controlled Group shall incur any
accumulated funding deficiency, as defined in Section 412 of the Code, or
request a funding waiver from the Internal Revenue Service for contributions;
(iii) the Borrower or any member of its Controlled Group shall incur any
withdrawal liability as a result of a complete or partial withdrawal within the
meaning of Section 4203 or 4205 of ERISA, or any other liability with respect
to a Plan, unless the amount of such liability has been funded within the Plan
or pursuant to one or more insurance contracts; (iv) the Borrower or any member
of its Controlled Group shall fail to make a required contribution by the due
date under Section 412 of the Code or Section 302 of ERISA which would result
in the imposition of a lien under Section 412 of the Code or Section 302 of
ERISA; (v) the Borrower, any member of its Controlled Group or any Plan sponsor
shall notify the PBGC of an intent to terminate, or the PBGC shall institute
proceedings to terminate, or the PBGC shall institute proceedings to terminate,
any Plan subject to Title IV of ERISA; (vi) a Reportable Event shall occur with
respect to a Plan subject to Title IV of ERISA, and within 15 days after the
reporting of such Reportable Event to the Administrative Agent, the
Administrative Agent shall have notified the Borrower in writing that the
Determining Lenders have made a determination that, on the basis of such
Reportable Event, there are reasonable grounds for the termination of such Plan
by the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer such Plan and as a result thereof an Event of
Default shall have occurred hereunder; (vii) a trustee shall be appointed by a
court of competent jurisdiction to administer any Plan or the assets thereof;
or (viii) any ERISA Event with respect to a Plan subject to Title IV of ERISA
shall have occurred, and 30 days thereafter (A) such ERISA Event, other than
such event described in clause (f) of the definition of ERISA Event herein, (if
correctable) shall not have been corrected and (B) the then present value of
such Plan's benefit liabilities, as defined in Title IV of ERISA, shall exceed
the then current value of assets accumulated in such Plan; provided, however,
that the events listed in subsections (i) - (viii) above shall constitute
Events of Default only if the maximum aggregate liability which the Borrower or
any member of its Controlled Group has a reasonable likelihood of incurring
under the applicable provisions of ERISA resulting from an event or events (A)
could reasonably be expected to have a Material Adverse Effect or (B) if
capitalized as Indebtedness on the Financial Statements of the Borrower, would
result in an Event of Default under Section 7.11 hereof.
(j) Any Obligor or any Foreign Subsidiary shall fail to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) with respect to any Indebtedness in excess
of $5,000,000 beyond any grace period provided with respect thereto, or any
other event or condition shall exist under any agreement or instrument under
which such Indebtedness is created or evidenced beyond any applicable grace
period, if the effect of such event or condition is to permit or cause the
holder of such Indebtedness (or a trustee on behalf of any such holder) to (i)
cause such Indebtedness to become due or prepaid prior to its date of maturity
or (ii) require the any Obligor or any Foreign Subsidiary to purchase, prepay
or redeem such Indebtedness;
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(k) Except as a result of transactions permitted by this
Agreement, any real property lease where the Borrower or any Subsidiary of the
Borrower is the lessee shall terminate or cease to be effective, and
termination or cessation thereof, together with all other real property leases,
if any, which have been terminated or cease to be effective, could reasonably
be expected to have a Material Adverse Effect; provided, however, that
termination or cessation of a real property lease shall not constitute an Event
of Default if another real property lease reasonably satisfactory to the
Administrative Agent is contemporaneously substituted therefor;
(l) Any provision of any Loan Document shall for any reason cease
to be valid and binding on or enforceable against any party to it (other than
the Administrative Agent, the Collateral Agent, or any Lender) in any material
respect other than in accordance with its terms or as the appropriate parties
under Section 11.11 hereof may otherwise agree in writing, and other than as a
result of an action or inaction by the Administrative Agent, the Collateral
Agent, any Lender or any representative thereof, or any such party (other than
the Administrative Agent, the Collateral Agent, or any Lender) shall so assert
in writing;
(m) Any Collateral Document shall for any reason cease to create a
valid and perfected first priority Lien (subject to the Intercreditor
Agreement) in any Collateral subject thereto, other than as (i) expressly
provided or permitted in such Collateral Document or in this Agreement, or (ii)
a result of an action or inaction by the Administrative Agent, the Collateral
Agent, any Lender or any representative thereof;
(n) A Change of Control shall occur;
(o) An Event of Default (as defined in the Term Credit Agreement)
shall occur; or
(p) Total assets owned by all Foreign Subsidiaries shall exceed 3%
of the aggregate amount of assets owned by the Borrower and its Subsidiaries.
Section 8.2 Remedies. If an Event of Default shall have occurred
and shall be continuing:
(a) With the exception of an Event of Default specified in Section
8.1(f) or (g) hereof, the Administrative Agent may at its election (provided
that the Administrative Agent has not previously received notice to the
contrary from the Determining Lenders), and shall upon the direction of the
Determining Lenders, but subject to the Intercreditor Agreement, terminate the
Commitment and/or by written notice to the Borrower declare the principal of
and interest on the Advances and all Obligations and other amounts owed under
the Loan Documents to be forthwith due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived, except
for notices expressly set forth in the Loan Documents.
(b) Upon the occurrence of an Event of Default specified in
Section 8.1(f) or (g) hereof, such principal, interest and other amounts shall
thereupon and concurrently therewith
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become due and payable and the Commitment shall forthwith terminate, all
without any action by the Administrative Agent, any Lender or any holders of
the Notes and without presentment, demand, protest or other notice of any kind,
all of which are expressly waived, anything in the Loan Documents to the
contrary notwithstanding.
(c) If any Letter of Credit shall be then outstanding, the
Administrative Agent may at its election, and shall upon the direction of the
Determining Lenders, make demand upon the Borrower to, and forthwith upon such
demand (but in the case of an Event of Default specified in Section 8.1(f) or
(g) hereof, without any demand or taking of any other action by the
Administrative Agent or any Lender), the Borrower shall, pay to the
Administrative Agent in same day funds at the office of the Administrative
Agent for deposit in the L/C Cash Collateral Account, an amount equal to the
maximum amount available to be drawn under the Letters of Credit then
outstanding.
(d) Subject to the Intercreditor Agreement, the Administrative
Agent and the Lenders may exercise all of the Rights granted to them under the
Loan Documents or under Applicable Law.
(e) The Rights of the Administrative Agent and the Lenders
hereunder shall be cumulative, and not exclusive.
ARTICLE 9
Changes in Circumstances
Section 9.1 LIBOR Basis Determination Inadequate. If with
respect to any proposed LIBOR Advance for any Interest Period, (i) any Lender
determines that deposits in dollars (in the applicable amount) are not being
offered to that Lender in the relevant market for such Interest Period or (ii)
the Determining Lenders determine that the LIBOR Rate for such proposed LIBOR
Advance does not adequately and fairly reflect the cost to such Lender of
making and maintaining such proposed LIBOR Advance for such Interest Period,
such Lender or Determining Lenders, as the case may be, shall forthwith give
prompt notice thereof to the Borrower, whereupon until such Lender or
Determining Lenders, as the case may be, notify the Borrower that the
circumstances giving rise to such situation no longer exist, the obligation of
such Lender to make LIBOR Advances shall be suspended; provided, however, such
Lender or the Determining Lenders, as the case may be, shall promptly notify
the Borrower if the circumstances giving rise to such situation no longer
exist.
Section 9.2 Illegality. If after the Agreement Date any change
or phase-in of applicable law, rule or regulation, or adoption thereof, or any
change in any interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its LIBOR Lending
Office) with any request or directive (whether or not having the force of law)
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of any such authority, central bank or comparable agency, shall make it
unlawful or impossible for such Lender (or its LIBOR Lending Office) to make,
maintain or fund its LIBOR Advances, such Lender shall promptly so notify the
Borrower and the Administrative Agent. Before giving any notice to the
Borrower pursuant to this Section, the notifying Lender shall designate a
different LIBOR Lending Office or other lending office if such designation will
avoid the need for giving such notice and will not, in the reasonable judgment
of the Lender, be disadvantageous to the Lender. Upon receipt of such notice,
notwithstanding anything contained in Article 2 hereof, the Borrower shall
repay in full the then outstanding principal amount of each LIBOR Advance owing
to the notifying Lender, together with accrued interest thereon and any
reimbursement required under Section 2.9 hereof, on either (a) the last day of
the Interest Period applicable to such Advance, if the Lender may lawfully
continue to maintain and fund such Advance to such day, or (b) immediately, if
the Lender may not lawfully continue to fund and maintain such Advance to such
day or if the Borrower so elects. Concurrently with repaying each affected
LIBOR Advance owing to such Lender if the Borrower does not terminate this
Agreement, notwithstanding anything contained in Article 2 hereof, the Borrower
may, without any requirement to satisfy the conditions precedent set forth in
Section 3.1, 3.2 or 3.3, borrow a Base Rate Advance from such Lender, and such
Lender shall make such Base Rate Advance, in an amount such that the
outstanding principal amount of the Advances owing to such Lender shall equal
the outstanding principal amount of the Advances owing immediately prior to
such repayment.
Section 9.3 Increased Costs.
(a) If after the Agreement Date any change, phase-in or adoption
of any law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof or
compliance by any Lender (or its LIBOR Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or compatible agency:
(i) shall subject a Lender (or its LIBOR Lending Office)
to any Tax (net of any tax benefit engendered thereby) with respect to
its LIBOR Advances or its obligation to make such Advances, or shall
change the basis of taxation of payments to a Lender (or to its LIBOR
Lending Office) of the principal of or interest on its LIBOR Advances
or in respect of any other amounts due under this Agreement, as the
case may be, or its obligation to make such Advances (except for
changes in (A) the rate of tax on the overall net income, net worth or
capital of the Lender and franchise taxes, doing business taxes or
minimum taxes imposed upon such Lender, (B) withholding taxes of any
Tribunal other than the United States of America or any state thereof
and (C) taxes referred to in clauses (ii), (iii) and (iv) of Section
2.13 hereof); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account
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of, or credit extended by, a Lender's LIBOR Lending Office or shall
impose on the Lender (or its LIBOR Lending Office) or on the London
interbank market any other condition affecting its LIBOR Advances or
its obligation to make such Advances (but excluding any reserves or
deposits that are included in the calculation of LIBOR Basis);
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to
reduce the amount of any sum received or receivable by a Lender (or its LIBOR
Lending Office) with respect thereto, by an amount deemed by a Lender to be
material ("Increased Advance Costs"), then, within 30 days after demand by a
Lender, the Borrower agrees to pay to such Lender such additional amount as
will compensate such Lender for such Increased Advance Costs, subject to
Section 11.9 hereof; provided, however, that the Borrower shall not be required
to comply with this Section 9.3 to the extent the Borrower has complied with
Section 2.13 hereof with respect to Taxes described in Section 9.3(a)(i)
hereof. The affected Lender will as soon as practicable notify the Borrower of
any event of which it has knowledge, occurring after the date hereof, which
will entitle such Lender to compensation pursuant to this Section and will
designate a different LIBOR Lending Office or other lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the reasonable judgment of the affected Lender made in good
faith, be disadvantageous to such Lender. Notwithstanding the foregoing, any
Lender's demand for Increased Advance Costs shall not include any Increased
Advance Costs with respect to any period more than 180 days prior to the date
that such Lender gives notice to the Borrower of such Increased Advance Costs
unless the effective date of the condition which results in the right to
receive Increased Advance Costs is retroactive (the "Increased Advance Costs
Retroactive Effective Date"). If any Increased Advance Costs has an Increased
Advance Costs Retroactive Effective Date and any Lender demands compensation
within 180 days after the date setting the Increased Advance Costs Retroactive
Date Effective Date (the "Increased Advance Costs Set Date"), such Lender shall
have the right to receive such Increased Advance Costs from the Increased
Advance Retroactive Effective Date. If a Lender does not demand such Increased
Advance Costs within 180 days after the Increased Advance Costs Set Date, such
Lender may not receive payment of Increased Advance Costs with respect to any
period more than 180 days prior to such demand.
(b) A certificate of any Lender claiming compensation under this
Section and setting forth the additional amounts to be paid to it hereunder
shall certify that such amounts or costs were actually incurred by such Lender
and shall show in reasonable detail an accounting of the amount payable and the
calculations used to determine in good faith such amount and shall be
controlling absent demonstrable error. In determining such amount, a Lender
may use any reasonable averaging and attribution methods. Nothing in this
Section 9.3 shall provide the Borrower or any of its Subsidiaries the right to
inspect the records, files or books of any Lender. If a Lender demands
compensation under this Section, the Borrower may at any time, upon at least
five Business Days' prior notice to the Lender, after reimbursement to the
Lender by the Borrower in accordance with this Section of all costs incurred,
prepay in full the then outstanding LIBOR Advances of the Lender, together with
accrued interest thereon to the date of prepayment, along with any
reimbursement required under Section 2.9 hereof. Concurrently
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with prepaying such LIBOR Advances, the Borrower may, without any requirement
to satisfy the conditions precedent set forth in Section 3.1, 3.2 or 3.3,
borrow a Base Rate Advance from the Lender, and the Lender shall make such Base
Rate Advance, in an amount such that the outstanding principal amount of the
Advances owing to such Lender shall equal the outstanding principal amount of
the Advances owing immediately prior to such prepayment.
Section 9.4 Effect On Base Rate Advances. If notice has been
given pursuant to Section 9.1, 9.2 or 9.3 hereof suspending the obligation of a
Lender to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be
repaid or prepaid, then, unless and until the Lender notifies the Borrower that
the circumstances giving rise to such repayment no longer apply, all Advances
which would otherwise be made by such Lender as LIBOR Advances shall be made
instead as Base Rate Advances.
Section 9.5 Capital Adequacy. If (a) the phase-in or the
introduction of or any change in or in the interpretation of any law, rule or
regulation after the Agreement Date or (b) compliance by a Lender with any Law
or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) adopted, promulgated or
phased-in after the Agreement Date (any of such events in clauses (a) and (b)
herein being referred to as a "Regulatory Modification") affects or would
affect the amount of capital required or expected to be maintained by a Lender
or any corporation controlling such Lender, and such Lender determines that the
amount of such capital is increased by or based upon the existence of such
Lender's commitment or Advances hereunder and other commitments or advances of
such Lender of this type, then, within 20 days after demand by such Lender,
subject to Section 11.9, the Borrower shall immediately pay to such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender with respect to such circumstances (collectively,
"Additional Costs"), to the extent that such Lender reasonably determines in
good faith such increase in capital to be allocable to the existence of such
Lender's commitments hereunder to the extent not compensated for in the Base
Rate Basis or in the LIBOR Rate Basis or in amounts paid by the Borrower
pursuant to Section 9.3 hereof. Notwithstanding the foregoing, any Lender's
demand for Additional Costs shall not include any Additional Costs with respect
to any period more than 180 days prior to the date that such Lender gives
notice to the Borrower of such Additional Costs unless the effective date of
the Regulatory Modification which results in the right to receive Additional
Costs is retroactive (the "Regulatory Modification Retroactive Effective
Date"). If any Regulatory Modification has a Regulatory Modification
Retroactive Effective Date and any Lender demands compensation within 180 days
after the date setting the Regulatory Modification Retroactive Effective Date
(the "Regulatory Modification Set Date"), such Lender shall have the right to
receive such Additional Costs from the Regulatory Modification Retroactive
Effective Date. If a Lender does not demand such Additional Costs within 180
days after the Regulatory Modification Set Date, such Lender may not receive
payment of Additional Costs with respect to any period more than 180 days prior
to such demand. A certificate as to such amounts submitted to the Borrower by
a Lender hereunder shall, in the absence of demonstrable error, be controlling
and binding for all purposes. A certificate as to any additional amounts
payable to any Lender under this Section 9.5 submitted to the Borrower by such
Lender shall certify that such amounts were
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actually incurred by such Lender or corporation controlling such Lender and
shall show in reasonable detail an accounting of the amount payable and the
calculations used to determine in good faith such amount and shall be
controlling absent demonstrable error. In determining such amount, such Lender
or a corporation controlling such Lender may use any reasonable averaging and
attribution methods. Notwithstanding the foregoing, nothing in this Section
9.5 shall provide the Borrower or any Subsidiary of the Borrower the right to
inspect the records, files or books of any Lender or any corporation
controlling such Lender.
Section 9.6 Replacement Lender. If the Borrower becomes
obligated to pay additional amounts to any Lender described in Section 9.2, 9.3
or 9.5, the Borrower may (a) reduce the Commitment in the full amount of such
Lender's Specified Percentage of the Commitment and repay such Lender in full
(including all amounts owed to such Lender under Section 9.2, 9.3 or 9.5
hereof) or (b) designate a financial institution reasonably acceptable to the
Administrative Agent to replace such Lender by purchasing for cash and
receiving an assignment of such Lender's pro rata share of such Lender's
obligations under the Loan Documents and the Rights of such Lender under the
Loan Documents without recourse to or warranty by, or expense to, such Lender,
for a purchase price equal to the outstanding amounts owing to such Lender
(including such additional amounts owing to such Lender pursuant to Section 9.3
or 9.5). Upon execution of an Assignment Agreement, such other financial
institution shall be deemed to be a "Lender" for all purposes of this Agreement
as set forth in Section 11.6 hereof. If any Lender is acquired by or merges
with any other Person (including any other Lender) and (i) such Lender is not
the surviving Person and (ii) there exists no Default or Event of Default
hereunder, the Borrower may replace such Lender in whole with another Eligible
Assignee reasonably acceptable to the Administrative Agent pursuant to an
Assignment Agreement within thirty days following the date of consummation of
any such acquisition or merger. If the Commitment is reduced by the Borrower
pursuant to Section 9.6(a), the Borrower and the Lenders agree that the
Specified Percentage of each Lender will be automatically adjusted.
Section 9.7 Replacement by the Borrower of a Lender.
(a) Acquired Lender. If any lender is acquired by or merges with
any other Person (including any other Lender) and (i) such lender is not the
surviving Person, and (ii) there exists no Default or Event of Default
hereunder, the Borrower may replace such Lender in whole with another Eligible
Assignee reasonably acceptable to the Administrative Agent pursuant to an
Assignment Agreement within thirty days following the date of consummation of
any such acquisition or merger.
(b) Certain Circumstances. If (i) there exists no Default or
Event of Default on any such date and no Default or Event of Default shall be
caused by the action permitted below and (ii) any Lender refuses to consent to
any amendment, waiver or consent to any provision hereof or in any Loan
Documents in accordance with the terms of Section 11.11 hereof (other than an
amendment to increase the Commitment of such Lender), but to which each other
Lender has previously agreed, then, the Borrower may, within 90 days after the
date of such consent,
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amendment or waiver, replace such Lender in whole with another Eligible
Assignee, pursuant to an Assignment Agreement.
ARTICLE 10
Agreement Among Lenders
Section 10.1 Agreement Among Lenders. The Lenders agree among
themselves that:
(a) Administrative Agent. Each Lender hereby appoints the
Administrative Agent as its nominee in its name and on its behalf, to receive
all documents and items to be furnished hereunder; to act as nominee for and on
behalf of all Lenders under the Loan Documents; to, except as otherwise
expressly set forth herein, take such action as may be requested by the
Determining Lenders, provided that, (i) unless and until the Administrative
Agent shall have received such requests, the Administrative Agent may take such
administrative action, or refrain from taking such administrative action, as it
may deem advisable and in the best interests of the Lenders, and (ii) the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to any Loan
Document or Applicable Law; to arrange the means whereby the proceeds of the
Advances of the Lenders are to be made available to the Borrower; to distribute
promptly to each Lender information, requests and documents received from the
Borrower, and each payment (in like funds received) with respect to any of such
Lender's Advances, or the ratable amount of fees or other amounts; and to
deliver to the Borrower requests, demands, approvals and consents received from
the Lenders. The Administrative Agent agrees to promptly distribute to each
Lender, at such Lender's address set forth below information, requests,
documents and payments received from the Borrower. The Administrative Agent
shall have no trustee or other fiduciary relationship in respect of any Lender
by reason of this Agreement or any other Loan Document. The Administrative
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement. The duties of the Administrative Agent are mechanical and
administrative in nature.
(b) Replacement of Administrative Agent. Should the
Administrative Agent or any successor Administrative Agent ever cease to be a
Lender hereunder, or should the Administrative Agent or any successor
Administrative Agent ever resign as Administrative Agent, or should the
Administrative Agent or any successor Administrative Agent ever be removed with
cause or without cause by the action of the Determining Lenders (other than the
Administrative Agent), then the Lender appointed by the other Lenders (provided
that no Event of Default shall have occurred and be continuing, with the
consent of the Borrower, which consent shall not be unreasonably withheld)
shall forthwith become the Administrative Agent, and the Borrower and the
Lenders shall execute such documents as any Lender may reasonably request to
reflect such change at no cost to the Borrower. If the Administrative Agent
also then serves in the capacity of the Swing Line Bank or the Issuing Bank,
such resignation or removal shall constitute resignation or removal of the
Swing Line Bank and the Issuing Bank and the
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successor Administrative Agent shall serve in the capacity of the Swing Line
Bank and the Issuing Bank. Any resignation or removal of the Administrative
Agent or any successor Administrative Agent shall become effective upon the
appointment by the Lenders of a successor Administrative Agent from among the
other Lenders; provided, however, if no successor Administrative Agent shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Administrative Agent's giving of notice of resignation or
the Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders and, provided that no Event
of Default shall have occurred and be continuing, with the consent of the
Borrower, which consent shall not be unreasonably withheld, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the Laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as the Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations under the Loan Documents, provided that if the retiring
or removed Administrative Agent is unable to appoint a successor Administrative
Agent, the Administrative Agent shall, after the expiration of a 60 day period
from the date of notice, be relieved of all obligations as Administrative Agent
hereunder. Notwithstanding any Administrative Agent's resignation or removal
hereunder, the provisions of this Article shall continue to inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Agreement.
(c) Expenses. Each Lender shall pay its pro rata share, based on
its Specified Percentage, of any reasonable expenses paid by the Administrative
Agent directly and solely in connection with any of the Loan Documents (other
than expenses for which the Administrative Agent has received compensation in
the form of the fees set forth in the Administrative Agent Fee Letter) if the
Administrative Agent does not receive reimbursement therefor from other sources
within 60 days after the date incurred. Any amount so paid by the Lenders to
the Administrative Agent shall be returned by the Administrative Agent pro rata
to each paying Lender to the extent later paid by the Borrower or any other
Person on the Borrower's behalf to the Administrative Agent.
(d) Delegation of Duties. The Administrative Agent may execute
any of its duties hereunder by or through officers, directors, employees,
attorneys or agents, and shall be entitled to (and shall be protected in
relying upon) advice of counsel concerning all matters pertaining to its duties
hereunder.
(e) Reliance by Administrative Agent. The Administrative Agent
and its officers, directors, employees, attorneys and agents shall be entitled
to rely and shall be fully protected in relying on any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telex or
teletype message, statement, order, or other document or conversation
reasonably believed by it or them in good faith to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinions of
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counsel selected by the Administrative Agent. The Administrative Agent may, in
its reasonable judgment, deem and treat the payee of any Note as the owner
thereof for all purposes hereof.
(f) Limitation of Administrative Agent's Liability. Neither the
Administrative Agent nor any of its officers, directors, employees, attorneys
or agents shall be liable for any action taken or omitted to be taken by it or
them hereunder in good faith and believed by it or them to be within the
discretion or power conferred to it or them by the Loan Documents or be
responsible for the consequences of any error of judgment, except for its or
their own gross negligence or willful misconduct. Except as aforesaid, the
Administrative Agent shall be under no duty to enforce any rights with respect
to any of the Advances, or any security therefor. The Administrative Agent
shall not be compelled to do any act hereunder or to take any action towards
the execution or enforcement of the powers hereby created or to prosecute or
defend any suit in respect hereof, unless indemnified to its reasonable
satisfaction against loss, cost, liability and expense. The Administrative
Agent shall not be responsible in any manner to any Lender for the
effectiveness, enforceability, genuineness, validity or due execution of any of
the Loan Documents, or for any representation, warranty, document, certificate,
report or statement made herein or furnished in connection with any Loan
Documents, or be under any obligation to any Lender to ascertain or to inquire
as to the performance or observation of any of the terms, covenants or
conditions of any Loan Documents on the part of the Borrower or any other
Obligor. TO THE EXTENT NOT REIMBURSED BY THE BORROWER, EACH LENDER HEREBY
SEVERALLY INDEMNIFIES AND HOLDS HARMLESS THE ADMINISTRATIVE AGENT, PRO RATA
ACCORDING TO ITS SPECIFIED PERCENTAGE, FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, REASONABLE EXPENSES AND/OR DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER WHICH MAY BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THE
ADMINISTRATIVE AGENT (IN SUCH CAPACITY) IN ANY WAY WITH RESPECT TO ANY LOAN
DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT UNDER THE
LOAN DOCUMENTS (INCLUDING ANY NEGLIGENT ACTION OF THE ADMINISTRATIVE AGENT),
EXCEPT TO THE EXTENT THE SAME ARE FINALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION TO RESULT FROM GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY THE
ADMINISTRATIVE AGENT. THE INDEMNITY PROVIDED IN THIS SECTION 10.1(f) SHALL
SURVIVE TERMINATION OF THIS AGREEMENT.
(g) Liability Among Lenders. No Lender shall incur any liability
(other than the sharing of expenses and other matters specifically set forth
herein and in the other Loan Documents) to any other Lender, except for acts or
omissions in bad faith.
(h) Rights as Lender. With respect to its commitment hereunder,
the Advances made by it and the Notes issued to it, the Administrative Agent
shall have the same rights as a Lender and may exercise the same as though it
were not the Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent or any Lender may accept
deposits
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from, act as trustee under indentures of, and generally engage in any kind of
business with, the Borrower and any of its Affiliates, and any Person who may
do business with or own securities of the Borrower or any of its Affiliates,
all as if the Administrative Agent were not the Administrative Agent hereunder
and without any duty to account therefor to the Lenders.
Section 10.2 Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent
or any other Lender and based upon the financial statements referred to in
Sections 4.1(j), 6.1, and 6.2 hereof, and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents. Each
Lender also acknowledges that its decision to fund the initial Advances shall
constitute evidence to the Administrative Agent that such Lender has deemed all
of the conditions set forth in Section 3.1 to have been satisfied.
Section 10.3 Benefits of Article. None of the provisions of this
Article shall inure to the benefit of any Person other than Lenders and, with
respect to Section 10.1(b), the Borrower; consequently, no such other Person
shall be entitled to rely upon, or to raise as a defense, in any manner
whatsoever, the failure of the Administrative Agent or any Lender to comply
with such provisions.
ARTICLE 11
Miscellaneous
Section 11.1 Notices.
(a) All notices and other communications under this Agreement
shall be in writing (except in those cases where giving notice by telephone is
expressly permitted) and shall be deemed to have been given on the date
personally delivered or sent by telecopy (answerback received), or three days
after deposit in the mail, designated as certified mail, return receipt
requested, postage-prepaid, or one day after being entrusted to a reputable
commercial overnight delivery service, addressed to the party to which such
notice is directed at its address determined as provided in this Section. All
notices and other communications under this Agreement shall be given to the
parties hereto at the following addresses:
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(i) If to the Borrower, at:
Pillowtex Corporation
0000 Xxxx Xxx
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(ii) If to the Administrative Agent, at:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(iii) If to a Lender, at its address shown below its name
on the signature pages hereof, or if applicable, set
forth in its Assignment Agreement.
(b) Any party hereto may change the address to which notices shall
be directed by giving 10 days' written notice of such change to the other
parties.
Section 11.2 Expenses. The Borrower shall promptly pay:
(a) all reasonable out-of-pocket expenses of the Administrative
Agent in connection with the preparation, negotiation, execution and delivery
of this Agreement and the other Loan Documents, the transactions contemplated
hereunder and thereunder, and the making of Advances hereunder, including
without limitation the reasonable fees and disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses, including reasonable
attorneys' fees, of the Administrative Agent in connection with the
transactions contemplated in this Agreement and the other Loan Documents and
the preparation, negotiation, execution and delivery of any waiver, amendment
or consent by the Administrative Agent relating to this Agreement or the other
Loan Documents; and
(c) all reasonable out-of-pocket costs, expenses and attorneys'
fees of the Administrative Agent and each Lender incurred for enforcement,
collection, restructuring, refinancing and "work-out", or otherwise incurred in
obtaining performance under the Loan Documents, which in each case shall
include without limitation reasonable fees and expenses of consultants, counsel
for the Administrative Agent and any Lender.
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Section 11.3 Waivers. The rights and remedies of the Lenders
under this Agreement and the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies which they would otherwise have. No
failure or delay by the Administrative Agent or any Lender in exercising any
right shall operate as a waiver of such right. The Lenders expressly reserve
the right to require strict compliance with the terms of this Agreement in
connection with any funding of a request for an Advance. In the event that any
Lender decides to fund an Advance at a time when the Borrower is not in strict
compliance with the terms of this Agreement, such decision by such Lender shall
not be deemed to constitute an undertaking by the Lender to fund any further
requests for Advances or preclude the Lenders from exercising any rights
available under the Loan Documents or at law or equity. Any waiver or
indulgence granted by the Lenders shall not constitute a modification of this
Agreement, except to the extent expressly provided in such waiver or
indulgence, or constitute a course of dealing by the Lenders at variance with
the terms of the Agreement such as to require further notice by the Lenders of
the Lenders' intent to require strict adherence to the terms of the Agreement
in the future. Any such actions shall not in any way affect the ability of the
Administrative Agent or the Lenders, in their discretion, to exercise any
rights available to them under this Agreement or under any other agreement,
whether or not the Administrative Agent or any of the Lenders are a party
thereto, relating to the Borrower.
Section 11.4 Calculation by the Lenders Conclusive and Binding.
Any mathematical calculation required or expressly permitted to be made by the
Administrative Agent or any Lender under this Agreement shall be controlling,
absent demonstrable error.
Section 11.5 Set-Off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence and during the continuation of an Event of Default, each
Lender and any subsequent holder of any Note, and any assignee of any Note,
subject to the Intercreditor Agreement, is hereby authorized by the Borrower at
any time or from time to time, without notice to the Borrower or any other
Person, any such notice being hereby expressly waived, to set-off, appropriate
and apply any deposits (general or special (except trust and escrow accounts),
time or demand, including without limitation Indebtedness evidenced by
certificates of deposit, in each case whether matured or unmatured) and any
other Indebtedness at any time held or owing by such Lender or holder to or for
the credit or the account of the Borrower, against and on account of the
Obligations and other liabilities of the Borrower to such Lender or holder,
irrespective of whether or not (a) the Lender or holder shall have made any
demand hereunder, or (b) the Lender or holder shall have declared the principal
of and interest on the Advances and other amounts due hereunder to be due and
payable as permitted by Section 8.2 hereof (but after each set-off such Lender
shall promptly notify the Administrative Agent and the Borrower). Any sums
obtained by any Lender or by any assignee or subsequent holder of any Note
shall, subject to the Intercreditor Agreement, be subject to pro rata
treatment of all Obligations and other liabilities hereunder in accordance with
each Specified Percentage.
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Section 11.6 Assignment.
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Documents without the prior
written consent of the Lenders.
(b) No Lender shall be entitled to assign or grant a participation
in its interest in this Agreement, its Notes or its Advances, except as
hereinafter set forth.
(c) Each Lender may sell participations to one or more banks or
other entities (the "Participants") in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Advances or Reimbursement Obligations owing to it and the Note
or Notes held by it) (the "Participations"); provided, however, that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Specified Percentage of the Commitment) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
any such Note for all purposes of this Agreement, (iv) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, (v) no Participant under any such
Participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by the Borrower
therefrom, except to the extent that such amendment, waiver or consent would
(A) reduce or postpone any date fixed for payment of principal of, or interest
on, the Notes or any fees or other amounts payable hereunder (B) increase the
commitment of any Participant or (C) release any Collateral or security for the
Obligations, except pursuant to the Loan Documents, in each case to the extent
subject to such Participation, and (vi) no Participation shall be in an amount
less than $5,000,000. The Lenders may, subject to Section 11.14 hereof,
provide copies of all financial information received from the Borrower to such
Participants.
(d) Each Lender may assign to one or more Eligible Assignees its
rights and obligations under this Agreement and the other Loan Documents;
provided, however, that (i) each such assignment shall be subject to the prior
written consent of the Administrative Agent and Borrower, which consents shall
not be unreasonably withheld (provided, however, notwithstanding anything
herein to the contrary, no consent of the (A) Borrower is required for any
assignment (x) during any time that an Event of Default has occurred and is
continuing, (y) to an Affiliate of a Lender and (z) to another Lender hereunder
and (B) Administrative Agent is required for any assignment (y) to an Affiliate
of a Lender and (z) to another Lender hereunder), (ii) no such assignment
(including any simultaneous assignment pursuant to the Term Credit Agreement)
shall be in an amount less than $5,000,000, unless the commitment (including
any commitment under the Amended and Restated Credit Agreement) of a Lender is
less than $5,000,000, in which case such assignment may be in the aggregate
amount of such Lender's Specified Percentage of the Commitment, (iii) the
applicable Lender, Administrative Agent, the Borrower and Eligible Assignee
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance Agreement (an "Assignment Agreement") in substantially the form of
Exhibit E hereto, together with the Notes subject to such assignment and (iv)
the Eligible
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Assignee executing the Assignment, shall deliver to the Administrative Agent a
processing fee of $3,500 (less any processing fee paid in respect of a
simultaneous assignment under the Term Credit Agreement). Upon such execution,
delivery and acceptance from and after the effective date specified in each
Assignment, which effective date shall be at least three Business Days after
the execution thereof and the recordation of the information therein in the
Register pursuant to Section 11.6(j) hereof, (A) the Eligible Assignee
thereunder shall be party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment, have the rights
and obligations of a Lender hereunder and (B) the applicable Lender shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such assignment, relinquish such rights and be released from such
obligations under this Agreement; provided, however, the indemnity provided
such Lender in Section 5.9 hereof shall survive such assignment.
(e) Notwithstanding anything in clause (d) above to the contrary,
(i) any Lender may assign and pledge all or any portion of its Advances and
Notes to any Federal Reserve Bank as collateral security pursuant to Regulation
A of F.R.S. Board and any Operating Circular issued by such Federal Reserve
Bank and (ii) any Lender that is a fund may at any time assign or pledge all or
any portion of its rights under this Agreement to secure such Lender's
indebtedness; provided, however, that no such assignment under this clause (e)
shall release the assignor Lender from its obligations hereunder.
(f) Upon its receipt of an Assignment Agreement executed by a
Lender and an Eligible Assignee, and any Note or Notes subject to such
assignment, the Borrower shall, subject to the Borrower's rights under Section
11.6(d), within five Business Days after its receipt of such Assignment
Agreement execute and deliver to the Administrative Agent in exchange for the
surrendered Notes new Notes to the order of such Eligible Assignee in an amount
equal to the portion of the Advances and the Specified Percentage of the
Commitment assigned to it pursuant to such Assignment Agreement and new Notes
to the order of the assignor Lender in an amount equal to the portion of the
Advances and the Specified Percentage of the Commitment retained by it
hereunder. Such new Notes shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Notes, shall be dated the
effective date of such Assignment Agreement and shall otherwise be in
substantially the form of Exhibit A hereto.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.6, disclose to the Eligible Assignee or Participant or proposed Eligible
Assignee or participant, any information relating to the Borrower furnished to
such Lender by or on behalf of the Borrower, provided such Person agrees in
writing to handle such information in accordance with the standards set forth
in Section 11.14 hereof.
(h) Except as specifically set forth in this Section 11.6, nothing
in this Agreement or any other Loan Documents, expressed or implied, is
intended to or shall confer on any Person other than the respective parties
hereto and thereto and their successors and assignees permitted
- 89 -
96
hereunder and thereunder any benefit or any legal or equitable right, remedy or
other claim under this Agreement or any other Loan Documents.
(i) Notwithstanding anything in this Section 11.6 to the contrary,
no Eligible Assignee or Participant (nor the assigning or participating Lender)
shall be entitled to receive (whether individually or collectively) any greater
payment under Section 2.14 or Section 9.3 or Section 9.5 than such assigning or
participating Lender or any other Lender would have been entitled to receive
with respect to the interest assigned or participated to such Eligible Assignee
or Participant.
(j) The Administrative Agent shall maintain at its address
referred to in Section 11.1 a copy of each Assignment Agreement delivered to
and accepted by it and a register (the "Register") for the recordation of the
names and addresses of the Lenders, any U.S. taxpayer identification number,
the Specified Percentages of the Lenders (the "Ownership Information"), whether
such Lender is an original Lender or the assignee of another Lender pursuant to
an Assignment Agreement and the effective date and the amount of each
Assignment Agreement delivered to and accepted by it and the parties thereto.
Any transfer of an ownership interest in any Advance, including any right to
principal or interest payable with respect to such Advance, shall be subject to
and conditioned upon the due recordation of such transfer and the Ownership
Information with respect to the transferee in the Register and such transfer
shall be effective only upon such recordation (and not prior thereto), which
recordation the Administrative Agent agrees to make. The entries in the
Register shall be controlling and binding for all purposes, absent demonstrable
error, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for
all purposes hereof. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
Section 11.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.
Section 11.8 Severability. Any provision of this Agreement or any
other Loan Document which is for any reason prohibited or found or held invalid
or unenforceable by any court or governmental agency shall be ineffective to
the extent of such prohibition or invalidity or unenforceability without
invalidating the remaining provisions hereof or thereof in such jurisdiction or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 11.9 Interest and Charges. It is not the intention of any
parties to this Agreement to make an agreement in violation of the laws of any
applicable jurisdiction relating to usury. Regardless of any provision in any
Loan Documents, no Lender shall ever be entitled to charge, receive, collect or
apply, as interest on the Obligations, any amount in excess of the Highest
Lawful Rate. If any Lender or participant ever receives, collects or applies,
as interest, any such excess, such amount which would be excessive interest
shall be deemed a partial
- 90 -
97
repayment of principal and treated hereunder as such; and if principal is paid
in full, any remaining excess shall be paid to the Borrower. In determining
whether or not the interest paid or payable, under any specific contingency,
exceeds the Highest Lawful Rate, the Borrower and the Lenders shall, to the
maximum extent permitted under Applicable Law, (a) characterize any
nonprincipal payment as an expense, fee or premium rather than as interest, (b)
exclude voluntary prepayments and the effect thereof, and (c) amortize,
prorate, allocate and spread in equal parts, the total amount of interest
throughout the entire contemplated term of the Obligations so that the interest
rate is uniform throughout the entire term of the Obligations; provided,
however, that if the Obligations are paid and performed in full prior to the
end of the full contemplated term thereof, and if the interest received for the
actual period of existence thereof exceeds the Highest Lawful Rate, the Lenders
shall refund to the Borrower the amount of such excess or credit the amount of
such excess against the total principal amount of the Obligations owing, and,
in such event, the Lenders shall not be subject to any penalties provided by
any laws for contracting for, charging or receiving interest in excess of the
Highest Lawful Rate. This Section shall control every other provision of all
agreements pertaining to the transactions contemplated by or contained in the
Loan Documents.
Section 11.10 Headings. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 11.11 Amendment and Waiver. Subject to the Intercreditor
Agreement, the provisions of this Agreement may not be amended, modified or
waived except by the written agreement of the Borrower and the Determining
Lenders; provided, however, that no such amendment, modification or waiver
shall be made (a) without the consent of all Lenders, if it would (i) increase
the amount of the Commitment, (ii) change the Specified Percentage or
commitment of any Lender, or (iii) extend or postpone the date of maturity of,
extend the due date for any payment of principal or interest on, reduce the
amount of any installment of principal or interest on, or reduce the rate of
interest on, any Advance, the Reimbursement Obligations or other amount owing
under any Loan Documents to which such Lender is entitled or (iv) release any
guaranty of the Obligations or all or substantially all of the Collateral
(except, in any case, pursuant to this Agreement or the other Loan Documents),
or (v) reduce the fees payable hereunder to which such Lender is entitled, or
(vi) revise this Section 11.11, or (vii) waive or extend the date for payment
or prepayment of any principal, interest or fees hereunder or (vii) amend the
definition of "Determining Lenders" or "Specified Percentage", (b) without the
consent of the Administrative Agent, if it, would alter the rights, duties or
obligations of the Administrative Agent; (c) without the consent of the Issuing
Bank, if it would alter the rights, duties or obligations of the Issuing Bank;
or (d) without the consent of the Swing Line Bank, if it would alter the
rights, duties or obligations of the Swing Line Bank. Neither this Agreement
nor any term hereof may be amended orally, nor may any provision hereof be
waived orally but only by an instrument in writing signed by the Administrative
Agent and, in the case of an amendment, by the Borrower.
Section 11.12 Exception to Covenants. Neither the Borrower nor any
of its Subsidiaries shall be deemed to be permitted to take any action or fail
to take any action which is permitted
- 91 -
98
as an exception to any of the covenants contained herein or which is within the
permissible limits of any of the covenants contained herein if such action or
omission would result in the breach of any other covenant contained herein.
Section 11.13 No Liability of Issuing Bank. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither the
Issuing Bank nor any Lender nor any of their respective officers or directors
shall be liable or responsible for: (a) the use that may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by the Issuing Bank against presentation of documents that do not
comply with the terms of a Letter of Credit, including failure of any documents
to bear any reference or adequate reference to the Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against the
Issuing Bank, and the Issuing Bank shall be liable to the Borrower, to the
extent of any direct, but not consequential, damages suffered by the Borrower
that a court of competent jurisdiction finally judicially determines were
caused by (i) the Issuing Bank's willful misconduct or gross negligence or (ii)
the Issuing Bank's willful failure to make lawful payment under a Letter of
Credit after the presentation to it of a draft and certificates strictly
complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
Section 11.14 Confidentiality. Each Lender and the Administrative
Agent agrees (on behalf of itself and each of its Affiliates, directors,
officers, employees and representatives) to use reasonable efforts to keep
confidential, in accordance with customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking or
investment practices, any non-public information supplied to it by the Borrower
or any of its Affiliates pursuant to this Agreement, provided that nothing
herein shall limit the disclosure of any such information (a) to the extent
required by statute, rule, regulation or judicial process, (b) to counsel for
any Lender or the Administrative Agent, (c) to bank or other examiners,
regulatory bodies, auditors or accountants of any Lender, (d) to the
Administrative Agent or any other Lender or any Affiliate thereof, (e) in
connection with any Litigation relating to the transactions contemplated by the
Loan Documents to which any one or more of Lenders is a party, (f) to the
extent necessary in connection with the exercise of any Right under this
Agreement or any other Loan Document, or (g) to any Eligible Assignee or
Participant (or prospective Eligible Assignee or Participant) or to any direct
or indirect contractual counterparties in swap agreements or to the
professional advisors of such swap counterparties so long as such Eligible
Assignee or Participant (or prospective Eligible Assignee or Participant) or
direct or indirect contractual counterparties in swap agreements or such swap
counterparties' professional advisors agrees to handle such information in
accordance with the provisions of this Section 11.14.
- 92 -
99
Section 11.15 Amendment, Restatement, Extension, Renewal and
Increase. This Agreement is a renewal, extension, amendment, increase and
restatement of the Existing Credit Agreement, and is not (i) a novation of the
"Obligations" (as defined in the Existing Credit Agreement) or (ii) a
satisfaction and discharge of such Obligations replaced by a new credit
facility. All terms and provisions of this Agreement supersede in their
entirety the Existing Credit Agreement. All Liens covering the Collateral, or
any part thereof, executed in connection with the Existing Credit Agreement
shall remain valid, binding and enforceable Liens against the Persons which
granted such Liens.
SECTION 11.16 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS (WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS) AND THE
UNITED STATES OF AMERICA. THE LOAN DOCUMENTS ARE PERFORMABLE IN DALLAS COUNTY,
TEXAS, AND THE BORROWER AND EACH SURETY, GUARANTOR, ENDORSER AND ANY OTHER
PARTY EVER LIABLE FOR PAYMENT OF ANY MONEY PAYABLE WITH RESPECT TO THE LOAN
DOCUMENTS, JOINTLY AND SEVERALLY WAIVE THE RIGHT TO BE SUED ELSEWHERE. WITHOUT
EXCLUDING ANY OTHER JURISDICTION, THE BORROWER AGREES THAT THE STATE AND
FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS, SHALL HAVE JURISDICTION OVER
PROCEEDINGS IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND
HEREBY SUBMITS WITH RESPECT TO ITSELF AND ITS PROPERTY TO THE JURISDICTION OF
ANY SUCH COURT FOR THE PURPOSE OF ANY SUIT, ACTION, PROCEEDING OR JUDGMENT
RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 11.17 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY
AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS
PROVISION IS A MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THIS AGREEMENT
AND MAKING ANY ADVANCES HEREUNDER.
SECTION 11.18 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER
WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES REGARDING THE SUBJECT MATTER HEREIN AND THEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE
- 93 -
100
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
- 94 -
101
IN WITNESS WHEREOF, this Credit Agreement is executed as of the date first
set forth above.
BORROWER: PILLOWTEX CORPORATION
By: /s/ J. XXXX XXXXXXXXXXX
----------------------------------
J. Xxxx Xxxxxxxxxxx
Vice President & Treasurer
102
ADMINISTRATIVE AGENT: NATIONSBANK OF TEXAS, N.A., as
Administrative Agent
By: /s/ XXXXXXX X. XXXXX
----------------------------------
Xxxxxxx X. Xxxxx
Vice President
LENDERS: NATIONSBANK OF TEXAS, N.A., as a
Lender, Swing Line Bank and Issuing Bank
By: /s/ XXXXXXX X. XXXXX
----------------------------------
Xxxxxxx X. Xxxxx
Vice President
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxx
000
XXXX XX XXXXXXX XX&XX
By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Name: XXXXX X. XXXXXXXX
--------------------------------
Title: MANAGING DIRECTOR
-------------------------------
000 Xxxxx XxXxxxx Xxxxxx, 0X
Xxxxxxx, Xxxxxxxx 00000
Attn:
-----------------------------
000
XXX XXXX XX XXXX XXXXXX
ATLANTA AGENCY
By: /s/ F.C.H. XXXXX
-------------------------------------
Name: F.C.H. XXXXX
--------------------------------
Title: SENIOR MANAGER LOAN OPERATIONS
-------------------------------
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: F.C.H. Xxxxx
105
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ XXXXX XXXXXX
----------------------------------
Xxxxx Xxxxxx
Vice President
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx
106
COMERICA BANK
By: /s/ XXX X. XXXXXXXX
----------------------------------
Name: XXX X. XXXXXXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxxxxx
107
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ XXXXXX XXXXXXXXX
----------------------------------
Name: XXXXXX XXXXXXXXX
-----------------------------
Title: SENIOR VICE PRESIDENT
----------------------------
0000 Xxxx Xxxxxx, Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxx
108
XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By: /s/ XXXX XX XXXX
----------------------------------
Name: XXXX XX XXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xx Xxxx
109
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ XXXXX X. XXXXXX
----------------------------------
Name: XXXXX X. XXXXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
0000 Xxxx Xxxxxx, XX 000
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx
000
XXXX XXX, XXXXX, N.A.
By: /s/ XXXXX XXXX
----------------------------------
Name: XXXXX XXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxx
111
BANKBOSTON, N.A.
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------
Name: XXXXXXX X. XXXXXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
112
BHF-BANK AKTIENGESELLSCHAFT
By: /s/ XXXX XXXXX /s/ XXXXXX X. XXXXX
---------------------------------------
Name: XXXX XXXXX XXXXXX X. XXXXX
----------------------------------
Title: AVP AVP
---------------------------------
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx X. Xxxxx
113
FIRST UNION NATIONAL BANK
By: /s/ XXXXXX X. XXXX
----------------------------------
Name: XXXXXX X. XXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxxxx
114
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ XXXXX X. XXXXX
----------------------------------
Name: XXXXX X. XXXXX
-----------------------------
Title: DULY AUTHORIZED SIGNATORY
----------------------------
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attn: Xxxxx Xxxxx
115
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH
By: /s/ W. XXXXXX X. XXXXX
----------------------------------
Name: W. XXXXXX X. XXXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
By: /s/ XXXX X. XXXXXXXX
----------------------------------
Name: XXXX X. XXXXXXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Services Department
with a copy to:
Rabobank Nederland
One Galleria Tower
00000 Xxxx Xxxx, Xxxx Xxx 00
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxx
116
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ XXXXX X. XXXXXX
----------------------------------
Name: XXXXX X. XXXXXX
-----------------------------
Title: ASSISTANT TREASURER
----------------------------
By: /s/ XXXXXXXXXXX X. XXXXXX
----------------------------------
Name: XXXXXXXXXXX X. XXXXXX
-----------------------------
Title: V.P. AND MANAGER
----------------------------
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx
000
XXX XXXX XX XXX XXXX
By: /s/ XXXXXX X. XXXXX
----------------------------------
Name: XXXXXX X. XXXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
118
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE
By: /s/ XXXXXX XXXXXX
----------------------------------
Name: XXXXXX XXXXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
By: /s/ XXXX XXXXXXX
----------------------------------
Name: XXXX XXXXXXX
-----------------------------
Title: FIRST VICE PRESIDENT
----------------------------
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxx
119
CREDITANSTALT BANKVEREIN
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------
Name: XXXXXX X. XXXXXXXX
-----------------------------
Title: EXECUTIVE V.P.
----------------------------
By: /s/ XXXX X. XXXXXX
----------------------------------
Name: XXXX X. XXXXXX
-----------------------------
Title: SENIOR ASSOCIATE
----------------------------
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxx
120
FLEET BANK, N.A.
By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Xxxxx X. Xxxxxxxx
Senior Vice President
1185 Avenue of the Americas, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx
121
THE FUJI BANK, LTD. - HOUSTON AGENCY
By: /s/ XXXXXX X. XXXXXXXX III
----------------------------------
Name: XXXXXX X. XXXXXXXX III
-----------------------------
Title: VICE PRESIDENT & MANAGER
----------------------------
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxx Fort
000
XXXXXXXX XXXX XX XXXXXX
By: /s/ XXXXX X. XXXXX
----------------------------------
Name: XXXXX X. XXXXX
-----------------------------
Title: GROUP VICE PRESIDENT
----------------------------
By: /s/ XXXX X. XXXXX
----------------------------------
Name: XXXX X. XXXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
0000 Xxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxxx
000
XXXXXXXX XXXX XXXX XX XXXXXXXX
By: /s/ XXX X. XXXXXX
----------------------------------
Xxx X. Xxxxxx
Vice President
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxx X. Xxxxxx
124
EXHIBIT A
REVOLVING CREDIT NOTE
Dallas, Texas $___________ December 19, 1997
PILLOWTEX CORPORATION, a Texas corporation (the "Borrower"), for value
received, promises to pay to the order of __________________________________
("Lender") or its registered assigns, at the principal office of NationsBank of
Texas, N.A., in lawful money of the United States of America, the principal sum
of _________________________________________________________ ($_____________),
or such lesser sum as shall be due and payable from time to time hereunder, as
hereinafter provided. All capitalized terms used but not defined herein shall
have the meanings set forth in the Credit Agreement described below.
Principal of and interest on the unpaid principal balance of Revolving
Credit Advances under this Revolving Credit Note (this "Note") from time to
time outstanding shall be due and payable as set forth in the Credit Agreement.
This Note is issued pursuant to and evidences Revolving Credit
Advances under an Amended and Restated Credit Agreement, dated as of December
19, 1997, among the Borrower, NationsBank of Texas, N.A., as Administrative
Agent, and the lenders parties thereto (as amended, restated, supplemented,
renewed, extended or otherwise modified from time to time, "Credit Agreement"),
to which reference is made for a statement of the rights and obligations of the
Lender and the duties and obligations of the Borrower in relation thereto; but
neither this reference to the Credit Agreement nor any provision thereof shall
affect or impair the absolute and unconditional obligation of the Borrower to
pay the principal sum of and interest on this Note when due.
THIS NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW), AND OF THE UNITED STATES OF AMERICA. THE
BORROWER AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS,
TEXAS SHALL HAVE JURISDICTION OVER THE PROCEEDINGS IN CONNECTION WITH THIS NOTE
AND THE OTHER LOAN DOCUMENTS.
THIS NOTE, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR
125
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
PILLOWTEX CORPORATION
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
- 2 -
126
EXHIBIT B
================================================================================
SECURITY AGREEMENT
Between
-----------------------------------
as Debtor
and
NATIONSBANK OF TEXAS, N.A.
as Collateral Agent
December 19, 1997
================================================================================
127
TABLE OF CONTENTS
Page
----
ARTICLE 1
Grant
-----
Section 1.1 Assignment and Grant of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
--------------------------------
Section 1.2 Description of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
--------------------------
Section 1.3 Debtor Remains Liable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
---------------------
Section 1.4 Delivery of Security and Instrument Collateral . . . . . . . . . . . . . . . . . . . . . . 6
----------------------------------------------
ARTICLE 2
Representations and Warranties
------------------------------
Section 2.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
------------------------------
ARTICLE 3
Covenants
---------
Section 3.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
------------------
Section 3.2 Equipment, Fixtures and Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
---------------------------------
Section 3.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
---------
Section 3.4 Place of Perfection; Records; Collection of Receivables, Chattel
-----------------------------------------------------------------
Paper and Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------------------
Section 3.5 Transfers and Other Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-------------------------
Section 3.6 Rights to Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-------------------------------------
Section 3.7 Right of the Collateral Agent to Notify Issuers . . . . . . . . . . . . . . . . . . . . . . 12
-----------------------------------------------
Section 3.8 The Collateral Agent Appointed Attorney-in-Fact . . . . . . . . . . . . . . . . . . . . . . 13
-----------------------------------------------
ARTICLE 4
Rights and Powers of the Collateral Agent
-----------------------------------------
Section 4.1 The Collateral Agent May Perform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
--------------------------------
Section 4.2 The Collateral Agent's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-----------------------------
Section 4.3 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
--------
Section 4.4 Further Approvals Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
--------------------------
SECTION 4.5 INDEMNITY AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
----------------------
128
ARTICLE 5
Miscellaneous
-------------
Section 5.1 Cumulative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-----------------
Section 5.2 Modifications; Amendments; Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
------------------------------
Section 5.3 Continuing Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
----------------------------
SECTION 5.4 GOVERNING LAW; TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
--------------------
Section 5.5 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
--------------------
Section 5.6 The Collateral Agent's Right to Use Agents . . . . . . . . . . . . . . . . . . . . . . . . 19
------------------------------------------
Section 5.7 Waivers of Rights Inhibiting Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . 19
----------------------------------------
Section 5.8 Notices and Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
----------------------
(a) Manner of Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
------------------
(b) Addresses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
---------
Section 5.9 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
----------------------
Section 5.10 Loan Document . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
-------------
Section 5.11 Consent to Jurisdiction; Waiver of Immunities . . . . . . . . . . . . . . . . . . . . . . . 20
---------------------------------------------
Section 5.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
------------
Section 5.13 Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
------------------------
Section 5.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
------------
[SECTION 5.15 NO NOVATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-----------
Section 5.16 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
----------------
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SCHEDULES:
Schedule 1 - Equipment, and Inventory Locations
Schedule 2 - Trade Names
Schedule 3 - Restricted Accounts
Schedule 4 - Rolling Stock
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SECURITY AGREEMENT
SECURITY AGREEMENT (this "Agreement"), dated as of December 19, 1997,
made between _____________________________ , a _______ corporation (the
"Debtor"), and NationsBank of Texas, N.A., a national banking association, in
its capacity as collateral agent (the "Collateral Agent") for itself, each
lender (and affiliate thereof that has entered into a Hedge Agreement with any
Obligor (as defined in the Credit Agreements defined below)) a party to the
Amended and Restated Credit Agreement described below (the "Revolving
Lenders"), NationsBank of Texas, N.A., in its capacity as administrative agent
under the Amended and Restated Credit Agreement (the "Revolving Agent"), each
lender (and affiliate thereof that has entered into a Hedge Agreement with any
Obligor (as defined in the Credit Agreements defined below)) a party to the
Term Credit Agreement described below (the "Term Lenders"), and NationsBank of
Texas, N.A., in its capacity as administrative agent under the Term Credit
Agreement (the "Term Agent") (each singularly, a "Secured Party", and
collectively, the "Secured Parties").
BACKGROUND
(1) [The Debtor] ["Pillowtex Corporation, a Texas corporation (the
"Borrower")], the Revolving Agent and the Revolving Lenders entered into that
certain Amended and Restated Credit Agreement, dated as of December 19, 1997
(as amended, modified, supplemented or restated from time to time, the "Amended
and Restated Credit Agreement").
(2) [The Debtor] [the Borrower], the Term Agent and the Term
Lenders entered into that certain Term Credit Agreement, dated as of December
19, 1997 (as amended, modified, supplemented or restated from time to time, the
"Term Credit Agreement"). The Amended and Restated Credit Agreement and the
Term Credit Agreement are herein, collectively, the "Credit Agreements."
Capitalized terms used herein and not otherwise defined herein shall have the
meanings given to them in each of the Credit Agreements.
(3) It is the intention of the parties hereto that this Agreement
create a first priority security interest in certain property of the Debtor
securing the payment of the obligations set forth in Section 1.2 hereof,
subject only to Permitted Liens.
(4) It is a condition precedent to the obligation of the Revolving
Lenders and the Term Lenders, as appropriate, to make the Advances, and issue,
or participate in the issuance of, Letters of Credit under the Credit
Agreements that the Debtor shall have executed and delivered to the Collateral
Agent this Agreement.
131
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and in order to induce the Secured Parties, as
appropriate, to make the Advances and issue, or participate in the issuance of,
Letters of Credit under the Credit Agreements, the Debtor hereby agrees with
the Collateral Agent for its benefit and the ratable benefit of the other
Secured Parties, as hereinafter set forth.
ARTICLE 1
Grant
Section 1.1 Assignment and Grant of Security. The Debtor hereby
assigns, pledges, hypothecates and transfers to the Collateral Agent, for its
benefit and the ratable benefit of the other Secured Parties, and hereby grants
to the Collateral Agent, for its benefit and the ratable benefit of the other
Secured Parties, a security interest in, the entire right, title and interest
of the Debtor, in and to the following assets of the Debtor, whether now owned
or hereafter acquired ("Collateral"):
(a) all writings which evidence both a monetary obligation and a
security interest in or a lease of specific goods ("Chattel Paper");
(b) all documents, warehouse receipts, bills of lading, including,
without limitation, documents of title (as defined in the UCC) or other
receipts covering, evidencing or representing collateral ("Documents");
(c) all equipment (as defined in the UCC), and (whether or not
included in such definition) all vehicles, tractors, trailers, rolling stock,
machinery, chattels, tools, parts, furniture, furnishings, and supplies, of
every nature, wherever located, all additions, accessories and improvements
thereto and substitutions therefor and all accessories, parts and equipment
which may be attached to or which are necessary for the operation and use of
such personal property, whether or not the same shall be deemed to be affixed
to real property, together with all accessions thereto, and all rights under or
arising out of present or future contracts relating to the foregoing,
excluding, however, any such Equipment or other property which is financed with
Indebtedness permitted to be incurred pursuant to Section 7.1(c) or 7.1(h) of
the Credit Agreements ("Equipment");
(d) all fixtures and articles of personal property now or
hereafter attached to or used in or about any building or buildings now erected
or hereafter to be erected on any real property now or hereafter owned or
leased by the Debtor (the "Property"), which are necessary to the complete and
comfortable use and occupancy of such building or buildings for the purposes
for which they were or are to be erected; all materials to be delivered to the
Property and used or
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to be used in connection with the construction of any building to be
constructed on the Property, including, but not limited to, all masonry,
siding, roof shingles, flooring, doors, windows, tile, shutters, stoves, ovens,
awnings, screens, cabinets, shades, blinds, carpets, draperies, furniture,
furnishings, plumbing, heating, air conditioning, lighting, ventilating,
refrigerating, cooking, laundry and incinerating equipment and all fixtures and
appurtenances thereto, and such other goods and chattels and personal property
as are ever used or furnished in operating such buildings or the activities
conducted therein, and all building materials and equipment now or hereafter
delivered to the Property and intended to be installed thereon ("Fixtures");
(e) all general intangibles (as defined in the UCC), and (whether
or not included in such definition) all contract rights; all trade secrets,
inventions, processes, production methods, proprietary information and
know-how; and all licenses or other agreements granted to Debtor with respect
to any of the foregoing; all information, advertising lists, customer lists,
identification of suppliers, data, plans, blueprints, specifications, designs,
drawings, recorded knowledge, surveys, engineering reports, test reports,
manuals, materials standards, processing standards, performance standards,
telephone numbers and telephone listings, catalogs, books, records, computer
and automatic machinery software and programs, and the like pertaining to
operations by or the business of the Debtor; all field accounting information
and all media in which or on which any of the information or knowledge or data
or records may be recorded or stored and all computer programs used for the
compilation or printout of such information, knowledge, records or data; all
licenses, consents, permits, variances, certifications and approvals of all
Tribunals now or hereafter held by Debtor pertaining to operations or business
now or hereafter conducted; all rights to receive return of deposits and trust
payments; all rights to payment under letters of credit and similar agreements;
and all causes of action, rights, claims and warranties now or hereafter owned
or acquired by Debtor ("General Intangibles");
(f) all instruments and letters of credit (each as defined in the
UCC, and (whether or not included in such definitions) all promissory notes,
drafts, bills of exchange and trade acceptances ("Instruments");
(g) all inventory in all of its forms, wherever located, now or
hereafter existing, including, but not limited to, (i) all raw materials and
work in process therefor, finished goods thereof, and materials used or
consumed in the manufacture or production thereof, (ii) goods in which Debtor
has an interest in mass or a joint or other interest or right of any kind
(including, without limitation, goods in which the Debtor has an interest or
right as consignee but only to the extent of the Debtor's interest therein),
and (iii) goods which are returned to or repossessed by the Debtor, and all
accessions thereto and products thereof and documents therefor (any and all
such inventory, accessions, products and documents being the "Inventory");
(h) all accounts, contract rights, chattel paper, documents,
instruments, deposit accounts, general intangibles, tax refunds (including,
without limitation, all federal and state income tax refunds and benefits of
net operating loss carry forwards) and other obligations of any kind owing to
the Debtor, now or hereafter existing, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of services, and
all rights now or
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hereafter existing in and to all security agreements, leases, and other
contracts securing or otherwise relating to any such accounts, contract rights,
chattel paper, documents, instruments, deposit accounts, general intangibles or
obligations (any and all such accounts, contract rights, chattel paper,
documents, instruments, deposit accounts, general intangibles and obligations
being the "Receivables");
(i) all agreements with each manufacturer, vendor, sales agent,
sales representative and each other Person pursuant to which the Debtor
receives, maintains, sells, leases or otherwise disposes of Inventory,
including all agreements permitting the use of each such Person's name, logo,
trademarks, tradenames and advertising ("Vendor Agreements");
(j) all right, title and interest of the Debtor in, to and under
each contract and other agreement relating to the lease, sale or other
disposition of Collateral;
(k) all rights, claims and benefits of the Debtor against any
Person arising out of, relating to or in connection with Collateral purchased
by the Debtor, including, without limitation, any such rights, claims or
benefits against any Person storing or transporting such Collateral;
(l) the balance of every deposit account of the Debtor under
control of the Collateral Agent and each other Secured Party and any other
claim of Debtor against the Collateral Agent and each other Secured Party, now
or hereafter existing, liquidated or unliquidated, and all money, instruments,
securities, documents, chattel paper, credits, claims, demands, income, and any
other property, rights and interests of the Debtor which at any time shall come
into the possession or custody or under the control of the Collateral Agent or
any other Secured Party or any of its agents, affiliates or correspondents, for
any purpose, and the proceeds of any thereof (the Collateral Agent and each
other Secured Party shall be deemed to have possession of any of the Collateral
in transit to or set apart for it or any of its agents, affiliates or
correspondents).
(m) 100% of the issued and outstanding Capital Stock of each
Domestic Subsidiary of Debtor, together with all Dividends, cash, proceeds,
profits, instruments, distributions and other property from time to time
distributed in respect thereof, and any subscription rights or warrants to
acquire any interest in such Subsidiary;
(n) 65% of the issued and outstanding Capital Stock of each direct
Foreign Subsidiary of Debtor, together with all Dividends, cash, proceeds,
profits, instruments, distributions and other property from time to time
distributed in respect thereof and any subscription rights or warrants to
acquire any interest in such Subsidiary;
(o) all Fieldcrest Xxxxxx Transaction Documents;
(p) all insurance policies and bonds and claims and payments under
any Collateral;
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(q) all property similar to the above hereafter acquired by
Debtor; and
(r) all accessions to, substitutions for and replacements,
proceeds and products of any and all of the foregoing Collateral (including,
without limitation, proceeds which constitute property of the types described
in this Section 1.1) and, to the extent not otherwise included, all (i)
payments under insurance (whether or not the Collateral Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral and (ii)
cash.
Notwithstanding anything herein to the contrary, the Lien granted
herein shall not (a) cover or be effective with respect to any assets which are
subject to Liens set forth on Schedule 3 of the Credit Agreements and Liens
resulting from the refinancing of the related Indebtedness (provided, however,
if at any time such amounts are released from such Liens then the Lien granted
herein shall automatically cover such assets without any action being taken by
the Debtor, the Collateral Agent or any other Person), (b) cover or be
effective with respect to any contracts of the Debtor which contain a provision
that they may not be assigned without the consent of the other party thereto if
the Lien granted herein is deemed to be an assignment in violation of such
assignment provision[, and] (c) cover or be effective with respect to any
Inventory, Equipment or Accounts which are identified as Inventory, General
Intangibles, Equipment or Accounts of the Xxxxxxx Packing Division of
Fieldcrest Xxxxxx, Inc., provided that the aggregate sales price of such
Inventory, General Intangibles, Equipment and Accounts is not in excess of
$1,700,000[, and (d) cover or be effective with respect to the publicly traded
Capital Stock of Fieldcrest Xxxxxx, Inc. that is being purchased by Debtor
pursuant to the Fieldcrest Xxxxxx Transaction (which Capital Stock shall be
cancelled and reissued with Debtor as the registered owner thereof, which
reissued Capital Stock shall be pledged and subject to the Lien granted herein
in favor of the Collateral Agent].
Section 1.2 Description of Obligations. This Agreement creates
an enforceable security interest in the Collateral, subject only to Permitted
Liens, to secure the payment and performance of any and all obligations now or
hereafter existing of the Debtor and each other Obligor under the Credit
Agreements and the other Loan Documents, including any extensions,
modifications, substitutions, amendments and renewals thereof, whether for
principal, interest, fees, premium, expenses, reimbursement obligations,
indemnification or otherwise (all such obligations of the Debtor and each other
Obligor being the "Obligations"). Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts which constitute
part of the Obligations and would be owed by the Debtor and each other Obligor
to the Collateral Agent or any other Secured Party under any Loan Document, but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding under any Debtor Relief
Law involving the Debtor, any other Obligor or any other Person (including all
such amounts which would become due or would be secured but for the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding of Debtor, any other Obligor or any other
Person under any Debtor Relief Law). [NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IN ANY ACTION OR PROCEEDING INVOLVING ANY STATE CORPORATE LAW, OR ANY
STATE OR FEDERAL BANKRUPTCY, INSOLVENCY,
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REORGANIZATION OR OTHER LAW AFFECTING THE RIGHTS OF CREDITORS GENERALLY IF THE
LIENS GRANTED BY THE DEBTOR HEREIN SHALL BE HELD VOID, INVALID OR
UNENFORCEABLE, OR SUBORDINATED TO THE LIENS OR CLAIMS OF ANY OTHER CREDITORS,
ON ACCOUNT OF THE AMOUNT OF THE OBLIGATIONS SECURED BY SUCH LIENS, THEN, THE
AMOUNT OF THE OBLIGATIONS SECURED BY SUCH LIENS SHALL, WITHOUT ANY ACTION BY
THE DEBTOR, THE COLLATERAL AGENT, ANY OTHER SECURED PARTY OR ANY OTHER PERSONS,
BE AUTOMATICALLY LIMITED AND REDUCED TO THE HIGHEST AMOUNT THAT IS VALID AND
ENFORCEABLE AND NOT SUBORDINATED TO THE CLAIMS OF OTHER CREDITORS AS DETERMINED
IN SUCH ACTION OR PROCEEDING.]
Section 1.3 Debtor Remains Liable. Anything herein to the
contrary notwithstanding, (a) the Debtor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Collateral Agent of any of the rights hereunder shall not release the Debtor
from any of its duties or obligations under the contracts and agreements
included in the Collateral, and (c) neither the Collateral Agent nor any other
Secured Party shall have any obligation or liability under the contracts and
agreements included in the Collateral by reason of this Agreement, nor shall
the Collateral Agent or any other Secured Party be obligated to perform any of
the obligations or duties of the Debtor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
Section 1.4 Delivery of Security and Instrument Collateral. All
certificates or instruments representing or evidencing the Collateral shall be
delivered to and held by or on behalf of the Collateral Agent pursuant hereto
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form
and substance reasonably satisfactory to the Collateral Agent. The Collateral
Agent shall have the right, as provided in Section 3.6, and during the
continuance, of an Event of Default, but without any requirement for prior
written notice to the Debtor, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of such Collateral. In
addition, the Collateral Agent shall have the right at any time during the
continuance of an Event of Default to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of
smaller or larger denominations. Except as provided in Section 3.8(d), the
Debtor maintains the voting rights in the Securities Collateral (as defined
below) which was granted in the Securities Collateral pursuant to Section
1.1(m) and (n).
ARTICLE 2
Representations and Warranties
Section 2.1 Representations and Warranties. The Debtor
represents and warrants to the Collateral Agent and each other Secured Party,
with respect to itself and the Collateral, as follows:
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(a) All of the Equipment, Fixtures and Inventory pledged by the
Debtor hereunder are located at the places specified on Schedule 1 hereto (as
supplemented from time to time by the Debtor by written notice to the
Collateral Agent as permitted herein) or in transit to a place specified on
Schedule 1 hereto (as supplemented from time to time by Debtor by written
notice to Collateral Agent as permitted herein) or in transit for sale to a
third-party purchaser that upon such sale will become the obligor under a
Receivable or promptly pay for such Equipment, Fixtures and Inventory. The
chief place of business and chief executive office of the Debtor and the office
where the Debtor keeps all of its records concerning the Receivables, are
located at the place specified on Schedule 1 hereto. Schedule 1 is a complete
and correct list of, as to any leased property on which any Collateral is
located, the description of such property sufficient for recording and the name
of the record owner of such property. All promissory notes or other
instruments evidencing the Receivables (excluding checks[ and notes evidencing
loans to employees not to exceed $250,000 in aggregate amount]) have been
delivered and pledged to the Collateral Agent duly endorsed and accompanied by
such duly executed instruments of transfer or assignment as are necessary for
such pledge, to be held as pledged collateral. All Equipment owned by the
Debtor consisting of vehicles, tractors, trailers and other rolling stock with
a net book value of $20,000 or more are identified on Schedule 4.
(b) The Debtor is the legal and beneficial owner of the Collateral
pledged by it free and clear of any Lien, except for (i) the security interest
created by this Agreement, (ii) Permitted Liens and (iii) Liens in connection
with Indebtedness with respect to which the requirements of Section 3.1(i) of
each of the Credit Agreements have been satisfied. No effective financing
statement or other similar document used to perfect and preserve a security
interest under the laws of any jurisdiction covering all or any part of the
Collateral is on file in any recording office, except such as may have been
filed (i) in favor of the Collateral Agent relating to this Agreement, (ii) in
respect of Permitted Liens, and (iii) in connection with Indebtedness with
respect to which the requirements of Section 3.1(i) of each of the Credit
Agreements have been satisfied. As of the date hereof, the Debtor has the
trade names set forth on Schedule 2 (and no others). The Debtor (including any
corporate or partnership predecessor) has not existed or operated under any
name other than as stated on Schedule 2 since the date three years preceding
the date of this Agreement.
(c) This Agreement and the pledge of the Collateral pursuant
hereto, together with the filing of financing statements containing the
description of the Collateral in the jurisdictions set forth on Schedule 1,
which will be made immediately following the date of closing, creates a valid
and perfected first priority security interest in the Collateral in which a
security interest can be perfected by filing a UCC financing statement,
securing the payment of the Obligations; provided that additional actions may
be required with respect to the perfection of proceeds of the Collateral; and
further provided that the Collateral Agent retains physical possession of any
Collateral, the possession of which is required for perfection.
(d) No material Necessary Authorization is required (i) for the
pledge by the Debtor of the Collateral pledged by it hereunder, for the grant
by the Debtor of the security interest granted hereby or for the execution,
delivery or performance of this Agreement by the Debtor,
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(ii) for the perfection or maintenance of the pledge, assignment and security
interest created hereby (including the first priority nature (subject to
Permitted Liens) of such pledge, assignment and security interest as provided
herein) (except for the filing of financing and continuation statements under
the UCC, fixture filings and filings with the United States Patent and
Trademark Office) or (iii) for the exercise by the Collateral Agent of the
rights provided for in this Agreement (except for consents of landlords
pursuant to the Landlords' Waivers and as otherwise required by law, including
pursuant to Section 4.4 of this Agreement), except, in each case, for such
Necessary Authorizations that already have been obtained by the Debtor and
except, in each case, where the failure to so obtain such Necessary
Authorizations could not reasonably be expected to have a Material Adverse
Effect.
(e) None of the Collateral described in Sections 1.1(m) and 1.1(n)
("Securities Collateral") is subject to any unpaid capital call or dispute, any
buy-sell, voting trust, transfer restriction, preferential right to purchase or
similar agreement or any option, warrant, put or call or similar agreement.
All of the Securities Collateral are duly authorized, validly issued and
non-assessable and were not issued in violation of the Rights of any Person.
ARTICLE 3
Covenants
Section 3.1 Further Assurances. (a) The Debtor agrees that where
any agreement existing as of the date hereof or hereafter to which Debtor is a
party contains any restriction that could reasonably be expected to prohibit
Debtor from granting any security interest under this Agreement, the Debtor
will use its reasonable best efforts to obtain the necessary consent to or
waiver of such restriction from any Person so as to enable the Debtor to
effectively grant to the Collateral Agent such security interest under this
Agreement.
(b) The Debtor agrees that from time to time, at the expense of
the Debtor, the Debtor will promptly execute and deliver all further
instruments and documents (including supplements to all schedules), and take
all further action, that may be necessary, and that the Collateral Agent may
reasonably request, in order to perfect and protect any pledge, assignment or
security interest granted or purported to be granted hereby, and the priority
thereof, or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, upon reasonable written request by the Collateral
Agent, the Debtor will: (i) during the continuation of an Event of Default,
xxxx conspicuously each Chattel Paper included in Receivables, and, at the
request of the Collateral Agent, each of its records pertaining to the
Collateral with the following legend:
THIS INSTRUMENT IS SUBJECT TO A SECURITY INTEREST AND LIEN PURSUANT TO
A SECURITY AGREEMENT DATED AS OF DECEMBER 19, 1997 (AS THE SAME HAS
BEEN AND MAY
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138
HEREAFTER BE AMENDED, MODIFIED OR RESTATED) MADE BY DEBTOR IN FAVOR OF
NATIONSBANK OF TEXAS, N.A., AS COLLATERAL AGENT FOR THE BENEFIT OF THE
SECURED PARTIES NAMED THEREIN.
or such other legend, in form and substance reasonably satisfactory to and as
specified by the Collateral Agent, indicating that such Chattel Paper or
Collateral is subject to the pledge, assignment and security interest granted
hereby; (ii) if any Collateral shall be evidenced by a promissory note or other
instrument, deliver and pledge to the Collateral Agent hereunder such note and
instrument duly indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance reasonably satisfactory to
the Collateral Agent; (iii) if any Collateral shall be evidenced by Chattel
Paper, during the continuance of an Event of Default, deliver to the Collateral
Agent such Chattel Paper duly endorsed and accompanied by duly executed
instrument of transfer or assignment, all in form and substance reasonably
satisfactory to the Collateral Agent; and (iv) execute and file such financing
or continuation statements, or amendments thereto, and such other instruments
or notices, as may be necessary, or as the Collateral Agent may reasonably
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby.
(c) In addition to such other information as shall be specifically
provided for herein, the Debtor will furnish to the Collateral Agent from time
to time during the continuance of an Event of Default statements and schedules
further identifying and describing the Collateral and such other lists,
documents, reports, and product, service and sales documents in connection with
the Collateral as the Collateral Agent may reasonably request, all in
reasonable detail. Subject to the confidentiality provisions of the Credit
Agreements, in connection with its enforcement of the security interest, the
Collateral Agent may use such information or transfer it to any assignee
permitted hereunder for such assignee's use.
(d) The Debtor hereby authorizes the Collateral Agent to file one
or more continuation statements and during the continuance of an Event of
Default, financing statements, relating to all or any part of the Collateral
without the signature of the Debtor where permitted by law. A photocopy or
other reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
Section 3.2 Equipment, Fixtures and Inventory.
(a) The Debtor shall not keep the Equipment, Fixtures and
Inventory pledged by it hereunder (other than Inventory sold in the ordinary
course of business) in any location other than the places specified in Schedule
1 unless no later than 15 days prior to removal from any such location the
Debtor has delivered to the Collateral Agent a financing statement for such
Equipment, Fixtures and Inventory kept by the Debtor at such other location or
such other documentation in the opinion of the Collateral Agent which is
reasonably necessary to properly perfect or maintain the perfection of the
security interest granted herein in such Collateral.
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(b) Except as permitted under the Credit Agreements, the Debtor
shall cause the Equipment and Fixtures pledged by it hereunder that are
necessary for the Debtor's business to be maintained and preserved in adequate
operating condition and repair for purposes of their current use with due
regard to the age thereof, taken as a whole, subject to ordinary wear and tear
and shall from time to time make or cause to be made all appropriate (in the
reasonable judgment of Debtor) all repairs, replacements, and other
improvements thereto in accordance with past practice, except where the failure
to so repair, replace or improve could not reasonably be expected to have a
Material Adverse Effect. The Debtor shall promptly furnish to the Collateral
Agent a statement respecting any loss or damage which singly or in the
aggregate equals or exceeds $1,000,000 for any fiscal year to any of the
Equipment pledged by it hereunder. The Debtor shall promptly furnish to the
Collateral Agent a statement respecting any loss or damage which singly or in
the aggregate equals or exceeds $1,000,000 for any fiscal year to any of the
Inventory pledged by it hereunder.
Section 3.3 Insurance. The Debtor shall, at its own expense,
maintain insurance with respect to the Collateral in accordance with the terms
set forth in Section 5.5 of the Credit Agreement. The Debtor further covenants
and agrees to keep the Collateral which is Inventory, Equipment, Fixtures and
other tangible personal property insured in such amounts, against such risks
and with such insurers as is consistent with customary and usual in the
industry for companies of similar size and capability, provided that none of
such insurance shall be in amounts less than the greater of (a) the replacement
value and (b) the original cost of the covered property (less any deduction
standard in the industry for such type of property), subject in the case of any
property damage insurance to normal and customary rights granted in the
ordinary course of business to (i) any landlord (with respect to the property
covered by any lease), (ii) in the case of any equipment financing, to any
equipment lessor or lender (with respect to the equipment covered thereby), or
(iii) mortgagees of any real property. All such policies of insurance shall
show the Collateral Agent as loss payee, as its interests may appear, and shall
provide for at least thirty days' prior written notice of cancellation or
change of coverage to the Collateral Agent. The Debtor shall promptly furnish
to the Collateral Agent evidence of such insurance in form and content
reasonably satisfactory to the Collateral Agent. If the Debtor fails to
maintain the insurance it is required to maintain with respect to the
Collateral in accordance with this Section 3.3, upon written notice to the
Debtor, the Collateral Agent may at its own option obtain insurance in such
Collateral, any premium thereby paid by the Collateral Agent to become part of
the Obligations, bear interest prior to the existence of an Event of Default,
at the then applicable Base Rate Basis, and during the existence of an Event of
Default, at the Default Rate. In the event the Collateral Agent maintains such
substitute insurance, the additional premium for such insurance shall be due on
demand and payable by the Debtor to the Collateral Agent in accordance with any
notice delivered to the Debtor by the Collateral Agent. Subject to Section 7.5
of the Credit Agreements, proceeds of insurance shall be applied as follows:
first, to reimburse the Collateral Agent for all reasonable costs and expenses,
if any, including reasonable attorneys' fees, incurred in connection with the
collection of such proceeds; second, if an Event of Default has not occurred
and is continuing or the amount of proceeds in respect of any one loss or
damage does not exceed $5,000,000, the proceeds shall be reinvested in
productive, tangible assets used in the business of the Debtor,
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and the Debtor shall provide the Collateral Agent with evidence reasonably
satisfactory to the Collateral Agent of such use; and third, if an Event of
Default has occurred and is continuing or the proceeds in respect of any one
loss or damage is equal to or greater than $5,000,000, the proceeds shall, at
the Collateral Agent's direction, be used to repair or replace the Collateral
or applied to the Obligations as provided in the Intercreditor Agreement.
Section 3.4 Place of Perfection; Records; Collection of
Receivables, Chattel Paper and Instruments.
(a) The Debtor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Receivables, and the originals of all Chattel Paper and Instruments, at the
location therefor specified in Section 2.1(a), in each case which may be
changed upon written notice to the Collateral Agent at least 30 days prior to
such change. The Debtor will hold and preserve such records and Chattel Paper
and Instruments and will permit representatives of the Collateral Agent at any
time during normal business hours and after reasonable notice to inspect and
make abstracts from and copies of such records and Chattel Paper and
Instruments.
(b) Except as otherwise provided in this Section 3.4(b), the
Debtor shall continue to collect, at its own expense, all amounts due or to
become due the Debtor under the Receivables, Chattel Paper and Instruments. In
connection with such collections, the Debtor may take (and, during the
continuance of an Event of Default at the Collateral Agent's direction, shall
take) such action as the Debtor or, during the continuance of an Event of
Default, the Collateral Agent, may deem reasonably necessary to enforce
collection of the Receivables, Chattel Paper and Instruments; provided,
however, that the Collateral Agent shall have the right (during the continuance
of an Event of Default) to notify the account debtors or obligors under any
Receivables, Chattel Paper and Instruments of the assignment of such
Receivables, Chattel Paper and Instruments to the Collateral Agent and to
direct such account debtors or obligors to make payment of all amounts due or
to become due to the Debtor thereunder directly to the Collateral Agent and,
upon such notification at the expense of the Debtor, to enforce collection of
any such Receivables, Chattel Paper and Instruments, and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as the Debtor might have done or as the Collateral Agent deems
reasonably necessary. During the continuance of an Event of Default, all
amounts and proceeds (including Instruments) received by the Debtor in respect
of the Receivables, Chattel Paper and Instruments shall be received in trust
for the benefit of the Collateral Agent hereunder, shall be segregated from
other funds of the Debtor and, after receipt of written notice from the
Collateral Agent, shall be forthwith paid over to the Collateral Agent in the
same form as so received (with any necessary indorsement) to be applied as
provided in the Intercreditor Agreement. During the continuation of an Event
of Default, the Debtor shall not adjust, settle or compromise the amount or
payment of any Receivable, Chattel Paper or Instrument, release wholly or
partly any account debtor or obligor thereof, or allow any credit or discount
thereon, in each case, other than those made in the ordinary course of
business. To the extent that the Collateral Agent has notified any account
debtor or obligor under any Receivables, Chattel Paper or Instrument of an
Event of Default and such Event of Default is
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cured or otherwise waived, the Collateral Agent shall promptly notify such
account holder or obligor of such fact.
Section 3.5 Transfers and Other Liens. The Debtor shall not (a)
sell, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, any of the Collateral, except as permitted
under the Credit Agreements, or (b) create or permit to exist any Lien upon any
of the Collateral, except Permitted Liens.
Section 3.6 Rights to Dividends and Distributions. With respect
to any Securities Collateral, the Collateral Agent shall have authority during
the continuance of an Event of Default, either to have the same registered in
the Collateral Agent's name or in the name of a nominee, and, with or without
such registration, upon such notification to demand of the issuer thereof, and
to receive and receipt for, any and all Dividends (including any stock or
similar Dividend) payable in respect thereof, whether they be ordinary or
extraordinary. If the Debtor shall become entitled to receive or shall receive
any interest in or certificate (including, without limitation, any interest in
or certificate representing a Dividend in connection with any reclassification,
increase, or reduction of capital, or issued in connection with any
reorganization), or any option or rights arising from or relating to any of the
Collateral that is evidenced by a certificate or other instrument or security,
whether as an addition to, in substitution of, as a conversion of, or in
exchange for any of the Collateral, or otherwise, the Debtor agrees to accept
the same as the Collateral Agent's agent and to hold the same in trust on
behalf of and for the benefit of the Collateral Agent, and, after receipt of
written notice from the Collateral Agent, to deliver the same immediately to
the Collateral Agent in the exact form received, with appropriate undated stock
or similar powers, duly executed in blank, to be held by the Collateral Agent,
subject to the terms hereof, as Collateral. Unless an Event of Default is in
existence, the Debtor shall be entitled to receive all cash Dividends paid in
respect of any of the Collateral (subject to the restrictions of any other Loan
Document). During the continuance of an Event of Default, the Collateral Agent
shall be entitled to all Dividends, and to any sums paid upon or in respect of
any Collateral, and to any additional securities issued in respect of the
Securities Collateral, upon the liquidation, dissolution, or reorganization of
the issuer thereof, all of which shall be paid to the Collateral Agent to be
held by it as additional collateral security for the Obligations and
application to the Obligations as provided in the Intercreditor Agreement. All
Dividends paid or distributed in respect of the Collateral which are received
by the Debtor in violation of this Agreement shall, until paid or delivered to
the Collateral Agent, be held by the Debtor in trust on behalf of and for the
benefit of the Collateral Agent as additional Collateral for the Obligations.
Section 3.7 Right of the Collateral Agent to Notify Issuers. At
any time during the continuance of an Event of Default, the Collateral Agent
may notify issuers of the Securities Collateral to make payments of all
Dividends directly to the Collateral Agent and the Collateral Agent may take
control of all proceeds of any Securities Collateral. Until the Collateral
Agent elects to exercise such rights, during the continuance of an Event of
Default, the Debtor, as agent of the Collateral Agent, shall collect and
segregate all Dividends and other amounts paid or distributed with respect to
the Securities Collateral. To the extent that the Collateral Agent
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has notified any issuer of Securities Collateral of an Event of Default and
such Event of Default is cured or otherwise waived, the Collateral Agent shall
promptly notify such issuer of such fact.
Section 3.8 The Collateral Agent Appointed Attorney-in-Fact. The
Debtor hereby irrevocably appoints the Collateral Agent the Debtor's
attorney-in-fact (exercisable during the continuance of an Event of Default),
with full authority in the place and stead of the Debtor and in the name of the
Debtor or otherwise to take any action and to execute any instrument (in
accordance with this Agreement, including without limitation, Section 4.2
hereof) which the Collateral Agent may deem reasonably necessary to accomplish
the purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Collateral Agent in accordance with Section 3.3,
(b) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in connection with the Collateral,
(c) to receive, indorse, and collect any drafts or other
Instruments, documents and Chattel Paper in connection with clauses (a) or (b)
above, and
(d) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem reasonably necessary for the
collection of any of the Collateral or otherwise to enforce compliance with the
terms and conditions of any Collateral or the rights of the Collateral Agent
with respect to any of the Collateral. THE DEBTOR HEREBY IRREVOCABLY GRANTS TO
THE COLLATERAL AGENT THE DEBTOR'S PROXY (EXERCISABLE DURING THE CONTINUANCE OF
AN EVENT OF DEFAULT) TO VOTE ANY SECURITIES COLLATERAL AND APPOINTS THE
COLLATERAL AGENT THE DEBTOR'S ATTORNEY-IN-FACT (EXERCISABLE DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT WHICH IS CONTINUING) TO PERFORM ALL
OBLIGATIONS OF DEBTOR UNDER THIS AGREEMENT. THE PROXY AND EACH POWER OF
ATTORNEY HEREIN GRANTED ARE COUPLED WITH AN INTEREST AND ARE IRREVOCABLE PRIOR
TO FINAL PAYMENT IN FULL OF THE OBLIGATIONS.
This appointment as attorney-in-fact and this proxy shall terminate
upon the termination of this Agreement pursuant to Section 5.3 hereof.
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ARTICLE 4
Rights and Powers of the Collateral Agent
Section 4.1 The Collateral Agent May Perform. If the Debtor
fails to perform any agreement contained herein, the Collateral Agent may
itself perform, or cause performance of, such agreement, and the reasonable
expenses of the Collateral Agent incurred in connection therewith shall be
payable by the Debtor under Section 4.5.
Section 4.2 The Collateral Agent's Duties. The powers conferred
on the Collateral Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the duty to exercise reasonable care in respect of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Collateral Agent shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
the Collateral Agent has or is deemed to have knowledge of such matters, or as
to the taking of any necessary steps to preserve rights against prior parties.
The Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which the Collateral Agent
accords property it holds as collateral generally. Except as provided in this
Section 4.2 and except to the extent of any gross negligence or willful
misconduct of the Collateral Agent or the other Secured Parties, the Collateral
Agent shall not have any duty or liability to protect or preserve any
Collateral or to preserve rights pertaining thereto. Nothing contained in this
Agreement shall be construed as requiring or obligating the Collateral Agent,
and the Collateral Agent shall not be required or obligated, to (i) present or
file any claim or notice or take any action, with respect to any Collateral or
in connection therewith or (ii) notify the Debtor of any decline in the value
of any Collateral.
Section 4.3 Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code in effect in the State of Texas at
that time (the "UCC") (whether or not the UCC applies to the affected
Collateral), and also may (i) require the Debtor to, and the Debtor hereby
agrees that it will at its expense and upon request of the Collateral Agent
forthwith, assemble all or part of the Collateral which is capable of being
assembled as directed by the Collateral Agent and make it available to the
Collateral Agent at a place to be designated by the Collateral Agent which is
reasonably convenient to both parties or (ii) without notice, except as
specified below, sell the Collateral or any portion thereof in one or more
parcels at public or private sale, at any of the Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Collateral Agent may reasonably deem commercially reasonable. The
Debtor agrees that, to the extent notice of sale shall be required by law, ten
days' written notice to the Debtor of the time and
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place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification, provided that ten days' written
notice does not violate any Applicable Law. The Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned.
(b) All cash proceeds received by the Collateral Agent upon any
sale of, collection of, or other realization upon, all or any part of the
Collateral shall be applied as follows:
First: To the payment of all reasonable out-of-pocket costs and
expenses incurred in connection with the sale of, collection of or
other realization upon Collateral, including reasonable attorneys'
fees and disbursements;
Second: To the payment of the Obligations as provided in the
Intercreditor Agreement and in such order and in such manner as
provided in the Intercreditor Agreement (with the Debtor remaining
liable for any deficiency); and
Third: To the extent of the balance (if any) of such proceeds, to the
payment to the Debtor or other Person legally entitled thereto.
(c) All payments received by the Debtor under or in connection
with any Collateral shall be received in trust for the benefit of the
Collateral Agent, shall be segregated from other funds of the Debtor and, after
receipt of written notice from the Collateral Agent, shall be forthwith paid
over to the Collateral Agent in the same form as so received (with any
necessary indorsement).
(d) Because of the Securities Act of 1933, as amended ("Securities
Act"), and other laws, including without limitation state "blue sky" laws, or
contractual restrictions or agreements, there may be legal restrictions or
limitations affecting the Collateral Agent in any attempts to dispose of the
Collateral and the enforcement of its rights hereunder. For these reasons, the
Collateral Agent is hereby authorized by the Debtor, but not obligated, during
the continuance of any Event of Default, to sell or otherwise dispose of any of
the Collateral at private sale, subject to an investment letter, or in any
other manner which will not require the Collateral, or any part thereof, to be
registered in accordance with the Securities Act, or the rules and regulations
promulgated thereunder, or any other law. The Debtor clearly understands that
the Collateral Agent may in its discretion approach a restricted number of
potential purchasers and that a sale under such circumstances may yield a lower
price for the Collateral than would otherwise be obtainable if same were
registered and sold in the open market. No sale so made in good faith by the
Collateral Agent shall be deemed to be not "commercially reasonable" because so
made. The Debtor agrees that in the event the Collateral Agent shall, during
the continuance of an Event of Default, sell the Collateral or any portion
thereof at any private sale or sales, the Collateral Agent shall have the right
to rely upon the advice and opinion of appraisers and other Persons, which
appraisers and other Persons are acceptable to
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the Collateral Agent, as to the best price reasonably obtainable upon such a
private sale thereof. In the absence of actual fraud, such reliance shall be
conclusive evidence that the Collateral Agent handled such matter in a
commercially reasonable manner under Applicable Law.
(e) If the Collateral Agent shall determine to exercise its right
to sell any or all of the Collateral, and if in the opinion of counsel for the
Collateral Agent it is necessary, or if in the opinion of the Collateral Agent
it is advisable, to have the Collateral or that portion thereof to be sold,
registered under the provisions of the Securities Act, the Debtor will, to the
fullest extent it has the capability to do so, cause the issuers of the
Collateral contemplated to be sold to execute and deliver, and cause the
directors and officers of each thereof to execute and deliver, all at the
Debtor's reasonable expense, all such instruments and documents, and to do or
cause to be done all such other acts and things, as may be necessary or, in the
opinion of the Collateral Agent, advisable to register the Collateral or that
portion thereof to be sold, under the provisions of the Securities Act and to
cause the registration statement relating thereto to become effective and to
remain effective for such period as the Collateral Agent may deem reasonably
necessary to facilitate the sale or other disposition of such Collateral from
the date of the first public offering of the Collateral or that portion thereof
to be sold, and to make all amendments thereto and/or to the related prospectus
which, in the opinion of the Collateral Agent, are reasonably necessary, all in
conformity with the requirements of the Securities Act. The Debtor shall use
its reasonable best efforts to cause each issuer of Collateral to comply with
the provisions of the securities or "blue sky" laws of any jurisdiction which
the Collateral Agent shall designate and to cause each issuer to make available
to its security holders, as soon as practicable, an earnings statement which
will satisfy the provisions of the Securities Act and applicable "blue sky"
laws.
(f) (i) The Debtor will maintain the accounts listed as
restricted and blocked accounts on Schedule 3 (the "Restricted
Accounts") with the Collateral Agent, in the name of the Debtor, but
such Restricted Accounts shall be under the sole control and dominion
of the Collateral Agent.
(ii) It shall be a term and condition of each Restricted
Account, notwithstanding any term or condition to the contrary in any
other agreement relating to such Restricted Account, that no amount
(including interest and other proceeds of the cash and other property
in the Restricted Account) shall be paid or released to or for the
account of, or withdrawn by or for the account of, the Debtor or any
other Person from such Restricted Account.
(iii) After the occurrence and continuance of an Event of
Default, the Debtor will promptly instruct each account debtor in
respect of Receivables arising from any sale of Inventory in the
ordinary course of business to make payment to the Restricted
Accounts.
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The Debtor understands and acknowledges that the Collateral Agent may and
permits the Collateral Agent to remove amounts from the Restricted Accounts
from time to time and use the amounts to reduce the Obligations.
Section 4.4 Further Approvals Required.
(a) In connection with the exercise by the Collateral Agent of its
rights hereunder that effects the disposition of or use of any Collateral, it
may be necessary to obtain the prior consent or approval of Tribunals and other
Persons to a transfer or assignment of Collateral.
(b) The Debtor hereby agrees, during the continuance of an Event
of Default, to execute, deliver, and file, and hereby appoints the Collateral
Agent as its attorney-in-fact, during the continuance of an Event of Default,
to execute, deliver, and file on the Debtor's behalf and in the Debtor's name,
all applications, certificates, filings, instruments, and other documents
(including without limitation any application for an assignment or transfer of
control or ownership) that may be necessary, in the Collateral Agent's
reasonably opinion, to obtain such consents, waivers, or approvals. Upon
request by the Collateral Agent, the Debtor further agrees to use its
reasonable best efforts to obtain the foregoing consents, waivers, and
approvals. The Debtor acknowledges that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section 4.4 and that such
failure would not be adequately compensable in damages, and therefore agrees
that this Section 4.4 may be specifically enforced. This appointment as
attorney-in-fact shall terminate upon the termination of this Agreement
pursuant to Section 5.3 hereof.
SECTION 4.5 INDEMNITY AND EXPENSES. (a) THE DEBTOR AGREES TO
INDEMNIFY THE COLLATERAL AGENT AND EACH OTHER SECURED PARTY FROM AND AGAINST
ANY AND ALL CLAIMS, LOSSES AND LIABILITIES (INCLUDING REASONABLE ATTORNEYS'
FEES) ARISING OR RESULTING FROM THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION,
ENFORCEMENT OF THIS AGREEMENT), EXPRESSLY INCLUDING SUCH CLAIMS, LOSSES OR
LIABILITIES ARISING OUT OF MERE NEGLIGENCE OF THE COLLATERAL AGENT OR ANY OTHER
SECURED PARTY, EXCEPT CLAIMS, LOSSES OR LIABILITIES AS FINALLY JUDICIALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM THE
COLLATERAL AGENT'S OR ANY OTHER SECURED PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, BUT EXCLUDING (i) ANY CLAIM OR LIABILITY THAT ARISES AS A DIRECT
RESULT OF THE OPERATION OF ANY COLLATERAL BY THE COLLATERAL AGENT OR ANY OF THE
OTHER SECURED PARTIES AFTER TAKING POSSESSION THEREOF BY FORECLOSURE OR BY
TRANSFER IN LIEU OF FORECLOSURE (PROVIDED THAT SUCH CLAIM OR LIABILITY DOES NOT
RELATE TO ANY CONDITION EXISTING ON OR WITH RESPECT TO SUCH COLLATERAL PRIOR TO
FORECLOSURE OR TRANSFER IN LIEU OF FORECLOSURE), (ii) MATTERS RAISED
EXCLUSIVELY BY A PARTICIPANT AGAINST THE COLLATERAL AGENT OR ANY OTHER SECURED
PARTY, AND
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(iii) MATTERS RAISED BY ONE LENDER AGAINST A LENDER OR BY ANY SHAREHOLDERS OF A
LENDER AGAINST A LENDER OR ITS MANAGEMENT.
(b) The Debtor will upon demand pay to the Collateral Agent the
amount of any and all reasonable out-of- pocket expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents,
which the Collateral Agent may incur in connection with (i) the administration
of this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Collateral Agent
hereunder or (iv) the failure by the Debtor to perform or observe any of the
provisions hereof.
ARTICLE 5
Miscellaneous
Section 5.1 Cumulative Rights. All rights of the Collateral
Agent and each other Secured Party under the Loan Documents are cumulative of
each other and of every other right which the Collateral Agent and each other
Secured Party may otherwise have at law or in equity or under any other
contract or other writing for the enforcement of the security interest herein
or the collection of the Obligations. The exercise of one or more rights shall
not prejudice or impair the concurrent or subsequent exercise of other rights.
Section 5.2 Modifications; Amendments; Etc. No amendment or
waiver of any provision of this Agreement, and no consent to any departure by
the Debtor here from, shall in any event be effective unless the same shall be
in writing and signed by the Collateral Agent (and the Debtor, in case of
amendment), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Section 5.3 Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until the latest of the Release Dates set forth in the
Credit Agreements, (b) be binding upon the Debtor, its successors and assigns,
and (c) inure to the benefit of, and be enforceable by, the Collateral Agent
and its successors, transferee and assigns as permitted by the Intercreditor
Agreement. Upon any such termination, the Collateral Agent will, at the
Debtor's expense, execute and deliver to Debtor such documents as the Debtor
shall reasonably request to evidence such termination. The Debtor agrees that
to the extent that the Collateral Agent or any other Secured Party receives any
payment or benefit and such payment or benefit, or any part thereof, is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or is required to be repaid to a trustee, receiver, or any other party under
any Debtor Relief Law, common law or equitable cause, then to the extent of
such payment or benefit, the Obligations or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if such
payment or benefit had not been made and, further, any such repayment by the
Collateral Agent or any other Secured Party, to the extent that the Collateral
Agent or any other Secured Party did not
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directly receive a corresponding cash payment, shall be added to and be
additional Obligations payable upon demand by the Collateral Agent or any other
Secured Party and secured hereby, and, if the lien and security interest hereof
shall have been released, such lien and security interest shall be reinstated
with the same effect and priority as on the date of execution hereof all as if
no release of such lien or security interest had ever occurred, to the extent
not prohibited by Applicable Law.
SECTION 5.4 GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF
A JURISDICTION OTHER THAN THE STATE OF TEXAS.
SECTION 5.5 WAIVER OF JURY TRIAL. THE COLLATERAL AGENT AND THE
DEBTOR HEREBY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, ALL
RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDINGS INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 5.6 The Collateral Agent's Right to Use Agents. The
Collateral Agent may exercise its rights under this Agreement through an agent
or other designee.
Section 5.7 Waivers of Rights Inhibiting Enforcement. To the
extent not prohibited by Applicable Law, the Debtor waives all rights of
redemption, appraisal, valuation or to the marshalling of assets.
Section 5.8 Notices and Deliveries.
(a) Manner of Delivery. All notices and other communications
provided for hereunder shall be in writing (except in those cases where giving
notice by telephone is expressly permitted) and shall be deemed to have been
given on the date personally delivered or sent by telecopy (answer back
received), or three days after deposit in the mail, designated as certified
mail, return receipt requested, postage prepaid, or one day after being
entrusted to a reputable commercial overnight delivery service, addressed to
the party to which such notice is directed at its address determined as
provided in this Section 5.8.
(b) Addresses. All notices, communications and materials to be
given or delivered pursuant to this Agreement shall be given or delivered at
the following respective addresses and telecopier and telephone numbers and to
the attention of the following individuals or departments:
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(i) if to the Debtor, to it at:
[c/o] Pillowtex Corporation
000 Xxxx Xxx
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
(ii) if to the Collateral Agent, to it at:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx
or at such other address or, telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify by giving 10 days' written notice to the other
specifically captioned "Notice of Change of Address".
Section 5.9 Successors and Assigns. All of the provisions of
this Agreement shall be binding and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
Section 5.10 Loan Document. This Agreement is a Loan Document
executed pursuant to the Credit Agreements and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
Section 5.11 Consent to Jurisdiction; Waiver of Immunities.
(a) The Debtor and the Collateral Agent each hereby irrevocably
submits to the non-exclusive jurisdiction of any United States Federal or Texas
State courts sitting in Dallas, Texas in any action or proceeding arising out
of or relating to this Agreement, and the Debtor and the Collateral Agent each
hereby irrevocably waives any objection it may now or hereafter have as to the
venue of any such suit, action or proceeding brought in such court or that such
court is an inconvenient forum.
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(b) Nothing in this section shall limit the right of the Debtor,
the Collateral Agent or any other Secured Party to bring any action or
proceeding against any other party or its property in the courts of any other
jurisdictions.
Section 5.12 Severability. Any provision of this Agreement which
is for any reason prohibited or found or held invalid or unenforceable by any
court or governmental agency shall be ineffective to the extent of such
prohibition or invalidity or unenforceability, without invalidating the
remaining provisions hereof in such jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 5.13 Obligations Not Affected. To the fullest extent
permitted by Applicable Law, the obligations of the Debtor under this Agreement
shall remain in full force and effect without regard to, and shall not be
impaired or affected by:
(a) any amendment or modification or addition or supplement to any
other Loan Document, any instrument delivered in connection therewith or any
assignment or transfer thereof;
(b) any exercise, non-exercise, or waiver by the Collateral Agent
or any other Secured Party of any right, remedy, power or privilege under or in
respect of, or any release of any guaranty, any collateral or the Collateral or
any part thereof provided pursuant to, this Agreement or any other Loan
Document;
(c) any waiver, consent, extension, indulgence or other action or
inaction in respect of this Agreement or any other Loan Document or any
assignment or transfer of any thereof; or
(d) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of the Debtor, any other
Obligor or any other Person, whether or not the Debtor shall have notice or
knowledge of any of the foregoing.
Section 5.14 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument.
[SECTION 5.15 NO NOVATION. THE EXECUTION, DELIVERY AND
EFFECTIVENESS OF THIS AGREEMENT SHALL NOT DISCHARGE OR RELEASE ANY LIEN OR
PRIORITY OF ANY SECURITY AGREEMENT, PLEDGE AGREEMENT OR OTHER INSTRUMENT
SECURING THE DEBTOR'S OBLIGATIONS FOR THE PAYMENT OF MONEY OUTSTANDING UNDER
THE EXISTING CREDIT AGREEMENT. NOTHING HEREIN CONTAINED SHALL BE CONSTRUED AS
A SUBSTITUTION, NOVATION, SATISFACTION OR DISCHARGE OF ANY COLLATERAL DOCUMENTS
(AS DEFINED IN THE EXISTING CREDIT AGREEMENT) OR THE LIENS GRANTED HEREBY, ALL
OF WHICH SHALL CONTINUE AND REMAIN IN FULL FORCE AND EFFECT, EXCEPT AS MODIFIED
HEREBY, OR BY INSTRUMENT EXECUTED CONCURRENTLY HEREWITH. THIS AGREEMENT
AMENDS, MODIFIES AND
- 21 -
151
RESTATES THAT CERTAIN RESTATED SECURITY AGREEMENT, DATED AS OF NOVEMBER 12,
1996, AMONG DEBTOR, CERTAIN OTHER AFFILIATES OF DEBTOR, AND NATIONSBANK OF
TEXAS, N.A.]
SECTION 5.16 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER
WITH THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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152
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
date first above written.
DEBTOR:
[DEBTOR]
By:
-------------------------------------
Name: J. Xxxx Xxxxxxxxxxx
Title: Vice President and Treasurer
COLLATERAL AGENT:
NATIONSBANK OF TEXAS, N.A.
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
- 23 -
153
Schedule 1
Equipment and Inventory Locations
Chief Place of Business, Chief Executive Office and
Location of Books and Records
*To Be Provided By Debtor*
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
154
Schedule 2
Trade Names
*To Be Provided By Debtor*
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
155
Schedule 3
Restricted Accounts
*To Be Provided By Debtor*
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
156
Schedule 4
Rolling Stock
*To Be Provided By Debtor*
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
157
EXHIBIT C
================================================================================
INTELLECTUAL PROPERTY SECURITY AGREEMENT AND ASSIGNMENT
Between
-------------------------------------------
as Debtor
and
NATIONSBANK OF TEXAS, N.A.
Collateral Agent
December 19, 1997
================================================================================
158
TABLE OF CONTENTS
Page
----
ARTICLE 1
Grant of Security Interest
--------------------------
Section 1.1 Assignment and Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . 2
-----------------------------------------
Section 1.2 Security for Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------------------------
Section 1.3 Validity and Priority of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . 3
------------------------------------------
Section 1.4 Maintenance of Status of Security Interest, Collateral and Rights . . . . . . . . . . . . . 3
-----------------------------------------------------------------
(a) Required Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
---------------
(b) Protection of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
------------------------
(c) Authorized Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
-----------------
(d) Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-------------
Section 1.5 Debtor Remains Obligated; the Collateral Agent and Secured Parties Not Obligated . . . . . 4
--------------------------------------------------------------------------------
Section 1.6 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-----------
ARTICLE 2
Representations and Warranties
------------------------------
Section 2.1 Authorization; Enforceability; Required Consents; Absence of Conflicts . . . . . . . . . . 4
----------------------------------------------------------------------
Section 2.2 Rights of the Debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
--------------------
Section 2.3 Perfection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
----------
Section 2.4 Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-------------
Section 2.5 Other Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
--------------
ARTICLE 3
Covenants
---------
Section 3.1 Chief Executive Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------------
Section 3.2 Preservation of Existence and Preservation of Enforceability . . . . . . . . . . . . . . . 6
------------------------------------------------------------
Section 3.3 No Disposition of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------------------
Section 3.4 Additional Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-------------------
ARTICLE 4
Event of Default
----------------
Section 4.1 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-----------------------
159
Section 4.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
--------
SECTION 4.3 INDEMNITY AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------------
ARTICLE 5
Interpretation
--------------
Section 5.1 Definitional Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----------------------
(a) Certain Terms Defined by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----------------------------------
(b) Other Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-------------------
(c) Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-----------------------------
Section 5.2 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-----------------
ARTICLE 6
Miscellaneous
-------------
Section 6.1 Expenses of the Debtor's Agreements and Duties . . . . . . . . . . . . . . . . . . . . . . 12
----------------------------------------------
Section 6.2 Collateral Agent's Right to Perform on the Debtor's Behalf . . . . . . . . . . . . . . . . 12
----------------------------------------------------------
Section 6.3 Collateral Agent's Right to Use Agents . . . . . . . . . . . . . . . . . . . . . . . . . . 13
--------------------------------------
Section 6.4 Limitation of the Collateral Agent's Obligations With Respect to Collateral . . . . . . . 13
---------------------------------------------------------------------------
Section 6.5 Rights of the Collateral Agent under UCC and Applicable Law . . . . . . . . . . . . . . . . 13
-----------------------------------------------------------
Section 6.6 Waivers of Rights Inhibiting Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . 13
----------------------------------------
Section 6.7 Notices and Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
----------------------
(a) Manner of Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
------------------
(b) Addresses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
---------
Section 6.8 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
------------------------------
Section 6.9 Amendments; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-------------------
SECTION 6.10 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-------------
SECTION 6.11 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
--------------------
Section 6.12 Consent to Jurisdiction; Waiver of Immunities . . . . . . . . . . . . . . . . . . . . . . . 15
---------------------------------------------
Section 6.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
------------
Section 6.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------
Section 6.15 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
----------------------
Section 6.16 Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
--------------
Section 6.17 Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------------------
SECTION 6.18 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
----------------
- ii -
160
INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of December 19,
1997, between ____________________________, a _______ corporation (the
"Debtor"), and NationsBank of Texas, N.A., a national banking association, in
its capacity as collateral agent (the "Collateral Agent"), for itself, each
lender (and affiliate thereof that has entered into a Hedge Agreement with any
Obligor (as defined in the Credit Agreements defined below) a party to the
Amended and Restated Credit Agreement described below (the "Revolving
Lenders"), NationsBank of Texas, N.A., in its capacity as administrative agent
under the Amended and Restated Credit Agreement (the "Revolving Agent"), each
lender (and affiliate thereof that has entered into a Hedge Agreement with any
Obligor (as defined in the Credit Agreements defined below) a party to the Term
Credit Agreement described below (the "Term Lenders"), and NationsBank of
Texas, N.A., in its capacity as administrative agent under the Term Credit
Agreement (the "Term ) (singularly, a "Secured Party" and collectively,
"Secured Parties").
RECITALS
(1) [The Debtor] [Pillowtex Corporation, a Texas corporation (the
"Borrower")], the Revolving Agent and the Revolving Lenders entered into that
certain Amended and Restated Credit Agreement, dated as of December 19, 1997
(as amended, modified, supplemented or restated from time to time, the "Amended
and Restated Credit Agreement").
(2) [The Debtor] [the Borrower], the Term Agent and the Term
Lenders entered into that certain Term Credit Agreement, dated as of December
19, 1997 (as amended, modified, supplemented or restated from time to time, the
"Term Credit Agreement"). The Amended and Restated Credit Agreement and the
Term Credit Agreement are herein, collectively, the "Credit Agreements."
Capitalized terms used herein and not otherwise defined herein shall have the
meanings given to them in each of the Credit Agreements or in Section 5.1.
(3) It is the intention of the parties hereto that this Agreement
create a first priority security interest in certain property of the Debtor
securing the payment of the obligations set forth in Section 1.2 hereof,
subject to only Permitted Liens.
(4) It is a condition precedent to the obligation of the Revolving
Lenders and the Term Lenders, as appropriate, to make the Advances, and issue,
or participate in the issuance of Letters of Credit under the Credit Agreements
that the Debtor shall have executed and delivered to the Collateral Agent this
Agreement.
161
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and in order to induce Secured Parties, as appropriate,
to, among other things, make the Advances and issue, or participate in the
issuance of, Letters of Credit under the Credit Agreements, the Debtor hereby
agrees with the Collateral Agent for its benefit and the ratable benefit of the
other Secured Parties, as hereinafter set forth.
ARTICLE 1
Grant of Security Interest
Section 1.1 Assignment and Grant of Security Interest. The
Debtor hereby assigns to, and pledges and grants to the Collateral Agent, for
its benefit and the ratable benefit of the other Secured Parties, a security
interest in, the entire right, title and interest of the Debtor, in and to the
Collateral.
Section 1.2 Security for Obligations. This Agreement creates an
enforceable security interest in the Collateral, subject only to Permitted
Liens, as provided herein, securing the payment and performance of any and all
obligations now or hereafter existing of the Debtor and each other Obligor
under the Credit Agreements and the other Loan Documents, including any
extensions, modifications, substitutions, amendments and renewals thereof,
whether for principal, interest, fees, expenses, indemnification or otherwise)
(all such obligations of the Debtor and each other Obligor being the
"Obligations"). Without limiting the generality of the foregoing, this
Agreement secures the payment of all amounts which constitute part of the
Obligations and would be owed by the Debtor and each other Obligor to the
Collateral Agent or any other Secured Party under any Loan Document, but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding under any Debtor Relief Law
involving the Debtor and any other Obligor (including all such amounts which
would become due or would be secured but for the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding of the Debtor, any other Obligor or any other Person under any
Debtor Relief Law). [NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN ANY
ACTION OR PROCEEDING INVOLVING ANY STATE CORPORATE LAW, OR ANY STATE OR FEDERAL
BANKRUPTCY, INSOLVENCY, REORGANIZATION OR OTHER LAW AFFECTING THE RIGHTS OF
CREDITORS GENERALLY IF THE SECURITY INTEREST GRANTED BY THE DEBTOR HEREIN SHALL
BE HELD VOID, INVALID OR UNENFORCEABLE, OR SUBORDINATED TO THE LIENS OR CLAIMS
OF ANY OTHER CREDITORS, ON ACCOUNT OF THE AMOUNT OF THE OBLIGATIONS SECURED BY
SUCH SECURITY INTEREST THEN, THE AMOUNT OF THE OBLIGATIONS SECURED BY SUCH
SECURITY INTEREST SHALL, WITHOUT ANY ACTION BY THE DEBTOR, THE COLLATERAL
AGENT, ANY OTHER SECURED PARTY OR ANY OTHER PERSONS, BE AUTOMATICALLY LIMITED
AND REDUCED TO THE HIGHEST AMOUNT THAT IS VALID AND ENFORCEABLE AND NOT
SUBORDINATED TO THE CLAIMS OF OTHER CREDITORS AS DETERMINED IN SUCH ACTION OR
PROCEEDING.]
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162
Section 1.3 Validity and Priority of Security Interest. The
Debtor agrees that the Security Interest shall at all times be valid,
perfected, continuing and binding and enforceable against the Debtor and all
other Persons, in accordance with the terms hereof, as security for the
Obligations, and that the Collateral shall not at any time be subject to any
other Lien, except Permitted Liens.
Section 1.4 Maintenance of Status of Security Interest,
Collateral and Rights.
(a) Required Action. The Debtor shall take all action that may be
necessary and that the Collateral Agent may reasonably request, so as at all
times (i) to maintain the validity, perfection, enforceability and priority of
the Security Interest in the Collateral in conformity with the requirements of
Section 1.3, and (ii) to protect and preserve, and to enable the exercise or
enforcement of, the rights of the Collateral Agent hereunder, including (A)
immediately discharging all Liens, except Permitted Liens, and (B) executing
and delivering financing or continuation statements, instruments of pledge,
notices and instructions in each case in form and substance reasonably
satisfactory to the Collateral Agent.
(b) Protection of Collateral. Except as permitted under the
Credit Agreements, the Debtor shall protect, preserve, renew and maintain, in
each case in a manner consistent with reasonably responsible business and legal
practices, all rights of the Debtor in the Collateral, including (i)
prosecuting such suits, proceedings or other actions for infringement, unfair
competition, dilution or other damage as the Debtor in its reasonable business
judgment deems appropriate under the circumstances or (ii) appearing in and
defending any action or proceeding that may materially adversely affect the
Debtor's title to or the Collateral Agent's security interest in all or any
material part of the Collateral, when such action is in the Debtor's reasonable
business judgment necessary to protect the Debtor's Collateral. Any expenses
incurred by the Debtor in protecting, preserving, renewing and maintaining the
Collateral shall be borne by the Debtor. To the maximum extent permitted by
Laws, during the continuance of an Event of Default, the Collateral Agent shall
have the right, without taking title to any Collateral, to bring suit to
enforce any or all Collateral or its Security Interest in any or all of the
Collateral, in which event the Debtor shall, at the reasonable request of the
Collateral Agent, do any and all lawful acts and execute any and all proper
documents reasonably required by the Collateral Agent in aid of such
enforcement. All reasonable costs, reasonable expenses and other moneys
reasonably advanced by the Collateral Agent in connection with the foregoing
shall, whether or not there are then outstanding any amounts under the Credit
Agreements, be treated as Obligations, but the making of any advances by the
Collateral Agent or any other Secured Party shall not relieve the Debtor of any
default hereunder.
(c) Authorized Action. The Collateral Agent is hereby authorized
to file one or more continuation statements, and during the continuance of an
Event of Default, financing statements, amendments thereto and instruments of
pledge, notices and instructions without the signature of or in the name of the
Debtor when permitted by Applicable Law provided that the Collateral Agent. A
carbon, photographic or other reproduction of this Agreement or of any
financing
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163
statement filed in connection with this Agreement shall be sufficient as a
financing statement where permitted by Applicable Law.
(d) Registrations. Except as permitted under the Credit
Agreements, the Debtor shall renew or maintain, as specified in and permitted
by any Applicable Law, and shall make any filings necessary to renew or
maintain the Registrations referred to in Section 2.4.
Section 1.5 Debtor Remains Obligated; the Collateral Agent and
Secured Parties Not Obligated. The grant by the Debtor to the Collateral Agent
of the Security Interest shall not relieve the Debtor from the performance of
any term, covenant, condition or agreement on its part to be performed or
observed (including by virtue of the exercise by the Collateral Agent of any of
its rights hereunder), or from any liability to any Person, under or in respect
of any of the Collateral or impose any obligation on the Collateral Agent or
any Secured Party or impose any liability on the Collateral Agent or any other
Secured Party for any act or omission on the part of the Debtor relative
thereto.
Section 1.6 Termination.
(a) After the latest of the Release Dates set forth in the Credit
Agreements, (i) this Agreement shall terminate and be of no further force and
effect (except as provided in Section 1.6(b)) and all rights to the Collateral
shall revert to the Debtor, and (ii) the Collateral Agent will, at the Debtor's
expense, execute and deliver to the Debtor such documents as the Debtor shall
reasonably request to evidence such termination.
(b) The Debtor agrees that, to the extent permitted by Applicable
Law, if at any time all or any part of any payment theretofore applied by the
Collateral Agent and the other Secured Parties to any of the Obligations is or
must be rescinded or returned by any Person for any reason whatsoever
(including the insolvency, bankruptcy or reorganization of the Debtor or any
other Person), such Obligations shall, for the purposes of this Agreement, to
the extent that such payment is or must be rescinded or returned, be deemed to
have continued in existence, notwithstanding such application by the Collateral
Agent or any other Secured Party, and the Security Interest granted hereunder
shall continue to be effective or be reinstated, as the case may be, as to such
Obligations, all as though such application by the Collateral Agent or any
other Secured Party had not been made.
ARTICLE 2
Representations and Warranties
The Debtor represents and warrants as follows:
Section 2.1 Authorization; Enforceability; Required Consents;
Absence of Conflicts. The Debtor has the legal power, and has taken all
necessary legal action to authorize it, to
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164
execute, deliver and perform in accordance with its terms this Agreement and to
execute and deliver all financing statements and other filings contemplated
hereby, including those supplementary or additional filings referred to in
Section 3.5. This Agreement has been duly executed and delivered by the Debtor
and is the legal, valid and binding obligation of the Debtor, enforceable in
accordance with its terms subject to (i) equitable principles generally and
(ii) the Debtor Relief Laws (insofar as such laws relate to the bankruptcy,
insolvency or similar event of the Debtor). The execution, delivery and
performance in accordance with its terms by the Debtor of this Agreement does
not and (absent any change in any Law) will not (a) except for the filing in
the jurisdiction set forth in Schedule 1 hereto and acceptance of financing
statements and continuation statements in connection therewith delivered to the
Collateral Agent describing this Agreement and the Collateral under the UCC,
the timely filing of this Agreement with the United States Patent and Trademark
Office and acceptance thereof to the extent permitted by Applicable Law and
those supplementary or additional filings referred to in Section 3.5, require
any consent or approval on or prior to the Agreement Date not already obtained,
including any consent or approval of any shareholder or partner of or other
holder of an equity interest in the Debtor except to the extent that the
failure to obtain such consent or approval could not reasonably be expected to
have a Material Adverse Effect, (b) violate or conflict with its organizational
documents, or (c) violate or conflict with, result in a breach of, constitute a
default under, or result in or require the creation of any Lien (other than the
Security Interest) upon any assets of the Debtor under any contract or
agreement or Applicable Laws, in each case the effect of which could reasonably
be expected to have a Material Adverse Effect.
Section 2.2 Rights of the Debtor. The Debtor is the legal and
beneficial owner of the Collateral free and clear of any Lien, except for the
Security Interest and Permitted Liens. No effective financing statement or
other instrument similar in effect naming the Debtor as "debtor" covering all
or any part of the Collateral is on file in any recording office, except such
as (a) may have been filed in favor of the Collateral Agent relating to this
Agreement, (b) may be filed in respect of Permitted Liens, and (c) may be filed
in connection with respect to which the requirements of Section 3.1(i) of each
of the Credit Agreements have been notified.
Section 2.3 Perfection. This Agreement, together with the
filings referred to in Section 2.1(a) above, will create in favor of the
Collateral Agent valid and perfected security interests in the Collateral and
such security interests will be a first priority security interest on existing
Registrations, subject only to Permitted Liens; provided that additional
actions may be required with respect to the perfection of proceeds of the
Collateral held on the date hereof.
Section 2.4 Registrations. Annexes X-0, X-0, X-0 and B-2, as
applicable, set forth a true and complete list of all material Registrations in
the United States Patent and Trademark Office and related state filings owned
by the Debtor as of the date hereof.
Section 2.5 Other Property. On the date hereof, the Debtor has
no interest in any Copyright that is material to the operation of the Debtor's
existing and anticipated business and that are registered or subject to any
application for registration, except where the failure to do
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165
so could not reasonably be expected to have a Material Release Effect, and the
Debtor does not believe, after appropriate review of all relevant facts and
circumstances, that any registration or filing with respect to any interest the
Debtor may have in any property which may constitute Copyrights is material to
the operation of the Debtor's existing and anticipated business.
ARTICLE 3
Covenants
Section 3.1 Chief Executive Office. The Debtor shall maintain
its chief executive office and the office where the books and records relating
to the Collateral are kept only at the location specified on Schedule 1 to the
Security Agreement executed by the Debtor pursuant to the Credit Agreements.
Section 3.2 Preservation of Existence and Preservation of
Enforceability. The Debtor shall, so long as any of the Obligations remain
outstanding, take all reasonable action and obtain all material Necessary
Authorizations reasonably required so that its obligations under this Agreement
will at all times be legal, valid and binding and enforceable in accordance
with its terms, subject to (i) equitable principles generally and (ii) the
Debtor Relief Laws (insofar as such laws relate to the bankruptcy, insolvency
or similar event of the Debtor), except, in each case, where the failure to
obtain such Necessary Authorizations could not reasonably be expected to have a
Material Adverse Effect.
Section 3.3 No Disposition of Collateral. Except to the extent
permitted by the Credit Agreements, the Debtor shall not sell, transfer or
otherwise dispose of any of the Collateral or any interest therein that is
material to the Debtor's business, or grant any license thereunder, except for
licenses granted or other dispositions in the ordinary course of business.
Section 3.4 Additional Property. If after the date hereof, the
Debtor uses or acquires any interest in any Registration which is within the
definition of "Collateral" or modification, reformulation or other alteration
to any Registration that is material to the Debtor's business, the Debtor shall
execute and deliver to the Collateral Agent all documents and instruments the
Collateral Agent may reasonably require to grant to the Collateral Agent a
perfected first priority Lien therein (subject only to Permitted Liens) and to
subject all of such interest to this Agreement, including but not limited to
any new, supplementary or additional filings.
ARTICLE 4
Event of Default
Upon the occurrence and during the continuance of an Event of Default:
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166
Section 4.1 Application of Proceeds. All cash proceeds received
by the Collateral Agent upon any sale of, collection of, or other realization
upon, all or any part of the Collateral shall be applied as follows:
First: To the payment of all reasonable out-of-pocket costs and
expenses incurred in connection with the sale of, collection of or other
realization upon Collateral, including reasonable attorneys' fees and
disbursements;
Second: To the payment of the Obligations as provided in the
Intercreditor Agreement and in such order and in such manner as provided in the
Intercreditor Agreement (with the Debtor remaining liable for any deficiency);
and
Third: To the extent of the balance (if any) of such proceeds, to the
payment to the Debtor or other Person legally entitled thereto.
Section 4.2 Remedies.
(a) If an Event of Default has occurred and is continuing, the
Collateral Agent may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code in effect in the State of Texas at that time (the "UCC")
(whether or not the Uniform Commercial Code applies to the affected
Collateral), and also may (i) require the Debtor to, and the Debtor hereby
agrees that it will at its expense and upon request of the Collateral Agent
forthwith, assemble all or part of the Collateral (to the extent capable of
being assembled) as directed by the Collateral Agent and make it available to
the Collateral Agent at a place to be designated by the Collateral Agent, which
is reasonably convenient to both parties or (ii) without notice, except as
specified below, sell the Collateral or any portion thereof in one or more
parcels at public or private sale, at any of the Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Collateral Agent may deem commercially reasonable. The Debtor
agrees that, to the extent notice of sale shall be required by Applicable Law,
ten days' written notice to the Debtor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification, provided that ten days' written notice does not
violate any Applicable Law. The Collateral Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. The Collateral Agent may be the purchaser at any sale of the
Collateral and pay all or any part of the purchase price thereof by cancelling
part or all of the Obligations.
(b) If an Event of Default has occurred and is continuing, the
Collateral Agent may obtain the appointment of a receiver of the Collateral.
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(c) If an Event of Default has occurred and is continuing, the
Collateral Agent may without notice to the Debtor and at such time or times as
the Collateral Agent in its reasonable discretion may determine, exercise any
or all of the Debtor's rights in, to and under, or in any way connected with or
related to, any or all of the Collateral in accordance with Section 6.4,
including (i) enforcing the performance of, and exercising any or all of the
Debtor's rights with respect to the Collateral, in each case by legal
proceedings or otherwise and (ii) settling, adjusting, compromising, extending,
renewing, discharging and releasing any or all of, and any legal proceedings
brought with respect to any or all of, the Debtor's rights with respect to the
Collateral.
(d) If an Event of Default has occurred and is continuing, the
Collateral Agent may exercise any other right or remedy available under any
other Loan Document or Applicable Laws.
(e) The Debtor agrees that, in any sale of any of the Collateral
after an Event of Default that has occurred and is continuing, the Collateral
Agent is authorized to comply with any limitation or restriction in connection
with such sale as counsel may advise the Collateral Agent is necessary in order
to avoid any violation of applicable Law (including compliance with such
procedures as may restrict the number of prospective bidders or purchasers,
require that such prospective bidders and purchasers have certain
qualifications, and restrict such prospective bidders and purchasers to Persons
who will represent and agree that they are purchasing for their own account or
investment and not with a view to the distribution or resale of such
Collateral), or in order to obtain any required approval of the sale or of the
purchase by any Tribunal, and the Debtor further agrees that such compliance
shall not result in such sale being considered or deemed not to have been made
in a commercially reasonable manner, nor shall the Collateral Agent or any
other Secured Party be liable or accountable to the Debtor for any discount
allowed solely by reason of the fact that such Collateral was sold in
compliance with any such limitation or restriction.
(f) Upon written demand of the Collateral Agent, after an Event of
Default has occurred and in continuing the Debtor shall execute and deliver to
the Collateral Agent an assignment or assignments of the Collateral and such
other documents as are reasonably necessary to carry out the intent and
purposes of this Agreement. The Debtor agrees that such an assignment and/or
recording shall be applied to reduce the Obligations outstanding only to the
extent that the Collateral Agent or any other Secured Party receives cash
proceeds in respect of the sale of, or realization upon, the Collateral.
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(g) For the purpose of enabling the Collateral Agent to exercise
rights and remedies under this Section 4.2 at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose, the Debtor hereby grants to the Collateral Agent, an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to the Debtor) to use, assign, license or sublicense any of
the Collateral now owned or hereafter acquired by the Debtor, wherever the same
may be located, including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all computer
programs used for the compilation or printout thereof.
SECTION 4.3 INDEMNITY AND EXPENSES.
(a) THE DEBTOR AGREES TO INDEMNIFY (WHICH SHALL BE PAYABLE FROM
TIME TO TIME ON DEMAND) THE COLLATERAL AGENT AND OTHER SECURED PARTIES FROM AND
AGAINST ANY AND ALL CLAIMS, LOSSES AND LIABILITIES (INCLUDING REASONABLE
ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THIS AGREEMENT (INCLUDING
ENFORCEMENT OF THIS AGREEMENT), EXPRESSLY INCLUDING SUCH CLAIMS, LOSSES, OR
LIABILITIES ARISING OUT OF MERE NEGLIGENCE OF THE COLLATERAL AGENT OR ANY OTHER
SECURED PARTY, EXCEPT CLAIMS, LOSSES OR LIABILITIES AS FINALLY JUDICIALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED SOLELY FROM
THE COLLATERAL AGENT'S OR ANY SECURED PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, BUT EXCLUDING (I) ANY CLAIM OR LIABILITY THAT ARISES AS A DIRECT
RESULT OF THE OPERATION OF ANY COLLATERAL BY THE COLLATERAL AGENT OR ANY OF THE
OTHER SECURED PARTIES AFTER TAKING POSSESSION THEREOF BY FORECLOSURE OR BY
TRANSFER IN LIEU OF FORECLOSURE (PROVIDED THAT SUCH CLAIM OR LIABILITY DOES NOT
RELATE TO ANY CONDITION EXISTING ON OR WITH RESPECT TO SUCH COLLATERAL PRIOR TO
FORECLOSURE OR TRANSFER IN LIEU OF FORECLOSURE), (II) MATTERS RAISED
EXCLUSIVELY BY A PARTICIPANT AGAINST THE COLLATERAL AGENT OR ANY OTHER SECURED
PARTY, AND (III) MATTERS RAISED BY ONE LENDER AGAINST A LENDER OR BY ANY
SHAREHOLDERS OF A LENDER AGAINST A LENDER OR ITS MANAGEMENT.
(b) The Debtor will upon demand pay to the Collateral Agent the
amount of any and all reasonable out-of- pocket expenses, including the
reasonable fees and disbursements of its counsel and of any experts and agents,
which the Collateral Agent may incur in connection with (i) the administration
of this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Collateral Agent
hereunder, or (iv) the failure by the Debtor to perform or observe any of the
provisions hereof.
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ARTICLE 5
Interpretation
Section 5.1 Definitional Provision.
(a) Certain Terms Defined by Reference. The terms "collateral",
"inventory", "rights", and "security interest" shall have the meanings ascribed
thereto in the UCC, or, when capitalized, the meanings specified in subsection
(b) below.
(b) Other Defined Terms. For purposes of this Agreement:
"Agreement" means this Agreement, including all schedules, annexes and
exhibits hereto.
"Collateral" means the Debtor's rights, title and interests, (whatever
they may be) in each of the following, in each case whether now or hereafter
existing or now owned or hereafter acquired by the Debtor and whether or not
the same is subject to Article 9 of the UCC, and wherever the same may be
located, but only to the extent such assets are not presently encumbered:
(i) the Trademarks and Goodwill;
(ii) the Patents;
(iii) all registrations or letters patent issued or applied
for (now or hereafter) with respect to the Trademarks and Patents and
renewals thereof in the United States and any state thereof (the
"Registrations");
(iv) any renewal, reissue, re-examination certificate,
extension or the like with respect to the Trademarks and Patents;
(v) all rights to use the Trademarks as trade names or
assumed names in all aspects of its business;
(vi) all inventions, processes, production methods,
proprietary information, know-how and trade secrets related to the
Patents;
(vii) all licenses, sublicenses or user or other agreements
granted in favor of or from the Debtor with respect to any of the
foregoing to the extent assignable without violation thereof, together
with any Goodwill connected with or symbolized by any such licenses
and agreements and the right to prepare for sale and sell any and all
inventory of the Debtor now or hereafter covered by such licenses and
agreements;
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170
(viii) all proceeds and products of the foregoing. The
inclusion of "proceeds" of Collateral in the definition of
"Collateral" shall not be deemed a consent by the Collateral Agent to
any sale or other disposition of any Collateral not otherwise
specifically permitted by the terms hereof or by the Credit
Agreements.
"Copyright" means any copyright, copyright registration and
applications for such registration, all subject matter related to such
copyrights, in any and all forms, and all copyrights and applications for
registration of copyrights related to such copyrights.
"Goodwill" means the goodwill of the businesses connected with the use
of (or associated with) and symbolized by the Trademarks, but not any other
goodwill.
"Governmental Approval" means any authorization, consent, approval,
license or exemption of, registration or filing with, or report or notice to,
any Tribunal.
"Information" means data, certificates, reports, statements (including
financial statements), documents and other information in form (including
electronic media) reasonably acceptable to the Collateral Agent.
"Patents" means all patents, all inventions and subject matter related
to such patents, in any and all forms, and all patents and applications for
patents related to such patents, including but not limited to the patents
listed on Annex A-1 attached hereto, all inventions and all subject matter
related to such patents, in any and all forms, and all patents and applications
for patents related to such patents, including those patents and applications
listed on Annex A-2 attached hereto, together with the reissues, divisions,
continuations, renewals, extensions and continuations- in-part thereof, all
income, royalties, damages and payments now or hereafter due and payable under
and with respect thereto, including, without limitation, damages for past or
future infringements thereof and the right to xxx for past, present and future
infringements thereof.
"Security Interest" means the continuing security interest of the
Collateral Agent in the Collateral intended to be effected by the terms of this
Agreement or any financing and continuation statements or other filings
contemplated hereby.
"Trademarks" means all trade names, trademarks, and service marks, in
any and all forms, and all trade name, trademark and service xxxx registrations
and applications for registration related to such trademarks, trade names and
service marks, including but not limited to the registered trade names,
trademarks, and service marks listed on Annex B- 1 attached hereto, and all
applications for registration of trade names, trademarks, and service marks,
including those applications listed on Annex B-2 attached hereto, all common
law rights to such trade names, trademarks and service marks, the right to
recover for all past, present and future infringements thereof, and all other
rights of any kind whatsoever accruing thereunder or pertaining thereto.
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171
"UCC" means Article 9 of the Uniform Commercial Code as in effect from
time to time in the State of Texas.
(c) Other Definitional Provisions.
(i) Except as otherwise specified herein, all references
herein (A) to any Person shall be deemed to include such Person's
successors and assigns, (B) to any Applicable Law referred to herein
shall be deemed references to such Applicable Law as the same may have
been or may be amended or supplemented from time to time and (C) to
this Agreement or other agreement defined or referred to herein shall
be deemed a reference to this Agreement or other agreement as the
terms thereof may have been or may be amended, supplemented, waived or
otherwise modified from time to time.
(ii) Whenever the context so requires, the neuter gender
includes the masculine or feminine, the masculine gender includes the
feminine, and the singular number includes the plural, and vice versa.
(iii) Except as otherwise indicated, any reference herein
to the "Collateral", the "Obligations" or any other collective or
plural term shall be deemed to be a reference to each and every item
included within the category described by such collective or plural
term, so that a reference to the "Collateral" or the "Obligations"
shall be deemed a reference to any or all of the Collateral or the
Obligations, as the case may be.
(iv) Capitalized Terms not otherwise defined herein have
the meaning specified in the Credit Agreements, and, to the extent of
any conflict, terms as defined in the Credit Agreements shall control
(provided, that a more expansive or explanatory definition shall not
be deemed a conflict).
Section 5.2 Power of Attorney. Each power of attorney, license
and other authorization in favor of the Collateral Agent or any other Person
granted by or pursuant to this Agreement shall be deemed to be irrevocable and
coupled with an interest.
ARTICLE 6
Miscellaneous
Section 6.1 Expenses of the Debtor's Agreements and Duties. The
Collateral Agent and the other Secured Parties shall not be liable for the
costs and expenses of the Debtor arising out of the Debtor's performance or
observance of the terms, conditions, covenants and agreements to be observed or
performed by the Debtor under this Agreement.
Section 6.2 Collateral Agent's Right to Perform on the Debtor's
Behalf. If the Debtor shall fail to observe or perform any of the terms,
conditions, covenants and agreements to be
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172
observed or performed by it under this Agreement, the Collateral Agent may (but
shall not be obligated to) do the same or cause it to be done or performed or
observed, either in its name or in the name and on behalf of the Debtor, and in
the event that the Debtor shall have failed to observe or perform any of the
terms, conditions, covenants and agreements to be observed or performed by it
under this Agreement, then the Debtor hereby authorizes the Collateral Agent to
do so, and the Debtor hereby appoints the Collateral Agent, and any other
Person the Collateral Agent may designate, as the Debtor's attorney-in-fact
(exercisable during the continuance of an Event of Default) to do, or cause to
be done, in the name, place and stead of the Debtor in any way in which the
Debtor itself could do, or cause to be done, any or all things necessary to
observe or perform the terms, conditions, covenants and agreements to be
observed or performed by the Debtor under this Agreement. In addition, the
Debtor hereby irrevocably appoints the Collateral Agent as the Debtor's
attorney-in-fact (exercisable during the continuance of an Event of Default) to
execute and deliver in the Debtor's name and stead to any purchaser at any sale
held under Section 4.2 hereof any and all documents and instruments of
assignment, transfer and conveyance necessary or appropriate to transfer to
such purchaser the Collateral sold at such sale. This appointment as
attorney-in-fact shall terminate upon the termination of this Agreement.
Section 6.3 Collateral Agent's Right to Use Agents. The
Collateral Agent may exercise its rights under this Agreement through an agent
or other designee.
Section 6.4 Limitation of the Collateral Agent's Obligations With
Respect to Collateral.
(a) Except for (i) exercising reasonable care in respect of
Collateral held by the Collateral Agent and (ii) accounting for moneys actually
received by it hereunder, the Collateral Agent shall not have any duty or
liability to protect or preserve any Collateral or to preserve rights
pertaining thereto, except to the extent of any gross negligence or willful
misconduct of the Collateral Agent or other Secured Parties.
(b) Nothing contained in this Agreement shall be construed as
requiring or obligating the Collateral Agent, and the Collateral Agent shall
not be required or obligated, to (i) present or file any claim or notice or
take any action, with respect to any Collateral or in connection therewith or
(ii) notify the Debtor of any decline in the value of any Collateral.
Section 6.5 Rights of the Collateral Agent under UCC and
Applicable Law. The Collateral Agent shall have, with respect to the
Collateral, in addition to all of their rights under this Agreement, (a) the
rights of a secured party under the UCC, whether or not the UCC would otherwise
apply to the collateral in question, and (b) the rights of a secured party
under all other Applicable Laws.
Section 6.6 Waivers of Rights Inhibiting Enforcement. To the
extent not prohibited by Applicable Law, the Debtor waives all rights of
redemption, appraisement, or marshalling of assets.
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173
Section 6.7 Notices and Deliveries.
(a) Manner of Delivery. All notices and other communications
provided for hereunder shall be in writing (except in those cases where giving
notice by telephone is expressly permitted) and shall be deemed to have been
given on the date personally delivered or sent by telecopy (answer back
received), or three days after deposit in the mail, designated as certified
mail, return receipt requested, postage prepaid, or one day after being
entrusted to a reputable commercial overnight delivery service, addressed to
the party to which such notice is directed at its address determined as
provided in this Section 5.9.
(b) Addresses. All notices, communications and materials to be
given or delivered pursuant to this Agreement shall be given or delivered at
the following respective addresses and telecopier and telephone numbers and to
the attention of the following individuals or departments:
(i) if to the Debtor, to it at:
Pillowtex Corporation
000 Xxxx Xxx
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
(ii) if to the Collateral Agent, to it at:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx
or at such other address or, telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify by giving 10 days' written notice to the other
specifically captioned "Notice of Change of Address".
Section 6.8 Rights and Remedies Cumulative. Each of the
Collateral Agent's rights and remedies under this Agreement shall be in
addition to all of its other rights and remedies under this Agreement and
Applicable Law, and nothing herein shall be construed as limiting any such
rights or remedies.
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174
Section 6.9 Amendments; Waivers. Any term, covenant, agreement
or condition of this Agreement may be amended, and any right under this
Agreement may be waived, if, but only if, such amendment or waiver is in
writing and is signed by the Collateral Agent and, in the case of an amendment,
by the Debtor. Unless otherwise specified in such waiver, a waiver of any
right under this Agreement shall be effective only in the specific instance and
for the specific purpose for which given. No election not to exercise, failure
to exercise or delay in exercising any right, nor any course of dealing or
performance, shall operate as a waiver of any right of the Collateral Agent
under this Agreement or Applicable Law, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or
the exercise of any other right of the Collateral Agent under this Agreement or
Applicable Law.
SECTION 6.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS
(WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS) AND THE UNITED STATES OF
AMERICA, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE REQUIRED TO BE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF TEXAS.
SECTION 6.11 WAIVER OF JURY TRIAL. THE COLLATERAL AGENT AND THE
DEBTOR HEREBY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL
BY JURY IN ANY JUDICIAL PROCEEDINGS INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR
RELATED TO, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 6.12 Consent to Jurisdiction; Waiver of Immunities.
(a) The Debtor and the Collateral Agent each hereby irrevocably
submits to the non-exclusive jurisdiction of any United States Federal or Texas
State courts sitting in Dallas, Texas, in any action or proceeding arising out
of or relating to this Agreement, and the Debtor and the Collateral Agent
hereby irrevocably waives any objection it may now or hereafter have as to the
venue of any such suit, action or proceeding brought in such court or that such
court is an inconvenient forum.
(b) Nothing in this section shall limit the right of the Debtor,
the Collateral Agent or any other Secured Party to bring any action or
proceeding against any other party or its property in the courts of any other
jurisdictions.
Section 6.13 Severability. Any provision of this Agreement which
is for any reason prohibited or found or held invalid or unenforceable by any
court or governmental agency shall be ineffective to the extent of such
prohibition or invalidity or unenforceability, without
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175
invalidating the remaining provisions hereof in such jurisdiction or affecting
the validity or enforceability of such provision in any other jurisdiction.
Section 6.14 Counterparts. This Agreement may be signed in any
number of counterparts, each of which when so executed and delivered shall be
deemed to be an original, but all such counterparts together shall constitute
but one and the same instrument.
Section 6.15 Successors and Assigns. All of the provisions of
this Agreement shall be binding and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
Section 6.16 Loan Documents. This Agreement is a Loan Document
executed pursuant to the Credit Agreements and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
Section 6.17 Obligations Not Affected. To the fullest extent
permitted by Applicable Law, the obligations of the Debtor under this Agreement
shall remain in full force and effect without regard to, and shall not be
impaired or affected by:
(a) any amendment or modification or addition or supplement to any
Loan Documents or any instrument delivered in connection therewith or any
assignment or transfer thereof;
(b) any exercise, non-exercise, or waiver by the Collateral Agent
or any other Secured Party of any right, remedy, power or privilege under or in
respect of, or any release of any guaranty or the Collateral or any part
thereof provided pursuant to, this Agreement or any other Loan Documents;
(c) any waiver, consent, extension, indulgence or other action or
inaction in respect of this Agreement, any other Loan Documents or any
assignment or transfer of any thereof; or
(d) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of the Debtor or any other
Person, whether or not the Debtor shall have notice or knowledge of any of the
foregoing.
SECTION 6.18 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER
WITH THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL ARGUMENTS BETWEEN
THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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176
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers all as of the date first above
written.
DEBTOR:
Name:
Title:
-----------------------------------
-----------------------------------
Telephone No.:
---------------
Telecopier No.:
---------------
Attention:
----------------------
----------------------
SECURED PARTY:
NATIONSBANK OF TEXAS, N.A., as the
Collateral Agent
By:
Name:
Title:
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177
Annex A-1
Patents
-------
Nature of Interest Country of
(e.g. owner, licensee) Patent No. Issue Date Issue
---------------------- ---------- ---------- ------------
178
Annex A-2
Patent Applications
-------------------
Nature of Interest Serial Country of
(e.g. owner, licensee) No. Filing Date Issue
---------------------- ------ ----------- ------------
179
Annex B-1
Registered Trademarks
---------------------
Nature of
Interest of Goods or
(e.g. owner, Registered Registration Int'l Class Services Date Country of
licensee Trademark No. Covered Covered Registered Reg.
------------ ---------- ------------ ----------- -------- ---------- ----------
180
Annex B-2
Trademark Applications
----------------------
Trademark
Nature of Application
Interest of relates to Int'l Goods or Country
(e.g. owner, following Serial Class Services Date of of
licensee Trademark No. Covered Covered Appl. Appl.
------------ ----------- ------ ------- -------- ------- -----
181
EXHIBIT D
COMPLIANCE CERTIFICATE
To: NationsBank of Texas, N.A., as Administrative Agent
From: Pillowtex Corporation
Date: ______________ ____, ____
Re: Amended and Restated Credit Agreement, dated as of December 19, 1997
("Credit Agreement"), among Pillowtex Corporation (the "Borrower"),
certain Lenders, and NationsBank of Texas, N.A., as Administrative
Agent
This Compliance Certificate is delivered pursuant to Section 6.3 of
the Credit Agreement. All capitalized terms used herein and defined in the
Credit Agreement shall be used as so defined. For purposes hereof, section
references herein related to sections of the Credit Agreement and bracketed
amounts or ratios refer to the maximum or minimum amounts or ratios required
under the relevant sections of the Credit Agreement.
I. Leverage Ratio
A. Total Debt, determined for the Borrower and its Subsidiaries on a
consolidated basis
1. Indebtedness for borrowed money $
------------
2. Obligations evidenced by bonds, debentures, notes or $
------------
other similar instruments
3. Non-contingent obligations to pay the deferred purchase $
------------
price of property or services other than trade payables
incurred in the ordinary course of business
4. Capitalized Lease Obligations $
------------
5. Total Debt [(1) + (2) + (3) + (4)] $
--------------
B. EBITDA, calculated for the four consecutive Fiscal Quarters
ending on the date of calculation (adjusted on a pro forma basis
to exclude from any period under consideration personnel costs
that have been eliminated concurrent with, or during the twelve-
month period subsequent to, the Agreement Date)
1. Earnings from operations
2. Depreciation $
------------
182
3. Amortization $
------------
4. Other non-cash charges (to the extent included in $
------------
determining Earnings from operations)
5. EBITDA [(1) + (2) + (3) + (4)] $
--------------
C. Leverage Ratio [(A) to (B)] to 1
----------
II. Covenant Calculations. [To be completed quarterly] Demonstration of
compliance with certain covenants contained in Article 7 of the Credit
Agreement for the period ended ____________________.
A. Section 7.1(c) Indebtedness of the Borrower and its Domestic $
-------------- --------------
Subsidiaries, including in respect of Capitalized Lease
Obligations, incurred to purchase, or to finance the purchase
of, assets which constitute property, plant and equipment
1. Maximum in aggregate principal amount outstanding, $35,000,000
when aggregated with Section 7.1(o)
--------------
2. Actual $
--------------
3. Difference [(1) - (2)] $
--------------
B. Section 7.1(h) Indebtedness assumed in connection with
--------------
Acquisitions permitted under Section 7.6 (excluding the
-----------
Fieldcrest Xxxxxx Transaction)
1. Maximum in aggregate principal amount outstanding $20,000,000
2. Actual $
--------------
3. Difference [(1) - (2)] $
--------------
C. Section 7.1(o) Other Indebtedness of the Borrower and its
--------------
Domestic Subsidiaries
1. Maximum in aggregate principal amount outstanding, $35,000,000
when aggregated with Section 7.1(c)
--------------
2. Actual $
--------------
3. Difference [(1) - (2)] $
--------------
D. Section 7.3(g) Investments consisting of non-cash
--------------
consideration received in connection with a sale of assets
permitted by Section 7.5
-----------
1. Maximum in aggregate amount outstanding at any time $25,000,000
2
183
2. Actual $
--------------
3. Difference [(1) - (2)] $
--------------
E. Section 7.3(i) Loans or advances to directors, officers and
--------------
employees of the Borrower or any of its Subsidiaries
1. Maximum in aggregate amount outstanding at any time $5,000,000
2. Actual $
--------------
3. Difference [(1) - (2)] $
--------------
F. Section 7.3(j) Other Investments
--------------
1. Maximum in aggregate amount outstanding at any time $25,000,000
2. Actual $
--------------
3. Difference [(1) - (2)] $
--------------
G. Section 7.5(c) Net Cash Proceeds from the disposition of
--------------
assets (to the extent not applied pursuant to Section 2.5(b))
--------------
outstanding and pending reinvestment pursuant to Section
-------
7.5(c)
------
1. Maximum at any time $5,000,000
2. Actual $
--------------
3. Difference [(1) - (2)] $
--------------
H. Section 7.7 Capital Expenditures
-----------
1. Maximum after the Agreement Date in aggregate amount
a. 3.25% of cumulative net revenues of the $
Borrower and its Subsidiaries from and after ---------------
the Agreement Date
b. Maximum [$175,000,000 + (a)] $
--------------
2. Actual $
--------------
3. Difference [(1) - (2)] $
--------------
I. Section 7.8(b) Dividends payable by the Borrower
--------------
1. Maximum in aggregate amount during any Fiscal Year $10,000,000
2. Actual $
--------------
3. Difference [(1) - (2)] $
--------------
3
184
J. Section 7.11 Maximum Leverage Ratio
------------
1. Maximum
a. From and including the last Fiscal Quarter of 5.75 to 1
Fiscal Year 1997 to but not including the
last Fiscal Quarter of Fiscal Year 1998
b. From and including the last Fiscal Quarter of 5.25 to 1
Fiscal Year 1998 to but not including the
last Fiscal Quarter of Fiscal Year 1999
c. From and including the last Fiscal Quarter of 4.75 to 1
Fiscal Year 1999 to but not including the
last Fiscal Quarter of Fiscal Year 2000
d. From and including the last Fiscal Quarter of 4.25 to 1
Fiscal Year 2000 and thereafter
2. Actual (see I.C. above) to 1
-----------
K. Section 7.12 Minimum Fixed Charge Coverage Ratio
------------
1. Minimum at the end of each Fiscal Quarter commencing 1.10 to 1
with the first Fiscal Quarter of Fiscal Year 1998
2. Actual
a. Pretax Cash Flow, for the four consecutive
Fiscal Quarters ending on the date of
calculation
(1) EBITDA (see I.B.5. above) $
---------------
(2) Capital Expenditures $
---------------
(3) Cash proceeds received from the sale $
of assets pursuant to Section 7.5(d) ---------------
--------------
(4) Pretax Cash Flow [(1) - (2) + (3)] $
--------------
4
185
b. Fixed Charges, calculated for the Borrower
and its Subsidiaries on a consolidated basis;
for the first three Fiscal Quarters of Fiscal
Year 1998, on an annualized basis, and for
each Fiscal Quarter thereafter, for the four
consecutive Fiscal Quarters ending on the
date of calculation
(1) Scheduled principal payments in $
respect of Indebtedness ---------------
(2) Cash interest expense (including $
interest expense pursuant to ---------------
Capitalized Lease Obligations)
(3) Cash Dividends paid $
---------------
(4) Fixed Charges [(1) + (2) + (3)] $
--------------
c. Fixed Charge Coverage Ratio [(a) to (b)] to 1
----------
L. Section 7.13 Minimum Net Worth
------------
1. Minimum
a. Fixed amount $
---------------
(1) From the Agreement Date to but not $250,000,000
including the last Fiscal Quarter of
Fiscal Year 1998
(2) From and including the last Fiscal $260,000,000
Quarter of Fiscal Year 1998 to but
not including the last Fiscal
Quarter of Fiscal Year 1999
(3) From and including the last Fiscal $280,000,000
Quarter of Fiscal Year 199 to but
not including the last Fiscal
Quarter of Fiscal Year 2000
(4) From and including the last Fiscal $300,000,000
Quarter of Fiscal Year 2000 to but
not including the last Fiscal
Quarter of Fiscal Year 2001
(5) From and including the last Fiscal $320,000,000
Quarter of Fiscal Year 2001 to but
not including the last Fiscal
Quarter of Fiscal Year 2002
5
186
(6) From and including the last Fiscal $340,000,000
Quarter of Fiscal Year 2002 and
thereafter
b. An amount equal to the net worth of any $
Person that, on or after the Agreement Date ---------------
becomes a Subsidiary of the Borrower or any
of its Subsidiaries or is merged into or
consolidated with the Borrower or any of its
Subsidiaries or substantially all of the
assets of which are acquired by the Borrower
or any of its Subsidiaries to the extent that
the purchase price therefor is paid in
Capital Stock of the Borrower or any of its
Subsidiaries
c. An amount equal to 100% of any increase in $
Net Worth pursuant to offerings of Capital ---------------
Stock of the Borrower or any of its
Subsidiaries or pursuant to the conversion or
exchange of any convertible subordinated debt
or redeemable preferred stock into Capital
Stock of the Borrower or any of its
Subsidiaries
(excluding any such increase in b. and c. above as a
result of the Fieldcrest Xxxxxx Transaction)
d. Minimum Net Worth [(a) + (b) + (c)] $
--------------
2. Actual $
--------------
3. Difference [(2) - (1)] $
--------------
III. Compliance Certificate. [To be completed quarterly] The undersigned
hereby certifies to you as follows:
(a) I am the duly elected qualified and acting chief financial
officer [or chief accounting officer] of Borrower.
(b) I have reviewed the provisions of the Credit Agreement and the
other Loan Documents, and a review of the activities of
Borrower during the period from _____________ ___, ____ to
__________ ___, ____ (the "Reporting Period") has been made
under my supervision with a view toward determining whether,
during the Reporting Period, Borrower has kept, observed,
performed and fulfilled all its obligations under the Credit
Agreement and such other Loan Documents.
6
187
(c) The representations and warranties made in the Loan Documents
are true and correct in all material respects as of the date
hereof as though made at and of the date hereof, except for
such representations and warranties which relate to a
particular date or which fail to be true and correct as a
result of events or occurrences permitted under the Loan
Documents, and no Default or Event of Default has occurred or
is continuing or is imminent.
This Compliance Certificate is executed and delivered on the ________
day of ______________________, ____.
PILLOWTEX CORPORATION
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
7
188
EXHIBIT E
ASSIGNMENT AND ACCEPTANCE
Dated _______________, _____
Reference is made to the Amended and Restated Credit Agreement dated
as of December 19, 1997 (as amended, modified or supplemented, the "Credit
Agreement") among Pillowtex Corporation, a Texas corporation ("Borrower"),
NationsBank of Texas, N.A. as Administrative Agent ("Administrative Agent"),
and the lenders parties thereto. Capitalized terms used but not defined herein
shall have the meanings set forth in the Credit Agreement and the Intercreditor
Agreement.
____________________________("Assignor") and ________________________
("Assignee") agree as follows:
1. Subject to the terms and conditions of this Assignment and
Acceptance, Assignor hereby sells and assigns to Assignee, and Assignee hereby
purchases and assumes from Assignor, $ ______________ in aggregate amount of
the Commitment in effect on the Effective Date (as defined below), and the
related pro rata share of the principal amount of Revolving Credit Advances
owing to Assignor on the Effective Date, the Revolving Credit Note held by
Assignor, and Assignor's participation in any Letters of Credit and
Reimbursement Obligations outstanding on the Effective Date.
2. Assignor (a) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (b) makes no representation or
warranty and assumes no responsibility with respect to (i) any statements,
warranties, or representations made in or in connection with the Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of the Credit Agreement or any other Loan Document or
(ii) the financial condition of the Borrower or any other Obligor or the
performance or observance by the Borrower or any other Obligor of any of their
respective obligations under the Credit Agreement or any other Loan Document;
and (c) attaches the Revolving Credit Note referred to in Paragraph 1 above to
exchange such Revolving Credit Note for new Revolving Credit Notes as provided
in Section 11.6(f) of the Credit Agreement.
3. Assignee (a) confirms that it has received a copy of the
Credit Agreement and the other Loan Documents, together with copies of the
financial statements referred to in Sections 4.1(j), 6.1 and 6.2 of the Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (b) agrees that it will, independently and without reliance upon
the Administrative Agent, Assignor, or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement and the other Loan Documents;
189
(c) appoints and authorizes the Administrative Agent and the Collateral Agent
to take such action as agent on its behalf and to exercise such powers under
the Credit Agreement, the other Loan Documents, and this Assignment and
Acceptance as are delegated to the Administrative Agent and the Collateral
Agent by the terms thereof and hereof, together with such powers as are
reasonably incidental thereto and hereto; (d) agrees that it will perform in
accordance with its terms all of the obligations which by the terms of the
Credit Agreement, the other Loan Documents, and this Assignment and Acceptance
are required to be performed by it as a Lender; (e) certifies that it is an
Eligible Assignee; and (f) specifies the addresses set forth in Schedule I
attached hereto as its address for the receipt of notices and as its initial
LIBOR Lender Office, respectively[; and (g) attaches the forms prescribed by
the IRS certifying as to Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to Assignee under the Credit Agreement, the other Loan Documents, and
this Assignment and Acceptance].
4. The effective date for this Assignment and Acceptance shall be
___________________, (the "Effective Date").
5. Upon such acceptance as of the Effective Date, the recordation
of the information herein in the Register and upon the remittance of a $3,500
processing fee to the Administrative Agent (less any processing fee paid in
respect of a simultaneous assignment under the Term Credit Agreement), (a)
Assignee shall be a party to the Credit Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (b) Assignor shall, to the extent provided in this Assignment
and Acceptance, relinquish its rights and be released from its obligations
under the Credit Agreement.
6. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of Texas. Without excluding
any other jurisdiction, Assignee agrees that the courts of Texas will have
jurisdiction over proceedings in connection herewith.
7. After giving effect to this Assignment and Acceptance (and all
other assignments under the Credit Agreement to be effective as of the
Effective Date):
a. Assignee's Specified Percentage shall be _____%.
b. Assignee's Voting Specified Percentage shall be ____%.
c. Assignor's Specified Percentage shall be _____%.
d. Assignor's Voting Specified Percentage shall be ____%.
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190
8. This Assignment and Acceptance may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same
instrument.
[NAME OF ASSIGNOR]
By:
----------------------------------
Name:
----------------------------
Title:
----------------------------
[NAME OF ASSIGNEE]
By:
----------------------------------
Name:
----------------------------
Title:
----------------------------
Accepted this ___ day of ____________, _____
NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent
By:
----------------------------------
Name:
----------------------------
Title:
----------------------------
PILLOWTEX CORPORATION
By:
----------------------------------
Name:
----------------------------
Title:
----------------------------
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191
Schedule I
ASSIGNEE'S ADDRESS
1. Address for the Advances and Receipt of Notices
2. Initial LIBOR Lending Office
192
EXHIBIT F
SUBSIDIARY GUARANTY
GUARANTY, dated _____________________________, made by each of the
parties listed on the signature pages hereof (collectively, the "Guarantors",
and each, a "Guarantor"), in favor of the Guarantied Parties referred to below.
W I T N E S S E T H:
WHEREAS, Pillowtex Corporation, a Texas corporation (the "Borrower"),
has entered into an Amended and Restated Credit Agreement, dated as of December
19, 1997, the financial institutions party thereto, and NationsBank of Texas,
N.A., as the administrative agent for said financial institutions (said Amended
and Restated Agreement, as it may be amended, supplemented or otherwise
modified from time to time, being the "Credit Agreement", and capitalized terms
not defined herein but defined therein being used herein as therein defined);
and
WHEREAS, the Borrower, directly or indirectly, owns beneficially and
of record 100% of the capital stock or other equity interests of the
Guarantors, and the Borrower and each of the Guarantors are members of the same
consolidated group of companies and are engaged in related businesses, and the
Guarantors will derive direct and indirect economic benefit from the Advances;
and
WHEREAS, it is a condition precedent to the obligation of the Lender
to make Advances under [THE REQUIREMENT OF SECTION 5.12 OF] the Credit
Agreement that the Guarantors shall have executed and delivered this Guaranty;
and
WHEREAS, the Lenders and the Administrative Agent are herein referred
to as the "Guarantied Parties";
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to make Advances and issue Letters of Credit, the Guarantors hereby
agree as follows:
SECTION 1. Guaranty. Each Guarantor hereby unconditionally and
irrevocably guarantees the full and prompt payment when due, whether at stated
maturity, by acceleration or otherwise, of, and the performance of, the
Obligations, whether now or hereafter existing and whether for principal,
interest, fees, expenses or otherwise, and any and all reasonable out-of-pocket
expenses (including, without limitation, reasonable counsel fees and expenses)
incurred by any of the Guarantied Parties in enforcing any rights under this
Guaranty. This Guaranty is an absolute guaranty of payment and performance and
not a guaranty of collection. In any action or proceeding involving any state
corporate Law, or any state or federal bankruptcy,
193
insolvency, reorganization or other Law affecting the rights of creditors
generally (collectively, the "Fraudulent Transfer Laws") if the obligations of
any Guarantor hereunder would otherwise, in each case after giving effect to
all other liabilities of such Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Guarantor in respect of intercompany indebtedness to
the Borrower, other Affiliates of the Borrower or other Obligors to the extent
that such indebtedness would be discharged in an amount equal to the amount
paid by such Guarantor hereunder) and after giving effect as assets to the
value (as determined under the applicable provisions of Fraudulent Transfer
Laws) of any agreement providing for an equitable allocation among such
Guarantor and other Obligors of obligations arising under guaranties by such
parties (including, without limitation, Section 10 of this Guaranty), be held
or determined to be void, invalid or unenforceable or subordinated to the
claims of any other creditors, on account of the amount of its liability under
this Guaranty, then, notwithstanding any other provision hereof to the
contrary, the amount of such liability shall, without any further action by
such Guarantor, any Lender, the Administrative Agent or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
SECTION 2. Guaranty Absolute. Each Guarantor guaranties that the
Obligations will be paid strictly in accordance with the terms of the Credit
Agreement, the Notes and the other Loan Documents, without set-off or
counterclaim, and regardless of any Law now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Guarantied
Parties with respect thereto. The liability of each Guarantor under this
Guaranty shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of any
other Loan Document or any other agreement or instrument relating to any Loan
Document, or avoidance or subordination of any of the Obligations;
(b) any change in the time, manner or place of payment of, or in
any other term of, or any increase in the amount of, all or any of the
Obligations, or any other amendment or waiver of any term of, or any consent to
departure from any requirement of, the Credit Agreement, the Notes or any of
the other Loan Documents;
(c) any exchange, release or non-perfection of any Lien on any
collateral for, or any release or amendment or waiver of any term of any other
guaranty of, or any consent to departure from any requirement of any other
guaranty of, all or any of the Obligations;
(d) the absence of any attempt to collect any of the Obligations
from the Borrower or from any other Guarantor or any other action to enforce
the same or the election of any remedy by any of the Guarantied Parties;
(e) any waiver, consent, extension, forbearance or granting of any
indulgence by any of the Guarantied Parties with respect to any provision of
any other Loan Document;
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194
(f) the election by any of the Guarantied Parties in any
proceeding under chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code") of the application of section 1111(b)(2) of the Bankruptcy
Code;
(g) any borrowing or grant of a security interest by the Borrower,
as debtor-in-possession, under section 364 of the Bankruptcy Code;
(h) the disallowance, under section 502 of the Bankruptcy Code, of
all or any portion of the claims of any of the Guarantied Parties for payment
of any of the Obligations; or
(i) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a borrower or a guarantor.
SECTION 3. Waiver. (a) Each Guarantor hereby (i) waives (A)
promptness, diligence, notice of acceptance and any and all other notices with
respect to any of the Obligations or this Guaranty, (B) any requirement that
any of the Guarantied Parties protect, secure, perfect or insure any security
interest in or other Lien on any property subject thereto or exhaust any right
or take any action against the Borrower or any other Person or any Collateral,
(C) the filing of any claim with a court in the event of receivership or
bankruptcy of the Borrower, (D) protest or notice with respect to nonpayment of
all or any of the Obligations, (E) the benefit of any statute of limitation,
(F) all demands whatsoever (and any requirement that same be made on the
Borrower as a condition precedent to much Guarantor's obligations hereunder)
and (G) all rights by which it might be entitled to require suit on an accrued
right of action in respect of any of the Obligations or require suit against
the Borrower or any other guarantor, whether arising pursuant to Section 34.02
of the Texas Business and Commerce Code, as amended, Section 17.001 of the
Texas Civil Practice and Remedies Code, as amended, Rule 31 of the Texas Rules
of Civil Procedure, as amended, or otherwise; and (ii) covenants and agrees
that, except as set forth in Section 11 hereof, this Guaranty will not be
discharged except by complete performance of the Obligations and any other
obligations of such Guarantor contained herein.
(b) If, in the exercise of any of its rights and remedies, any of
the Guarantied Parties shall forfeit any of its rights or remedies, including,
without limitation, its right to enter a deficiency judgment against the
Borrower or any other Person, whether because of any applicable law pertaining
to "election of remedies" or the like, each Guarantor hereby consents to such
action by such Guarantied Party and waives any claim based upon such action.
Any election of remedies which results in the denial or impairment of the right
of such Guarantied Party to seek a deficiency judgment against the Borrower
shall not impair the obligation of such Guarantor to pay the full amount of the
Obligations or any other obligation of such Guarantor contained herein.
(c) In the event any of the Guarantied Parties shall bid at any
foreclosure or trustee's sale or at any private sale permitted by law or under
any of the Loan Documents, such Guarantied Party may bid all or less than the
amount of the Obligations and the amount of such bid, if successful, need not
be paid by such Guarantied Party but shall be credited against the
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195
Obligations. The amount of the successful bid at any such sale, whether such
Guarantied Party or any other Person is the successful bidder, shall be
conclusively deemed to be the fair market value of the Collateral and the
difference between such bid amount and the remaining balance of the Obligations
shall be deemed to be the amount of the Obligations guaranteed under this
Guaranty, subject to any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which any of
the Guarantied Parties might otherwise be entitled by reason of such bidding at
any such sale; provided, however, that the terms of such sale are commercially
reasonable and in accordance with the provisions of the Loan Documents.
(d) Each Guarantor agrees that notwithstanding the foregoing and
without limiting the generality of the foregoing if, after the occurrence and
during the continuance of an Event of Default, the Guarantied Parties are
prevented by Applicable Law from exercising their respective rights to
accelerate the maturity of the Obligations, to collect interest on the
Obligations, or to enforce or exercise any other right or remedy with respect
to the Obligations, or the Administrative Agent is prevented from taking any
action to realize on the Collateral, such Guarantor agrees to pay to the
Administrative Agent for the account of the Guarantied Parties, upon demand
therefor, the amount that would otherwise have been due and payable had such
rights and remedies been permitted to be exercised by the Guarantied Parties.
(e) Each Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of the Borrower and of each other
guarantor of all or any part of the Obligations, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations or any part thereof,
that diligent inquiry would reveal. Each Guarantor hereby agrees that the
Guarantied Parties shall have no duty to advise any Guarantor of information
known to any of the Guarantied Parties regarding such condition or any such
circumstance. In the event that any of the Guarantied Parties in its sole
discretion undertakes at any time or from time to time to provide any such
information to any Guarantor, such Guarantied Party shall be under no
obligation (i) to undertake any investigation not a part of its regular
business routine, (ii) to disclose any information which, pursuant to accepted
or reasonable banking or commercial finance practices, such Guarantied Party
wishes to maintain confidential, or (iii) to make any other or future
disclosures of such information or any other information to such Guarantor.
(f) Each Guarantor consents and agrees that the Guarantied Parties
shall be under no obligation to xxxxxxxx any assets in favor of any Guarantor
or otherwise in connection with obtaining payment of any or all of the
Obligations from any Person or source.
SECTION 4. Representations and Warranties. Each Guarantor hereby
represents and warrants to the Guarantied Parties as follows:
(a) Such Guarantor (i) is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of the state of
its organization, (ii) is duly qualified as a foreign corporation or other
legal organization and in good standing under the laws of each jurisdiction in
which the character of its properties or the nature of its business requires
such
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196
qualification, except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect, (iii) has all requisite power and
authority to own its properties, to lease the property it operates under lease
and to conduct its business as now or currently proposed to be conducted, (iv)
is in compliance with its certificate of incorporation, by-laws, or other
similar organizational and governance documents, (v) is in compliance with all
other applicable requirements of Law except for such noncompliances as in the
aggregate would have no Material Adverse Effect, and (vi) has all Necessary
Authorizations, except for Necessary Authorizations which can be obtained by
the taking of ministerial action to secure the grant or transfer thereof or
failures which in the aggregate would not have any reasonable likelihood of
having a Material Adverse Effect.
(b) The execution, delivery and performance by such Guarantor of
this Guaranty:
(i) is within its legal powers;
(ii) has been duly authorized by all necessary legal
action, including, without limitation, the consent of stockholders,
partners or other equity holders where required; and
(iii) does not and will not (A) contravene its certificate
of incorporation or by-laws or other comparable governing documents,
(B) violate any other applicable requirement of Applicable Law
(including, without limitation, Regulations G, T, U and X of the Board
of Governors of the Federal Reserve System), or any order or decree of
any Tribunal or arbitrator except to the extent that any such
violation could not reasonably be expected to have a Material Adverse
Effect, (C) conflict with or result in the breach of, or constitute a
default under, or result in or permit the termination or acceleration
of, any of its agreements, (D) result in the creation or imposition of
any Lien upon any of its property (other than Liens in favor of the
Collateral Agent for the benefit of the Administrative Agent and the
Lenders and the administrative agent and the lenders under the Term
Credit Agreement), or (E) require the consent or approval of any
Tribunal or any other Person necessary on or prior to the Agreement
Date not already obtained, except to the extent that the failure to
obtain such consent or approval could not reasonably be expected to
have a Material Adverse Effect.
(c) This Guaranty has been duly executed and delivered by such
Guarantor and is the legal, valid and binding obligation of such Guarantor
enforceable against it in accordance with its terms, subject to Debtor Relief
Laws (insofar as any such law relates to the bankruptcy, insolvency or similar
event of the Guarantor) and general principles of equity.
(d) Except as reflected on Schedule 4 to the Credit Agreements as
of the Agreement Date, there is no Litigation pending against such Guarantor or
any of its Subsidiaries, or in any other manner relating directly and adversely
to such Guarantor or any of its Subsidiaries, or any of their properties, in
any court, Tribunal or arbitrator with respect to which there is a reasonable
likelihood of an adverse determination and that, if adversely determined, is
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197
reasonably likely to have a Material Adverse Effect. The performance by such
Guarantor under this Guaranty is not restrained or enjoined (either
temporarily, preliminarily or permanently).
SECTION 5. Amendments. Etc. No amendment or waiver of any provision
of this Guaranty nor consent to any departure by any Guarantor herefrom shall
in any event be effective unless the same shall be in writing, approved by the
Determining Lenders (or by all the Lenders where the approval of each Lender is
required under the Credit Agreement) and signed by the Administrative Agent,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 6. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (except in those
cases where giving notice by telephone is expressly permitted) and shall be
deemed to have been given on the date personally delivered or sent by telecopy
(answer back received), or three days after deposit in the mail, designated as
certified mail, return receipt requested, postage prepaid, or one day after
being entrusted to a reputable commercial overnight delivery service, if to any
Guarantor, addressed to it at its address specified on the signature pages
hereof, and if to any Guaranteed Party, addressed to it at the address of such
Guaranteed Party specified in the Credit Agreement.
SECTION 7. No Waiver; Remedies. (a) No failure on the part of any
Guarantied Party to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by Law or any of the other Loan
Documents.
(b) Failure by any of the Guarantied Parties at any time or times
hereafter to require strict performance by the Borrower, any Guarantor or any
other Person of any of the provisions, warranties, terms or conditions
contained in any of the Loan Documents now or at any time or times hereafter
executed by the Borrower, any Guarantor or such other Person and delivered to
any of the Guarantied Parties shall not waive, affect or diminish any right of
any of the Guarantied Parties at any time or times hereafter to demand strict
performance thereof, and such right shall not be deemed to have been modified
or waived by any course of conduct or knowledge of any of the Guarantied
Parties or any agent, officer, employee of any of the Guarantied Parties.
(c) No waiver by the Guarantied Parties of any default shall
operate as a waiver of any other default or the same default on a future
occasion, and no action by any of the Guarantied Parties permitted hereunder
shall in way affect or impair any of the rights of the Guarantied Parties or
the obligations of any Guarantor under this Guaranty or under any of the other
Loan Documents, except as specifically set forth in any such waiver. Any
determination by a court of competent jurisdiction of the amount of any
principal and/or interest or other amount constituting any of the Obligations
shall be conclusive and binding on each Guarantor irrespective of whether such
Guarantor was a party to the suit or action in which such determination was
made.
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198
SECTION 8. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each of the Guarantied Parties, subject to
the Intercreditor Agreement, is hereby authorized at any time and from time to
time, to the fullest extent permitted by Law, to set off and apply any and all
deposits (general or special (except trust and escrow accounts), time or
demand, provisional or final) at any time held and other Indebtedness at any
time owing by such Guarantied Party to or for the credit or the account of each
Guarantor against any and all of the obligations of each Guarantor now or
hereafter existing under this Guaranty, irrespective of whether or not such
Guarantied Party shall have made any demand under this Guaranty and although
such obligations may be contingent and unmatured. Each of the Guarantied
Parties agrees promptly to notify each Guarantor after any such set-off and
application made by such Guarantied Party; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Guarantied Party under this Section 8 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Guarantied Party may have.
SECTION 9. Continuing Guaranty; Transfer of Notes. Subject to
Section 11, this Guaranty is a continuing guaranty and shall remain in full
force and effect until the Release Date, (ii) be binding upon each Guarantor,
its successors and assigns, and (iii) inure to the benefit of and be
enforceable by the Guarantied Parties and their respective successors,
transferees, and permitted assigns. Without limiting the generality of the
foregoing clause (iii), each of the Guarantied Parties may assign or otherwise
transfer any Note held by it or Obligations owing to it to any other Person,
and such other Person shall thereupon become vested with all the rights in
respect thereof granted to such Guarantied Party herein or otherwise with
respect to such of the Notes and Obligations so transferred or assigned,
subject, however, to compliance with the provisions of Section 11.6 of the
Credit Agreement in respect of assignments.
SECTION 10. Reimbursement. To the extent that any Guarantor shall be
required to repay a portion of the Advances which shall exceed the greater of
(a) the amount of such Advances actually received by such Guarantor and (b) the
amount which such Guarantor would otherwise have paid if such Guarantor had
repaid the aggregate amount of such Advances (excluding the amount thereof
repaid by the Borrower) in the same proportion as such Guarantor's net worth
immediately after the later of the Agreement Date or the date such Guarantor
becomes a party to this Guaranty bears to the aggregate net worth of the
Guarantors (calculated for each Guarantor based on such Guarantor's net worth
immediately after the later of the Agreement Date or the date such Guarantor
becomes a party to this Guaranty), then such Guarantor shall be reimbursed by
the other Guarantors for the amount of such excess, pro rata, based on their
respective net worth immediately after the Agreement Date or the date such
Guarantor becomes a party to this Guaranty, as applicable. This Section 10 is
intended only to define the relative rights of the Guarantors, and nothing set
forth in this Section 10 is intended to or shall impair the obligations of the
Guarantors, jointly and severally, to pay to the Guarantied Parties the
Obligations as and when the same shall become due and payable in accordance
with the terms hereof.
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SECTION 11. Reinstatement. This Guaranty shall remain in full force
and effect and continue to be effective should any petition be filed by or
against any Obligor for liquidation or reorganization, should any Obligor
become insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any
Obligor's assets, and shall, to the fullest extent permitted by Applicable Law,
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant
to Applicable Law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligees of the Obligations or such part thereof,
whether as a "voidable preference," "fraudulent transfer," or otherwise, all as
though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall, to the fullest extent permitted by law, be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored
or returned.
SECTION 12. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND
BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 13. Submission to Jurisdiction; Jury Trial. (a) Any legal
action or proceeding with respect to this Guaranty or any document related
thereto may be brought in the courts of the State of Texas or the United States
of America for Dallas, Texas, and, each of the Guarantors and Guarantied
Parties hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each of the
Guarantors and Guarantied Parties hereby irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any such action or proceeding in such respective jurisdictions.
(b) Nothing contained in this Section 13 shall affect the right of
any Guarantor or Guarantied Party to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against any
other party or its property in any other jurisdiction.
(c) THE GUARANTORS AND GUARANTIED PARTIES EACH, TO THE MAXIMUM
EXTENT PERMITTED BY APPLICABLE LAW, WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED ON OR ARISING OUT OF THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT.
SECTION 14. Section Titles. The Section titles contained in this
Guaranty are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of this Guaranty.
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SECTION 15. Execution in Counterparts. This Guaranty 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 taken together shall constitute one and the
same Guaranty.
SECTION 16. Miscellaneous. All references herein to the Borrower or
to any Guarantor shall include their respective successors and assigns,
including, without limitation, a receiver, trustee or debtor-in-possession of
or for the Borrower or such Guarantor. All references to the singular shall be
deemed to include the plural where the context so requires.
SECTION 17. Subrogation and Subordination.
(a) Subrogation. Notwithstanding any reference to subrogation
contained herein to the contrary, until the Release Date, each Guarantor hereby
irrevocably waives any claim or other rights which it may have or hereafter
acquire against the Borrower that arise from the existence, payment,
performance or enforcement of such Guarantor's obligations under this Guaranty,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, any right to participate in any
claim or remedy of any Lender against the Borrower or any collateral which any
Lender now has or hereafter acquires, whether or not such claim, remedy or
right arises in equity, or under contract, statutes or common law, including
without limitation, the right to take or receive from the Borrower, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to any Guarantor in violation of the preceding sentence and the
Obligations shall not have been paid in full, such amount shall be deemed to
have been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Lenders, and shall forthwith be paid to the Administrative
Agent to be credited and applied upon the Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Credit Agreement and that the
waiver set forth in this Section 17(a) is knowingly made in contemplation of
such benefits.
(b) Subordination. All debt and other liabilities of the Borrower
to any Guarantor ("Borrower Debt") are expressly subordinate and junior to the
Obligations and any instruments evidencing the Borrower Debt to the extent
provided below.
(i) Until the Release Date, each Guarantor agrees that it
will not request, demand, accept, or receive (by set-off or other
manner) any payment amount, credit or reduction of all or any part of
the amounts owing under the Borrower Debt or any security therefor,
except as specifically allowed pursuant to clause (ii) below of the
Credit Agreements;
(ii) Notwithstanding the provisions of clause (i), the
Borrower may pay to the Guarantors and the Guarantors may receive and
retain from the Borrower regularly scheduled payments due and owing
under the terms of the Borrower Debt, provided that
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the Borrower's right to pay and the Guarantor's right to receive any
such regularly scheduled amount shall automatically and be immediately
suspended and cease (A) upon the occurrence of a Default (as defined
in the Loan Documents) or (B) if, after taking into account the effect
of such payment, a Default would occur and be continuing. The
Guarantors' right to receive amounts under this clause (ii) (including
any amounts which theretofore may have been suspended) shall
automatically be reinstated in such time as the Default which was the
basis of such suspension has been cured to the Lenders' satisfaction
(provided that no subsequent Default has occurred) or such earlier
date, if any, and the Administrative Agent gives notice to the
Guarantors of reinstatement by the Determining Lenders, in the
Determining Lenders' sole discretion;
(iii) If any Guarantor receives any payment on the Borrower
Debt in violation of this Guaranty, such Guarantor will hold such
payment in trust for the Lenders and will immediately deliver such
payment to the Administrative Agent;
(iv) Until the Release Date, no Guarantor will demand or
accelerate the maturity of all or any part of the Borrower Debt, nor
collect or enforce, or attempt to collect or enforce, from the
Borrower all or any part of the Borrower Debt, whether through the
commencement or joinder of a suit, action or proceeding of any type
(judicial or otherwise) or proceeding under any Debtor Relief Laws
(the "Insolvency Proceeding"), the enforcement of any rights against
any property of the Borrower, or otherwise, except where any
Guaranteed Party shall request such Guarantor to file a claim in
connection with any such proceeding and except as set forth in clause
(v); and
(v) In the event of any Insolvency Proceeding, the
Obligations shall first be paid, discharged and performed in full
before any payment or performance is made upon the Borrower Debt
notwithstanding any other provisions which may be made in such
Insolvency Proceeding. In the event of any Insolvency Proceeding,
each Guarantor will at any time prior to the Release Date (A) file, at
the request of any Guarantied Party, any claim, proof of claim or
similar instrument necessary to enforce the Borrower's obligation to
pay the Borrower Debt, and (B) hold in trust for and pay to the
Guarantied Parties any and all monies, obligations, property, stock
dividends or other assets received in any such proceeding on account
of the Borrower Debt in order that the Guarantied Parties may apply
such monies or the cash proceeds of such other assets to the
Obligations. In the event that any Guarantor fails to take such
action upon any Guarantied Party's request, such Guarantied Party
shall be deemed to have been appointed the attorney-in-fact for such
Guarantor with respect to the Borrower Debt, and such Guarantied Party
may in that capacity (i) demand, xxx for, collect and receive any and
all such monies, dividends or other assets, (ii) file any claim, proof
of claim or similar instrument, and (iii) institute such other
proceedings which such Guarantied Party, may deem reasonably necessary
for the collection of the Obligations and the enforcement of the terms
of this Guaranty. Upon request of any Guarantied Party, each
Guarantor will execute and deliver to such Guarantied Party such other
and further powers of attorney or other instruments as such Guarantied
Party may reasonably request
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to effect the purposes of this Guaranty. If in any proceeding to
enforce the payment of the Obligations it becomes necessary that any
Guarantor itself prove such claims, such Guarantor shall do so upon
reasonable request by such Guarantied Party. In proving these claims,
however, such Guarantor shall act as the collection agent of such
Guarantied Party and shall promptly pay any funds so received to such
Guarantied Party.
SECTION 18. Guarantor Insolvency. Should any Guarantor voluntarily
seek, consent to, or acquiesce in the benefits of any Debtor Relief Law or
become a party to or be made the subject of any proceeding provided for by any
Debtor Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the rights of any Lender granted hereunder, then,
the obligations of such Guarantor under this Guaranty shall be, as between such
Guarantor and such Lender, a fully-matured, due, and payable obligation of such
Guarantor to such Lender (without regard to whether the Borrower is then in
default under the Credit Agreement or whether any part of the Obligations is
then due and owing by the Borrower to such Lender), payable in full by such
Guarantor to such Lender upon demand, which shall be the estimated amount owing
in respect of the contingent claim created hereunder.
SECTION 19. Rate Provision. It is not the intention of any Lender to
make an agreement violative of the laws of any applicable jurisdiction relating
to usury. Regardless of any provision in this Guaranty, no Lender shall ever
be entitled to contract, charge, receive, collect or apply, as interest on the
Obligations, any amount in excess of the Highest Lawful Rate. In no event
shall any Guarantor be obligated to pay any amount in excess of the Highest
Lawful Rate. If from any circumstance the Administrative Agent or any Lender
shall ever receive, collect or apply anything of value deemed excess interest
under Applicable Law, an amount equal to such excess shall be applied to the
reduction of the principal amount of outstanding Advances, and any remainder
shall be promptly refunded to the payor. In determining whether or not
interest paid or payable with respect to the Obligations, under any specified
contingency, exceeds the Highest Lawful Rate, the Guarantors and the Lenders
shall, to the maximum extent permitted by Applicable Law, (a) characterize any
non-principal payment as an expense, fee or premium rather than as interest,
(b) amortize, prorate, allocate and spread the total amount of interest
throughout the full term of such Obligations so that the interest paid on
account of such Obligations does not exceed the Highest Lawful Rate and/or (c)
allocate interest between portions of such Obligations; provided that if the
Obligations are paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period
of existence thereof exceeds the Highest Lawful Rate, the Lenders shall refund
to the payor the amount of such excess or credit the amount of such excess
against the total principal amount owing, and, in such event, no Lender shall
be subject to any penalties provided by any laws for contracting for, charging
or receiving interest in excess of the Highest Lawful Rate.
Section 20. Severability. Any provision of this Guaranty which is
for any reason prohibited or found or held invalid or unenforceable by any
court or governmental agency shall be ineffective to the extent of such
prohibition or invalidity or unenforceability, without
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invalidating the remaining provisions hereof in such jurisdiction or affecting
the validity or enforceability of such provision in any other jurisdiction.
SECTION 21. ENTIRE AGREEMENT. THIS GUARANTY REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER HEREIN AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its duly authorized officer on the date first above
written.
--------------------------------------
Notice Address for all Guarantors
for this Guaranty:
By:
----------------------------------
----------------------------------- Name:
--------------------------------
----------------------------------- Title:
-------------------------------
-----------------------------------
Telephone:
------------------------
Telecopier:
------------------------
Accepted and Acknowledged:
NATIONSBANK OF TEXAS, N.A., as
the Administrative Agent
By:
----------------------------
Name:
-----------------------
Title:
----------------------
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EXHIBIT G
NOTICE OF BORROWING
NationsBank of Texas, N.A., as
the Administrative Agent
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Re: Pillowtex Corporation
Ladies and Gentlemen:
The undersigned, an Authorized Signatory of Pillowtex Corporation,
pursuant to the Amended and Restated Credit Agreement, dated as of December 19,
1997, among the undersigned, the financial institutions party thereto and
NationsBank of Texas, N.A., as the Administrative Agent (said Agreement, as it
may be amended, supplemented or otherwise modified from time to time, being the
"Credit Agreement" and capitalized terms not defined herein but defined therein
being used herein as therein defined), hereby gives you notice, irrevocably,
pursuant to Section 2.2 of the Credit Agreement, that the undersigned hereby
requests a Revolving Credit Advance under the Credit Agreement, and in that
connection sets forth below the information relating to such borrowing (the
"Proposed Borrowing") as required by Section 2.2 of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is _____________,
____.
(ii) The aggregate amount of the Revolving Credit Advances
constituting the Proposed Borrowing is $___________, of which amount
$_______ consists of Base Rate Advances, $_________ consists of LIBOR
Rate Advances having an initial Interest Period of _____ months.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
(A) the representations and warranties of the Borrower contained
in Article 4 of the Credit Agreement and in each of the other Loan
Documents to which it is a party (other than those representations and
warranties that specifically relate to an earlier date) are true and
correct as though made on and as of such date, except as otherwise
expressly provided in Section 4.2 of the Credit Agreement; and
(B) no Default or Event of Default is continuing, or will result
from the Proposed Borrowing.
Very truly yours,
PILLOWTEX CORPORATION
By:
-------------------------------------
Name:
--------------------------------
Title:
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206
EXHIBIT H-1
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Xxxx X. Xxxxxxx
XXXXXXX, XXXXXXX & XXXXXXX, P.C.
3400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS, SECURITY AGREEMENT
AND FIXTURE FILING
THE STATE OF NORTH CAROLINA )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF CATAWBA )
THAT, BEACON MANUFACTURING COMPANY, a North Carolina corporation
("Grantor"), for and in consideration of the sum of Ten Dollars to Grantor in
hand paid by XXXXXXX X. XXXX, Trustee, of 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx,
Xxxxxx Xxxxxx, Xxxxx 00000 ("Trustee"), in order to secure the payment of the
indebtedness hereinafter referred to and the performance of the obligations,
covenants, agreements and undertakings of Grantor hereinafter described, does
hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER, ASSIGN and SET OVER to Trustee,
WITH POWER OF SALE, for the benefit of NationsBank of Texas, N.A., a national
banking association ("NationsBank"), having its principal office at 000 Xxxx
Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000, as the collateral agent (in such
capacity NationsBank is called "Collateral Agent") on behalf of NationsBank and
each other lender (and affiliate of each other lender) which is now or
hereafter a party to the Credit Agreements (as defined below) (collectively,
"Lenders" and singly, a "Lender") all of Grantor's leasehold interest in the
real estate situated in the State of North Carolina, in the Counties set forth
in Exhibit A attached hereto and described in Exhibit A attached hereto and
made a part hereof (the "Land"), together with (i) all rights, power and
privileges of Grantor as lessee under those certain Lease Agreements with the
lessors (the "Lessors") as described on Exhibit B attached hereto and made a
part hereof, and memoranda of which are, or will be simultaneously herewith,
recorded in the office of County Clerk of Catawba County, State of North
Carolina (such Lease Agreements, together with any amendments, modifications,
renewals, extensions, amendments and restatements thereof, collectively, the
"Leases" and individually, a "Lease"); (ii) all of Grantor's interest in the
buildings and other improvements ("Improvements") now on or that may be
hereafter placed on said Land; (iii) Grantor's interest in all materials,
equipment, fixtures or other property whatsoever, now or hereafter attached to,
installed in, or used in connection with the buildings and other improvements
now erected or hereafter to be erected on said Land, including, but not limited
to, all heating, plumbing, lighting, water heating, cooking,
207
laundry, refrigerating, incinerating, ventilating and air conditioning
equipment, disposals, dishwashers, refrigerators and ranges, utility lines and
equipment (whether owned individually or jointly with others), sprinkler
systems, fire extinguishing apparatus and equipment, tanks, engines, pipers,
fittings, dynamos, generators, machines, elevators, motors, cabinets, shades,
blinds, partitions, window screens, screen doors, storm windows, awnings,
drapes, and rugs and other floor coverings, and all fixtures, accessions and
appurentances thereto, and all renewals or replacements of or substitutions for
any of the foregoing, all of which property and things are hereby declared to
be permanent fixtures and accessions to the leasehold and part of the realty
conveyed herein as security for the indebtedness herein mentioned; (iv) all
interests now or hereafter of Grantor in and to all easements and rights of way
now or hereafter used in connection with any of the foregoing real estate or as
a means of ingress to or egress from said real estate; (v) all interests now or
hereafter of Grantor in and to any streets, ways, alleys and/or strips of land
adjoining said Land or any part thereof; (vi) all licenses of Grantor necessary
for the operation and maintenance of the foregoing; and (vii) all rights,
estates, hereditaments, powers and privileges of Grantor appurtenant or
incident to the foregoing. This conveyance shall include and the lien,
security interest and assignment created hereby shall encumber and extend to
all other, further or additional title, estates, interest or rights which may
exist now or at any time be acquired by Grantor in or to the property demised
under any lease creating a leasehold estate related to or covering all or any
of the foregoing property and including Grantor's rights, if any, to purchase
the property demised under any such lease and, if fee simple title to any of
such property shall ever become vested in Grantor, such fee simple interest
shall be encumbered by this Deed of Trust in the same manner as if Grantor had
fee simple title to such property as of the date of execution hereof.
TO HAVE AND TO HOLD the foregoing property (the "Mortgaged Property")
unto Trustee and his successors or substitutes in this trust and to his or
their successors and assigns, IN TRUST, WITH POWER OF SALE, for the benefit of
Collateral Agent, however, upon the terms, provisions and conditions herein set
forth.
In order to secure the payment of the indebtedness described in this
Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and
Financing Statement ("Deed of Trust") and the performance of the obligations,
covenants, agreements and undertakings of Grantor described in this Deed of
Trust, Grantor hereby grants to Collateral Agent a security interest and lien
in all of Grantor's right, title and interest in and to all present and future
(i) goods, inventory, equipment (excluding, however, any equipment or other
property which is financed with Indebtedness permitted to be incurred pursuant
to Sections 7.1(c) and 7.1(h) of the Credit Agreements), furnishings, fixtures,
furniture, chattels and personal property of whatever nature owned by Grantor
now or hereafter attached or affixed to or used in or about the building or
buildings now erected or hereafter to be erected on the Mortgaged Property, or
otherwise located on the Mortgaged Property, (ii) fixtures, accessions and
appurtenances to any of the foregoing or following, (iii) renewals or
replacements of or substitutions for any of the foregoing or following, (iv)
building materials and equipment now or hereafter delivered to said premises
and intended to be installed therein, (v) occupancy agreements, leases, rents
(including security deposits and advance rentals under lease agreements now or
at any time hereafter
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covering or affecting any of the Mortgaged Property and all property described
in this Paragraph and held by or for the benefit of Grantor), fees, royalties,
bonuses, issues, room rents, profits, revenues or other income or benefits of
whatever nature received or due in connection with the Mortgaged Property and
all property described in this Paragraph, (vi) monetary deposits which Grantor
has been required to give to any public or private utility with respect to
utility services furnished to the Mortgaged Property or to the Lessor or other
lessor of the Real Property, (vii) permits, licenses, franchises, certificates
and agreements related to the foregoing, and other rights and privileges
obtained in connection with, or necessary for the operation and maintenance of,
the foregoing, and all other rights and privileges obtained in connection with
the Mortgaged Property and all property described in this Paragraph, (viii)
plans, specifications, maps, surveys, reports, operating, management and
maintenance contracts, architectural, engineering and construction contracts,
books of account, insurance policies, guarantees, warranties and other
documents, of whatever kind or character, relating to the use, construction
upon, occupancy, leasing, sale or operation of the Mortgaged Property and all
property described in this Paragraph, (ix) all proceeds from the taking of any
of the Mortgaged Property and any property described in this Paragraph or any
rights appurtenant thereto by right of eminent domain or by private or other
purchase in lieu thereof, (x) all proceeds (including premium refunds) of each
policy of insurance relating to the Mortgaged Property and any property
described in this Paragraph, (xi) all guarantees, sureties and other agreements
assuring performance of any obligation of any tenant of the Mortgaged Property
and all property described in this Paragraph, and (xii) all proceeds arising
from or by virtue of the sale, lease or other disposition of the Mortgaged
Property and any property described in this Paragraph (all of the property
described in this Paragraph hereinafter collectively called the "Personal
Property") and all proceeds and products of the Personal Property. (The
Mortgaged Property and the Personal Property are hereinafter sometimes
collectively called the "Property").
ARTICLE I
Secured Indebtedness
1.1. Secured Indebtedness. This Deed of Trust is made to secure
and enforce the payment of the following, agreements, documents, obligations,
indebtedness and liabilities: (a) all present and future obligations,
indebtedness and liabilities, and all renewals and extensions of all or any
part thereof of Grantor to Lenders or any Lender arising from, by virtue of, or
pursuant to (i) that certain Amended and Restated Credit Agreement dated as of
December 19, 1997, among the [Grantor][Pillowtex Corporation, a Texas
corporation (the "Borrower)], NationsBank of Texas, N.A., in its capacity as
Administrative Agent, and certain of the (said Amended and Restated Credit
Agreement, as amended, modified, renewed, extended, restated or refinanced from
time to time, the "Amended and Restated Credit Agreement"), (ii) that certain
Term Credit Agreement dated as of December 19, 1997, among [Grantor] [the
Borrower], NationsBank of Texas, N.A., in its capacity as Administrative Agent,
and certain of the Lenders (said Term Credit Agreement, as amended, modified,
renewed, extended, restated or refinanced from time to time, the "Term Credit
Agreement") (The Amended and Restated
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Credit Agreement and the Term Credit Agreement are herein, collectively, called
the "Credit Agreements"), (iii) the Notes (as defined in the Credit
Agreements), and (iv) the other Loan Documents (as defined in the Credit
Agreements), including, without limitation, interest, fees and other charges
that would accrue or become owing both prior to and subsequent to and but for
the commencement of any proceeding against or with respect to Grantor under any
chapter of the Bankruptcy Code of 1978, 11 U.S.C. Section 101 et. seq. whether
or not a claim is allowed for the same in any such proceeding, and (b) all
indebtedness and obligations incurred or arising pursuant to the provisions of
this Deed of Trust. The indebtedness referred to in this Paragraph 1.1 is
hereinafter sometimes called the "Secured Indebtedness". Initially-capitalized
terms used herein and not otherwise herein defined shall have the meaning given
to such terms in the Credit Agreements.
1.2 Obligations Secured; Future Advances. The following obligations
("Secured Obligations") are secured by this Deed of Trust:
This Deed of Trust is given wholly or partially to secure future
obligations which may be incurred hereunder and which are evidenced by the
Notes. The amount of present obligations secured hereby is Three Million Three
Hundred Sixty Thousand and 00/100 Dollars ($3,360,000) and the maximum
principal amount, including present and future obligations, which may be
secured at any one time is Three Million Three Hundred Sixty Thousand and
00/100 Dollars ($3,360,000). All such future obligations shall be incurred no
later than December 1, 2012, but in no event later than fifteen (15) years from
the date hereof.
ARTICLE II.
Representations and Warranties
2.1. Representations and Warranties. Grantor represents and
warrants to the Trustee, the Collateral Agent and the Lenders as follows:
(a) Title and Authority. Grantor is the lawful owner of
good title to the Leases, and has good right and authority to grant,
bargain, sell, transfer, assign and mortgage the Mortgaged Property,
subject to Lessor's consent, and to grant a security interest in the
Personal Property.
(b) Warranty. For so long as any of the Secured
Indebtedness shall be outstanding, Grantor will warrant and defend the
title to the Mortgaged Property against the claims of all persons
whomsoever claiming or to claim the same or any part thereof, subject
to Permitted Liens.
(c) Leases. The Leases on the Land are in full force and
effect; no default (nor any event, which with notice or lapse of time
or both, could cause such a default) has occurred and is continuing
thereunder and there have been no renewals and/or
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extensions of, or supplements, modifications, or amendments to any
Lease. Grantor is in the possession of the premises covered by, and
leased under the Leases. No other lease or rental agreement, oral or
written, relates to Grantor's use or occupancy of the Mortgaged
Property other than the Leases.
2.2. Covenants and Agreements. So long as the Secured Indebtedness
or any part thereof remains unpaid, Grantor covenants and agrees with the
Trustee, the Collateral Agent and the Lenders as follows:
(a) Taxes on Lien.
In the event of the enactment after the date hereof of any
Applicable Law deducting from the value of property for the purpose of
taxation any lien or security interest thereon, or imposing upon the
Trustee, the Collateral Agent or any Lender the payment of the whole
or any part of the taxes (excluding income, franchise, gross receipts
or similar taxes imposed on the Lenders, the Trustee or the Collateral
Agent) or assessments or charges or liens herein required to be paid
by Grantor, or changing in any way the laws relating to the taxation
of deeds of trust or mortgages or security agreements or debts secured
by deeds of trust or mortgages or security agreements or the interest
of the trustee or beneficiary or mortgagee or secured party in the
property covered thereby, or the manner of collection of such taxes,
so as to affect this Deed of Trust or any of the Secured Indebtedness
or the Trustee, the Collateral Agent or any Lender, then, and in any
such event, Grantor, upon demand by the Trustee, the Collateral Agent
or any Lender, shall to the extent not prohibited by Applicable Law,
pay such taxes, assessments, charges or liens, or reimburse the
Trustee, the Collateral Agent or such Lender therefor.
(b) Insurance. Grantor will maintain insurance with
respect to the Mortgaged Property in accordance with the Credit
Agreements. Collateral Agent understands and acknowledges that the
Lease may require that all property insurance maintained with respect
to the leased premises provide that the proceeds of such insurance be
payable to the Lessors or the Lessors' mortgagees, subject to all
applicable provisions of the Leases with respect to the use of such
proceeds to restore the Improvements.
(c) Protection and Defense of Lien. If the validity of
this Deed of Trust or of any rights, titles, liens or security
interests created or evidenced hereby with respect to the Property or
any part thereof shall be attacked directly or indirectly or if any
legal proceedings are instituted against Grantor with respect thereto,
Grantor will give prompt written notice thereof to the Collateral
Agent and at Grantor's own cost and expense diligently will endeavor
to cure any defect that may be developed or claimed, and will take all
necessary and proper steps for the defense of such legal proceedings,
including but not limited to the employment of counsel, the
prosecution or defense of litigation and the release or discharge of
all adverse claims, other than Permitted Liens, and the Trustee and
Collateral Agent, or either of them (whether or not named as parties
to legal
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proceedings with respect thereto) are hereby authorized and empowered
to take such additional steps as in their judgment and discretion
reasonably may be necessary or proper for the defense of any such
legal proceedings or the protection of the validity of this Deed of
Trust and the rights, titles, liens and security interests created or
evidenced hereby, including but not limited to the employment of
counsel, the prosecution or defense of litigation, the compromise or
discharge of any adverse claims made with respect to the Property,
other than Permitted Liens, the purchase of any tax title and the
removal of prior liens or security interests which do not constitute
Permitted Liens, and all reasonable expenses so incurred of every kind
and character shall be a demand obligation owing by Grantor, and the
party incurring such expenses shall be subrogated to all rights of the
person receiving such payment. Should the Trustee or the Collateral
Agent intend to take any such action described in the immediately
preceding sentence, the Trustee or the Collateral Agent, as
appropriate, shall, subject to the immediately succeeding proviso,
prior to taking any such action notify Grantor of such intention and
give Grantor a reasonable opportunity to provide such defense or
protection; provided, however, if in the reasonable opinion of the
Trustee or the Collateral Agent the giving of such notice and
opportunity to provide such defense or protection would materially
impair or materially hinder such defense or protection or would
otherwise be materially disadvantageous to rights or interests of the
Trustee or the Collateral Agent hereunder or the rights, title, liens
or security interests created or evidenced hereby, the Trustee and the
Collateral Agent shall have no obligation to give such notice and
opportunity to provide such defense or protection prior to the taking
of any such action, but after taking any such action Trustee or
Collateral Agent shall give notice thereof to Grantor.
(d) Permitted Liens. Grantor will comply with and will
perform all of the covenants, agreements and obligations imposed upon
it or the Property in the Permitted Liens in accordance with their
respective terms and provisions if the failure to do so would have a
Material Adverse Effect. Grantor will not modify or permit any
modification of any Permitted Lien against the Mortgaged Property the
result of which would have a Material Adverse Effect without the prior
written consent of Collateral Agent.
(e) [Intentionally omitted.]
(f) Leases. Grantor may not lease or enter into any
other occupancy agreement authorizing the occupancy of any portion of
any of the Mortgaged Property by third parties without the prior
written consent of Collateral Agent, which consent shall not be
unreasonably withheld.
(g) Estoppel Certificate. Grantor shall at any time and
from time to time furnish promptly upon request a written statement in
such form as may be reasonably required by Collateral Agent stating
(if it is the fact) that the Leases are in full force and effect; that
the Leases have not been released, subordinated or modified; that
there are no offsets or defenses against the enforcement of any Lease;
that this Deed of Trust is
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a valid and binding obligation of Grantor, enforceable against Grantor
in accordance with its terms, subject to Debtor Relief Laws (as such
term is defined in the Credit Agreement); that this Deed of Trust has
not been released, subordinated or modified; and that to the best of
Grantor's knowledge there are no offsets or defenses against the
enforcement of this Deed of Trust, or if any of the foregoing
statements are untrue, specifying the reasons therefor.
(h) Compliance with Laws. Grantor shall, and shall use
reasonable efforts to cause any tenant of the Property to, comply with
all applicable restrictive covenants and all Applicable Laws except
where failure to do so could not be reasonably expected to have a
Material Adverse Effect.
(i) Tax and Insurance Escrow. Upon the occurrence and
during the continuance of a Default, Grantor will upon written request
of Collateral Agent, deposit with Collateral Agent a sum equal to
accrued and unpaid ad valorem taxes, assessments and charges (which
charges for the purpose of this subparagraph shall include without
limitation ground rents and water and sewer rents and any other
recurring charge which could create or result in a lien against the
Property) against the Property for the then current year and the
accrued and unpaid premiums for such policies of insurance for the
then current year, all as reasonably estimated by Collateral Agent and
prorated to the end of the calendar month following the month during
which such Default occurred, and thereafter will deposit with
Collateral Agent sufficient funds (as reasonably estimated from time
to time by Collateral Agent) to permit the Collateral Agent to pay, at
least 5 days prior to the delinquency date thereof, the next maturing
ad valorem taxes, assessments and charges and premiums for such
policies of insurance. Collateral Agent shall have the right to rely
upon tax information furnished by applicable taxing authorities in the
payment of such taxes or assessments and shall have no obligation to
make any protest of any such taxes or assessments. Any excess over
the amounts required for such purposes shall be held by Collateral
Agent for payment of future taxes, assessments, charges and premiums,
applied to any Secured Indebtedness, or refunded to Grantor, at
Collateral Agent's option; and any deficiency in such funds so
deposited shall be made up by Grantor upon demand of Collateral Agent.
All such funds so deposited shall bear interest at the normal interest
rate for money market deposits at NationsBank, may be mingled with the
general funds of Collateral Agent and shall be applied by Collateral
Agent toward the payment of such taxes, assessments, charges and
premiums when statements therefor are presented to Collateral Agent by
Grantor (which statements shall be presented by Grantor to Collateral
Agent a reasonable time before the applicable amount is due);
provided, however, that if Collateral Agent has made demand for
payment of all of the Secured Indebtedness, such funds may at
Collateral Agent's option be applied to the payment of the Secured
Indebtedness in the order determined by Collateral Agent and that
Collateral Agent may at any time, in its discretion, apply all or any
part of such funds toward the payment of any such taxes, assessments,
charges or premiums which are past due, together with any penalties or
late charges with respect thereto. The conveyance or transfer of
Grantor's interest in the Property for any reason
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(including without limitation the foreclosure of a subordinate lien or
security interest or a transfer by operation of law) shall constitute
an assignment of transfer of Grantor's interest in and rights to such
funds held by Collateral Agent under this subparagraph (i) but subject
to the rights of Collateral Agent hereunder.
(j) Further Assurances. Grantor will, on request of
Collateral Agent, (i) promptly correct any defect or error which may
be discovered in the contents of this Deed of Trust or in any other
instrument executed in connection herewith or in the execution or
acknowledgment thereof; (ii) execute, acknowledge, deliver and record
or file such further instruments (including without limitation further
deeds of trust, security agreements, financing statements,
continuation statements and assignments of rents or leases) and do
such further acts as may be reasonably necessary or proper to carry
out more effectively the purposes of this Deed of Trust and such other
instruments and to subject to the liens and security interests hereof
and thereof any property intended by the terms hereof and thereof to
be covered hereby and thereby including specifically, but without
limitation, any renewals, additions, substitutions, replacements, or
appurtenances to the Property; (iii) execute, acknowledge, deliver,
procure and record or file any document or instrument (including
specifically any financing statement) deemed reasonable by Collateral
Agent to protect the lien or the security interest hereunder against
the rights or interests of third persons, and Grantor will pay all
reasonable costs connected with any of the foregoing; and (iv) use
reasonable efforts to cause any tenant under any lease agreement of
any of the Property to furnish, in the manner and to the extent
required under the Lease, any instrument or perform, in the manner and
to the extent required under the Lease, any act reasonably deemed
advisable by Collateral Agent to protect the lien or the security
interest hereunder.
(k) Leases. To the extent that a contrary action or
omission would be reasonably likely to cause a Material Adverse
Effect: (1) Grantor shall punctually and properly perform, observe,
and otherwise comply with each and every covenant, agreement,
requirement and condition set forth in the Leases, and do or cause to
be done all things necessary or appropriate to keep the Leases in full
force and effect and to preserve and keep unimpaired the rights of
Grantor, Trustee and Collateral Agent thereunder, and Grantor shall
neither do nor suffer to be done any act of commission or omission
which would justify the Lessor under any Lease to cancel same, evict
Grantor, or declare due and payable all or any part of the rental and
other sums payable thereunder in advance of the time specified therein
for the payment thereof; (2) Grantor will not, without the express
written consent of Collateral Agent, surrender, forfeit, cancel or
terminate, or permit the surrender, forfeiture, cancellation, or
termination of any Lease in whole or in part, whether or not a default
shall have occurred and shall be continuing thereunder; and (3)
Grantor will not, without the express prior written consent of
Collateral Agent, amend, modify or impair, or permit the amendment,
modification or impairment of any Lease in any manner which would
materially adversely affect rights of Grantor, Trustee or Collateral
Agent thereunder. Grantor shall promptly notify Collateral Agent in
writing upon receipt or delivery by Grantor of any written notice of
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default under any Lease. If for any reason Grantor cannot timely make
any payment under any Lease or perform or comply with any of its
obligations under any Lease, Grantor shall notify Collateral Agent in
sufficient time to enable Collateral Agent (but Collateral Agent shall
not be obligated) to timely make such payments and/or to perform or
comply with such other obligations.
2.3. Right of Collateral Agent to Perform. Grantor agrees that, if
after any applicable notice or grace period, Grantor fails to perform any act
or to take any action which hereunder Grantor is required to perform or take,
or to pay any money which hereunder Grantor is required to pay, Collateral
Agent, in Grantor's name or in its own name and after the giving of any
required notice and expiration of any applicable cure period, may but shall not
be obligated to perform or cause to be performed such act or take such action
or pay such money, and any reasonable expenses so incurred by Collateral Agent,
and any money so paid by Collateral Agent, shall be a demand obligation owing
by Grantor to Collateral Agent and Collateral Agent, upon making such payment,
shall be subrogated to all of the rights of the person or entity receiving such
payment. Any amounts due and owing by Grantor to Collateral Agent pursuant to
this Deed of Trust shall bear interest from the date such amount becomes due
until paid at a rate of interest per annum equal to the lesser of (i) the
Default Rate or (ii) the Highest Lawful Rate, and shall be a part of the
Secured Indebtedness and shall be secured by this Deed of Trust and by any
other Loan Document. Should Collateral Agent intend to perform or cause to be
performed such act or take such action or pay such money, Collateral Agent
shall, subject to the immediately succeeding proviso, prior to taking any such
action notify Grantor of such intention and give Grantor a reasonable
opportunity to take such action; provided, however, if in the reasonable
opinion of Collateral Agent the giving of such notice and opportunity to take
action would materially impair the validity or priority of this Deed of Trust,
the rights or interests of the Trustee or Collateral Agent hereunder or any
rights, titles, liens or security interests created or evidenced hereby,
Collateral Agent shall have no obligation to give such notice and opportunity
to take action prior to taking of such action, but, nevertheless, shall give
prompt written notice of the taking of such action to Grantor.
ARTICLE III.
Remedies in Event of Default
3.1. Defaults. The term "Default" as used in this Deed of Trust
shall mean the occurrence and continuance of an "Event of Default" as defined
in the Credit Agreements.
3.2. Acceleration. Upon the occurrence and during the continuance
of a Default, Collateral Agent shall have the option of declaring all Secured
Indebtedness in its entirety to be immediately due and payable, and the liens
and security interests evidenced hereby shall be subject to foreclosure in any
manner provided for herein or provided for by law as Collateral Agent may
elect.
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3.3. Possession. Upon the occurrence and during the continuance of
a Default, Collateral Agent is authorized prior or subsequent to the
institution of any foreclosure proceedings to enter upon the Property, or any
part thereof, and to take possession of the Property and of all books, records
and accounts relating thereto and to exercise without interference from Grantor
any and all rights which Grantor has with respect to the management,
possession, operation, protection or preservation of the Property, including
the right to rent the same for the account of Grantor and to deduct from such
rents all reasonable costs, expenses and liabilities of every reasonable
character incurred by Collateral Agent in collecting such rents and in
managing, operating, maintaining, protecting or preserving the Property and to
apply the remainder of such rents on the Secured Indebtedness in such manner as
Collateral Agent may elect. All such costs, expenses and liabilities incurred
by Collateral Agent in collecting such rents and in managing, operating,
maintaining, protecting or preserving the Property, if not paid out of rents as
hereinabove provided, shall constitute a demand obligation owing by Grantor and
shall bear interest from the date of expenditure until paid at a rate of
interest per annum equal to the Default Rate, all of which shall constitute a
portion of the Secured Indebtedness. If necessary to obtain the possession
provided for above, Collateral Agent may invoke any and all legal remedies to
dispossess Grantor, including specifically one or more actions for forcible
entry and detainer, trespass to try title and restitution. In connection with
any action taken by Collateral Agent pursuant to this Paragraph 3.3, Collateral
Agent shall not be liable for any loss sustained by Grantor resulting from any
failure to let the Property, or any part thereof, or from any other act or
omission of Collateral Agent in managing the Property, including without
limitation, the negligence of Collateral Agent, unless such loss is caused by
the gross negligence or willful misconduct of Collateral Agent, and Collateral
Agent shall not be obligated to perform or discharge any obligation, duty or
liability under any lease agreement covering the Property or any part thereof
or under or by reason of this instrument or the exercise of rights or remedies
hereunder. Should Collateral Agent incur any such liability, the amount
thereof, including reasonable costs, expenses and reasonable attorneys' fees,
shall be secured hereby, and Grantor shall reimburse Collateral Agent therefor
immediately upon demand. Nothing in this Paragraph 3.3 shall impose any duty,
obligation or responsibility upon Collateral Agent for the control, care,
management or repair of the Property, or shall operate to make Collateral Agent
responsible or liable for any waste committed on the Property or by any other
parties or for any dangerous or defective condition of the Property, or for any
negligence in the management, upkeep, operation, repair or control of the
Property resulting in loss or injury or death to any tenant, licensee, employee
or stranger, unless such waste, dangerous or defective condition or injury or
death is directly a result of gross negligence or willful misconduct by
Collateral Agent, and not just Collateral Agent's own ordinary negligence.
3.4. Foreclosure. During a Default, Trustee, his successor or
substitute, is authorized and empowered and it shall be his special duty at the
request of Collateral Agent to take all actions necessary to sell the Mortgaged
Property in accordance with the statutes of the State where the Land is
located, as such statutes are then in force governing sales of real estate
under powers conferred by deed of trust. Any sale made by Trustee hereunder
may be of the entire Mortgaged Property or in such parcels as Collateral Agent
may request, and any sale may be adjourned by announcement at the time and
place appointed for such sale without further notice
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except as may be required by law. The sale by Trustee of less than the whole
of the Mortgaged Property shall not exhaust the power of sale herein granted,
and Trustee is specifically empowered to make successive sale or sales under
such power until the whole of the Mortgaged Property shall be sold; and, if the
proceeds of such sale of less than the whole of the Mortgaged Property shall be
less than the aggregate of the Secured Indebtedness and the expense of
executing this trust as provided herein, this Deed of Trust and the lien hereof
shall remain in full force and effect as to the unsold portion of the Mortgaged
Property just as though no sale had been made; provided, however, that Grantor
shall never have any right to require the sale of less than the whole of the
Mortgaged Property but Collateral Agent shall have the right, at its sole
election, to request Trustee to sell less than the whole of the Mortgaged
Property. After each sale, Trustee shall make to the purchaser or purchasers
at such sale good and sufficient conveyances in the name of Grantor, conveying
the Mortgaged Property so sold to the purchaser or purchasers with general
warranty of leasehold title, and shall receive the proceeds of said sale or
sales and apply the same as herein provided. Payment of the purchase price to
Trustee shall satisfy the obligation of purchaser at such sale therefor, and
such purchaser shall not be responsible for the application thereof. The power
of sale granted herein shall not be exhausted by any sale held hereunder by
Trustee or his substitute or successor, and such power of sale may be exercised
from time to time and as many times as Collateral Agent may deem necessary
until all of the Mortgaged Property has been duly sold and all of the Secured
Indebtedness has been fully paid. In the event any sale hereunder is not
completed or is defective in the opinion of Collateral Agent, such sale shall
not exhaust the power of sale hereunder and Collateral Agent shall have the
right to cause a subsequent sale or sales to be made hereunder. Any and all
statements of fact or other recitals made in any deed or deeds given by Trustee
or any successor or substitute appointed hereunder as to nonpayment of the
Secured Indebtedness, or as to the occurrence of any Default, or as to
Collateral Agent having declared all of such indebtedness to be due and
payable, or as to the request to sell, or as to notice of time, place and terms
of sale and of the properties to be sold having been duly given, or as to the
refusal, failure or inability to act of Trustee or any substitute or successor,
or as to the appointment of any substitute or successor trustee, or as to any
other act or thing having been duly done by Collateral Agent or by such
Trustee, substitute or successor, shall be taken as prima facie evidence of the
truth of the facts so stated and recited. Trustee, his successor or
substitute, may appoint or delegate any one or more persons as agent to perform
any act or acts necessary or incident to any sale held by Trustee, including
the posting of notices and the conduct of sale, but in the name and on behalf
of Trustee, his successor or substitute.
3.5. Judicial Foreclosure. This instrument shall be effective as a
mortgage as well as a deed of trust and during a Default may be foreclosed as
to any of the Property in any manner permitted by the laws of any State in
which any part of the Property is situated, and any foreclosure suit may be
brought by the Trustee or by Collateral Agent. In the event a foreclosure
hereunder shall be commenced by the Trustee or his or her substitute or
successor, Collateral Agent may at any time before the sale of the Property
direct the said Trustee to abandon the sale, and may then institute suit for
the collection of the Notes and the other Secured Indebtedness, and for the
foreclosure of this Deed of Trust. It is agreed that if Collateral Agent
should institute a suit for the collection of the Notes or any other Secured
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Indebtedness and for the foreclosure of this Deed of Trust, Collateral Agent
may at any time before the entry of a final judgment in said suit dismiss the
same, and require the Trustee or his or her substitute or successor to sell the
Property in accordance with the provisions of this Deed of Trust.
3.6. Receiver. In addition to all other remedies herein provided
for, Grantor agrees that during a Default, subject to any mandatory
requirements of applicable law, Collateral Agent shall as a matter of right be
entitled to the appointment of a receiver or receivers for all or any part of
the Property, whether such receivership be incident to a proposed sale of such
Property or otherwise, and without regard to the value of the Property or the
solvency of any person or persons liable for the payment of the Secured
Indebtedness, and Grantor does hereby consent to the appointment of such
receiver or receivers, waives any and all defenses to such appointment and
agrees not to oppose any application therefor by Collateral Agent, but nothing
herein is to be construed to deprive Collateral Agent of any other right,
remedy or privilege it may now or hereafter have under the law to have a
receiver appointed; provided, however, that the appointment of such receiver,
trustee or other appointee by virtue of any court order, statute or regulation
shall not impair or in any manner prejudice the rights of Collateral Agent to
receive payment of the rents and income from the Property. Any money advanced
by Collateral Agent in connection with any such receivership shall be a demand
obligation owing by Grantor to Collateral Agent and shall bear interest from
the date of making such advancement by Collateral Agent until paid at a rate of
interest per annum equal to the lesser of (i) the Base Rate Basis plus 2%, or
(ii) the Highest Lawful Rate, and shall be secured by this Deed of Trust and by
any other instrument securing the Secured Indebtedness.
3.7. Proceeds of Sale. The proceeds of any sale held by the
Trustee or any receiver or public officer in foreclosure of the liens evidenced
hereby shall be applied:
first, to the payment of all necessary reasonable costs and
expenses incident to such foreclosure sale, including but not limited
to all court costs and charges of every character in the event
foreclosed by suit, and a reasonable fee to the Trustee acting under
the provisions of Paragraph 3.4 if foreclosed by power of sale as
provided in Paragraph 3.4;
second, to the payment in full of the Secured Indebtedness
(including specifically without limitation the principal, interest and
reasonable attorneys' fees due and unpaid on the Notes and the amounts
due and unpaid and owed to Collateral Agent under this Deed of Trust),
to be distributed in accordance with the Intercreditor Agreement; and
third, the remainder, if any, shall be paid to Grantor or
other party legally entitled thereto.
3.8. The Collateral Agent as Purchaser. Collateral Agent shall
have the right to become the purchaser at any sale held by any Trustee or
substitute or successor or by any receiver or public officer, and Collateral
Agent purchasing at such sale shall have the right to
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credit upon the amount of the bid made therefor, to the extent necessary to
satisfy such bid, the Secured Indebtedness owing to the Collateral Agent and/or
Lenders for the equal and ratable benefit of Lenders.
3.9. Uniform Commercial Code.
(a) During a Default, the Collateral Agent may exercise
its rights of enforcement with respect to the Personal Property under
the Uniform Commercial Code as adopted in the State of Texas, as
amended, and in conjunction with, in addition to or in substitution
for those rights and remedies, and all rights and remedies granted to
Lenders under any Loan Document executed by Grantor governing security
interests in personal property of Grantor.
(b) any sale made pursuant to the provisions of this
Paragraph 3.9 shall be deemed to have been a public sale conducted in
a commercially reasonable manner if held contemporaneously with the
sale of the Mortgaged Property under power of sale as provided herein
upon giving the same notice with respect to the sale of the Personal
Property hereunder as is required for such sale of the Mortgaged
Property under power of sale; and
(c) any and all statements of fact or other recitals made
in any xxxx of sale or assignment or other instrument evidencing any
foreclosure sale hereunder as to nonpayment of the Secured
Indebtedness, or as to the occurrence of any Default, or as to
Collateral Agent and/or Lenders having declared all of such
indebtedness to be due and payable, or as to notice of time, place and
terms of sale and of the properties to be sold having been duly given,
or as to any other act or thing having been duly done by Collateral
Agent and/or Lenders, shall be taken as prima facie evidence of the
truth of the facts so stated and recited; and
(d) Collateral Agent may appoint or delegate any one or
more persons as agent to perform any act or acts necessary or incident
to any sale held by Collateral Agent, including the sending of notices
and the conduct of the sale, but in the name and on behalf of
Collateral Agent.
3.10. Partial Foreclosure. During a Default, Collateral Agent shall
have the right to proceed with foreclosure of the liens and security interests
evidenced hereby without declaring the entire Secured Indebtedness due, and in
such event any such foreclosure sale may be made subject to the unmatured part
of the Secured Indebtedness; and any such sale shall not in any manner affect
the unmatured part of the Secured Indebtedness, but as to such unmatured part
this Deed of Trust shall remain in full force and effect just as though no sale
had been made. The proceeds of any such sale shall be applied as provided in
Paragraph 3.7 except that the amount paid under subparagraph second thereof
shall be only the matured portion of the Secured Indebtedness and any proceeds
of such sale in excess of those provided for in subparagraphs first and second
(modified as provided above) shall be applied to installments of principal of
and
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interest on the Notes in the inverse order of maturity. Several sales may be
made hereunder without exhausting the right of sale for any unmatured part of
the Secured Indebtedness.
3.11. Remedies Cumulative. All remedies herein expressly provided
for are cumulative of any and all other remedies existing at law or in equity
and are cumulative of any and all other remedies provided for in any other
instrument securing the payment of the Secured Indebtedness, or any part
thereof, or otherwise benefiting the Trustee, the Collateral Agent and the
Lenders, and the Trustee, the Collateral Agent and the Lenders shall, in
addition to the remedies herein provided, be entitled to avail themselves of
all such other remedies as may now or hereafter exist at law or in equity for
the collection of the Secured Indebtedness and the enforcement of the covenants
herein and the foreclosure of the liens and security interests evidenced
hereby, and the resort to any remedy provided for hereunder or under any such
other instrument or provided for by law shall not prevent the concurrent or
subsequent employment of any other appropriate remedy or remedies, except as
may be provided under applicable law.
3.12. Resort to Any Security. Collateral Agent may resort to any
security given by this Deed of Trust or to any other security now existing or
hereafter given to secure the payment of the Secured Indebtedness, in whole or
in part, and in such portions and in such order as may seem best to Collateral
Agent in its sole and uncontrolled discretion, and any such action shall not be
considered as a waiver of any of the rights, benefits, liens or security
interests evidenced by this Deed of Trust, except as may be provided under
applicable law.
3.13. Waiver. To the full extent Grantor may do so, Grantor agrees
that Grantor will not at any time insist upon, plead, claim or take the benefit
or advantage of any law now or hereafter in force pertaining to the rights and
remedies of sureties or providing for any appraisement, valuation, stay,
extension or redemption, and Grantor, for Grantor and Grantor's heirs,
devisees, representatives, successors and assigns, and for any and all persons
ever claiming any interest in the Property, to the extent permitted by law and
except with respect to rights set forth herein or in the other Loan Documents,
hereby waives and releases all rights of redemption, valuation, appraisement,
stay of execution, notice of intention to mature or declare due the whole of
the Secured Indebtedness and all rights to a marshaling of the assets of
Grantor, including the Property, or to a sale in inverse order of alienation in
the event of foreclosure of the liens and security interests hereby created.
Grantor shall not have or assert any right under any statute or rule of law
pertaining to the marshaling of assets, sale in inverse order of alienation,
the exemption of homestead, the administration of estates of decedents or other
matters whatever to defeat, reduce or affect the rights of the Trustee or
Collateral Agent under the terms of this Deed of Trust to a sale of the
Property for the collection of the Secured Indebtedness without any prior or
different resort for collection, or the rights of the Trustee or Collateral
Agent under the terms of this Deed of Trust to the payment of such indebtedness
out of the proceeds of sale of the Property in preference to every other
claimant whatever. If any law referred to in this Paragraph 3.13 and now in
force, of which Grantor or Grantor's successors and assigns and such other
persons claiming any interest in the Property might take advantage despite this
Paragraph 3.13 shall hereafter be repealed or cease to be in force, such law
shall not thereafter be deemed to preclude the application of this Paragraph
3.13. TO THE
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EXTENT NOT PROHIBITED BY APPLICABLE LAWS, IF THE PROPERTY IS SOLD IN ACCORDANCE
WITH THE TERMS OF THIS DEED OF TRUST FOR AN AMOUNT LESS THAN THE OBLIGATIONS OF
GRANTOR TO TRUSTEE, LENDERS OR COLLATERAL AGENT, THE DEFICIENCY SHALL BE
DETERMINED BY THE PURCHASE PRICE AT THE SALE.
3.14. Delivery of Possession After Foreclosure. In the event there
is a foreclosure sale hereunder and at the time of such sale Grantor or
Grantor's successors or assigns or any other persons claiming any interest in
the Property by, through or under Grantor are occupying or using the Property,
or any part thereof, each and all shall immediately become the tenant of the
purchaser at such sale, which tenancy shall be a tenancy from day-to-day,
terminable at the will of either landlord or tenant, at a reasonable rental per
day based upon the value of the property occupied, such rental to be due daily
to the purchaser. In the event the tenant fails to surrender possession of
said property upon demand, the purchaser shall be entitled to institute and
maintain an action for forcible entry and detainer of said property in the
Justice of the Peace Court in the Justice Precinct in which such property, or
any part thereof, is situated.
3.15. Insurance Premiums. Subject to the terms of the Leases, upon
any foreclosure of the Mortgaged Property pursuant to this Deed of Trust,
Collateral Agent shall have the right to cancel any policy of insurance
covering all or any part of the Mortgaged Property and shall be entitled to
receive any unearned premiums from such policy. The unearned premiums received
by Collateral Agent shall be applied in the same manner as provided in
Paragraph 3.7 above regarding the application of proceeds of sale of the
Mortgaged Property.
ARTICLE IV.
Assignment of Rents, Profits, Income,
Contracts and Bonds
4.1. Assignment. Grantor does hereby absolutely and
unconditionally assign, transfer and set over to Collateral Agent all rents,
income, profits and proceeds to be derived from the Property, including without
limitation the immediate and continuing right, subject to the license granted
below, to collect and receive all of the rents, income, receipts, revenues,
issues, profits and other sums of money that may now or at any time hereafter
become due and payable to Grantor under the terms of any present or future
leases now or hereafter covering the Property, or any part thereof, including
but not limited to minimum rents, additional rents, percentage rents,
deficiency rents and liquidated damages following default, all proceeds payable
under any policy of insurance covering the loss of rents resulting from
untenantability caused by destruction or damage to the Property, and liens and
rights, whether constitutional, statutory, contractual or otherwise, in favor
of Grantor as the lessor of any of the Property, and all of Grantor's rights to
recover monetary amounts from any lessee in bankruptcy including, without
limitation, rights of recovery for use and occupancy and damage claims arising
out of lease defaults, including rejections, under the Bankruptcy Reform Act of
1978, as amended, or any other present or
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future federal or state insolvency, bankruptcy or similar law (all of the
foregoing hereinafter collectively called "Applicable Bankruptcy Law"),
together with any sums of money that may now or at any time hereafter become
due and payable to Grantor by virtue of any and all royalties, overriding
royalties, bonuses, delay rentals and any other amount of any kind or character
arising under any and all present and future oil, gas and mining leases
covering the Property or any part thereof; and all proceeds and other amounts
paid or owing to Grantor under or pursuant to any and all contracts and bonds
relating to the construction, erection or renovation of the Property; subject
however to a license hereby granted by Collateral Agent to Grantor to collect
and receive and expend all of the foregoing, subject to the terms and
conditions hereof. Upon the occurrence and continuance of any Default,
Collateral Agent shall have the right, power and privilege (but shall be under
no duty) to terminate such license whereupon Collateral Agent shall have the
right and authority, whether or not it takes possession of the Property, to
seek enforcement of any such lease, contract or bond and to demand, collect,
receive, xxx for and recover in its own name any and all of the above described
amounts assigned hereby and to apply the sum(s) collected, first to the payment
of reasonable expenses incident to the collection of the same, second to the
payment of the Secured Indebtedness, and the balance, if any, to Grantor or
other party legally entitled thereto; provided, however, that Collateral Agent
shall not be deemed to have taken possession of the Property except on the
exercise of its option to do so, evidenced by its demand and overt act for such
purpose. Grantor shall make no assignment or other disposition of the above
described amounts assigned hereby, nor, unless permitted under the Credit
Agreement, shall Grantor cancel or amend any such lease, contract, bond or any
other instrument under which such amounts are to be paid or waive, excuse,
condone, discount, set off, compromise or in any manner release any obligation
thereunder if to do so could reasonably be expected to have a Material Adverse
Effect, nor shall Grantor during the existence of a Default receive or collect
any such amount thus assigned for a period of more than one month in advance of
the date on which payment thereof is due and Grantor shall duly and punctually
observe and perform every obligation to be performed by it under each such
lease, contract, bond or other instrument if the failure to do so could
reasonably be expected to have a Material Adverse Effect, and shall not do or
permit to be done anything to impair the security thereof and shall enforce if
the failure to do so could reasonably be expected to have a Material Adverse
Effect, every obligation of each other party thereto. The assignment contained
in this Paragraph 4.1. shall become null and void upon the release of this Deed
of Trust. It shall never be necessary for Collateral Agent to institute legal
proceedings of any kind whatsoever to enforce the provisions of this Paragraph
4.1.
ARTICLE V.
Hazardous Materials
5.1. Definitions. For the purpose of this Deed of Trust, Grantor,
Collateral Agent and Trustee agree that, unless the context otherwise specifies
or requires, the following terms shall have the meaning specified below:
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(a) "Hazardous Materials" means (a) any "hazardous waste"
as defined by the Resource Conservation and Recovery Act of 1976 (42
U.S.C. Section 6901 et seq.), as amended from time to time, and
regulations promulgated thereunder; (b) any "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. Section 9601 et seq.) ("CERCLA"), as
amended from time to time, and regulations promulgated thereunder; (c)
asbestos; (d) polychlorinated biphenyls; (e) underground storage
tanks, whether empty, filled or partially filled with any substance,
(f) any substance the presence of which on the Land and Improvements
is prohibited by any Governmental Requirements (as defined below); and
(g) any other substance which by any Governmental Requirements
requires special handling or notification of any federal, state or
local governmental entity in its collection, storage, treatment, or
disposal.
(b) "Hazardous Materials Contamination" means the
contamination (whether presently existing or with respect to Sections
5.3, 5.4 and 5.5 only, hereafter occurring) of the buildings,
facilities, soil, groundwater, air or other elements on or of the Land
and Improvements by Hazardous Materials, or the contamination of the
buildings, facilities, soil, groundwater, air or other elements on or
of any other property as a result of Hazardous Materials at any time
(whether before or after the date of this Deed of Trust) emanating
from the Land and Improvements, in either case, in a manner violating
applicable Governmental Requirements.
(c) "Governmental Requirements" means all laws,
ordinances, rules, and regulations of any Governmental Authority (as
defined below) applicable to Grantor or the Land and Improvements.
(d) "Governmental Authority" means the United States, the
state, county, city, or any other political subdivision in which the
Land and Improvements is located, and any other political subdivision,
agency, or instrumentality exercising jurisdiction over Grantor or the
Land and Improvements.
5.2. [Intentionally omitted.]
5.3. Grantor's Covenants. Grantor agrees to (a) give notice to
Collateral Agent promptly upon Grantor's acquiring knowledge of the presence of
any Hazardous Materials which would have a Material Adverse Effect on the Land
and Improvements or of any Hazardous Materials Contamination which would have a
Material Adverse Effect with a full description thereof; and (b) promptly
comply with any Governmental Requirements requiring the removal, treatment or
disposal of such Hazardous Materials or Hazardous Materials Contamination and
provide Collateral Agent with reasonably satisfactory evidence of such
compliance, except to the extent that Grantor's liability for such removal,
treatment and disposal of such Hazardous Materials or Hazardous Materials
Contamination is being contested in good faith by Grantor.
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5.4. Site Assessments. Grantor will permit Collateral Agent (by
its officers, employees and agents) from time to time, but not more frequently
than once in any twelve-month period (unless otherwise required by any Tribunal
having supervisory authority over Collateral Agent) to contract for the
services of persons (the "Site Reviewers") to perform environmental site
assessments (the "Site Assessments") on the Land and Improvements for the
purpose of determining whether there exists on the Land and Improvements any
environmental condition which could reasonably be expected to result in any
liability, cost or expense to the owner, occupier or operator of the Land and
Improvements arising under any Governmental Requirements relating to Hazardous
Materials. Subject to the consent of the Lessor and subject to the provisions
of the Lease, the Site Assessments may be performed at any time or times, upon
reasonable notice, and under reasonable conditions established by Grantor which
do not impede the performance of the Site Assessments. Site Assessments shall
be conducted in accordance with Governmental Requirements. Subject to the
consent of the Lessor and subject to the provisions of the Lease, the Site
Reviewers are hereby authorized to enter upon the Land and Improvements for
such purposes. Subject to the consent of the Lessor and subject to the
provisions of the Lease, the Site Reviewers are further authorized to perform
both above and below the ground testing for environmental damage or the
presence of Hazardous Materials on the Land and Improvements and such other
tests on the Land and Improvements as may be necessary to conduct the Site
Assessments in the reasonable opinion of the Site Reviewers. Grantor will
supply to the Site Reviewers such historical and operational information
regarding the Land and Improvements as Grantor has in its possession or control
and as may be reasonably requested by the Site Reviewers to facilitate the Site
Assessments and will make available for meeting with the Site Reviewers
appropriate personnel employed by Grantor having knowledge of such matters.
The costs of performing such Site Assessments, except during a Default, shall
be paid by Collateral Agent. During a Default, the reasonable cost of
performing such Site Assessments shall be paid by Grantor upon demand of
Collateral Agent and any such expenses borne by Collateral Agent and not
promptly reimbursed by Grantor shall be secured by this Deed of Trust.
5.5. [Intentionally omitted.]
ARTICLE VI.
Miscellaneous
6.1. Release. Upon the Release Date, (as defined in the Term
Credit Agreement) the Property shall become wholly clear of the liens, security
interests, conveyances and assignments evidenced hereby, which shall be
released of record by Collateral Agent at Grantor's cost.
6.2. Successor Trustee. The Trustee may resign by an instrument in
writing addressed to Collateral Agent, or the Trustee may be removed at any
time with or without cause by an instrument in writing executed by Collateral
Agent. In case of the death, resignation, removal or disqualification of the
Trustee or if for any reason Collateral Agent shall deem it desirable
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to appoint a substitute or successor trustee to act instead of the herein named
trustee or any substitute or successor trustee, then Collateral Agent shall
have the right and hereby is authorized and empowered to appoint a successor
trustee, or a substitute trustee, without other formality than appointment and
designation in writing executed by Collateral Agent and the authority hereby
conferred shall extend to the appointment of other successor and substitute
trustees successively until the Secured Indebtedness finally has been paid in
full or until the Property is sold hereunder. In the event the Secured
Indebtedness is owned by more than one person or entity, the holder or holders
of not less than a majority in the amount of such indebtedness shall have the
right and authority to make the appointment of a successor or substitute
trustee provided for in the preceding sentence. Such appointment and
designation by Collateral Agent or by the holder or holders of not less than a
majority of the Secured Obligations shall be full evidence of the right and
authority to make the same and of all facts therein recited. If Collateral
Agent is a corporation and such appointment is executed in its behalf by an
officer of such corporation, such appointment shall be conclusively presumed to
be executed with authority and shall be valid and sufficient without proof of
any action by the board of directors or any superior officer of the
corporation. Upon the making of any such appointment and designation, all of
the estate and title of the Trustee in the Property shall vest in the named
successor or substitute trustee and thereupon he shall succeed to and shall
hold, possess and execute all the rights, powers, privileges, immunities and
duties herein conferred upon the Trustee; but, nevertheless, upon the written
request of Collateral Agent or of the successor or substitute Trustee, the
Trustee ceasing to act shall execute and deliver an instrument transferring to
such successor or substitute Trustee all of the estate and title in the
Property of the Trustee so ceasing to act, together with all the rights,
powers, privileges, immunities and duties herein conferred upon the Trustee,
and shall assign, transfer and deliver any of the properties and moneys held by
said Trustee hereunder to said successor or substitute Trustee. All references
herein to the Trustee shall be deemed to refer to the Trustee (including any
successor or substitute appointed and designated as herein provided) from time
to time acting hereunder. Grantor hereby ratifies and confirms any and all
acts which the herein named Trustee or her successor or successors, substitute
or substitutes, in this trust, lawfully shall do by virtue hereof.
6.3. Liability and Indemnification of Trustee. The Trustee shall
not be liable for any error of judgment or act done by the Trustee in good
faith, or be otherwise responsible or accountable under any circumstances
whatsoever, except for the Trustee's gross negligence or willful misconduct.
The Trustee shall have the right to rely on any instrument, document or
signature authorizing or supporting any action taken or proposed to be taken by
him or her hereunder, believed by him or her in good faith to be genuine. All
moneys received by the Trustee, until used or applied as herein provided, shall
be held in trust for the purposes for which they were received, but need not be
segregated in any manner from any other moneys (except to the extent required
by law), and the Trustee shall be under no liability for interest on any monies
received by him or her hereunder, except to the extent required hereunder or
under Applicable Law. Grantor will reimburse the Trustee for, and indemnify
and save harmless him or her against, any and all liability and expenses which
reasonably may be incurred by him or her in the performance of his or her
duties hereunder, except for such liability and expenses
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attributable to the Trustee's gross negligence or willful misconduct. The
foregoing indemnity shall not terminate upon release, foreclosure or other
termination of this Deed of Trust.
6.4. Waiver by Collateral Agent. Collateral Agent may, subject to
the Credit Agreement, at any time and from time to time in writing (a) waive
compliance by Grantor with any covenant herein made by Grantor to the extent
and in the manner specified in such writing; (b) consent to Grantor doing any
act which Grantor hereunder is prohibited from doing, or consent to Grantor
failing to do any act which Grantor hereunder is required to do, to the extent
and in the manner specified in such writing; (c) release any part of the
Property, or any interest therein, from the lien and security interest of this
Deed of Trust without the joinder of the Trustee, or (d) release any party
liable, either directly or indirectly, for the Secured Indebtedness or for any
covenant herein or in any other instrument now or hereafter securing the
payment of the Secured Indebtedness, without impairing or releasing the
liability of any other party. No such act shall in any way impair the rights
of Trustee or Collateral Agent hereunder except to the extent specifically
agreed to by Collateral Agent in such writing.
6.5. Actions by Trustee or Collateral Agent. The lien, security
interest and other security rights of Trustee, Collateral Agent and Lenders
hereunder shall not be impaired by any indulgence, moratorium or release
granted by Collateral Agent (except as provided in Section 6.1), including but
not limited to (a) any renewal, extension, increase or modification which
Collateral Agent or any Lender may grant with respect to any Secured
Indebtedness, (b) any surrender, compromise, release, renewal, extension,
exchange or substitution which Collateral Agent or any Lender may grant in
respect of the Property, or any part thereof or any interest therein (except to
the extent specifically surrendered, compromised, released, renewed, extended,
exchanged or substituted), or (c) any release or indulgence granted to any
endorser, guarantor or surety of any Secured Indebtedness. The taking of
additional security by Trustee or Collateral Agent shall not release or impair
the lien, security interest or other security rights of Trustee or Collateral
Agent hereunder or affect the liability of Grantor or of any endorser or
guarantor or other surety or improve the right of any permitted junior
lienholder in the Property.
6.6. Rights of Collateral Agent. Collateral Agent may, subject to
the Credit Agreement, waive any Default or other default without waiving any
other prior or subsequent Default or other default. Collateral Agent may
remedy any Default or other default without waiving the Default or other
default remedied. Neither the failure by Collateral Agent to exercise, nor the
delay by Collateral Agent in exercising, any right, power or remedy upon any
Default or other default shall be construed as a waiver of such Default or
other default or as a waiver of the right to exercise any such right, power or
remedy at a later date. No single or partial exercise by Collateral Agent of
any right, power or remedy hereunder shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right, power or remedy
hereunder may be exercised at any time and from time to time. No modification
or waiver of any provision hereof or consent to any departure by Grantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by Collateral Agent, and then such waiver or consent shall be
effective only in the specific instances, for the purpose for which given and
to the extent therein specified. No notice to or demand on Grantor in any case
shall
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of itself entitle Grantor to any other or further notice or demand in similar
or other circumstances. Acceptance by Collateral Agent of any payment in an
amount less than the amount then due on any Secured Indebtedness shall be
deemed an acceptance on account only and shall not in any way affect the
existence of a Default or other default hereunder.
6.7. Reproduction as Financing Statement. A carbon, photographic
or other reproduction of this Deed of Trust or of any financing statement
relating to this Deed of Trust shall be sufficient as a financing statement.
6.8. Fixture Filing. Some of the above goods are or are to become
fixtures on the Land. This Deed of Trust shall be effective as a financing
statement filed as a fixture filing with respect to all fixtures included
within the Property and is to be filed for record in the real property records
of the county where the Land is situated. The mailing address of Grantor is
set forth below the signature of Grantor to this Deed of Trust and the address
of Collateral Agent from which information concerning the security interest may
be obtained is 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000.
6.9. Filing and Recordation. Grantor will cause this Deed of Trust
and all amendments and supplements thereto and substitutions therefor and all
financing statements and continuation statements relating hereto to be
recorded, filed, re-recorded and refiled in such manner and in such places as
the Trustee or Collateral Agent shall reasonably request, and will pay all such
recording, filing, re-recording and refiling taxes, fees and other charges.
6.10. Dealing with Successor. In the event the ownership of the
Property or any part thereof becomes vested in a person other than Grantor,
Collateral Agent may, without notice to Grantor, deal with such successor or
successors in interest with reference to this Deed of Trust and to the Secured
Indebtedness in the same manner as with Grantor, without in any way vitiating
or discharging Grantor's liability hereunder or for the payment of the Secured
Indebtedness. Except as agreed to in writing by all Lenders and Collateral
Agent, no sale of the Property, no forbearance on the part of Collateral Agent
or any Lender and no extension of the time for the payment of any of the
Secured Indebtedness given by Collateral Agent or any Lender shall operate to
release, discharge, modify, change or affect, in whole or in part, the
liability of Grantor hereunder or for the payment of the Secured Indebtedness
or the liability of any other person hereunder or for the payment of the
Secured Indebtedness, except to the extent proceeds of any such sale are
applied as provided in Paragraph 3.7.
6.11. Place of Payment. Secured Indebtedness which may be owing
hereunder at any time by Grantor shall be payable at the place designated in
the Loan Documents, or if no such designation is made, at the office of
Collateral Agent at the address indicated in this Deed of Trust, or at such
other place in the continental United States as Collateral Agent may designate
in writing.
6.12. Subrogation. To the extent that proceeds of the Secured
Indebtedness are used to pay indebtedness secured by any outstanding lien,
security interest, charge or prior
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encumbrance against the Property, such proceeds have been advanced by Lenders
at Grantor's request and Lenders shall be subrogated to any and all rights,
security interests and liens owned or held by any owner or holder of such
outstanding liens, security interests, charges or encumbrances, irrespective of
whether said liens, security interests, charges or encumbrances are released;
provided, however, that the terms and provisions of this Deed of Trust shall
govern the rights and remedies of Lenders and shall supersede the terms,
provisions, rights and remedies under and pursuant to the instruments creating
the lien or liens to which Lenders are subrogated hereunder.
6.13. Application of Indebtedness. If any part of the Secured
Indebtedness cannot be lawfully secured by this Deed of Trust or if any part of
the Property cannot be lawfully subject to the lien and security interest
hereof to the full extent of such indebtedness, then all payments made shall be
applied on said indebtedness first in discharge of that portion thereof which
is unsecured by this Deed of Trust.
6.14. Usury. It is the intent of the Lenders and Grantor in the
execution of the Credit Agreement, this Deed of Trust, the other Loan Documents
and all other instruments now or hereafter securing the Secured Indebtedness or
executed in connection therewith or under any other written or oral agreement
by the undersigned in favor of Collateral Agent and/or Lenders to contract in
strict compliance with applicable usury law. In furtherance thereof,
Collateral Agent, Lenders and Grantor stipulate and agree that none of the
terms and provisions contained in the Credit Agreement, this Deed of Trust, the
other Loan Documents or any other instrument securing the Notes or executed in
connection herewith, or in any other written or oral agreement by Grantor in
favor of Lenders and/or Collateral Agent, shall ever be construed to create a
contract to pay for the use, forbearance or detention of money, or interest at
a rate in excess of the maximum interest rate permitted to be charged by
applicable law. Neither Grantor nor any guarantors, endorsers, sureties or
other parties now or hereafter becoming liable for the Secured Indebtedness or
any part thereof shall ever be required to pay interest on Secured Indebtedness
or arising under any instrument securing the Secured Indebtedness or under any
of the other Loan Documents, or in any other written or oral agreement by
Grantor in favor of Lenders and/or Collateral Agent, at a rate in excess of the
maximum interest that may be lawfully charged under Applicable Laws, and the
provisions of this Paragraph 6.14 shall control over all other provisions of
the Credit Agreements, this Deed of Trust, the other Loan Documents and any
other instruments now or hereafter securing the Secured Indebtedness or
executed in connection herewith or any other oral or written agreements which
may be in apparent conflict herewith. All interest paid or agreed to be paid
to Lenders and/or Collateral Agent shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full period
until payment in full of the principal of the Secured Indebtedness so that the
interest thereon for such full period shall not exceed the maximum amount
permitted by Applicable Laws. Lenders and/or Collateral Agent expressly
disavow any intention to charge or collect excessive unearned interest or
finance charges in the event the maturity of the Secured Indebtedness is
accelerated. If the maturity of the Secured Indebtedness shall be accelerated
for any reason or if the principal of the Secured Indebtedness is paid prior to
the end of the term of the Secured Indebtedness, and as a result thereof the
interest received for the actual period
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of existence of the loan evidenced by the Secured Indebtedness exceeds the
applicable maximum lawful rate, Lenders and/or Collateral Agent shall refund to
Grantor the amount of such excess or shall credit the amount of such excess
against the principal balance of the Secured Indebtedness then outstanding. In
the event that Lenders and/or Collateral Agent shall collect monies and/or any
other thing of value which are deemed to constitute interest which would
increase the effective interest rate on the Secured Indebtedness to a rate in
excess of that permitted to be charged by applicable law, an amount equal to
interest in excess of the lawful rate shall, upon such determination, at the
option of Lenders and/or Collateral Agent, be either immediately returned to
Grantor or credited against the principal balance of the other Secured
Indebtedness, without further penalty to such holder. By execution of this
Deed of Trust, Grantor acknowledges that it believes the loan to be
non-usurious and agrees that if, at any time, Grantor should have reason to
believe that such loan is in fact usurious, it will give Lenders and/or
Collateral Agent notice of such condition, and Grantor agrees that Lenders
and/or Collateral Agent shall have 90 days after receipt of such notice in
which to make appropriate refund or other adjustment in order to correct such
condition if in fact such condition exists. As used in this Paragraph 6.14,
"interest" means any sum that must be treated as interest under Applicable Laws
in determining whether a loan is usurious. THE TERM "APPLICABLE LAWS" AS USED
IN THIS PARAGRAPH 6.14 SHALL MEAN THE LAWS OF THE STATE OF TEXAS OR THE LAWS OF
THE UNITED STATES, WHICHEVER LAWS ALLOW THE GREATER RATE OF INTEREST, AS SUCH
LAWS NOW EXIST OR MAY BE CHANGED OR AMENDED OR COME INTO EFFECT IN THE FUTURE.
6.15. Notice. Any notice, request, demand or other communication
required or permitted hereunder, or under the Loan Documents, or under any
other instrument securing the payment of the Loan Documents (unless otherwise
expressly provided therein) shall be given in the same manner as in Section
11.1 of the Credit Agreements.
6.16. Successors and Assigns. The terms, provisions, covenants and
conditions hereof shall be binding upon Grantor, and the representatives,
successors and assigns of Grantor including all successors in interest of
Grantor in and to all or any part of the Property, and shall inure to the
benefit of the Trustee and Collateral Agent and their respective heirs,
successors, substitutes and assigns and shall constitute covenants running with
the land. All references in this Deed of Trust to Grantor, Trustee or
Collateral Agent shall be deemed to include all such heirs, devisees,
representatives, successors, substitutes and assigns.
6.17. Severability. A determination that any provision of this Deed
of Trust is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and any determination that the application of
any provision of this Deed of Trust to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to any other persons or circumstances.
6.18. Gender and Number. Within this Deed of Trust, words of any
gender shall be held and construed to include any other gender, and words in
the singular and plural number shall be held and construed to include the other
number, unless the context otherwise requires.
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6.19. Counterparts. This Deed of Trust may be executed in any
number of counterparts with the same effect as if all parties hereto had signed
the same document. All such counterparts shall be construed together and shall
constitute one instrument.
6.20. Reporting Requirements. Grantor agrees to comply with any and
all reporting requirements applicable to the transaction secured by this Deed
of Trust which are set forth in any law, statute, ordinance, rule, regulation,
order or determination of any governmental authority, and further agrees upon
request of Collateral Agent to furnish Collateral Agent with evidence of such
compliance.
6.21. Headings. The paragraph headings contained in this Deed of
Trust are for convenience only and shall in no way enlarge or limit the scope
or meaning of the various and several paragraphs hereof.
6.22. Modification or Termination. The Loan Documents may only be
modified or terminated by a written instrument or instruments executed by the
party against whom enforcement of the modification or termination is asserted.
Any alleged modification or termination which is not so documented shall not be
effective as to any party.
6.23. ENTIRE AGREEMENT. THIS DEED OF TRUST, TOGETHER WITH THE
CREDIT AGREEMENTS, AND ALL OTHER LOAN DOCUMENTS (ALL AS IN EFFECT ON THE DATE
HEREOF AND AS THE SAME MAY BE AMENDED, SUPPLEMENTED, OR OTHERWISE MODIFIED
HEREAFTER FROM TIME TO TIME) REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
6.24. GOVERNING LAW. EXCEPT TO THE EXTENT THAT THE REAL PROPERTY
LOANS OF ANY STATE IN WHICH ANY OF THE MORTGAGED PROPERTY MAY BE LOCATED
CONTROLS, THIS DEED OF TRUST SHALL BE CONSTRUED, INTERPRETED, ENFORCED AND
GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE LAWS
OF THE UNITED STATES APPLICABLE TO TRANSACTIONS WITHIN TEXAS.
6.25. Multiple Advance Loan. This Deed of Trust is given to secure,
among other things, a multiple advance loan and shall secure not only presently
existing indebtedness but also future advances, whether such advances are
obligatory or to be made at the option of the Collateral Agent or any Lender or
otherwise, to the same extent as if such future advances were made on the date
of execution of this Deed of Trust. The lien of this Deed of Trust shall be
valid as to all indebtedness hereby secured, including future advances, from
the time of its filing for record in the recorder's or registrar's office of
the county in which the Mortgaged Property is located.
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IN WITNESS WHEREOF, Grantor has executed this Leasehold Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing as of the
19th day of December, 1997.
BEACON MANUFACTURING COMPANY
[Corporate Seal]
Attest:
By:
------------------------------------
------------------------- Name: J. Xxxx Xxxxxxxxxxx
Title: Vice President and Treasurer
Address: 0000 Xxxx Xxx
Xxxxxx, Xxxxx 00000-0000
STATE OF TEXAS )
) ss:
COUNTY OF DALLAS )
This ________ day of December, 1997, personally came before me,
_______________________, Notary Public of ___________ County, State of
__________________, J. Xxxx Xxxxxxxxxxx, who being by me duly sworn, says that
he is the Vice President and Treasurer of Beacon Manufacturing Company, a North
Carolina corporation, and that the seal affixed to the foregoing instrument in
writing is the corporate seal of said corporation, and that said writing was
signed and sealed by him in behalf of said corporation by its authority duly
given. And the said Vice President and Treasurer acknowledged the said writing
to be the act and deed of said corporation.
Witness my hand and notarial seal, this the __________ day of
December, 1997.
----------------------------------
Notary Public, State of
----------
----------------------------------
Print Name of Notary here
My Commission Expires:
----------------------------------
(NOTARY SEAL)
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EXHIBIT H-2
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Xxxx X. Xxxxxxx
XXXXXXX, XXXXXXX & XXXXXXX, P.C.
3400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
DEED TO SECURE DEBT, ASSIGNMENT OF LEASES
AND RENTS, AND SECURITY AGREEMENT
STATE OF GEORGIA (
( KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF COLUMBUS (
THAT, _____________________________________________, a _______
corporation (hereinafter called "Grantor"), in order to secure the payment of
the indebtedness hereinafter referred to and the performance of the
obligations, covenants, agreements and undertakings of Grantor hereinafter
described, does hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER, ASSIGN and SET
OVER to NATIONSBANK OF TEXAS, N.A., a national banking association (hereinafter
called "NationsBank"), having its principal office at 000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxxxxx, Xxxxx 00000, as the collateral agent (hereinafter in such
capacity NationsBank is called the "Collateral Agent") on behalf of NationsBank
and each other lender (and affiliate of each other lender) a party to the
Credit Agreements described below (hereinafter collectively called "Lenders"),
all of the real estate situated in the State of ___________________________, in
the Counties set forth in Exhibit "A" attached hereto and described in Exhibit
"A" attached hereto and made a part hereof (the "Land"), together with (i) all
the buildings and other improvements now on or that may be hereafter placed on
said Land; (ii) Grantor's interest in all materials, equipment, fixtures or
other property whatsoever, now or hereafter attached to, installed in, or used
in connection with the buildings and other improvements now erected or
hereafter to be erected on said Land, including, but not limited to, all
heating, plumbing, lighting, water heating, cooking, laundry, refrigerating,
incinerating, ventilating and air conditioning equipment, disposals,
dishwashers, refrigerators and ranges, utility lines and equipment (whether
owned individually or jointly with others),
THE AGGREGATE PRINCIPAL INDEBTEDNESS, EXCLUSIVE OF INTEREST AND COSTS, SECURED
BY THIS INSTRUMENT IS [spell out in letters] ($____________). THE PRINCIPAL
INDEBTEDNESS SECURED BY THIS INSTRUMENT MATURES ______________, 19__.
232
sprinkler systems, fire extinguishing apparatus and equipment, tanks, engines,
pipes, fittings, dynamos, generators, machines, elevators, motors, cabinets,
shades, blinds, partitions, window screens, screen doors, storm windows,
awnings, drapes, and rugs and other floor coverings, and all fixtures,
accessions and appurtenances thereto, and all renewals or replacements of or
substitutions for any of the foregoing, all of which property and things are
hereby declared to be permanent fixtures and accessions to the freehold and
part of the realty conveyed herein as security for the indebtedness herein
mentioned; (iii) Grantor's interest in all easements and rights of way now or
hereafter used in connection with any of the foregoing real estate or as a
means of ingress to or egress from said real estate; (iv) Grantor's interest,
now or hereafter acquired, in and to any streets, ways, alleys and/or strips
and gores of land adjoining said Land or any part thereof; and (v) Grantor's
interest in and to all rights, estates, hereditaments, powers and privileges
appurtenant or incident to the foregoing.
TO HAVE AND TO HOLD the foregoing property (herein called the
"Mortgaged Property") unto Collateral Agent and its successors and assigns, in
fee simple, however, upon the terms, provisions and conditions herein set
forth.
Notwithstanding any other provision of this instrument to the
contrary, this instrument is (1) a security deed passing title to the Mortgaged
Property and made in compliance with the provisions of Section 44-14-60 et seq.
of the Official Code of Georgia Annotated, as amended, and not a mortgage, and
(2) a security agreement covering all of the fixtures located on or comprising
a part of the Property under the Uniform Commercial Code, as enacted in the
State of Georgia.
In order to secure the payment of the indebtedness hereinafter
referred to and the performance of the obligations, covenants, agreements and
undertakings of Grantor hereinafter described, Grantor further grants (to the
extent not prohibited by Applicable Law) to the Collateral Agent a security
interest and lien in Grantor's right, title and interest in and to all present
and future (i) goods, inventory, equipment (excluding, however, any equipment
or other property which is financed with Indebtedness permitted to be incurred
pursuant to Sections 7.1(c) and 7.1(h) of the Credit Agreements), furnishings,
fixtures, furniture, chattels and other personal property of whatever nature
owned by Grantor now or hereafter attached or affixed to or used in or about
the building or buildings now erected or hereafter to be erected on the
Mortgaged Property or otherwise located on the Mortgaged Property, (ii)
fixtures, accessions and appurtenances to any of the foregoing or following,
(iii) renewals or replacements of or substitutions for any of the foregoing or
following, (iv) building materials and equipment now or hereafter delivered to
said premises and intended to be installed therein, (v) occupancy agreements,
leases, rents (including security and other deposits and advance rentals under
occupancy agreements and lease agreements now or at any time hereafter covering
or affecting any of the Mortgaged Property and all property described in this
paragraph and held by or for the benefit of Grantor), fees, royalties, bonuses,
issues, room rents, profits, revenues or other income or benefits of whatever
nature received or due in connection with the Mortgaged Property and all
property described in this
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paragraph, (vi) monetary deposits which Grantor has been required to give to
any public or private utility with respect to utility services furnished to the
Mortgaged Property, (vii) permits, licenses, franchises, certificates, and
agreements related to any of the foregoing or following, and all other rights
and privileges obtained in connection with, or necessary for the operation and
maintenance of, the foregoing, and all other rights and privileges obtained in
connection with the Mortgaged Property and all property described in this
paragraph, (viii) plans, specifications, maps, surveys, reports, operating and
management and maintenance contracts, architectural, engineering, construction
and development contracts, books of account, insurance policies, guarantees,
warranties and other documents, of whatever kind or character, relating to the
ownership, use, construction upon, occupancy, leasing, sale or operation of the
Mortgaged Property and all property described in this paragraph, (ix) oil, gas
and other hydrocarbons and other minerals produced from or allocated to the
Mortgaged Property and all products processed or obtained therefrom, the
proceeds thereof, and all accounts and general intangibles under which such
proceeds may arise, (x) all proceeds from the taking of any of the Mortgaged
Property and any property described in this paragraph or any rights appurtenant
thereto by right of eminent domain or by private or other purchase in lieu
thereof, (xi) all proceeds (including premium refunds) of each policy of
insurance relating to the Mortgaged Property and any property described in this
paragraph, (xii) all guarantees, sureties and other agreements assuring
performance of any obligation of any tenant of the Mortgaged Property and all
property described in this paragraph, and (xiii) all proceeds arising from or
by virtue of the sale, lease or other disposition of the Mortgaged Property and
any property described in this paragraph (all of the property described in this
paragraph hereinafter collectively called the "Personal Property") and all
proceeds and products of the Personal Property. (The Mortgaged Property and
the Personal Property are hereinafter sometimes collectively called the
"Property").
ARTICLE I.
Secured Indebtedness
1.1. Secured Indebtedness. This Deed to Secure Debt, Assignment of
Leases and Rents, and Security Agreement (hereinafter called this "Deed") is
made to secure and enforce the payment of the following, agreements, documents,
obligations, indebtedness and liabilities: (a) all present and future
obligations, indebtedness and liabilities, and all renewals and extensions of
all or any part thereof of Grantor to Lenders or any Lender arising from, by
virtue of, or pursuant to (i) that certain Amended and Restated Credit
Agreement dated as of December __, 1997 among [Grantor] [Pillowtex Corporation,
a Texas corporation (the "Borrower")], NationsBank of Texas, N.A., in its
capacity as Administrative Agent and certain Lenders named therein (said
Amended and Restated Credit Agreement, as amended, modified, renewed, extended
or restated from time to time, the "Amended and Restated Credit Agreement"),
(ii) that certain Term Credit Agreement dated as of December __, 1997, among
[Grantor] [the Borrower], NationsBank of Texas, N.A., in its capacity as
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Administrative Agent, and certain Lenders named therein (said Term Credit
Agreement, as amended, modified, renewed, extended, restated or refinanced from
time to time, the "Term Credit Agreement") (the Amended and Restated Credit
Agreement and the Term Credit Agreement are herein collectively called the
"Credit Agreements"), (iii) the Notes (as defined in the Credit Agreements),
and (iv) the other Loan Documents (as defined in the Credit Agreements),
including, without limitation, interest, fees and other charges that would
accrue or become owing both prior to and subsequent to and but for the
commencement of any proceeding against or with respect to Grantor under any
chapter of the Bankruptcy Code of 1978, 11 U.S.C. Section 101 et. seq. whether
or not a claim is allowed for the same in any such proceeding, and (b) all
indebtedness and obligations incurred or arising pursuant to the provisions of
this Deed. The indebtedness referred to in this Paragraph 1.1 is hereinafter
sometimes called the "Secured Indebtedness". Initially capitalized terms used
herein and not otherwise herein defined shall have the respective meanings
given to such terms in the Credit Agreements. This Deed, the Credit
Agreements, the Notes, the other Loan Documents as defined in the Credit
Agreements, and all other instruments, certificates, affidavits or documents
evidencing, governing, securing, guaranteeing, or relating to the Secured
Indebtedness all as amended, modified, renewed, extended or restated from time
to time, are hereinafter collectively called the "Loan Documents."
ARTICLE II.
Representations and Warranties
2.1. Representations and Warranties. Grantor represents and
warrants to the Collateral Agent and the Lenders as follows:
(a) Title and Authority. Grantor is the lawful owner of
good and indefeasible fee simple title to the Property, subject only
to the matters described in Exhibit "B" attached hereto and made a
part hereof (the "Permitted Encumbrances") and has good right and
authority to grant, bargain, sell, transfer, assign and mortgage the
Mortgaged Property and to grant a security interest in the Personal
Property.
(b) Compliance with Covenants and Laws. The
construction, occupancy, operation and use of the Property and the
intended use thereof by Grantor subject to the provisions of Article V
below complies with all laws, statutes, ordinances, rules,
regulations, orders and determinations of any governmental authority
and any board of fire underwriters (or any body exercising similar
functions) and any restrictive covenants or deed restrictions (whether
recorded or otherwise), including, without limitation, all applicable
zoning, subdivision, platting, licensing, building, and flood disaster
statutes, ordinances, rules, regulations, orders and determinations of
any governmental authority (hereinafter sometimes collectively called
"Applicable Laws"), except where the failure to so comply could not
have a material adverse effect on (i) the financial condition or
prospects of Grantor, (ii) the value of the Property taken
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as a whole, (iii) Grantor's use of, and business operations of, the
Property taken as a whole, or (iv) the validity or enforceability of
this Deed or the liens and security interests granted hereunder
(hereinafter collectively called "Material Adverse Effect"). Grantor
has obtained all requisite zoning, utility, building, health,
operating and occupancy permits from the governmental authorities
having jurisdiction over the Property, except where the failure to
obtain such zoning and permits would not have a Material Adverse
Effect.
(c) No Suits. There are no judicial or administrative
actions, suits or proceedings pending or, to the best of Grantor's
knowledge threatened, affecting the Property which, if adversely
determined, would be reasonably likely to have a Material Adverse
Effect, or involving the validity, enforceability or priority of this
Deed.
(d) Condition of Property. To the best of Grantor's
knowledge after reasonable investigation, the Mortgaged Property is
served by electric, gas, storm and sanitary sewers, sanitary water
supply, telephone and other utilities required for the Grantor's
current and anticipated uses thereof on the date hereof at or within
the boundary lines of the Mortgaged Property. To the best of
Grantor's knowledge after reasonable investigation, all streets,
alleys and easements (including without limitation easements for
ingress and egress, easements for vehicular traffic and parking and
for pedestrian traffic, easements for utilities, and easements for
reciprocal uses) necessary to serve Grantor's current and anticipated
uses of the Mortgaged Property have been completed and are
serviceable, such streets, alleys and easements have been dedicated
and accepted by applicable governmental entities, and/or all
agreements creating such easements have been filed of record in the
real property records of the County set forth on Exhibit "A" attached
hereto. The Mortgaged Property is in reasonably good condition and
repair and proper working order, and is free from damage caused by
fire or other casualty. Grantor has no actual knowledge of any latent
or patent structural or other significant defect or deficiency in the
Mortgaged Property that (i) would materially and adversely affect
Grantor's intended use of the Mortgaged Property or (ii) have a
Material Adverse Effect. None of the Mortgaged Property not covered
by flood insurance is within a flood plain. To the best of Grantor's
knowledge after reasonable investigation, none of the improvements on
the Mortgaged Property create an encroachment over, across or upon any
of the Mortgaged Property boundary lines, rights of way or easements,
and no buildings or other improvements on adjoining land create such
an encroachment, except as disclosed on the survey of the Land
delivered to the Collateral Agent. There is, to the actual knowledge
of Grantor, no condemnation proceeding pending or threatened that
would affect the Mortgaged Property.
(e) Warranty. Grantor will warrant and forever defend
the title to the Mortgaged Property against the claims of all persons
whomsoever claiming or to claim the same or any part thereof, subject
to the Permitted Encumbrances.
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2.2. Covenants and Agreements. So long as the Secured Indebtedness
or any part thereof remains unpaid, Grantor covenants and agrees with the
Collateral Agent and the Lenders as follows:
(a) Taxes on Lien.
In the event of the enactment after the date hereof of any
Applicable Laws deducting from the value of property for the purpose
of taxation any lien or security interest thereon, or imposing upon
the Collateral Agent or any Lender the payment of the whole or any
part of the taxes (other than taxes imposed on the overall income of
Lenders or the Collateral Agent) or assessments or charges or liens
herein required to be paid by Grantor, or changing in any way the laws
relating to the taxation of deeds of trust or mortgages or security
agreements or debts secured by deeds of trust or mortgages or security
agreements or the interest of the secured party in the property
covered thereby, or the manner of collection of such taxes, so as to
affect this Deed or any of the Secured Indebtedness or the Collateral
Agent or any Lender, then, and in any such event, Grantor, upon demand
by the Collateral Agent or any Lender, shall to the extent not
prohibited by any Applicable Laws, pay such taxes, assessments,
charges or liens, or reimburse the Collateral Agent or such Lender
therefor.
(b) Ad Valorem Taxes. Grantor will cause to be paid
prior to delinquency all taxes and assessments heretofore or hereafter
levied or assessed against the Property, or any part thereof, and upon
request of the Collateral Agent will furnish the Collateral Agent with
receipts showing payment of such taxes and assessments prior to the
applicable delinquency date therefor; except that Grantor in good
faith may contest, by appropriate proceedings, the validity,
applicability or amount of any asserted tax or assessment, and,
pending such contest, Grantor shall not be deemed in Default hereunder
if, prior to delinquency of the asserted tax or assessment, Grantor
establishes an escrow, or provides security reasonably acceptable to
the Collateral Agent, or adequate reserves have been established to
cover the payment of such tax or assessment with costs, interest and
penalties and a reasonable additional sum to cover possible costs,
interest and penalties (which escrow and/or security shall be returned
to Grantor upon payment of all such taxes, assessments, costs,
interest and penalties), and if Grantor promptly causes to be paid any
amount adjudged by a court of competent jurisdiction to be due, with
all costs, interest and penalties thereon, promptly after such
judgment becomes final; provided, however, that in any event each such
contest shall be concluded and the tax assessment, costs, interest and
penalties shall be paid prior to the date any writ or order is issued
under which the Property, or any part thereof, may be sold. No
reserve (or security required in (d) below) is required until such
time that the aggregate of alleged unpaid ad valorem taxes on all
properties of Grantor and all unpaid debts described in (d) below
shall exceed $100,000.
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(c) Operation of Property. Grantor will operate, and
will cause the operation of, the Property in a reasonably good and
workmanlike manner and in accordance with all Applicable Laws and will
pay all fees or charges of any kind in connection therewith, except
where the failure to so operate and pay such fees or charges would not
have a Material Adverse Effect. Grantor will keep, and will cause the
keeping of, the Property occupied to the extent necessary not to
impair the insurance carried thereon. Grantor will not use or occupy,
or allow the use or occupancy of, the Property in any manner which
violates any Applicable Laws, or except where the failure to so occupy
would not have a Material Adverse Effect, which constitutes a public
or private nuisance or which makes void, voidable or cancelable, any
insurance then in force with respect thereto. Grantor will not,
without the prior written consent of the Collateral Agent (which
consent shall not be unreasonably withheld), initiate or consent to
any zoning reclassification of the Property or seek or consent to any
variance under existing zoning ordinances applicable to the Property
or use or permit the use of the Property in such a manner as would
result in such use becoming a nonconforming use under applicable
zoning ordinances or other Applicable Laws. Grantor will not, without
the prior written consent of the Collateral Agent (which consent shall
not be unreasonably withheld), impose any restrictive covenant or any
encumbrance upon the Property which does not constitute a Permitted
Encumbrance, execute or file any subdivision plat affecting the
Property or consent to the annexation of the Property to any
municipality. Grantor shall not cause or permit any drilling or
exploration for, or extraction, removal or production of, minerals
from the surface or subsurface of the Property. Grantor will not do
anything to cause the value of the Property to be materially lessened.
If Grantor receives a written notice or claim from any federal, state
or other governmental entity pertaining to the Property, including,
specifically but without limitation, a notice that the Property is not
in compliance with any Applicable Law, Grantor promptly will furnish a
copy of such notice or claim to the Collateral Agent.
(d) Debts for Construction. Grantor will cause all debts
and liabilities of any character, including without limitation all
debts and liabilities for labor, material and equipment and all debts
and charges for utilities servicing the Property, incurred in the
construction, maintenance, operation or development of the Property to
be paid before the same become delinquent. Notwithstanding the
foregoing, Grantor in good faith may contest, by appropriate
proceedings, the validity, applicability or amount of any asserted
mechanics' or materialmen's liens, and, pending such contest, Grantor
shall not be deemed in Default hereunder if Grantor provides the
Collateral Agent with security reasonably satisfactory to the
Collateral Agent and if Grantor promptly causes to be paid any amount
adjudged by a court of competent jurisdiction to be due, with all
costs and interest thereon, promptly after such judgment becomes
final; provided, however, that in any event each such contest shall be
concluded and the lien, interest and costs shall be paid, bonded
around or otherwise removed prior to the date any writ or order is
issued under which the Property, or any part thereof, may be sold. No
security (or reserve required in (b) above) is required until such
time
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that the aggregate of alleged unpaid ad valorem taxes on all
properties and all unpaid debts described in this clause (d) shall
exceed $100,000.
(e) Repair and Maintenance. Grantor will keep the
Property reasonably in good order, repair, operating condition and
appearance, causing all reasonably necessary repairs and replacements,
promptly to be made, and will not allow any of the Property to be
misused, abused or wasted or to deteriorate, normal wear and tear and
casualty excepted. Grantor promptly will replace all worn-out or
obsolete fixtures or personal property covered by this Deed that are
reasonably necessary in the operation of the Property with fixtures or
personal property comparable to the replaced fixtures or personal
property, and will repaint the Property when reasonably needed.
Notwithstanding the foregoing, Grantor will not, without the prior
written consent of the Collateral Agent do or permit to be done
anything to the Property that materially may impair its value,
including but not limited to (i) removing from the Property any
fixtures or personal property covered by this Deed (but not including
any personal property in which Grantor is the lessee thereof) which
are necessary or desirable in the operation of the Property, except
such as is replaced by Grantor by an article of equal suitability and
value, owned by Grantor, free and clear of any lien or security
interest (except that (i) created by this Deed or any other Loan
Document, (ii) otherwise permitted in the Loan Documents or (iii) in
respect of capitalized leases) or such as is permitted to be removed
by a tenant pursuant to such tenant's lease or (ii) making any
structural or other alteration to the Property that materially impairs
the value thereof. Nothing contained herein will prevent tenants of
the Property from making alterations and improvements expressly
permitted under their leases of any part of the Mortgaged Property.
Upon request of the Collateral Agent, Grantor will deliver to the
Collateral Agent an inventory describing and showing the make, model,
serial number and location of all fixtures and personal property used
in the management, maintenance and operation of the Property, with a
certification by Grantor that said inventory is a true and complete
schedule of all such fixtures and personal property used in the
management, maintenance and operation of the Property, that such items
specified in the inventory constitute all of the fixtures and personal
property required in the management, maintenance and operation of the
Property, and that all such items are owned by Grantor free and clear
of any lien or security interest (except the Permitted Encumbrances).
(f) Insurance and Casualty. Grantor will keep the
Property insured against loss or damage by fire, explosion, windstorm,
hail, flood (as to any portion of the Property which shall at any time
be located in an identified "flood prone" area in which flood
insurance has been made available pursuant to the federal Flood
Disaster Protection Act of 1973, and then in the amount of the
outstanding balance of the Notes or the maximum amount of coverage
available, whichever is less), tornado and such other hazards as
required by the Collateral Agent and consistent with industry
standards. Notwithstanding the foregoing, Grantor further covenants
and agrees to keep the Property insured by policies of fire, extended
coverage and other insurance
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239
in such company or companies reasonably acceptable to the Collateral
Agent and upon such terms and provisions, and with such endorsements,
all as reasonably may be acceptable to the Collateral Agent and
consistent with industry standards. Grantor further agrees that
Grantor will deliver to the Collateral Agent receipts evidencing the
payment of all premiums, and certificates of insurance addressed to
the Collateral Agent evidencing compliance with the insurance
requirements set forth herein and, when appropriate, evidencing
renewals of all such policies of insurance before any such insurance
shall expire. All insurance policies required pursuant to this
subparagraph (f) shall contain a prohibition against cancellation,
material endorsement, material alteration or reissuance of such policy
effecting a change in coverage thereunder unless such insurer first
shall have given the Collateral Agent 30 days prior written notice
thereof. All fire, extended and other insurance coverage insurance
policies required hereunder shall be on a replacement cost basis in an
amount not less than that necessary to comply with any co-insurance
percentage stipulated in the policy, but not less than one hundred
percent (100%) of the Property's insurable value, and shall be subject
to deductibles, if any, not to exceed $250,000. Grantor further
agrees that all insurance policies shall provide that proceeds
thereunder will be jointly payable to the Collateral Agent and
Grantor, for the benefit of Grantor and Lenders as their interests may
appear pursuant and subject to a mortgagee clause (without
contribution) of standard form attached to or otherwise made a part of
the applicable policy. In the event any of the Property covered by
such insurance is destroyed or damaged by fire, explosion, windstorm,
hail or by any other casualty against which insurance shall have been
required hereunder, (i) the Collateral Agent may, but shall not be
obligated to, make proof of loss if not made promptly by Grantor, (ii)
each insurance company concerned is hereby authorized and directed to
make payment for such loss jointly to the Collateral Agent and
Grantor, and (iii) the Collateral Agent shall apply the insurance
proceeds as follows:
(A) first, to reimburse the Collateral Agent for
all costs and expenses, including reasonable attorneys' fees,
incurred in connection with the collection of such proceeds;
and
(B) second, if a Default has not occurred or, if
a Default has occurred, such Default is not then continuing,
proceeds of insurance from losses shall be used at Grantor's
option by Grantor (i) for repair or replacement of Property
and Grantor shall provide the Collateral Agent with evidence
satisfactory to the Collateral Agent of such use or (ii) to be
applied to Secured Indebtedness.
(C) third, if a Default has occurred and is
continuing, proceeds of insurance from losses shall at
Lenders' option be applied to Secured Indebtedness as provided
in the Intercreditor Agreement or to repair or replacement of
Property.
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240
In any event, the unpaid portion of the Secured Indebtedness shall
remain in full force and effect and Grantor shall not be excused in
the payment thereof. If any act or occurrence of any kind or nature
(including any casualty on which insurance was not obtained or
obtainable) shall result in material damage to or material loss or
destruction of the Property, Grantor shall give prompt notice thereof
to the Collateral Agent and, if Grantor elects to restore the Property
to its prior condition (pursuant to subparagraph B of this Paragraph
2.2(f)(iii)), Grantor, at Grantor's sole cost and expense and
regardless of whether the insurance proceeds, if any, shall be
sufficient for the purpose, promptly shall restore, repair, replace
and rebuild the Property as nearly as possible to its value, condition
and character immediately prior to such damage, loss or destruction in
accordance with plans and specifications submitted to and reasonably
and promptly approved by the Collateral Agent. Grantor hereby
irrevocably appoints the Collateral Agent as Grantor's
attorney-in-fact, with full authority in place and stead of Grantor
and in the name of Grantor or otherwise, after the occurrence of any
Default and during the continuance of same to obtain any insurance
required to be obtained pursuant to this Paragraph 2.2(f) and which is
not so obtained and to receive, indorse, and collect any drafts or
other instruments, documents and chattel paper, in connection
therewith. The appointment of the Collateral Agent as
attorney-in-fact is coupled with an interest and is irrevocable prior
to final payment in full of the Secured Indebtedness.
(g) Liability and Other Insurance. Grantor shall
maintain comprehensive general liability insurance against claims for
bodily injury or death and property damage occurring in or upon or
resulting from the Property, in standard form and with such insurance
company or companies and policy coverage limits and terms as
reasonably may be acceptable to the Collateral Agent, and such other
insurance as the Collateral Agent from time to time reasonably may
require, with companies reasonably acceptable to the Collateral Agent,
upon such terms and provisions, in such amounts, and with such
endorsements, all as reasonably are approved by the Collateral Agent.
Grantor shall maintain with respect to each policy or agreement
evidencing such comprehensive general liability insurance such
endorsements as reasonably may be required by the Collateral Agent
consistent with accepted industry practice and shall at all times
following request therefor by the Collateral Agent deliver and
maintain with the Collateral Agent receipts evidencing the payment of
all premiums, and certificates of insurance addressed to the
Collateral Agent, evidencing compliance with the insurance
requirements set forth herein and, when appropriate, evidencing
renewals of all such policies of insurance 30 days before any such
insurance shall expire. All insurance policies required pursuant to
this subparagraph (g) shall contain a prohibition against
cancellation, material endorsement, material alteration or reissuance
of such policy effecting a change in coverage thereunder unless such
insurer first shall have given the Collateral Agent 30 days prior
written notice thereof. Grantor further agrees that all insurance
policies described in this Paragraph 2.2(g) shall name the Collateral
Agent, for the benefit of Lenders, as an additional insured party.
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(h) Condemnation. Promptly upon obtaining actual
knowledge of the institution of any proceedings for the condemnation
of the Property, or any portion thereof, or any other proceedings
arising out of injury or damage to the Property, or any portion
thereof, Grantor will notify the Collateral Agent of the pendency of
such proceedings. The Collateral Agent may participate in any such
proceedings if in the reasonable opinion of the Collateral Agent such
participation is necessary to protect the rights or interests of the
Collateral Agent, and Grantor shall from time to time deliver to the
Collateral Agent all instruments reasonably requested by it to permit
such participation. Grantor shall, at its expense, diligently
prosecute any such proceedings, and shall consult with the Collateral
Agent, its attorneys and experts, and cooperate with them in the
carrying on or defense of any such proceedings. All proceeds of
condemnation awards or proceeds of sale in lieu of condemnation with
respect to the Property, or any portion thereof, and all judgments,
decrees and awards for injury or damage to the Property, or any
portion thereof, shall be paid to the Collateral Agent and shall be
applied as follows:
(i) first, to reimburse Grantor or the Collateral
Agent for all reasonable costs and expenses, including
reasonable attorneys' fees, incurred in connection with
collection of such proceeds;
(ii) second, to the payment of Secured Indebtedness
as provided in the Intercreditor Agreement; and
(iii) third, to the extent of the balance (if any)
of such proceeds, to Grantor or other party legally entitled
thereto.
Grantor hereby assigns and transfers all such proceeds, judgments,
decrees and awards to Lenders and agrees to execute such further
assignments of all such proceeds, judgments, decrees and awards as
Lenders may reasonably request; provided, however, the disbursement of
such proceeds, judgments, decrees and awards shall be applied as
provided above in this Paragraph 2.2(h). Lenders are hereby
authorized, in the name of Grantor, to execute and deliver valid
acquittances for, and to appeal from, any such judgment, decree or
award. Lenders shall not be, in any event or circumstances, liable or
responsible for failure to collect, or for failure to exercise
diligence in the collection of, any such proceeds, judgments, decrees
and/or awards.
(i) Protection and Defense of Lien. If the validity or
priority of this Deed or of any rights, titles, liens or security
interests created or evidenced hereby with respect to the Property, or
any part thereof, shall be attacked directly or indirectly or if any
legal proceedings are instituted against Grantor with respect thereto,
Grantor will give prompt written notice thereof to the Collateral
Agent and at Grantor's own cost and expense diligently will endeavor
to cure any defect that may be developed or claimed, and will take all
necessary and proper steps for the defense of such legal
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proceedings, including but not limited to the employment of counsel,
the prosecution or defense of litigation and the release or discharge
of all adverse claims (other than Permitted Encumbrances), and the
Collateral Agent, (whether or not named as a party to legal
proceedings with respect thereto) is hereby authorized and empowered
to take such additional steps as in its judgment and discretion
reasonably may be necessary or proper for the defense of any such
legal proceedings or the protection of the validity or priority of
this Deed and the rights, titles, liens and security interests created
or evidenced hereby, including but not limited to the employment of
counsel, the prosecution or defense of litigation, the compromise or
discharge of any adverse claims (other than Permitted Encumbrances)
made with respect to the Property or any part thereof, the purchase of
any tax title and the removal of prior liens or security interests
which do not constitute Permitted Encumbrances, and all reasonable
expenses so incurred of every kind and character shall be a demand
obligation owing by Grantor, and the party incurring such expenses
shall be subrogated to all rights of the person receiving such
payment. Should the Collateral Agent intend to take any such action
described in the immediately preceding sentence, the Collateral Agent
shall, subject to the immediately succeeding proviso, prior to taking
any such action notify Grantor of such intention and give Grantor a
reasonable opportunity to provide such defense or protection;
provided, however, if in the reasonable opinion of the Collateral
Agent the giving of such notice and opportunity to provide such
defense or protection would impair or hinder such defense or
protection or would otherwise be disadvantageous to rights or
interests of the Collateral Agent hereunder or the rights, title,
liens or security interests created or evidenced hereby, the
Collateral Agent shall have no obligation to give such notice and
opportunity to provide such defense or protection prior to the taking
of any such action, but after taking any such action the Collateral
Agent shall give notice thereof to Grantor.
(j) Permitted Encumbrances. Grantor will comply with and
will perform all of the covenants, agreements and obligations imposed
upon it or the Property in the Permitted Encumbrances in accordance
with their respective terms and provisions if the failure to do so
would have a Material Adverse Effect. Grantor will not modify or
permit any modification of any Permitted Encumbrances against the
Mortgaged Property, the result of which would have a Material Adverse
Effect without the prior written consent of the Collateral Agent.
(k) Books and Records. Grantor will permit all
contracts, statements, invoices, bills and claims for labor, materials
and services supplied for the construction and operation of the
improvements forming a part of the Property to be inspected and copied
by the Collateral Agent and its representatives at all times during
reasonable business hours upon reasonable notice; provided, however,
if a Default shall have occurred and be continuing there shall be no
requirement to give reasonable notice. If applicable, such
information shall be kept confidential in accordance with the
applicable Sections of the Credit Agreements.
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(l) Leases. Grantor may not lease or enter into any
other occupancy agreement covering any material portion of any of the
Mortgaged Property by third parties without the prior written consent
of Grantor, which consent shall not be unreasonably withheld.
(m) Fees and Expenses; Indemnification. Grantor will pay
all appraisal fees, filing and recording fees, inspection fees, survey
fees, taxes, brokerage fees and commissions, abstract fees, title
policy fees, uniform commercial code search fees, escrow fees,
reasonable attorney's fees, and all other costs and expenses of every
character reasonably and properly incurred by Grantor, the Collateral
Agent or Lenders in connection with this Deed, either at the closing
thereof or at any time during the term thereof, or otherwise
attributable or chargeable to Grantor as owner of the Property, and
will reimburse the Trustee, the Collateral Agent and Lenders for all
such costs and expenses incurred by each of them. Grantor shall pay
all reasonable and proper expenses and reimburse the Collateral Agent
and Lenders for any reasonable expenditures, including reasonable
attorney's fees and legal expenses, incurred or expended in connection
with (i) the breach, by Grantor of any covenant herein or (ii) the
Collateral Agent's or Lender's reasonable exercise of any of the
rights and remedies hereunder or the Collateral Agent's or Lenders'
reasonable protection of the Property and the lien and security
interest therein. Notwithstanding anything to the contrary contained
in this Deed, any provision requiring the payment of attorneys' fees
or reasonable attorneys' fees shall, in all instances, mean attorneys'
fees calculated at such attorneys' regular hourly rates for the actual
number of hours expended on the matter, and the parties agree that the
provisions of the Official Code of Georgia Section 13-1-11(a)(2) shall
not apply. Grantor will indemnify and hold harmless, the Collateral
Agent and Lenders (for purposes of this subparagraph (m), the terms
"Collateral Agent" and "Lenders" shall include the directors,
officers, employees and agents of the Collateral Agent and Lenders and
any persons or entities owned or controlled by or affiliated with the
Collateral Agent and Lenders) from and against, and reimburse them
for, all claims, demands, liabilities, losses, damages, judgments,
penalties, costs and expenses (including, without limitation,
reasonable attorney's fees) which may be imposed upon, asserted
against or incurred or paid by any of them by reason of, on account
of or in connection with any bodily injury or death or property damage
occurring in or upon or in the vicinity of the Property through any
cause whatsoever, or asserted against any of them on account of any
act performed or omitted to be performed hereunder or on account of
any transaction arising out of or in any way connected with the
Property or with this Deed. The foregoing indemnities shall not apply
with respect to matters caused by or arising out of the gross
negligence or willful misconduct of the Collateral Agent and/or
Lenders. Grantor agrees, however, that it expressly intends to
indemnify the Collateral Agent and Lenders from and hold each of them
harmless against any and all losses, liabilities, claims, damages or
expenses arising out of their ordinary negligence. The foregoing
indemnities, however, shall not apply with respect to any losses,
liabilities, claims, damages or expenses incurred by the Collateral
Agent, Lenders or the Trustee
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in any action or proceeding by Grantor against the Collateral Agent,
Lenders unless the Collateral Agent or Lenders prevail in such action
or proceeding. The foregoing indemnities shall not terminate upon
release, foreclosure or other termination of this Deed but will
survive foreclosure of this Deed or conveyance in lieu of foreclosure
and the repayment of the Secured Indebtedness and the discharge and
release of this Deed and the other Loan Documents, but Grantor shall
not be liable for any damages as a result of an event that occurs
after foreclosure of the Mortgaged Property (or any portion thereof)
or the taking of a deed in lieu of foreclosure covering the Mortgaged
Property (or any portion thereof), unless such damage occurs as a
result of or arises out of a condition that existed prior to such
foreclosure or such taking of a deed in lieu of foreclosure. Any
amount to be paid hereunder by Grantor to the Collateral Agent and/or
Lenders shall be a demand obligation owing by Grantor to the
Collateral Agent and/or Lenders and shall be subject to and governed
by the provisions of Paragraph 2.3 hereof.
(n) Estoppel Certificate. Grantor shall at any time and
from time to time furnish promptly upon request a written statement in
such form as may be reasonably required by the Collateral Agent
stating that this Deed is a valid and binding obligation of Grantor,
enforceable against Grantor in accordance with its terms, subject to
Debtor Relief Laws (as such term is defined in the Credit Agreement);
that this Deed has not been released, subordinated or modified; and
that to the best of Grantor's knowledge there are no offsets or
defenses against the enforcement of this Deed, or if any of the
foregoing statements are untrue, specifying the reasons therefor.
(o) Compliance with Laws. Grantor shall, and shall use
reasonable efforts to cause any tenant of the Property to, comply with
all applicable restrictive covenants and all Applicable Laws with
respect to which the failure to so comply would have a Material
Adverse Effect.
(p) Tax and Insurance Escrow. In order to secure the
performance and discharge of Grantor's obligations under subparagraphs
(b), (f) and (g) of this Paragraph 2.2, but not in lieu of such
obligations, Grantor will upon written request of the Collateral
Agent, deposit with the Collateral Agent upon the occurrence and
continuance of a Default, a sum equal to accrued and unpaid ad valorem
taxes, assessments and charges (which charges for the purpose of this
subparagraph shall include without limitation ground rents and water
and sewer rents and any other recurring charge which could create or
result in a lien against the Property) against the Property for the
then current year and the accrued and unpaid premiums for such
policies of insurance for the then current year, all as reasonably
estimated by the Collateral Agent and prorated to the end of the
calendar month following the month during which such Default occurred,
and thereafter will deposit with the Collateral Agent, sufficient
funds (as reasonably estimated from time to time by the Collateral
Agent) to permit the Collateral Agent to pay, at least 5 days prior to
the delinquency
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date thereof, the next maturing ad valorem taxes, assessments and
charges and premiums for such policies of insurance. The Collateral
Agent shall have the right to rely upon tax information furnished by
applicable taxing authorities in the payment of such taxes or
assessments and shall have no obligation to make any protest of any
such taxes or assessments. Any excess over the amounts required for
such purposes shall be held by the Collateral Agent for payment of
future taxes, assessments, charges and premiums, applied to any
Secured Indebtedness, or refunded to Grantor, at the Collateral
Agent's option; and any deficiency in such funds so deposited shall be
made up by Grantor upon demand of the Collateral Agent. All such
funds so deposited shall bear interest at the normal interest rate for
money market deposits at NationsBank, may be mingled with the general
funds of the Collateral Agent and shall be applied by the Collateral
Agent toward the payment of such taxes, assessments, charges and
premiums when statements therefor are presented to the Collateral
Agent by Grantor (which statements shall be presented by Grantor to
the Collateral Agent a reasonable time before the applicable amount is
due); provided, however, that if the Collateral Agent has made demand
for payment of all of the Secured Indebtedness, such funds may at the
Collateral Agent's option be, applied to the payment of the Secured
Indebtedness in the order determined by the Collateral Agent and that
the Collateral Agent may at any time, in its discretion, apply all or
any part of such funds toward the payment of any such taxes,
assessments, charges or premiums which are past due, together with any
penalties or late charges with respect thereto. The conveyance or
transfer of Grantor's interest in the Property for any reason
(including without limitation the foreclosure of a subordinate lien or
security interest or a transfer by operation of law) shall constitute
an assignment or transfer of Grantor's interest in and rights to such
funds held by the Collateral Agent under this subparagraph (p) but
subject to the rights of the Collateral Agent hereunder.
(q) Further Assurances. Grantor will, on request of the
Collateral Agent, (i) promptly correct any defect or error which may
be discovered in the contents of this Deed or in any other instrument
executed in connection herewith or in the execution or acknowledgment
thereof; (ii) execute, acknowledge, deliver and record or file such
further instruments (including without limitation further deeds of
trust, security agreements, financing statements, continuation
statements and assignments of rents or leases) and do such further
acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Deed and such other instruments and
to subject to the liens and security interests hereof and thereof any
property intended by the terms hereof or thereof to be covered hereby
or thereby, including specifically, but without limitation, any
renewals, additions, substitutions, replacements, or appurtenances to
the Property; (iii) execute, acknowledge, deliver, procure and record
or file any document or instrument (including specifically any
financing statement) deemed advisable by the Collateral Agent to
protect the lien or the security interest hereunder against the rights
or interests of third persons, and Grantor will pay all reasonable
costs associated with any of the foregoing; (iv) use reasonable
efforts to cause any tenant under any lease agreement of any of the
Property to furnish any
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instrument or perform any act deemed advisable by the Collateral Agent
to protect the lien or the security interest hereunder; and (v)
provide such certificates, documents, reports, information, affidavits
and other instruments (including but not limited to appraisals,
surveys and current title reports) and do such further acts as may be
reasonably necessary or proper in the reasonable determination of the
Collateral Agent to enable the Collateral Agent to comply with the
requirements or requests of any agency having jurisdiction over the
Collateral Agent or any of the Lenders or any examiners of such
agencies with respect to the Secured Indebtedness, Grantor or the
Property.
2.3. Right of the Collateral Agent to Perform. Grantor agrees
that, if, after any applicable notice or grace period, Grantor fails to perform
any act or to take any action which hereunder Grantor is required to perform or
take, or to pay any money which hereunder Grantor is required to pay, the
Collateral Agent, in Grantor's name or in its own name and after the giving of
any required notice and expiration of any applicable cure period, may but shall
not be obligated to perform or cause to be performed such act or take such
action or pay such money, and any reasonable expenses so incurred by the
Collateral Agent, and any money so paid by the Collateral Agent, shall be a
demand obligation owing by Grantor to the Collateral Agent and the Collateral
Agent, upon making such payment, shall be subrogated to all of the rights of
the person or entity receiving such payment. Any amounts due and owing by
Grantor to the Collateral Agent pursuant to this Deed shall bear interest from
the date such amount becomes due until paid at a rate of interest per annum
equal to the lesser of (i) the Base Rate Basis, plus 2%, or (ii) the highest
lawful rate, and shall be a part of the Secured Indebtedness and shall be
secured by this Deed and by any other Loan Document. Should the Collateral
Agent intend to perform or cause to be performed such act or take such action
or pay such money, the Collateral Agent shall, subject to the immediately
succeeding proviso, prior to taking any such action notify Grantor of such
intention and give Grantor a reasonable opportunity to take such action;
provided, however, if in the reasonable opinion of the Collateral Agent the
giving of such notice and opportunity to take action would materially impair
the validity or priority of this Deed, the rights or interests of the
Collateral Agent hereunder or any rights, titles, liens or security interests
created or evidenced hereby, the Collateral Agent shall have no obligation to
give such notice and opportunity to take action prior to taking such action,
but, nevertheless, shall give prompt written notice of the taking of such
action to Grantor.
ARTICLE III.
Remedies in Event of Default
3.1. Defaults. The term "Default" as used in this Deed shall mean
the occurrence and continuance of an "Event of Default" as defined in the
Credit Agreements.
3.2. Acceleration. Upon the occurrence and during the continuance
of a Default, the Collateral Agent shall have the option of declaring all
Secured Indebtedness in its entirety
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to be immediately due and payable, and the liens and security interests
evidenced hereby shall be subject to foreclosure in any manner provided for
herein or provided for by law as the Collateral Agent may elect.
3.3. Possession. Upon the occurrence and during the continuance of
a Default, the Collateral Agent is authorized prior or subsequent to the
institution of any foreclosure proceedings to enter upon the Property, or any
part thereof, and to take possession of the Property and of all books, records
and accounts relating thereto and to exercise without interference from Grantor
any and all rights which Grantor has with respect to the management,
possession, operation, protection or preservation of the Property, including
the right to rent the same for the account of Grantor and to deduct from such
rents all reasonable costs, expenses and liabilities of every reasonable
character incurred by the Collateral Agent in collecting such rents and in
managing, operating, maintaining, protecting or preserving the Property and to
apply the remainder of such rents on the Secured Indebtedness in such manner as
the Collateral Agent may elect. All such costs, expenses and liabilities
incurred by the Collateral Agent in collecting such rents and in managing,
operating, maintaining, protecting or preserving the Property, if not paid out
of rents as hereinabove provided, shall constitute a demand obligation owing by
Grantor and shall bear interest from the date of expenditure until paid at a
rate of interest per annum equal to the Default Rate, all of which shall
constitute a portion of the Secured Indebtedness. If necessary to obtain the
possession provided for above, the Collateral Agent may invoke any and all
legal remedies to dispossess Grantor, including specifically one or more
actions for forcible entry and detainer, trespass to try title and restitution.
In connection with any action taken by the Collateral Agent pursuant to this
Paragraph 3.3, the Collateral Agent shall not be liable for any loss sustained
by Grantor resulting from any failure to let the Property, or any part thereof,
or from any other act or omission of the Collateral Agent in managing the
Property, including without limitation, the negligence of the Collateral Agent,
unless such loss is caused by the gross negligence or willful misconduct of the
Collateral Agent, and the Collateral Agent shall not be obligated to perform or
discharge any obligation, duty or liability under any lease agreement covering
the Property or any part thereof or under or by reason of this instrument or
the exercise of rights or remedies hereunder. Should the Collateral Agent
incur any such liability, the amount thereof, including reasonable costs,
expenses and reasonable attorneys' fees, shall be secured hereby, and Grantor
shall reimburse the Collateral Agent therefor immediately upon demand. Nothing
in this Paragraph 3.3 shall impose any duty, obligation or responsibility upon
the Collateral Agent for the control, care, management or repair of the
Property, or shall operate to make the Collateral Agent responsible or liable
for any waste committed on the Property or by any other parties or for any
dangerous or defective condition of the Property, or for any negligence in the
management, upkeep, operation, repair or control of the Property resulting in
loss or injury or death to any tenant, licensee, employee or stranger, unless
such waste, dangerous or defective condition or injury or death is directly a
result of gross negligence or willful misconduct by the Collateral Agent, and
not just the Collateral Agent's own ordinary negligence. Grantor hereby
assents to, ratifies and confirms any and all actions of the Collateral Agent
with respect to the Property taken under this Paragraph 3.3.
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3.4. Foreclosure. Collateral Agent may sell and dispose of the
Mortgaged Property at public auction, at the usual place for conducting sales
at the courthouse in the county where the Mortgaged Property or any part
thereof may be located, to the highest bidder for cash, first advertising the
time, terms and place of such sale by publishing a notice thereof once a week
for four consecutive weeks (without regard to the actual number of days) in a
newspaper in which sheriff's advertisements are published in said county, all
other notice being hereby waived by Grantor; and Collateral Agent may thereupon
execute and deliver to the purchaser at said sale a sufficient conveyance of
the Mortgaged Property in fee simple, which conveyance may contain recitals as
to the happening of the default upon which the execution of the power of sale,
herein granted, depends, the said recitals shall be presumptive evidence that
all preliminary acts prerequisite to said sale and deed were in all things duly
complied with. Grantor hereby constitutes and appoints Collateral Agent or its
assigns agent and attorney-in-fact to make such recitals, sale and conveyance,
and all of the acts of such attorney-in-fact are hereby ratified, and Grantor
agrees that such recitals shall be binding and conclusive upon Grantor and that
the conveyance to be made by Collateral Agent or its assigns (and in the event
of a deed in lieu of foreclosure, then as to such conveyance) shall be
effectual to bar all right, title and interest, equity of redemption, including
all statutory redemption, homestead, dower, curtesy and all other exemptions of
Grantor, or its successors in interest, in and to the Mortgaged Property. At
the election of Collateral Agent, the Mortgaged Property, or any part thereof,
may be sold in one parcel and as an entirety, or in such parcels, manner or
order as Collateral Agent may elect, and one or more exercises of the powers
herein granted shall not extinguish or exhaust the powers unless the entire
Mortgaged Property is sold or the indebtedness secured hereby is paid in full,
and Collateral Agent, or its assigns, shall collect the proceeds of such sale,
applying such proceeds as hereinafter provided (in the event of deficiency,
Grantor shall immediately on demand from Collateral Agent pay over to
Collateral Agent, or its nominee, such deficiency). Grantor acknowledges that
Collateral Agent may bid for and purchase the Mortgaged Property at any such
foreclosure sale and shall be entitled to apply all or any part of the
indebtedness secured hereby as a credit to the purchase price. The power and
agency hereby granted are coupled with an interest and are irrevocable by death
or otherwise.
3.5. Receiver. In addition to all other remedies herein provided
for, Grantor agrees that upon the occurrence and during the continuance of a
Default, the Collateral Agent shall as a matter of right be entitled to the
appointment of a receiver or receivers for all or any part of the Property,
whether such receivership be incident to a proposed sale of such Property or
otherwise, and without regard to the value of the Property or the solvency of
any person or persons liable for the payment of the Secured Indebtedness, and
Grantor does hereby consent to the appointment of such receiver or receivers,
waives any and all defenses to such appointment and agrees not to oppose any
application therefor by the Collateral Agent, but nothing herein is to be
construed to deprive the Collateral Agent of any other right, remedy or
privilege it may now or hereafter have under any Applicable Laws to have a
receiver appointed; provided, however, that the appointment of such receiver,
trustee or other appointee by virtue of any court order, statute or regulation
shall not impair or in any manner prejudice the rights of the Collateral Agent
to receive payment of the rents, room
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rents, deposits for lodging and income from the Property. Any money advanced
by the Collateral Agent in connection with any such receivership shall be a
demand obligation owing by Grantor to the Collateral Agent and shall bear
interest from the date of making such advancement by the Collateral Agent until
paid at a rate of interest per annum equal to the Highest Lawful Rate, and
shall be secured by this Deed and by any other instrument securing the Secured
Indebtedness.
3.6. Proceeds of Sale. The proceeds of any sale held by the
Collateral Agent or any receiver or public officer in foreclosure of the liens
evidenced hereby shall be applied:
first, to the payment of all necessary and reasonable costs
and expenses incident to such foreclosure sale, including but not
limited to all court costs and charges of every character in the event
foreclosed by suit, and a reasonable fee to the Collateral Agent
acting under the provisions of Paragraph 3.4 if foreclosed by power of
sale as provided in Paragraph 3.4;
second, to the payment in full of the Secured Indebtedness
(including specifically without limitation the principal, interest and
reasonable attorneys' fees due and unpaid on the Notes and the amounts
due and unpaid and owed to the Collateral Agent under this Deed), to
be distributed in accordance with the Intercreditor Agreement; and
third, the remainder, if any, shall be paid to Grantor or
other party legally entitled thereto.
3.7. The Collateral Agent as Purchaser. The Collateral Agent shall
have the right to become the purchaser at any foreclosure sale, and the
Collateral Agent purchasing at such sale shall have the right to credit upon
the amount of the bid made therefor, to the extent necessary to satisfy such
bid, the Secured Indebtedness owing to the Collateral Agent and/or Lenders for
the equal and ratable benefit of Lenders.
3.8. Uniform Commercial Code.
(a) Upon the occurrence and during the continuance of a
Default, the Collateral Agent may exercise its rights of enforcement
with respect to the Personal Property under the Uniform Commercial
Code as adopted in the State of Georgia, as amended from time to time,
and in conjunction with, in addition to or in substitution for those
rights and remedies, and all rights and remedies granted to the
Collateral Agent and/or Lenders under any Loan Document executed by
Grantor governing security interests in personal property of Grantor;
(b) any sale made pursuant to the provisions of this
Paragraph 3.9 shall be deemed to have been a public sale conducted in
a commercially reasonable manner if held contemporaneously with the
sale of the Mortgaged Property under power of sale
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as provided herein upon giving the same notice with respect to the
sale of the Personal Property hereunder as is required for such sale
of the Mortgaged Property under power of sale;
(c) any and all statements of fact or other recitals made
in any xxxx of sale or assignment or other instrument evidencing any
foreclosure sale hereunder as to nonpayment of the Secured
Indebtedness, or as to the occurrence of any Default, or as to the
Collateral Agent and/or Lenders having declared all of such
indebtedness to be due and payable, or as to notice of time, place and
terms of sale and of the properties to be sold having been duly given,
or as to any other act or thing having been duly done by the
Collateral Agent and/or Lenders, shall be taken as prima facie
evidence of the truth of the facts so stated and recited; and
(d) The Collateral Agent may appoint or delegate any one
or more persons as agent to perform any act or acts necessary or
incident to any sale held by the Collateral Agent, including the
sending of notices and the conduct of the sale, but in the name and on
behalf of the Collateral Agent.
3.9. Partial Foreclosure. During a Default, the Collateral Agent
shall have the right to proceed with foreclosure of the liens and security
interests evidenced hereby without declaring the entire Secured Indebtedness
due, and in such event any such foreclosure sale may be made subject to the
unmatured part of the Secured Indebtedness; and any such sale shall not in any
manner affect the unmatured part of the Secured Indebtedness, but as to such
unmatured part this Deed shall remain in full force and effect just as though
no sale had been made. The proceeds of any such sale shall be applied as
provided in Paragraph 3.7 hereof, except that the amount paid under
subparagraph second thereof shall be only the matured portion of the Secured
Indebtedness and any proceeds of such sale in excess of those provided for in
subparagraphs first and second (modified as provided above) shall be applied to
installments of principal of and interest on the Notes in the inverse order of
maturity. Several sales may be made hereunder without exhausting the right of
sale for any unmatured part of the Secured Indebtedness.
3.10. Remedies Cumulative. All remedies herein expressly provided
for are cumulative of any and all other remedies existing at law or in equity
and are cumulative of any and all other remedies provided for in any other
instrument securing the payment of the Secured Indebtedness, or any part
thereof, or otherwise benefiting the Collateral Agent and Lenders, and the
Collateral Agent and Lenders shall, in addition to the remedies herein
provided, be entitled to avail themselves of all such other remedies as may now
or hereafter exist at law or in equity for the collection of the Secured
Indebtedness and the enforcement of the covenants herein and the foreclosure of
the liens and security interests evidenced hereby, and the resort to any remedy
provided for hereunder or under any such other instrument or provided for by
law shall not prevent the concurrent or subsequent employment of any other
appropriate remedy or remedies.
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3.11. Resort to Any Security. The Collateral Agent may resort to
any security given by this Deed or to any other security now existing or
hereafter given to secure the payment of the Secured Indebtedness, in whole or
in part, and in such portions and in such order as may seem best to the
Collateral Agent in its sole and uncontrolled discretion, and any such action
shall not in anywise be considered as a waiver of any of the rights, benefits,
liens or security interests evidenced by this Deed, except as may be provided
to the contrary under Applicable Laws.
3.12. Waiver. To the full extent Grantor may do so, Grantor agrees
that Grantor will not at any time insist upon, plead, claim or take the benefit
or advantage of any law now or hereafter in force pertaining to the rights and
remedies of sureties or providing for any appraisement, valuation, stay,
extension, redemption or reinstatement, and Grantor, for Grantor and Grantor's
heirs, devisees, representatives, successors and assigns, and for any and all
persons ever claiming any interest in the Property, to the extent permitted by
Applicable Laws and except with respect to rights expressly set forth herein or
in the other Loan Documents, hereby waives and releases all rights of
redemption, valuation, appraisement, stay of execution, notice of intention to
mature or declare due the whole of the Secured Indebtedness and all rights to a
marshaling of the assets of Grantor, including the Property, reinstatement
(including all rights under Official Code of Georgia Annotated Section
44-14-85) or to a sale in inverse order of alienation in the event of
foreclosure of the liens and security interests hereby created. Grantor shall
not have or assert any right under any statute or rule of law pertaining to the
marshaling of assets, sale in inverse order of alienation, the exemption of
homestead, the administration of estates of decedents or other matters whatever
to defeat, reduce or affect the rights of the Collateral Agent under the terms
of this Deed to a sale of the Property for the collection of the Secured
Indebtedness without any prior or different resort for collection, or the
rights of the Trustee or the Collateral Agent under the terms of this Deed to
the payment of such indebtedness out of the proceeds of sale of the Property in
preference to every other claimant whatsoever. If the Property is sold for an
amount less than the Secured Indebtedness, the deficiency shall be determined
by the purchase price at the sale or sales. If any law referred to in this
Paragraph 3.13 and now in force, of which Grantor or Grantor's successors and
assigns and such other persons claiming any interest in the Property might take
advantage despite this Paragraph 3.13 shall hereafter be repealed or cease to
be in force, such law shall not thereafter be deemed to preclude the
application of this Paragraph 3.13. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAWS, IF THE PROPERTY IS SOLD IN ACCORDANCE WITH THE TERMS OF THIS DEED FOR AN
AMOUNT LESS THAN THE OBLIGATIONS OF GRANTOR TO COLLATERAL AGENT or LENDERS, THE
DEFICIENCY SHALL BE DETERMINED BY THE PURCHASE PRICE AT THE SALE.
3.13. Delivery of Possession After Foreclosure. In the event there
is a foreclosure sale hereunder and at the time of such sale Grantor or
Grantor's successors or assigns or any other persons claiming any interest in
the Property by, through or under Grantor are occupying or using the Property,
or any part thereof, each and all shall immediately become the tenant at
sufferance to the purchaser at such sale, which tenancy shall be terminable at
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the will of landlord. In the event the tenant fails to surrender possession of
said Property upon demand, the purchaser shall be entitled to summarily
dispossess such tenant.
3.14. Tender After Acceleration. If, following the occurrence of a
Default and the acceleration of the Secured Indebtedness but prior to the
foreclosure of this Deed against the Property, Grantor shall tender to the
Collateral Agent and/or Lenders payment of an amount sufficient to pay the
entire Secured Indebtedness, such tender shall be deemed to be a voluntary
prepayment and, consequently, Grantor shall also pay to Lenders any charge or
premium required to be paid in order to prepay principal and, if such principal
payment is made during any period when prepayment is prohibited by this Deed,
or the Loan Documents, the applicable charge or premium shall be the maximum
prepayment penalty provided for in the Loan Documents; provided, however, that
in no event shall any amount payable under this Paragraph 3.15, when added to
the interest otherwise payable on the Secured Indebtedness, exceed the maximum
interest permitted under Applicable Laws.
3.15. Insurance Premiums. Upon any foreclosure of the Mortgaged
Property pursuant to this Deed, the Collateral Agent shall have the right to
cancel any policy of insurance covering all or any part of the Mortgaged
Property and shall be entitled to receive any unearned premiums from such
policy. The unearned premiums received by the Collateral Agent shall be
applied in the same manner as provided in Paragraph 3.7 above regarding the
application of proceeds of sale of the Mortgaged Property.
ARTICLE IV.
Assignment of Rents, Profits, Income,
Contracts and Bonds
4.1. Assignment. Grantor does hereby absolutely and
unconditionally assign, transfer and set over to the Collateral Agent all
rents, income, profits and proceeds to be derived from the Property, including
without limitation the immediate and continuing right, subject to the license
granted below, to collect and receive all of the rents, income, receipts,
revenues, issues, profits and other sums of money that may now or at any time
hereafter become due and payable to Grantor under the terms of any present or
future leases now or hereafter covering the Property, or any part thereof,
including but not limited to minimum rents, additional rents, percentage rents,
deficiency rents and liquidated damages following default, all proceeds payable
under any policy of insurance covering the loss of rents resulting from
untenantability caused by destruction or damage to the Property, and liens and
rights, whether constitutional, statutory, contractual or otherwise, in favor
of Grantor as the lessor of any of the Property, and all of Grantor's rights to
recover monetary amounts from any lessee in bankruptcy including, without
limitation, rights of recovery for use and occupancy and damage claims arising
out of lease defaults, including rejections, under the Bankruptcy Reform Act of
1978, as amended, or any other present or future federal or state insolvency,
bankruptcy or similar law (all of the foregoing hereinafter collectively called
"Applicable Bankruptcy Law"), together with any sums of money that may now or
at any
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time hereafter become due and payable to Grantor by virtue of any and all
royalties, overriding royalties, bonuses, delay rentals and any other amount of
any kind or character arising under any and all present and future oil, gas and
mining leases covering the Property, or any part thereof; and all proceeds and
other amounts paid or owing to Grantor under or pursuant to any and all
contracts and bonds relating to the construction, erection or renovation of the
Property, or any part thereof; subject however, to a license hereby granted by
the Collateral Agent to Grantor to collect and receive and expend all of the
foregoing, subject to the terms and conditions hereof. Upon the occurrence and
continuance of any Default, the Collateral Agent shall have the right, power
and privilege (but shall be under no duty) to terminate such license whereupon
the Collateral Agent shall have the right and authority, whether or not it
takes possession of the Property, to seek enforcement of any such lease,
contract or bond and to demand, collect, receive, xxx for and recover in its
own name any and all of the above described amounts assigned hereby and to
apply the sum(s) collected, first to the payment of reasonable expenses
incident to the collection of the same, second to the payment of the Secured
Indebtedness, and the balance, if any, to Grantor or other party legally
entitled thereto; provided, however, that the Collateral Agent shall not be
deemed to have taken possession of the Property except on the exercise of its
option to do so, evidenced by its demand and overt act for such purpose.
Grantor shall make no assignment or other disposition of the above described
amounts assigned hereby, nor, unless permitted under the Credit Agreements,
shall Grantor cancel or amend any such lease, contract, bond or any other
instrument under which such amounts are to be paid or waive, excuse, condone,
discount, set off, compromise or in any manner release any obligation
thereunder if to do so could reasonably be expected to have a Material Adverse
Effect, nor shall Grantor during the existence of a Default receive or collect
any such amount thus assigned for a period of more than one month in advance of
the date on which payment thereof is due and Grantor shall duly and punctually
observe and perform every obligation to be performed by it under each such
lease, contract, bond or other instrument if the failure to do so could
reasonably be expected to have a Material Adverse Effect and shall not do or
permit to be done anything to impair the security thereof and shall enforce, if
the failure to do so could reasonably be expected to have a Material Adverse
Effect, every obligation of each other party thereto. The assignment contained
in this Paragraph 4.1. shall become null and void upon the release of this
Deed. It shall never be necessary for the Collateral Agent to institute legal
proceedings of any kind whatsoever to enforce the provisions of this Paragraph
4.1.
ARTICLE V.
Hazardous Materials
5.1. Definitions. For the purpose of this Deed, Grantor and the
Collateral Agent agree that, unless the context otherwise specifies or
requires, the following terms shall have the meaning specified below:
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(a) "Hazardous Materials" means (a) any "hazardous waste"
as defined by the Resource Conservation and Recovery Act of 1976 (42
U.S.C. Section 6901 et seq.), as amended from time to time, and
regulations promulgated thereunder; (b) any "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. Section 9601 et seq.) ("CERCLA"), as
amended from time to time, and regulations promulgated thereunder; (c)
asbestos; (d) polychlorinated biphenyls; (e) underground storage
tanks, whether empty, filled or partially filled with any substance,
(f) any substance the presence of which on the Mortgaged Property is
prohibited by any Governmental Requirements (as defined below); and
(g) any other substance which by any Governmental Requirements
requires special handling or notification of any federal, state or
local governmental entity in its collection, storage, treatment, or
disposal.
(b) "Hazardous Materials Contamination" means the
contamination (whether presently existing or hereafter occurring) of
the buildings, facilities, soil, groundwater, air or other elements on
or of the Mortgaged Property by Hazardous Materials, or the
contamination of the buildings, facilities, soil, groundwater, air or
other elements on or of any other property as a result of Hazardous
Materials at any time (whether before or after the date of this Deed)
emanating from the Mortgaged Property, in either case, in a manner
violating applicable Governmental Requirements.
(c) "Governmental Requirements" means all laws,
ordinances, rules, and regulations of any Governmental Authority (as
defined below) applicable to Grantor or the Mortgaged Property.
(d) "Governmental Authority" means the United States, the
State, county, city, or any other political subdivision in which the
Mortgaged Property is located, and any other political subdivision,
agency, or instrumentality exercising jurisdiction over Grantor or the
Mortgaged Property.
5.2. Grantor's Warranties. Grantor hereby represents and warrants
that:
(a) To Grantor's actual knowledge, no Hazardous
Materials have been collected, stored, treated or disposed of in a
manner which materially violates any Applicable Laws, and no Hazardous
Materials which would have a Material Adverse Effect are now located
on the Mortgaged Property other than Hazardous Materials used in the
ordinary course of Grantor's operations, all of which have been used
in accordance, in all material respects, with proper specifications
and procedures in accordance with Applicable Laws, and neither Grantor
nor, to Grantor's actual knowledge and belief, any other person has
ever caused or permitted any Hazardous Materials which would have a
Material Adverse Effect to be placed, held, located or disposed of on,
under or at the Mortgaged Property, or any part thereof other than
Hazardous Materials used in the ordinary course of Grantor's
operations, all of which
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have been used in accordance, in all material respects, with proper
specifications and procedures in accordance with Applicable Laws;
(b) To Grantor's actual knowledge, no part of the
Mortgaged Property is being used nor, to Grantor's actual knowledge
and belief, has been previously used for the disposal, storage,
treatment, processing or other handling of Hazardous Materials, the
effect of which would have a Material Adverse Effect, nor is any part
of the Mortgaged Property affected by any Hazardous Materials
Contamination which would have a Material Adverse Effect;
(c) To Grantor's actual knowledge and belief, no property
adjoining the Mortgaged Property is being used, or has ever been used
at any previous time for the disposal, storage, treatment, processing
or other handling of Hazardous Materials which would have a Material
Adverse Effect, nor is any other property adjoining the Mortgaged
Property affected by Hazardous Materials Contamination which would
have a Material Adverse Effect.
5.3. Grantor's Covenants. Grantor agrees to (a) give notice to the
Collateral Agent promptly upon Grantor's acquiring knowledge of the presence of
any Hazardous Materials which would have a Material Adverse Effect on the
Mortgaged Property or of any Hazardous Materials Contamination which would have
a Material Adverse Effect, with a full description thereof; (b) promptly comply
with any Governmental Requirements requiring the removal, treatment or disposal
of such Hazardous Materials or Hazardous Materials Contamination and provide
the Collateral Agent with reasonably satisfactory evidence of such compliance;
and (c) provide the Collateral Agent within thirty (30) days after demand by
the Collateral Agent, with a bond, letter of credit or similar financial
assurance evidencing to the Collateral Agent's reasonable satisfaction that the
necessary funds are available to pay the cost of removing, treating and
disposing of such Hazardous Materials or Hazardous Materials Contamination and
discharging any assessments which may be established on the Mortgaged Property
as a result thereof.
5.4. Site Assessments. Grantor will permit the Collateral Agent
(by its officers, employees and agents) at any time and from time to time, but
not more frequently than once in any twelve-month period (unless otherwise
required by any Tribunal having supervisory authority over the Collateral
Agent) to contract for the services of persons (the "Site Reviewers") to
perform environmental site assessments (the "Site Assessments") on any
Mortgaged Property for the purpose of determining whether there exists on such
Mortgaged Property any environmental condition which could reasonably be
expected to result in any liability, cost or expense to the owner, occupier or
operator of such Mortgaged Property arising under any Governmental Requirements
relating to Hazardous Materials. The Site Assessments may be performed at any
time or times, upon reasonable notice, and under reasonable conditions
established by Grantor which do not impede the performance of the Site
Assessments. Site Assessments shall be conducted in accordance with
Governmental Requirements. The Site Reviewers are hereby authorized to enter
upon any Mortgaged
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Property for such purposes. The Site Reviewers are further authorized to
perform both above and below the ground testing for environmental damage or the
presence of Hazardous Materials on any Mortgaged Property and such other tests
on any Mortgaged Property as may be necessary to conduct the Site Assessments
in the reasonable opinion of the Site Reviewers. Grantor will supply to the
Site Reviewers such historical and operational information regarding any
Mortgaged Property as may be reasonably requested by the Site Reviewers to
facilitate the Site Assessments and will make available for meeting with the
Site Reviewers appropriate personnel employed by Grantor having knowledge of
such matters. The costs of performing such Site Assessments, except during a
Default, shall be paid by the Collateral Agent. During a Default, the
reasonable cost of performing such Site Assessments after the occurrence and
during the continuance of a Default or Event of Default shall be paid by
Grantor upon demand of the Collateral Agent and any such expenses borne by the
Collateral Agent and not immediately reimbursed by Grantor shall be secured by
this Deed.
5.5. Indemnification. Regardless of whether any Site Assessments
are conducted hereunder, if any Default or Event of Default shall have occurred
and be continuing or any remedies in respect of any Mortgaged Property are
exercised by the Collateral Agent or any Lender, Grantor shall defend,
indemnify and hold harmless the Collateral Agent and Lenders from any and all
liabilities (including strict liability), actions, demands, penalties, losses,
costs or expenses (including, without limitation, reasonable attorneys' fees
and expenses, and remedial costs), suits, costs of any settlement or judgment
and claims of any and every kind whatsoever which may now or in the future
(whether before or after the release of this Deed) be paid, incurred or
suffered by or asserted against the Collateral Agent or Lenders by any person
or entity or governmental agency for, with respect to, or as a direct or
indirect result of, the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission or release from any Mortgaged Property of any
Hazardous Materials or any Hazardous Materials Contamination or arise out of or
result from the environmental condition of any Mortgaged Property or the
applicability of any Governmental Requirements relating to Hazardous Materials
(including, without limitation, CERCLA or any federal, state or local so-called
"superfund" or "superlien" laws, or any code, rule, regulation, order or decree
promulgated thereunder); provided, however, the indemnity provided above shall
not apply to any liabilities, actions, demands, penalties, losses, costs or
expenses, suits, costs of any settlement or judgment and claims of any and
every kind whatsoever which are determined in a final, non-appealable judgment
by a court of competent jurisdiction to have been (i) caused by or within the
control of the Collateral Agent and/or Lenders as a result of actions in their
capacities as beneficiaries of this Deed and not as a result of any
determination in such judgment or otherwise that any covenants, conditions or
provisions in any of the Loan Documents give or purport to give control over
Grantor or any of the Mortgaged Property or (ii) which are the result of an
event that occurs after foreclosure of the Mortgaged Property (or any portion
thereof) or the taking of a deed in lieu of foreclosure covering the Mortgaged
Property (or any portion thereof), unless such event occurs as a result of or
arises out of a Hazardous Materials Contamination or an environmental condition
of the Mortgaged Property that occurred or existed prior to such foreclosure or
such taking of a deed in lieu of foreclosure. The covenants, warranties and
indemnifications contained in this Section 5.5
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shall survive the release of this Deed to Secure Debt and termination of the
Credit Agreement. For the purposes of this Section 5.5, the term "Collateral
Agent" and "Lenders" shall include all subsequent owners or holders of any
obligations secured by this Deed, all directors, officers, employees and agents
of such entity and any persons or entities owned or controlled by or affiliated
with the Collateral Agent or any Lender, and their respective directors,
officers, employees and agents.
ARTICLE VI.
Miscellaneous
6.1. Release. Upon the Release Date, the Property shall become
wholly clear of the liens, security interests, conveyances and assignments
evidenced hereby, which shall be released by the Collateral Agent at Grantor's
cost.
6.2. Waiver by the Collateral Agent. The Collateral Agent may at
any time and from time to time in writing (a) waive compliance by Grantor with
any covenant herein made by Grantor to the extent and in the manner specified
in such writing; (b) consent to Grantor doing any act which Grantor hereunder
is prohibited from doing, or consent to Grantor failing to do any act which
Grantor hereunder is required to do, to the extent and in the manner specified
in such writing; (c) release any part of the Property, or any interest therein,
from the lien and security interest of this Deed, or (d) release any party
liable, either directly or indirectly, for the Secured Indebtedness or for any
covenant herein or in any other instrument now or hereafter securing the
payment of the Secured Indebtedness, without impairing or releasing the
liability of any other party. No such act shall in any way impair the rights
of the Collateral Agent hereunder except to the extent specifically agreed to
by the Collateral Agent in such writing.
6.3. Actions by the Collateral Agent. The lien, security interest
and other security rights of the Collateral Agent and Lenders hereunder shall
not be impaired by any indulgence, moratorium or release granted by the
Collateral Agent (except as provided in Section 6.1), including but not limited
to (a) any renewal, extension, increase or modification which the Collateral
Agent or any Lender may grant with respect to any Secured Indebtedness, (b) any
surrender, compromise, release, renewal, extension, exchange or substitution
which the Collateral Agent or any Lender may grant in respect of the Property,
or any part thereof or any interest therein (except to the extent specifically
surrendered, compromised, released, renewed, extended, exchanged or
substituted), or (c) any release or indulgence granted to any endorser,
guarantor or surety of any Secured Indebtedness. The taking of additional
security by the Collateral Agent or any Lender shall not release or impair the
lien, security interest or other security rights of the Collateral Agent
hereunder or affect the liability of Grantor or of any endorser or guarantor or
other surety or improve the right of any permitted junior lienholder in the
Property.
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6.4. Rights of the Collateral Agent. The Collateral Agent may,
subject to the Credit Agreements, waive any Default or other default without
waiving any other prior or subsequent Default or other default. the Collateral
Agent may remedy any Default or other default without waiving the Default or
other default remedied. Neither the failure by the Collateral Agent to
exercise, nor the delay by the Collateral Agent in exercising, any right, power
or remedy upon any Default or other default shall be construed as a waiver of
such Default or other default or as a waiver of the right to exercise any such
right, power or remedy at a later date. No single or partial exercise by the
Collateral Agent of any right, power or remedy hereunder shall exhaust the same
or shall preclude any other or further exercise thereof, and every such right,
power or remedy hereunder may be exercised at any time and from time to time.
No modification or waiver of any provision hereof or consent to any departure
by Grantor therefrom shall in any event be effective unless the same shall be
in writing and signed by the Collateral Agent, and then such waiver or consent
shall be effective only in the specific instances, for the purpose for which
given and to the extent therein specified. No notice to or demand on Grantor
in any case shall of itself entitle Grantor to any other or further notice or
demand in similar or other circumstances. Acceptance by the Collateral Agent
of any payment in an amount less than the amount then due on any Secured
Indebtedness shall be deemed an acceptance on account only and shall not in any
way affect the existence of a Default or other default hereunder.
6.5. Filing and Recordation. Grantor will cause this Deed and all
amendments and supplements thereto and substitutions therefor and all financing
statements and continuation statements relating hereto to be recorded, filed,
re-recorded and refiled in such manner and in such places as the Collateral
Agent shall reasonably request, and will pay all such recording, filing,
re-recording and refiling taxes, fees and other charges.
6.6. Dealing with Successor. In the event the ownership of the
Property or any part thereof becomes vested in a person other than Grantor, the
Collateral Agent may, without notice to Grantor, deal with such successor or
successors in interest with reference to this Deed and to the Secured
Indebtedness in the same manner as with Grantor, without in any way vitiating
or discharging Grantor's liability hereunder or for the payment of the Secured
Indebtedness. Except as agreed to in writing by all Lenders and the Collateral
Agent, no sale of the Property, no forbearance on the part of the Collateral
Agent or any Lender and no extension of the time for the payment of any of the
Secured Indebtedness given by the Collateral Agent or any Lender shall operate
to release, discharge, modify, change or affect, in whole or in part, the
liability of Grantor hereunder or for the payment of the Secured Indebtedness
or the liability of any other person hereunder or for the payment of the
Secured Indebtedness, except to the extent proceeds of any such sale are
applied as provided in Paragraph 3.7 hereof.
6.7. Place of Payment. All Secured Indebtedness which may be owing
hereunder at any time by Grantor shall be payable at the place designated in
the Loan Documents, or if no such designation is made, at the office of the
Collateral Agent at the address indicated in
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this Deed, or at such other place in the continental United States as the
Collateral Agent may designate in writing.
6.8. Subrogation. To the extent that proceeds of the Secured
Indebtedness are used to pay indebtedness secured by any outstanding lien,
security interest, charge or prior encumbrance against the Property, such
proceeds have been advanced by Lenders at Grantor's request and Lenders shall
be subrogated to any and all rights, security interests and liens owned or held
by any owner or holder of such outstanding liens, security interests, charges
or encumbrances, irrespective of whether said liens, security interests,
charges or encumbrances are released; provided, however, that the terms and
provisions of this Deed shall govern the rights and remedies of Lenders and
shall supersede the terms, provisions, rights and remedies under and pursuant
to the instruments creating the lien or liens to which Lenders are subrogated
hereunder.
6.9. Application of Indebtedness. If any part of the Secured
Indebtedness cannot be lawfully secured by this Deed or if any part of the
Property cannot be lawfully subject to the lien and security interest hereof to
the full extent of such indebtedness, then all payments made shall be applied
on said indebtedness first in discharge of that portion thereof which is
unsecured by this Deed.
6.10. Usury. It is the intent of the Collateral Agent, the Lenders
and Grantor in the execution of the Credit Agreements, this Deed, the other
Loan Documents and all other instruments now or hereafter securing the Secured
Indebtedness or executed in connection therewith or under any other written or
oral agreement by the undersigned in favor of the Collateral Agent and/or
Lenders to contract in strict compliance with applicable usury law. In
furtherance thereof, the Collateral Agent, Lenders and Grantor stipulate and
agree that none of the terms and provisions contained in the Credit Agreements,
this Deed, the other Loan Documents or any other instrument securing the Notes
or executed in connection herewith, or in any other written or oral agreement
by Grantor in favor of Lenders and/or the Collateral Agent, shall ever be
construed to create a contract to pay for the use, forbearance or detention of
money, interest at a rate in excess of the maximum interest rate permitted to
be charged by Applicable Laws. Neither Grantor nor any guarantors, endorsers,
sureties or other parties now or hereafter becoming liable for the Secured
Indebtedness, or any part thereof, shall ever be required to pay interest on
Secured Indebtedness, under any instrument securing the Secured Indebtedness or
under any of the other Loan Documents, or in any other written or oral
agreement by Grantor in favor of Lenders and/or the Collateral Agent, at a rate
in excess of the maximum interest that may be lawfully charged under Applicable
Laws, and the provisions of this Paragraph 6.14 shall control over all other
provisions of the Credit Agreements, this Deed, the other Loan Documents and
any other instruments now or hereafter securing the Secured Indebtedness or
executed in connection herewith or any other oral or written agreements which
may be in apparent conflict herewith. All interest paid or agreed to be paid
to Lenders and/or the Collateral Agent shall, to the extent permitted by
Applicable Laws, be amortized, prorated, allocated and spread throughout the
full period until payment in full of the principal of the
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Secured Indebtedness so that the interest thereon for such full period shall
not exceed the maximum amount permitted by Applicable Laws. Lenders and/or the
Collateral Agent expressly disavow any intention to charge or collect excessive
unearned interest or finance charges in the event the maturity of the Secured
Indebtedness is accelerated. If the maturity of the Secured Indebtedness shall
be accelerated for any reason or if the principal of the Secured Indebtedness
is paid prior to the end of the term of the Secured Indebtedness, and as a
result thereof the interest received for the actual period of existence of the
loans evidenced by the Secured Indebtedness exceeds the applicable maximum
lawful rate, Lenders and/or the Collateral Agent shall refund to Grantor the
amount of such excess or shall credit the amount of such excess against the
principal balance of the Secured Indebtedness then outstanding. In the event
that Lenders and/or the Collateral Agent shall collect monies and/or any other
thing of value which are deemed to constitute interest which would increase the
effective interest rate on the Secured Indebtedness to a rate in excess of that
permitted to be charged by Applicable Laws, an amount equal to interest in
excess of the lawful rate shall, upon such determination, at the option of
Lenders and/or the Collateral Agent, be either immediately returned to Grantor
or credited against the principal balance of the other Secured Indebtedness,
without further penalty to such holder. By execution of this Deed, Grantor
acknowledges that it believes the loan to be non-usurious and agrees that if,
at any time, Grantor should have reason to believe that such loan is in fact
usurious, it will give Lenders and/or the Collateral Agent notice of such
condition, and Grantor agrees that Lenders and/or the Collateral Agent shall
have 90 days after receipt of such notice in which to make appropriate refund
or other adjustment in order to correct such condition if in fact such
condition exists. As used in this Paragraph 6.14, "interest" means any sum
that must be treated as interest under Applicable Laws in determining whether a
loan is usurious. THE TERM "APPLICABLE LAWS" AS USED IN THIS PARAGRAPH 6.14
SHALL MEAN THE LAWS OF THE STATE OF TEXAS OR THE LAWS OF THE UNITED STATES,
WHICHEVER LAWS ALLOW THE GREATER RATE OF INTEREST, AS SUCH LAWS NOW EXIST OR
MAY BE CHANGED OR AMENDED OR COME INTO EFFECT IN THE FUTURE.
6.11. Notice. Any notice, request, demand or other communication
required or permitted hereunder, or under the Loan Documents, or under any
other instrument securing the payment of the Loan Documents (unless otherwise
expressly provided therein) shall be given in the same manner as set forth in
Section 11.1(a) of the Credit Agreements.
6.12. Successors and Assigns. The terms, provisions, covenants and
conditions hereof shall be binding upon Grantor, and the representatives,
successors and assigns of Grantor including all successors in interest of
Grantor in and to all or any part of the Property, and shall inure to the
benefit of the Collateral Agent and the Lenders, and their respective heirs,
successors, substitutes and assigns and shall constitute covenants running with
the land. All references in this Deed to Grantor, the Collateral Agent or
Lenders shall be deemed to include all such heirs, devisees, representatives,
successors, substitutes and assigns.
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6.13. Severability. A determination that any provision of this Deed
is unenforceable or invalid shall not affect the enforceability or validity of
any other provision and any determination that the application of any provision
of this Deed to any person or circumstance is illegal or unenforceable shall
not affect the enforceability or validity of such provision as it may apply to
any other persons or circumstances.
6.14. Gender and Number. Within this Deed, words of any gender
shall be held and construed to include any other gender, and words in the
singular and plural number shall be held and construed to include the other
number, unless the context otherwise requires.
6.15. Counterparts. This Deed may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document. All such counterparts shall be construed together and shall
constitute one instrument.
6.16. Reporting Requirements. Grantor agrees to comply with any and
all reporting requirements applicable to the transaction secured by this Deed
which are set forth in any law, statute, ordinance, rule, regulation, order or
determination of any governmental authority, and further agrees upon request of
the Collateral Agent to furnish the Collateral Agent with evidence of such
compliance.
6.17. Headings. The paragraph headings contained in this Deed are
for convenience only and shall in no way enlarge or limit the scope or meaning
of the various and several paragraphs hereof.
6.18. Consent of the Collateral Agent. Except where otherwise
provided herein or in any of the other Loan Documents, in any instance
hereunder where the approval, consent or the exercise of judgment of the
Collateral Agent is required, the granting or denial of such approval or
consent and the exercise of such judgment shall be within the sole discretion
of the Collateral Agent, and the Collateral Agent shall not, for any reason or
to any extent, be required to grant such approval or consent or exercise such
judgment in any particular manner, regardless of the reasonableness of either
the request or the Collateral Agent's judgment.
6.19. Modification or Termination. The Loan Documents may only be
modified or terminated by a written instrument or instruments executed by the
party against whom enforcement of the modification or termination is asserted.
Any alleged modification or termination which is not so documented shall not be
effective as to any party.
6.20. ENTIRE AGREEMENT. THIS DEED, TOGETHER WITH THE CREDIT
AGREEMENTS, AND ALL OTHER LOAN DOCUMENTS (ALL AS IN EFFECT ON THE DATE HEREOF
AND AS THE SAME MAY BE AMENDED, SUPPLEMENTED, RESTATED OR OTHERWISE MODIFIED
HEREAFTER FROM TIME TO TIME) REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
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SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
6.21. GOVERNING LAW. EXCEPT TO THE EXTENT THAT THE REAL PROPERTY
LAWS OF ANY STATE IN WHICH ANY OF THE MORTGAGED PROPERTY MAY BE LOCATED MAY
CONTROL, THIS DEED SHALL BE CONSTRUED, INTERPRETED, AND GOVERNED BY AND IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED
STATES APPLICABLE TO TRANSACTIONS WITHIN SUCH STATE; PROVIDED, HOWEVER, THIS
DEED SHALL BE ENFORCED UNDER AND PURSUANT TO THE LAWS OF THE STATE OF GEORGIA
AND THE LAWS OF THE UNITED STATES OF AMERICA APPLICABLE TO TRANSACTIONS WITHIN
SUCH STATE.
6.22. Multiple Advance Loan. This Deed is given to secure, among
other things, a multiple advance loan and shall secure not only presently
existing indebtedness but also future advances, whether such advances are
obligatory or to be made at the option of the Collateral Agent or any Lender or
otherwise, to the same extent as if such future advances were made on the date
of execution of this Deed. The lien of this Deed shall be valid as to all
indebtedness hereby secured, including future advances, from the time of its
filing for record in the recorder's or registrar's office of the county in
which the Mortgaged Property is located.
6.23. Credit Agreements Control. In the event of any conflict or
inconsistency between any of the terms and provisions of the Credit Agreements
or any other Loan Documents (other than this Deed) and any of the terms and
provisions of this Deed, the terms and provisions of the Credit Agreements and
such other Loan Documents shall control.
IN WITNESS WHEREOF, Grantor has executed this Deed, Assignment of
Leases and Rents and Security Agreement as of the __ day of _________, ______.
------------------------------
a corporation
-----------
By:
---------------------------
Name:
----------------------
Title:
---------------------
Address:
- 32 -
263
SIGNED, SEALED AND DELIVERED
in the presence of:
--------------------------------
Unofficial Witness
--------------------------------
Notary Public
[Notary Stamp]
[Notary Seal]
- 33 -
264
EXHIBIT "A"
[Description of Property]
265
EXHIBIT "B"
[Description of Permitted Encumbrances]
266
EXHIBIT I-1
LANDLORD'S AGREEMENT
THIS LANDLORD'S AGREEMENT ("Agreement") is executed as of the ____ day
of _______________, 1997, by and among NATIONSBANK OF TEXAS, N.A., as
Collateral Agent for the benefit of the Lenders defined below ("Collateral
Agent"), ____________________________, a _________________________, together
with its predecessors and successors, ("Lessee") and _________________________
("Landlord").
W I T N E S S E T H :
WHEREAS, Landlord and Lessee, have entered into that certain Lease
Agreement dated ___________________, 1997 (as amended, modified and
supplemented, the "Lease"), covering certain real property situated in
________________ County, _______________, more particularly described in
Exhibit A attached to this Agreement (the "Property"); and
WHEREAS, [Lessee] [PILLOWTEX CORPORATION (THE "BORROWER")] is a party
to that certain Amended and Restated Credit Agreement and that certain Term
Credit Agreement, among [Lessee] [THE BORROWER], certain lenders party thereto
(the "Lenders"), and NationsBank of Texas, N.A., as Administrative Agent (said
Credit Agreements, as amended, modified, supplemented, renewed, extended or
restated, the "Credit Agreements"), pursuant to which Lenders have agreed,
among other things, to make loans ("Advances") to [Lessee] [the Borrower];
WHEREAS, Lessee, in consideration of, among other things, the Advances
made or to be made to Lessee by Lenders pursuant to the Credit Agreements, has
executed an agreement in favor of a trustee (the "Trustee") covering Lessee's
interest in the Lease and the Property (such agreement, as amended, modified,
supplemented, renewed or extended, whether titled as a mortgage, a deed of
trust or other agreement shall be referred to herein as the "Deed of Trust")
and a Security Agreement in favor of Collateral Agent on behalf of Lenders
covering Lessee's interest in certain assets of Lessee (as amended, modified,
supplemented, the "Security Agreement"); and
WHEREAS, Collateral Agent and Lessee desire that Landlord acknowledge
the Lease and the Deed of Trust and Lessee's, Collateral Agent's and Lenders'
rights under the Lease, the Deed of Trust and the Security Agreement;
NOW, THEREFORE, in consideration of the premises, the covenants,
conditions, provisions and agreements set forth in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Collateral Agent, Lessee and Landlord hereby represent,
acknowledge, covenant and agree as follows:
267
1. Non-Disturbance. Landlord hereby agrees that (a) as long as no
default exists under the Lease which has not been cured or waived and (b) as
long as no event has occurred which, with the lapse of time or the giving of
notice or both, would entitle Landlord to dispossess Lessee, the Lease shall
not be terminated prior to the expiration date of the term thereof, nor shall
Lessee's possession or enjoyment of the Property be interfered with in the
event that Trustee or Collateral Agent or any successor-in-interest thereto
takes possession of any part of the Property or Excluded Property (as herein
defined) pursuant to the Deed of Trust, Security Agreement or otherwise,
provided that such Trustee, Collateral Agent or successor-in-interest agrees to
assume all obligations thereafter accruing under and to be bound by the terms
of the Lease. If any part of the Property is acquired by Trustee, Collateral
Agent or any successor-in-interest thereto by foreclosure or otherwise,
Trustee, Collateral Agent or such successor shall take title to Lessee's
interest in the Property or any part thereof subject to the terms of the Lease
and this Agreement, and Lessee's occupancy of the Property in accordance with
the terms of the Lease shall not be disturbed or otherwise affected except in
accordance with the terms of the Lease and this Agreement, provided that such
Trustee, Collateral Agent or successor-in-interest agrees to assume all
obligations thereafter accruing under and to be bound by the terms of the
Lease.
2. Attornment. If any proceedings are brought for the foreclosure of
Trustee's or Collateral Agent's deed of trust lien, mortgage lien, security
interest or other encumbrance on the Lease or the Property, Landlord agrees
that the substitution as lessee under the Lease of Trustee, Collateral Agent,
any successor-in-interest to Trustee or Collateral Agent, or purchaser at the
foreclosure sale, shall not constitute a default or event of default under the
Lease, and Landlord further agrees to recognize Trustee, Collateral Agent, any
successor-in-interest to Trustee, Collateral Agent or purchaser at the
foreclosure sale, as the lessee under the Lease with all rights and privileges
as are held by Lessee, provided that such Trustee, Collateral Agent or
successor-in-interest agrees to assume all obligations thereafter accruing
under and to be bound by the terms of the Lease. Such attornment shall be
effective and self-operative without the execution of any further instrument
on the part of any of the parties hereto. Landlord agrees, however, to execute
and deliver at any time, and from time to time, upon the request of Trustee,
Collateral Agent or of any other holder(s) of any of the indebtedness or any
such nominee or purchaser, any instrument or certificate which, in its sole
judgment, Trustee, Collateral Agent, such other holder(s), or such nominee or
purchaser, as the case may be, deems to be necessary or appropriate in any such
foreclosure proceeding or conveyance in lieu of foreclosure or otherwise to
evidence such attornment, provided that the rights of Lessee under the Lease
shall not be impaired or Lessee's obligations increased, as a result thereof.
3. Acknowledgment and Agreement by Landlord. Landlord acknowledges and
agrees that:
(a) This Agreement shall constitute written consent of the
Landlord to the encumbrance of the Lease to Collateral Agent and Lenders under
the Deed of Trust and Security Agreement and the subsequent assignment of the
Lease to any successor-in-interest to Trustee, Collateral Agent or purchaser at
the foreclosure sale and shall constitute a waiver of (i) all restrictions to
such encumbrance and assignment in the Lease, including notice requirements,
268
and (ii) events of default created by such encumbrance and assignment under the
terms of the Lease.
(b) From and after the date hereof, in the event of any act or
omission by Lessee which would give Landlord the right, either immediately or
after the lapse of time or the giving of notice, to terminate the Lease or to
claim a partial or total eviction, Landlord will not exercise any such right;
(i) Until it has given written notice of such act or
omission to Collateral Agent; and
(ii) Until the longer of (A) thirty days, or (B) the same
period of time as is given to Lessee under the Lease to cure such act
or omission, shall have elapsed following receipt of such notice by
Collateral Agent and following the time when Collateral Agent or
Trustee shall have become entitled under the Deed of Trust or the
Security Agreement to remedy such act or omission;
(c) From and after the date hereof, Landlord will not materially
modify or amend the Lease without the prior written consent of Collateral
Agent, which consent will not be unreasonably withheld, and, in the event of
any material modification or amendment of the Lease without the prior written
consent of Collateral Agent, such modification or amendment shall be voidable
at any time at the option of Collateral Agent, in its sole discretion;
(d) It has notice that the Lease and all sums, if any, due to
Lessee thereunder have been assigned or are to be assigned to Collateral Agent
as security for the obligations secured by the Deed of Trust and the Security
Agreement. In the event that Collateral Agent notifies Landlord of a default
under the Deed of Trust or the Security Agreement and demands that Landlord pay
all sums due Lessee under the Lease (if any) to Collateral Agent, Landlord
shall honor such demand and pay all sums due Lessee under the Lease (if any)
directly to Collateral Agent or as otherwise required pursuant to such notice;
(e) It shall use its reasonable efforts to send a copy of any
notice or statement under the Lease to Collateral Agent at the same time such
notice or statement is sent to Lessee; and
(f) This Agreement satisfies any condition or requirement in the
Lease relating to the granting of a non-disturbance agreement.
4. No Obligation of Collateral Agent. Collateral Agent and Lenders have
no obligation and will not incur any liability hereunder or under the Lease
until such time as Collateral Agent takes possession of the Property or
otherwise acquires Lessee's interest in the Lease, whereupon Collateral Agent
and the Lenders shall be deemed to have assumed all obligations of Lessee
thereafter accruing or arising under the Lease.
- 3 -
269
5. Landlord's Agreement. Landlord hereby:
(a) Waives each and every right which Landlord now has, or may
hereafter have, by contract, statute or otherwise, or by virtue of the Lease
now in effect or any other lease related to the Property hereafter executed by
Lessee, to levy or distrain upon for rent, in arrears, in advance, or both, or
for any other claim of Landlord against Lessee or to claim or assert any title
or interest or lien in and to the following described property (hereinafter
called the "Excluded Property"):
All of Lessee's property now or hereafter located on or in the
Property, including but not limited to, all inventory now owned or
hereafter acquired by Lessee, including all goods, merchandise, raw
materials, goods in process, supplies or other personal property held
for sale or lease or furnished or to be furnished under contracts of
service or used or consumed in Lessee's business, all fixtures, all
furnishings, all general intangibles, all equipment (wherever located)
and all substitutions and accessions thereto, now or hereafter
existing, all parts thereof and all accessions and all proceeds and
products thereof
which are already on the Property, or may hereafter be delivered or installed
thereon, and are or may hereafter become subject to the Security Agreement or
the Deed of Trust granting any interest in the Excluded Property, or any of
same, in favor of Trustee or Collateral Agent;
(b) Recognizes and acknowledges that any claim or claims that
Trustee or Collateral Agent or any Lender has or may hereafter have against the
Excluded Property by virtue of the Security Agreement or the Deed of Trust is
senior and superior to any lien or claim of any nature which the Landlord now
has or may hereafter have to the Excluded Property by constitution, statute,
agreement or otherwise;
(c) Agrees that in the event of default by Lessee in the payment
of any indebtedness or other obligation to Collateral Agent or any Lender, or
in the performance of any of the terms and conditions of the Credit Agreement,
the Security Agreement, the Deed of Trust, Trustee or Collateral Agent or its
agent may remove the Excluded Property or any part thereof from the Property,
in accordance with the terms and conditions of the Security Agreement or the
Deed of Trust and Landlord covenants and agrees that Landlord will make no
claim whatsoever to the Excluded Property and will not attempt in any way to
impede such removal of the Excluded Property by Trustee, Collateral Agent or
their agent; and
(d) Agrees that Lenders at any time and from time to time, may,
without affecting the validity of this Agreement, renew, extend or otherwise
modify the terms of payment of any indebtedness of Lessee to Lenders or the
performance of any of the terms and conditions of the Security Agreement, Deed
of Trust, or other agreement with Lessee or Lenders or any other person or
entity now or hereinafter liable for or whose property secure the obligation of
Lessor to Lenders, without the consent of Landlord and without giving notice
thereof to Landlord.
- 4 -
270
(e) Represents and warrants that, to the best of its knowledge,
the Property is free and clear of any mortgage, deed of trust, deed to secure
debt or similar encumbrance ("Mortgage") or that, to the best of its knowledge,
if the Property is subject to a Mortgage, the Lease is superior to such
Mortgage and would survive any foreclosure or exercise of a power of sale
contained in the Mortgage.
6. Inconsistent Provisions. This Agreement supersedes any inconsistent
provision of the Lease.
7. Notices. Any notice, demand or request permitted, required or desired
to be given in connection with this Agreement shall be in writing and shall be
deemed effective if hand delivered, or if sent by United States certified or
registered mail, return receipt requested, postage prepaid, or if sent by
private receipted courier guaranteeing same-day or next-day delivery,
addressed to the respective party at its address provided below.
If sent by U.S. certified mail in accordance with this Section 7, such
notices shall be deemed given and received on the earlier of (a) actual receipt
at the above specified address of the named addressee, or (b) on the third
business day after deposit with the United States Postal Service. Notice given
by any other means shall be deemed given and received only upon actual receipt
at the herein specified address of the named addressee.
8. Time. Time is of the essence in all matters pertaining to the
performance of this Agreement.
9. Authority. The parties to this Agreement warrant and represent to one
another that they have the power and authority to enter into and perform their
respective obligations under this Agreement in the names, titles and capacities
herein stated and on behalf of any entities, persons, estates or firms
represented or purported to be represented by such person, and that all formal
requirements necessary or required by any state and/or federal law or private
agreement in order for the parties to enter into and perform their respective
obligations under this Agreement have been fully complied with.
10. Entire Agreement. This Agreement represents the entire agreement
among Collateral Agent, Lessee and Landlord regarding the subject matter dealt
with herein, and it may not be modified, amended or discharged except by
written amendment executed by the party against whom enforcement of such
modification, amendment or discharge is sought.
11. Successors and Assigns. The terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
heirs, administrators, personal representatives, successors and assigns.
12. Governing Law. The terms, provisions and conditions of this Agreement
shall be governed by and construed in accordance with the laws of the State of
_____________ without reference to principles of conflicts of laws.
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271
13. Attorneys' Fees. Should any litigation, administrative proceeding or
arbitration be commenced by any of the parties hereto or their representatives,
or should any party institute any proceeding in a court which has jurisdiction
over any other party hereto or any or all of its property or assets, or should
any litigation or proceeding be commenced concerning any provision of this
Agreement or the rights and duties of any person or entity in relation thereto,
then the party or parties prevailing in such litigation or proceeding shall be
entitled, in addition to such other relief as may be granted, to a reasonable
sum as and for such prevailing party's attorneys' fees and court costs in such
litigation or proceeding, which shall be determined by the court (or presiding
official) in such litigation or proceeding or in a separate action brought for
that purpose.
14. Indemnity. Notwithstanding anything to the contrary provided herein,
Administrative Agent and Lenders shall (a) indemnify and hold harmless
Landlord for any damage to the Property or any Person caused by or as a result
of any removal of the Excluded Property from the Property by Collateral Agent
or any Lender or any of their representatives and (b) repair any damage caused
by or as a result of removal of the Excluded Property from the Property by
Collateral Agent or any Lender or any of their representatives.
15. Severability. If any provision of this Agreement shall, for any
reason, be held to be violative of any applicable law, and so much of this
Agreement is held to be unenforceable, then the invalidity of such specific
provision shall not be held to invalidate any other provision of this
Agreement, all of which other provisions shall remain in full force and effect.
16. Headings; Construction. The headings contained in this Agreement are
for reference purposes only and shall not modify or affect this Agreement in
any manner whatsoever. Wherever required by this context, any gender shall
include any other gender, the singular shall include the plural, and the plural
shall include the singular.
17. Counterparts. This Agreement may be executed in any number of
counterparts each of which, when so executed, shall be deemed an original and
all of which taken together shall constitute the Agreement.
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
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272
EXECUTED as of the date first written above.
COLLATERAL AGENT:
NATIONSBANK OF TEXAS, N.A.
Address:
NationsBank of Texas, N.A.
as Collateral Agent
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000 By:
-----------------------------
Attention: Xxxxx X. Xxxxxxxxx Name:
------------------------
Title:
-----------------------
LANDLORD:
Address:
-------------------------------------
----------------------------------
----------------------------------
----------------------------------
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
LESSEE:
Address:
-------------------------------------
----------------------------------
----------------------------------
----------------------------------
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
- 7 -
000
XXX XXXXX XX XXXXX }
}
COUNTY OF DALLAS }
This instrument was acknowledged before me on the _____ day of
_________________, 1997, by __________________, ______________________ of
NationsBank of Texas, N.A., a national banking association.
-------------------------------------
Notary Public, State of Texas
My Commission Expires:
----------------------------------
THE STATE OF _____________ }
}
COUNTY OF ________________ }
This instrument was acknowledged before me on the _____ day of
__________, 1997, by ____________________, ____________________ of
______________________________, a ____________________ corporation, on behalf
of said corporation.
-------------------------------------
Notary Public, State of
--------------
My Commission Expires:
----------------------------------
- 8 -
274
THE STATE OF _____________ }
}
COUNTY OF ________________ }
This instrument was acknowledged before me on the _____ day of
__________, 1997, by ____________________, ____________________ of
_____________________________, a ______________________, on behalf of said
_________________.
-------------------------------------
Notary Public, State of
--------------
My Commission Expires:
----------------------------------
- 9 -
275
EXHIBIT "A"
Real property description:
Being ___________ square feet in a building located on the
following-described tract of real property in _______________, _____________
County, _______________________ (such real property being commonly referred to
as ________________________________________):
[LEGAL DESCRIPTION OF PROPERTY SUFFICIENT FOR CONVEYANCING PURPOSES]
Owner of Record:
----------------------------
276
--------------------------------------------------------------------------------
SPACE ABOVE THIS LINE FOR RECORDER'S USE
EXHIBIT I-2
LANDLORD'S WAIVER AND CONSENT
STATE OF ___________________ (
( KNOW ALL MEN BY THESE PRESENTS
COUNTY OF __________________ (
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, the undersigned, _____ ________________ (the "Landlord")
hereby acknowledges, covenants and represents to NATIONS BANK OF TEXAS, N.A.,
in its capacity as the Collateral Agent for itself and certain other lenders
(collectively, "Lenders") as follows:
1. Landlord is the owner of certain real property (the
"Premises") described on Exhibit "A" attached hereto and incorporated herein by
reference for all purposes.
2. _____________________ (the "Tenant") has heretofore leased,
and is occupying, the Premises under a valid and enforceable Lease, dated
__________, 19__ (as amended, supplemented, restated, extended or otherwise
modified from time to time, the "Lease"), between Landlord and Tenant.
3. As of the date hereof, Tenant is not in default under the
Lease, nor has any event or circumstance occurred which, with the giving of
notice or lapse of time or both, would constitute such a default under the
Lease.
4. Landlord acknowledges that Tenant has granted, or may
hereafter grant, for the benefit of Lenders a security interest (the "Security
Interest") in the following described property now or hereafter owned by Tenant
which is or may hereafter from time to time be situated on or about the
Premises (the "Collateral"):
All present and future accounts, chattel paper, inventory, equipment,
contract rights, documents, instruments, deposit accounts, general
intangibles and other personal property and fixtures now or hereafter
owned, held or acquired by Tenant, together with any and all books of
account, customer lists and other records relating in any way to the
foregoing, and in any case where an account arises from the sale of
goods, the interest of Tenant in such goods, and, including, without
limitation, all of the following: All of Tenant's accounts
277
receivable, including rights to payment for goods sold or services
rendered, whether or not earned by performance, and all other rights
to receive payments of money from any person; Tenant's inventory,
including raw materials, work in process, and finished goods, owned or
held on consignment, wherever located; all equipment owned by Tenant,
and all of Tenant's right, title and interest under equipment leases,
tools, parts and accessories; processes, plans, specifications, and
manuals; customer lists; computer hardware and all programs, disks,
software and manuals used or usable in connection therewith; Tenant's
rights under any computer service or consulting agreements;
trademarks, trade names and service marks; rights or claims under
contracts, income tax refunds, and all proceeds of the foregoing,
including, without limitation, insurance proceeds payable by reason of
loss or damage to any of the foregoing.
5. Landlord hereby waives, relinquishes and disclaims any and all
rights, if any, to maintain, obtain or enforce a landlord's lien (whether
contractual or statutory) or any other liens, encumbrances or claims which
Landlord has or may hereafter have against the Collateral or any interest
therein, and hereby releases the Collateral from any and all sales, process,
levy, execution, garnishment, attachment, judgment, or distraint and lien,
whether given by operation of law, by the Lease (or any amendments,
supplements, substitutions or renewals thereof), by agreement or otherwise, for
rent due or to become due, and for any and all other claims or demands, present
or future, which either Landlord may have therein.
6. Landlord will not, in any manner, hinder or prevent Lenders or
Lenders' agents from coming onto the Premises to inspect the Collateral, to
remove the Collateral from the Premises or to take possession and exhibit
and/or conduct a sale of the Collateral on the Premises, and Landlord does
hereby specifically consent to any and all such activity(ies). Lenders shall
(a) indemnify and hold harmless Landlord for any damage to the Premises or any
person caused by or as a result of any such activities by Lenders or Lenders'
agents and (b) repair any damage caused by or as a result of any such
activities by Lenders or Lenders' Agents.
7. Landlord shall immediately notify Lenders at the address for
Lenders set forth herein of the earlier to occur of (i) the retaking of
possession of the Premises by Landlord (whether by judicial process or
otherwise) or (ii) the giving or delivering of any notice or demand to Tenant
in connection with any default by Tenant or the intention of Landlord to retake
possession of the Premises. After any such retaking of possession of the
Premises (or any part thereof) by Landlord, or if for any other reason,
Landlord ever comes into possession or control of any of the Collateral or of
any of the proceeds of any of the Collateral, Landlord shall store, maintain
and protect any such Collateral or proceeds thereof then under Landlord's
possession or control. In the event Lenders have not reclaimed and/or removed
such Collateral or proceeds thereof within sixty (60) days after Lender
receives notice of the taking of possession or control of the Collateral or
proceeds thereof by Landlord, Lenders shall reimburse Landlord for the
reasonable costs incurred by Landlord in storing, maintaining and protecting
such Collateral. The address for notice to Lenders is as follows:
000
XxxxxxxXxxx xx Xxxxx, X.X., as
Collateral Agent 000 Xxxx
Xxxxxx, 00xx Xxxxx Xxxxxx,
Xxxxx 00000 Attention: Xxxxx
X. Xxxxxxxxx
8. Landlord acknowledges that Lenders are relying on the
representations and covenants set forth herein and that, but for the execution
by Landlord of this Landlord's Waiver and Consent, Lenders would not make,
renew or extend the loan or loans to the Tenant, or any affiliate of the
Tenant, which are secured by the Security Interest.
9. This Landlord's Waiver and Consent shall bind Landlord, and
its successors and assigns, and shall inure to the benefit of Lenders, and
their respective successors and assigns.
EXECUTED this _____ day of _______________, 1997.
________________________________________
By:
______________________________
Name:_________________________
Title:________________________
STATE OF ___________ (
(
COUNTY OF __________ (
This instrument was acknowledged before me on the _____ day of
____________________, 1997, by _______________ , as the _____________________of
____________________________ on behalf of said corporation.
______________________________
NOTARY PUBLIC IN AND FOR THE
STATE OF ____________
My Commission Expires:
__________________________________
______________________________
(Printed Name of Notary)
279
EXHIBIT "A"
Real property description:
Being ___________ square feet in a building located on the
following-described tract of real property in _______________, _____________
County, ___________ (such real property being commonly referred to as
________________________________________):
[LEGAL DESCRIPTION OF PROPERTY SUFFICIENT FOR CONVEYANCING PURPOSES]
Owner of Record: ________________________
000
XXXXXXX X
XXXXX XXXX XXXX
Xxxxxx, Xxxxx $15,000,000 December 19, 1997
PILLOWTEX CORPORATION, a Texas corporation (the "Borrower"), for value
received, promises to pay to the order of NationsBank of Texas, N.A. ("Lender")
or its registered assigns, at the principal office of NationsBank of Texas,
N.A., in lawful money of the United States of America, the principal sum of
Fifteen Million and No/100 Dollars ($15,000,000), or such lesser sum as shall
be due and payable from time to time hereunder, as hereinafter provided. All
capitalized terms used but not defined herein shall have the meanings set forth
in the Credit Agreement described below.
Principal of and interest on the unpaid principal balance of Swing
Line Advances under this Swing Line Note (this "Note") from time to time
outstanding shall be due and payable as set forth in the Credit Agreement.
This Note is issued pursuant to and evidences Swing Line Advances
under an Amended and Restated Credit Agreement, dated as of December 19, 1997,
among the Borrower, NationsBank of Texas, N.A., as Administrative Agent, and
the lenders parties thereto (as amended, restated, supplemented, renewed,
extended or otherwise modified from time to time, "Credit Agreement"), to which
reference is made for a statement of the rights and obligations of the Lender
and the duties and obligations of the Borrower in relation thereto; but neither
this reference to the Credit Agreement nor any provision thereof shall affect
or impair the absolute and unconditional obligation of the Borrower to pay the
principal sum of and interest on this Note when due.
THIS NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW), AND OF THE UNITED STATES OF AMERICA. THE
BORROWER AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS,
TEXAS SHALL HAVE JURISDICTION OVER THE PROCEEDINGS IN CONNECTION WITH THIS NOTE
AND THE OTHER LOAN DOCUMENTS.
THIS NOTE, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
PILLOWTEX CORPORATION
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
281
EXHIBIT K
NOTICE OF CONTINUATION/CONVERSION
NationsBank of Texas, N.A., as
the Administrative Agent
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Re: Pillowtex Corporation
Ladies and Gentlemen:
The undersigned, an Authorized Signatory of Pillowtex Corporation,
pursuant to the Amended and Restated Credit Agreement, dated as of December 19,
1997, among the undersigned, the financial institutions party thereto and
NationsBank of Texas, N.A., as the Administrative Agent (said Agreement, as it
may be amended, supplemented or otherwise modified from time to time, being the
"Credit Agreement" and capitalized terms not defined herein but defined therein
being used herein as therein defined), hereby gives you notice, irrevocably,
pursuant to Section 2.2 of the Credit Agreement, that the undersigned hereby
requests a [conversion] [continuation] on _____________, ____ of
$________________ in principal amount of presently outstanding Revolving Credit
Advances that are [Base Rate Advances] [LIBOR Advances having an Interest
Period ending on ____________, ______] [to] [as] [Base Rate] [LIBOR] Advances.
[The Interest Period for such amount requested to be [converted to] [continued
as] LIBOR Advances is [1] [2] [3] [6] months.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the [conversion]
[continuation], before and after giving effect thereto:
(A) the representations and warranties of the Borrower contained
in Article 4 of the Credit Agreement and in each of the other Loan
Documents to which it is a party (other than those representations and
warranties that specifically relate to an earlier date) are true and
correct as though made on and as of such date, except as otherwise
expressly provided in Section 4.2 of the Credit Agreement; and
282
(B) no Default or Event of Default is continuing, or will result
from the [continuation] [conversion].
Very truly yours,
PILLOWTEX CORPORATION
By:
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Name:
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Title:
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EXHIBIT L
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (as the same may from time to time be
amended, modified, supplemented or restated, this "Intercreditor Agreement")
dated as of December 19, 1997, is made by and among Pillowtex Corporation, a
Texas corporation (the "Borrower"), each of the Persons listed as Grantors on
the signature pages hereto (the "Grantors"), NationsBank of Texas, N.A., in its
capacity as Collateral Agent (the "Collateral Agent"), NationsBank of Texas,
N.A., as administrative agent (in such capacity, together with any successor
thereto, the "Revolving Administrative Agent") for itself and certain other
lenders (collectively, the "Revolving Lenders"), under the Revolving Credit
Agreement (as hereinafter defined), the Revolving Lenders, NationsBank of
Texas, N.A., as administrative agent (in such capacity, with any successor
thereto, the "Term Administrative Agent") for itself and certain other lenders
(collectively, the "Term Lenders") under the Term Credit Agreement (as
hereinafter defined), and the Term Lenders.
BACKGROUND.
The Borrower is a party to that certain Amended and Restated Credit
Agreement dated as of December 19, 1997 (as amended, modified, supplemented or
restated from time to time, the "Revolving Credit Agreement") with the
Revolving Lenders and the Revolving Administrative Agent.
The Borrower is a party to that certain Term Credit Agreement dated as
of December 19, 1997 (as amended, modified, supplemented or restated from time
to time, the "Term Credit Agreement") with the Term Lenders and the Term
Administrative Agent.
The parties hereto intend for (a) the rights of payment in respect of
the Advances and the Liens of the Revolving Lenders in the Collateral (as
hereinafter defined) to be pari passu with the rights of payment in respect of
the Advances and the Liens of the Term Lenders in the Collateral, and (b) the
voting rights with respect to the Revolving Credit Agreement and the Term
Credit Agreement be set forth in this Agreement.
It is a requirement of the Revolving Credit Agreement and the Term
Credit Agreement that the Borrower, the Grantors and the Secured Parties (as
hereinafter defined) execute and deliver to the Collateral Agent, for the
benefit of the Secured Parties, this Intercreditor Agreement in order to
further define the rights and obligations of the parties hereto.
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AGREEMENT.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Borrower, the Grantors, the
Revolving Administrative Agent, the Term Administrative Agent, the Revolving
Lenders, and the Term Lenders agree with the Collateral Agent as follows:
I. DEFINED TERMS
1.1 Defined Terms. Except as otherwise defined below, as used in
this Intercreditor Agreement defined and capitalized terms shall have the
meanings set forth in the Revolving Credit Agreement and the Term Credit
Agreement.
"Assignment Agreement" means an Assignment Agreement under the
Revolving Credit Agreement or the Term Credit Agreement.
"Collateral" means, collectively, any and all of the property in which
the Collateral Agent, the Revolving Administrative Agent, any Revolving Lender,
the Term Administrative Agent or any Term Lender has a Lien pursuant to any
Loan Document.
"Commitments" means, collectively, the Commitment (as defined in the
Revolving Credit Agreement) and the Commitments (as defined in the Term Credit
Agreement).
"Credit Agreements" means, collectively, the Revolving Credit
Agreement and the Term Credit Agreement.
"Distribution Date" means each date established by the Collateral
Agent as a date for the distribution of amounts on deposit in the Collateral
Account, as defined in Section 4.1.
"Event of Default" means an Event of Default under the Revolving
Credit Agreement or the Term Credit Agreement.
"Loan Document" means a Loan Document under the Revolving Credit
Agreement or the Term Credit Agreement.
"Obligations" means all Obligations (collectively, as defined in each
of the Revolving Credit Agreement and the Term Credit Agreement).
"Proceeds" has the meaning assigned to it under the UCC and, in any
event, shall include, but not be limited to, (a) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to the Borrower or any
Grantor from time to time with respect to any of the Collateral, (b) any and
all payments (in any form whatsoever) made or due and payable to
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the Borrower or any Grantor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Tribunal and (c) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral.
"Pro Rata" means for any Person a fraction (a) the numerator of which
is the amount of unpaid principal and face amount of the Revolving Obligations
and the Term Obligations owing to such Person, and (b) the denominator of which
is the aggregate amount of unpaid principal and face amount of the Revolving
Obligations and the Term Obligations owing to the Revolving Lenders and the
Term Lenders.
"Revolving Loan Documents" means Loan Documents as defined in the
Revolving Credit Agreement.
"Required Lenders" means any combination of Revolving Lenders and Term
Lenders whose Voting Specified Percentages aggregate more than 50%; provided,
however, in the event that all of the Commitments have been terminated,
"Required Lender" means, on any date of determination, any combination of
Lenders having more than 50% of the Revolving Advances and Term Advances then
outstanding.
"Revolving Obligations" means Obligations as defined in the Revolving
Credit Agreement.
"Secured Party" means each of, and "Secured Parties" means all of, the
Collateral Agent, the Revolving Administrative Agent, the Revolving Lenders,
the Term Administrative Agent and the Term Lenders.
"Term Loan Documents" means Loan Documents as defined in the Term
Credit Agreement.
"Term Obligations" means Obligations as defined in the Term Credit
Agreement.
"Voting Specified Percentage" means, as to any Revolving Lender or
Term Lender, the percentage indicated beside its name on Schedule 1 hereto as
the Voting Specified Percentage, or as adjusted or specified in any Assignment
Agreement or any amendment to this Intercreditor Agreement [SUCH PERCENTAGE TO
BE EACH LENDER'S AGGREGATE COMMITMENT UNDER THE REVOLVING CREDIT AGREEMENT AND
THE TERM CREDIT AGREEMENT DIVIDED BY ALL COMMITMENTS UNDER THE REVOLVING CREDIT
AGREEMENT AND THE TERM CREDIT AGREEMENT].
1.2 Interpretation. For purposes of distributing proceeds of
Collateral and the definition of "Pro Rata" and "Secured Parties" (but not for
purposes of determining "Required Lenders", "Voting Specified Percentages" or
for purposes of Section 9.1 or 10.3 hereof), (a) "Revolving Lenders" shall
include any Person that is or was a Revolving Lender or an Affiliate of a
Revolving Lender now or at the time it entered into a Hedge Agreement with the
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Borrower or any Grantor and (b) "Term Lenders" shall include any Person that is
or was a Term Lender or an Affiliate of a Term Lender now or at the time it
entered into an Interest Hedge Agreement with the Borrower or any Grantor.
II. AGREEMENT TO HOLD COLLATERAL
In reliance upon, and subject to, the provisions of Article VII, the
Collateral Agent will hold the Liens in the Collateral granted to the
Collateral Agent under the Collateral Documents and granted to the Revolving
Administrative Agent under the Revolving Credit Agreement in respect of the L/C
Cash Collateral Account on behalf of and for the ratable benefit of the
Collateral Agent, the Revolving Administrative Agent, the Revolving Lenders,
the Term Administrative Agent and the Term Lenders on the terms and conditions
set forth in this Intercreditor Agreement.
III. ACCELERATION
3.1 Exercise of Rights and Remedies. Upon the occurrence and
during the continuance of an Event of Default, with the consent of or at the
request of the Required Lenders, the Collateral Agent shall exercise the rights
and remedies provided in this Intercreditor Agreement, the Collateral Documents
and the Revolving Credit Agreement in respect of the L/C Cash Collateral
Account. If the Revolving Administrative Agent, the Term Administrative Agent
and the Collateral Agent are not the same Person, the Revolving Administrative
Agent and the Term Administrative Agent shall give the Collateral Agent notice
of such Event of Default under the Revolving Credit Agreement and the Term
Credit Agreement, respectively.
3.2 Right to Initiate Judicial Proceedings. If an Event of
Default shall occur and be continuing, the Collateral Agent, with the consent
of or at the request of the Required Lenders, (a) shall have the right and
power to institute and maintain such suits and proceedings as it may deem
appropriate and permitted under any Collateral Document and the Revolving
Credit Agreement in respect of the L/C Cash Collateral Account to protect and
enforce the rights vested in it or any Secured Party by this Intercreditor
Agreement, each Collateral Document and the Revolving Credit Agreement in
respect of the L/C Cash Collateral Account and (b) may either after entry, or
without entry, proceed by suit or suits at law or in equity to enforce such
rights and to foreclose upon the Collateral and to sell all or, from time to
time, any of the Collateral under the judgment or decree of a court of
competent jurisdiction, all in accordance with the Collateral Documents and the
Revolving Credit Agreement in respect of the L/C Cash Collateral Account.
3.3 Remedies Not Exclusive.
(a) No remedy conferred upon or reserved to the Collateral Agent
herein or to any Secured Party in the Collateral Documents, the Revolving Loan
Documents or the Term Loan
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Documents is intended to be exclusive of any other remedy or remedies, but
every such remedy shall be cumulative and shall be in addition to every other
remedy conferred herein or in any Collateral Document, the Revolving Loan
Documents or the Term Loan Documents or now or hereafter existing at Law or in
equity; provided, however, any exercise of any rights or remedies by the
Collateral Agent or any other Secured Party shall be subject to the terms of
this Intercreditor Agreement.
(b) If the Collateral Agent shall have proceeded to enforce any
right, remedy or power under this Intercreditor Agreement, any Collateral
Document or under the Revolving Credit Agreement in respect of the L/C Cash
Collateral Account and the proceeding for the enforcement thereof shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then the Borrower, the Grantors, the
Collateral Agent and the other Secured Parties shall, subject to any
determination in such proceeding, severally and respectively be restored to
their former positions and rights hereunder or thereunder with respect to the
Collateral and in all other respects, and thereafter all rights, remedies and
powers of the Collateral Agent and the other Secured Parties shall continue as
though no such proceeding had been taken.
(c) All rights of action and of asserting claims upon or under
this Intercreditor Agreement, the Collateral Documents and the Revolving Credit
Agreement in respect of the L/C Cash Collateral Account may be enforced by the
Collateral Agent without the possession of any Collateral Document, any
Revolving Loan Document, any Term Loan Document or other instrument evidencing
any Revolving Obligations or Term Obligations or the production thereof at any
trial or other proceeding relative thereto, and any suit or proceeding
instituted by the Collateral Agent shall be brought in its name as the
Collateral Agent and any recovery or judgment shall be held as part of the
Collateral on behalf of and for the ratable benefit of the Collateral Agent,
the Term Lenders, the Term Administrative Agent, the Revolving Lenders, and the
Revolving Administrative Agent and distributed as provided in Section 4.4.
3.4 Limitation by Law. All rights, remedies and powers provided
herein may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of Law, and all the provisions hereof are
intended to be subject to all applicable mandatory provisions of Law which may
be controlling and to be limited to the extent necessary so that they will not
render this Intercreditor Agreement or any Collateral Document invalid,
unenforceable in whole or in part.
IV. COLLATERAL ACCOUNT; DISTRIBUTIONS
4.1 The Collateral Account. During the continuance of an Event of
Default, with the consent of or at the request of the Required Lenders, all
moneys which are required by this Intercreditor Agreement or any Collateral
Document or the Revolving Credit Agreement in respect of the L/C Cash
Collateral Account to be delivered to the Collateral Agent or any other Secured
Party or which are received by the Collateral Agent or any agent or nominee of
the
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Collateral Agent or any other Secured Party in respect of the Collateral shall
be deposited in an account established at the principal office of the
Collateral Agent (the "Collateral Account") and held by the Collateral Agent
for the benefit of the Secured Parties and applied in accordance with the terms
of this Intercreditor Agreement.
4.2 Control of Collateral Account. Subject to the terms of this
Intercreditor Agreement, all right, title and interest in and to the Collateral
Account shall vest in the Collateral Agent, and the Collateral Account shall be
subject to the exclusive dominion and control of the Collateral Agent.
4.3 Investment of Funds Deposited in Collateral Account. The
Collateral Agent shall use reasonable efforts to invest and reinvest moneys on
deposit in the Collateral Account at any time in:
(a) marketable obligations of the United States having a
maturity of not more than six months from the date of acquisition;
(b) marketable obligations directly and fully guaranteed
by the United States having a maturity of not more than one year from
the date of acquisition;
(c) bankers' acceptances and certificates of deposit and
other interest-bearing obligations issued by the Collateral Agent or
any bank organized under the Laws of the United States or any state
thereof with capital, surplus and undivided profits aggregating at
least $500,000,000, in each case having a maturity of not more than
six months from the date of acquisition;
(d) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses
(a), (b) and (c) entered into with the Collateral Agent or any bank
meeting the qualifications specified in clause (c) above; and
(e) commercial paper rated at least A-1 or the equivalent
thereof by Standard & Poor's Ratings Group, a Division of XxXxxx-Xxxx,
Inc., a New York corporation, or P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc. and maturing within three months after
the date of acquisition.
All such investments and the interest and income received thereon and the net
proceeds realized on the sale or redemption thereof shall be held in the
Collateral Account as part of the Collateral. Except for gross negligence or
wilful misconduct, the Collateral Agent shall not be liable for any investment,
for any failure to invest hereunder, or for any performance of any such
investment or any loss or penalty resulting therefrom.
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4.4 Application of Moneys.
(a) The Collateral Agent shall have the right, upon an Event of
Default, to apply moneys held by it in the Collateral Account to the payment of
due and unpaid fees and expenses owing to it pursuant to Section 5.3. If the
Collateral Agent exercises its rights pursuant to the preceding sentence, all
remaining moneys held by the Collateral Agent in the Collateral Account or
received by the Collateral Agent shall, to the extent available for
distribution (it being understood that the Collateral Agent may liquidate
investments prior to maturity in order to make a distribution pursuant to this
Section 4.4), be distributed by the Collateral Agent on each Distribution Date
in the following order of priority:
First: to the Collateral Agent for any unpaid expenses owing
to it pursuant to Section 5.3;
Second: to any Revolving Lender and any Term Lender which has
theretofore advanced or paid any expenses of the Collateral Agent, Pro
Rata an amount equal to the amount thereof so advanced or paid by such
Revolving Lender or such Term Lender and for which such Revolving
Lender or such Term Lender has not been reimbursed prior to such
Distribution Date;
Third: to the Revolving Lenders and the Term Lenders, Pro
Rata an amount equal to the unpaid amount of the Revolving Obligations
and Term Obligations which are due and owing under the relative
Collateral Documents and which constitute the Revolving Obligations
and the Term Obligations as of the Distribution Date;
Fourth: to the Revolving Lenders and the Term Lenders, Pro
Rata amounts equal to all other sums which constitute the Revolving
Obligations and the Term Obligations; and
Fifth: any surplus then remaining shall be paid to the
Borrower and/or the Grantors or their respective successors or assigns
or to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
(b) The term "unpaid" as used in clause Third of Section 4.4(a)
refers:
(i) in the absence of a bankruptcy proceeding with
respect to the Borrower or any Grantor, to all amounts of the
Revolving Obligations and the Term Obligations outstanding as of a
Distribution Date, and
(ii) during the pendency of a bankruptcy proceeding with
respect to the Borrower or any Grantor, to all amounts allowed by the
bankruptcy court in respect of the Revolving Obligations and the Term
Obligations as a basis for distribution (including estimated amounts,
if any, allowed in respect of contingent claims), to the extent that
prior distributions have not been made in respect thereof.
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(c) The Collateral Agent shall make all payments and distributions
under this Section 4.4 on account of the Revolving Obligations to the Revolving
Administrative Agent for redistribution to the Revolving Lenders in accordance
with the provisions of the Revolving Credit Agreement. The Collateral Agent
shall make all payments and distributions under this Section 4.4 on account of
the Term Obligations to the Term Administrative Agent for redistribution to the
Term Lenders in accordance with the provisions of the Term Credit Agreement.
(d) If any Revolving Lender or any Term Lender has advanced or
paid any expenses of the Collateral Agent in excess of its Pro Rata Share
hereunder and is not paid or reimbursed in full for the amount of such advances
or payments, such Revolving Lender or Term Lender shall have a claim against
any Revolving Lender or Term Lender which has not paid its Pro Rata Share of
such expenses of the Collateral Agent.
4.5 The Collateral Agent's Calculations. In making the
determinations and allocations required by Section 4.4, the Collateral Agent
may rely upon information supplied by the Revolving Administrative Agent as to
the amounts payable with respect to the Revolving Obligations and by the Term
Administrative Agent as to amounts payable with respect to the Term
Obligations, and the Collateral Agent shall have no liability to any of the
Revolving Lenders or the Term Lenders for actions taken in reliance on such
information. All distributions made by the Collateral Agent pursuant to
Section 4.4 shall be (subject to any decree of any court of competent
jurisdiction) final, and the Collateral Agent shall have no duty to inquire as
to the application by the Revolving Administrative Agent or the Term
Administrative Agent of any amounts distributed to them.
V. AGREEMENTS WITH THE COLLATERAL AGENT
5.1 Delivery of Collateral Documents. The Revolving
Administrative Agent and the Term Administrative Agent have delivered to the
Collateral Agent true and complete copies of all Loan Documents as in effect on
the date hereof. The Revolving Administrative Agent and the Term
Administrative Agent, as the case may be, shall deliver to the Collateral
Agent, promptly upon the execution thereof, a true and complete copy of all
amendments, modifications or supplements to any Loan Document entered into
after the date hereof.
5.2 Certain Information. In the event the Revolving
Administrative Agent, the Term Administrative Agent and the Collateral Agent
are not the same Person, the Revolving Administrative Agent and the Term
Administrative shall deliver to the Collateral Agent, between May 1 and May 15
and between November 1 and November 15 in each year, and from time to time upon
request of the Collateral Agent, a list setting forth as of a date not more
than 10 days prior to the date of such delivery, the aggregate unpaid principal
and interest on the Revolving Obligations and the Term Obligations,
respectively, and the name and address of each holder thereof.
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5.3 Compensation and Expenses. The Borrower agrees to pay to the
Collateral Agent, from time to time upon demand, all of the reasonable
our-of-pocket costs and expenses of the Collateral Agent (including, without
limitation, the reasonable fees and disbursements of its counsel and such
special counsel as the Collateral Agent reasonably elects to retain) (a)
arising in connection with the preparation, execution, delivery, modification,
and termination of this Intercreditor Agreement, or the enforcement against the
Borrower or any Guarantor of any of the provisions hereof, (b) incurred or
required to be advanced in connection with the preservation, protection or
defense of the Collateral Agent's rights or any rights of the other Secured
Parties under this Intercreditor Agreement, or (c) incurred by the Collateral
Agent in connection with the resignation of the Collateral Agent pursuant to
Section 7.6. The obligations of the Borrower under this Section 5.3 shall
survive the termination of the other provisions of this Intercreditor
Agreement.
5.4 STAMP AND OTHER SIMILAR TAXES. THE BORROWER AGREES TO
INDEMNIFY AND HOLD HARMLESS THE COLLATERAL AGENT, THE REVOLVING ADMINISTRATIVE
AGENT, THE TERM ADMINISTRATIVE AGENT, EACH REVOLVING LENDER AND EACH TERM
LENDER FROM ANY PRESENT OR FUTURE CLAIM FOR LIABILITY FOR ANY STAMP OR ANY
OTHER SIMILAR TAX AND ANY PENALTIES OR INTEREST WITH RESPECT THERETO, WHICH MAY
BE ASSESSED, LEVIED OR COLLECTED BY ANY JURISDICTION IN CONNECTION WITH THIS
INTERCREDITOR AGREEMENT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, OTHER THAN
TAXES, PENALTIES AND INTEREST WHICH ARE FINALLY JUDICIALLY DETERMINED BY A
COURT OF COMPETENT JURISDICTION TO HAVE ARISEN AS A RESULT OF GROSS NEGLIGENCE
OR WILFUL MISCONDUCT ON THE PART OF THE COLLATERAL AGENT, THE REVOLVING
ADMINISTRATIVE AGENT, THE TERM ADMINISTRATIVE AGENT, ANY REVOLVING LENDER OR
ANY TERM LENDER. THIS INDEMNIFICATION SHALL BE MADE WITHIN 30 DAYS FROM THE
DATE THE APPLICABLE PARTY MAKES WRITTEN DEMAND THEREFOR. THE OBLIGATIONS OF
THE BORROWER UNDER THIS SECTION 5.4 SHALL SURVIVE THE TERMINATION OF THE OTHER
PROVISIONS OF THIS INTERCREDITOR AGREEMENT.
5.5 Filing Fees, Excise Taxes, Etc. The Borrower agrees to pay or
to reimburse the Collateral Agent for any and all reasonable payments made by
the Collateral Agent in respect of all search, filing, recording and
registration fees, taxes, excise taxes and other similar imposts which may be
payable or determined to be payable in respect to the execution and delivery of
this Intercreditor Agreement and each Collateral Document. The obligations of
the Borrower under this Section 5.5 shall survive the termination of the other
provisions of this Intercreditor Agreement.
5.6 INDEMNIFICATION. THE BORROWER AGREES TO INDEMNIFY, AND HOLD
THE COLLATERAL AGENT, ITS REPRESENTATIVES, OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, AND ATTORNEYS (COLLECTIVELY, THE "INDEMNITEES") HARMLESS FROM AND
AGAINST ANY AND ALL LIABILITIES,
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OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, REASONABLE
COSTS, REASONABLE OUT-OF-POCKET EXPENSES (INCLUDING, WITHOUT LIMITATION, THE
REASONABLE FEES AND EXPENSES OF COUNSEL) AND REASONABLE DISBURSEMENTS OF ANY
KIND OR NATURE WHATSOEVER WHICH MAY AT ANY TIME BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST ANY OF THE INDEMNITEES IN ANY WAY RELATING TO OR ARISING OUT
OF ANY OF THIS INTERCREDITOR AGREEMENT OR ANY DOCUMENTS CONTEMPLATED BY OR
REFERRED TO HEREIN OR ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT, EVENT OR
TRANSACTION RELATING THERETO (INCLUDING IN CONNECTION WITH OR AS A RESULT OF,
IN WHOLE OR IN PART, THE ORDINARY OR MERE NEGLIGENCE OF ANY INDEMNITEE, TO THE
EXTENT THAT ANY OF THE SAME RESULTS, DIRECTLY OR INDIRECTLY, FROM ANY CLAIMS
MADE OR ACTIONS, SUITS OR PROCEEDINGS COMMENCED BY OR ON BEHALF OF ANY PERSON
OR ENTITY, OTHER THAN THE REVOLVING ADMINISTRATIVE AGENT, THE TERM
ADMINISTRATIVE AGENT, THE REVOLVING LENDERS OR THE TERM LENDERS. IN ANY SUIT,
PROCEEDING OR ACTION BROUGHT BY THE COLLATERAL AGENT UNDER OR WITH RESPECT TO
ANY CONTRACT, AGREEMENT, INTEREST OR OBLIGATION CONSTITUTING PART OF THE
COLLATERAL FOR ANY SUM OWING THEREUNDER, OR TO ENFORCE ANY PROVISIONS THEREOF,
THE BORROWER WILL SAVE, INDEMNIFY AND KEEP THE INDEMNITEES HARMLESS FROM AND
AGAINST ALL EXPENSE, LOSS OR DAMAGE SUFFERED BY REASON OF ANY DEFENSE, SETOFF,
COUNTERCLAIM, RECOUPMENT OR REDUCTION OF LIABILITY WHATSOEVER OF THE OBLIGOR
THEREUNDER (INCLUDING IN CONNECTION WITH OR AS A RESULT OF, IN WHOLE OR IN
PART, THE MERE NEGLIGENCE OF ANY INDEMNITEE, ARISING OUT OF A BREACH BY THE
BORROWER OR ANY GRANTOR OF ANY OBLIGATION THEREUNDER OR ARISING OUT OF ANY
OTHER AGREEMENT, INDEBTEDNESS OR LIABILITY AT ANY TIME OWING TO OR IN FAVOR OF
SUCH OBLIGOR OR ITS SUCCESSORS FROM THE BORROWER OR SUCH GRANTOR, AND ALL SUCH
OBLIGATIONS OF THE BORROWER AND THE GRANTORS SHALL BE AND REMAIN ENFORCEABLE
AGAINST AND ONLY AGAINST THE BORROWER OR SUCH GRANTOR AND SHALL NOT BE
ENFORCEABLE AGAINST ANY INDEMNITEE OR ANY SECURED PARTY. THE AGREEMENTS IN
THIS SECTION 5.6 SHALL SURVIVE THE PAYMENT OF THE REVOLVING OBLIGATIONS, THE
TERM OBLIGATIONS AND TERMINATION OF THE OTHER PROVISIONS OF THIS INTERCREDITOR
AGREEMENT. THE INDEMNITEES SHALL NOT BE SO INDEMNIFIED AND HELD HARMLESS FOR
ANY (i) LOSSES OR DAMAGES WHICH THE BORROWER PROVES WERE CAUSED BY INDEMNITEES'
WILFUL MISCONDUCT OR GROSS NEGLIGENCE, (ii) ANY CLAIM OR LIABILITY THAT ARISES
AS THE DIRECT RESULT OF THE OPERATION OF THE PROPERTY OF THE BORROWER OR ANY
GRANTOR BY ANY INDEMNITEE AFTER TAKING POSSESSION THEREOF BY FORECLOSURE OR BY
TRANSFER IN LIEU OF FORECLOSURE (PROVIDED THAT SUCH CLAIM OR LIABILITY DOES NOT
RELATE TO ANY CONDITION EXISTING
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ON SUCH PROPERTY PRIOR TO FORECLOSURE OR TRANSFER IN LIEU OF FORECLOSURE), AND
(iii) MATTERS CAUSED BY A SECURED PARTY AGAINST AN INDEMNITEE OR ITS
MANAGEMENT.
5.7 Additional Collateral. It is expressly understood that in no
event shall the Revolving Administrative Agent, the Term Administrative Agent,
any Revolving Lender or any Term Lender be entitled to a grant of a Lien in any
Collateral in which the Collateral Agent is not granted a Lien that is pari
passu with such Lien and subject to this Intercreditor Agreement.
VI. POSSESSION AND USE OF COLLATERAL; PARTIAL RELEASES
6.1 Use of Collateral. The rights of the Borrower and the
Grantors in and to the Collateral are set forth in the Revolving Credit
Agreement, the Term Credit Agreement and the Collateral Documents.
6.2 Releases. Releases and dispositions of all or substantially
all of the Collateral (other than sales, releases and dispositions of
Collateral pursuant to the exercise of remedies as provided in this
Intercreditor Agreement or which are expressly permitted by the terms and
provisions of the Revolving Credit Agreement, the Term Credit Agreement and the
Collateral Documents) may be made by the Collateral Agent, only at the
direction of all Revolving Lenders and all Term Lenders. Releases and
dispositions of less than all or substantially all of the Collateral (other
than sales, releases and dispositions of Collateral pursuant to the exercise of
remedies as provided in this Intercreditor Agreement or which are expressly
permitted by the terms and provisions of the Revolving Credit Agreement, the
Term Credit Agreement and the Collateral Documents) may be made by the
Collateral Agent, only at the discretion of the Required Lenders. Sales,
releases or other dispositions of Collateral which are permitted by the terms
and provisions of the Revolving Credit Agreement, the Term Credit Agreement and
the Collateral Documents shall not require any written or oral authorization or
consent of the Collateral Agent, the Revolving Lenders or the Term Lenders.
Sales or other dispositions of Collateral which are pursuant to the exercise of
remedies hereunder or under any Collateral Document shall not require any
written or oral authorization or consent of the Revolving Administrative Agent,
the Term Administrative Agent, any Revolving Lender or any Term Lender.
Nevertheless, the Borrower may request that the Collateral Agent execute and
deliver to the Borrower, any Grantor or any purchaser of Collateral a written
release, disclaimer or quitclaim of the Collateral Agent's, the Revolving
Administrative Agent's, the Term Administrative Agent's, the Revolving Lenders'
or the Term Lenders' interest in any Collateral under the Collateral Documents,
and such purchaser shall be entitled to rely conclusively on such release,
disclaimer or quitclaim. Unless requested by the Borrower, it shall not be
necessary for any Revolving Lender, any Term Lender, the Revolving
Administrative Agent or the Term Administrative Agent to sign such release.
Such request shall be in writing, shall describe the property to be released in
reasonable detail, and, shall state that such release is or will be in
accordance with the Revolving Credit Agreement, the Term Credit Agreement and
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the Collateral Documents. The Collateral Agent shall send a copy of all
releases to the Revolving Administrative Agent and the Term Administrative
Agent.
VII. THE COLLATERAL AGENT
7.1 Appointment. The Revolving Administrative Agent, the Term
Administrative Agent, the Revolving Lenders and the Term Lenders irrevocably
designate and appoint NationsBank of Texas, N.A. as the Collateral Agent under
this Intercreditor Agreement, the Collateral Documents and the Revolving Credit
Agreement in respect of the L/C Cash Collateral Account as attorney-in-fact
with full power and authority in the name of the Revolving Administrative
Agent, the Term Administrative Agent, each Revolving Lender or each Term Lender
or in the Collateral Agent's name to take such action under the provisions of
this Intercreditor Agreement, the Collateral Documents and the Revolving Credit
Agreement in respect of the L/C Cash Collateral Account and to exercise such
powers and perform such duties as are expressly delegated to the Collateral
Agent and/or the Revolving Administrative Agent, the Term Administrative Agent,
the Revolving Lenders and the Term Lenders by the terms hereof and thereof,
together with such other powers as are reasonably incidental thereto. Without
limiting the generality of the foregoing, each of the Revolving Administrative
Agent, the Term Administrative Agent, the Revolving Lenders and the Term
Lenders hereby gives the Collateral Agent the power and rights on behalf of
each of the Revolving Administrative Agent, the Term Administrative Agent, the
Revolving Lenders and the Term Lenders, without notice to or further assent by
each of the Revolving Administrative Agent, the Term Administrative Agent, the
Revolving Lenders and the Term Lenders to do the following:
(a) to ask for, demand, xxx for, collect, receive and
give acquittance for any and all moneys due or to become due upon, or
in connection with, the Collateral;
(b) to receive, take, endorse, assign and deliver any and
all checks, notes, drafts, acceptances, documents and other negotiable
and non-negotiable instruments taken or received by the Collateral
Agent as, or in connection with, the Collateral;
(c) to commence, prosecute, defend, settle, compromise or
adjust any claim, suit, action or proceeding with respect to, or in
connection with, the Collateral;
(d) to sell, transfer, release, assign or otherwise deal
in or with the Collateral or any part thereof as fully and effectively
as if the Collateral Agent were the absolute owner thereof; and
(e) to do, at its option, at any time or from time to
time, all acts and things which the Collateral Agent deems necessary
to protect or preserve the Collateral and to realize upon the
Collateral.
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Said attorney, the Collateral Agent, is hereby granted and given full
power and authority to do and perform every act necessary and proper to be done
in the exercise of any of the foregoing powers. Understanding that powers of
attorney are strictly construed, each of the Revolving Administrative Agent,
the Term Administrative Agent, the Revolving Lenders and the Term Lenders
declares that it is its expressed intention that this power of attorney shall
be liberally construed to give the fullest effect to the powers granted herein.
7.2 Exculpatory Provisions.
(a) The Collateral Agent shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations or
warranties in this Intercreditor Agreement, the Revolving Loan Documents or the
Term Loan Documents. The Collateral Agent makes no representations as to the
value or condition of the Collateral or any part thereof, or as to the title of
the Borrower or any Grantor thereto or as to the security, perfection or
priority afforded by this Intercreditor Agreement, any Collateral Document or
the Revolving Credit Agreement in respect of the L/C Cash Collateral Account,
or as to the validity, execution, enforceability, legality or sufficiency of
this Intercreditor Agreement, the Revolving Loan Documents, the Term Loan
Documents, the Revolving Obligations or the Term Obligations, and the
Collateral Agent shall incur no liability or responsibility in respect of any
such matters. The Collateral Agent shall not be responsible for insuring the
Collateral or for the payment of taxes, charges or assessments or discharging
of any Liens upon the Collateral or otherwise as to the maintenance of the
Collateral, except that the Collateral shall be accorded treatment
substantially equal to that which the Collateral Agent accords to collateral
held generally by the Collateral Agent for its sole benefit.
(b) The Collateral Agent shall not be required to ascertain or
inquire as to the performance by the Borrower or any Grantor of any of the
covenants or agreements contained herein or in any Revolving Loan Document or
Term Loan Document. Whenever it is necessary, or in the opinion of the
Collateral Agent advisable, for the Collateral Agent to ascertain the amount of
the Revolving Obligations or the Term Obligations, then held by the Revolving
Lenders or the Term Lenders, as the case may be, the Collateral Agent may rely
on a certificate of the Revolving Administrative Agent, in the case of the
Revolving Obligations, or of the Term Administrative Agent, in the case of the
Term Obligations.
(c) Unless the Collateral Agent receives security or indemnity
satisfactory to it, the Collateral Agent shall be under no obligation or duty
to take any action under this Intercreditor Agreement, any Collateral Document
or the Revolving Credit Agreement in respect of the L/C Cash Collateral Account
if taking such action (i) would subject the Collateral Agent to a tax in any
jurisdiction where it is not then subject to a tax or (ii) would require the
Collateral Agent to qualify to do business in any jurisdiction where it is not
then so qualified.
(d) Notwithstanding any other provision of this Intercreditor
Agreement, the Collateral Agent shall not be liable for any action taken or
omitted to be taken by it in accordance with this Intercreditor Agreement, the
Collateral Documents or the Revolving Credit
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Agreement in respect of the L/C Cash Collateral Account, except to the extent
that taking such action or omitting to take such action is finally determined
by a court of competent jurisdiction to constitute gross negligence or wilful
misconduct by the Collateral Agent.
(e) The Collateral Agent shall have the same rights with respect
to any Revolving Obligations or Term Obligations held by it as any Secured
Party and may exercise such rights as though it were not the Collateral Agent
hereunder, and may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Grantor as if it were not the
Collateral Agent.
7.3 Delegation of Duties. The Collateral Agent may execute any of
the powers hereof and perform any duty hereunder either directly or by or
through agents or attorneys-in-fact. The Collateral Agent shall be entitled to
advice of counsel concerning all matters pertaining to such powers and duties.
The Collateral Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it in good faith.
7.4 Reliance by the Collateral Agent.
(a) The Collateral Agent may consult with counsel, and any advice
or statements of legal counsel (including, without limitation, counsel to the
Borrower or any Grantor) shall be full and complete authorization and
protection in respect of any action taken or suffered by it hereunder or under
any Collateral Document in accordance therewith.
(b) The Collateral Agent may conclusively rely, and shall be fully
protected in acting, upon any resolution, statement, certificate, instrument,
opinion, report, notice, request, consent, order, bond or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties or, in the case of cables, telecopies and telexes,
to have been sent by the proper party or parties, except to the extent that
such reliance or action is finally determined by a court of competent
jurisdiction to constitute gross negligence or wilful misconduct of the
Collateral Agent. The Collateral Agent may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Collateral Agent and conforming
to the requirements of this Intercreditor Agreement, except to the extent that
such reliance is finally determined by a court of competent jurisdiction to
constitute gross negligence or wilful misconduct of the Collateral Agent.
(c) The Collateral Agent shall not be under any obligation to
exercise any of the rights or powers vested in the Collateral Agent by this
Intercreditor Agreement or the Collateral Documents, at the request or
direction of the Required Lenders pursuant to this Intercreditor Agreement, or
otherwise, unless the Collateral Agent shall have been provided security or
indemnity to its satisfaction against the fees, costs, expenses and liabilities
which may be incurred by it, including such reasonable advances as may be
requested by the Collateral Agent.
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7.5 Limitations on Duties of the Collateral Agent.
(a) The Collateral Agent shall be obligated to perform such duties
and only such duties as are specifically set forth in this Intercreditor
Agreement, the Collateral Documents and the Revolving Credit Agreement in
respect of the L/C Cash Collateral Account, and no implied covenants or
obligations shall be read into this Intercreditor Agreement, any Collateral
Document or the Revolving Credit Agreement against the Collateral Agent. The
Collateral Agent may exercise the rights and powers vested in it and the
Revolving Administrative Agent by this Intercreditor Agreement, the Collateral
Documents and the Credit Agreement in respect of the L/C Cash Collateral
Account, and shall not be liable with respect to any action taken by it, or
omitted to be taken by it.
(b) The Collateral Agent shall not be under any obligation to take
any action which is discretionary with the Collateral Agent under the
provisions hereto, any Collateral Document or the Revolving Credit Agreement in
respect of the L/C Cash Collateral Account, except upon the written request of
the Required Lenders and subject to the terms of this Intercreditor Agreement.
7.6 Resignation of the Collateral Agent. Should the Collateral
Agent ever cease to be either the Revolving Administrative Agent or the Term
Administrative Agent, or should the Collateral Agent ever resign as the
Collateral Agent, or should the Collateral Agent ever be removed with cause by
the Required Lenders (other than the Lender then acting as the Collateral
Agent), then the Revolving Administrative Agent or the Term Administrative
Agent appointed by the Required Lenders (other than the Lenders then acting as
the Collateral Agent) shall forthwith become the Collateral Agent, and the
Borrower, each Grantor, the Revolving Administrative Agent, the Term
Administrative Agent, the Revolving Lenders and the Term Lenders shall execute
such documents as any Revolving Lender or Term Lender may reasonably request to
reflect such change. Any resignation or removal of the Collateral Agent shall
become effective upon the appointment by the Required Lenders (other than the
Lender then acting as the Collateral Agent) of a successor Collateral Agent;
provided, however, that if the Required Lenders fail for any reason to appoint
a successor within 60 days after such removal or resignation, the Collateral
Agent shall thereafter have no obligation to act as the Collateral Agent
hereunder.
7.7 Status of Successor. Every successor Collateral Agent
appointed pursuant to Section 7.6 shall be a commercial bank in good standing
and having power to act as the Collateral Agent hereunder, incorporated under
the laws of the United States of America or any State thereof or the District
of Columbia, and borrowing a combined capital and surplus of at least
$500,000,000.
7.8 Merger of the Collateral Agent. Any corporation into which
the Collateral Agent may be merged, or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the
Collateral Agent shall be a party, shall be the Collateral Agent under this
Intercreditor Agreement, the Collateral Documents and the Revolving Credit
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Agreement in respect of the L/C Cash Collateral Account without the execution
or filing of any paper or any further act on the part of the parties hereto,
provided that such corporation meets the requirements of Section 7.7.
7.9 Treatment of Payee or Endorsee by the Collateral Agent;
Representatives of the Revolving Lenders and the Term Lenders. The Collateral
Agent may treat the registered holder or, if none, the payee or endorsee of any
promissory note evidencing the Revolving Obligations or the Term Obligations as
the absolute owner thereof for all purposes and shall not be affected by any
notice to the contrary.
7.10 Non-Reliance on the Collateral Agent. Each Revolving Lender
and Term Lender expressly acknowledges that neither the Collateral Agent nor
any of its officers, directors, employees, agents, attorneys, attorneys-in-fact
or affiliates has made any representations or warranties to them. Each
Revolving Lender and Term Lender represents to the Collateral Agent that such
Revolving Lender or Term Lender independently and without reliance upon the
Collateral Agent, and based on such documents and information as they have
deemed or will deem appropriate, has made and will make its own appraisal of
and investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and each other Grantor, and has
made and will make their own decision to extend credit to the Borrower. Each
Revolving Lender and Term Lender also represents that it will, independently
and without reliance upon the Collateral Agent, and based on such documents and
information as they shall deem appropriate at the time continue to make its own
creditor analysis, appraisals and decisions in taking or not taking action
under this Intercreditor Agreement, any Revolving Loan Document or any Term
Loan Document, and to make such investigation as they deem necessary to inform
themselves as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower and each Grantor. Except for
notices, reports and other documents expressly required to be furnished to the
Revolving Lenders and the Term Lenders by the Collateral Agent hereunder or
other documentation or information about the Borrower in the possession of the
Collateral Agent which is specifically requested, the Collateral Agent shall
not have any duty or responsibility to provide any Revolving Lender or Term
Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower or any Grantor which may come into its possession or the possession of
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates. Each Revolving Lender and Term Lender acknowledges that the
Collateral Agent and its affiliates may exercise all contractual and legal
rights and remedies which may exist from time to time with respect to other
existing and future relationships with the Borrower or any Grantor without any
duty to account therefor to such Revolving Lender or Term Lender.
7.11 INDEMNIFICATION. THE REVOLVING LENDERS AND THE TERM LENDERS
AGREE TO INDEMNIFY THE COLLATERAL AGENT (IN ITS CAPACITY AS SUCH), WITHOUT
LIMITING THE OBLIGATION OF THE BORROWER AND EACH GRANTOR TO DO SO, PRO RATA
ACCORDING TO THE RESPECTIVE PRINCIPAL AMOUNTS OF THE REVOLVING OBLIGATIONS AND
THE TERM
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OBLIGATIONS HELD BY THE REVOLVING LENDERS AND THE TERM LENDERS AT THE DATE OF
ANY CLAIM BY THE COLLATERAL AGENT FOR INDEMNITY UNDER THIS SECTION 7.11, FROM
AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, REASONABLE EXPENSES (INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND EXPENSES OF COUNSEL) OR DISBURSEMENTS OF
ANY KIND WHATSOEVER WHICH ANY AT ANY TIME BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST THE COLLATERAL AGENT IN ANY WAY RELATING TO OR ARISING OUT OF
THIS INTERCREDITOR AGREEMENT, THE REVOLVING LOAN DOCUMENTS, THE TERM LOAN
DOCUMENTS OR ANY OTHER DOCUMENTS CONTEMPLATED HEREBY OR THEREBY OR REFERRED TO
HEREIN OR THEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY
ACTION TAKEN OR OMITTED BY THE COLLATERAL AGENT HEREUNDER OR THEREUNDER OR IN
CONNECTION THEREWITH, INCLUDING THE MERE NEGLIGENCE OF THE COLLATERAL AGENT,
BUT EXCLUDING ANY CLAIM OR LIABILITY THAT IS FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION TO HAVE ARISEN AS A RESULT OF THE GROSS NEGLIGENCE OR
WILFUL MISCONDUCT OF THE COLLATERAL AGENT. THE REVOLVING LENDERS AND THE TERM
LENDERS AGREE TO REIMBURSE THE COLLATERAL AGENT (TO THE EXTENT NOT REIMBURSED
BY THE BORROWER AND THE GRANTORS), PRO RATA, PROMPTLY UPON DEMAND FOR ANY
REASONABLE OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES)
INCURRED BY THE COLLATERAL AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION,
DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER
THROUGH LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF
RIGHTS OR RESPONSIBILITIES UNDER THIS INTERCREDITOR AGREEMENT, THE REVOLVING
CREDIT AGREEMENT, THE TERM CREDIT AGREEMENT, THE COLLATERAL DOCUMENTS, OR ANY
OTHER DOCUMENTS CONTEMPLATED HEREBY OR THEREBY. THE AGREEMENTS IN THIS SECTION
7.11 SHALL SURVIVE THE PAYMENT OF THE REVOLVING OBLIGATIONS, THE TERM
OBLIGATIONS AND THE TERMINATION OF THE OTHER PROVISIONS OF THIS INTERCREDITOR
AGREEMENT.
7.11 Benefits of Article. None of the provisions of this Article
VII shall inure to the benefit of any Person other than the Revolving Lenders,
the Revolving Administrative Agent, the Term Lenders, the Term Administrative
Agent and the Collateral Agent; consequently, no such other Person shall be
entitled to rely upon, or to raise as a defense in any manner whatsoever, the
failure of the Collateral Agent or any of the Revolving Lenders, the Revolving
Administrative Agent, the Term Lenders or the Term Administrative Agent to
comply with such provisions.
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VIII. COLLATERAL AGENT PROVISIONS
8.1 Agreement. The Revolving Lenders, the Revolving
Administrative Agent, the Borrower, the Grantors, the Term Lenders and the Term
Administrative Agent agree that all Liens of the Collateral Agent in the
Collateral are on behalf of and for the ratable benefit of the Secured Parties.
In the event that the Revolving Administrative Agent, the Term Administrative
Agent, any Term Lender or any Revolving Lender at any time obtains possession
of any of the Collateral, it shall promptly deliver such Collateral to the
Collateral Agent, unless precluded by Law or judicial order.
8.2 Obligations Hereunder Not Affected. All rights and interests
of the Collateral Agent, the Revolving Administrative Agent, the Term
Administrative Agent, the Revolving Lenders and the Term Lenders hereunder, and
all agreements and obligations of the Borrower and the Grantors under this
Intercreditor Agreement, shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of the
Revolving Credit Agreement, this Intercreditor Agreement, the Term
Credit Agreement, the Collateral Documents, or any other Revolving
Loan Documents or Term Loan Documents.
(b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Revolving Obligations
or the Term Obligations, or any other amendment or waiver of or any
consent to departure from the Revolving Credit Agreement, this
Intercreditor Agreement, the Term Credit Agreement, the Collateral
Documents or any other Revolving Loan Documents or Term Loan
Documents.
(c) any exchange, release or non-perfection of any
Collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Revolving
Obligations or the Term Obligations.
(d) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Borrower or
any Grantor in respect of the Revolving Obligations or the Term
Obligations. This Intercreditor Agreement shall continue to be
effective or be reinstated, as th