<PAGE> 1
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - --- EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - --- EXCHANGE ACT OF 1934
For the transition period from ------------------ to --------------
Commission File Number 1-7340
KELLWOOD COMPANY
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-2472410
- - ------------------------------------- -------------------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
600 KELLWOOD PARKWAY, P.O. BOX 14374, ST. LOUIS, MO 63178
- - --------------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 576-3100
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
Number of shares of common stock, par value $.01, outstanding
at July 31, 1994 (only one class): 21,060,371
--------------
<PAGE> 2
KELLWOOD COMPANY
----------------
<TABLE>
INDEX
-----
<CAPTION>
Page No.
--------
<C> <S> <C>
PART I. FINANCIAL INFORMATION
Condensed Consolidated Balance Sheet 3
Condensed Consolidated Statement of Earnings 4
Condensed Consolidated Statement of Cash Flows 5
Notes to Condensed Consolidated Financial
Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION 8
</TABLE>
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<PAGE> 3
PART I. FINANCIAL INFORMATION
------------------------------
<TABLE>
KELLWOOD COMPANY AND SUBSIDIARIES
---------------------------------
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
------------------------------------------------
(Amounts in thousands)
<CAPTION>
July 31,
-------------------- April 30,
1994 1993 1994
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
- - ------
Current assets:
Cash and time deposits $ 11,183 $ 19,915 $ 17,666
Receivables, net 194,308 182,078 180,724
Inventories 233,266 206,630 196,017
Prepaid taxes and expenses 19,950 16,882 18,650
-------- -------- --------
Total Current Assets 458,707 425,505 413,057
Property, plant and equipment, net 67,284 68,777 67,975
Intangible assets, net 112,077 111,990 107,692
Other assets 55,089 47,362 53,133
-------- -------- --------
$ 693,157 $ 653,634 $ 641,857
======== ======== ========
LIABILITIES AND SHAREOWNERS' EQUITY
- - -----------------------------------
Current liabilities:
Current portion of long-term debt $ 9,429 $ 7,069 $ 8,916
Notes payable 58,611 116,386 9,010
Accounts payable 62,991 60,236 63,238
Accrued expenses 65,882 53,184 69,487
-------- -------- --------
Total current liabilities 196,913 236,875 150,651
Long-term debt 149,514 100,081 153,014
Deferred income taxes and other 30,590 28,688 31,236
Shareowners' equity:
Common stock 92,476 87,697 90,657
Retained earnings 262,843 238,284 255,290
Cumulative translation adjustment (8,946) (8,937) (8,926)
-------- -------- --------
346,373 317,044 337,021
Less treasury stock, at cost (30,233) (29,054) (30,065)
-------- -------- --------
Total shareowners' equity 316,140 287,990 306,956
-------- -------- --------
$ 693,157 $ 653,634 $ 641,857
======== ======== ========
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
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<PAGE> 4
<TABLE>
KELLWOOD COMPANY AND SUBSIDIARIES
---------------------------------
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
--------------------------------------------------------
(Amounts in thousands except per share data)
<CAPTION>
Three Months Ended
July 31,
--------------------
1994 1993
--------- ---------
<S> <C> <C>
Net sales $ 300,937 $ 298,480
Costs and expenses:
Cost of products sold 234,618 236,151
Selling, general and administrative expenses 41,974 41,528
Amortization of intangible assets 3,210 3,070
Gain on disposal of assets (104) (3,047)
Interest expense 3,917 3,962
Interest income and other, net (789) (562)
-------- --------
Earnings before income taxes 18,111 17,378
Income taxes 7,400 7,470
-------- --------
Net earnings $ 10,711 $ 9,908
======== ========
Weighted average shares outstanding:
Primary 21,022 20,754
======== ========
Fully diluted 21,477 21,213
======== ========
Earnings per share:
Primary $ .51 $ .48
======== ========
Fully diluted $ .50 $ .47
======== ========
Dividends paid per share $ .15 $ .13
======== ========
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
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<PAGE> 5
<TABLE>
KELLWOOD COMPANY AND SUBSIDIARIES
---------------------------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
----------------------------------------------------------
(Amounts in thousands)
<CAPTION>
Three Months Ended
July 31,
-------------------
1994 1993
-------- --------
<S> <C> <C>
Operating activities:
Net earnings $ 10,711 $ 9,908
Add (deduct) items not affecting operating
cash flows:
Depreciation and amortization 6,324 6,183
Increase in prepaid pension cost (1,849) (1,741)
Gain on disposal of assets, net of write-offs (104) (3,047)
Deferred taxes and other (888) 1,424
------- -------
14,194 12,727
Changes in noncash working capital components,
net of effect of acquisition:
Receivables (10,399) 5,031
Inventories (34,177) (3,299)
Prepaid expenses (1,260) (1,130)
Accounts payable (878) (5,239)
Accrued expenses (3,679) (11,206)
------- -------
Net cash (used for) operating activities (36,199) (3,116)
------- -------
Investing activities:
Additions to property, plant and equipment (2,358) (3,466)
Proceeds from disposal of assets 104 3,047
Investment in subsidiaries (5,500) (23,000)
Other investing activities 92 357
------- -------
Net cash (used for) investing activities (7,662) (23,062)
------- -------
Financing activities:
Proceeds from notes payable, net 41,872 11,987
Reduction of long-term debt (2,987) (3,349)
Dividends paid (3,158) (2,769)
Other financing activities 1,651 1,046
------- -------
Net cash provided by financing
activities 37,378 6,915
------- -------
Net (decrease) in cash and time deposits (6,483) (19,263)
Cash and time deposits - beginning of period 17,666 39,178
------- -------
Cash and time deposits - end of period $ 11,183 $ 19,915
======= =======
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
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<PAGE> 6
KELLWOOD COMPANY AND SUBSIDIARIES
---------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Amounts in thousands except per share data)
1. It is the opinion of management that all adjustments
necessary for a fair statement of results for the interim
periods have been reflected in the statements presented.
Such adjustments were normal and recurring in nature.
Accounting policies have been continued without change and
are described in the Summary of Significant Accounting
Policies contained in the Company's 1994 Annual Report to
Shareowners. For additional information regarding the
Company's financial condition, refer to the footnotes
accompanying the annual financial statements. Details in
those notes have not changed significantly except as a
result of normal transactions in the interim.
<TABLE>
2. Total inventory consisted of:
<CAPTION>
July 31, July 31, April 30,
1994 1993 1994
--------- --------- ---------
<S> <C> <C> <C>
Finished goods $ 109,050 $ 99,163 $ 81,998
Work in process 53,369 49,693 46,896
Raw materials 70,847 57,774 67,123
-------- -------- --------
$ 233,266 $ 206,630 $ 196,017
======== ======== ========
</TABLE>
If inventories were valued at current replacement costs,
they would have totalled $242,812, $216,248 and $205,188 at
July 31, 1994, July 31, 1993, and April 30, 1994,
respectively.
3. On July 1, 1993, all of the capital stock of Goodman
Knitting Co., Inc., a designer and marketer of branded
apparel, was purchased for cash. The acquisition has been
accounted for using the purchase method and, accordingly,
the results of operations are included in the consolidated
statement of earnings from the date of acquisition. Assets
acquired and liabilities assumed were recorded at their
estimated fair value, and the excess costs over net tangible
assets are being amortized over the estimated useful lives
of the related intangible assets. Had the purchase taken
place May 1, 1993, unaudited pro forma consolidated net
sales would have been $300,937 and $306,232 for the three
months ended July 31, 1994 and 1993, respectively.
Consolidated net earnings and earnings per share would not
have been significantly different.
4. The gain on disposal of assets resulted from the sale of
certain excess export quota rights.
5. Revolving credit agreements dated June 24, 1994, and
totalling $120,000 expire June 23, 1995 ($50,000), and
June 24, 1997 ($70,000). Each borrowing under the
agreements bears interest at one of several specified rates
dependent upon several factors including the Company's
leverage ratio, senior debt rating and the applicable
eurodollar margin. Facility fees can range from .1% to .25%
of the committed amount outstanding. At July 31, 1994, the
entire $120,000 was available for future borrowings.
Covenants are more flexible than those currently existing
for Kellwood's notes due insurance companies.
- 6 -
<PAGE> 7
KELLWOOD COMPANY AND SUBSIDIARIES
---------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
--------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
OPERATING RESULTS
- - -----------------
First quarter operating results, particularly in the branded and
Domestic private label portfolios, were very good. Total sales
were up 1% for the quarter compared to last year. It is
important to note that last year's sales period included 14 weeks
compared to this year's 13 week first quarter.
Operating earnings (defined as net sales less cost of products
sold and selling, general and administrative expenses) increased
$3.5 million or 17% for the quarter as compared to the same
period last year. The improved operating earnings resulted from
a combination of a more favorable product mix, increased volume
and improved efficiency.
Last year's first quarter results were favorably impacted by a
$3.0 million gain on the disposal of certain excess Hong Kong
export quota rights. This year the value of Hong Kong quota was
severely depressed. As a result, Kellwood only sold a small
amount of excess quota realizing a negligible gain of $0.1
million.
The decrease in the effective tax rate is due to changes in the
earnings mix.
FINANCIAL CONDITION
- - -------------------
The current ratio was 2.3 to 1 at July 31, 1994 as compared to
2.7 to 1 at April 30, 1994 and 1.8 to 1 at July 31, 1993.
Accounts receivable and inventory levels have both increased but
remain in line with increased sales and demand.
The decrease in cash used for investing activities primarily
resulted from the acquisition of Goodman Knitting in July, 1993.
On a comparable basis, a substantially smaller acquisition
occurred in May, 1994 when Kellwood acquired Sierra Designs.
Total debt represents 41% of capitalization at July 31, 1994, as
compared to 36% at April 30, 1994 and 44% at July 31, 1993. The
increase from year end resulted from additional working capital
needed to fund internal growth. In June 1994, Kellwood
negotiated a $120 million fully committed revolving credit
agreement. At July 31, 1994 the entire $120 million was
available for future borrowings.
The combined operating, cash and equity position of the Company
should continue to provide the capital flexibility necessary to
fund future opportunities as well as to meet existing
obligations.
OUTLOOK
- - -------
Kellwood anticipates an improved and strengthened second quarter,
but not a robust retail climate. In continuing Kellwood's
program to acquire companies that will expand and complement
Kellwood's existing product offerings, the Company announced on
August 24, 1994 the signing of a definitive agreement to acquire
Halmode Apparel, Inc. This multidivisional women's apparel maker
with annual sales in excess of $150 million, markets dresses,
junior sportswear, maternitywear, and uniforms. The acquisition
is subject to Federal Trade Commission approval and is expected
to be completed during Kellwood's second quarter.
- 7 -
<PAGE> 8
PART II. OTHER INFORMATION
---------------------------
KELLWOOD COMPANY
----------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - -----------------------------------------
<TABLE>
a) EXHIBITS:
<CAPTION>
S.E.C. Exhibit
Reference No. Description
------------- ---------------------------------------
<C> <S>
4.7.1 Long-Term Credit Agreement dated as
of June 24, 1994, among Kellwood
Company, Certain Commercial Lending
Institutions, and The Bank of Nova
Scotia, as Agent, filed herewith.
4.7.2 Short-Term Credit Agreement dated
as of June 24, 1994, among Kellwood
Company, Certain Commercial Lending
Institutions, and The Bank of Nova
Scotia, as Agent, filed herewith.
27 Financial Data Schedule, filed
herewith.
</TABLE>
b) REPORTS ON FORM 8-K:
No reports were filed on Form 8-K during the three months
ended July 31, 1994.
- 8 -
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be duly
signed on its behalf by the undersigned thereunto duly
authorized.
KELLWOOD COMPANY
September 8, 1994 /s/ Thomas H. Pollihan
---------------------------------------
Thomas H. Pollihan
Vice President, Secretary and General
Counsel
September 8, 1994 /s/ James C. Jacobsen
---------------------------------------
James C. Jacobsen
Executive Vice President Administration
(Chief Financial Officer)
- 9 -
<PAGE> 1
LONG-TERM CREDIT AGREEMENT
dated as of June 24, 1994
among
KELLWOOD COMPANY,
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
and
THE BANK OF NOVA SCOTIA, as Agent
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . 1
SECTION 1.1 Defined Terms. . . . . . . . . . . . . . . . 1
SECTION 1.2 Use of Defined Terms . . . . . . . . . . . . 18
SECTION 1.3 Cross-References . . . . . . . . . . . . . . 18
SECTION 1.4 Accounting and Financial Determinations. . . 18
ARTICLE 2
COMMITMENTS, BORROWING PROCEDURES AND NOTES. . . . . . . . . . 18
SECTION 2.1 Commitments. . . . . . . . . . . . . . . . . 18
SECTION 2.2 Reduction or Termination of the Commitments. 19
SECTION 2.3 Extension of Stated Maturity Date. . . . . . 20
SECTION 2.4 Committed Loans Borrowing Procedure. . . . . 22
SECTION 2.5 Continuation and Conversion Elections. . . . 23
SECTION 2.6 Procedures with Respect to Bid Rate Loans. . 23
SECTION 2.7 Funding. . . . . . . . . . . . . . . . . . . 26
SECTION 2.8 Availability of Funds. . . . . . . . . . . . 26
SECTION 2.9 Reliance Upon Telephonic Notices . . . . . . 26
SECTION 2.10 Currency . . . . . . . . . . . . . . . . . . 27
SECTION 2.11 Conditions . . . . . . . . . . . . . . . . . 27
SECTION 2.12 Notes. . . . . . . . . . . . . . . . . . . . 27
ARTICLE 3
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES . . . . . . . . . . 27
SECTION 3.1 Repayments and Prepayments . . . . . . . . . 27
SECTION 3.2 Interest Provisions. . . . . . . . . . . . . 28
SECTION 3.2.1 Rates . . . . . . . . . . . . . . . . 28
SECTION 3.2.2 Default Rates . . . . . . . . . . . . 29
SECTION 3.2.3 Payment Dates . . . . . . . . . . . . 29
SECTION 3.3 Fees . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.3.1 Facility Fee. . . . . . . . . . . . . 30
SECTION 3.3.2 Agent's Fees. . . . . . . . . . . . . 30
ARTICLE 4
CERTAIN EURODOLLAR AND OTHER LOAN PROVISIONS . . . . . . . . . 30
SECTION 4.1 Increased Cost . . . . . . . . . . . . . . . 30
SECTION 4.2 Deposits Unavailable or Interest Rate
Unascertainable or Inadequate;
Impracticability. . . . . . . . . . . . . 31
SECTION 4.3 Changes in Law Rendering Eurodollar Loans
Unlawful. . . . . . . . . . . . . . . . . 32
SECTION 4.4 Discretion of the Lenders as to Manner of
Funding . . . . . . . . . . . . . . . . . 33
SECTION 4.5 Funding Losses . . . . . . . . . . . . . . . 33
<PAGE> 3
SECTION 4.6 Increased Capital Costs. . . . . . . . . . . 34
SECTION 4.7 Taxes. . . . . . . . . . . . . . . . . . . . 34
SECTION 4.8 Payments, Computations, etc. . . . . . . . . 36
SECTION 4.9 Sharing of Payments. . . . . . . . . . . . . 36
SECTION 4.10 Application of Certain Payments . . . . . . 37
SECTION 4.11 Setoff . . . . . . . . . . . . . . . . . . . 38
SECTION 4.12 Use of Proceeds . . . . . . . . . . . . . . 38
ARTICLE 5
CONDITIONS TO BORROWING . . . . . . . . . . . . . . . . . . . 39
SECTION 5.1 Initial Borrowing . . . . . . . . . . . . . 39
SECTION 5.1.1 Resolutions, etc. . . . . . . . . . 39
SECTION 5.1.2 Delivery of Notes . . . . . . . . . 39
SECTION 5.1.3 This Agreement . . . . . . . . . . . 39
SECTION 5.1.4 Opinions of Counsel . . . . . . . . 39
SECTION 5.1.5 Consents, etc. . . . . . . . . . . . 40
SECTION 5.1.6 Closing Fees, Expenses, etc. . . . . 40
SECTION 5.1.7 Forms from the Lenders . . . . . . . 40
SECTION 5.1.8 Process Agent . . . . . . . . . . . . 40
SECTION 5.1.9 Termination . . . . . . . . . . . . 40
SECTION 5.1.10 No Material Adverse Change . . . . . 40
SECTION 5.1.11 Compliance Certificate . . . . . . . 40
SECTION 5.1.12 Other Documents . . . . . . . . . . 40
SECTION 5.2 All Borrowings . . . . . . . . . . . . . . 40
SECTION 5.2.1 Compliance with Warranties, No Default,
etc. . . . . . . . . . . . . . . . . 40
SECTION 5.2.2 Borrowing Request or Bid Request . . 41
SECTION 5.2.3 Satisfactory Legal Form . . . . . . 42
ARTICLE 6
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 42
SECTION 6.1 Organization, etc. . . . . . . . . . . . . . 42
SECTION 6.2 Due Authorization, Non-Contravention, etc. . 42
SECTION 6.3 Government Approval, Regulation, etc. . . . 42
SECTION 6.4 Validity, etc. . . . . . . . . . . . . . . 43
SECTION 6.5 Financial Information . . . . . . . . . . . 43
SECTION 6.6 No Material Adverse Change; No Default . . . 43
SECTION 6.7 Litigation, Labor Controversies, etc.. . . . 44
SECTION 6.8 Subsidiaries . . . . . . . . . . . . . . . 44
SECTION 6.9 Ownership of Properties . . . . . . . . . . 44
SECTION 6.10 Taxes . . . . . . . . . . . . . . . . . . . 44
SECTION 6.11 Pension and Welfare Plans . . . . . . . . . 45
SECTION 6.12 Environmental Warranties . . . . . . . . . 45
SECTION 6.13 Regulations G, U and X . . . . . . . . . . 46
SECTION 6.14 Insurance . . . . . . . . . . . . . . . . . 46
SECTION 6.15 Indebtedness . . . . . . . . . . . . . . . 46
SECTION 6.16 Accuracy of Information . . . . . . . . . . 46
SECTION 6.17 Material Subsidiary . . . . . . . . . . . 46
<PAGE> 4
ARTICLE 7
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.1 Corporate Existence, etc. . . . . . . . . . 47
SECTION 7.2 Insurance . . . . . . . . . . . . . . . . . 47
SECTION 7.3 Taxes, Claims for Labor and Materials,
Compliance with Law . . . . . . . . . . . 47
SECTION 7.4 Maintenance, etc. . . . . . . . . . . . . . 48
SECTION 7.5 Nature of Business . . . . . . . . . . . . 48
SECTION 7.6 Interest Coverage Ratio . . . . . . . . . . 48
SECTION 7.7 Leverage Ratio . . . . . . . . . . . . . . 48
SECTION 7.8 Consolidated Shareholder's Equity . . . . . 48
SECTION 7.9 Confirmation of Senior Debt Rating . . . . 48
SECTION 7.10 Limitations on Indebtedness . . . . . . . . 49
SECTION 7.11 Liens and Negative Pledges . . . . . . . . 50
SECTION 7.11.1 Limitation on Liens . . . . . . . . 50
SECTION 7.11.2 Restrictive Agreements, etc. . . . 52
SECTION 7.12 Acquisitions . . . . . . . . . . . . . . . 52
SECTION 7.13 Mergers, Consolidations and
Sales of Assets . . . . . . . . . . . . . 52
SECTION 7.13.1 Mergers, Consolidations and
Dispositions . . . . . . . . . . . 52
SECTION 7.13.2 Issuance or Sale of Stock by
Subsidiaries . . . . . . . . . . . 54
SECTION 7.13.3 Sale of Stock in Subsidiaries . . . 54
SECTION 7.14 Guaranties . . . . . . . . . . . . . . . . 54
SECTION 7.15 Compliance with Applicable Law . . . . . . 55
SECTION 7.16 Transactions with Affiliates. . . . . . . . 55
SECTION 7.17 ERISA Compliance . . . . . . . . . . . . 55
SECTION 7.18 Reports and Rights of Inspection . . . . . 56
SECTION 7.19 Environmental Covenant . . . . . . . . . . 60
ARTICLE 8
EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.1 Listing of Events of Default.. . . . . . . . 60
SECTION 8.1.1 Non-Payment of Obligations. . . . . . 61
SECTION 8.1.2 Breach of Warranty. . . . . . . . . . 61
SECTION 8.1.3 Non-Performance of Covenants and
Obligations . . . . . . . . . . . . . 61
SECTION 8.1.4 Default on Other Indebtedness . . . 61
SECTION 8.1.5 Judgments . . . . . . . . . . . . . . 62
SECTION 8.1.6 Pension Plans . . . . . . . . . . . 62
SECTION 8.1.7 Bankruptcy, Insolvency, etc. . . . . 63
SECTION 8.1.8 Change of Control Event . . . . . . . 63
SECTION 8.1.9 Environmental Matters . . . . . . . . 64
SECTION 8.2 Action in Bankruptcy . . . . . . . . . . . . 64
SECTION 8.3 Action if Other Event of Default . . . . . 64
<PAGE> 5
ARTICLE 9
THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.1 Actions. . . . . . . . . . . . . . . . . . . 64
SECTION 9.2 Funding Reliance, etc. . . . . . . . . . . . 65
SECTION 9.3 Exculpation . . . . . . . . . . . . . . . . 66
SECTION 9.4 Successor . . . . . . . . . . . . . . . . . 66
SECTION 9.5 Loans by Scotiabank . . . . . . . . . . . . 66
SECTION 9.6 Credit Decisions . . . . . . . . . . . . . 67
SECTION 9.7 Copies, etc. . . . . . . . . . . . . . . . 67
ARTICLE 10
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . 67
SECTION 10.1 Waivers, Amendments, etc. . . . . . . . . 67
SECTION 10.2 Notices . . . . . . . . . . . . . . . . . 68
SECTION 10.3 Payment of Costs and Expenses . . . . . . 68
SECTION 10.4 Indemnification . . . . . . . . . . . . . 69
SECTION 10.5 Survival . . . . . . . . . . . . . . . . 70
SECTION 10.6 Severability . . . . . . . . . . . . . . . 70
SECTION 10.7 Headings . . . . . . . . . . . . . . . . . 70
SECTION 10.8 Execution in Counterparts, Effectiveness,
etc. . . . . . . . . . . . . . . . . . . 70
SECTION 10.9 Governing Law; Entire Agreement . . . . . 70
SECTION 10.10 Successors and Assigns . . . . . . . . . . 71
SECTION 10.11 Sale and Transfer of Loans;
Participations in Loans . . . . . . . . . 71
SECTION 10.11.1 Assignments . . . . . . . . . . . 71
SECTION 10.11.2 Participations . . . . . . . . . . 72
SECTION 10.12 Confidentiality . . . . . . . . . . . . . 73
SECTION 10.13 Other Transactions . . . . . . . . . . . 74
SECTION 10.14 CHOICE OF FORUM; CONSENT TO SERVICE OF
PROCESS AND JURISDICTION . . . . . . . . 74
SECTION 10.15 WAIVER OF JURY TRIAL . . . . . . . . . . 75
SECTION 10.16 Process Agent. . . . . . . . . . . . . . . 75
</TABLE>
<PAGE> 6
SCHEDULE I - Commitments, Addresses and Telephone and Facsimile
Numbers
EXHIBIT A-1 - Form of Committed Note
EXHIBIT A-2 - Form of Bid Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Continuation/Conversion Notice
EXHIBIT B-3 - Form of Bid Request
EXHIBIT B-4 - Form of Invitation for Competitive Bid Quotes
EXHIBIT C-1 - Form of Bid
EXHIBIT C-2 - Form of Bid Rate Loan Acknowledgment
EXHIBIT C-3 - Form of Bid Rate Loan Confirmation
EXHIBIT D - Form of Certificate of Kellwood Company
EXHIBIT E - Forms of Opinions of Counsel to the Company
EXHIBIT F - Form of Opinion of Counsel to the Agent
EXHIBIT G - Schedule of Litigation
EXHIBIT H - Schedule of Subsidiaries
EXHIBIT I - Schedule of Tax Matters
EXHIBIT J - Schedule of Plans
EXHIBIT K - Schedule of Environmental Matters
EXHIBIT L - Schedule of Indebtedness
EXHIBIT M - Intentionally Omitted
EXHIBIT N - Schedule of Existing Liens
EXHIBIT O - Form of Annual Consolidating Summary
EXHIBIT P - Form of Lender Assignment Agreement
EXHIBIT Q - Form of Confidentiality Letter
<PAGE> 7
LONG-TERM CREDIT AGREEMENT
THIS LONG-TERM CREDIT AGREEMENT, dated as of June 24, 1994
(as amended, supplemented, restated or otherwise modified from
time to time, this "Agreement"), is by and among KELLWOOD
---------
COMPANY, a Delaware corporation (the "Company"), the various
-------
financial institutions as are or may become parties hereto
(collectively, the "Lenders", and, individually, a "Lender"), and
------- ------
THE BANK OF NOVA SCOTIA, a Canadian chartered bank
("Scotiabank"), as agent (in such capacity, the "Agent") for the
---------- -----
Lenders.
W I T N E S S E T H:
WHEREAS, the Company has requested the Lenders to make
loans to the Company and the Lenders have agreed to extend a
long-term revolving credit facility to the Company upon the terms
and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Defined Terms. The following terms (whether
-------------
or not underscored) when used in this Agreement, including its
preamble and recitals, shall, except where the context otherwise
requires, have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):
"Acquiring Person" is defined in "Change of Control Event."
---------------- -----------------------
"Affiliate" means any Person (other than a Subsidiary) (i)
---------
which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with,
the Company, (ii) which beneficially owns or holds 15% or more of
any class of the Voting Stock of the Company, or (iii) 15% or
more of the Voting Stock (or in the case of a Person which is not
a corporation, 15% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The
term "control" means the possession, directly or indirectly, of
-------
the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of Voting
Stock, by contract or otherwise.
"Agent" is defined in the preamble and includes each other
----- --------
Person as shall have subsequently been appointed as the successor
Agent pursuant to Section 9.4.
-----------
<PAGE> 8
"Agent Fee Letter" means those separate confidential fee
----------------
letter agreements, dated March 25, 1994 and May 26, 1994,
respectively, between the Company and Scotiabank, as the same may
be amended, modified or supplemented from time to time, together
with any substitutions therefor or replacements thereof.
"Aggregate Outstanding Loans" means, as at any date of
---------------------------
determination thereof and without duplication, the sum of (a) the
aggregate principal amount of all outstanding Committed Loans
plus (b) the aggregate principal amount of all outstanding Bid
- - ----
Rate Loans.
"Agreement" is defined in the preamble.
--------- --------
"Alternate Base Rate" means, on any date and with respect
-------------------
to all Base Rate Loans, a fluctuating rate of interest per annum
--- -----
equal to the higher of
(a) the rate of interest most recently announced by
Scotiabank at Atlanta, Georgia as its base rate; or
(b) the Federal Funds Effective Rate most recently
determined by the Agent plus 0.50%.
----
The Alternate Base Rate is not necessarily intended to be the
lowest rate of interest determined by Scotiabank in connection
with extensions of credit. Changes in the rate of interest
determined by reference to the Alternate Base Rate will take
effect simultaneously with each change in the Alternate Base
Rate. The Agent will give notice promptly to the Company and the
Lenders of changes in the Alternate Base Rate; provided that the
--------
failure to so notify shall not affect the Alternate Base Rate.
"Anniversary Date" means each June 24, or the next Business
----------------
Day if such day is not a Business Day, in each year during the
term of this Agreement.
<TABLE>
"Applicable Eurodollar Margin" and "Applicable Facility Fee
---------------------------- -----------------------
Percentage", respectively mean, during any Pricing Period, the
- - ----------
amount set forth below for such Applicable Eurodollar Margin or
Applicable Facility Fee Percentage, as the case may be, depending
upon the Leverage Ratio as of the last day of the fiscal quarter
most recently ended prior to the first day of such Pricing
Period:
<CAPTION>
Applicable
Applicable Facility
Leverage Eurodollar Fee
Ratio Margin Percentage
----- ---------- ----------
<S> <C> <C>
Less than or equal
to 0.25 to 1.00 0.225% 0.125%
-2-
<PAGE> 9
Greater than 0.25 to
1.00, but less than
or equal to 0.35 to 1.00 0.275% 0.150%
Greater than 0.35 to
to 1.00, but less than
or equal to .50 to 1.00 0.300% 0.175%
Greater than .50 to 1.00 0.350% 0.250%
</TABLE>
; provided that, if and only for so long as the Company is in
--------
default of its obligation to deliver (which delivery may be by
facsimile transmission) a compliance certificate under Section
-------
7.18(h), the Applicable Eurodollar Margin shall be 1.00% and the
- - -------
Applicable Commitment Fee Percentage shall be 0.350%,
respectively; and provided, further, that notwithstanding
-------- -------
anything contained herein to the contrary, if and for each day
that the Company receives a senior unsecured non-credit enhanced
long-term debt rating (a "Senior Debt Rating") from a Rating
------------------
Agency, the Applicable Eurodollar Margin and the Applicable
Facility Fee Percentage, respectively, for such day shall be the
amount set forth below for such Applicable Eurodollar Margin and
Applicable Fee Percentage, as the case may be, depending on the
Senior Debt Rating of the Company for such day:
<TABLE>
<CAPTION>
Applicable
Applicable Facility
Senior Debt Eurodollar Fee
Rating Margin Percentage
------ ---------- ----------
<S> <C> <C>
Greater than or equal 0.225% 0.125%
to either A- or A3
Greater than or equal 0.275% 0.150%
to either BBB+ or Baa1
Greater than or equal 0.300% 0.175%
to either BBB or Baa2
Less than BBB and Baa2 0.350% 0.250%
</TABLE>
If the Company receives a Senior Debt Rating from more than
one Rating Agency, the lowest Senior Debt Rating received by the
Company shall be used to determine each of the Applicable
Eurodollar Margin and the Applicable Facility Fee Percentage.
The Company shall immediately notify the Agent of a change in the
Senior Debt Rating. Any change in the Applicable Eurodollar
Margin or the Applicable Facility Fee Percentage resulting from a
change in the Senior Debt Rating shall be effective as of the
opening of business on the day on which such change in the Senior
Debt Rating becomes effective.
"Assignee Lender" is defined in Section 10.11.1.
--------------- ---------------
-3-
<PAGE> 10
"Base Rate Loan" means a Committed Loan bearing interest at
--------------
a rate determined by reference to the Alternate Base Rate.
"Bid" means one or more offers by a Lender to make one or
---
more Bid Rate Loans, submitted to the Agent no later than the
relevant Submission Deadline on a duly completed and executed
form substantially similar to Exhibit C-1, personally delivered
-----------
or transmitted by telecopy to the Agent.
"Bid Notes" and "Bid Note" respectively mean (a) the
--------- --------
promissory notes of the Lender, substantially in the form of
Exhibit A-2, duly completed, evidencing Bid Rate Loans made to
- - -----------
the Company by a Lender, and (b) a single such promissory note.
"Bid Rate" means, relative to any Bid Rate Loan of any
--------
Lender, the fixed rate of interest (expressed to the nearest
1/10,000 of 1%), in each case offered by such Lender in its Bid
offering to make such Bid Rate Loan and, if the context so
requires, accepted by the Company.
"Bid Rate Loan" is defined in Section 2.1(b).
------------- --------------
"Bid Rate Loan Acknowledgment" means an acknowledgment, duly
----------------------------
executed by an authorized officer of the Company, of the
Company's acceptance of a Bid, substantially in the form of
Exhibit C-2.
- - -----------
"Bid Rate Loan Confirmation" means a notice by the Agent to
--------------------------
each Lender of a Borrowing of Bid Rate Loans, substantially in
the form of Exhibit C-3.
-----------
"Bid Request" means a request by the Company for Bids,
-----------
submitted to the Agent by telephone no later than the time
specified in Section 2.6(a), promptly confirmed in writing on the
--------------
same day on a duly completed and executed form substantially
similar to Exhibit B-3, and personally delivered or transmitted
-----------
by telecopy to the Agent.
"Borrowing" means a borrowing by the Company from the
---------
Lenders (or any of them) pursuant to Section 2.1(a) or 2.1(b).
-------------- ------
"Borrowing Request" means a loan request and certificate
-----------------
duly executed by an authorized officer of the Company,
substantially in the form of Exhibit B-1 hereto and delivered
pursuant to Section 2.4. -----------
-----------
"Business Day" means any day which is neither a Saturday or
------------
Sunday nor a legal holiday on which banks are authorized or
required to be closed in Atlanta, Georgia, New York, New York, or
Chicago, Illinois and, relative to the making, continuing,
prepaying or repaying of any Eurodollar Loans, any day on which
dealings are carried on in the London interbank eurodollar
market.
-4-
<PAGE> 11
"Capital Expenditures" means, with respect to any Person,
--------------------
for any period the aggregate of all expenditures incurred by such
Person during such period on a consolidated basis (whether or not
paid in cash and including that portion of Capitalized Leases
which is capitalized on the consolidated balance sheet of such
Person during such period) which expenditures are required to be
included in, or reflected by, the property, plant or equipment or
similar fixed asset accounts on the balance sheet of such Person
prepared in accordance with GAAP.
"Capitalized Lease" means any lease the obligation for
-----------------
Rentals with respect to which is required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Capitalized Rentals" means as of the date of any
-------------------
determination the amount at which the aggregate Rentals due and
to become due under all Capitalized Leases under which the
Company or any Subsidiary is a lessee would be reflected as a
liability on a consolidated balance sheet of the Company and its
Subsidiaries.
"CERCLA" means the Comprehensive Environmental Response,
------
Compensation and Liability Act of 1980, as amended.
"Change of Control Event" means the earlier to occur of
-----------------------
(a) the date of a public announcement that a Person or group of
affiliated or associated Persons (an "Acquiring Person") has
----------------
acquired, or has obtained the right to acquire, legal or
beneficial ownership of 50% or more of the Voting Stock of the
Company, (b) the date an Acquiring Person acquires all or
substantially all of the assets of the Company (for purposes
hereof, the term "Acquiring Person" shall not include the
Company, any of its Subsidiaries or any employee benefit plan (or
related trust), sponsored or maintained by the Company or any of
its Subsidiaries) or (c) on the date on which a majority of the
board of directors of the Company shall consist of Persons other
than Continuing Directors (for purposes of this definition,
"Continuing Director" means any member of the board of directors
-------------------
of the Company on the date hereof and any other member of the
board of directors of the Company who shall be nominated or
elected to succeed a Continuing Director by at least a majority
of the Continuing Directors who are then members of the board of
directors of the Company).
"Code" means the Internal Revenue Code of 1986, as amended,
----
and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to
time. References to sections of the Code also include any
successor sections.
"Commitment" means, relative to any Lender, the amount of
----------
such Lender's obligation to make Committed Loans pursuant to
Section 2.1(a) as set forth on Schedule I, as amended from time
- - -------------- ----------
-5-
<PAGE> 12
to time, or as set forth in the applicable Lender Assignment
Agreement executed and delivered pursuant to Section 10.11,
-------------
reduced by the amount of any permanent reduction(s) in such
amount pursuant to this Agreement.
"Commitment Amount" means, on any date, $70,000,000, as such
-----------------
amount may be reduced from time to time pursuant to Section 2.2.
-----------
"Commitment Termination Date" means the earliest of
---------------------------
(a) the Stated Maturity Date;
(b) the date on which the Commitment Amount is
terminated in full or reduced to zero pursuant to Section
2.2; and -------
---
(c) the date on which any Commitment Termination Event
occurs.
"Commitment Termination Event" means
----------------------------
(a) the occurrence of any Default described in clauses
(a) through (d) of Section 8.1.7; or -------
--- --- -------------
(b) the occurrence and continuance of any other Event
of Default and the declaration of the Loans to be due and
payable and the Commitments to be terminated pursuant to
Section 8.3.
-----------
"Committed Loans" is defined in Section 2.1(a).
--------------- --------------
"Committed Notes" and "Committed Note" respectively mean
--------------- --------------
(a) the promissory notes of the Company, substantially in the
form of Exhibit A-1, duly completed, evidencing Committed Loans
-----------
made to the Company by a Lender, and (b) a single such promissory
note.
"Company" is defined in the preamble.
------- --------
"Consolidated Debt" means, as of the date of any
-----------------
determination thereof and without duplication, (a) all
"Indebtedness" of the Company and its Subsidiaries described in
clauses (i), (ii), (iii), (iv) and (vi) of the definition of such
- - ------- --- ---- ----- ---- ----
term, and (b) Guaranties of Indebtedness of other Persons, except
Subsidiaries.
"Consolidated Net Income" for any period means the sum of
-----------------------
(i) any cash consideration received with respect to sales of
export quota rights and (ii) gross revenues of the Company and
its Subsidiaries for such period less all expenses and other
----
proper charges (including taxes on income), determined on a
consolidated basis in accordance with GAAP consistently applied
and after eliminating earnings or losses attributable to
-6-
<PAGE> 13
outstanding Minority Interests. The following items shall not be
included in the computation of Consolidated Net Income:
(a) any gains or losses on the sale or other
disposition of investments or fixed or capital assets (other
than sales or other dispositions, in addition to sales of
export quota rights included pursuant to clause (i) above,
----------
which do not (x) in any one case, result in a gain or loss
in excess of $100,000 or (y) when aggregated with all other
such sales or dispositions made in the same fiscal year of
the Company, result in an aggregate gain or loss in excess
of $300,000), and any taxes on such excluded gains and any
tax deductions or credits on account of any such excluded
losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary accrued
prior to the date it became a Subsidiary;
(d) net earnings and losses of any corporation (other
than a Subsidiary), substantially all the assets of which
have been acquired in any manner, realized by such other
corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other
than a Subsidiary) with which the Company or a Subsidiary
shall have consolidated or which shall have merged into or
with the Company or a Subsidiary prior to the date of such
consolidation or merger;
(f) net earnings of any business entity (other than a
Subsidiary) in which the Company or any Subsidiary has an
ownership interest unless such net earnings shall have
actually been received by the Company or such Subsidiary in
the form of cash distributions;
(g) any portion of the net earnings of any Subsidiary
which for any reason is unavailable for payment of dividends
to the Company or any other Subsidiary;
(h) earnings resulting from any reappraisal,
revaluation or write-up of assets;
(i) any deferred or other credit representing any
excess of the equity in any Subsidiary at the date of
acquisition thereof over the amount invested in such
Subsidiary;
(j) any gain arising from the acquisition, retirement
or disposition of any Securities of the Company or any
Subsidiary; and
-7-
<PAGE> 14
(k) any reversal of any contingency reserve, except to
the extent that provision for such contingency reserve shall
have been made from income arising during such period.
"Consolidated Net Tangible Assets" means, as of the date of
--------------------------------
any determination thereof, the total amount of all assets of the
Company and its Subsidiaries (less depreciation, depletion and
other properly deductible valuation reserves) after deducting,
without duplication, the sum of: (i) goodwill, patents, trade
names, trademarks, copyrights, franchises, experimental expense,
organization expense, unamortized debt discount and expense, the
excess of cost of shares acquired over book value of related
assets and such other assets as are properly classified as
"intangible assets" in accordance with GAAP; and (ii) all
deferred assets and prepaid expenses, including period insurance
and prepaid taxes, determined in accordance with GAAP.
"Consolidated Shareholder's Equity" means, as of the date of
---------------------------------
any determination thereof, the amount that would be reflected as
shareholders' equity upon a consolidated balance sheet of the
Company and its Subsidiaries determined in accordance with GAAP.
"Continuation/Conversion Notice" means a notice of
------------------------------
continuation or conversion and certificate duly executed by an
authorized officer of the Company, substantially in the form of
Exhibit B-2 hereto.
- - -----------
"Continuing Director" is defined in "Change of Control
------------------- -----------------
Event."
- - -----
"Controlled Group" means all members of a controlled group
----------------
of corporations and all members of a controlled group of trades
or businesses (whether or not incorporated) under common control
which, together with the Company, are treated as a single
employer under Section 414(b) or 414(c) of the Code or Section
4001 of ERISA.
"Default" means any Event of Default or any Unmatured Event
-------
of Default.
"Default Rate" is defined in Section 3.2.2.
------------ -------------
"Depreciation" means, with respect to any period, the total
------------
amounts added to depreciation, obsolescence, amortization,
valuation and other proper reserves during such period, as
reflected in the consolidated balance sheet of the Company and
its Subsidiaries in order to provide a reasonable method for
systematically allocating the cost of the depreciable asset over
its estimated useful life in accordance with GAAP.
"Dollar" and the sign "$" mean lawful money of the United
------ -
States.
-8-
<PAGE> 15
"Effective Date" means June 24, 1994.
--------------
"Environmental Laws" means all applicable federal, state or
------------------
local statutes, laws, ordinances, codes, rules and regulations
(including consent decrees and administrative orders to which the
Company or any Subsidiary is a party) relating to public health
and safety and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in
effect from time to time. References to sections of ERISA also
include any successor sections.
"Eurocurrency Reserve Requirement" means, with respect to
--------------------------------
any Eurodollar Loan for any Interest Period, a percentage equal
to the daily average during such Interest Period of the
percentages in effect on each day of such Interest Period, as
prescribed by the F.R.S. Board, for determining the aggregate
maximum reserve requirements (including all basic, supplemental,
marginal and other reserves) applicable to "Eurocurrency
liabilities" pursuant to Regulation D or any other then
applicable regulation of the F.R.S. Board which prescribes
reserve requirements applicable to "Eurocurrency liabilities," as
defined in Regulation D. Without limiting the effect of the
foregoing, the Eurocurrency Reserve Requirement shall reflect any
other reserves required to be maintained by Scotiabank against
(i) any category of liabilities that includes deposits by
reference to which the Eurodollar Rate (Adjusted) is to be
determined, or (ii) any category of extensions of credit or other
assets that includes Eurodollar Loans. For purposes of this
Agreement, any Eurodollar Loans hereunder shall be deemed to be
funded with the proceeds of "Eurocurrency liabilities," as
defined in Regulation D, and, as such, shall be deemed to be
subject to such reserve requirements without the benefit of, or
credit for, proration, exceptions or offsets which may be
available to Scotiabank from time to time under Regulation D.
"Eurodollar Loan" means a Committed Loan bearing interest at
---------------
a rate determined by reference to the Eurodollar Rate (Adjusted).
"Eurodollar Office" means, relative to any Lender, the
-----------------
office of such Lender designated from time to time by such Lender
as the office which shall be making or maintaining the Eurodollar
Loans of such Lender hereunder or through which such Lender will
be determining the Eurodollar Rate. A Lender's Eurodollar Office
may be, at such Lender's option, either a domestic office or a
foreign office.
"Eurodollar Rate" means, with respect to each Interest
---------------
Period for a Eurodollar Loan, the rate per annum at which Dollar
--- -----
deposits in immediately available funds are offered to Scotiabank
two Business Days prior to the beginning of such Interest Period
-9-
<PAGE> 16
by major banks in the London interbank eurodollar market at or
about 11:00 a.m., London time, for delivery on the first day of
such Interest Period, for the number of days comprised therein
and in an amount equal to the amount of the Eurodollar Loan of
Scotiabank to be outstanding during such Interest Period.
"Eurodollar Rate (Adjusted)" means, with respect to each
--------------------------
Interest Period for a Eurodollar Loan, a rate per annum (rounded
--- -----
upward, if necessary, to the nearest 1/100 of 1%) determined
pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
(Adjusted) -------------------------
1-Eurocurrency Reserve
Requirement
"Event of Default" is defined in Section 8.1.
---------------- -----------
"Existing Agreement" means that certain Credit Agreement
------------------
dated as of July 1, 1991, as amended or otherwise modified from
time to time prior to the date hereof, among the Company, certain
commercial lending institutions party thereto and Continental
Bank N.A., as agent.
"Facility Fee" is defined in Section 3.3.1.
------------ -------------
"FDIC" means the Federal Deposit Insurance Corporation, and
----
its successors and assigns.
"Federal Funds Effective Rate" means, for any day, an
----------------------------
interest 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, as
published for such day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Scotiabank from three Federal funds
brokers of recognized standing selected by it.
"F.R.S. Board" means the Board of Governors of the Federal
------------
Reserve System or any successor thereto.
"GAAP" is defined in Section 1.4.
---- -----------
"Guaranties" by any Person means all obligations (other than
----------
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person
guaranteeing, or in effect guaranteeing, any Indebtedness,
dividend or other obligation, of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any property or
assets constituting security therefor, (ii) to advance or supply
-10-
<PAGE> 17
funds (y) for the purchase or payment of such Indebtedness or
obligation, or (z) to maintain working capital or other balance
sheet condition or fixed charge coverage or otherwise to advance
or make available funds for the purchase or payment of such
Indebtedness or obligation, (iii) to lease property or to
purchase Securities or other property or services primarily for
the purpose of assuring the owner of such Indebtedness or
obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure
the owner of the Indebtedness or obligation of the primary
obligor against loss in respect thereof. For the purposes of all
the computations made under this Agreement, a Guaranty in respect
of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness
for borrowed money which has been guaranteed, and a Guaranty in
respect of any other obligation or liability or any dividend
shall be deemed to be Indebtedness equal to the maximum aggregate
amount of such obligation, liability or dividend.
"Hazardous Material" means
------------------
(a) any "hazardous substance," as defined by CERCLA;
(b) any "hazardous waste," as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance within
the meaning of any other applicable federal, state or local
law, regulation, ordinance or requirement (including consent
decrees and administrative orders to which the Company or
any Subsidiary is a party) relating to or imposing liability
or standards of conduct concerning any hazardous or toxic
waste, substance or material, all as amended or hereafter
amended.
"Impermissible Qualification" means, relative to the opinion
---------------------------
or certification of any independent public accountant as to any
financial statement, any qualification or exception to such
opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination
of matters relevant to such financial statement; or
(c) which relates to the treatment or classification
of any item in such financial statement and which, as a
condition to its removal, would require an adjustment to
such item the effect of which would be to cause the Company
-11-
<PAGE> 18
to be in default of any of its obligations under this
Agreement.
"Indebtedness" of any Person means, without duplication, all
------------
(i) obligations of such Person for borrowed money or which have
been incurred in connection with the acquisition of property or
assets or which are evidenced by bonds, notes, debentures or
other similar instruments, (ii) obligations secured by any lien
or other charge upon property or assets owned by such Person,
even though such Person has not assumed or become liable for the
payment of such obligations, (iii) obligations created or arising
under any conditional sale or other title retention agreement
with respect to property acquired by such Person, notwithstanding
the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited
to repossession or sale of property, (iv) Capitalized Rentals
payable by such Person under any Capitalized Lease, (v)
Guaranties of such Person and (vi) amounts of indebtedness which
represent recourse liabilities to such Person with respect to any
structured financing or off-balance sheet financing that would be
included on a balance sheet of such Person in accordance with
GAAP if such financing were characterized as Indebtedness rather
than a sale of assets.
"Indemnified Liabilities" is defined in Section 10.4.
----------------------- ------------
"Indemnified Parties" is defined in Section 10.4.
------------------- ------------
"Interest Charges" for any period means all interest and all
----------------
amortization of debt discount and expense on all Indebtedness of
the Company and its Subsidiaries. Computations of Interest
Charges on a pro forma basis for Indebtedness having a variable
interest rate shall be calculated at the rate in effect on the
date of any determination.
"Interest Coverage Ratio" means, as at any date of
-----------------------
determination, with respect to any period for the Company and its
Subsidiaries, the ratio of (a) Consolidated Net Income for the
previous twelve-month consecutive period ending as of the date of
determination plus (to the extent deducted in determining
----
Consolidated Net Income) Depreciation, Interest Charges, all
provisions for any federal, state or other income taxes and all
other non-cash charges made for the same period less Capital
----
Expenditures for the same period to (b) Interest Charges for the
same period.
"Interest Period" (a) with respect to any Eurodollar Loan,
---------------
means the period beginning on and including the date on which
such Loan is made or continued as or converted into a Eurodollar
Loan and ending one, two, three or six months thereafter as the
Company shall specify in the related notice pursuant to
Section 2.4 or 2.5, and (b) with respect to any Bid Rate Loan,
- - ----------- ---
means the period from the Borrowing date for such Bid Rate Loan
-12-
<PAGE> 19
and ending not less than seven (7) days nor more than one hundred
seventy-nine (179) days thereafter (which final day must be a
Business Day) as specified by the Company in the applicable Bid
Request; provided that:
--------
(A) if the Company does not specify any Interest
Period for any Eurodollar Loan in the related notice
pursuant to Section 2.4 or 2.5, such Interest Period shall
----------- ---
be the period starting on the Borrowing date or the last day
of the prior Interest Period, as the case may be, for such
Eurodollar Loan and ending one month thereafter;
(B) if an Interest Period for any Eurodollar Loan
would otherwise end on a day which is not a Business Day,
such Interest Period shall end on the next succeeding
Business Day (unless such next succeeding Business Day is
the first Business Day of a calendar month, in which case
such Interest Period shall end on the next preceding
Business Day);
(C) no Interest Period may end later than the Stated
Maturity Date; and
(D) in the case of an Interest Period for a Eurodollar
Loan, if there exists no day numerically corresponding to
the first day of such Interest Period in the month in which
the last day of such Interest Period would otherwise fall,
such Interest Period shall end on the last Business Day of
such month.
"Invitation for Competitive Bid Quotes" means a notice to
-------------------------------------
Lenders by the Agent inviting Bids, substantially in the form of
Exhibit B-4, completed and delivered pursuant to Section 2.6(a).
- - ----------- --------------
"Lender" and "Lenders" are defined in the preamble.
------ ------- --------
"Lender Assignment Agreement" means an Assignment and
---------------------------
Assumption Agreement substantially in the form of Exhibit P
hereto. ---------
"Leverage Ratio" means the ratio of (a) Consolidated Debt to
--------------
(b) the sum of (i) Consolidated Debt plus (ii) Consolidated
Shareholder's Equity. ----
"Lien" means any security interest, mortgage, pledge,
----
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property
to secure payment of a debt or performance of an obligation or
other priority or preferential arrangement of any kind or nature
whatsoever.
"Loans" and "Loan" respectively mean (a) all loans
----- ----
(including Committed Loans and Bid Rate Loans) made by the
-13-
<PAGE> 20
Lenders or a single Lender (as the context requires) to the
Company pursuant to Article 2, and (b) a single such Committed or
---------
Bid Rate Loan made by any Lender.
"Loan Document" means this Agreement, the Notes, the Agent
-------------
Fee Letter and each other relevant agreement, document or
instrument delivered in connection with this Agreement, the Notes
and the Agent Fee Letter.
"Material Compliance" means compliance to the extent that
-------------------
any non-compliance does not have a material adverse effect on the
financial condition, operations, assets, business, properties or
prospects of the Company and its Subsidiaries taken as a whole or
the ability of the Company to pay or perform any of the
Obligations or the enforceability of any of the Loan Documents.
"Material Subsidiary" means (i) American Recreation
-------------------
Products, Inc., a Delaware corporation; 2426-4152 Quebec, Inc., a
corporation formed under the laws of Quebec, Canada; Canadian
Recreation Products, Inc., a corporation formed under the laws of
Quebec, Canada; California Ivy, Inc., a California corporation;
KWD Holdings, Inc., a Delaware corporation; Kellwood Asia
Limited, a corporation formed under the laws of Hong Kong; Smart
Shirts, Limited, a corporation formed under the laws of Hong
Kong; Smart Shirts Manufacturers, Limited, a corporation formed
under the laws of Hong Kong; Keeta Company Limited, a corporation
formed under the laws of Hong Kong; South Asia Garments Limited,
a corporation formed under the laws of Hong Kong; Wing Chiap
Company, Limited, a corporation formed under the laws of Hong
Kong; RSDB Sports Wear, Inc., a Delaware corporation; Tri-W
Corporation, a North Carolina corporation and Sierra Designs
Acquisition Corporation, a Delaware corporation; (ii) any
Subsidiary that the Company designates as a "Material Subsidiary"
by updating Exhibit H hereto in a written notice delivered (which
---------
may be by facsimile transmission) to the Agent from time to time;
and (iii) any Subsidiary which is acquired or created or party to
a merger or some other corporate reorganization or otherwise
acquires all or substantially all of the assets of another Person
following the Effective Date and meets any of the following
conditions:
(a) the assets of such Subsidiary (valued at the
greater of book or fair market) as at the end of the
immediately preceding fiscal year exceed $1,000,000; or
(b) the aggregate sum of all assets (valued at the
greater of book or fair market) of such Subsidiary, when
combined with the assets of all other Subsidiaries to which
clauses (a) through (d) of Section 8.1.7 would have applied
----------- --- -------------
if not for the limitations set forth in this definition
during the 3-year period immediately preceding the date of
such determination, exceeds $1,000,000; or
-14-
<PAGE> 21
(c) the sum of the portion of Consolidated Net Income
of the Company and its Subsidiaries which were contributed
by such Subsidiary during the immediately preceding fiscal
year exceeds $1,000,000.
"Maximum Offer" is defined in Section 2.6(b).
------------- --------------
"Maximum Request" is defined in Section 2.6(a).
--------------- --------------
"Minority Interests" means any shares of stock of any class
------------------
of a Subsidiary (other than directors' qualifying shares as
required by law) that are not owned by the Company and/or one or
more of its Subsidiaries. Minority Interests shall be valued by
valuing Minority Interests constituting preferred stock at the
voluntary or involuntary liquidating value of such preferred
stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and
surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the
foregoing method of valuing Minority Interests in preferred
stock.
"Notes" and "Note" respectively mean (a) the Bid Notes and
----- ----
the Committed Notes, and (b) a single such Note.
"Obligations" means all obligations (monetary or otherwise)
-----------
of the Company arising under or in connection with this
Agreement, the Notes and each other Loan Document.
"Participant" is defined in Section 10.11.2.
----------- ---------------
"PBGC" means the Pension Benefit Guaranty Corporation and
----
any entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan," as such term is
------------
defined in Section 3(2) of ERISA, which is subject to Title IV of
ERISA (other than a multiemployer plan as defined in Section
4001(a)(3) of ERISA), and to which the Company or any
corporation, trade or business that is, along with the Company, a
member of a Controlled Group, may have liability, including any
liability by reason of having been a substantial employer within
the meaning of Section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage
----------
set forth on Schedule I hereto, as amended from time to time, or
----------
set forth in the applicable Lender Assignment Agreement, as such
percentage may be adjusted from time to time pursuant to Lender
Assignment Agreement(s) executed by such Lender and its Assignee
Lender(s) and delivered pursuant to Section 10.11.
-------------
"Permits" is defined in Section 7.15.
------- ------------
-15-
<PAGE> 22
"Person" means any natural person, corporation, partnership,
------
firm, association, trust, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or other
capacity.
"Plan" means any Pension Plan or Welfare Plan.
----
"Portion" is defined in Section 2.6(b).
------- --------------
"Pricing Period" means the period commencing on the forty-
--------------
fifth day after the end of a fiscal quarter and ending on the
forty-fourth day after the end of the succeeding fiscal quarter.
"Process Agent" means The Prentice-Hall Corporation System,
-------------
Inc. or any successor thereto or, upon prior written notice to
the Agent, any other entity appointed by the Company to act as
its process agent; provided that part of the business of such
--------
other entity is to act as a process agent for other Persons.
"Pro Rata Distribution Event" is defined in Section 4.10(c).
--------------------------- ---------------
"Purchasing Lender" is defined in Section 2.3(b).
----------------- --------------
"Quarterly Payment Date" means the last day of each January,
----------------------
April, July and October or, if any such day is not a Business
Day, the next succeeding Business Day.
"Rating Agency" means Standard & Poor's Ratings Group, Inc.,
-------------
Moody's Investors Services, Inc. or Duff & Phelps, as the case
may be, provided that a Senior Debt Rating from Duff & Phelps
--------
shall only be effective for purposes of determining the
Applicable Eurodollar Margin and the Applicable Facility Fee
Percentage at a time when the Company has also concurrently
received a Senior Debt Rating from another Rating Agency.
"Release" means a "release", as such term is defined in
-------
CERCLA.
"Rentals" means and includes all fixed rents (including as
-------
such all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the property)
payable by the Company or a Subsidiary, as lessee or sublessee
under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Company or a
Subsidiary (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and
similar charges. Fixed rents under any so-called "percentage
leases" shall be computed solely on the basis of the minimum
rents, if any, required to be paid by the lessee regardless of
sales volume or gross revenues.
"Required Lenders" means, at any time, Lenders holding at
----------------
least 66-2/3% of the Commitments; provided that after the
--------
-16-
<PAGE> 23
Commitments shall have been irrevocably terminated, "Required
--------
Lenders" shall mean Lenders holding at least 66-2/3% of all
- - -------
outstanding Loans.
"Resource Conservation and Recovery Act" means the Resource
--------------------------------------
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
as amended. -------
"Responsible Officer" means the President, Chief Executive
-------------------
Officer, Executive Vice President-Administration, Vice President-
Controller, Vice President-Treasurer or General Counsel of the
Company.
"Scotiabank" is defined in the preamble.
---------- --------
"Security" has the same meaning as in Section 2(1) of the
--------
Securities Act of 1933, as amended.
"Senior Debt Rating" is defined in "Applicable Eurodollar
------------------ ---------------------
Margin".
- - ------
"Stated Maturity Date" means June 24, 1997, or such
--------------------
anniversary thereof (or the next Business Day if such day is not
a Business Day) to which the Stated Maturity Date shall be
extended pursuant to Section 2.3.
-----------
"Submission Deadline" is defined in Section 2.6(b).
------------------- --------------
"Subsidiary" means any corporation, partnership,
----------
association, limited liability company, or other business entity
of which 50% or more of the Voting Stock is at the time directly
or indirectly owned by the Company, by the Company and one or
more other Subsidiaries, or by one or more other Subsidiaries.
"Taxes" is defined in Section 4.7.
----- -----------
"Terminating Lender" means any Lender that has given or is
------------------
deemed to have given a Termination Notice.
"Termination Notice" means a notice by a Lender to the Agent
------------------
and the Company in writing pursuant to Section 2.3 that such
-----------
Lender does not desire to extend the Stated Maturity Date;
provided that any Lender that fails to respond to a request by
- - --------
the Company to extend the Stated Maturity Date within the
applicable response time shall be deemed to have given a
Termination Notice to the Company and the Agent.
"Type" means, relative to any Committed Loan, the portion
----
thereof, if any, being maintained as a Base Rate Loan or a
Eurodollar Loan.
-17-
<PAGE> 24
"Unmatured Event of Default" means any condition, occurrence
--------------------------
or event which, after notice or lapse of time or both, would
constitute an Event of Default.
"Voting Stock" means Securities of any class or classes the
------------
holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
"Welfare Plan" means a "welfare plan", as such term is
------------
defined in Section 3(1) of ERISA.
"Wholly-owned" when used in connection with any Subsidiary
------------
means a Subsidiary of which all of the issued and outstanding
shares of stock (except shares required as directors' qualifying
shares) shall be owned by the Company and/or one or more of its
Wholly-owned Subsidiaries.
SECTION 1.2 Use of Defined Terms. Unless otherwise defined
--------------------
or the context otherwise requires, terms for which meanings are
provided in this Agreement shall have such meanings when used in
the Notes and each Borrowing Request, Continuation/Conversion
Notice, Loan Document, notice and other communication delivered
from time to time in connection with this Agreement or any other
Loan Document.
SECTION 1.3 Cross-References. Unless otherwise specified,
----------------
references in this Agreement and in each other Loan Document to
any Article or Section are references to such Article or Section
of this Agreement or such other Loan Document, as the case may
be, and, unless otherwise specified, references in any Article,
Section or definition to any clause are references to such clause
of such Article, Section or definition.
SECTION 1.4 Accounting and Financial Determinations.
---------------------------------------
Unless otherwise specified, all accounting terms used herein or
in any other Loan Document shall be interpreted, all accounting
determinations and computations hereunder or thereunder shall be
made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in accordance with,
those generally accepted accounting principles ("GAAP") applied
----
in the preparation of the financial statements referred to in
Section 6.5.
- - -----------
ARTICLE 2
COMMITMENTS, BORROWING PROCEDURES AND NOTES
2.1 Commitments.
-----------
(a) From time to time on any Business Day occurring
prior to the Commitment Termination Date, each Lender,
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<PAGE> 25
severally and for itself alone, agrees to make Loans
("Committed Loans") to the Company equal to the product of
---------------
(i) such Lender's Percentage and (ii) the aggregate amount
of the Borrowing of Committed Loans requested by the Company
to be made on such Business Day; provided that (x) the
--------
aggregate principal amount of all Committed Loans which any
Lender shall be committed to have outstanding shall not at
any time exceed such Lender's Commitment and (y) the
aggregate principal amount of all Committed Loans which the
Lenders shall be committed to have outstanding shall not at
any time exceed an amount which, when added (without
duplication) to the sum of all other Aggregate Outstanding
Loans on such day (after giving effect to the incurrence or
repayment of any Aggregate Outstanding Loans on such day),
would exceed the Commitment Amount. Within the foregoing
limits, and subject to the terms and conditions hereinafter
set forth, the Company may borrow, prepay and reborrow
Committed Loans.
(b) From time to time on any Business Day occurring
prior to the Commitment Termination Date, each Lender,
severally and for itself alone, on the terms and subject to
the conditions hereinafter set forth, hereby agrees to make
loans (the "Bid Rate Loans") to the Company in amounts equal
--------------
to such Lender's Bids which have been accepted as provided
in, and as more particularly described in, Section 2.6(c).
--------------
No Lender shall be obligated to make any Bid. The aggregate
principal amount of Bid Rate Loans which the Company may
request to be made on any Business Day shall not exceed an
amount which, when added (without duplication) to the sum of
all other Aggregate Outstanding Loans on such Business Day
(after giving effect to the incurrence or repayment of any
Aggregate Outstanding Loans on such day), would exceed the
Commitment Amount.
SECTION 2.2 Reduction or Termination of the Commitments.
-------------------------------------------
The Company shall have the right, at any time and from time to
time, to reduce permanently in part, or to terminate in whole,
without penalty or premium, the Commitment Amount, upon not less
than three (3) Business Days' prior notice (by telecopier, or by
telephone (confirmed in writing promptly thereafter)) received by
the Agent (which shall promptly advise each Lender thereof),
which notice shall designate the date (which shall be a Business
Day) of such reduction or termination and the amount of any
partial reduction of the Commitment Amount; provided that the
--------
Company may not reduce the Commitment Amount to an amount which
is less than the Aggregate Outstanding Loans on the effective
date specified in the Company's aforesaid notice. Any such
partial reduction or termination of the Commitment Amount shall
be in a minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof and shall reduce each Lender's
Commitment by an amount equal to the product of (a) such Lender's
Percentage and (b) the aggregate reduction in the Commitment
-19-
<PAGE> 26
Amount. Such partial reduction or termination of the Commitment
Amount shall be effective on the date specified in the Company's
aforesaid notice. The Company may only terminate the Commitment
Amount upon payment in full of all Aggregate Outstanding Loans
and all other Obligations.
SECTION 2.3 Extension of Stated Maturity Date.
---------------------------------
(a) Provided that no Default shall have occurred and
be continuing, and that all of the representations and
warranties contained in the Loan Documents are true and
correct in all material respects as of the date of such
request, at least sixty (60) but not more than ninety (90)
days before the first, second, third and, if the Stated
Maturity Date has been previously extended, fourth
Anniversary Date, the Company may provide the Agent with
written notice that it desires to extend the Stated Maturity
Date for an additional year; provided that the Stated
--------
Maturity Date may not extend beyond the fifth Anniversary
Date.
(b) Upon receipt of written notice requesting
extension of the Stated Maturity Date from the Company, the
Agent will promptly provide copies of such notice to the
Lenders. Each Lender shall notify (but in any event within
five (5) Business Days) the Agent of its consent to or
rejection of the extension of the Stated Maturity Date (by
telecopier, or by telephone (confirmed in writing promptly
thereafter) on or before thirty (30) days prior to the
applicable Anniversary Date. The failure of any Lender to
timely notify the Agent of its consent or rejection pursuant
to this clause (b) shall be deemed to be a rejection by such
----------
Lender of such extension request, and such Lender shall be a
Terminating Lender hereunder. Promptly after the applicable
response date, the Agent shall give each non-Terminating
Lender and the Company notice of its receipt (or deemed
receipt) or non-receipt of Termination Notices. If the
Agent has notified the Company of its receipt (or deemed
receipt) of any Termination Notices, the Company shall then
have the right to have the Terminating Lender's Commitment
and Committed Loans assigned to and assumed by (which right
shall expire one (1) Business Day prior to the applicable
Anniversary Date) one or more Assignee Lenders (which may be
non-Terminating Lenders) as purchasing banks under this
Agreement (in such capacity, each a "Purchasing Lender") to
-----------------
replace such Terminating Lender(s); provided that no
--------
Purchasing Lender may have a Commitment greater than the
then Commitment of the Lender (including its Affiliates)
which is then the Agent without the approval of such Lender.
(c) On any applicable Anniversary Date, if (i) the
aggregate amount of the Commitments which have not been the
subject of a Termination Notice given or deemed given
-20-
<PAGE> 27
pursuant to Section 2.3(b) plus the Commitments, if any, to
-------------- ----
be assumed by Purchasing Lender(s) equals at least 67% of
the Commitment Amount existing as of the date the Company
provided written notice to the Agent under Section 2.3(a),
--------------
(ii) no Default has occurred and is continuing on and as of
such date, and (iii) the representations and warranties
contained in the Loan Documents are true and correct in all
material respects on and as of such date, then the Agent
shall so notify the Company, and if the Company
affirmatively requests the Agent in writing (which may be by
facsimile) to extend the Stated Maturity Date, then the
following shall occur on such Anniversary Date: (1) the
Stated Maturity Date shall be automatically extended for one
year for all of the Lenders other than the Terminating
Lenders, (2) the Terminating Lender(s) (upon payment in full
of all of the Obligations owed to them on and as of such
date by the Company and/or the Purchasing Lenders) shall
cease to be Lenders hereunder, (3) the Purchasing Lenders
shall be Lenders hereunder and (4) the Commitment Amount
shall be automatically reduced by the amount, if any, that
the Commitment Amount exceeds the Commitments of the Lenders
(after giving effect to any Commitments to be assumed by
Purchasing Lender(s)); provided that the Aggregate
--------
Outstanding Loans shall not exceed the resulting Commitment
Amount. The transfer of Commitments and outstanding
Committed Loans from Terminating Lenders to Purchasing
Lenders shall take place as of the applicable Anniversary
Date, and pursuant to the execution, delivery, acceptance
and recording of a Lender Assignment Agreement in accordance
with the procedures set forth in Section 10.11.1; it being
--------------- --------
understood, however, that any Purchasing Lender that is also
---------- -------
a non-Terminating Lender shall not be required to pay any
processing or recordation fees to the Agent pursuant to such
Section 10.11.1.
---------------
(d) On any applicable Anniversary Date, if (i) the
aggregate amount of the Commitments which have not been the
subject of a Termination Notice given or deemed given
pursuant to Section 2.3(b) plus the Commitments, if any, to
-------------- ----
be assumed by Purchasing Lender(s) is less than 67% of the
Commitment Amount existing as of the date the Company
provided written notice to the Agent under Section 2.3(a),
--------------
(ii) a Default has occurred and is continuing on and as of
such date, (iii) the representations and warranties
contained in the Loan Documents are not true and correct in
all material respects on and as of such date, (iv) any
Terminating Lender shall not have been fully paid all of the
Obligations owed to it by the Company on and as of such
date, or (v) if the conditions contained in Section 2.3(c)
--------------
are satisfied, but the Company fails to affirmatively
request the Agent in writing (which may be by facsimile) to
extend the Stated Maturity Date for an additional year, then
the Stated Maturity Date shall not be so extended and,
-21-
<PAGE> 28
irrespective of whether a Lender has sent or has not sent a
Termination Notice as provided in Section 2.3(b), the Stated
--------------
Maturity Date of each Lender shall not be extended on such
Anniversary Date and no Purchasing Lender shall assume a
Commitment pursuant to this Section 2.3 and no Lender shall
be a Terminating Lender. -----------
(e) Each Terminating Lender shall have no further
rights or obligations or Commitment hereunder following the
date on which it is terminated as a Lender under this
Agreement as provided herein other than any rights or
obligations accruing on or prior to such date on which it is
terminated as a Lender under this Agreement as provided
herein.
SECTION 2.4 Committed Loans Borrowing Procedure. By
-----------------------------------
delivering a Borrowing Request to the Agent, the Company may from
time to time irrevocably request that a Borrowing of Committed
Loans be made in a minimum amount of $5,000,000 and an integral
multiple of $1,000,000 in excess thereof or in the unused amount
of the Commitments but shall not exceed an amount which, on the
proposed date of the Borrowing, when added (without duplication)
to the sum of all other Aggregate Outstanding Loans on such date
(after giving effect to the incurrence or repayment of any
Aggregate Outstanding Loans on such date) would exceed the
Commitment Amount. Such Borrowing Request, in the case of a
Borrowing of Base Rate Loans, shall be delivered to the Agent on
or before 11:00 a.m., Atlanta time, on a Business Day (which may
be the same day as the date requested for the Borrowing), and, in
the case of a Borrowing of Eurodollar Loans, shall be delivered
to the Agent on or before 11:00 a.m., Atlanta time, on a Business
Day that is at least three (3) but no more than five (5) Business
Days prior to the date requested for such Borrowing. On the
terms and subject to the conditions of this Agreement, each
Borrowing of Committed Loans shall be comprised of the Type of
Loans, and shall be made on the Business Day, specified in such
Borrowing Request. On or before 3:00 p.m., Atlanta time, in the
case of a Borrowing of Base Rate Loans, or on or before 12:00
noon, Atlanta time, in the case of a Borrowing of Eurodollar
Loans, on such Business Day each Lender shall deposit with the
Agent same day funds in an amount equal to the product of (i)
such Lender's Percentage and (ii) the amount of the requested
Borrowing. Such deposit will be made to an account which the
Agent shall specify from time to time by notice to the Lenders.
To the extent funds are received from the Lenders (subject to the
provisions of Section 2.8), the Agent shall make such funds
-----------
available to the Company by wire transfer to the accounts the
Company shall have specified in its Borrowing Request. No
Lender's obligation to make any Committed Loan shall be affected
by any other Lender's failure to make any Committed Loan. All
Borrowings, repayments and prepayments of Committed Loans shall,
except as otherwise required by Section 4.10(b) following the
---------------
occurrence of a Pro Rata Distribution Event, be made so that
-22-
<PAGE> 29
after giving effect thereto all Committed Loans shall be pro rata
among the Lenders according to their respective Percentages.
SECTION 2.5 Continuation and Conversion Elections. By
-------------------------------------
delivering a Continuation/Conversion Notice to the Agent on or
before 11:00 a.m., Atlanta time, on a Business Day, the Company
may from time to time irrevocably elect, on not less than three
(3) nor more than five (5) Business Days' notice, that all, or
any portion in an aggregate minimum amount of $5,000,000 and an
integral multiple of $1,000,000 in excess thereof, of any
Committed Loans be, in the case of Base Rate Loans, converted
into Eurodollar Loans or, in the case of Eurodollar Loans, be
converted into a Base Rate Loan or continued as a Eurodollar Loan
(in the absence of delivery of a Continuation/Conversion Notice
with respect to any Eurodollar Loan at least three (3) Business
Days but no more than five (5) Business Days before the last day
of the then current Interest Period with respect thereto, such
Eurodollar Loans shall, on such last day, automatically convert
to a Base Rate Loan); provided that (w) each such conversion or
--------
continuation shall be pro-rated among the applicable outstanding
Committed Loans of all Lenders, (x) no portion of the outstanding
principal amount of any Committed Loans may be continued as, or
be converted into, Eurodollar Loans less than one (1) month prior
to the Stated Maturity Date or when any Default has occurred and
is continuing, (y) any conversion into, or continuation of, any
Eurodollar Loans on a day other than the last day of the then
current Interest Period with respect thereto shall be subject to
the provisions of Section 4.5, and (z) after giving effect to any
-----------
continuation or conversion, the aggregate principal amount of any
Eurodollar Loans having a particular Interest Period shall be at
least $5,000,000 and an integral multiple of $1,000,000 in excess
thereof.
SECTION 2.6 Procedures with Respect to Bid Rate Loans.
-----------------------------------------
(a) The Company may make Bid Requests by 11:00 a.m.,
Atlanta time, at least two (2) Business Days prior to the
proposed date of Borrowing for one or more Bid Rate Loans.
Each Bid Request shall be given to the Agent (which shall
promptly on the same day give notice thereof to each Lender
by telecopy of an Invitation For Competitive Bid Quotes if
the Bid Request is not rejected pursuant to this Section),
-------
by telephone (confirmed in writing promptly on the same day
by the delivery of a Bid Request, signed by an authorized
officer of the Company), and shall specify (i) the proposed
date of Borrowing, which shall be a Business Day; provided
--------
that there shall be no more than five (5) Bid Requests in
any one calendar month, (ii) the aggregate amount of the
proposed Bid Rate Loans (the "Maximum Request") which shall
---------------
not (A) exceed an amount which, on the proposed date of
Borrowing, when added (without duplication) to the sum of
all other Aggregate Outstanding Loans on such date (after
giving effect to the incurrence or repayment of any
-23-
<PAGE> 30
Aggregate Outstanding Loans on such date) would exceed the
Commitment Amount, or (B) be less than $1,000,000 or, for
amounts in excess thereof, an integral multiple of $500,000,
(iii) the Interest Period(s) therefor, and (iv) if more than
one Interest Period is so specified, the principal amount
(not less than $1,000,000 or, for amounts in excess thereof,
an integral multiple of $500,000) allocable to each such
Interest Period. A Bid Request that does not conform
substantially to the form of Exhibit B-3 shall be rejected,
-----------
and the Agent shall promptly notify the Company of such
rejection.
(b) Each Lender in its sole discretion may (but is not
obligated to) submit a Bid or Bids to the Agent not later
than 10:00 a.m., Atlanta time (or, upon reasonable prior
notice to the Lenders, such other time as the Company and
Agent may agree), on the proposed date of the Borrowing
specified in such Bid Request (such 10:00 a.m. time (or
agreed other time) being herein called the "Submission
----------
Deadline"), by telecopy or in writing, and thereby
--------
irrevocably offer to make all or any part (any such part
referred to as a "Portion") of any Bid Rate Loan described
-------
in the relevant Bid Request at a Bid Rate specified therein
in an aggregate principal amount of $1,000,000 and, for
amounts in excess thereof, an integral multiple of $500,000;
provided that Bids submitted by the Agent may only be
--------
submitted if the Agent notifies the Company of the terms of
its Bid not later than fifteen (15) minutes prior to the
Submission Deadline. Multiple Bids may be delivered to the
Agent. The aggregate Portions of Bid Rate Loans for any or
all Interest Periods offered by a Lender in its Bid may
exceed the Maximum Request contained in the relevant Bid
Request; provided that each Bid shall set forth the maximum
--------
aggregate amount of the Bid Rate Loans offered thereby which
the Company may accept (the "Maximum Offer"), which Maximum
-------------
Offer shall not exceed the Maximum Request.
(c) The Agent shall promptly give notice by telephone
(promptly confirmed in writing) to the Company of all
complying Bids received by the Agent prior to the Submission
Deadline. The Company shall, in its sole discretion but
subject to Section 2.6(d), irrevocably accept or reject any
--------------
such complying Bid (or any Portion offered by such Bid) not
later than 11:00 a.m., Atlanta time, on the proposed
Borrowing date by notice to the Agent by telephone
(confirmed in writing in the form of a Bid Rate Loan
Acknowledgment promptly the same day). Promptly on the day
of the Submission Deadline, the Agent will give notice to
each Lender that submitted a Bid as to the extent, if any,
that such Lender's Bid has been accepted. If the Agent
fails to receive notice from the Company of its acceptance
or rejection of any Bids at or prior to 11:00 a.m., Atlanta
time, on such day, all such Bids shall be deemed to have
-24-
<PAGE> 31
been rejected by the Company, and the Agent will give to
each Lender which submitted a Bid notice of such rejection
by telephone on such day. In due course following the
acceptance of any Bid, the Agent shall notify each Lender
that submitted a Bid, in the form of a Bid Rate Loan
Confirmation, of the amount, maturity date and Bid Rate for
each Bid Rate Loan.
(d) If the Company accepts a Portion of a proposed Bid
Rate Loan for a single Interest Period at the Bid Rate
provided therefor in a Lender's Bid, such Portion shall be
in a principal amount of $1,000,000 (subject to such lesser
allocation as may be made pursuant to the provisions below
in this clause (d)) or, for amounts in excess thereof, in
----------
integral multiples of $500,000. The aggregate principal
amount of Bid Rate Loans accepted by the Company following
Bids responding to a Bid Request shall not exceed the
Maximum Request. The aggregate principal amount of Bid Rate
Loans accepted by the Company pursuant to a Lender's Bid
shall not exceed the Maximum Offer therein contained. If
the Company accepts any Bid Rate Loans or Portion offered in
any Bid, the Company must accept Bids (and Bid Rate Loans
and Portions thereby offered) based exclusively upon the
successively lowest Bid Rates within each Interest Period
and no other criteria. If two (2) or more Lenders submit
Bids with identical Bid Rates for the same Interest Period
and the Company accepts any thereof, the Company shall,
subject to the first three sentences of this clause (d),
----------
accept all such Bids as nearly as possible in proportion to
the amounts of such Lenders' respective Bids with identical
Bid Rates for such Interest Period; provided that if the
--------
amount of Bid Rate Loans to be so allocated is not
sufficient to enable each such Lender to make such Bid Rate
Loan (or Portions thereof) in an aggregate principal amount
of $1,000,000, or for amounts in excess thereof, an integral
multiple of $500,000, the Company shall round the Bid Rate
Loans (or Portions thereof) allocated to such Lender or
Lenders as the Company shall select as necessary to a
minimum of $500,000 and the nearest multiple of $100,000.
(e) Not later than 1:00 p.m., Atlanta time, on the
relevant Borrowing date, each Lender whose Bid was accepted
by the Company shall make available to the Agent at its head
office in Atlanta, Georgia, in immediately available funds,
the proceeds of such Lender's Bid Rate Loan(s). Promptly
upon receipt thereof by the Agent (subject to the provisions
of Section 2.8) and fulfillment (or, as provided herein,
-----------
waiver) of the conditions and against receipt of the
documents, if any, specified in Article 5 with respect to
---------
the relevant Borrowing, the Agent shall make available to
the Company (at an account with the Agent or elsewhere as
the Company may from time to time instruct the Agent in
writing) on the relevant Borrowing date the proceeds of such
-25-
<PAGE> 32
Borrowing, in immediately available funds. Each Borrowing
of Bid Rate Loans shall be on a Business Day.
SECTION 2.7 Funding. Each Lender may, if it so elects,
-------
fulfill its obligation to make, continue or convert Eurodollar
Loans hereunder by causing one of its foreign branches or
affiliates (or an international banking facility created by such
Lender) to make or maintain such Eurodollar Loan; provided that
--------
such Eurodollar Loan shall nonetheless be deemed to have been
made and to be held by such Lender, and the obligation of the
Company to repay such Eurodollar Loan shall nevertheless be to
such Lender for the account of such foreign branch, affiliate or
international banking facility.
SECTION 2.8 Availability of Funds. Unless the Company or a
---------------------
Lender, as the case may be, notifies the Agent prior to the date
on which it is scheduled to make payment to the Agent, that it
does not intend to make such payment, the Agent may assume that
such payment has been made. The Agent may, but shall not be
obligated to, make the amount of such payment available to the
intended recipient in reliance upon such assumption. If such
Lender or the Company, as the case may be, has not in fact made
such payment to the Agent, the recipient of such payment shall,
on demand by the Agent, repay to the Agent the amount so made
available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) if the recipient is a
--- -----
Lender, the Federal Funds Effective Rate for such day plus, if
----
such amount is not recovered within four (4) Business Days (and
commencing on such fourth Business Day), 1% per annum, or (ii) if
--- -----
the recipient is the Company, the applicable interest rate
otherwise payable by the Company in respect of such Loan (or at
the Default Rate if payment to the Company was not to be made in
respect of a Loan).
SECTION 2.9 Reliance Upon Telephonic Notices. The Agent
--------------------------------
may rely and act upon notice given by telephone by individuals
reasonably believed by the Agent to be those individuals
designated by the Company to the Agent in writing from time to
time to possess authority to give such notice, without waiting
for such receipt of written confirmation thereof, and the Company
hereby indemnifies and holds harmless the Agent from and against
any and all losses, costs, expenses, damages, claims, actions and
other proceedings relating to such reliance, except for such
losses, costs, expenses, damages, claims, actions and proceedings
resulting from acts or omissions constituting gross negligence or
willful misconduct on the part of the Agent. If a written
confirmation differs in any respect from the action taken by the
Agent, the records of the Agent shall govern absent manifest
error.
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<PAGE> 33
SECTION 2.10 Currency. All Loans shall be denominated in
Dollars. --------
SECTION 2.11 Conditions. Notwithstanding any other
----------
provision of this Agreement, (a) no Lender shall be obligated to
make any Loan and (b) no Lender shall be obligated to convert
into or permit the continuation at the end of the applicable
Interest Period of any Eurodollar Loan if, in any such case, a
Default exists or would result therefrom. The making of any Loan
and the conversion into or continuation at the end of the
applicable Interest Period of any Eurodollar Loan shall be deemed
to be a certification by the Borrower that the applicable
conditions under Section 5.2 have been satisfied.
-----------
SECTION 2.12 Notes.
-----
(a) The Committed Loans of each Lender shall be
evidenced by a Committed Note payable to the order of such
Lender in the principal amount of the original Commitment of
such Lender.
(b) The Bid Rate Loans of each Lender shall be
evidenced by a Bid Note payable to the order of such Lender
in the principal amount of the original Commitment Amount.
(c) Each Lender shall record in its records, or at its
option on the schedule attached to its applicable Notes, the
date and amount of each Loan made by such Lender thereunder,
each repayment or prepayment thereof, and the dates on which
any Interest Period for such Loan shall begin and end.
Prior to any transfer or assignment of any of its Notes,
each Lender shall record on the schedule attached thereto
the then outstanding principal amount thereof and the date
through which interest has been paid. The aggregate unpaid
principal amount so recorded shall be rebuttable,
presumptive evidence of the principal amount owing and
unpaid on such Note. The failure to so record, or any error
in so recording, any such amount on such schedule shall not,
however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the outstanding
principal amount of its Loans together with all interest
accruing thereon, nor shall such failure or error affect the
Company's obligations under any other Loan Document.
ARTICLE 3
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1 Repayments and Prepayments. The Company shall
--------------------------
repay in full the unpaid principal amount of each Loan upon the
Commitment Termination Date. Prior thereto, the Company
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<PAGE> 34
(a) shall repay each Bid Rate Loan on the last day of
the Interest Period for such Bid Rate Loan; and
(b) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the
outstanding principal amount of any Committed Loans;
provided that
--------
(i) any such prepayment shall be made pro rata
--- ----
among Loans of the same Type (whether Base Rate Loans
or Eurodollar Loans) and, if applicable, having the
same Interest Period of all Lenders;
(ii) no such prepayment of any Eurodollar Loan
may be made on any day other than the last day of the
Interest Period for such Eurodollar Loan unless the
Company shall pay all amounts, if any, required by
Section 4.5;
-----------
(iii) all such voluntary prepayments shall
require at least three (3) but no more than five (5)
Business Days' prior written notice to the Agent; and
(iv) all such voluntary partial prepayments shall
be in an aggregate minimum amount of $5,000,000 and an
integral multiple of $1,000,000 in excess thereof.
Each prepayment of any Loans made pursuant to this Section
-------
3.1 shall be without premium or penalty, except as may be
- - ---
required by Section 4.5. No voluntary prepayment of principal of
-----------
any Loans shall cause a reduction in the Commitment Amount. No
Bid Rate Loan may be prepaid to a Lender prior to the last day of
its applicable Interest Period without the prior written consent
of the Lender holding such Bid Rate Loan, which consent may be
given or withheld at such Lender's sole and absolute discretion.
Any such prepayment of a Bid Rate Loan prior to the end of its
applicable Interest Period shall be subject to the payments, if
any, required by Section 4.5.
-----------
SECTION 3.2 Interest Provisions. Interest on the
-------------------
outstanding principal amount of Loans shall accrue and be payable
in accordance with this Section 3.2.
-----------
SECTION 3.2.1 Rates. The Company hereby promises to pay
-----
interest (calculated in Dollars) on the unpaid principal amount
of each Loan of each Lender at a rate per annum as follows:
--- -----
(a) if such Loan is a Base Rate Loan, interest at a
rate per annum equal to the Alternate Base Rate from time to
--- -----
time in effect;
(b) if such Loan is a Eurodollar Loan, interest at a
rate per annum equal to the Eurodollar Rate (Adjusted)
--- -----
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<PAGE> 35
applicable to the Interest Period therefor, plus the
----
Applicable Eurodollar Margin for each day during such
period; and
(c) if such Loan is a Bid Rate Loan, interest at a
rate per annum equal to the applicable Bid Rate accepted by
--- -----
the Company in accordance with Section 2.6.
-----------
All Base Rate Loans shall bear interest from and including
the date such Base Rate Loan is made or the date a Eurodollar
Loan is converted into such Base Rate Loan to (but not including)
the date such Base Rate Loan is paid. All Eurodollar Loans and
Bid Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the
last day of such Interest Period at the interest rate determined
by the Agent as applicable to such Eurodollar Loan or at the
applicable Bid Rate accepted by the Company, as the case may be.
Each determination by the Agent of the interest rate applicable
to any Loan shall be conclusive and binding upon the parties
hereto, in the absence of manifest error. At the request in
writing of the Company, however, the Agent shall deliver to the
Company a statement showing the computations used by the Agent in
determining such interest rate.
SECTION 3.2.2 Default Rates. After the date any
-------------
principal amount of, or to the extent permitted by law during the
existence of an Event of Default arising under Section 8.1.1, the
-------------
interest on, any Loan is due and payable (whether on the
Commitment Termination Date, upon acceleration or otherwise), the
Company shall pay interest (after as well as before judgment) on
such principal or interest from the due date therefor until such
principal or interest is paid, at a rate per annum equal to the
--- -----
Alternate Base Rate, from time to time in effect (but not less
than the Alternate Base Rate, Eurodollar Rate (Adjusted) or Bid
Rate, as the case may be, in effect at such due date) plus 2.0%
per annum (the "Default Rate"). ----
- - --- ----- ------------
SECTION 3.2.3 Payment Dates. Interest accrued on each
-------------
Loan shall be payable, without duplication:
(a) on the Commitment Termination Date;
(b) on the date of any payment or prepayment, in whole
or in part, of principal outstanding on such Loan (other
than Base Rate Loans);
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the Effective Date;
(d) with respect to Eurodollar Loans on the last day
of each applicable Interest Period for such Eurodollar Loans
and, if such Interest Period shall exceed three months, on
the day of the third month of such Interest Period
-29-
<PAGE> 36
numerically corresponding to the first day of such Interest
Period (or, if there is no such numerically corresponding
day in such third month, on the last Business Day of such
third month);
(e) with respect to Bid Rate Loans, on the last day of
each applicable Interest Period for such Bid Rate Loans; and
(f) with respect to any Base Rate Loans converted into
Eurodollar Loans on a day when interest would not otherwise
have been payable pursuant to clause (c), on the first
----------
Quarterly Payment Date occurring after the date of such
conversion.
Interest accrued on Loans or other monetary Obligations after the
date such amount is due and payable (whether on the Stated
Maturity Date, upon acceleration or otherwise) shall be payable
upon demand.
SECTION 3.3 Fees. The Company agrees to pay the fees set
----
forth in this Section 3.3. All such fees shall be non-
refundable. -----------
SECTION 3.3.1 Facility Fee. The Company agrees to pay to
------------
the Agent, for the account of each Lender, a facility fee (the
"Facility Fee") in an amount equal to the product of (i) the
------------
Applicable Facility Fee Percentage multiplied by (ii) the
Commitment Amount for the period commencing on the Effective Date
and continuing through the final Commitment Termination Date.
The Facility Fee shall be calculated for each day and be payable
by the Company in arrears on each Quarterly Payment Date,
commencing with the first such day following the Effective Date,
and on the Commitment Termination Date.
SECTION 3.3.2 Agent's Fees. The Company agrees to pay to
------------
the Agent for its own account all other fees in the amounts and
at the times required pursuant to the Agent Fee Letter.
ARTICLE 4
CERTAIN EURODOLLAR AND OTHER LOAN PROVISIONS
SECTION 4.1 Increased Cost. If, as a result of any law,
--------------
rule, regulation, treaty or directive, or any change therein or
in the interpretation or administration thereof, or compliance by
any Lender with any request or directive (whether or not having
the force of law) from any court, central bank, governmental
authority, agency or instrumentality, or comparable agency:
(a) any tax, duty or other charge with respect to its
Commitments, its Loans, its Notes or any Lender's Loan or
obligation to make Loans is imposed, modified or deemed
applicable, or the basis of taxation of payments to any
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<PAGE> 37
Lender of the principal of, or interest on, any Loan (other
than taxes imposed on the overall net income of such Lender
by the jurisdiction in which such Lender has its principal
office) is changed;
(b) any reserve, special deposit, special assessment
or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender is
imposed, modified or deemed applicable, excluding any
reserve contained in the computation of "Eurodollar Rate
(Adjusted)"; or
(c) any other condition affecting this Agreement or
any Loan is imposed on any Lender or the interbank
eurodollar market;
and any Lender determines that, by reason thereof, the cost to
such Lender of making or maintaining or issuing its Commitment or
any Loan is increased, or the amount of any sum receivable by
such Lender hereunder or under its Notes is reduced; then, the
Company shall, within thirty (30) days of demand therefor (such
demand to be accompanied by the detailed notice of such Lender
described below), pay directly to such Lender such additional
amount or amounts as will compensate such Lender for such
additional cost or reduction. Without limiting the foregoing,
the Company may be required to reimburse any Lender for FDIC
assessments or other direct or indirect costs related to FDIC
insurance or continuation of FDIC insurance, including, without
limitation, the costs of purchasing equity interests of, or other
investments in, the FDIC, on Loans, whether or not such Lender
shall fund such Loans with deposits subject to FDIC insurance.
The affected Lender shall promptly notify the Company in writing
of the occurrence of any such event, such notice to state, in
reasonable detail, the reasons therefor and the additional amount
required fully to compensate such Lender for such increased cost
or reduced amount. Determinations by any Lender for purposes of
this Section 4.1 of the additional amounts required to compensate
-----------
such Lender in respect of the foregoing shall be conclusive in
the absence of manifest error. In determining such amounts, such
Lender may use any reasonable averaging, attribution and
allocation methods.
SECTION 4.2 Deposits Unavailable or Interest Rate
-------------------------------------
Unascertainable or Inadequate; Impracticability. If the Company
- - -----------------------------------------------
has any Eurodollar Loan outstanding, or has notified the Agent of
its intention to borrow a Eurodollar Loan as provided herein,
then in the event that, prior to any Interest Period, the Agent
shall have determined (or the Lenders holding at least 50% of the
Commitments shall have notified the Agent that such Lenders have
determined) (which determination shall be conclusive and binding
on the parties hereto absent manifest error) that:
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<PAGE> 38
(a) deposits of the necessary amount for the relevant
Interest Period are not available to any Lender in the
interbank eurodollar market or that, by reason of
circumstances affecting such market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for
such Interest Period;
(b) the Eurodollar Rate (Adjusted) will not adequately
and fairly reflect the cost to the Lenders of making or
funding the Eurodollar Loans for such Interest Period; or
(c) the making or funding of Eurodollar Loans has
become impracticable as a result of any event occurring
after the date of this Agreement which, in the opinion of
the Agent, materially and adversely affects such Loans or
any Lender's obligation to make such Loans or the interbank
eurodollar market;
the Agent shall promptly give notice of such determination to the
Company, and, until the Agent shall notify the Company that the
circumstances causing such determination no longer exist, (i) any
notice of a new Eurodollar Loan given by the Company and not yet
borrowed or converted shall be deemed to be a notice to make a
Base Rate Loan, and (ii) the Company shall be obligated to either
prepay in full any outstanding Eurodollar Loans on the last day
of the then current Interest Period with respect thereto or
convert any such Loans to Base Rate Loans on such last day.
SECTION 4.3 Changes in Law Rendering Eurodollar Loans
-----------------------------------------
Unlawful. If at any time due to the adoption of any law, rule,
- - --------
regulation, treaty or directive, or any change therein or in the
interpretation or administration thereof by any court, central
bank, governmental authority, agency or instrumentality, or
comparable agency charged with the interpretation or
administration thereof, or for any other reason arising
subsequent to the date hereof, it shall become unlawful or
impossible for any Lender to make or fund any Eurodollar Loan
which it is committed to make hereunder, the obligation of all
Lenders to provide Eurodollar Loans shall, upon the happening of
such event, forthwith be suspended for the duration of such
illegality or impossibility, and any notice of a new Eurodollar
Loan given by the Company and not yet borrowed or converted shall
be deemed to be a notice to make a Base Rate Loan. If any such
event shall make it unlawful or impossible for any Lender to
continue any Eurodollar Loans previously made by it hereunder,
such Lender shall, upon the happening of such event, notify the
Company and the Agent thereof in writing, and the Company shall,
on the earlier of (i) the last day of the then current Interest
Period with respect thereto, or (ii) if required by such law,
rule, regulation, treaty, directive or interpretation, on such
date as shall be specified in such notice, either convert all
Eurodollar Loans to Base Rate Loans or prepay in full all
Eurodollar Loans, together with accrued interest thereon, without
-32-
<PAGE> 39
any premium or penalty (except as provided in Section 4.5).
-----------
Before any Lender shall give any notice to the Agent or the
Company regarding the illegality or impossibility of such
Lender's making or continuing any Eurodollar Loans, such Lender
shall designate a different Eurodollar Office if such designation
will avoid the need for giving such notice and will not, in the
sole judgment of such Lender, be otherwise materially
disadvantageous to such Lender. If conditions subsequently
change so that the foregoing conditions no longer exist, such
Lender shall promptly notify the Company and the Agent thereof,
and upon the Agent's receipt of such notice the obligation of the
Lenders to make Eurodollar Loans shall be reinstated.
SECTION 4.4 Discretion of the Lenders as to Manner of
-----------------------------------------
Funding. Notwithstanding any provision of this Agreement to the
- - -------
contrary, each Lender shall be entitled to fund and maintain its
funding of all or any part of the Loans in any manner it sees
fit; it being understood, however, that for purposes of this
-------------------
Agreement, all determinations hereunder shall be made as if such
Lender had actually funded and maintained each Eurodollar Loan
during the Interest Period for such Loan through the purchase of
deposits having a term corresponding to such Interest Period and
bearing an interest rate equal to the Eurodollar Rate (Adjusted)
for such Interest Period (whether or not such Lender shall have
granted any participations in such Loan).
SECTION 4.5 Funding Losses. In the event any Lender shall
--------------
sustain or incur any loss or expense (including any loss or
expense sustained or incurred in obtaining, liquidating or
employing deposits or other funds acquired by such Lender to
make, continue or maintain any portion of any Loan) as a result
of
(a) any failure of the Company to make any payment
when due of any amount due hereunder or under any Note;
(b) any conversion or repayment or prepayment of the
principal amount of any Eurodollar Loans or Bid Rate Loans
on a date other than the scheduled last day of the Interest
Period applicable thereto, whether pursuant to Section 3.1
or otherwise; -----------
(c) any failure of the Company to borrow any Loans in
accordance with the Borrowing Request therefor or pursuant
to any Bid accepted, as the case may be; or
(d) any failure of the Company to continue or convert
any Loans in accordance with the Continuation/Conversion
Notice therefor;
then, upon the written notice of such Lender to the Company (with
a copy to the Agent) (but in any event within 120 days after such
Lender obtains actual knowledge of such loss or expense, and the
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<PAGE> 40
Company shall not be liable for any such loss or expense that
accrues between the latest date such notification is required to
be given and the date it was actually given), the Company shall,
within five (5) days of its receipt thereof, pay directly to such
Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense.
Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Company.
SECTION 4.6 Increased Capital Costs. If any change in, or
-----------------------
the introduction, application, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or
regulation, note, directive, guideline, decision, request, treaty
or guideline (whether or not having the force of law) of any
court, central bank, regulator or other governmental authority
(including, without limitation, application of or changes to
Regulation H and Regulation Y of the F.R.S. Board issued by the
F.R.S. Board on January 19, 1989 and regulations of the
Comptroller of the Currency, Department of the Treasury, 12 CFR
Part 3, Appendix A, issued by the Comptroller of the Currency on
January 27, 1989) affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person
controlling such Lender, and such Lender determines (in its
reasonable discretion) that the rate of return on its or such
controlling Person's capital as a consequence of its Commitment
or the Loans made by such Lender is reduced to a level below that
which such Lender or such controlling Person could have achieved
but for the occurrence of any such circumstance, then, in any
such case upon notice from time to time by such Lender to the
Company (but in any event within 120 days after such Lender
obtains actual knowledge of such event, and the Company shall not
be liable for any such reduced return that accrues between the
latest date such notification is required to be given and the
date it was actually given), the Company shall, within thirty
(30) days of demand therefor (such demand to be accompanied by
the statement of such Lender set forth below), pay directly to
such Lender additional amounts sufficient to compensate such
Lender or such controlling Person for such reduction in rate of
return. A statement of such Lender as to any such additional
amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive
and binding on the Company. In determining such amount, such
Lender may take into consideration the policies of such Lender or
any Person controlling such Lender with respect to capital
requirements and may use any method of averaging and attribution
that it (in its reasonable discretion) shall deem applicable.
SECTION 4.7 Taxes. All payments by the Company of
-----
principal of, and interest on, the Loans and all other amounts
payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or
-34-
<PAGE> 41
other charges of any nature whatsoever imposed by any taxing
authority, but excluding franchise taxes and taxes imposed on or
measured by any Lender's net income or receipts (such non-
excluded items being called "Taxes"). In the event that any
-----
withholding or deduction from any payment to be made by the
Company hereunder is required in respect of any Taxes pursuant to
any applicable law, rule or regulation, then the Company will
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt
or other documentation satisfactory to the Agent evidencing
such payment to such authority; and
(c) pay to the Agent for the account of the Lenders
such additional amount or amounts as is necessary to ensure
that the net amount actually received by each Lender will
equal the full amount such Lender would have received had no
such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or
any Lender with respect to any payment received by the Agent or
such Lender hereunder, the Agent or such Lender may pay such
Taxes and the Company will promptly pay such additional amounts
(including any penalties, interest or expenses) as is necessary
in order that the net amount received by such person after the
payment of such Taxes (including any Taxes on such additional
amount) shall equal the amount such person would have received
had not such Taxes been asserted.
If the Company fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Agent, for
the account of the respective Lenders, the required receipts or
other required documentary evidence, the Company shall indemnify
the Lenders for any incremental Taxes, interest or penalties that
may become payable by any Lender as a result of any such failure.
For purposes of this Section 4.7, a distribution hereunder by the
-----------
Agent or any Lender to or for the account of any Lender shall be
deemed a payment by the Company.
Upon the request of the Company or the Agent, each Lender
that is organized under the laws of a jurisdiction other than the
United States shall, prior to the due date of any payments under
any Note, execute and deliver to the Company and the Agent, on or
about the first scheduled payment date in each calendar year, one
or more (as the Company or the Agent may reasonably request)
United States Internal Revenue Service Forms 4224 or Forms 1001
or such other forms or documents (or successor forms or
documents), appropriately completed, as may be applicable to
establish the extent, if any, to which a payment to such Lender
is exempt from withholding or deduction of Taxes.
-35-
<PAGE> 42
SECTION 4.8 Payments, Computations, etc. Unless otherwise
---------------------------
expressly provided, all payments by the Company pursuant to this
Agreement, the Notes or any other Loan Document shall be made by
the Company to the Agent for the pro rata account of the Lenders
--- ----
entitled to receive such payment. All such payments required to
be made to the Agent shall be made, without setoff, deduction,
recoupment or counterclaim, not later than 12:00 noon, Atlanta
time, on the date due, in same day or immediately available
funds, to such account as the Agent shall specify from time to
time by notice to the Company. Funds received after that time
shall be deemed to have been received by the Agent on the next
succeeding Business Day. The Agent shall promptly remit in same
day funds to each Lender its share, if any, of such payments
received by the Agent for the account of such Lender. All
interest on Base Rate Loans (except when the Federal Funds
Effective Rate component of the Alternate Base Rate is effective)
shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring
during the period for which such interest or fee is payable over
a year comprised of 365 or, if appropriate, 366 days. All
interest on Eurodollar Loans and Base Rate Loans (when the
Federal Funds Effective Rate component of the Alternate Base Rate
is effective) and all per annum fees shall be computed on the
--- -----
basis of the actual number of days (including the first day but
excluding the last day) occurring during the period for which
such interest is payable over a year comprised of 360 days.
Whenever any payment to be made shall otherwise be due on a day
which is not a Business Day, such payment shall (except as
otherwise required by clause (B) of the definition of the term
----------
"Interest Period" with respect to Eurodollar Loans) be made on
---------------
the next succeeding Business Day and such extension of time shall
be included in computing interest and fees, if any, in connection
with such payment.
SECTION 4.9 Sharing of Payments. Except for payments made
-------------------
to the Agent pursuant to the cost and expenses provision of
Section 10.3 and to or for the benefit of any Lender pursuant to
- - ------------
the indemnity or additional compensation provisions of Article 4
---------
or Section 10.4, if any Lender shall receive, out of the assets
------------
of the Company or otherwise, any payment on account of (a) prior
to any Pro Rata Distribution Event, its Committed Loans, and
(b) after any Pro Rata Distribution Event, any Obligations in
excess of such Lender's pro rata share of the total sums received
--- ----
by the Lenders as payments on account of the Committed Loans or
the Obligations, as the case may be, whether the same be paid,
received or applied voluntarily, involuntarily or by operation of
law, by application of offset on any debt or otherwise, then such
Lender shall purchase for cash from the other Lenders an
undivided interest in all the Committed Loans or Obligations, as
the case may be, of the same class in an amount which shall
result in each Lender receiving its pro rata share of such total
--- ----
sums; provided that if any such purchase is made and the excess
--------
payment (or portion thereof) requiring such purchase is
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<PAGE> 43
thereafter recovered (in whole or in part) from the purchasing
Lender, then such purchase shall be pro tanto rescinded and the
--- -----
applicable portion of the purchase price restored to the
purchasing Lender, without interest. The Company agrees that any
Lender so purchasing a participation from another Lender pursuant
to this Section 4.9 may, to the fullest extent permitted by law,
-----------
exercise all its rights of payment (including pursuant to Section
-------
4.10) with respect to such participation as fully as if such
- - ----
Lender were the direct creditor of the Company in the amount of
such participation. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section applies, such
Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the
rights of the Lenders entitled under this Section to share in the
benefits of any recovery on such secured claim. It is expressly
understood and agreed by the Company and the Lenders that the
provisions of Section 10.11 shall not apply to any participations
-------------
purchased or sold pursuant to this Section.
SECTION 4.10 Application of Certain Payments.
-------------------------------
(a) Prior to the occurrence and continuation of a Pro
Rata Distribution Event, each payment of principal shall be
applied to such of the Loans as the Company shall direct by
notice to be received by the Agent on or before the date of
such payment; provided that any Loans of the Company
--------
maturing the same day shall be paid pro rata among such
--- ----
Loans. The Agent shall remit each such payment by the
Company in accordance therewith ratably among the applicable
Lenders holding such Loans based upon the amount of such
Loans due on such day. Concurrently with each remittance to
any Lender of its share of any such payment, the Agent shall
advise each Lender as to the application of such payment.
(b) Following the occurrence and during the
continuation of a Pro Rata Distribution Event, the Agent and
the Lenders shall apply all collections and recoveries of
the Loans and the other Obligations (after payment of any
costs and expenses to the Agent pursuant to Section 10.3)
------------
first, to the payment of principal of and interest on the
-----
outstanding Loans on a pro rata basis to each Lender based
--- ----
on the respective amounts of such principal of and accrued
interest on, such Loans owed to such Lender (whether or not
matured and currently payable), second, to payment of the
------
remaining outstanding Obligations owed to each Lender on a
pro rata basis to each Lender based on the respective
--- ----
remaining amounts of such Obligations owed to each Lender
(whether or not matured and currently payable) and third, to
-----
the remaining outstanding Obligations owed to any other
Person pursuant to the indemnification provisions of Section
-------
10.4 on a pro rata basis to each such Person based on the
---- --- ----
respective amounts of such Obligations owed to such Person.
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<PAGE> 44
(c) For purposes hereof, a "Pro Rata Distribution
---------------------
Event" means the first to occur of (i) an Event of Default
-----
under Section 8.1.1 or 8.1.7 or (ii) any other Event of
------------- -----
Default if the Required Lenders shall have instructed the
Agent that payments shall be applied as provided in
Section 4.10(b) above. The Agent shall promptly notify the
---------------
Company and each Lender of the occurrence of a Pro Rata
Distribution Event but failure to so notify shall not affect
the occurrence of such Pro Rata Distribution Event.
(d) The Lenders and the Agent agree that if any
distribution shall be made by the Agent contrary to this
Section 4.10 (whether because the Agent shall not, at the
------------
time of distribution, have been aware of the occurrence of
any Event of Default or otherwise), the Lenders shall
cooperate with the Agent to redistribute payments,
collections or recoveries in accordance with this Section
4.10. -------
----
SECTION 4.11 Setoff. Each Lender shall, upon the
------
occurrence of any Default described in clauses (a) through (d) of
----------- ---
Section 8.1.7 or, with the consent of the Required Lenders, upon
- - -------------
the occurrence of any other Event of Default, have the right to
appropriate and apply to the payment of the Obligations owing to
it (whether or not then due), and (as security for such
Obligations) the Company hereby grants to each Lender a
continuing security interest in, any and all balances, credits,
deposits, accounts or moneys of the Company then or thereafter
maintained with such Lender solely for such purposes; provided
--------
that any such appropriation and application shall be subject to
the provisions of Sections 4.9 and 4.10. Each Lender agrees
------------ ----
promptly to notify the Company and the Agent after any such
setoff and application made by such Lender; provided that the
--------
failure to give such notice shall not affect the validity of such
setoff and application. The rights of each Lender under this
Section 4.11 are in addition to other rights and remedies
- - ------------
(including other rights of setoff under applicable law or
otherwise) which such Lender may have.
SECTION 4.12 Use of Proceeds. The Company shall use the
---------------
proceeds of each Borrowing for general corporate purposes;
without limiting the foregoing, no proceeds of any Loan will be
used to acquire any equity security of a class which is
registered pursuant to Section 12 of the Securities Exchange Act
of 1934 (except as otherwise permitted pursuant to Section 7.12)
------------
or any "margin stock", as defined in F.R.S. Board Regulation U.
-38-
<PAGE> 45
ARTICLE 5
CONDITIONS TO BORROWING
SECTION 5.1 Initial Borrowing. The obligations of the
-----------------
Lenders to fund the initial Borrowing shall be subject to the
prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 5.1.
-----------
SECTION 5.1.1 Resolutions, etc. The Agent shall have
----------------
received each of the following:
(a) an executed Officer's Certificate (with a signed
copy for each Lender) substantially in the form of Exhibit D
---------
from the Company, certifying as to (i) a true and correct
copy of the Company's certificate of incorporation and all
amendments as filed with the Secretary of State of its state
of incorporation, (ii) duly adopted resolutions of the
Company's Board of Directors, stating that such resolutions
are true and correct, have not been altered or repealed, and
are in full force and effect, approving the execution,
delivery and performance of the Loan Documents to which the
Company is a party, and the transactions contemplated herein
and therein, (iii) a true and correct copy of the Company's
bylaws as in effect on the Effective Date, (iv) incumbency
and specimen signatures of the officers of the Company
executing the Loan Documents to which the Company is a
party, and (v) the satisfaction of the conditions set forth
in Section 5.2. The Agent and the Lenders may conclusively
-----------
rely on such certificate until the Agent shall receive a
further certificate cancelling or amending the prior
certificate and submitting the signatures of the officers
named in such further certificate; and
(b) a certified copy of the certificate of
incorporation and a good standing certificate issued by the
Secretary of State of the Company's state of incorporation.
SECTION 5.1.2 Delivery of Notes. The Agent shall have
-----------------
received, for the account of each Lender, the Bid Notes and the
Committed Notes duly executed and delivered by the Company.
SECTION 5.1.3 This Agreement. The Agent shall have
--------------
received an executed counterpart of this Agreement from each of
the parties hereto.
SECTION 5.1.4 Opinions of Counsel. The Agent shall have
-------------------
received opinions, each dated a date satisfactory to the Agent
and addressed to the Agent and all Lenders, from
(a) McDermott, Will & Emery, counsel to the Company,
substantially in the form set forth in Exhibit E hereto; and
---------
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<PAGE> 46
(b) Mayer, Brown & Platt, counsel to the Agent,
substantially in the form of Exhibit F hereto.
---------
SECTION 5.1.5 Consents, etc. The Agent shall have received
-------------
certified copies of all documents evidencing any necessary
action, consents and approvals of other Persons with respect to
this Agreement, the Notes and the other Loan Documents.
SECTION 5.1.6 Closing Fees, Expenses, etc. The Agent shall
---------------------------
have received for its own account, or for the account of each
Lender, as the case may be, all fees, costs and expenses due and
payable pursuant to Sections 3.3 and 10.3, if then invoiced.
------------ ----
SECTION 5.1.7 Forms from the Lenders. The Agent shall have
----------------------
received Forms 4224 or Forms 1001 required to be furnished
pursuant to Section 4.7 duly executed by the applicable Lenders.
-----------
SECTION 5.1.8 Process Agent. The Company shall have
-------------
delivered to the Agent a copy of a letter of acceptance of the
Process Agent accepting its appointment (or confirming its
appointment) as agent for service of process in New York.
SECTION 5.1.9 Termination. The Agent shall have received
-----------
satisfactory evidence of the termination of the Existing
Agreement and the payment of all obligations thereunder.
SECTION 5.1.10 No Material Adverse Change. The Agent shall
--------------------------
have received evidence that no event shall have occurred since
April 30, 1993 and no condition shall exist which has had or
could reasonably be expected to have a material adverse effect on
the financial condition of the Company or any of its
Subsidiaries, taken as a whole, or the ability of the Company to
perform its obligations under any of the Loan Documents.
SECTION 5.1.11 Compliance Certificate. The Agent shall
----------------------
have received a compliance certificate referred to in Section
-------
7.18(h) as of the end of the fiscal quarter ended April 30, 1994,
- - -------
duly executed by an authorized officer of the Company.
SECTION 5.1.12 Other Documents. The Agent shall have
---------------
received such other documents as the Agent shall have reasonably
requested.
SECTION 5.2 All Borrowings. The obligation of each Lender
--------------
to fund any Loan on the occasion of any Borrowing (including the
initial Borrowing) shall be subject to the satisfaction of each
of the conditions precedent set forth in this Section 5.2.
-----------
SECTION 5.2.1 Compliance with Warranties, No Default, etc.
-------------------------------------------
Both before and after giving effect to any Borrowing (but, if any
Default of the nature referred to in Section 8.1.4 shall have
-------------
occurred with respect to any other Indebtedness, without giving
effect to the application, directly or indirectly, of the
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<PAGE> 47
proceeds thereof) the following statements shall be true and
correct:
(a) the representations and warranties set forth in
Article 6 (excluding, however, those contained in Section
--------- -------
6.7) shall be true and correct in all material respects with
---
the same effect as if then made (unless stated to relate
solely to an earlier date, in which case such
representations and warranties shall be true and correct as
of such earlier date);
(b) except as disclosed by the Company to the Agent
and the Lenders pursuant to Section 6.7:
-----------
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be
pending or, to the knowledge of the Company,
threatened against the Company or any of its
Subsidiaries which might materially adversely
affect the Company's consolidated business,
operations, assets, revenues, properties or
prospects or which purports to affect the
legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document;
and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or
governmental investigation or proceeding disclosed
pursuant to Section 6.7 which might materially
-----------
adversely affect the Company's consolidated
business, operations, assets, revenues, properties
or prospects or which purports to affect the
legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document;
and
(c) no Default shall have then occurred and be
continuing, and neither the Company nor any of its
Subsidiaries are in material violation of any law or
governmental rule or regulation or court or administrative
order or decree.
SECTION 5.2.2 Borrowing Request or Bid Request. The Agent
--------------------------------
shall have received a Borrowing Request or a Bid Request for such
Borrowing, as the case may be. Each of the delivery of a
Borrowing Request or a Bid Request, as the case may be, and the
acceptance by the Company of the proceeds of such Borrowing shall
constitute a representation and warranty by the Company that on
the date of such Borrowing (both immediately before and after
giving effect to such Borrowing and the application of the
proceeds thereof) the statements made in Section 5.2.1 are true
and correct. -------------
-41-
<PAGE> 48
SECTION 5.2.3 Satisfactory Legal Form. All documents
-----------------------
executed or submitted pursuant hereto by or on behalf of the
Company or any of its Subsidiaries shall be satisfactory in form
and substance to the Agent and its counsel; and the Agent and its
counsel shall have received all information, approvals, opinions,
documents or instruments as the Agent or its counsel may
reasonably request.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into
this Agreement and to make Loans hereunder, the Company
represents and warrants unto the Agent and each Lender as set
forth in this Article 6.
---------
SECTION 6.1 Organization, etc. Each of the Company and
-----------------
each of its Material Subsidiaries is a corporation validly
organized and existing and in good standing under the laws of its
jurisdiction of incorporation and is duly licensed or qualified
to do business and is in good standing as a foreign corporation
in each jurisdiction where the failure to so qualify would have a
materially adverse effect on the financial condition, operations,
assets, business or properties of the Company and its
Subsidiaries on a consolidated basis. Each of the Company and
each of its Material Subsidiaries has full power and authority
and holds all requisite governmental licenses, permits and other
approvals to own and hold under lease and operate its property
and to conduct its business substantially as currently conducted
by it.
SECTION 6.2 Due Authorization, Non-Contravention, etc. The
-----------------------------------------
execution, delivery and performance by the Company of this
Agreement, the Notes and each other Loan Document executed or to
be executed by it are within the Company's corporate powers, have
been duly authorized by all necessary corporate action, and do
not (a) contravene the Company's articles of incorporation or
by-laws; (b) contravene any indenture or loan or credit agreement
or any other contractual agreement or instrument, or law or
governmental rule or regulation or court or administrative decree
or order binding on or affecting the Company or any of its
properties or (c) result in, or require the creation or imposi-
tion of, any Lien on any properties of the Company or any of its
Subsidiaries.
SECTION 6.3 Government Approval, Regulation, etc. No
------------------------------------
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any
other Person is required for the due execution, delivery or
performance by the Company of this Agreement, the Notes or any
other Loan Document. The Company and its Subsidiaries are in
-42-
<PAGE> 49
Material Compliance with all laws, governmental rules and
regulations, and court and administrative decrees and orders
applicable to them. Neither the Company nor any of its
Subsidiaries is an "investment company" or a company "controlled"
by 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.
SECTION 6.4 Validity, etc. This Agreement constitutes,
-------------
and the Notes and each other Loan Document executed by the
Company will, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligations of the
Company enforceable in accordance with their respective terms,
except as enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of
equity limiting the availability of equitable remedies.
SECTION 6.5 Financial Information. The Company's audited
---------------------
consolidated financial statement as of April 30, 1993, and the
Company's unaudited consolidated financial statement as of
January 31, 1994, and the related balance sheets and statements
of earnings and cash flow of the Company and each of its
Subsidiaries relating to each such financial statement, copies of
which have been furnished to the Agent and each Lender, have been
prepared in accordance with GAAP consistently applied, and
present fairly the consolidated financial condition of the
corporations covered thereby as at the dates thereof and the
results of their operations for the periods then ended, subject
(in the case of the interim financial statement) to year-end
audit adjustments.
SECTION 6.6 No Material Adverse Change; No Default. Since
--------------------------------------
April 30, 1993, there has been no material adverse change in the
financial condition, operations, assets, business, properties or
prospects of the Company or any of its Affiliates or the ability
of the Company to perform its obligations under any of the Loan
Documents. Neither the Company nor any of its Material
Subsidiaries is in default under or in violation of its
organizational documents or any law, governmental rule or
regulation or any agreement or instrument to which the Company or
any Material Subsidiary is a party or by which any of their
respective properties or assets is bound or affected, which
default might materially and adversely affect the financial
condition or operations of the Company and its Subsidiaries taken
as a whole or which purports to affect the legality, validity or
enforceability of any Loan Document. No Default has occurred and
is continuing.
-43-
<PAGE> 50
SECTION 6.7 Litigation, Labor Controversies, etc. There
------------------------------------
is no pending or, to the knowledge of the Company, threatened
litigation, action, proceeding, or labor controversy affecting
the Company or any of its Material Subsidiaries, or any of their
respective properties, businesses, assets or revenues, which may
materially adversely affect the financial condition, operations,
assets, business, properties or prospects of the Company and its
Material Subsidiaries, taken as a whole, or which purports to
affect the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document, except as
disclosed in Exhibit G hereto. Other than any liability incident
---------
to such litigation or proceeding, neither the Company nor any of
its Material Subsidiaries has any material contingent liability
not provided for or disclosed in the financial statements
referred to in Section 6.5.
-----------
SECTION 6.8 Subsidiaries. As of the date of this
------------
Agreement, the Company has no Subsidiaries except those
Subsidiaries which are identified in Exhibit H hereto, which
---------
Exhibit H identifies each Subsidiary which is a Material
- - ---------
Subsidiary, and states the jurisdiction of incorporation of each
Subsidiary and the percentage of its voting stock owned by the
Company and/or its Subsidiaries.
SECTION 6.9 Ownership of Properties. The Company and each
-----------------------
of its Material Subsidiaries has good and marketable title to all
of its properties and assets, real and personal, tangible and
intangible, of any nature whatsoever (including shares of stock
of Material Subsidiaries (all of which shares have been duly
issued and are fully paid and non-assessable), patents,
trademarks, trade names, service marks and copyrights), free and
clear of all Liens, charges or claims (including infringement
claims with respect to patents, trademarks, copyrights and the
like) except (a) as permitted pursuant to Section 7.11, or (b) as
------------
sold or otherwise disposed of in the ordinary course of business.
SECTION 6.10 Taxes. The Company and each of its
-----
Subsidiaries has filed all tax returns and reports required by
law to have been filed by it and, except as disclosed in Exhibit
-------
I hereto, has paid all taxes and governmental charges thereby
- - -
shown to be owing, except any such taxes or charges which are
being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books. The federal income
tax liability of the Company and its Material Subsidiaries has
been audited by the Internal Revenue Service and, except as
disclosed in Exhibit I hereto, has been finally determined and
---------
satisfied (or the time for audit has expired) for all tax years
up to and including the tax year ended April 30, 1992. Except as
disclosed in Exhibit I hereto, the Company is not aware of any
---------
proposed assessment against the Company or any of its Material
Subsidiaries for additional taxes (or any basis for any such
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<PAGE> 51
assessment) which might be material to the Company and its
Material Subsidiaries taken as a whole.
SECTION 6.11 Pension and Welfare Plans. Except as
-------------------------
disclosed in Exhibit J hereto, during the twelve-consecutive-
---------
month period immediately prior to the date of the execution and
delivery of this Agreement and prior to the date of any Borrowing
hereunder, no steps have been taken to terminate any Pension
Plan, and no contribution failure has occurred with respect to
any Pension Plan sufficient to give rise to a Lien under Section
302(f) of ERISA. Except as disclosed in Exhibit J hereto, no
---------
condition exists or event or transaction has occurred with
respect to any Pension Plan which might result in the incurrence
by the Company or any member of the Controlled Group of any
material liability, fine or penalty. Except as disclosed in
Exhibit J hereto, neither the Company nor any member of the
- - ---------
Controlled Group has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than
liability for continuation coverage described in Part 6 of Title
I of ERISA.
SECTION 6.12 Environmental Warranties. The Company and its
------------------------
Subsidiaries are, to the best knowledge of the Company, each in
Material Compliance with all Environmental Laws (a) now
applicable to the Company or any Subsidiary, or (b) which will be
applicable (or, if not in Material Compliance with such laws and
regulations referred to in this clause (b), the Company or such
----------
Subsidiary is taking appropriate action diligently pursued to be
in Material Compliance therewith on a timely basis or to be
exempt from compliance). Except as disclosed on Exhibit K,
---------
neither the Company nor any Subsidiary has any knowledge of any
(i) presently outstanding allegations by governmental officials
that the Company or any of its Subsidiaries is now or at any time
prior to the date hereof was in material violation of such
Environmental Laws, (ii) material administrative or judicial
proceedings presently pending against the Company or any of its
Subsidiaries pursuant to such Environmental Laws, and (iii)
material claim presently outstanding against the Company or any
of its Subsidiaries which was asserted pursuant to such laws or
regulations that in each case would reasonably be expected to
result in a liability to the Company or any Subsidiary in excess
of $10,000,000 or $10,000,000 in the aggregate for all such
claims (net in each case of actual uncontested insurance coverage
or effective uncontested indemnifications with respect thereto).
Except as disclosed in Exhibit K, the Company reasonably believes
---------
that no facts or circumstances known to it or any Subsidiary
could form the basis for the assertion of any material claim
against the Company or any Subsidiary relating to environmental
matters, including any material claim arising from past or
present environmental practices asserted under any Environmental
Laws that in each case would reasonably be expected to result in
a liability to the Company or any Subsidiary in excess of
$10,000,000 or $10,000,000 in the aggregate for all such claims
-45-
<PAGE> 52
(net in each case of actual uncontested insurance coverage or
effective uncontested indemnifications with respect thereto).
SECTION 6.13 Regulations G, U and X. The Company is not
----------------------
engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Loans
will be used for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation G, U or X. Terms for
which meanings are provided in F.R.S. Board Regulation G, U or X
or any regulations substituted therefor, as from time to time in
effect, are used in this Section with such meanings.
SECTION 6.14 Insurance. The Company and each of its
---------
Material Subsidiaries maintain insurance coverage by financially
sound and reputable insurers in such forms and amounts and
against such risks as are customary for corporations of
established reputation engaged in the same or a similar business
and owning and operating similar properties in similar locations.
SECTION 6.15 Indebtedness. Except as disclosed on Exhibit
------------ -------
L hereto or as otherwise permitted pursuant to Section 7.10, as
- - - ------------
of the date hereof, neither the Company nor any Subsidiary has
any Indebtedness, and said Exhibit L indicates which of such
---------
Indebtedness described therein is secured.
SECTION 6.16 Accuracy of Information. All factual
-----------------------
information heretofore or contemporaneously furnished by or on
behalf of the Company in writing to the Agent or any Lender for
purposes of or in connection with this Agreement or any
transaction contemplated hereby (including the copies of the
various note agreements entered into by the Company with various
insurance companies, true and complete copies of which were
furnished to the Agent and each Lender in connection with its
execution and delivery hereof) is, and all other such factual
information hereafter furnished by or on behalf of the Company to
the Agent or any Lender will be, true and accurate in every
material respect on the date as of which such information is
dated or certified and as of the date of execution and delivery
of this Agreement by the Agent and such Lender, and such
information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to
make such information not misleading.
SECTION 6.17 Material Subsidiary. The Company and its
-------------------
Material Subsidiaries together account for more than 85% of each
of (a) the sum of all assets (valued at the greater of book or
fair market) of the Company and its Subsidiaries as of the end of
the most recently completed fiscal quarter, and (b) the
Consolidated Net Income of the Company and its Subsidiaries, as
of the end of the most recently completed fiscal quarter, for the
immediately preceding 12-month consecutive period.
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<PAGE> 53
ARTICLE 7
COVENANTS
The Company agrees with the Agent and each Lender that,
until all Commitments have terminated and all Obligations have
been paid and performed in full:
SECTION 7.1 Corporate Existence, etc. The Company will
------------------------
preserve and maintain, and cause each Subsidiary to preserve and
maintain (except for any sale, dissolution, liquidation or merger
not otherwise prohibited hereby), its existence, rights,
privileges and franchises in the jurisdiction of its
incorporation or other formation; and qualify and remain
qualified as a foreign Person authorized to do business in each
other jurisdiction in which the failure to so qualify would
reasonably be expected to have a materially adverse effect on the
Company and its Subsidiaries taken as a whole or on the ability
of the Company to perform its obligations under any of the Loan
Documents.
SECTION 7.2 Insurance. The Company will maintain, and will
---------
cause each Subsidiary to maintain, insurance coverage by
financially sound and reputable insurers in such forms and
amounts and against such risks as are customary for corporations
of established reputation engaged in the same or a similar
business and owning and operating similar properties in similar
locations.
SECTION 7.3 Taxes, Claims for Labor and Materials,
--------------------------------------
Compliance with Laws. The Company will promptly pay and
- - --------------------
discharge, and will cause each Subsidiary promptly to pay and
discharge, all lawful taxes, assessments and governmental charges
or levies imposed upon the Company or such Subsidiary,
respectively, or upon or in respect of all or any part of the
property or business of the Company or such Subsidiary, all trade
accounts payable in accordance with usual and customary business
terms, and all claims for work, labor or materials, if the
failure to pay or discharge such tax, assessment, charge, levy,
account payable or claim could result in any material lien or
charge upon any property of the Company or any Material
Subsidiary; provided that the Company or such Subsidiary shall
--------
not be required to pay any such tax, assessment, charge, levy,
account payable or claim if (a) the validity, applicability or
amount thereof is being contested in good faith by appropriate
actions or proceedings which will prevent the forfeiture or sale
of any property of the Company or such Subsidiary or any material
interference with the use thereof by the Company or such
Subsidiary, and (b) the Company or such Subsidiary shall set
aside on its books, reserves or accruals deemed by it to be
adequate with respect thereto. The Company will promptly comply,
and will cause each Subsidiary to comply, with all laws,
ordinances or governmental rules and regulations to which it is
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<PAGE> 54
subject (but excluding all Environmental Laws), the violation of
which would materially and adversely affect the properties,
business, prospects, profits or condition (financial or
otherwise) of the Company and its Material Subsidiaries taken as
a whole or could result in any material lien or charge upon any
property of the Company or any Material Subsidiary.
SECTION 7.4 Maintenance, etc. The Company will maintain,
----------------
preserve and keep, and will cause each Subsidiary to maintain,
preserve and keep, its material properties which are used or
useful in the conduct of its business (whether owned in fee or a
leasehold interest) in good repair and working order and from
time to time will make all necessary repairs, replacements,
renewals and additions so that at all times the efficiency
thereof shall be maintained, the failure to maintain, preserve or
keep of which would be reasonably likely to materially and
adversely affect the properties, business, prospects, profits or
condition (financial or otherwise) of the Company and its
Material Subsidiaries taken as a whole or could result in any
material Lien or charge upon any property of the Company or any
Material Subsidiary.
SECTION 7.5 Nature of Business. Neither the Company nor
------------------
any Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis,
which would then be engaged in by the Company and its
Subsidiaries would be substantially changed from the general
nature of the business engaged in by the Company and its
Subsidiaries taken as a whole on the date of this Agreement.
SECTION 7.6 Interest Coverage Ratio. The Company will as
-----------------------
of the last day of each fiscal quarter have an Interest Coverage
Ratio at not less than 2.25 to 1.0.
SECTION 7.7 Leverage Ratio. The Company will at all times
--------------
keep and maintain the Leverage Ratio at not more than 0.55 to
1.00.
SECTION 7.8 Consolidated Shareholder's Equity. The Company
---------------------------------
will at all times keep and maintain Consolidated Shareholder's
Equity in an amount not less than $200,000,000.
SECTION 7.9 Confirmation of Senior Debt Rating. The
----------------------------------
Company will cause each Rating Agency that has issued a Senior
Debt Rating to the Company at any time during the last twelve
consecutive calendar months to confirm the Senior Debt Rating
given to the Company at least once during any consecutive six-
month period and at any other time reasonably requested by the
Agent, but no more than two additional times in any consecutive
twelve-month period; provided that the Company shall not be
--------
required to cause any Rating Agency to confirm its Senior Debt
Rating given to the Company if (a) such Rating Agency no longer
issues a Senior Debt Rating to the Company or (b) if the
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<PAGE> 55
Applicable Eurodollar Margin is not determined by reference to
the Senior Debt Rating at such time; it being understood that the
-- ----- ----------
Company will not have to cause any Rating Agency to comply with
this Section 7.9 so long as such Rating Agency is providing its
-----------
credit assessment monitoring service to the Company on a basis
the same as (in the case of Standard & Poor's Ratings Group) or
similar to (in the case of each other Rating Agency) the credit
assessment monitoring service offered by Standard & Poor's
Ratings Group to the Company as of the date of this Agreement.
SECTION 7.10 Limitations on Indebtedness. The Company will
---------------------------
not and will not permit any Subsidiary to create, assume or incur
or in any manner be or become liable in respect of any
Indebtedness, except:
(a) Indebtedness of the Company and its Subsidiaries
outstanding as of the date of this Agreement and described
in Exhibit L hereto (including any extensions, renewals or
---------
refinancings thereof not to exceed 100% of the amount of
such Indebtedness immediately prior to such extension
renewal or refinancing);
(b) unsecured Consolidated Debt of the Company that is
pari passu with, or subordinate in right of payment to, the
---- -----
Obligations and that contains terms and conditions no more
favorable than the terms and conditions set forth herein,
created, assumed or incurred after the date hereof; provided
--------
that at the time of creation, assumption or incurrence
thereof and after giving effect thereto and to the
application of the proceeds thereof, no Default shall have
occurred and be continuing;
(c) unsecured Consolidated Debt of any Subsidiary that
contains terms and conditions no more favorable than the
terms and conditions set forth herein, created, assumed or
incurred after the date hereof; provided that at the time of
--------
creation, assumption or incurrence thereof and after giving
effect thereto and to the application of the proceeds
thereof, no Default shall have occurred and be continuing;
and provided further that the aggregate amount of such Debt
-------- -------
(including such Debt existing as of the date of this
Agreement) at any time outstanding shall not exceed 20% of
Consolidated Net Tangible Assets;
(d) Capitalized Rentals, not to exceed $50,000,000 in
the aggregate at any one time outstanding; and
(e) Consolidated Debt of a Subsidiary to the Company
or to a Wholly-owned Subsidiary.
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<PAGE> 56
SECTION 7.11 Liens and Negative Pledges.
--------------------------
SECTION 7.11.1 Limitation on Liens. The Company will not,
-------------------
and will not permit any Subsidiary to, create or incur, or suffer
to be incurred or to exist, any Lien of any kind on its or their
property or assets, whether now owned or hereafter acquired, or
upon any income or profits therefrom, or transfer any property
for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general
creditors, or acquire or agree to acquire, or permit any
Subsidiary to acquire, any property or assets upon conditional
sales agreements or other title retention devices, except:
(a) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or
demand of mechanics and materialmen; provided that payment
--------
thereof is not at the time required by Section 7.3;
-----------
(b) Liens of or resulting from any judgment or award,
the time for the appeal or petition for rehearing of which
shall not have expired, or in respect of which the Company
or a Subsidiary shall at any time in good faith be
prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured, and any
pledges or deposits for the purpose of securing such appeal
or stay; provided that the aggregate amount secured by said
--------
Liens, pledges and deposits does not at any time exceed
$10,000,000;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including warehousemen's
and attorneys' liens, statutory landlords' liens and liens
on inventory securing short term obligations due to the
party selling such inventory) and deposits, pledges or Liens
to secure the performance of bids, tenders or trade
contracts, or to secure statutory obligations, surety or
appeal bonds or other Liens of like general nature incurred
in the ordinary course of business and not in connection
with the borrowing of money; provided that, in each case,
--------
the obligation secured is not overdue, or, if overdue, is
being contested in good faith by appropriate actions or
proceedings;
(d) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-
of-way, utilities and other similar purposes, or zoning or
other restrictions as to the use of real properties, which
are necessary for the conduct of the activities of the
Company and its Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and
similarly situated and which do not in any event materially
-50-
<PAGE> 57
impair their use in the operation of the business of the
Company and its Subsidiaries;
(e) Liens of the Company and its Subsidiaries
outstanding as of the date hereof and described on Exhibit N
hereto; ---------
(f) Liens, mortgages, conditional sales contracts,
security interests, or other arrangements for the retention
of title (including Capitalized Leases) incurred after the
date hereof and given to secure the payments of the purchase
price incurred in connection with the acquisition or
construction of fixed assets useful and intended to be used
in carrying on the business of the Company or a Subsidiary,
including Liens existing on such fixed assets at the time of
acquisition thereof or at the time of acquisition by the
Company or a Subsidiary of any business entity then owning
such fixed assets, whether or not such existing Liens were
given to secure the payment of the purchase price of the
fixed assets to which they attach so long as they were not
incurred, extended or renewed in contemplation of such
acquisition; provided that (i) the Lien or charge shall
--------
attach solely to the property acquired or purchased, (ii) at
the time of acquisition of such fixed assets, the aggregate
amount remaining unpaid on all Indebtedness secured by Liens
on such fixed assets whether or not assumed by the Company
or a Subsidiary shall not exceed an amount equal to the
lesser of the total purchase price or fair market value at
the time of acquisition of such fixed assets (as determined
in good faith by the Board of Directors of the Company),
(iii) all Indebtedness secured by such Liens shall be
payable in equal monthly, quarterly, semiannual or annual
installments of principal and interest and shall not be
callable at the lender's option for reasons unrelated to the
creditworthiness of the Company or such Subsidiary or the
destruction of the collateral for such Indebtedness, (iv)
all such Indebtedness shall have been incurred within the
applicable limitations provided in Section 7.10, and (v) the
------------
aggregate unpaid principal amount of all such Indebtedness
so secured and at any time outstanding shall not exceed 15%
of Consolidated Net Tangible Assets; and
(g) Liens incurred by the Company or any Subsidiary in
addition to those described in clauses (a) through (f)
----------- ---
above; provided that (i) the aggregate amount of all
--------
Indebtedness secured by Liens pursuant to this clause (g)
----------
shall not at any time exceed 3% of Consolidated Net Tangible
Assets, and (ii) all such Indebtedness shall have been
incurred within the applicable limitations provided in
Section 7.10.
------------
In case any property or asset is subjected to a Lien not
otherwise permitted by this Section 7.11.1, the Company will make
--------------
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<PAGE> 58
or cause to be made provision whereby the Notes will be secured,
to the fullest extent permitted under applicable law, equally and
ratably with all other obligations secured thereby, and in any
case the Notes shall (but only upon the occurrence of such
condition precedent) have the benefit, to the full extent that
the holders may be entitled thereto under applicable law, of an
equitable lien equally and ratably securing the Notes.
Compliance with the provisions of this paragraph shall not be
deemed to constitute a waiver of, or consent to, any violation of
the foregoing provisions of this Section 7.11.1.
--------------
SECTION 7.11.2 Restrictive Agreements, etc. The Company
---------------------------
will not, and will not permit any of its Subsidiaries to, enter
into any agreement (excluding this Agreement and any other Loan
Document) prohibiting
(a) the ability of the Company to amend or otherwise
modify this Agreement or any other Loan Document; or
(b) the ability of any Subsidiary to make any
payments, directly or indirectly, to the Company by way of
dividends, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments, or
any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly
or indirectly, to the Company.
SECTION 7.12 Acquisitions. The Company and its Subsidiaries
------------
will not, in one transaction or a series of transactions,
directly or indirectly, consolidate or be a party to a merger
with, another Person, or purchase or otherwise acquire all or
substantially all of the assets of another Person or more than
50% of any Securities of another Person if (a) such Person and
the Company do not engage in the same business, (b) such
consolidation, merger, purchase or acquisition is opposed by such
Person's board of directors or other governing body or by a
shareholder or shareholders or other Person or Persons
controlling more than 25% of the Voting Stock of such Person,
(c) the Company or any Subsidiary knows of facts or circumstances
that would make it reasonably likely that such purchase or other
acquisition would be hostile, or (d) at the time of such
consolidation, merger, purchase or acquisition and after giving
effect thereto, a Default shall have occurred and be continuing.
SECTION 7.13 Mergers, Consolidations and Sales of Assets.
-------------------------------------------
SECTION 7.13.1 Mergers, Consolidations and Dispositions.
----------------------------------------
The Company will not, and will not permit any Subsidiary to (i)
consolidate with or be a party to a merger with any other
corporation, or (ii) sell, lease or otherwise dispose of all or,
except in the ordinary course of business, any part of the assets
of the Company and its Subsidiaries, provided that:
--------
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<PAGE> 59
(a) any Subsidiary may merge or consolidate with or
into the Company or any Wholly-owned Subsidiary so long as
in any merger, consolidation or sale involving the Company,
the Company or the Wholly-owned Subsidiary, as the case may
be, shall be the surviving or continuing corporation;
(b) any Subsidiary may sell, lease or otherwise
dispose of all or any substantial part of its assets to the
Company or any Wholly-owned Subsidiary;
(c) the Company may consolidate or merge with any
other corporation if (i) the Company is the surviving or
continuing corporation, (ii) at the time of such consolida-
tion or merger and after giving effect thereto no Default
shall have occurred and be continuing, and (iii) such
consolidation or merger would not be prohibited by Section
7.12; and -------
----
(d) the Company or any Subsidiary may sell, lease or
otherwise dispose of any assets for fair value if such
assets (valued at the greater of book or fair market), when
added to all other assets sold, leased or otherwise disposed
of by the Company and its Subsidiaries (other than in the
ordinary course of business) during the immediately
preceding four consecutive fiscal quarters, do not exceed
20% of consolidated assets of the Company and its
Subsidiaries (determined as of the end of the immediately
preceding fiscal quarter in accordance with GAAP), and also
do not contribute more than 20% of the consolidated gross
revenues of the Company and its Subsidiaries (determined as
of the end of the immediately preceding four consecutive
fiscal quarters in accordance with GAAP).
For purposes of Section 7.13.1(d):
-----------------
(A) the sale or discount of any receivable for
fair value consistent with industry custom and without
recourse shall be deemed to be "in the ordinary course
of business," and
(B) the sale or discount of any receivable for
fair value consistent with industry custom and with
recourse shall be deemed to be "in the ordinary course
of business" to the extent that all such recourse
obligations of the Company at any one time outstanding
do not exceed an amount equal to 2% of Consolidated
Shareholder's Equity.
Notwithstanding anything contained herein to the contrary, any
merger, consolidation or disposition permitted under Section
-------
7.13.1 shall not be deemed to trigger a Change of Control Event
- - ------
under clause (a) or (b) of the definition thereof.
---------- ---
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<PAGE> 60
SECTION 7.13.2 Issuance or Sale of Stock by Subsidiaries.
-----------------------------------------
The Company will not permit any Subsidiary to issue or sell any
shares of stock of any class (including as "stock" for the
purposes of this Section 7.13, any warrants, rights or options to
------------
purchase or otherwise acquire stock or other Securities
exchangeable for or convertible into stock) of such Subsidiary to
any Person other than the Company or a Wholly-owned Subsidiary,
except for the purpose of qualifying directors, or except in
satisfaction of the validly pre-existing preemptive rights of
minority shareholders in connection with the simultaneous
issuance of stock to the Company and/or a Subsidiary whereby the
Company and/or such Subsidiary maintain their same proportionate
interests in such Subsidiary.
SECTION 7.13.3 Sale of Stock in Subsidiaries. The Company
-----------------------------
will not sell, transfer or otherwise dispose of any shares of
stock in any Subsidiary (except to qualify directors) or any
Indebtedness of any Subsidiary, and will not permit any
Subsidiary to sell, transfer or otherwise dispose of (except to
the Company or a Wholly-owned Subsidiary) any shares of stock or
any Indebtedness of any other Subsidiary, unless:
(a) any of the conditions of Section 7.13.1 shall have
been satisfied; --------------
(b) simultaneously with such sale, transfer, or
disposition, all shares of stock and all Indebtedness of
such Subsidiary at the time owned by the Company and by
every other Subsidiary shall be sold, transferred or
disposed of as an entirety;
(c) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the
retention of such stock and Indebtedness is no longer in the
best interests of the Company;
(d) such stock and Indebtedness is sold, transferred
or otherwise disposed of to a Person, for fair value and on
terms reasonably deemed by the Board of Directors to be
adequate and satisfactory; and
(e) the Subsidiary being disposed of shall not have
any continuing investment in the Company or any other
Subsidiary not being simultaneously disposed of.
SECTION 7.14 Guaranties. The Company will not, and will not
----------
permit any Subsidiary to, become or be liable in respect of any
Guaranty except Guaranties which are limited in amount to a
stated maximum dollar exposure and are incurred in compliance
with this Agreement to guaranty obligations permissible under
this Agreement.
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<PAGE> 61
SECTION 7.15 Compliance with Applicable Law. The Company
------------------------------
will comply, and cause each Subsidiary to comply, in all material
respects with all laws, rules and regulations binding or
affecting the Company or such Subsidiary (but excluding all
Environmental Laws), the failure to comply with which would be
reasonably expected to have a materially adverse effect on the
financial condition of the Company and its Subsidiaries taken as
a whole or the ability of the Company to perform its obligations
under any of the Loan Documents; and the Company shall obtain and
maintain, and cause each Subsidiary to obtain and maintain, all
permits, licenses and approvals (collectively, "Permits")
-------
necessary to construct, own, operate, use and maintain their
respective property and assets to conduct their respective
businesses, except where the failure to obtain or maintain such
Permit would not reasonably be expected to have a materially
adverse effect on the financial condition of the Company and its
Subsidiaries taken as a whole or the ability of the Company to
perform its obligations under any of the Loan Documents.
SECTION 7.16 Transactions with Affiliates. The Company will
----------------------------
not, and will not permit any Subsidiary to, enter into or be a
party to any transaction or arrangement with any Affiliate
(including, without limitation, the purchase from, sale to or
exchange of property with, or the rendering of any service by or
for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in
a comparable arm's-length transaction with a Person other than an
Affiliate.
SECTION 7.17 ERISA Compliance.
----------------
(a) The Company will not permit the present value of
all employee benefits vested under all "employee pension
benefit plans," as such term is defined in Section 3 of
ERISA, maintained by the Company or any of its Subsidiaries
to exceed the present value of the assets allocable to such
vested benefits.
(b) All assumptions and methods used to determine the
present value of vested employee benefits under employee
benefit plans and the present value of assets of employee
pension benefit plans shall be reasonable in the good faith
judgment of the Company and shall comply with all
requirements of law.
(c) Neither the Company nor any Subsidiary will cause
any employee pension benefit plan maintained or participated
in by it to:
(i) engage in any "prohibited transaction," as
such term is defined in Section 4975 of
-55-
<PAGE> 62
the Code, which, either itself or because
of any excise tax or other penalty which
may be imposed, involves the possibility
of materially affecting the business,
prospects, profits, properties or
condition (financial or otherwise) of the
Company and its Subsidiaries taken as a
whole;
(ii) incur any "accumulated funding
deficiency," as such term is defined in
Section 302 of ERISA, whether or not
waived; or
(iii) terminate in a manner which results in the
imposition of a lien or charge of any kind
on the property or assets of the Company
or any Subsidiary pursuant to Section 4068
of ERISA.
SECTION 7.18 Reports and Rights of Inspection. The Company
--------------------------------
will keep, and will cause each Subsidiary to keep, proper books
of record and account in which full and correct entries will be
made of all dealings or transactions of or in relation to the
business and affairs of the Company or such Subsidiary, in
accordance with GAAP (except for changes in application disclosed
in the financial statements furnished to the Agent and each
Lender pursuant to this Section 7.18 and not resulting in an
------------
Impermissible Qualification by the independent public accountants
referred to in Section 7.18(b)) and will furnish to the Agent and
---------------
each Lender (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in
--------------------
any event within 45 days after the end of each quarterly
fiscal period (except the last) of each fiscal year of the
Company, duplicate copies of:
(i) a consolidated balance sheet of the
Company and its Subsidiaries as of the
close of such quarterly fiscal period,
(ii) consolidated statements of income and
retained earnings of the Company and its
Subsidiaries for such quarterly fiscal
period and for the portion of the fiscal
year ending with such quarterly fiscal
period, and
(iv) consolidated statements of cash flows of
the Company and its Subsidiaries for such
quarterly fiscal period and for the
portion of the fiscal year ending with
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<PAGE> 63
such quarterly fiscal period, in each case
setting forth in comparative form the
consolidated figures for the preceding
fiscal year, all in reasonable detail and
accompanied by a certificate of an
authorized financial officer of the
Company to the effect that the
consolidated financial statements have
been prepared in accordance with GAAP and
present fairly the financial condition of
the Company and its Subsidiaries;
(b) Annual Statements. As soon as available and in
-----------------
any event within 120 days after the close of each fiscal
year of the Company, duplicate copies of:
(i) a consolidated balance sheet of the
Company and its Subsidiaries, as of the
close of such fiscal year, and
(ii) consolidated statements of income and
shareowners' equity and cash flows of the
Company and its Subsidiaries, for such
fiscal year, setting forth in comparative
form the consolidated figures for the
preceding fiscal year, all in reasonable
detail and accompanied by a report thereon
of a firm of independent public
accountants of recognized national
standing selected by the Company to the
effect that the consolidated financial
statements have been prepared in
accordance with GAAP and present fairly
the financial condition of the Company and
its Subsidiaries and of the Company and
its consolidated subsidiaries, and that
the examination of such accountants in
connection with such financial statements
has been made in accordance with GAAP and
accordingly includes such tests of the
accounting records and such other auditing
procedures as were considered necessary in
the circumstances;
(c) Annual Consolidating Summary. As soon as
----------------------------
available and in any event within 120 days after the close
of each fiscal year of the Company, a consolidating summary
of business unit sales, operating income, assets and
investments of the Company and its Material Subsidiaries
prepared by an authorized financial officer of the Company
and substantially in the form set forth in Exhibit O hereto;
---------
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<PAGE> 64
(d) Audit Reports. Promptly upon receipt thereof, one
-------------
copy of each interim or special audit, if any, made by
independent accountants of the books of the Company or any
Subsidiary;
(e) SEC and Other Reports. Promptly upon their
---------------------
becoming available, one copy of each financial statement,
report, notice or proxy statement sent by the Company to
stockholders generally and of each regular or periodic
report, and any registration statement or prospectus filed
by the Company or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any
successor agency, and copies of any orders in any
proceedings to which the Company or any of its Subsidiaries
is a party, issued by any governmental agency, Federal or
state, having jurisdiction over the Company or any of its
Subsidiaries;
(f) [Reserved];
(g) Notice of Litigation and Judgment. Promptly upon
---------------------------------
any officer of the Company becoming aware thereof, written
notice of any proceedings threatened or pending against or
affecting the Company or any Subsidiary in any court or
before any governmental authority or arbitration board or
tribunal which claim, if decided against the Company or any
Subsidiary, could reasonably be expected to expose the
Company or any Subsidiary to liability in an amount equal to
$2,000,000 or more;
(h) Officers' Certificates. Within the periods
----------------------
provided in paragraphs (a) and (b) above, a certificate of
-------------- ---
an authorized financial officer of the Company stating that
such officer has reviewed the provisions of this Agreement
and (i) setting forth the information and computations (in
sufficient detail), to the extent applicable, required in
order to establish whether the Company was in compliance
with the requirements of Sections 7.6 through 7.17,
------------ ----
inclusive, at the end of the period covered by the financial
statements then being furnished, and (ii) stating whether
there existed as of the end of such fiscal period and
whether, to the best of such officer's knowledge, there
exists on the date of the certificate or existed at any time
during such fiscal period any Default and, if any such
condition or event existed during such period or exists on
the date of the certificate, specifying the nature and
period of existence thereof and the action the Company has
taken or is taking and proposes to take with respect
thereto;
(i) Accountants' Certificates. Within the period
-------------------------
provided in paragraph (b) above, a certificate of the
-------------
accountants who render an opinion with respect to such
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<PAGE> 65
financial statements, stating that they have reviewed this
Agreement and stating further whether, in making their
audit, such accountants have become aware of any Default
under any of the terms or provisions of this Agreement
insofar as any such terms or provisions pertain to
accounting matters or determinations and, if any such
condition or event then exists, specifying the nature and
period of existence thereof;
(j) Notice of Default. As soon as possible and in any
-----------------
event within three (3) days after any officer of the Company
shall have become aware of the occurrence of each Default, a
statement of a Responsible Officer of the Company setting
forth the details of such Default and the action which the
Company has taken and proposes to take with respect thereto;
(k) Notices Regarding Pension Plans. Immediately upon
-------------------------------
becoming aware of the institution of any steps by the
Company or any other Person to terminate any Pension Plan,
or the failure to make a required contribution to any
Pension Plan if such failure is sufficient to give rise to a
Lien under Section 302(f) of ERISA, or the taking of any
action with respect to a Pension Plan which could result in
the requirement that the Company furnish a bond or other
security to the PBGC or such Pension Plan, or the occurrence
of any event with respect to any Pension Plan which could
result in the incurrence by the Company of any material
liability, fine or penalty, or any material increase in the
contingent liability of the Company with respect to any
post-retirement Welfare Plan benefit, notice thereof and
copies of all documentation relating thereto;
(l) Notices Regarding Subsidiaries. Promptly from
------------------------------
time to time, upon request of the Agent, a written report of
any change in the list of Material Subsidiaries set forth on
Exhibit H hereto or any change in the designation of any
---------
Subsidiary as or to "Material";
(m) Notice of Material Adverse Change. Immediately
---------------------------------
upon becoming aware of the occurrence of a material adverse
change in the financial condition, operations, business,
prospects or properties of the Company and its Subsidiaries
taken as a whole or the occurrence of any event which
materially and adversely impairs the prospect of payment or
performance of the Obligations, notice thereof and copies of
all documentation relating thereto; and
(n) Requested Information. With reasonable
---------------------
promptness, such other data and information as the Agent or
any Lender may reasonably request.
Without limiting the foregoing, the Company will permit the Agent
and each Lender (or such Persons as may be designated by the
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<PAGE> 66
Agent or any Lender) to visit and inspect any of the properties
of the Company or any Subsidiary, to examine all their books of
account, records, reports and other papers, to make copies and
extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers, employees,
and independent public accountants (and by this provision the
Company authorizes said accountants to discuss with the Agent and
each Lender the finances and affairs of the Company and its
Subsidiaries) all at such reasonable times and as often as may be
reasonably requested. The Company shall be required to pay or
reimburse the Agent and each Lender for all reasonable expenses
which the Agent or such Lender may incur in connection with any
such visitation or inspection if an Event of Default shall exist
or be continuing at the time of such visitation or inspection.
SECTION 7.19 Environmental Covenant. The Company will, and
----------------------
will cause each of its Subsidiaries to,
(a) use and operate all of its facilities and
properties in Material Compliance with all Environmental
Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental
matters in effect and remain in Material Compliance
therewith, and handle all Hazardous Materials in Material
Compliance with all applicable Environmental Laws;
(b) immediately notify the Agent and provide copies
upon receipt of all written claims, complaints or notices
relating to the failure of the Company to be in Material
Compliance with Environmental Laws, and shall promptly cure
or settle and have dismissed with prejudice any actions and
proceedings relating to the failure of the Company to be in
Material Compliance with Environmental Laws; provided that
--------
nothing in the preceding clause shall be deemed to prohibit
the Company from contesting any such action expeditiously,
in good faith and through appropriate proceedings, so long
as (i) the Company sets aside on its books such reserves as
are required by GAAP in connection with such matters and
(ii) such contest shall not impair the validity or
enforceability of this Agreement; and
(c) provide such information which the Agent may
reasonably request from time to time to evidence compliance
with this Section 7.19.
------------
ARTICLE 8
EVENTS OF DEFAULT
SECTION 8.1 Listing of Events of Default. Each of the
----------------------------
following events, occurrences or conditions described in this
Section 8.1 shall constitute an "Event of Default."
- - ----------- ----------------
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SECTION 8.1.1 Non-Payment of Obligations. The Company shall
--------------------------
default in the payment or prepayment when due of any principal of
any Loan, or the Company shall default (and such default shall
continue unremedied for a period of three (3) Business Days) in
the payment when due of any non-use or other fee or of any
interest on any Loan and/or other Obligation.
SECTION 8.1.2 Breach of Warranty. Any representation or
------------------
warranty of the Company made or deemed to be made hereunder or in
any other Loan Document or any other writing or certificate
furnished by or on behalf of the Company to the Agent or any
Lender for the purposes of or in connection with this Agreement
or any such other Loan Document (including any certificates
delivered pursuant to Article 5) is or shall be incorrect when
---------
made in any material respect.
SECTION 8.1.3 Non-Performance of Covenants and Obligations.
--------------------------------------------
The Company shall default in the due performance and observance
of any other agreement contained herein or in any other Loan
Document, and such default shall continue unremedied for a period
of thirty (30) days after the earlier of (x) notice thereof shall
have been given to the Company by the Agent or any Lender, or (y)
any Responsible Officer of the Company shall have obtained
knowledge of the occurrence of such default.
SECTION 8.1.4 Default on Other Indebtedness.
-----------------------------
(a) (i) A default shall have occurred and be
continuing, for the grace period, if any, applicable
thereto, in the payment when due, whether by acceleration or
otherwise, of (A) any Indebtedness (other than any
Obligation constituting Indebtedness) of, (B) any
reimbursement obligation in respect of any letter of credit
issued for the account of, or (C) any payment obligation in
respect of any Guaranty issued by, the Company or any of its
Subsidiaries, which Indebtedness is in a principal amount,
individually or in the aggregate for all of the foregoing
items in clauses (A) through (C), at any one time in default
----------- ---
equal to or in excess of Five Million Dollars ($5,000,000),
or (ii) a default shall occur in the performance or
observance of any obligation or condition with respect to
any Indebtedness (other than any Obligation constituting
Indebtedness), any letter of credit or any Guaranty, which,
in the case of any such Indebtedness, letter of credit or
Guaranty, is in a principal amount, individually or in the
aggregate for all such Indebtedness, letters of credit and
Guaranties, at any time equal to or in excess of Five
Million Dollars ($5,000,000), if the effect of such default
is (1) (x) to accelerate the maturity of any such
Indebtedness or any obligation which is supported by any
such Guaranty or (y) to require the advance payment or cash
collateralization of any such letter of credit reimbursement
obligation, or (2) such default shall continue unremedied
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for any applicable period of time sufficient to permit the
holder or holders of any such Indebtedness or obligation, or
the issuer of any such letter of credit, or any trustee or
agent for any such Person, to cause such Indebtedness or
obligation to become due and payable prior to its expressed
maturity or to cause the advance payment or cash
collateralization of any such letter of credit reimbursement
obligation;
(b) Any default, termination event or like event by or
relating to the Company or any of its Subsidiaries shall
have occurred under any agreement (other than any Loan
Document) that involves a commitment of Five Million Dollars
($5,000,000) or more and provides for (i) the sale,
assignment or factoring of accounts receivable or (ii) any
other structured financing or off-balance sheet financing
and, in the case of any such default, termination event or
like event, shall have continued for the grace period, if
any, applicable thereto, and as a result (A) in the case of
clause (i) next above, the obligation to purchase, take by
----------
assignment or factor such receivables shall have been
terminated or the transferee of receivables shall have the
right (with or without the passage of time or the giving of
notice, or both) to terminate such obligation prior to the
stated maturity date therefor or (B) in the case of clause
------
(ii) next above, the obligations of the other party or
----
parties to such other structured financing or off-balance
sheet financing shall terminate or such other party or
parties shall have the right to terminate obligations prior
to the stated maturity date therefor;
SECTION 8.1.5 Judgments. Any final judgment or judgments
---------
for the payment of money aggregating in excess of $2,000,000 is
or are outstanding against the Company or any Subsidiary or
against the property or assets of either and any one of such
judgments has remained unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of 30 days from the date of its
entry; provided that in lieu of such 30-day period, a period of
--------
90 days shall apply to any such judgment that is fully insured
against by a reputable insurance company which has acknowledged
its obligation for such judgment and which is accorded a rating
by A.M. Best Company, Inc. of A+.
SECTION 8.1.6 Pension Plans. Any of the following events
-------------
shall occur with respect to any Pension Plan
(a) the institution of any steps by the Company, any
member of its Controlled Group or any other Person to
terminate a Pension Plan if, as a result of such
termination, the Company or any such member could be
required to make a contribution to such Pension Plan, or
could reasonably expect to incur a liability or obligation
to such Pension Plan, in excess of $5,000,000; or
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<PAGE> 69
(b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a Lien under Section
302(f) of ERISA.
SECTION 8.1.7 Bankruptcy, Insolvency, etc. The Company or
---------------------------
any of its Material Subsidiaries shall:
(a) become insolvent or generally fail to pay, or
admit in writing its inability to pay, debts as they become
due;
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver or other custodian for
the Company or any of its Material Subsidiaries or any
property of any thereof, or make a general assignment for
the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for the
Company or any of its Material Subsidiaries or for a
substantial part of the property of any thereof, and such
trustee, receiver, sequestrator or other custodian shall not
be discharged within thirty (30) days; provided that the
--------
Company and each Material Subsidiary hereby expressly
authorizes the Agent and each Lender to appear in any court
conducting any relevant proceeding during such thirty-day
period to preserve, protect and defend their rights under
the Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case
or proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in
respect of the Company or any of its Material Subsidiaries,
and, if any such case or proceeding is not commenced by the
Company or such Material Subsidiary, such case or proceeding
shall be consented to or acquiesced in by the Company or
such Material Subsidiary or shall result in the entry of an
order for relief or shall remain for sixty (60) days
undismissed; provided that the Company and each Material
--------
Subsidiary hereby expressly authorizes the Agent and each
Lender to appear in any court conducting any such case or
proceeding during such sixty-day period to preserve, protect
and defend their rights under the Loan Documents; or
(e) take any corporate action authorizing, or in
furtherance of, any of the foregoing.
SECTION 8.1.8 Change of Control Event. A Change of Control
Event shall occur. -----------------------
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<PAGE> 70
SECTION 8.1.9 Environmental Matters. The Company or any of
---------------------
its Subsidiaries shall be the subject of any proceeding or
investigation pertaining to the release by the Company or any of
its Subsidiaries, or any other Person, of any Hazardous Material,
or any violation of or non-compliance with any Environmental
Laws, which would, in either case, have a materially adverse
effect on the Company and its Subsidiaries taken as a whole or
the ability of the Company to perform any of the Loan Documents.
SECTION 8.2 Action if Bankruptcy. If any Event of Default
--------------------
described in clauses (a) through (d) of Section 8.1.7 shall
----------- --- -------------
occur, the Commitments (if not theretofore terminated) shall
automatically terminate and the outstanding principal amount of
all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without
notice or demand.
SECTION 8.3 Action if Other Event of Default. If any Event
--------------------------------
of Default (other than any Event of Default described in clauses
-------
(a) through (d) of Section 8.1.7) shall occur for any reason,
- - --- --- -------------
whether voluntary or involuntary, and be continuing, the Agent,
upon the direction of the Required Lenders, shall declare the
outstanding principal amount of the Loans and other Obligations
to be due and payable and the Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other Obligations shall be and become immediately
due and payable, and the Commitments shall immediately terminate,
all without notice, demand or presentment. The Agent shall
promptly advise the Company of any such declaration, but failure
to do so shall not impair the effect of such declaration.
ARTICLE 9
THE AGENT
SECTION 9.1 Actions. Each Lender hereby appoints
-------
Scotiabank as its Agent under and for purposes of this Agreement,
the Notes and each other Loan Document. Each Lender authorizes
the Agent to act on behalf of such Lender under this Agreement,
the Notes and each other Loan Document and, in the absence of
other written instructions from the Required Lenders received
from time to time by the Agent (with respect to which the Agent
agrees that it will comply, except as otherwise provided in this
Section or as otherwise advised by counsel), to exercise such
powers hereunder and thereunder as are specifically delegated to
or required of the Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental
thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Agent, pro rata
--- ----
according to such Lender's Percentage, from and against any and
all liabilities, obligations, losses, damages, claims, costs or
expenses of any kind or nature whatsoever which may at any time
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<PAGE> 71
be imposed on, incurred by, or asserted against, the Agent in any
way relating to or arising out of this Agreement, the Notes and
any other Loan Document, including reasonable attorneys' fees,
and as to which the Agent is not reimbursed by the Company;
provided that no Lender shall be liable for the payment of any
- - --------
portion of such liabilities, obligations, losses, damages,
claims, costs or expenses which have resulted solely from the
Agent's gross negligence or willful misconduct. Without limiting
the generality of the foregoing, each Lender hereby agrees, to
the extent of such Lender's Percentage, to reimburse the Agent
promptly following the Agent's demand, for any reasonable out-of-
pocket expenses (including attorneys' fees and expenses) incurred
by the Agent in connection with the administration and
enforcement of the Loan Documents, and not reimbursed to the
Agent by the Company except to the extent such expenses are
caused by the gross negligence or willful misconduct of the
Agent. If and to the extent that the foregoing undertaking may
be unenforceable for any reason, each Lender hereby agrees to
make the maximum contribution, to the extent of such Lender's
Percentage, to the payment and satisfaction of each of such
amounts which is permissible under applicable law.
Notwithstanding any other provision hereof, each Lender's
obligations under this Section 9.1 shall survive the termination
-----------
of such Lender's Commitment and this Agreement and the discharge
of the Company's obligations hereunder but only with respect to
such matters which occurred prior to the time such Lender ceased
to be a Lender hereunder. The Agent shall not be required to
take any action hereunder, under the Notes or under any other
Loan Document, or to prosecute or defend any suit in respect of
this Agreement, the Notes or any other Loan Document, unless it
is indemnified hereunder to its satisfaction. If any indemnity
in favor of the Agent shall be or become, in the Agent's
determination, inadequate, the Agent may call for additional
indemnification from the Lenders and cease to do the acts
indemnified against hereunder until such additional indemnity is
given.
SECTION 9.2 Funding Reliance, etc. Unless the Agent shall
---------------------
have been notified by telephone, confirmed in writing, by any
Lender by 12:00 noon, Atlanta time, on the day of a Borrowing
that such Lender will not make available the amount which would
constitute its Percentage of such Borrowing on the date specified
therefor, the Agent may assume that such Lender has made such
amount available to the Agent and, in reliance upon such
assumption, make available to the Company a corresponding amount.
If and to the extent that such Lender shall not have made such
amount available to the Agent, such Lender and the Company
severally agree to repay the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day
from the date the Agent made such amount available to the Company
to the date such amount is repaid to the Agent, at the Federal
Funds Effective Rate.
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<PAGE> 72
SECTION 9.3 Exculpation. Neither the Agent nor any of its
-----------
directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it under
this Agreement or any other Loan Document, or in connection
herewith or therewith, except for its own willful misconduct or
gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan
Document, nor to make any inquiry respecting the performance by
the Company of its obligations hereunder or under any other Loan
Document. Any such inquiry which may be made by the Agent shall
not obligate it to make any further inquiry or to take any
action. The Agent shall be entitled to rely upon advice of
counsel concerning legal matters and upon any notice, consent,
certificate, statement or writing which the Agent believes to be
genuine and to have been presented by a proper Person.
SECTION 9.4 Successor. The Agent may resign as such at any
---------
time upon at least thirty (30) days' prior notice to the Company
and all Lenders. If the Agent at any time shall resign, the
Required Lenders may appoint another Lender as a successor Agent
(which prior to the occurrence and continuation of a Default
shall be acceptable to the Company) which shall thereupon become
the Agent hereunder. If no successor Agent so acceptable to the
Company shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within thirty (30) days
after the retiring Agent's giving notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State
thereof) or a U.S. branch or agency of a commercial banking
institution, and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall
be entitled to receive from the retiring Agent such documents of
transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's
resignation hereunder as the Agent, the provisions of:
(a) this Article 9 shall inure to its benefit as to
---------
any actions taken or omitted to be taken by it while it was
the Agent under this Agreement; and
(b) Section 10.3 and Section 10.4 shall continue to
------------ ------------
inure to its benefit.
SECTION 9.5 Loans by Scotiabank. Scotiabank shall have the
-------------------
same rights and powers with respect to (x) the Loans made by it
or any of its affiliates, and (y) the interest in the Notes held
by it or any of its affiliates as any other Lender and may
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exercise the same as if it were not the Agent. Scotiabank and
its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Company or any
Subsidiary or affiliate of the Company as if Scotiabank were not
the Agent hereunder.
SECTION 9.6 Credit Decisions. Each Lender acknowledges
----------------
that it has, independently of the Agent and each other Lender,
and based on such Lender's review of the financial information of
the Company, this Agreement, the other Loan Documents (the terms
and provisions of which being satisfactory to such Lender) and
such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to
extend its Commitment. Each Lender also acknowledges that it
will, independently of the Agent and each other Lender, and based
on such other documents, information and investigations as it
shall deem appropriate at any time, continue to make its own
credit decisions as to exercising or not exercising from time to
time any rights and privileges available to it under this
Agreement or any other Loan Document.
SECTION 9.7 Copies, etc. The Agent shall give prompt
-----------
notice to each Lender of each notice or request required or
permitted to be given to the Agent by the Company pursuant to the
terms of this Agreement (unless concurrently delivered to the
Lenders by the Company). Upon request by any Lender, the Agent
will distribute to each Lender each document or instrument
received for its account and copies of all other communications
received by the Agent from the Company for distribution to the
Lenders by the Agent in accordance with the terms of this
Agreement.
ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.1 Waivers, Amendments, etc. The provisions of
------------------------
this Agreement and of each other Loan Document may from time to
time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by the
Company and the Required Lenders; provided that no such
--------
amendment, modification or waiver which would:
(a) modify any requirement hereunder that any
particular action be taken by all the Lenders or by the
Required Lenders shall be effective unless consented to by
each Lender;
(b) modify Section 2.3 (as it pertains to percentages
-----------
of the Commitment Amount), Section 4.10 or this Section
------------ -------
10.1, change the definitions of "Applicable Eurodollar
---- ---------------------
Margin," "Applicable Facility Fee Percentage" and "Required
------ ---------------------------------- --------
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<PAGE> 74
Lenders," increase the Commitment Amount or the Commitment
-------
or Percentage of any Lender, reduce any fees described in
Article 3, or extend the Stated Maturity Date (except as
---------
contemplated by Section 2.3) shall be made without the
-----------
consent of each Lender and each holder of the Notes;
(c) extend the due date for, or reduce the amount of,
any scheduled repayment or prepayment of principal of or
interest on any Loan (or reduce the principal amount of
accrued interest or rate of interest on any Loan) shall be
made without the consent of the Lender holding such Loan; or
(d) affect adversely the interests, rights or
obligations of the Agent qua the Agent without consent of
the Agent. ---
No failure or delay on the part of the Agent, any Lender or any
holder of any Note in exercising any power or right under this
Agreement or any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
power or right preclude any other or further exercise thereof or
the exercise of any other power or right. No notice to or demand
on the Company in any case shall entitle it to any notice or
demand in similar or other circumstances. No waiver or approval
by the Agent, any Lender or any holder of any Note under this
Agreement or any other Loan Document shall, except as may be
otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
SECTION 10.2 Notices. All notices and other communications
-------
provided to any party hereto under this Agreement or any other
Loan Document shall be in writing or by facsimile. Any notice,
if mailed and properly addressed with postage prepaid or if
properly addressed and sent by prepaid courier service, shall be
deemed given when received; any notice, if transmitted by
facsimile, shall be deemed given when transmitted. Unless
otherwise specified in a notice in writing sent in accordance
with the foregoing provisions of this Section 10.2, notices and
------------
other communications shall be given to or made upon the
respective parties hereto at their respective addresses (or to
their respective facsimile numbers) shown on Schedule I hereto.
----------
SECTION 10.3 Payment of Costs and Expenses. The Company
-----------------------------
agrees to pay on demand all reasonable expenses of the Agent
(including the reasonable fees and other expenses of counsel to
the Agent and of local counsel, if any, who may be retained by
counsel to the Agent) in connection with
(a) the negotiation, preparation, execution and
delivery of this Agreement and of each other Loan Document,
including schedules and exhibits, and any amendments,
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waivers, consents, supplements or other modifications to
this Agreement or any other Loan Document as may from time
to time hereafter be required, whether or not the
transactions contemplated hereby are consummated,
(b) the preparation and review of the form of any
document or instrument relevant to this Agreement or any
other Loan Document, and
(c) the negotiation of any restructuring or "work-
out," whether or not consummated, of any Obligations.
The Company further agrees to pay, and to save the Agent and the
Lenders harmless from all liability for, any stamp or other taxes
which may be payable in connection with the execution or delivery
of this Agreement, the borrowings hereunder, or the issuance of
the Notes or any other Loan Documents. The Company also agrees
to reimburse the Agent and each Lender upon demand for all
reasonable expenses (including reasonable attorneys' fees and
other expenses) incurred by the Agent or such Lender in
connection with any "workout," whether or not consumated, of any
Obligations or the enforcement of any Obligations.
SECTION 10.4 Indemnification. In consideration of the
---------------
execution and delivery of this Agreement by each Lender and the
extension of the Commitments, the Company hereby indemnifies,
exonerates and holds the Agent and each Lender and each of their
respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") free and harmless from
-------------------
and against any and all actions, causes of action, suits, losses,
costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such
Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
-----------
Liabilities"), incurred by the Indemnified Parties or any of them
- - -----------
as a result of, or arising out of, or relating to:
(a) this Agreement or any Loan Document or any
transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan;
(b) any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by the
Company or any of its Subsidiaries of all or any portion of
the stock or assets of any Person, whether or not the Agent
or such Lender is party thereto;
(c) any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or
other matter relating to the protection of the environment
or the Release by the Company or any of its Subsidiaries of
any Hazardous Material; or
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<PAGE> 76
(d) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or
releasing from, any real property owned or operated by the
Company or any Subsidiary thereof of any Hazardous Material
(including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or
within the control of, the Company or such Subsidiary,
except for any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the
relevant Indemnified Party's gross negligence or willful
misconduct. If and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under
applicable law.
SECTION 10.5 Survival. The obligations of the Company
--------
under Sections 4.1, 4.5, 4.6, 4.7, 10.3 and 10.4, and the
------------ --- --- --- ---- ----
obligations of the Lenders under Section 9.1, shall in each case
-----------
survive any termination of this Agreement, the payment in full of
all Obligations and the termination of all Commitments. The
representations and warranties made by the Company in this
Agreement and in each other Loan Document shall survive the
execution and delivery of this Agreement and each such other Loan
Document.
SECTION 10.6 Severability. Any provision of this Agreement
------------
or any other Loan Document which is prohibited or unenforceable
in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7 Headings. The various headings of this
--------
Agreement and of each other Loan Document are inserted for
convenience only and shall not affect the meaning or
interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8 Execution in Counterparts, Effectiveness, etc.
---------------------------------------------
This Agreement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and
all of which shall constitute together but one and the same
agreement.
SECTION 10.9 Governing Law; Entire Agreement. THIS
-------------------------------
AGREEMENT, THE NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK. This Agreement, the Notes and the
other Loan Documents constitute the entire understanding among
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the parties hereto with respect to the subject matter hereof and
supersede any prior agreements, written or oral, with respect
thereto.
SECTION 10.10 Successors and Assigns. This Agreement shall
----------------------
be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns; provided
that: --------
(a) the Company may not assign or transfer its rights
or obligations hereunder without the prior written consent
of the Agent and all Lenders; and
(b) the rights of sale, assignment and transfer of the
Lenders are subject to Section 10.11.
-------------
SECTION 10.11 Sale and Transfer of Loans; Participations in
---------------------------------------------
Loans. Each Lender may make assignments of, or have outstanding
- - -----
at any time participations in, its Loans and Commitment to one
other Person in accordance with this Section 10.11; provided that
------------- --------
the provisions of this Section shall not apply to any
participations purchased or sold pursuant to Section 4.9.
-----------
SECTION 10.11.1 Assignments. Any Lender (including without
-----------
limitation any Assignee Lender):
(a) with the written consents of the Company and the
Agent (which consents shall not be unreasonably delayed or
withheld and which consent, in the case of the Company,
shall be deemed to have been given in the absence of a
written notice delivered by the Company to the Agent, on or
before the fifth Business Day after receipt by the Company
of such Lender's written request for consent) may at any
time assign and delegate to a commercial bank or other
Person (other than a mutual fund or insurance company), and
(b) with notice to the Company and the Agent, but
without the consent of the Company or the Agent, may assign
and delegate to any of its affiliates or to any other Lender
(each Person described in either of the foregoing clauses as
being the Person to whom such assignment and delegation is to be
made, being hereinafter referred to as an "Assignee Lender"), a
---------------
fraction of such Lender's total Committed Loans and Commitment
such that the amount of such assignment shall be in a minimum
amount of $3,000,000 (or if less the total amount of such
Lender's Committed Loans and Commitment); provided that any such
--------
Assignee Lender will comply, if applicable, with the provisions
contained in the last sentence of Section 4.7; and provided
----------- --------
further, that the Company and the Agent shall be entitled to
- - -------
continue to deal solely and directly with such Lender in
connection with the interests so assigned and delegated to an
Assignee Lender until
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<PAGE> 78
(x) such Assignee Lender shall have executed and
delivered to the Agent and if appropriate, the Company, a
Lender Assignment Agreement, accepted by the Agent, and such
Lender and Assignee Lender and
(y) the processing fees described below shall have
been paid to the Agent, and the Agent shall have so notified
the Company.
From and after the date that the Agent accepts such Lender
Assignment Agreement, (i) the Assignee Lender thereunder shall be
deemed automatically to have become a party hereto and to the
extent that rights and obligations hereunder have been assigned
and delegated to such Assignee Lender in connection with such
Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan
Documents, and (ii) the assignor Lender, to the extent that
rights and obligations hereunder have been assigned and delegated
by it in connection with such Lender Assignment Agreement, shall
be released from its obligations hereunder and under the other
Loan Documents. Promptly after the recording of such Lender
Assignment Agreement, the Company, at its own expense, shall
execute and deliver to the Agent in exchange for the surrendered
Note or Notes a new Committed Note payable to the order of such
Assignee Lender in an amount equal to the Commitment assumed by
it pursuant to such Lender Assignment Agreement and a Bid Note
for such Assignee Lender, and, if the assigning Lender has
retained a Commitment hereunder, a new Committed Note payable to
the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder in substitution for such
assigning Lender's old Committed Note and not in payment thereof.
Such Committed Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered
Committed Note, and together with the Bid Note for such Assignee
Lender shall be dated the effective date of such Lender
Assignment Agreement (or such earlier date as shall be acceptable
to such Persons) and shall otherwise be in substantially the form
of Exhibit A-1 and Exhibit A-2, as appropriate. Such assignor
----------- -----------
Lender or such Assignee Lender must also pay a processing fee to
the Agent upon delivery of any Lender Assignment Agreement in the
amount of $2,500 (for which the Company shall have no
reimbursement obligation). Any attempted assignment and
delegation not made in accordance with this Section 10.11.1 shall
be null and void. ---------------
Notwithstanding anything contained in this Section 10.11.1
---------------
to the contrary, each Lender shall have the unrestricted right to
assign its rights hereunder to any Federal Reserve Bank to secure
such Lender's borrowing from such Federal Reserve Bank.
SECTION 10.11.2 Participations. Any Lender may at any time
--------------
sell to a commercial bank or other Person (other than a mutual
fund or insurance company) (each of such commercial banks and
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<PAGE> 79
other Persons being herein called a "Participant") participating
-----------
interests in any of the Loans, its Commitment, or other interests
of such Lender hereunder in the aggregate amount of $3,000,000 or
greater; provided that:
--------
(a) no participation contemplated in this
Section 10.11 shall relieve such Lender from its Commitment
-------------
or its other obligations hereunder or under any other Loan
Document,
(b) such Lender shall remain solely responsible for
the performance of its Commitment and such other
obligations,
(c) the Company and the Agent shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and
each of the other Loan Documents,
(d) no Participant, unless such Participant is an
affiliate of such Lender, or is itself a Lender, shall be
entitled to require such Lender to take or refrain from
taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any
Participant that such Lender will not, without such
Participant's consent, take any actions of the type
described in clause (b) or (c) of Section 10.1,
---------- --- ------------
(e) the Company shall not be required to pay any
amount under Section 4.7 that is greater than the amount
-----------
which it would have been required to pay had no
participating interest been sold, and
(f) no Participant may further participate in any
interest hereunder (and each participation agreement shall
contain a restriction to the effect).
The Company acknowledges and agrees, subject to the foregoing
provisions of this Section 10.11.2, that each Participant, for
---------------
purposes of Sections 4.1, 4.5, 4.6, 4.7, 4.9, 4.10, 10.3 and
------------ --- --- --- --- ---- ----
10.4, shall be considered a Lender; provided that no Participant
- - ---- --------
shall receive any payment under such Sections greater than the
Lender from whom such Participant purchased such participation
would have received if such Lender had not sold such
participation.
SECTION 10.12 Confidentiality. The Lenders shall hold all
---------------
non-public information (which has been identified as such by the
Company) obtained pursuant to the requirements of this Agreement
in accordance with their customary procedures for handling
confidential information of this nature and in accordance with
safe and sound banking practices, and in any event the Lenders
may make disclosure (i) to any of their examiners, affiliates,
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<PAGE> 80
outside auditors, counsel and other professional advisors who
have a need to know such information in connection with this
Agreement, or (ii) as required by any governmental agency or
representative thereof or pursuant to legal process, or (iii) in
order to preserve, protect or enforce any of the Lenders' rights
and remedies hereunder or under any of the other Loan Documents,
or (iv) to any actual or prospective transferee or assignee;
provided that:
- - --------
(a) unless specifically prohibited by applicable law
or court order, each Lender shall notify the Company of any
request by any governmental agency or representative thereof
(other than any such request in connection with an
examination of the financial condition of such Lender by
such governmental agency) or other requests made pursuant to
legal process for disclosure of any such non-public
information prior to disclosure of such information;
(b) each Lender shall give prompt notice to the
Company after any disclosure given by such Lender pursuant
to clause (iii) above;
(c) prior to any such disclosure to an actual or
prospective transferee or assignee or participant pursuant
to this Section 10.12, each Lender shall require any such
-------------
transferee, assignee or participant receiving a disclosure
of non-public information to execute a letter substantially
in the form of Exhibit Q hereto; and
---------
(d) except as may be required by an order of a court
of competent jurisdiction and to the extent set forth
therein, upon the request of the Company each Lender shall
be obligated or required to return any such materials
furnished by the Company or any Subsidiary unless such
Lender informs the Company upon such request, that such
Lender is required to retain such materials pursuant to any
applicable law, regulation or internal policy of such
Lender.
SECTION 10.13 Other Transactions. Nothing contained herein
------------------
shall preclude the Agent or any other Lender from engaging in any
transaction, in addition to those contemplated by this Agreement
or any other Loan Document, with the Company or any of its
Affiliates in which the Company or such Affiliate is not
restricted hereby from engaging with any other Person.
SECTION 10.14 CHOICE OF FORUM; CONSENT TO SERVICE OF
--------------------------------------
PROCESS AND JURISDICTION. ANY SUIT, ACTION OR PROCEEDING AGAINST
- - ------------------------
THE COMPANY WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE
OTHER LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY A COURT IN
RESPECT THEREOF, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AS THE LENDERS AND THE AGENT IN THEIR
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<PAGE> 81
DISCRETION MAY ELECT AND THE COMPANY HEREBY SUBMITS TO THE NON-
EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUCH
SUIT, ACTION OR PROCEEDING. THE COMPANY HEREBY AGREES THAT
SERVICE OF ALL WRITS, PROCESS AND SUMMONSES IN ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN THE STATE OF NEW YORK MAY BE
BROUGHT UPON THE PROCESS AGENT, AND THE COMPANY HEREBY
IRREVOCABLY APPOINTS THE PROCESS AGENT, AS ITS TRUE AND LAWFUL
ATTORNEY-IN-FACT IN THE NAME, PLACE AND STEAD OF THE COMPANY TO
ACCEPT SUCH SERVICE OF ANY AND ALL SUCH WRITS, PROCESS AND
SUMMONSES. THE COMPANY HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID
COURT BY THE MAILING THEREOF BY THE AGENT BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY'S PROCESS AGENT.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTIONS WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN
DOCUMENTS BROUGHT IN THE COURTS FOR THE STATE OF NEW YORK OR THE
SOUTHERN DISTRICT OF NEW YORK AND HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 10.15 WAIVER OF JURY TRIAL. THE COMPANY, THE
--------------------
AGENT, AND EACH LENDER HEREBY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM OR
RELATING TO ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREE, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
SECTION 10.16 Process Agent. The Company agrees to keep
-------------
appointed the Process Agent as its process agent to collect
service of process in the State of New York during the term of
this Agreement.
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<PAGE> 82
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
KELLWOOD COMPANY
By /s/ James C. Jacobsen
-------------------------------------
Name: James C. Jacobsen
Title: Executive Vice President
Administration
THE BANK OF NOVA SCOTIA,
individually and as Agent
By /s/ F.C.H. Ashby
-------------------------------------
Name: F.C.H. Ashby
Title: Senior Assistant Agent
THE BOATMEN'S NATIONAL BANK OF ST.
LOUIS
By /s/ C. Susan Taylor
-------------------------------------
Name: C. Susan Taylor
Title: Vice President
CHEMICAL BANK
By /s/ Susan H. Atha
-------------------------------------
Name: Susan H. Atha
Title: Vice President
CONTINENTAL BANK N.A.
/s/ Barry Watters
-------------------------------------
Name: Barry Watters
Title: Vice President
-76-
<PAGE> 83
CREDIT SUISSE
By /s/ William P. Murray
-------------------------------------
Name: William P. Murray
------------------------------
Title: Member of Senior Management
------------------------------
By /s/ Kristinn R. Kristinsson
-------------------------------------
Name: Kristinn R. Kristinsson
------------------------------
Title: Associate
------------------------------
THE DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By /s/ Masami Tsuboi
-------------------------------------
Name: Masami Tsuboi
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Jeanette Ganousis
-------------------------------------
Name: Jeanette Ganousis
Title: Vice President
MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION
By /s/ Edward A. Cheney
-------------------------------------
Name: Edward A. Cheney
Title: Vice President
NATIONSBANK OF NORTH CAROLINA, N.A.
By /s/ Louise Comiskey
-------------------------------------
Name: Louise Comiskey
Title: Vice President
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<PAGE> 84
UNION BANK OF SWITZERLAND
By /s/ Michelle Moreno
-------------------------------------
Name: Michelle Moreno
Title: Vice President
By /s/ Robert H. Riley III
-------------------------------------
Name: Robert H. Riley III
Title: First Vice President
WACHOVIA BANK OF GEORGIA, N. A.
By /s/ Terry Akins
-------------------------------------
Name: Terry Akins
Title: Senior Vice President
-78-
<PAGE> 1
SHORT-TERM CREDIT AGREEMENT
dated as of June 24, 1994
among
KELLWOOD COMPANY,
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
and
THE BANK OF NOVA SCOTIA, as Agent
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<S> <C>
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . 1
SECTION 1.1 Defined Terms . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Use of Defined Terms. . . . . . . . . . . . . . . 18
SECTION 1.3 Cross-References. . . . . . . . . . . . . . . . . 18
SECTION 1.4 Accounting and Financial Determinations . . . . . 18
ARTICLE 2 COMMITMENTS, BORROWING PROCEDURES AND NOTES . . . . 18
SECTION 2.1 Commitments . . . . . . . . . . . . . . . . . . . 18
SECTION 2.2 Reduction or Termination of the Commitments . . . 19
SECTION 2.3 [Reserved]. . . . . . . . . . . . . . . . . . . . 20
SECTION 2.4 Committed Loans Borrowing Procedure . . . . . . . 20
SECTION 2.5 Continuation and Conversion Elections . . . . . . 20
SECTION 2.6 Procedures with Respect to Bid Rate Loans . . . . 21
SECTION 2.7 Funding . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.8 Availability of Funds . . . . . . . . . . . . . . 24
SECTION 2.9 Reliance Upon Telephonic Notices. . . . . . . . . 24
SECTION 2.10 Currency. . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.11 Conditions. . . . . . . . . . . . . . . . . . . . 24
SECTION 2.12 Notes . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 3 REPAYMENTS, PREPAYMENTS, INTEREST AND FEES . . . . 25
SECTION 3.1 Repayments and Prepayments. . . . . . . . . . . . 25
SECTION 3.2 Interest Provisions . . . . . . . . . . . . . . . 26
SECTION 3.2.1 Rates . . . . . . . . . . . . . . . . 26
SECTION 3.2.2 Default Rates . . . . . . . . . . . . 27
SECTION 3.2.3 Payment Dates . . . . . . . . . . . . 27
SECTION 3.3 Fees. . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.3.1 Facility Fee. . . . . . . . . . . . . 28
SECTION 3.3.2 Agent's Fees. . . . . . . . . . . . . 28
ARTICLE 4 CERTAIN EURODOLLAR AND OTHER LOAN PROVISIONS . . . . 28
SECTION 4.1 Increased Cost. . . . . . . . . . . . . . . . . . 28
SECTION 4.2 Deposits Unavailable or Interest Rate
Unascertainable or Inadequate; Impracticability . . . . . 29
SECTION 4.3 Changes in Law Rendering Eurodollar Loans
Unlawful. . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.4 Discretion of the Lenders as to Manner
of Funding. . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.5 Funding Losses. . . . . . . . . . . . . . . . . . 31
SECTION 4.6 Increased Capital Costs . . . . . . . . . . . . . 32
SECTION 4.7 Taxes . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.8 Payments, Computations, etc . . . . . . . . . . . 33
SECTION 4.9 Sharing of Payments . . . . . . . . . . . . . . . 34
SECTION 4.10 Application of Certain Payments.. . . . . . . . . 35
SECTION 4.11 Cheloid . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.12 Use of Proceeds.. . . . . . . . . . . . . . . . . 36
-i-
<PAGE> 3
ARTICLE 5 CONDITIONS TO BORROWING . . . . . . . . . . . . . . 36
SECTION 5.1 Initial Borrowing.. . . . . . . . . . . . . . . . 36
SECTION 5.1.1 Resolutions, etc. . . . . . . . . . . 36
SECTION 5.1.2 Delivery of Notes.. . . . . . . . . . 37
SECTION 5.1.3 This Agreement. . . . . . . . . . . . 37
SECTION 5.1.4 Opinions of Counsel.. . . . . . . . . 37
SECTION 5.1.5 Consents, etc.. . . . . . . . . . . . 37
SECTION 5.1.6 Closing Fees, Expenses, etc.. . . . . 37
SECTION 5.1.7 Forms from the Lenders. . . . . . . . 38
SECTION 5.1.8 Process Agent . . . . . . . . . . . . 38
SECTION 5.1.9 Termination.. . . . . . . . . . . . . 38
SECTION 5.1.10 No Material Adverse Change. . . . . . 38
SECTION 5.1.11 Compliance Certificate. . . . . . . . 38
SECTION 5.1.12 Other Documents.. . . . . . . . . . . 38
SECTION 5.2 All Borrowings. . . . . . . . . . . . . . . . . . 38
SECTION 5.2.1 Compliance with Warranties,
No Default, etc.. . . . . . . . . . 38
SECTION 5.2.2 Borrowing Request or Bid
Request.. . . . . . . . . . . . . . 39
SECTION 5.2.3 Satisfactory Legal Form . . . . . . . 39
ARTICLE 6 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 40
SECTION 6.1 Organization, etc.. . . . . . . . . . . . . . . . 40
SECTION 6.2 Due Authorization, Non-Contravention, etc.. . . . 40
SECTION 6.3 Government Approval, Regulation, etc. . . . . . . 40
SECTION 6.4 Validity, etc. . . . . . . . . . . . . . . . . . 41
SECTION 6.5 Financial Information.. . . . . . . . . . . . . . 41
SECTION 6.6 No Material Adverse Change; No Default. . . . . . 41
SECTION 6.7 Litigation, Labor Controversies, etc. . . . . . . 41
SECTION 6.8 Subsidiaries. . . . . . . . . . . . . . . . . . . 42
SECTION 6.9 Ownership of Properties.. . . . . . . . . . . . . 42
SECTION 6.10 Taxes.. . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.11 Pension and Welfare Plans.. . . . . . . . . . . . 42
SECTION 6.12 Environmental Warranties. . . . . . . . . . . . . 43
SECTION 6.13 Regulations G, U and X. . . . . . . . . . . . . . 43
SECTION 6.14 Insurance.. . . . . . . . . . . . . . . . . . . . 44
SECTION 6.15 Indebtedness. . . . . . . . . . . . . . . . . . . 44
SECTION 6.16 Accuracy of Information.. . . . . . . . . . . . . 44
SECTION 6.17 Material Subsidiary.. . . . . . . . . . . . . . . 44
ARTICLE 7 COVENANTS . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.1 Corporate Existence, etc. . . . . . . . . . . . . 45
SECTION 7.2 Insurance.. . . . . . . . . . . . . . . . . . . . 45
SECTION 7.3 Taxes, Claims for Labor and Materials,
Compliance with Laws. . . . . . . . . . . . . . . . . . . 45
SECTION 7.4 Maintenance, etc. . . . . . . . . . . . . . . . . 46
SECTION 7.5 Nature of Business. . . . . . . . . . . . . . . . 46
SECTION 7.6 Interest Coverage Ratio.. . . . . . . . . . . . . 46
SECTION 7.7 Leverage Ratio. . . . . . . . . . . . . . . . . . 46
SECTION 7.8 Consolidated Shareholder's Equity.. . . . . . . . 46
-ii-
<PAGE> 4
SECTION 7.9 Confirmation of Senior Debt Rating. . . . . . . . 46
SECTION 7.10 Limitations on Indebtedness.. . . . . . . . . . . 47
SECTION 7.11 Liens and Negative Pledges. . . . . . . . . . . . 47
SECTION 7.11.1 Limitation on Liens. . . . . . . . . 47
SECTION 7.11.2 Restrictive Agreements, etc. . . . . 50
SECTION 7.12 Acquisitions. . . . . . . . . . . . . . . . . . . 50
SECTION 7.13 Mergers, Consolidations and Sales of Assets.. . . 50
SECTION 7.13.1 Mergers, Consolidations and
Dispositions. . . . . . . . . . . 50
SECTION 7.13.2 Issuance or Sale of Stock by
Subsidiaries. . . . . . . . . . . . 51
SECTION 7.13.3 Sale of Stock in Subsidiaries. . . . 52
SECTION 7.14 Guaranties. . . . . . . . . . . . . . . . . . . . 52
SECTION 7.15 Compliance with Applicable Law. . . . . . . . . . 52
SECTION 7.16 Transactions with Affiliates. . . . . . . . . . . 53
SECTION 7.17 EROSE Compliance. . . . . . . . . . . . . . . . . 53
SECTION 7.18 Reports and Rights of Inspection. . . . . . . . . 54
SECTION 7.19 Environmental Covenant. . . . . . . . . . . . . . 58
ARTICLE 8 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . 58
SECTION 8.1 Listing of Events of Default. . . . . . . . . . . 58
SECTION 8.1.1 Non-Payment of Obligations. . . . . . 58
SECTION 8.1.2 Breach of Warranty. . . . . . . . . . 58
SECTION 8.1.3 Non-Performance of Covenants and
Obligations. . . . . . . . . . . . . 59
SECTION 8.1.4 Default on Other Indebtedness. . . . 59
SECTION 8.1.5 Judgments.. . . . . . . . . . . . . . 60
SECTION 8.1.6 Pension Plans.. . . . . . . . . . . . 60
SECTION 8.1.7 Bankruptcy, Insolvency, etc.. . . . . 60
SECTION 8.1.8 Change of Control Event.. . . . . . . 61
SECTION 8.1.9 Environmental Matters.. . . . . . . . 61
SECTION 8.2 Action if Bankruptcy. . . . . . . . . . . . . . . 61
SECTION 8.3 Action if Other Event of Default. . . . . . . . . 62
ARTICLE 9 THE AGENT . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.1 Actions.. . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.2 Funding Reliance, etc.. . . . . . . . . . . . . . 63
SECTION 9.3 Exculpation.. . . . . . . . . . . . . . . . . . . 63
SECTION 9.4 Successor.. . . . . . . . . . . . . . . . . . . . 64
SECTION 9.5 Loans by Scotiabank.. . . . . . . . . . . . . . . 64
SECTION 9.6 Credit Decisions. . . . . . . . . . . . . . . . . 64
SECTION 9.7 Copies, etc.. . . . . . . . . . . . . . . . . . . 65
ARTICLE 10 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . 65
SECTION 10.1 Waivers, Amendments, etc.. . . . . . . . . . . . 65
SECTION 10.2 Notices. . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.3 Payment of Costs and Expenses. . . . . . . . . . 66
SECTION 10.4 Indemnification. . . . . . . . . . . . . . . . . 67
SECTION 10.5 Survival.. . . . . . . . . . . . . . . . . . . . 68
SECTION 10.6 Severability.. . . . . . . . . . . . . . . . . . 68
SECTION 10.7 Headings.. . . . . . . . . . . . . . . . . . . . 68
SECTION 10.8 Execution in Counterparts, Effectiveness, etc. . 68
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<PAGE> 5
SECTION 10.9 Governing Law; Entire Agreement. . . . . . . . . 68
SECTION 10.10 Successors and Assigns.. . . . . . . . . . . . . 68
SECTION 10.11 Sale and Transfer of Loans;
Participations in Loans.. . . . . . . . . . . . . . . . . 69
SECTION 10.11.1 Assignments. . . . . . . . . . . . 69
SECTION 10.11.2 Participations. . . . . . . . . . . 70
SECTION 10.12 Confidentiality. . . . . . . . . . . . . . . . . 71
SECTION 10.13 Other Transactions.. . . . . . . . . . . . . . . 72
SECTION 10.14 CHOICE OF FORUM; CONSENT TO SERVICE OF
PROCESS AND JURISDICTION. . . . . . . . . . . . . . . . . 72
SECTION 10.15 WAIVER OF JURY TRIAL.. . . . . . . . . . . . . . 73
SECTION 10.16 Process Agent. . . . . . . . . . . . . . . . . . 73
</TABLE>
-iv-
<PAGE> 6
SCHEDULE I - Commitments, Addresses and Telephone and
Facsimile Numbers
EXHIBIT A-1 - Form of Committed Note
EXHIBIT A-2 - Form of Bid Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Continuation/Conversion Notice
EXHIBIT B-3 - Form of Bid Request
EXHIBIT B-4 - Form of Invitation for Competitive Bid Quotes
EXHIBIT C-1 - Form of Bid
EXHIBIT C-2 - Form of Bid Rate Loan Acknowledgment
EXHIBIT C-3 - Form of Bid Rate Loan Confirmation
EXHIBIT D - Form of Certificate of Kellwood Company
EXHIBIT E - Forms of Opinions of Counsel to the Company
EXHIBIT F - Form of Opinion of Counsel to the Agent
EXHIBIT G - Schedule of Litigation
EXHIBIT H - Schedule of Subsidiaries
EXHIBIT I - Schedule of Tax Matters
EXHIBIT J - Schedule of Plans
EXHIBIT K - Schedule of Environmental Matters
EXHIBIT L - Schedule of Indebtedness
EXHIBIT M - Intentionally Omitted
EXHIBIT N - Schedule of Existing Liens
EXHIBIT O - Form of Annual Consolidating Summary
EXHIBIT P - Form of Lender Assignment Agreement
EXHIBIT Q - Form of Confidentiality Letter
-v-
<PAGE> 7
SHORT-TERM CREDIT AGREEMENT
THIS SHORT-TERM CREDIT AGREEMENT, dated as of June
24, 1994 (as amended, supplemented, restated or otherwise
modified from time to time, this "Agreement"), is by and among
---------
KELLWOOD COMPANY, a Delaware corporation (the "Company"), the
-------
various financial institutions as are or may become parties
hereto (collectively, the "Lenders", and, individually, a
-------
"Lender"), and THE BANK OF NOVA SCOTIA, a Canadian chartered bank
------
("Scotiabank"), as agent (in such capacity, the "Agent") for the
---------- -----
Lenders.
W I T N E S S E T H:
WHEREAS, the Company has requested the Lenders to
make loans to the Company and the Lenders have agreed to extend a
short-term revolving credit facility to the Company upon the
terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises
and the mutual agreements herein contained, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Defined Terms. The following terms
-------------
(whether or not underscored) when used in this Agreement,
including its preamble and recitals, shall, except where the
context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural
forms thereof):
"Acquiring Person" is defined in "Change of
---------------- ---------
Control Event."
- - -------------
"Affiliate" means any Person (other than a
---------
Subsidiary) (i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, the Company, (ii) which beneficially owns or holds
15% or more of any class of the Voting Stock of the Company, or
(iii) 15% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 15% or more of the equity interest)
of which is beneficially owned or held by the Company or a
Subsidiary. The term "control" means the possession, directly or
-------
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
<PAGE> 8
"Agent" is defined in the preamble and includes
----- --------
each other Person as shall have subsequently been appointed as
the successor Agent pursuant to Section 9.4.
-----------
"Agent Fee Letter" means those separate
----------------
confidential fee letter agreements, dated March 25, 1994 and May
26, 1994, respectively, between the Company and Scotiabank, as
the same may be amended, modified or supplemented from time to
time, together with any substitutions therefor or replacements
thereof.
"Aggregate Outstanding Loans" means, as at any
---------------------------
date of determination thereof and without duplication, the sum of
(a) the aggregate principal amount of all outstanding Committed
Loans plus (b) the aggregate principal amount of all outstanding
----
Bid Rate Loans.
"Agreement" is defined in the preamble.
--------- --------
"Alternate Base Rate" means, on any date and with
-------------------
respect to all Base Rate Loans, a fluctuating rate of interest
per annum equal to the higher of
- - --- -----
(a) the rate of interest most recently announced
by Scotiabank at Atlanta, Georgia as its base
rate; or
(b) the Federal Funds Effective Rate most
recently determined by the Agent plus 0.50%.
----
The Alternate Base Rate is not necessarily intended to be the
lowest rate of interest determined by Scotiabank in connection
with extensions of credit. Changes in the rate of interest
determined by reference to the Alternate Base Rate will take
effect simultaneously with each change in the Alternate Base
Rate. The Agent will give notice promptly to the Company and the
Lenders of changes in the Alternate Base Rate; provided that the
--------
failure to so notify shall not affect the Alternate Base Rate.
"Applicable Eurodollar Margin" and "Applicable
---------------------------- ----------
Facility Fee Percentage" respectively mean, during any Pricing
- - -----------------------
Period, the amount set forth below for such Applicable Eurodollar
Margin or Applicable Facility Fee Percentage, as the case may be,
depending upon the Leverage Ratio as of the last day of the
fiscal quarter most recently ended prior to the first day of such
Pricing Period:
-2-
<PAGE> 9
<TABLE>
<CAPTION>
Applicable
Applicable Facility
Leverage Eurodollar Fee
Ratio Margin Percentage
----- ---------- ----------
<S> <C> <C>
Less than or equal
to 0.25 to 1.00 0.250% 0.100%
Greater than 0.25 to
1.00, but less than
or equal to 0.35 to 1.00 0.300% 0.125%
Greater than 0.35 to
to 1.00, but less than
or equal to .50 to 1.00 0.325% 0.150%
Greater than .50 to 1.00 0.400% 0.200%
</TABLE>
; provided that, if and only for so long as the Company is in
--------
default of its obligation to deliver (which delivery may be by
facsimile transmission) a compliance certificate under Section
-------
7.18(h), the Applicable Eurodollar Margin shall be 1.00% and the
- - -------
Applicable Commitment Fee Percentage shall be 0.350%,
respectively; and provided, further, that notwithstanding
-------- -------
anything contained herein to the contrary, if and for each day
that the Company receives a senior unsecured non-credit enhanced
long-term debt rating (a "Senior Debt Rating") from a Rating
------------------
Agency, the Applicable Eurodollar Margin and the Applicable
Facility Fee Percentage, respectively, for such day shall be the
amount set forth below for such Applicable Eurodollar Margin and
Applicable Fee Percentage, as the case may be, depending on the
Senior Debt Rating of the Company for such day:
<TABLE>
<CAPTION>
Applicable
Applicable Facility
Senior Debt Eurodollar Fee
Rating Margin Percentage
------ ---------- ----------
<S> <C> <C>
Greater than or equal 0.250% 0.100%
to either A- or A3
Greater than or equal 0.300% 0.125%
to either BBB+ or Baa1
Greater than or equal 0.325% 0.150%
to either BBB or Baa2
Less than BBB and Baa2 0.400% 0.200%
</TABLE>
If the Company receives a Senior Debt Rating from more than
one Rating Agency, the lowest Senior Debt Rating received by the
Company shall be used to determine each of the Applicable
-3-
<PAGE> 10
Eurodollar Margin and the Applicable Facility Fee Percentage.
The Company shall immediately notify the Agent of a change in the
Senior Debt Rating. Any change in the Applicable Eurodollar
Margin or the Applicable Facility Fee Percentage resulting from a
change in the Senior Debt Rating shall be effective as of the
opening of business on the day on which such change in the Senior
Debt Rating becomes effective.
"Assignee Lender" is defined in Section 10.11.1.
--------------- ---------------
"Base Rate Loan" means a Committed Loan bearing interest at
--------------
a rate determined by reference to the Alternate Base Rate.
"Bid" means one or more offers by a Lender to make one or
---
more Bid Rate Loans, submitted to the Agent no later than the
relevant Submission Deadline on a duly completed and executed
form substantially similar to Exhibit C-1, personally delivered
-----------
or transmitted by telecopy to the Agent.
"Bid Notes" and "Bid Note" respectively mean (a) the
--------- --------
promissory notes of the Lender, substantially in the form of
Exhibit A-2, duly completed, evidencing Bid Rate Loans made to
- - -----------
the Company by a Lender, and (b) a single such promissory note.
"Bid Rate" means, relative to any Bid Rate Loan of any
--------
Lender, the fixed rate of interest (expressed to the nearest
1/10,000 of 1%), in each case offered by such Lender in its Bid
offering to make such Bid Rate Loan and, if the context so
requires, accepted by the Company.
"Bid Rate Loan" is defined in Section 2.1(b).
------------- --------------
"Bid Rate Loan Acknowledgment" means an acknowledgment, duly
----------------------------
executed by an authorized officer of the Company, of the
Company's acceptance of a Bid, substantially in the form of
Exhibit C-2.
- - -----------
"Bid Rate Loan Confirmation" means a notice by the Agent to
--------------------------
each Lender of a Borrowing of Bid Rate Loans, substantially in
the form of Exhibit C-3.
-----------
"Bid Request" means a request by the Company for Bids,
-----------
submitted to the Agent by telephone no later than the time
specified in Section 2.6(a), promptly confirmed in writing on the
--------------
same day on a duly completed and executed form substantially
similar to Exhibit B-3, and personally delivered or transmitted
-----------
by telecopy to the Agent.
"Borrowing" means a borrowing by the Company from the
---------
Lenders (or any of them) pursuant to Section 2.1(a) or 2.1(b).
-------------- ------
"Borrowing Request" means a loan request and certificate
-----------------
duly executed by an authorized officer of the Company,
-4-
<PAGE> 11
substantially in the form of Exhibit B-1 hereto and delivered
-----------
pursuant to Section 2.4.
-----------
"Business Day" means any day which is neither a Saturday or
------------
Sunday nor a legal holiday on which banks are authorized or
required to be closed in Atlanta, Georgia, New York, New York, or
Chicago, Illinois and, relative to the making, continuing,
prepaying or repaying of any Eurodollar Loans, any day on which
dealings are carried on in the London interbank eurodollar
market.
"Capital Expenditures" means, with respect to any Person,
--------------------
for any period the aggregate of all expenditures incurred by such
Person during such period on a consolidated basis (whether or not
paid in cash and including that portion of Capitalized Leases
which is capitalized on the consolidated balance sheet of such
Person during such period) which expenditures are required to be
included in, or reflected by, the property, plant or equipment or
similar fixed asset accounts on the balance sheet of such Person
prepared in accordance with GAAP.
"Capitalized Lease" means any lease the obligation for
-----------------
Rentals with respect to which is required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Capitalized Rentals" means as of the date of any
-------------------
determination the amount at which the aggregate Rentals due and
to become due under all Capitalized Leases under which the
Company or any Subsidiary is a lessee would be reflected as a
liability on a consolidated balance sheet of the Company and its
Subsidiaries.
"CERCLA" means the Comprehensive Environmental Response,
------
Compensation and Liability Act of 1980, as amended.
"Change of Control Event" means the earlier to occur of
-----------------------
(a) the date of a public announcement that a Person or group of
affiliated or associated Persons (an "Acquiring Person") has
----------------
acquired, or has obtained the right to acquire, legal or
beneficial ownership of 50% or more of the Voting Stock of the
Company, (b) the date an Acquiring Person acquires all or
substantially all of the assets of the Company (for purposes
hereof, the term "Acquiring Person" shall not include the
Company, any of its Subsidiaries or any employee benefit plan (or
related trust), sponsored or maintained by the Company or any of
its Subsidiaries) or (c) on the date on which a majority of the
board of directors of the Company shall consist of Persons other
than Continuing Directors (for purposes of this definition,
"Continuing Director" means any member of the board of directors
-------------------
of the Company on the date hereof and any other member of the
board of directors of the Company who shall be nominated or
elected to succeed a Continuing Director by at least a majority
-5-
<PAGE> 12
of the Continuing Directors who are then members of the board of
directors of the Company).
"Code" means the Internal Revenue Code of 1986, as amended,
----
and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to
time. References to sections of the Code also include any
successor sections.
"Commitment" means, relative to any Lender, the amount of
----------
such Lender's obligation to make Committed Loans pursuant to
Section 2.1(a) as set forth on Schedule I, as amended from time
- - -------------- ----------
to time, or as set forth in the applicable Lender Assignment
Agreement executed and delivered pursuant to Section 10.11,
-------------
reduced by the amount of any permanent reduction(s) in such
amount pursuant to this Agreement.
"Commitment Amount" means, on any date, $50,000,000, as such
-----------------
amount may be reduced from time to time pursuant to Section 2.2.
-----------
"Commitment Termination Date" means the earliest of
---------------------------
(a) the Stated Maturity Date;
(b) the date on which the Commitment Amount is
terminated in full or reduced to zero pursuant to Section
2.2; and -------
---
(c) the date on which any Commitment Termination Event
occurs.
"Commitment Termination Event" means
----------------------------
(a) the occurrence of any Default described in clauses
(a) through (d) of Section 8.1.7; or -------
--- --- -------------
(b) the occurrence and continuance of any other Event
of Default and the declaration of the Loans to be due and
payable and the Commitments to be terminated pursuant to
Section 8.3.
-----------
"Committed Loans" is defined in Section 2.1(a).
--------------- --------------
"Committed Notes" and "Committed Note" respectively mean
--------------- --------------
(a) the promissory notes of the Company, substantially in the
form of Exhibit A-1, duly completed, evidencing Committed Loans
-----------
made to the Company by a Lender, and (b) a single such promissory
note.
"Company" is defined in the preamble.
------- --------
"Consolidated Debt" means, as of the date of any
-----------------
determination thereof and without duplication, (a) all
-6-
<PAGE> 13
"Indebtedness" of the Company and its Subsidiaries described in
clauses (i), (ii), (iii), (iv) and (vi) of the definition of such
- - ----------- ---- ----- ---- ----
term, and (b) Guaranties of Indebtedness of other Persons, except
Subsidiaries.
"Consolidated Net Income" for any period means the sum of
-----------------------
(i) any cash consideration received with respect to sales of
export quota rights and (ii) gross revenues of the Company and
its Subsidiaries for such period less all expenses and other
----
proper charges (including taxes on income), determined on a
consolidated basis in accordance with GAAP consistently applied
and after eliminating earnings or losses attributable to
outstanding Minority Interests. The following items shall not be
included in the computation of Consolidated Net Income:
(a) any gains or losses on the sale or other
disposition of investments or fixed or capital assets (other
than sales or other dispositions, in addition to sales of
export quota rights included pursuant to clause (i) above,
----------
which do not (x) in any one case, result in a gain or loss
in excess of $100,000 or (y) when aggregated with all other
such sales or dispositions made in the same fiscal year of
the Company, result in an aggregate gain or loss in excess
of $300,000), and any taxes on such excluded gains and any
tax deductions or credits on account of any such excluded
losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary accrued
prior to the date it became a Subsidiary;
(d) net earnings and losses of any corporation (other
than a Subsidiary), substantially all the assets of which
have been acquired in any manner, realized by such other
corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other
than a Subsidiary) with which the Company or a Subsidiary
shall have consolidated or which shall have merged into or
with the Company or a Subsidiary prior to the date of such
consolidation or merger;
(f) net earnings of any business entity (other than a
Subsidiary) in which the Company or any Subsidiary has an
ownership interest unless such net earnings shall have
actually been received by the Company or such Subsidiary in
the form of cash distributions;
(g) any portion of the net earnings of any Subsidiary
which for any reason is unavailable for payment of dividends
to the Company or any other Subsidiary;
-7-
<PAGE> 14
(h) earnings resulting from any reappraisal,
revaluation or write-up of assets;
(i) any deferred or other credit representing any
excess of the equity in any Subsidiary at the date of
acquisition thereof over the amount invested in such
Subsidiary;
(j) any gain arising from the acquisition, retirement
or disposition of any Securities of the Company or any
Subsidiary; and
(k) any reversal of any contingency reserve, except to
the extent that provision for such contingency reserve shall
have been made from income arising during such period.
"Consolidated Net Tangible Assets" means, as of the date of
--------------------------------
any determination thereof, the total amount of all assets of the
Company and its Subsidiaries (less depreciation, depletion and
other properly deductible valuation reserves) after deducting,
without duplication, the sum of: (i) goodwill, patents, trade
names, trademarks, copyrights, franchises, experimental expense,
organization expense, unamortized debt discount and expense, the
excess of cost of shares acquired over book value of related
assets and such other assets as are properly classified as
"intangible assets" in accordance with GAAP; and (ii) all
deferred assets and prepaid expenses, including period insurance
and prepaid taxes, determined in accordance with GAAP.
"Consolidated Shareholder's Equity" means, as of the date of
---------------------------------
any determination thereof, the amount that would be reflected as
shareholders' equity upon a consolidated balance sheet of the
Company and its Subsidiaries determined in accordance with GAAP.
"Continuation/Conversion Notice" means a notice of
------------------------------
continuation or conversion and certificate duly executed by an
authorized officer of the Company, substantially in the form of
Exhibit B-2 hereto.
- - -----------
"Continuing Director" is defined in "Change of Control
------------------- -----------------
Event."
- - -----
"Controlled Group" means all members of a controlled group
----------------
of corporations and all members of a controlled group of trades
or businesses (whether or not incorporated) under common control
which, together with the Company, are treated as a single
employer under Section 414(b) or 414(c) of the Code or Section
4001 of EROSE.
"Default" means any Event of Default or any Unmatured Event
-------
of Default.
"Default Rate" is defined in Section 3.2.2.
------------ -------------
-8-
<PAGE> 15
"Depreciation" means, with respect to any period, the total
------------
amounts added to depreciation, obsolescence, amortization,
valuation and other proper reserves during such period, as
reflected in the consolidated balance sheet of the Company and
its Subsidiaries in order to provide a reasonable method for
systematically allocating the cost of the depreciable asset over
its estimated useful life in accordance with GAAP.
"Dollar" and the sign "$" mean lawful money of the United
------ -
States.
"Effective Date" means June 24, 1994.
--------------
"Environmental Laws" means all applicable federal, state or
------------------
local statutes, laws, ordinances, codes, rules and regulations
(including consent decrees and administrative orders to which the
Company or any Subsidiary is a party) relating to public health
and safety and protection of the environment.
"EROSE" means the Employee Retirement Income Security Act of
-----
1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in
effect from time to time. References to sections of EROSE also
include any successor sections.
"Eurocurrency Reserve Requirement" means, with respect to
--------------------------------
any Eurodollar Loan for any Interest Period, a percentage equal
to the daily average during such Interest Period of the
percentages in effect on each day of such Interest Period, as
prescribed by the F.R.S. Board, for determining the aggregate
maximum reserve requirements (including all basic, supplemental,
marginal and other reserves) applicable to "Eurocurrency
liabilities" pursuant to Regulation D or any other then
applicable regulation of the F.R.S. Board which prescribes
reserve requirements applicable to "Eurocurrency liabilities," as
defined in Regulation D. Without limiting the effect of the
foregoing, the Eurocurrency Reserve Requirement shall reflect any
other reserves required to be maintained by Scotiabank against
(i) any category of liabilities that includes deposits by
reference to which the Eurodollar Rate (Adjusted) is to be
determined, or (ii) any category of extensions of credit or other
assets that includes Eurodollar Loans. For purposes of this
Agreement, any Eurodollar Loans hereunder shall be deemed to be
funded with the proceeds of "Eurocurrency liabilities," as
defined in Regulation D, and, as such, shall be deemed to be
subject to such reserve requirements without the benefit of, or
credit for, proration, exceptions or offsets which may be
available to Scotiabank from time to time under Regulation D.
"Eurodollar Loan" means a Committed Loan bearing interest at
---------------
a rate determined by reference to the Eurodollar Rate (Adjusted).
-9-
<PAGE> 16
"Eurodollar Office" means, relative to any Lender, the
-----------------
office of such Lender designated from time to time by such Lender
as the office which shall be making or maintaining the Eurodollar
Loans of such Lender hereunder or through which such Lender will
be determining the Eurodollar Rate. A Lender's Eurodollar Office
may be, at such Lender's option, either a domestic office or a
foreign office.
"Eurodollar Rate" means, with respect to each Interest
---------------
Period for a Eurodollar Loan, the rate per annum at which Dollar
--- -----
deposits in immediately available funds are offered to Scotiabank
two Business Days prior to the beginning of such Interest Period
by major banks in the London interbank eurodollar market at or
about 11:00 a.m., London time, for delivery on the first day of
such Interest Period, for the number of days comprised therein
and in an amount equal to the amount of the Eurodollar Loan of
Scotiabank to be outstanding during such Interest Period.
"Eurodollar Rate (Adjusted)" means, with respect to each
--------------------------
Interest Period for a Eurodollar Loan, a rate per annum (rounded
--- -----
upward, if necessary, to the nearest 1/100 of 1%) determined
pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
(Adjusted) -------------------------
1-Eurocurrency Reserve
Requirement
"Event of Default" is defined in Section 8.1.
---------------- -----------
"Existing Agreement" means that certain Credit Agreement
------------------
dated as of July 1, 1991, as amended or otherwise modified from
time to time prior to the date hereof, among the Company, certain
commercial lending institutions party thereto and Continental
Bank N.A., as agent.
"Facility Fee" is defined in Section 3.3.1.
------------ -------------
"FDIC" means the Federal Deposit Insurance Corporation, and
----
its successors and assigns.
"Federal Funds Effective Rate" means, for any day, an
----------------------------
interest 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, as
published for such day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Scotiabank from three Federal funds
brokers of recognized standing selected by it.
"F.R.S. Board" means the Board of Governors of the Federal
------------
Reserve System or any successor thereto.
-10-
<PAGE> 17
"GAAP" is defined in Section 1.4.
---- -----------
"Guaranties" by any Person means all obligations (other than
----------
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person
guaranteeing, or in effect guaranteeing, any Indebtedness,
dividend or other obligation, of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any property or
assets constituting security therefor, (ii) to advance or supply
funds (y) for the purchase or payment of such Indebtedness or
obligation, or (z) to maintain working capital or other balance
sheet condition or fixed charge coverage or otherwise to advance
or make available funds for the purchase or payment of such
Indebtedness or obligation, (iii) to lease property or to
purchase Securities or other property or services primarily for
the purpose of assuring the owner of such Indebtedness or
obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure
the owner of the Indebtedness or obligation of the primary
obligor against loss in respect thereof. For the purposes of all
the computations made under this Agreement, a Guaranty in respect
of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness
for borrowed money which has been guaranteed, and a Guaranty in
respect of any other obligation or liability or any dividend
shall be deemed to be Indebtedness equal to the maximum aggregate
amount of such obligation, liability or dividend.
"Hazardous Material" means
------------------
(a) any "hazardous substance," as defined by CERCLA;
(b) any "hazardous waste," as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance within
the meaning of any other applicable federal, state or local
law, regulation, ordinance or requirement (including consent
decrees and administrative orders to which the Company or
any Subsidiary is a party) relating to or imposing liability
or standards of conduct concerning any hazardous or toxic
waste, substance or material, all as amended or hereafter
amended.
"Impermissible Qualification" means, relative to the opinion
---------------------------
or certification of any independent public accountant as to any
-11-
<PAGE> 18
financial statement, any qualification or exception to such
opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination
of matters relevant to such financial statement; or
(c) which relates to the treatment or classification
of any item in such financial statement and which, as a
condition to its removal, would require an adjustment to
such item the effect of which would be to cause the Company
to be in default of any of its obligations under this
Agreement.
"Indebtedness" of any Person means, without duplication, all
------------
(i) obligations of such Person for borrowed money or which have
been incurred in connection with the acquisition of property or
assets or which are evidenced by bonds, notes, debentures or
other similar instruments, (ii) obligations secured by any lien
or other charge upon property or assets owned by such Person,
even though such Person has not assumed or become liable for the
payment of such obligations, (iii) obligations created or arising
under any conditional sale or other title retention agreement
with respect to property acquired by such Person, notwithstanding
the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited
to repossession or sale of property, (iv) Capitalized Rentals
payable by such Person under any Capitalized Lease, (v)
Guaranties of such Person and (vi) amounts of indebtedness which
represent recourse liabilities to such Person with respect to any
structured financing or off-balance sheet financing that would be
included on a balance sheet of such Person in accordance with
GAAP if such financing were characterized as Indebtedness rather
than a sale of assets.
"Indemnified Liabilities" is defined in Section 10.4.
----------------------- ------------
"Indemnified Parties" is defined in Section 10.4.
------------------- ------------
"Interest Charges" for any period means all interest and all
----------------
amortization of debt discount and expense on all Indebtedness of
the Company and its Subsidiaries. Computations of Interest
Charges on a pro forma basis for Indebtedness having a variable
interest rate shall be calculated at the rate in effect on the
date of any determination.
"Interest Coverage Ratio" means, as at any date of
-----------------------
determination, with respect to any period for the Company and its
Subsidiaries, the ratio of (a) Consolidated Net Income for the
previous twelve-month consecutive period ending as of the date of
determination plus (to the extent deducted in determining
----
Consolidated Net Income) Depreciation, Interest Charges, all
-12-
<PAGE> 19
provisions for any federal, state or other income taxes and all
other non-cash charges made for the same period less Capital
Expenditures for the same period to (b) Interest Charges for the
same period.
"Interest Period" (a) with respect to any Eurodollar Loan,
---------------
means the period beginning on and including the date on which
such Loan is made or continued as or converted into a Eurodollar
Loan and ending one, two, three or six months thereafter as the
Company shall specify in the related notice pursuant to
Section 2.4 or 2.5, and (b) with respect to any Bid Rate Loan,
- - ----------- ---
means the period from the Borrowing date for such Bid Rate Loan
and ending not less than seven (7) days nor more than one hundred
seventy-nine (179) days thereafter (which final day must be a
Business Day) as specified by the Company in the applicable Bid
Request; provided that:
--------
(A) if the Company does not specify any Interest
Period for any Eurodollar Loan in the related notice
pursuant to Section 2.4 or 2.5, such Interest Period shall
----------- ---
be the period starting on the Borrowing date or the last day
of the prior Interest Period, as the case may be, for such
Eurodollar Loan and ending one month thereafter;
(B) if an Interest Period for any Eurodollar Loan
would otherwise end on a day which is not a Business Day,
such Interest Period shall end on the next succeeding
Business Day (unless such next succeeding Business Day is
the first Business Day of a calendar month, in which case
such Interest Period shall end on the next preceding
Business Day);
(C) no Interest Period may end later than the Stated
Maturity Date; and
(D) in the case of an Interest Period for a Eurodollar
Loan, if there exists no day numerically corresponding to
the first day of such Interest Period in the month in which
the last day of such Interest Period would otherwise fall,
such Interest Period shall end on the last Business Day of
such month.
"Invitation for Competitive Bid Quotes" means a notice to
-------------------------------------
Lenders by the Agent inviting Bids, substantially in the form of
Exhibit B-4, completed and delivered pursuant to Section 2.6(a).
- - ----------- --------------
"Lender" and "Lenders" are defined in the preamble.
------ ------- --------
"Lender Assignment Agreement" means an Assignment and
---------------------------
Assumption Agreement substantially in the form of Exhibit P
hereto. ---------
-13-
<PAGE> 20
"Leverage Ratio" means the ratio of (a) Consolidated Debt to
--------------
(b) the sum of (i) Consolidated Debt plus (ii) Consolidated
Shareholder's Equity. ----
"Lien" means any security interest, mortgage, pledge,
----
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property
to secure payment of a debt or performance of an obligation or
other priority or preferential arrangement of any kind or nature
whatsoever.
"Loans" and "Loan" respectively mean (a) all loans
----- ----
(including Committed Loans and Bid Rate Loans) made by the
Lenders or a single Lender (as the context requires) to the
Company pursuant to Article 2, and (b) a single such Committed or
---------
Bid Rate Loan made by any Lender.
"Loan Document" means this Agreement, the Notes, the Agent
-------------
Fee Letter and each other relevant agreement, document or
instrument delivered in connection with this Agreement, the Notes
and the Agent Fee Letter.
"Material Compliance" means compliance to the extent that
-------------------
any non-compliance does not have a material adverse effect on the
financial condition, operations, assets, business, properties or
prospects of the Company and its Subsidiaries taken as a whole or
the ability of the Company to pay or perform any of the
Obligations or the enforceability of any of the Loan Documents.
"Material Subsidiary" means (i) American Recreation
-------------------
Products, Inc., a Delaware corporation; 2426-4152 Quebec, Inc., a
corporation formed under the laws of Quebec, Canada; Canadian
Recreation Products, Inc., a corporation formed under the laws of
Quebec, Canada; California Ivy, Inc., a California corporation;
KWD Holdings, Inc., a Delaware corporation; Kellwood Asia
Limited, a corporation formed under the laws of Hong Kong; Smart
Shirts, Limited, a corporation formed under the laws of Hong
Kong; Smart Shirts Manufacturers, Limited, a corporation formed
under the laws of Hong Kong; Keeta Company Limited, a corporation
formed under the laws of Hong Kong; South Asia Garments Limited,
a corporation formed under the laws of Hong Kong; Wing Chiap
Company, Limited, a corporation formed under the laws of Hong
Kong; RSDB Sports Wear, Inc., a Delaware corporation; Tri-W
Corporation, a North Carolina corporation and Sierra Designs
Acquisition Corporation, a Delaware corporation; (ii) any
Subsidiary that the Company designates as a "Material Subsidiary"
by updating Exhibit H hereto in a written notice delivered (which
---------
may be by facsimile transmission) to the Agent from time to time;
and (iii) any Subsidiary which is acquired or created or party to
a merger or some other corporate reorganization or otherwise
acquires all or substantially all of the assets of another Person
following the Effective Date and meets any of the following
conditions:
-14-
<PAGE> 21
(a) the assets of such Subsidiary (valued at the
greater of book or fair market) as at the end of the
immediately preceding fiscal year exceed $1,000,000; or
(b) the aggregate sum of all assets (valued at the
greater of book or fair market) of such Subsidiary, when
combined with the assets of all other Subsidiaries to which
clauses (a) through (d) of Section 8.1.7 would have applied
----------- --- -------------
if not for the limitations set forth in this definition
during the 3-year period immediately preceding the date of
such determination, exceeds $1,000,000; or
(c) the sum of the portion of Consolidated Net Income
of the Company and its Subsidiaries which were contributed
by such Subsidiary during the immediately preceding fiscal
year exceeds $1,000,000.
"Maximum Offer" is defined in Section 2.6(b).
------------- --------------
"Maximum Request" is defined in Section 2.6(a).
--------------- --------------
"Minority Interests" means any shares of stock of any class
------------------
of a Subsidiary (other than directors' qualifying shares as
required by law) that are not owned by the Company and/or one or
more of its Subsidiaries. Minority Interests shall be valued by
valuing Minority Interests constituting preferred stock at the
voluntary or involuntary liquidating value of such preferred
stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and
surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the
foregoing method of valuing Minority Interests in preferred
stock.
"Notes" and "Note" respectively mean (a) the Bid Notes and
----- ----
the Committed Notes, and (b) a single such Note.
"Obligations" means all obligations (monetary or otherwise)
-----------
of the Company arising under or in connection with this
Agreement, the Notes and each other Loan Document.
"Participant" is defined in Section 10.11.2.
----------- ---------------
"PBGC" means the Pension Benefit Guaranty Corporation and
----
any entity succeeding to any or all of its functions under EROSE.
"Pension Plan" means a "pension plan," as such term is
------------
defined in Section 3(2) of EROSE, which is subject to Title IV of
EROSE (other than a multiemployer plan as defined in Section
4001(a)(3) of EROSE), and to which the Company or any
corporation, trade or business that is, along with the Company, a
member of a Controlled Group, may have liability, including any
liability by reason of having been a substantial employer within
-15-
<PAGE> 22
the meaning of Section 4063 of EROSE at any time during the
preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of EROSE.
"Percentage" means, relative to any Lender, the percentage
----------
set forth on Schedule I hereto, as amended from time to time, or
----------
set forth in the applicable Lender Assignment Agreement, as such
percentage may be adjusted from time to time pursuant to Lender
Assignment Agreement(s) executed by such Lender and its Assignee
Lender(s) and delivered pursuant to Section 10.11.
-------------
"Permits" is defined in Section 7.15.
------- ------------
"Person" means any natural person, corporation, partnership,
------
firm, association, trust, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or other
capacity.
"Plan" means any Pension Plan or Welfare Plan.
----
"Portion" is defined in Section 2.6(b).
------- --------------
"Pricing Period" means the period commencing on the forty-
--------------
fifth day after the end of a fiscal quarter and ending on the
forty-fourth day after the end of the succeeding fiscal quarter.
"Process Agent" means The Prentice-Hall Corporation System,
-------------
Inc. or any successor thereto or, upon prior written notice to
the Agent, any other entity appointed by the Company to act as
its process agent; provided that part of the business of such
--------
other entity is to act as a process agent for other Persons.
"Pro Rata Distribution Event" is defined in Section 4.10(c).
--------------------------- ---------------
"Quarterly Payment Date" means the last day of each January,
----------------------
April, July and October or, if any such day is not a Business
Day, the next succeeding Business Day.
"Rating Agency" means Standard & Poor's Ratings Group, Inc.,
-------------
Moody's Investors Services, Inc. or Duff & Phelps, as the case
may be, provided that a Senior Debt Rating from Duff & Phelps
--------
shall only be effective for purposes of determining the
Applicable Eurodollar Margin and the Applicable Facility Fee
Percentage at a time when the Company has also concurrently
received a Senior Debt Rating from another Rating Agency.
"Release" means a "release", as such term is defined in
-------
CERCLA.
"Rentals" means and includes all fixed rents (including as
-------
such all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the property)
payable by the Company or a Subsidiary, as lessee or sublessee
-16-
<PAGE> 23
under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Company or a
Subsidiary (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and
similar charges. Fixed rents under any so-called "percentage
leases" shall be computed solely on the basis of the minimum
rents, if any, required to be paid by the lessee regardless of
sales volume or gross revenues.
"Required Lenders" means, at any time, Lenders holding at
----------------
least 66-2/3% of the Commitments; provided that after the
--------
Commitments shall have been irrevocably terminated, "Required
--------
Lenders" shall mean Lenders holding at least 66-2/3% of all
- - -------
outstanding Loans.
"Resource Conservation and Recovery Act" means the Resource
--------------------------------------
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
as amended.
"Responsible Officer" means the President, Chief Executive
-------------------
Officer, Executive Vice President-Administration, Vice President-
Controller, Vice President-Treasurer or General Counsel of the
Company.
"Scotiabank" is defined in the preamble.
---------- --------
"Security" has the same meaning as in Section 2(1) of the
--------
Securities Act of 1933, as amended.
"Senior Debt Rating" is defined in "Applicable Eurodollar
------------------ ---------------------
Margin".
- - ------
"Stated Maturity Date" means June 23, 1995.
--------------------
"Submission Deadline" is defined in Section 2.6(b).
------------------- --------------
"Subsidiary" means any corporation, partnership,
----------
association, limited liability company, or other business entity
of which 50% or more of the Voting Stock is at the time directly
or indirectly owned by the Company, by the Company and one or
more other Subsidiaries, or by one or more other Subsidiaries.
"Taxes" is defined in Section 4.7.
----- -----------
"Type" means, relative to any Committed Loan, the portion
----
thereof, if any, being maintained as a Base Rate Loan or a
Eurodollar Loan.
"Unmatured Event of Default" means any condition, occurrence
--------------------------
or event which, after notice or lapse of time or both, would
constitute an Event of Default.
-17-
<PAGE> 24
"Voting Stock" means Securities of any class or classes the
------------
holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
"Welfare Plan" means a "welfare plan", as such term is
------------
defined in Section 3(1) of EROSE.
"Wholly-owned" when used in connection with any Subsidiary
------------
means a Subsidiary of which all of the issued and outstanding
shares of stock (except shares required as directors' qualifying
shares) shall be owned by the Company and/or one or more of its
Wholly-owned Subsidiaries.
SECTION 1.2 Use of Defined Terms. Unless otherwise defined
--------------------
or the context otherwise requires, terms for which meanings are
provided in this Agreement shall have such meanings when used in
the Notes and each Borrowing Request, Continuation/Conversion
Notice, Loan Document, notice and other communication delivered
from time to time in connection with this Agreement or any other
Loan Document.
SECTION 1.3 Cross-References. Unless otherwise specified,
----------------
references in this Agreement and in each other Loan Document to
any Article or Section are references to such Article or Section
of this Agreement or such other Loan Document, as the case may
be, and, unless otherwise specified, references in any Article,
Section or definition to any clause are references to such clause
of such Article, Section or definition.
SECTION 1.4 Accounting and Financial Determinations.
---------------------------------------
Unless otherwise specified, all accounting terms used herein or
in any other Loan Document shall be interpreted, all accounting
determinations and computations hereunder or thereunder shall be
made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in accordance with,
those generally accepted accounting principles ("GAAP") applied
----
in the preparation of the financial statements referred to in
Section 6.5.
- - -----------
ARTICLE 2
COMMITMENTS, BORROWING PROCEDURES AND NOTES
2.1 Commitments.
-----------
(a) From time to time on any Business Day occurring
prior to the Commitment Termination Date, each Lender,
severally and for itself alone, agrees to make Loans
("Committed Loans") to the Company equal to the product of
---------------
(i) such Lender's Percentage and (ii) the aggregate amount
of the Borrowing of Committed Loans requested by the Company
-18-
<PAGE> 25
to be made on such Business Day; provided that (x) the
--------
aggregate principal amount of all Committed Loans which any
Lender shall be committed to have outstanding shall not at
any time exceed such Lender's Commitment and (y) the
aggregate principal amount of all Committed Loans which the
Lenders shall be committed to have outstanding shall not at
any time exceed an amount which, when added (without
duplication) to the sum of all other Aggregate Outstanding
Loans on such day (after giving effect to the incurrence or
repayment of any Aggregate Outstanding Loans on such day),
would exceed the Commitment Amount. Within the foregoing
limits, and subject to the terms and conditions hereinafter
set forth, the Company may borrow, prepay and reborrow
Committed Loans.
(b) From time to time on any Business Day occurring
prior to the Commitment Termination Date, each Lender,
severally and for itself alone, on the terms and subject to
the conditions hereinafter set forth, hereby agrees to make
loans (the "Bid Rate Loans") to the Company in amounts equal
--------------
to such Lender's Bids which have been accepted as provided
in, and as more particularly described in, Section 2.6(c).
--------------
No Lender shall be obligated to make any Bid. The aggregate
principal amount of Bid Rate Loans which the Company may
request to be made on any Business Day shall not exceed an
amount which, when added (without duplication) to the sum of
all other Aggregate Outstanding Loans on such Business Day
(after giving effect to the incurrence or repayment of any
Aggregate Outstanding Loans on such day), would exceed the
Commitment Amount.
SECTION 2.2 Reduction or Termination of the Commitments.
-------------------------------------------
The Company shall have the right, at any time and from time to
time, to reduce permanently in part, or to terminate in whole,
without penalty or premium, the Commitment Amount, upon not less
than three (3) Business Days' prior notice (by telecopier, or by
telephone (confirmed in writing promptly thereafter)) received by
the Agent (which shall promptly advise each Lender thereof),
which notice shall designate the date (which shall be a Business
Day) of such reduction or termination and the amount of any
partial reduction of the Commitment Amount; provided that the
--------
Company may not reduce the Commitment Amount to an amount which
is less than the Aggregate Outstanding Loans on the effective
date specified in the Company's aforesaid notice. Any such
partial reduction or termination of the Commitment Amount shall
be in a minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof and shall reduce each Lender's
Commitment by an amount equal to the product of (a) such Lender's
Percentage and (b) the aggregate reduction in the Commitment
Amount. Such partial reduction or termination of the Commitment
Amount shall be effective on the date specified in the Company's
aforesaid notice. The Company may only terminate the Commitment
-19-
<PAGE> 26
Amount upon payment in full of all Aggregate Outstanding Loans
and all other Obligations.
SECTION 2.3 [Reserved].
--------
SECTION 2.4 Committed Loans Borrowing Procedure. By
-----------------------------------
delivering a Borrowing Request to the Agent, the Company may from
time to time irrevocably request that a Borrowing of Committed
Loans be made in a minimum amount of $5,000,000 and an integral
multiple of $1,000,000 in excess thereof or in the unused amount
of the Commitments but shall not exceed an amount which, on the
proposed date of the Borrowing, when added (without duplication)
to the sum of all other Aggregate Outstanding Loans on such date
(after giving effect to the incurrence or repayment of any
Aggregate Outstanding Loans on such date) would exceed the
Commitment Amount. Such Borrowing Request, in the case of a
Borrowing of Base Rate Loans, shall be delivered to the Agent on
or before 11:00 a.m., Atlanta time, on a Business Day (which may
be the same day as the date requested for the Borrowing), and, in
the case of a Borrowing of Eurodollar Loans, shall be delivered
to the Agent on or before 11:00 a.m., Atlanta time, on a Business
Day that is at least three (3) but no more than five (5) Business
Days prior to the date requested for such Borrowing. On the
terms and subject to the conditions of this Agreement, each
Borrowing of Committed Loans shall be comprised of the Type of
Loans, and shall be made on the Business Day, specified in such
Borrowing Request. On or before 3:00 p.m., Atlanta time, in the
case of a Borrowing of Base Rate Loans, or on or before 12:00
noon, Atlanta time, in the case of a Borrowing of Eurodollar
Loans, on such Business Day each Lender shall deposit with the
Agent same day funds in an amount equal to the product of (i)
such Lender's Percentage and (ii) the amount of the requested
Borrowing. Such deposit will be made to an account which the
Agent shall specify from time to time by notice to the Lenders.
To the extent funds are received from the Lenders (subject to the
provisions of Section 2.8), the Agent shall make such funds
-----------
available to the Company by wire transfer to the accounts the
Company shall have specified in its Borrowing Request. No
Lender's obligation to make any Committed Loan shall be affected
by any other Lender's failure to make any Committed Loan. All
Borrowings, repayments and prepayments of Committed Loans shall,
except as otherwise required by Section 4.10(b) following the
---------------
occurrence of a Pro Rata Distribution Event, be made so that
after giving effect thereto all Committed Loans shall be pro rata
among the Lenders according to their respective Percentages.
SECTION 2.5 Continuation and Conversion Elections. By
-------------------------------------
delivering a Continuation/Conversion Notice to the Agent on or
before 11:00 a.m., Atlanta time, on a Business Day, the Company
may from time to time irrevocably elect, on not less than three
(3) nor more than five (5) Business Days' notice, that all, or
any portion in an aggregate minimum amount of $5,000,000 and an
integral multiple of $1,000,000 in excess thereof, of any
-20-
<PAGE> 27
Committed Loans be, in the case of Base Rate Loans, converted
into Eurodollar Loans or, in the case of Eurodollar Loans, be
converted into a Base Rate Loan or continued as a Eurodollar Loan
(in the absence of delivery of a Continuation/Conversion Notice
with respect to any Eurodollar Loan at least three (3) Business
Days but no more than five (5) Business Days before the last day
of the then current Interest Period with respect thereto, such
Eurodollar Loans shall, on such last day, automatically convert
to a Base Rate Loan); provided that (w) each such conversion or
--------
continuation shall be pro-rated among the applicable outstanding
Committed Loans of all Lenders, (x) no portion of the outstanding
principal amount of any Committed Loans may be continued as, or
be converted into, Eurodollar Loans less than one (1) month prior
to the Stated Maturity Date or when any Default has occurred and
is continuing, (y) any conversion into, or continuation of, any
Eurodollar Loans on a day other than the last day of the then
current Interest Period with respect thereto shall be subject to
the provisions of Section 4.5, and (z) after giving effect to any
-----------
continuation or conversion, the aggregate principal amount of any
Eurodollar Loans having a particular Interest Period shall be at
least $5,000,000 and an integral multiple of $1,000,000 in excess
thereof.
SECTION 2.6 Procedures with Respect to Bid Rate Loans.
-----------------------------------------
(a) The Company may make Bid Requests by 11:00 a.m.,
Atlanta time, at least two (2) Business Days prior to the
proposed date of Borrowing for one or more Bid Rate Loans.
Each Bid Request shall be given to the Agent (which shall
promptly on the same day give notice thereof to each Lender
by telecopy of an Invitation For Competitive Bid Quotes if
the Bid Request is not rejected pursuant to this Section),
-------
by telephone (confirmed in writing promptly on the same day
by the delivery of a Bid Request, signed by an authorized
officer of the Company), and shall specify (i) the proposed
date of Borrowing, which shall be a Business Day; provided
--------
that there shall be no more than five (5) Bid Requests in
any one calendar month, (ii) the aggregate amount of the
proposed Bid Rate Loans (the "Maximum Request") which shall
---------------
not (A) exceed an amount which, on the proposed date of
Borrowing, when added (without duplication) to the sum of
all other Aggregate Outstanding Loans on such date (after
giving effect to the incurrence or repayment of any
Aggregate Outstanding Loans on such date) would exceed the
Commitment Amount, or (B) be less than $1,000,000 or, for
amounts in excess thereof, an integral multiple of $500,000,
(iii) the Interest Period(s) therefor, and (iv) if more than
one Interest Period is so specified, the principal amount
(not less than $1,000,000 or, for amounts in excess thereof,
an integral multiple of $500,000) allocable to each such
Interest Period. A Bid Request that does not conform
substantially to the form of Exhibit B-3 shall be rejected,
-----------
-21-
<PAGE> 28
and the Agent shall promptly notify the Company of such
rejection.
(b) Each Lender in its sole discretion may (but is not
obligated to) submit a Bid or Bids to the Agent not later
than 10:00 a.m., Atlanta time (or, upon reasonable prior
notice to the Lenders, such other time as the Company and
Agent may agree), on the proposed date of the Borrowing
specified in such Bid Request (such 10:00 a.m. time (or
agreed other time) being herein called the "Submission
----------
Deadline"), by telecopy or in writing, and thereby
--------
irrevocably offer to make all or any part (any such part
referred to as a "Portion") of any Bid Rate Loan described
-------
in the relevant Bid Request at a Bid Rate specified therein
in an aggregate principal amount of $1,000,000 and, for
amounts in excess thereof, an integral multiple of $500,000;
provided that Bids submitted by the Agent may only be
--------
submitted if the Agent notifies the Company of the terms of
its Bid not later than fifteen (15) minutes prior to the
Submission Deadline. Multiple Bids may be delivered to the
Agent. The aggregate Portions of Bid Rate Loans for any or
all Interest Periods offered by a Lender in its Bid may
exceed the Maximum Request contained in the relevant Bid
Request; provided that each Bid shall set forth the maximum
--------
aggregate amount of the Bid Rate Loans offered thereby which
the Company may accept (the "Maximum Offer"), which Maximum
-------------
Offer shall not exceed the Maximum Request.
(c) The Agent shall promptly give notice by telephone
(promptly confirmed in writing) to the Company of all
complying Bids received by the Agent prior to the Submission
Deadline. The Company shall, in its sole discretion but
subject to Section 2.6(d), irrevocably accept or reject any
--------------
such complying Bid (or any Portion offered by such Bid) not
later than 11:00 a.m., Atlanta time, on the proposed
Borrowing date by notice to the Agent by telephone
(confirmed in writing in the form of a Bid Rate Loan
Acknowledgment promptly the same day). Promptly on the day
of the Submission Deadline, the Agent will give notice to
each Lender that submitted a Bid as to the extent, if any,
that such Lender's Bid has been accepted. If the Agent
fails to receive notice from the Company of its acceptance
or rejection of any Bids at or prior to 11:00 a.m., Atlanta
time, on such day, all such Bids shall be deemed to have
been rejected by the Company, and the Agent will give to
each Lender which submitted a Bid notice of such rejection
by telephone on such day. In due course following the
acceptance of any Bid, the Agent shall notify each Lender
that submitted a Bid, in the form of a Bid Rate Loan
Confirmation, of the amount, maturity date and Bid Rate for
each Bid Rate Loan.
-22-
<PAGE> 29
(d) If the Company accepts a Portion of a proposed Bid
Rate Loan for a single Interest Period at the Bid Rate
provided therefor in a Lender's Bid, such Portion shall be
in a principal amount of $1,000,000 (subject to such lesser
allocation as may be made pursuant to the provisions below
in this clause (d)) or, for amounts in excess thereof, in
----------
integral multiples of $500,000. The aggregate principal
amount of Bid Rate Loans accepted by the Company following
Bids responding to a Bid Request shall not exceed the
Maximum Request. The aggregate principal amount of Bid Rate
Loans accepted by the Company pursuant to a Lender's Bid
shall not exceed the Maximum Offer therein contained. If
the Company accepts any Bid Rate Loans or Portion offered in
any Bid, the Company must accept Bids (and Bid Rate Loans
and Portions thereby offered) based exclusively upon the
successively lowest Bid Rates within each Interest Period
and no other criteria. If two (2) or more Lenders submit
Bids with identical Bid Rates for the same Interest Period
and the Company accepts any thereof, the Company shall,
subject to the first three sentences of this clause (d),
----------
accept all such Bids as nearly as possible in proportion to
the amounts of such Lenders' respective Bids with identical
Bid Rates for such Interest Period; provided that if the
--------
amount of Bid Rate Loans to be so allocated is not
sufficient to enable each such Lender to make such Bid Rate
Loan (or Portions thereof) in an aggregate principal amount
of $1,000,000, or for amounts in excess thereof, an integral
multiple of $500,000, the Company shall round the Bid Rate
Loans (or Portions thereof) allocated to such Lender or
Lenders as the Company shall select as necessary to a
minimum of $500,000 and the nearest multiple of $100,000.
(e) Not later than 1:00 p.m., Atlanta time, on the
relevant Borrowing date, each Lender whose Bid was accepted
by the Company shall make available to the Agent at its head
office in Atlanta, Georgia, in immediately available funds,
the proceeds of such Lender's Bid Rate Loan(s). Promptly
upon receipt thereof by the Agent (subject to the provisions
of Section 2.8) and fulfillment (or, as provided herein,
-----------
waiver) of the conditions and against receipt of the
documents, if any, specified in Article 5 with respect to
---------
the relevant Borrowing, the Agent shall make available to
the Company (at an account with the Agent or elsewhere as
the Company may from time to time instruct the Agent in
writing) on the relevant Borrowing date the proceeds of such
Borrowing, in immediately available funds. Each Borrowing
of Bid Rate Loans shall be on a Business Day.
SECTION 2.7 Funding. Each Lender may, if it so elects,
-------
fulfill its obligation to make, continue or convert Eurodollar
Loans hereunder by causing one of its foreign branches or
affiliates (or an international banking facility created by such
Lender) to make or maintain such Eurodollar Loan; provided that
-23-
<PAGE> 30
such Eurodollar Loan shall nonetheless be deemed to have been
made and to be held by such Lender, and the obligation of the
Company to repay such Eurodollar Loan shall nevertheless be to
such Lender for the account of such foreign branch, affiliate or
international banking facility.
SECTION 2.8 Availability of Funds. Unless the Company or a
---------------------
Lender, as the case may be, notifies the Agent prior to the date
on which it is scheduled to make payment to the Agent, that it
does not intend to make such payment, the Agent may assume that
such payment has been made. The Agent may, but shall not be
obligated to, make the amount of such payment available to the
intended recipient in reliance upon such assumption. If such
Lender or the Company, as the case may be, has not in fact made
such payment to the Agent, the recipient of such payment shall,
on demand by the Agent, repay to the Agent the amount so made
available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) if the recipient is a
--- -----
Lender, the Federal Funds Effective Rate for such day plus, if
----
such amount is not recovered within four (4) Business Days (and
commencing on such fourth Business Day), 1% per annum, or (ii) if
--- -----
the recipient is the Company, the applicable interest rate
otherwise payable by the Company in respect of such Loan (or at
the Default Rate if payment to the Company was not to be made in
respect of a Loan).
SECTION 2.9 Reliance Upon Telephonic Notices. The Agent
--------------------------------
may rely and act upon notice given by telephone by individuals
reasonably believed by the Agent to be those individuals
designated by the Company to the Agent in writing from time to
time to possess authority to give such notice, without waiting
for such receipt of written confirmation thereof, and the Company
hereby indemnifies and holds harmless the Agent from and against
any and all losses, costs, expenses, damages, claims, actions and
other proceedings relating to such reliance, except for such
losses, costs, expenses, damages, claims, actions and proceedings
resulting from acts or omissions constituting gross negligence or
willful misconduct on the part of the Agent. If a written
confirmation differs in any respect from the action taken by the
Agent, the records of the Agent shall govern absent manifest
error.
SECTION 2.10 Currency. All Loans shall be denominated in
Dollars. --------
SECTION 2.11 Conditions. Notwithstanding any other
----------
provision of this Agreement, (a) no Lender shall be obligated to
make any Loan and (b) no Lender shall be obligated to convert
into or permit the continuation at the end of the applicable
Interest Period of any Eurodollar Loan if, in any such case, a
Default exists or would result therefrom. The making of any Loan
-24-
<PAGE> 31
and the conversion into or continuation at the end of the
applicable Interest Period of any Eurodollar Loan shall be deemed
to be a certification by the Borrower that the applicable
conditions under Section 5.2 have been satisfied.
-----------
SECTION 2.12 Notes.
-----
(a) The Committed Loans of each Lender shall be
evidenced by a Committed Note payable to the order of such
Lender in the principal amount of the original Commitment of
such Lender.
(b) The Bid Rate Loans of each Lender shall be
evidenced by a Bid Note payable to the order of such Lender
in the principal amount of the original Commitment Amount.
(c) Each Lender shall record in its records, or at its
option on the schedule attached to its applicable Notes, the
date and amount of each Loan made by such Lender thereunder,
each repayment or prepayment thereof, and the dates on which
any Interest Period for such Loan shall begin and end.
Prior to any transfer or assignment of any of its Notes,
each Lender shall record on the schedule attached thereto
the then outstanding principal amount thereof and the date
through which interest has been paid. The aggregate unpaid
principal amount so recorded shall be rebuttable,
presumptive evidence of the principal amount owing and
unpaid on such Note. The failure to so record, or any error
in so recording, any such amount on such schedule shall not,
however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the outstanding
principal amount of its Loans together with all interest
accruing thereon, nor shall such failure or error affect the
Company's obligations under any other Loan Document.
ARTICLE 3
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1 Repayments and Prepayments. The Company shall
--------------------------
repay in full the unpaid principal amount of each Loan upon the
Commitment Termination Date. Prior thereto, the Company
(a) shall repay each Bid Rate Loan on the last day of
the Interest Period for such Bid Rate Loan; and
(b) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the
outstanding principal amount of any Committed Loans;
provided that
--------
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<PAGE> 32
(i) any such prepayment shall be made pro rata
--- ----
among Loans of the same Type (whether Base Rate Loans
or Eurodollar Loans) and, if applicable, having the
same Interest Period of all Lenders;
(ii) no such prepayment of any Eurodollar Loan
may be made on any day other than the last day of the
Interest Period for such Eurodollar Loan unless the
Company shall pay all amounts, if any, required by
Section 4.5;
-----------
(iii) all such voluntary prepayments shall
require at least three (3) but no more than five (5)
Business Days' prior written notice to the Agent; and
(iv) all such voluntary partial prepayments shall
be in an aggregate minimum amount of $5,000,000 and an
integral multiple of $1,000,000 in excess thereof.
Each prepayment of any Loans made pursuant to this Section
-------
3.1 shall be without premium or penalty, except as may be
- - ---
required by Section 4.5. No voluntary prepayment of principal of
-----------
any Loans shall cause a reduction in the Commitment Amount. No
Bid Rate Loan may be prepaid to a Lender prior to the last day of
its applicable Interest Period without the prior written consent
of the Lender holding such Bid Rate Loan, which consent may be
given or withheld at such Lender's sole and absolute discretion.
Any such prepayment of a Bid Rate Loan prior to the end of its
applicable Interest Period shall be subject to the payments, if
any, required by Section 4.5.
-----------
SECTION 3.2 Interest Provisions. Interest on the
-------------------
outstanding principal amount of Loans shall accrue and be payable
in accordance with this Section 3.2.
-----------
SECTION 3.2.1 Rates. The Company hereby promises to pay
-----
interest (calculated in Dollars) on the unpaid principal amount
of each Loan of each Lender at a rate per annum as follows:
--- -----
(a) if such Loan is a Base Rate Loan, interest at a
rate per annum equal to the Alternate Base Rate from time to
--- -----
time in effect;
(b) if such Loan is a Eurodollar Loan, interest at a
rate per annum equal to the Eurodollar Rate (Adjusted)
--- -----
applicable to the Interest Period therefor, plus the
----
Applicable Eurodollar Margin for each day during such
period; and
(c) if such Loan is a Bid Rate Loan, interest at a
rate per annum equal to the applicable Bid Rate accepted by
--- -----
the Company in accordance with Section 2.6.
-----------
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<PAGE> 33
All Base Rate Loans shall bear interest from and including
the date such Base Rate Loan is made or the date a Eurodollar
Loan is converted into such Base Rate Loan to (but not including)
the date such Base Rate Loan is paid. All Eurodollar Loans and
Bid Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the
last day of such Interest Period at the interest rate determined
by the Agent as applicable to such Eurodollar Loan or at the
applicable Bid Rate accepted by the Company, as the case may be.
Each determination by the Agent of the interest rate applicable
to any Loan shall be conclusive and binding upon the parties
hereto, in the absence of manifest error. At the request in
writing of the Company, however, the Agent shall deliver to the
Company a statement showing the computations used by the Agent in
determining such interest rate.
SECTION 3.2.2 Default Rates. After the date any
-------------
principal amount of, or to the extent permitted by law during the
existence of an Event of Default arising under Section 8.1.1, the
-------------
interest on, any Loan is due and payable (whether on the
Commitment Termination Date, upon acceleration or otherwise), the
Company shall pay interest (after as well as before judgment) on
such principal or interest from the due date therefor until such
principal or interest is paid, at a rate per annum equal to the
--- -----
Alternate Base Rate, from time to time in effect (but not less
than the Alternate Base Rate, Eurodollar Rate (Adjusted) or Bid
Rate, as the case may be, in effect at such due date) plus 2.0%
per annum (the "Default Rate"). ----
- - --- ----- ------------
SECTION 3.2.3 Payment Dates. Interest accrued on each
-------------
Loan shall be payable, without duplication:
(a) on the Commitment Termination Date;
(b) on the date of any payment or prepayment, in whole
or in part, of principal outstanding on such Loan (other
than Base Rate Loans);
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the Effective Date;
(d) with respect to Eurodollar Loans on the last day
of each applicable Interest Period for such Eurodollar Loans
and, if such Interest Period shall exceed three months, on
the day of the third month of such Interest Period
numerically corresponding to the first day of such Interest
Period (or, if there is no such numerically corresponding
day in such third month, on the last Business Day of such
third month);
(e) with respect to Bid Rate Loans, on the last day of
each applicable Interest Period for such Bid Rate Loans; and
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<PAGE> 34
(f) with respect to any Base Rate Loans converted into
Eurodollar Loans on a day when interest would not otherwise
have been payable pursuant to clause (c), on the first
----------
Quarterly Payment Date occurring after the date of such
conversion.
Interest accrued on Loans or other monetary Obligations after the
date such amount is due and payable (whether on the Stated
Maturity Date, upon acceleration or otherwise) shall be payable
upon demand.
SECTION 3.3 Fees. The Company agrees to pay the fees set
----
forth in this Section 3.3. All such fees shall be non-
refundable. -----------
SECTION 3.3.1 Facility Fee. The Company agrees to pay to
------------
the Agent, for the account of each Lender, a facility fee (the
"Facility Fee") in an amount equal to the product of (i) the
------------
Applicable Facility Fee Percentage multiplied by (ii) the
Commitment Amount for the period commencing on the Effective Date
and continuing through the final Commitment Termination Date.
The Facility Fee shall be calculated for each day and be payable
by the Company in arrears on each Quarterly Payment Date,
commencing with the first such day following the Effective Date,
and on the Commitment Termination Date.
SECTION 3.3.2 Agent's Fees. The Company agrees to pay to
------------
the Agent for its own account all other fees in the amounts and
at the times required pursuant to the Agent Fee Letter.
ARTICLE 4
CERTAIN EURODOLLAR AND OTHER LOAN PROVISIONS
SECTION 4.1 Increased Cost. If, as a result of any law,
--------------
rule, regulation, treaty or directive, or any change therein or
in the interpretation or administration thereof, or compliance by
any Lender with any request or directive (whether or not having
the force of law) from any court, central bank, governmental
authority, agency or instrumentality, or comparable agency:
(a) any tax, duty or other charge with respect to its
Commitments, its Loans, its Notes or any Lender's Loan or
obligation to make Loans is imposed, modified or deemed
applicable, or the basis of taxation of payments to any
Lender of the principal of, or interest on, any Loan (other
than taxes imposed on the overall net income of such Lender
by the jurisdiction in which such Lender has its principal
office) is changed;
(b) any reserve, special deposit, special assessment
or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender is
-28-
<PAGE> 35
imposed, modified or deemed applicable, excluding any
reserve contained in the computation of "Eurodollar Rate
(Adjusted)"; or
(c) any other condition affecting this Agreement or
any Loan is imposed on any Lender or the interbank
eurodollar market;
and any Lender determines that, by reason thereof, the cost to
such Lender of making or maintaining or issuing its Commitment or
any Loan is increased, or the amount of any sum receivable by
such Lender hereunder or under its Notes is reduced; then, the
----
Company shall, within thirty (30) days of demand therefor (such
demand to be accompanied by the detailed notice of such Lender
described below), pay directly to such Lender such additional
amount or amounts as will compensate such Lender for such
additional cost or reduction. Without limiting the foregoing,
the Company may be required to reimburse any Lender for FDIC
assessments or other direct or indirect costs related to FDIC
insurance or continuation of FDIC insurance, including, without
limitation, the costs of purchasing equity interests of, or other
investments in, the FDIC, on Loans, whether or not such Lender
shall fund such Loans with deposits subject to FDIC insurance.
The affected Lender shall promptly notify the Company in writing
of the occurrence of any such event, such notice to state, in
reasonable detail, the reasons therefor and the additional amount
required fully to compensate such Lender for such increased cost
or reduced amount. Determinations by any Lender for purposes of
this Section 4.1 of the additional amounts required to compensate
-----------
such Lender in respect of the foregoing shall be conclusive in
the absence of manifest error. In determining such amounts, such
Lender may use any reasonable averaging, attribution and
allocation methods.
SECTION 4.2 Deposits Unavailable or Interest Rate
-------------------------------------
Unascertainable or Inadequate; Impracticability. If the Company
- - -----------------------------------------------
has any Eurodollar Loan outstanding, or has notified the Agent of
its intention to borrow a Eurodollar Loan as provided herein,
then in the event that, prior to any Interest Period, the Agent
shall have determined (or the Lenders holding at least 50% of the
Commitments shall have notified the Agent that such Lenders have
determined) (which determination shall be conclusive and binding
on the parties hereto absent manifest error) that:
(a) deposits of the necessary amount for the relevant
Interest Period are not available to any Lender in the
interbank eurodollar market or that, by reason of
circumstances affecting such market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for
such Interest Period;
-29-
<PAGE> 36
(b) the Eurodollar Rate (Adjusted) will not adequately
and fairly reflect the cost to the Lenders of making or
funding the Eurodollar Loans for such Interest Period; or
(c) the making or funding of Eurodollar Loans has
become impracticable as a result of any event occurring
after the date of this Agreement which, in the opinion of
the Agent, materially and adversely affects such Loans or
any Lender's obligation to make such Loans or the interbank
eurodollar market;
the Agent shall promptly give notice of such determination to the
Company, and, until the Agent shall notify the Company that the
circumstances causing such determination no longer exist, (i) any
notice of a new Eurodollar Loan given by the Company and not yet
borrowed or converted shall be deemed to be a notice to make a
Base Rate Loan, and (ii) the Company shall be obligated to either
prepay in full any outstanding Eurodollar Loans on the last day
of the then current Interest Period with respect thereto or
convert any such Loans to Base Rate Loans on such last day.
SECTION 4.3 Changes in Law Rendering Eurodollar Loans
-----------------------------------------
Unlawful. If at any time due to the adoption of any law, rule,
- - --------
regulation, treaty or directive, or any change therein or in the
interpretation or administration thereof by any court, central
bank, governmental authority, agency or instrumentality, or
comparable agency charged with the interpretation or
administration thereof, or for any other reason arising
subsequent to the date hereof, it shall become unlawful or
impossible for any Lender to make or fund any Eurodollar Loan
which it is committed to make hereunder, the obligation of all
Lenders to provide Eurodollar Loans shall, upon the happening of
such event, forthwith be suspended for the duration of such
illegality or impossibility, and any notice of a new Eurodollar
Loan given by the Company and not yet borrowed or converted shall
be deemed to be a notice to make a Base Rate Loan. If any such
event shall make it unlawful or impossible for any Lender to
continue any Eurodollar Loans previously made by it hereunder,
such Lender shall, upon the happening of such event, notify the
Company and the Agent thereof in writing, and the Company shall,
on the earlier of (i) the last day of the then current Interest
Period with respect thereto, or (ii) if required by such law,
rule, regulation, treaty, directive or interpretation, on such
date as shall be specified in such notice, either convert all
Eurodollar Loans to Base Rate Loans or prepay in full all
Eurodollar Loans, together with accrued interest thereon, without
any premium or penalty (except as provided in Section 4.5).
-----------
Before any Lender shall give any notice to the Agent or the
Company regarding the illegality or impossibility of such
Lender's making or continuing any Eurodollar Loans, such Lender
shall designate a different Eurodollar Office if such designation
will avoid the need for giving such notice and will not, in the
sole judgment of such Lender, be otherwise materially
-30-
<PAGE> 37
disadvantageous to such Lender. If conditions subsequently
change so that the foregoing conditions no longer exist, such
Lender shall promptly notify the Company and the Agent thereof,
and upon the Agent's receipt of such notice the obligation of the
Lenders to make Eurodollar Loans shall be reinstated.
SECTION 4.4 Discretion of the Lenders as to Manner of
-----------------------------------------
Funding. Notwithstanding any provision of this Agreement to the
- - -------
contrary, each Lender shall be entitled to fund and maintain its
funding of all or any part of the Loans in any manner it sees
fit; it being understood, however, that for purposes of this
-------------------
Agreement, all determinations hereunder shall be made as if such
Lender had actually funded and maintained each Eurodollar Loan
during the Interest Period for such Loan through the purchase of
deposits having a term corresponding to such Interest Period and
bearing an interest rate equal to the Eurodollar Rate (Adjusted)
for such Interest Period (whether or not such Lender shall have
granted any participations in such Loan).
SECTION 4.5 Funding Losses. In the event any Lender shall
--------------
sustain or incur any loss or expense (including any loss or
expense sustained or incurred in obtaining, liquidating or
employing deposits or other funds acquired by such Lender to
make, continue or maintain any portion of any Loan) as a result
of
(a) any failure of the Company to make any payment
when due of any amount due hereunder or under any Note;
(b) any conversion or repayment or prepayment of the
principal amount of any Eurodollar Loans or Bid Rate Loans
on a date other than the scheduled last day of the Interest
Period applicable thereto, whether pursuant to Section 3.1
or otherwise; -----------
(c) any failure of the Company to borrow any Loans in
accordance with the Borrowing Request therefor or pursuant
to any Bid accepted, as the case may be; or
(d) any failure of the Company to continue or convert
any Loans in accordance with the Continuation/Conversion
Notice therefor;
then, upon the written notice of such Lender to the Company (with
a copy to the Agent) (but in any event within 120 days after such
Lender obtains actual knowledge of such loss or expense, and the
Company shall not be liable for any such loss or expense that
accrues between the latest date such notification is required to
be given and the date it was actually given), the Company shall,
within five (5) days of its receipt thereof, pay directly to such
Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense.
Such written notice (which shall include calculations in
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<PAGE> 38
reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Company.
SECTION 4.6 Increased Capital Costs. If any change in, or
-----------------------
the introduction, application, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or
regulation, note, directive, guideline, decision, request, treaty
or guideline (whether or not having the force of law) of any
court, central bank, regulator or other governmental authority
(including, without limitation, application of or changes to
Regulation H and Regulation Y of the F.R.S. Board issued by the
F.R.S. Board on January 19, 1989 and regulations of the
Comptroller of the Currency, Department of the Treasury, 12 CFR
Part 3, Appendix A, issued by the Comptroller of the Currency on
January 27, 1989) affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person
controlling such Lender, and such Lender determines (in its
reasonable discretion) that the rate of return on its or such
controlling Person's capital as a consequence of its Commitment
or the Loans made by such Lender is reduced to a level below that
which such Lender or such controlling Person could have achieved
but for the occurrence of any such circumstance, then, in any
such case upon notice from time to time by such Lender to the
Company (but in any event within 120 days after such Lender
obtains actual knowledge of such event, and the Company shall not
be liable for any such reduced return that accrues between the
latest date such notification is required to be given and the
date it was actually given), the Company shall, within thirty
(30) days of demand therefor (such demand to be accompanied by
the statement of such Lender set forth below), pay directly to
such Lender additional amounts sufficient to compensate such
Lender or such controlling Person for such reduction in rate of
return. A statement of such Lender as to any such additional
amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive
and binding on the Company. In determining such amount, such
Lender may take into consideration the policies of such Lender or
any Person controlling such Lender with respect to capital
requirements and may use any method of averaging and attribution
that it (in its reasonable discretion) shall deem applicable.
SECTION 4.7 Taxes. All payments by the Company of
-----
principal of, and interest on, the Loans and all other amounts
payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing
authority, but excluding franchise taxes and taxes imposed on or
measured by any Lender's net income or receipts (such non-
excluded items being called "Taxes"). In the event that any
-----
withholding or deduction from any payment to be made by the
Company hereunder is required in respect of any Taxes pursuant to
any applicable law, rule or regulation, then the Company will
-32-
<PAGE> 39
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt
or other documentation satisfactory to the Agent evidencing
such payment to such authority; and
(c) pay to the Agent for the account of the Lenders
such additional amount or amounts as is necessary to ensure
that the net amount actually received by each Lender will
equal the full amount such Lender would have received had no
such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or
any Lender with respect to any payment received by the Agent or
such Lender hereunder, the Agent or such Lender may pay such
Taxes and the Company will promptly pay such additional amounts
(including any penalties, interest or expenses) as is necessary
in order that the net amount received by such person after the
payment of such Taxes (including any Taxes on such additional
amount) shall equal the amount such person would have received
had not such Taxes been asserted.
If the Company fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Agent, for
the account of the respective Lenders, the required receipts or
other required documentary evidence, the Company shall indemnify
the Lenders for any incremental Taxes, interest or penalties that
may become payable by any Lender as a result of any such failure.
For purposes of this Section 4.7, a distribution hereunder by the
-----------
Agent or any Lender to or for the account of any Lender shall be
deemed a payment by the Company.
Upon the request of the Company or the Agent, each Lender
that is organized under the laws of a jurisdiction other than the
United States shall, prior to the due date of any payments under
any Note, execute and deliver to the Company and the Agent, on or
about the first scheduled payment date in each calendar year, one
or more (as the Company or the Agent may reasonably request)
United States Internal Revenue Service Forms 4224 or Forms 1001
or such other forms or documents (or successor forms or
documents), appropriately completed, as may be applicable to
establish the extent, if any, to which a payment to such Lender
is exempt from withholding or deduction of Taxes.
SECTION 4.8 Payments, Computations, etc. Unless otherwise
---------------------------
expressly provided, all payments by the Company pursuant to this
Agreement, the Notes or any other Loan Document shall be made by
the Company to the Agent for the pro rata account of the Lenders
--- ----
entitled to receive such payment. All such payments required to
be made to the Agent shall be made, without cheloid, deduction,
recoupment or counterclaim, not later than 12:00 noon, Atlanta
time, on the date due, in same day or immediately available
-33-
<PAGE> 40
funds, to such account as the Agent shall specify from time to
time by notice to the Company. Funds received after that time
shall be deemed to have been received by the Agent on the next
succeeding Business Day. The Agent shall promptly remit in same
day funds to each Lender its share, if any, of such payments
received by the Agent for the account of such Lender. All
interest on Base Rate Loans (except when the Federal Funds
Effective Rate component of the Alternate Base Rate is effective)
shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring
during the period for which such interest or fee is payable over
a year comprised of 365 or, if appropriate, 366 days. All
interest on Eurodollar Loans and Base Rate Loans (when the
Federal Funds Effective Rate component of the Alternate Base Rate
is effective) and all per annum fees shall be computed on the
--- -----
basis of the actual number of days (including the first day but
excluding the last day) occurring during the period for which
such interest is payable over a year comprised of 360 days.
Whenever any payment to be made shall otherwise be due on a day
which is not a Business Day, such payment shall (except as
otherwise required by clause (B) of the definition of the term
----------
"Interest Period" with respect to Eurodollar Loans) be made on
---------------
the next succeeding Business Day and such extension of time shall
be included in computing interest and fees, if any, in connection
with such payment.
SECTION 4.9 Sharing of Payments. Except for payments made
-------------------
to the Agent pursuant to the cost and expenses provision of
Section 10.3 and to or for the benefit of any Lender pursuant to
- - ------------
the indemnity or additional compensation provisions of Article 4
---------
or Section 10.4, if any Lender shall receive, out of the assets
------------
of the Company or otherwise, any payment on account of (a) prior
to any Pro Rata Distribution Event, its Committed Loans, and
(b) after any Pro Rata Distribution Event, any Obligations in
excess of such Lender's pro rata share of the total sums received
--- ----
by the Lenders as payments on account of the Committed Loans or
the Obligations, as the case may be, whether the same be paid,
received or applied voluntarily, involuntarily or by operation of
law, by application of offset on any debt or otherwise, then such
Lender shall purchase for cash from the other Lenders an
undivided interest in all the Committed Loans or Obligations, as
the case may be, of the same class in an amount which shall
result in each Lender receiving its pro rata share of such total
--- ----
sums; provided that if any such purchase is made and the excess
--------
payment (or portion thereof) requiring such purchase is
thereafter recovered (in whole or in part) from the purchasing
Lender, then such purchase shall be pro tanto rescinded and the
--- -----
applicable portion of the purchase price restored to the
purchasing Lender, without interest. The Company agrees that any
Lender so purchasing a participation from another Lender pursuant
to this Section 4.9 may, to the fullest extent permitted by law,
-----------
exercise all its rights of payment (including pursuant to Section
-------
4.10) with respect to such participation as fully as if such
- - ----
-34-
<PAGE> 41
Lender were the direct creditor of the Company in the amount of
such participation. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured
claim in lieu of a cheloid to which this Section applies, such
Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the
rights of the Lenders entitled under this Section to share in the
benefits of any recovery on such secured claim. It is expressly
understood and agreed by the Company and the Lenders that the
provisions of Section 10.11 shall not apply to any participations
-------------
purchased or sold pursuant to this Section.
SECTION 4.10 Application of Certain Payments.
-------------------------------
(a) Prior to the occurrence and continuation of a Pro
Rata Distribution Event, each payment of principal shall be
applied to such of the Loans as the Company shall direct by
notice to be received by the Agent on or before the date of
such payment; provided that any Loans of the Company
--------
maturing the same day shall be paid pro rata among such
--- ----
Loans. The Agent shall remit each such payment by the
Company in accordance therewith ratably among the applicable
Lenders holding such Loans based upon the amount of such
Loans due on such day. Concurrently with each remittance to
any Lender of its share of any such payment, the Agent shall
advise each Lender as to the application of such payment.
(b) Following the occurrence and during the
continuation of a Pro Rata Distribution Event, the Agent and
the Lenders shall apply all collections and recoveries of
the Loans and the other Obligations (after payment of any
costs and expenses to the Agent pursuant to Section 10.3)
------------
first, to the payment of principal of and interest on the
-----
outstanding Loans on a pro rata basis to each Lender based
--- ----
on the respective amounts of such principal of and accrued
interest on, such Loans owed to such Lender (whether or not
matured and currently payable), second, to payment of the
------
remaining outstanding Obligations owed to each Lender on a
pro rata basis to each Lender based on the respective
--- ----
remaining amounts of such Obligations owed to each Lender
(whether or not matured and currently payable) and third, to
-----
the remaining outstanding Obligations owed to any other
Person pursuant to the indemnification provisions of Section
-------
10.4 on a pro rata basis to each such Person based on the
---- --- ----
respective amounts of such Obligations owed to such Person.
(c) For purposes hereof, a "Pro Rata Distribution
---------------------
Event" means the first to occur of (i) an Event of Default
-----
under Section 8.1.1 or 8.1.7 or (ii) any other Event of
------------- -----
Default if the Required Lenders shall have instructed the
Agent that payments shall be applied as provided in
Section 4.10(b) above. The Agent shall promptly notify the
---------------
Company and each Lender of the occurrence of a Pro Rata
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<PAGE> 42
Distribution Event but failure to so notify shall not affect
the occurrence of such Pro Rata Distribution Event.
(d) The Lenders and the Agent agree that if any
distribution shall be made by the Agent contrary to this
Section 4.10 (whether because the Agent shall not, at the
------------
time of distribution, have been aware of the occurrence of
any Event of Default or otherwise), the Lenders shall
cooperate with the Agent to redistribute payments,
collections or recoveries in accordance with this Section
-------
4.10.
----
SECTION 4.11 Cheloid. Each Lender shall, upon the
-------
occurrence of any Default described in clauses (a) through (d) of
----------- ---
Section 8.1.7 or, with the consent of the Required Lenders, upon
- - -------------
the occurrence of any other Event of Default, have the right to
appropriate and apply to the payment of the Obligations owing to
it (whether or not then due), and (as security for such
Obligations) the Company hereby grants to each Lender a
continuing security interest in, any and all balances, credits,
deposits, accounts or moneys of the Company then or thereafter
maintained with such Lender solely for such purposes; provided
--------
that any such appropriation and application shall be subject to
the provisions of Sections 4.9 and 4.10. Each Lender agrees
------------ ----
promptly to notify the Company and the Agent after any such
cheloid and application made by such Lender; provided that the
--------
failure to give such notice shall not affect the validity of such
cheloid and application. The rights of each Lender under this
Section 4.11 are in addition to other rights and remedies
- - ------------
(including other rights of cheloid under applicable law or
otherwise) which such Lender may have.
SECTION 4.12 Use of Proceeds. The Company shall use the
---------------
proceeds of each Borrowing for general corporate purposes;
without limiting the foregoing, no proceeds of any Loan will be
used to acquire any equity security of a class which is
registered pursuant to Section 12 of the Securities Exchange Act
of 1934 (except as otherwise permitted pursuant to Section 7.12)
------------
or any "margin stock", as defined in F.R.S. Board Regulation U.
ARTICLE 5
CONDITIONS TO BORROWING
SECTION 5.1 Initial Borrowing. The obligations of the
-----------------
Lenders to fund the initial Borrowing shall be subject to the
prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 5.1.
-----------
SECTION 5.1.1 Resolutions, etc. The Agent shall have
----------------
received each of the following:
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<PAGE> 43
(a) an executed Officer's Certificate (with a signed
copy for each Lender) substantially in the form of Exhibit D
---------
from the Company, certifying as to (i) a true and correct
copy of the Company's certificate of incorporation and all
amendments as filed with the Secretary of State of its state
of incorporation, (ii) duly adopted resolutions of the
Company's Board of Directors, stating that such resolutions
are true and correct, have not been altered or repealed, and
are in full force and effect, approving the execution,
delivery and performance of the Loan Documents to which the
Company is a party, and the transactions contemplated herein
and therein, (iii) a true and correct copy of the Company's
bylaws as in effect on the Effective Date, (iv) incumbency
and specimen signatures of the officers of the Company
executing the Loan Documents to which the Company is a
party, and (v) the satisfaction of the conditions set forth
in Section 5.2. The Agent and the Lenders may conclusively
-----------
rely on such certificate until the Agent shall receive a
further certificate cancelling or amending the prior
certificate and submitting the signatures of the officers
named in such further certificate; and
(b) a certified copy of the certificate of
incorporation and a good standing certificate issued by the
Secretary of State of the Company's state of incorporation.
SECTION 5.1.2 Delivery of Notes. The Agent shall have
-----------------
received, for the account of each Lender, the Bid Notes and the
Committed Notes duly executed and delivered by the Company.
SECTION 5.1.3 This Agreement. The Agent shall have
--------------
received an executed counterpart of this Agreement from each of
the parties hereto.
SECTION 5.1.4 Opinions of Counsel. The Agent shall have
-------------------
received opinions, each dated a date satisfactory to the Agent
and addressed to the Agent and all Lenders, from
(a) McDermott, Will & Emery, counsel to the Company,
substantially in the form set forth in Exhibit E hereto; and
---------
(b) Mayer, Brown & Platt, counsel to the Agent,
substantially in the form of Exhibit F hereto.
---------
SECTION 5.1.5 Consents, etc. The Agent shall have received
-------------
certified copies of all documents evidencing any necessary
action, consents and approvals of other Persons with respect to
this Agreement, the Notes and the other Loan Documents.
SECTION 5.1.6 Closing Fees, Expenses, etc. The Agent shall
---------------------------
have received for its own account, or for the account of each
Lender, as the case may be, all fees, costs and expenses due and
payable pursuant to Sections 3.3 and 10.3, if then invoiced.
------------ ----
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<PAGE> 44
SECTION 5.1.7 Forms from the Lenders. The Agent shall have
----------------------
received Forms 4224 or Forms 1001 required to be furnished
pursuant to Section 4.7 duly executed by the applicable Lenders.
-----------
SECTION 5.1.8 Process Agent. The Company shall have
-------------
delivered to the Agent a copy of a letter of acceptance of the
Process Agent accepting its appointment (or confirming its
apointment) as agent for service of process in New York.
SECTION 5.1.9 Termination. The Agent shall have received
-----------
satisfactory evidence of the termination of the Existing
Agreement and the payment of all obligations thereunder.
SECTION 5.1.10 No Material Adverse Change. The Agent shall
--------------------------
have received evidence that no event shall have occurred since
April 30, 1993 and no condition shall exist which has had or
could reasonably be expected to have a material adverse effect on
the financial condition of the Company or any of its
Subsidiaries, taken as a whole, or the ability of the Company to
perform its obligations under any of the Loan Documents.
SECTION 5.1.11 Compliance Certificate. The Agent shall
----------------------
have received a compliance certificate referred to in Section
-------
7.18(h) as of the end of the fiscal quarter ended April 30, 1994,
- - -------
duly executed by an authorized officer of the Company.
SECTION 5.1.12 Other Documents. The Agent shall have
---------------
received such other documents as the Agent shall have reasonably
requested.
SECTION 5.2 All Borrowings. The obligation of each Lender
--------------
to fund any Loan on the occasion of any Borrowing (including the
initial Borrowing) shall be subject to the satisfaction of each
of the conditions precedent set forth in this Section 5.2.
-----------
SECTION 5.2.1 Compliance with Warranties, No Default, etc.
-------------------------------------------
Both before and after giving effect to any Borrowing (but, if any
Default of the nature referred to in Section 8.1.4 shall have
-------------
occurred with respect to any other Indebtedness, without giving
effect to the application, directly or indirectly, of the
proceeds thereof) the following statements shall be true and
correct:
(a) the representations and warranties set forth in
Article 6 (excluding, however, those contained in Section
--------- -------
6.7) shall be true and correct in all material respects with
----
the same effect as if then made (unless stated to relate
solely to an earlier date, in which case such
representations and warranties shall be true and correct as
of such earlier date);
(b) except as disclosed by the Company to the Agent
and the Lenders pursuant to Section 6.7:
-----------
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<PAGE> 45
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be
pending or, to the knowledge of the Company,
threatened against the Company or any of its
Subsidiaries which might materially adversely
affect the Company's consolidated business,
operations, assets, revenues, properties or
prospects or which purports to affect the
legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document;
and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or
governmental investigation or proceeding disclosed
pursuant to Section 6.7 which might materially
-----------
adversely affect the Company's consolidated
business, operations, assets, revenues, properties
or prospects or which purports to affect the
legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document;
and
(c) no Default shall have then occurred and be
continuing, and neither the Company nor any of its
Subsidiaries are in material violation of any law or
governmental rule or regulation or court or administrative
order or decree.
SECTION 5.2.2 Borrowing Request or Bid Request. The Agent
--------------------------------
shall have received a Borrowing Request or a Bid Request for such
Borrowing, as the case may be. Each of the delivery of a
Borrowing Request or a Bid Request, as the case may be, and the
acceptance by the Company of the proceeds of such Borrowing shall
constitute a representation and warranty by the Company that on
the date of such Borrowing (both immediately before and after
giving effect to such Borrowing and the application of the
proceeds thereof) the statements made in Section 5.2.1 are true
-------------
and correct.
SECTION 5.2.3 Satisfactory Legal Form. All documents
-----------------------
executed or submitted pursuant hereto by or on behalf of the
Company or any of its Subsidiaries shall be satisfactory in form
and substance to the Agent and its counsel; and the Agent and its
counsel shall have received all information, approvals, opinions,
documents or instruments as the Agent or its counsel may
reasonably request.
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<PAGE> 46
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into
this Agreement and to make Loans hereunder, the Company
represents and warrants unto the Agent and each Lender as set
forth in this Article 6.
---------
SECTION 6.1 Organization, etc. Each of the Company and
-----------------
each of its Material Subsidiaries is a corporation validly
organized and existing and in good standing under the laws of its
jurisdiction of incorporation and is duly licensed or qualified
to do business and is in good standing as a foreign corporation
in each jurisdiction where the failure to so qualify would have a
materially adverse effect on the financial condition, operations,
assets, business or properties of the Company and its
Subsidiaries on a consolidated basis. Each of the Company and
each of its Material Subsidiaries has full power and authority
and holds all requisite governmental licenses, permits and other
approvals to own and hold under lease and operate its property
and to conduct its business substantially as currently conducted
by it.
SECTION 6.2 Due Authorization, Non-Contravention, etc. The
-----------------------------------------
execution, delivery and performance by the Company of this
Agreement, the Notes and each other Loan Document executed or to
be executed by it are within the Company's corporate powers, have
been duly authorized by all necessary corporate action, and do
not (a) contravene the Company's articles of incorporation or by-
laws; (b) contravene any indenture or loan or credit agreement or
any other contractual agreement or instrument, or law or
governmental rule or regulation or court or administrative decree
or order binding on or affecting the Company or any of its
properties or (c) result in, or require the creation or
imposition of, any Lien on any properties of the Company or any
of its Subsidiaries.
SECTION 6.3 Government Approval, Regulation, etc. No
------------------------------------
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any
other Person is required for the due execution, delivery or
performance by the Company of this Agreement, the Notes or any
other Loan Document. The Company and its Subsidiaries are in
Material Compliance with all laws, governmental rules and
regulations, and court and administrative decrees and orders
applicable to them. Neither the Company nor any of its
Subsidiaries is an "investment company" or a company "controlled"
by 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
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<PAGE> 47
company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION 6.4 Validity, etc. This Agreement constitutes,
-------------
and the Notes and each other Loan Document executed by the
Company will, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligations of the
Company enforceable in accordance with their respective terms,
except as enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of
equity limiting the availability of equitable remedies.
SECTION 6.5 Financial Information. The Company's audited
---------------------
consolidated financial statement as of April 30, 1993, and the
Company's unaudited consolidated financial statement as of
January 31, 1994, and the related balance sheets and statements
of earnings and cash flow of the Company and each of its
Subsidiaries relating to each such financial statement, copies of
which have been furnished to the Agent and each Lender, have been
prepared in accordance with GAAP consistently applied, and
present fairly the consolidated financial condition of the
corporations covered thereby as at the dates thereof and the
results of their operations for the periods then ended, subject
(in the case of the interim financial statement) to year-end
audit adjustments.
SECTION 6.6 No Material Adverse Change; No Default. Since
--------------------------------------
April 30, 1993, there has been no material adverse change in the
financial condition, operations, assets, business, properties or
prospects of the Company or any of its Affiliates or the ability
of the Company to perform its obligations under any of the Loan
Documents. Neither the Company nor any of its Material
Subsidiaries is in default under or in violation of its
organizational documents or any law, governmental rule or
regulation or any agreement or instrument to which the Company or
any Material Subsidiary is a party or by which any of their
respective properties or assets is bound or affected, which
default might materially and adversely affect the financial
condition or operations of the Company and its Subsidiaries taken
as a whole or which purports to affect the legality, validity or
enforceability of any Loan Document. No Default has occurred and
is continuing.
SECTION 6.7 Litigation, Labor Controversies, etc. There
------------------------------------
is no pending or, to the knowledge of the Company, threatened
litigation, action, proceeding, or labor controversy affecting
the Company or any of its Material Subsidiaries, or any of their
respective properties, businesses, assets or revenues, which may
materially adversely affect the financial condition, operations,
assets, business, properties or prospects of the Company and its
Material Subsidiaries, taken as a whole, or which purports to
affect the legality, validity or enforceability of this
-41-
<PAGE> 48
Agreement, the Notes or any other Loan Document, except as
disclosed in Exhibit G hereto. Other than any liability incident
---------
to such litigation or proceeding, neither the Company nor any of
its Material Subsidiaries has any material contingent liability
not provided for or disclosed in the financial statements
referred to in Section 6.5.
-----------
SECTION 6.8 Subsidiaries. As of the date of this
------------
Agreement, the Company has no Subsidiaries except those
Subsidiaries which are identified in Exhibit H hereto, which
---------
Exhibit H identifies each Subsidiary which is a Material
- - ---------
Subsidiary, and states the jurisdiction of incorporation of each
Subsidiary and the percentage of its voting stock owned by the
Company and/or its Subsidiaries.
SECTION 6.9 Ownership of Properties. The Company and each
-----------------------
of its Material Subsidiaries has good and marketable title to all
of its properties and assets, real and personal, tangible and
intangible, of any nature whatsoever (including shares of stock
of Material Subsidiaries (all of which shares have been duly
issued and are fully paid and non-assessable), patents,
trademarks, trade names, service marks and copyrights), free and
clear of all Liens, charges or claims (including infringement
claims with respect to patents, trademarks, copyrights and the
like) except (a) as permitted pursuant to Section 7.11, or (b) as
------------
sold or otherwise disposed of in the ordinary course of business.
SECTION 6.10 Taxes. The Company and each of its
-----
Subsidiaries has filed all tax returns and reports required by
law to have been filed by it and, except as disclosed in Exhibit
-------
I hereto, has paid all taxes and governmental charges thereby
- - -
shown to be owing, except any such taxes or charges which are
being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books. The federal income
tax liability of the Company and its Material Subsidiaries has
been audited by the Internal Revenue Service and, except as
disclosed in Exhibit I hereto, has been finally determined and
---------
satisfied (or the time for audit has expired) for all tax years
up to and including the tax year ended April 30, 1992. Except as
disclosed in Exhibit I hereto, the Company is not aware of any
---------
proposed assessment against the Company or any of its Material
Subsidiaries for additional taxes (or any basis for any such
assessment) which might be material to the Company and its
Material Subsidiaries taken as a whole.
SECTION 6.11 Pension and Welfare Plans. Except as
-------------------------
disclosed in Exhibit J hereto, during the twelve-consecutive-
---------
month period immediately prior to the date of the execution and
delivery of this Agreement and prior to the date of any Borrowing
hereunder, no steps have been taken to terminate any Pension
Plan, and no contribution failure has occurred with respect to
any Pension Plan sufficient to give rise to a Lien under Section
-42-
<PAGE> 49
302(f) of EROSE. Except as disclosed in Exhibit J hereto, no
---------
condition exists or event or transaction has occurred with
respect to any Pension Plan which might result in the incurrence
by the Company or any member of the Controlled Group of any
material liability, fine or penalty. Except as disclosed in
Exhibit J hereto, neither the Company nor any member of the
- - ---------
Controlled Group has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than
liability for continuation coverage described in Part 6 of Title
I of EROSE.
SECTION 6.12 Environmental Warranties. The Company and its
------------------------
Subsidiaries are, to the best knowledge of the Company, each in
Material Compliance with all Environmental Laws (a) now
applicable to the Company or any Subsidiary, or (b) which will be
applicable (or, if not in Material Compliance with such laws and
regulations referred to in this clause (b), the Company or such
----------
Subsidiary is taking appropriate action diligently pursued to be
in Material Compliance therewith on a timely basis or to be
exempt from compliance). Except as disclosed on Exhibit K,
---------
neither the Company nor any Subsidiary has any knowledge of any
(i) presently outstanding allegations by governmental officials
that the Company or any of its Subsidiaries is now or at any time
prior to the date hereof was in material violation of such
Environmental Laws, (ii) material administrative or judicial
proceedings presently pending against the Company or any of its
Subsidiaries pursuant to such Environmental Laws, and (iii)
material claim presently outstanding against the Company or any
of its Subsidiaries which was asserted pursuant to such laws or
regulations that in each case would reasonably be expected to
result in a liability to the Company or any Subsidiary in excess
of $10,000,000 or $10,000,000 in the aggregate for all such
claims (net in each case of actual uncontested insurance coverage
or effective uncontested indemnifications with respect thereto).
Except as disclosed in Exhibit K, the Company reasonably believes
---------
that no facts or circumstances known to it or any Subsidiary
could form the basis for the assertion of any material claim
against the Company or any Subsidiary relating to environmental
matters, including any material claim arising from past or
present environmental practices asserted under any Environmental
Laws that in each case would reasonably be expected to result in
a liability to the Company or any Subsidiary in excess of
$10,000,000 or $10,000,000 in the aggregate for all such claims
(net in each case of actual uncontested insurance coverage or
effective uncontested indemnifications with respect thereto).
SECTION 6.13 Regulations G, U and X. The Company is not
----------------------
engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Loans
will be used for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation G, U or X. Terms for
which meanings are provided in F.R.S. Board Regulation G, U or X
-43-
<PAGE> 50
or any regulations substituted therefor, as from time to time in
effect, are used in this Section with such meanings.
SECTION 6.14 Insurance. The Company and each of its
---------
Material Subsidiaries maintain insurance coverage by financially
sound and reputable insurers in such forms and amounts and
against such risks as are customary for corporations of
established reputation engaged in the same or a similar business
and owning and operating similar properties in similar locations.
SECTION 6.15 Indebtedness. Except as disclosed on Exhibit
------------ -------
L hereto or as otherwise permitted pursuant to Section 7.10, as
- - - ------------
of the date hereof, neither the Company nor any Subsidiary has
any Indebtedness, and said Exhibit L indicates which of such
---------
Indebtedness described therein is secured.
SECTION 6.16 Accuracy of Information. All factual
-----------------------
information heretofore or contemporaneously furnished by or on
behalf of the Company in writing to the Agent or any Lender for
purposes of or in connection with this Agreement or any
transaction contemplated hereby (including the copies of the
various note agreements entered into by the Company with various
insurance companies, true and complete copies of which were
furnished to the Agent and each Lender in connection with its
execution and delivery hereof) is, and all other such factual
information hereafter furnished by or on behalf of the Company to
the Agent or any Lender will be, true and accurate in every
material respect on the date as of which such information is
dated or certified and as of the date of execution and delivery
of this Agreement by the Agent and such Lender, and such
information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to
make such information not misleading.
SECTION 6.17 Material Subsidiary. The Company and its
-------------------
Material Subsidiaries together account for more than 85% of each
of (a) the sum of all assets (valued at the greater of book or
fair market) of the Company and its Subsidiaries as of the end of
the most recently completed fiscal quarter, and (b) the
Consolidated Net Income of the Company and its Subsidiaries, as
of the end of the most recently completed fiscal quarter, for the
immediately preceding 12-month consecutive period.
ARTICLE 7
COVENANTS
The Company agrees with the Agent and each Lender that,
until all Commitments have terminated and all Obligations have
been paid and performed in full:
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<PAGE> 51
SECTION 7.1 Corporate Existence, etc. The Company will
------------------------
preserve and maintain, and cause each Subsidiary to preserve and
maintain (except for any sale, dissolution, liquidation or merger
not otherwise prohibited hereby), its existence, rights,
privileges and franchises in the jurisdiction of its
incorporation or other formation; and qualify and remain
qualified as a foreign Person authorized to do business in each
other jurisdiction in which the failure to so qualify would
reasonably be expected to have a materially adverse effect on the
Company and its Subsidiaries taken as a whole or on the ability
of the Company to perform its obligations under any of the Loan
Documents.
SECTION 7.2 Insurance. The Company will maintain, and will
---------
cause each Subsidiary to maintain, insurance coverage by
financially sound and reputable insurers in such forms and
amounts and against such risks as are customary for corporations
of established reputation engaged in the same or a similar
business and owning and operating similar properties in similar
locations.
SECTION 7.3 Taxes, Claims for Labor and Materials,
--------------------------------------
Compliance with Laws. The Company will promptly pay and
- - --------------------
discharge, and will cause each Subsidiary promptly to pay and
discharge, all lawful taxes, assessments and governmental charges
or levies imposed upon the Company or such Subsidiary,
respectively, or upon or in respect of all or any part of the
property or business of the Company or such Subsidiary, all trade
accounts payable in accordance with usual and customary business
terms, and all claims for work, labor or materials, if the
failure to pay or discharge such tax, assessment, charge, levy,
account payable or claim could result in any material lien or
charge upon any property of the Company or any Material
Subsidiary; provided that the Company or such Subsidiary shall
--------
not be required to pay any such tax, assessment, charge, levy,
account payable or claim if (a) the validity, applicability or
amount thereof is being contested in good faith by appropriate
actions or proceedings which will prevent the forfeiture or sale
of any property of the Company or such Subsidiary or any material
interference with the use thereof by the Company or such
Subsidiary, and (b) the Company or such Subsidiary shall set
aside on its books, reserves or accruals deemed by it to be
adequate with respect thereto. The Company will promptly comply,
and will cause each Subsidiary to comply, with all laws,
ordinances or governmental rules and regulations to which it is
subject (but excluding all Environmental Laws), the violation of
which would materially and adversely affect the properties,
business, prospects, profits or condition (financial or
otherwise) of the Company and its Material Subsidiaries taken as
a whole or could result in any material lien or charge upon any
property of the Company or any Material Subsidiary.
-45-
<PAGE> 52
SECTION 7.4 Maintenance, etc. The Company will maintain,
----------------
preserve and keep, and will cause each Subsidiary to maintain,
preserve and keep, its material properties which are used or
useful in the conduct of its business (whether owned in fee or a
leasehold interest) in good repair and working order and from
time to time will make all necessary repairs, replacements,
renewals and additions so that at all times the efficiency
thereof shall be maintained, the failure to maintain, preserve or
keep of which would be reasonably likely to materially and
adversely affect the properties, business, prospects, profits or
condition (financial or otherwise) of the Company and its
Material Subsidiaries taken as a whole or could result in any
material Lien or charge upon any property of the Company or any
Material Subsidiary.
SECTION 7.5 Nature of Business. Neither the Company nor
------------------
any Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis,
which would then be engaged in by the Company and its
Subsidiaries would be substantially changed from the general
nature of the business engaged in by the Company and its
Subsidiaries taken as a whole on the date of this Agreement.
SECTION 7.6 Interest Coverage Ratio. The Company will as
-----------------------
of the last day of each fiscal quarter have an Interest Coverage
Ratio at not less than 2.25 to 1.0.
SECTION 7.7 Leverage Ratio. The Company will at all times
--------------
keep and maintain the Leverage Ratio at not more than 0.55 to
1.00.
SECTION 7.8 Consolidated Shareholder's Equity. The Company
---------------------------------
will at all times keep and maintain Consolidated Shareholder's
Equity in an amount not less than $200,000,000.
SECTION 7.9 Confirmation of Senior Debt Rating. The
----------------------------------
Company will cause each Rating Agency that has issued a Senior
Debt Rating to the Company at any time during the last twelve
consecutive calendar months to confirm the Senior Debt Rating
given to the Company at least once during any consecutive six-
month period and at any other time reasonably requested by the
Agent, but no more than two additional times in any consecutive
twelve-month period; provided that the Company shall not be
--------
required to cause any Rating Agency to confirm its Senior Debt
Rating given to the Company if (a) such Rating Agency no longer
issues a Senior Debt Rating to the Company or (b) if the
Applicable Eurodollar Margin is not determined by reference to
the Senior Debt Rating at such time; it being understood that the
-- ----- ----------
Company will not have to cause any Rating Agency to comply with
this Section 7.9 so long as such Rating Agency is providing its
-----------
credit assessment monitoring service to the Company on a basis
the same as (in the case of Standard & Poor's Ratings Group) or
similar to (in the case of each other Rating Agency) the credit
-46-
<PAGE> 53
assessment monitoring service offered by Standard & Poor's
Ratings Group to the Company as of the date of this Agreement.
SECTION 7.10 Limitations on Indebtedness. The Company will
---------------------------
not and will not permit any Subsidiary to create, assume or incur
or in any manner be or become liable in respect of any
Indebtedness, except:
(a) Indebtedness of the Company and its Subsidiaries
outstanding as of the date of this Agreement and described
in Exhibit L hereto (including any extensions, renewals or
---------
refinancings thereof not to exceed 100% of the amount of
such Indebtedness immediately prior to such extension
renewal or refinancing);
(b) unsecured Consolidated Debt of the Company that is
pari passu with, or subordinate in right of payment to, the
---- -----
Obligations and that contains terms and conditions no more
favorable than the terms and conditions set forth herein,
created, assumed or incurred after the date hereof; provided
--------
that at the time of creation, assumption or incurrence
thereof and after giving effect thereto and to the
application of the proceeds thereof, no Default shall have
occurred and be continuing;
(c) unsecured Consolidated Debt of any Subsidiary that
contains terms and conditions no more favorable than the
terms and conditions set forth herein, created, assumed or
incurred after the date hereof; provided that at the time of
--------
creation, assumption or incurrence thereof and after giving
effect thereto and to the application of the proceeds
thereof, no Default shall have occurred and be continuing;
and provided further that the aggregate amount of such Debt
-------- -------
(including such Debt existing as of the date of this
Agreement) at any time outstanding shall not exceed 20% of
Consolidated Net Tangible Assets;
(d) Capitalized Rentals, not to exceed $50,000,000 in
the aggregate at any one time outstanding; and
(e) Consolidated Debt of a Subsidiary to the Company
or to a Wholly-owned Subsidiary.
SECTION 7.11 Liens and Negative Pledges.
--------------------------
SECTION 7.11.1 Limitation on Liens. The Company will not,
-------------------
and will not permit any Subsidiary to, create or incur, or suffer
to be incurred or to exist, any Lien of any kind on its or their
property or assets, whether now owned or hereafter acquired, or
upon any income or profits therefrom, or transfer any property
for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general
-47-
<PAGE> 54
creditors, or acquire or agree to acquire, or permit any
Subsidiary to acquire, any property or assets upon conditional
sales agreements or other title retention devices, except:
(a) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or
demand of mechanics and materialmen; provided that payment
--------
thereof is not at the time required by Section 7.3;
-----------
(b) Liens of or resulting from any judgment or award,
the time for the appeal or petition for rehearing of which
shall not have expired, or in respect of which the Company
or a Subsidiary shall at any time in good faith be
prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured, and any
pledges or deposits for the purpose of securing such appeal
or stay; provided that the aggregate amount secured by said
--------
Liens, pledges and deposits does not at any time exceed
$10,000,000;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including warehousemen's
and attorneys' liens, statutory landlords' liens and liens
on inventory securing short term obligations due to the
party selling such inventory) and deposits, pledges or Liens
to secure the performance of bids, tenders or trade
contracts, or to secure statutory obligations, surety or
appeal bonds or other Liens of like general nature incurred
in the ordinary course of business and not in connection
with the borrowing of money; provided that, in each case,
--------
the obligation secured is not overdue, or, if overdue, is
being contested in good faith by appropriate actions or
proceedings;
(d) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-
of-way, utilities and other similar purposes, or zoning or
other restrictions as to the use of real properties, which
are necessary for the conduct of the activities of the
Company and its Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and
similarly situated and which do not in any event materially
impair their use in the operation of the business of the
Company and its Subsidiaries;
(e) Liens of the Company and its Subsidiaries
outstanding as of the date hereof and described on Exhibit N
---------
hereto;
(f) Liens, mortgages, conditional sales contracts,
security interests, or other arrangements for the retention
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<PAGE> 55
of title (including Capitalized Leases) incurred after the
date hereof and given to secure the payments of the purchase
price incurred in connection with the acquisition or
construction of fixed assets useful and intended to be used
in carrying on the business of the Company or a Subsidiary,
including Liens existing on such fixed assets at the time of
acquisition thereof or at the time of acquisition by the
Company or a Subsidiary of any business entity then owning
such fixed assets, whether or not such existing Liens were
given to secure the payment of the purchase price of the
fixed assets to which they attach so long as they were not
incurred, extended or renewed in contemplation of such
acquisition; provided that (i) the Lien or charge shall
--------
attach solely to the property acquired or purchased, (ii) at
the time of acquisition of such fixed assets, the aggregate
amount remaining unpaid on all Indebtedness secured by Liens
on such fixed assets whether or not assumed by the Company
or a Subsidiary shall not exceed an amount equal to the
lesser of the total purchase price or fair market value at
the time of acquisition of such fixed assets (as determined
in good faith by the Board of Directors of the Company),
(iii) all Indebtedness secured by such Liens shall be
payable in equal monthly, quarterly, semiannual or annual
installments of principal and interest and shall not be
callable at the lender's option for reasons unrelated to the
creditworthiness of the Company or such Subsidiary or the
destruction of the collateral for such Indebtedness, (iv)
all such Indebtedness shall have been incurred within the
applicable limitations provided in Section 7.10, and (v) the
------------
aggregate unpaid principal amount of all such Indebtedness
so secured and at any time outstanding shall not exceed 15%
of Consolidated Net Tangible Assets; and
(g) Liens incurred by the Company or any Subsidiary in
addition to those described in clauses (a) through (f)
----------- ---
above; provided that (i) the aggregate amount of all
--------
Indebtedness secured by Liens pursuant to this clause (g)
----------
shall not at any time exceed 3% of Consolidated Net Tangible
Assets, and (ii) all such Indebtedness shall have been
incurred within the applicable limitations provided in
Section 7.10.
------------
In case any property or asset is subjected to a Lien not
otherwise permitted by this Section 7.11.1, the Company will make
--------------
or cause to be made provision whereby the Notes will be secured,
to the fullest extent permitted under applicable law, equally and
ratably with all other obligations secured thereby, and in any
case the Notes shall (but only upon the occurrence of such
condition precedent) have the benefit, to the full extent that
the holders may be entitled thereto under applicable law, of an
equitable lien equally and ratably securing the Notes.
Compliance with the provisions of this paragraph shall not be
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<PAGE> 56
deemed to constitute a waiver of, or consent to, any violation of
the foregoing provisions of this Section 7.11.1.
--------------
SECTION 7.11.2 Restrictive Agreements, etc. The Company
---------------------------
will not, and will not permit any of its Subsidiaries to, enter
into any agreement (excluding this Agreement and any other Loan
Document) prohibiting
(a) the ability of the Company to amend or otherwise
modify this Agreement or any other Loan Document; or
(b) the ability of any Subsidiary to make any
payments, directly or indirectly, to the Company by way of
dividends, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments, or
any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly
or indirectly, to the Company.
SECTION 7.12 Acquisitions. The Company and its Subsidiaries
------------
will not, in one transaction or a series of transactions,
directly or indirectly, consolidate or be a party to a merger
with, another Person, or purchase or otherwise acquire all or
substantially all of the assets of another Person or more than
50% of any Securities of another Person if (a) such Person and
the Company do not engage in the same business, (b) such
consolidation, merger, purchase or acquisition is opposed by such
Person's board of directors or other governing body or by a
shareholder or shareholders or other Person or Persons
controlling more than 25% of the Voting Stock of such Person,
(c) the Company or any Subsidiary knows of facts or circumstances
that would make it reasonably likely that such purchase or other
acquisition would be hostile, or (d) at the time of such
consolidation, merger, purchase or acquisition and after giving
effect thereto, a Default shall have occurred and be continuing.
SECTION 7.13 Mergers, Consolidations and Sales of Assets.
-------------------------------------------
SECTION 7.13.1 Mergers, Consolidations and Dispositions.
----------------------------------------
The Company will not, and will not permit any Subsidiary to (i)
consolidate with or be a party to a merger with any other
corporation, or (ii) sell, lease or otherwise dispose of all or,
except in the ordinary course of business, any part of the assets
of the Company and its Subsidiaries, provided that:
--------
(a) any Subsidiary may merge or consolidate with or
into the Company or any Wholly-owned Subsidiary so long as
in any merger, consolidation or sale involving the Company,
the Company or the Wholly-owned Subsidiary, as the case may
be, shall be the surviving or continuing corporation;
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<PAGE> 57
(b) any Subsidiary may sell, lease or otherwise
dispose of all or any substantial part of its assets to the
Company or any Wholly-owned Subsidiary;
(c) the Company may consolidate or merge with any
other corporation if (i) the Company is the surviving or
continuing corporation, (ii) at the time of such
consolidation or merger and after giving effect thereto no
Default shall have occurred and be continuing, and (iii)
such consolidation or merger would not be prohibited by
Section 7.12; and
------------
(d) the Company or any Subsidiary may sell, lease or
otherwise dispose of any assets for fair value if such
assets (valued at the greater of book or fair market), when
added to all other assets sold, leased or otherwise disposed
of by the Company and its Subsidiaries (other than in the
ordinary course of business) during the immediately
preceding four consecutive fiscal quarters, do not exceed
20% of consolidated assets of the Company and its
Subsidiaries (determined as of the end of the immediately
preceding fiscal quarter in accordance with GAAP), and also
do not contribute more than 20% of the consolidated gross
revenues of the Company and its Subsidiaries (determined as
of the end of the immediately preceding four consecutive
fiscal quarters in accordance with GAAP).
For purposes of Section 7.13.1(d):
-----------------
(A) the sale or discount of any receivable for
fair value consistent with industry custom and without
recourse shall be deemed to be "in the ordinary course
of business," and
(B) the sale or discount of any receivable for
fair value consistent with industry custom and with
recourse shall be deemed to be "in the ordinary course
of business" to the extent that all such recourse
obligations of the Company at any one time outstanding
do not exceed an amount equal to 2% of Consolidated
Shareholder's Equity.
Notwithstanding anything contained herein to the contrary, any
merger, consolidation or disposition permitted under Section
-------
7.13.1 shall not be deemed to trigger a Change of Control Event
- - ------
under clause (a) or (b) of the definition thereof.
---------- ---
SECTION 7.13.2 Issuance or Sale of Stock by Subsidiaries.
-----------------------------------------
The Company will not permit any Subsidiary to issue or sell any
shares of stock of any class (including as "stock" for the
purposes of this Section 7.13, any warrants, rights or options to
------------
purchase or otherwise acquire stock or other Securities
exchangeable for or convertible into stock) of such Subsidiary to
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<PAGE> 58
any Person other than the Company or a Wholly-owned Subsidiary,
except for the purpose of qualifying directors, or except in
satisfaction of the validly pre-existing preemptive rights of
minority shareholders in connection with the simultaneous
issuance of stock to the Company and/or a Subsidiary whereby the
Company and/or such Subsidiary maintain their same proportionate
interests in such Subsidiary.
SECTION 7.13.3 Sale of Stock in Subsidiaries. The Company
-----------------------------
will not sell, transfer or otherwise dispose of any shares of
stock in any Subsidiary (except to qualify directors) or any
Indebtedness of any Subsidiary, and will not permit any
Subsidiary to sell, transfer or otherwise dispose of (except to
the Company or a Wholly-owned Subsidiary) any shares of stock or
any Indebtedness of any other Subsidiary, unless:
(a) any of the conditions of Section 7.13.1 shall have
--------------
been satisfied;
(b) simultaneously with such sale, transfer, or
disposition, all shares of stock and all Indebtedness of
such Subsidiary at the time owned by the Company and by
every other Subsidiary shall be sold, transferred or
disposed of as an entirety;
(c) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the
retention of such stock and Indebtedness is no longer in the
best interests of the Company;
(d) such stock and Indebtedness is sold, transferred
or otherwise disposed of to a Person, for fair value and on
terms reasonably deemed by the Board of Directors to be
adequate and satisfactory; and
(e) the Subsidiary being disposed of shall not have
any continuing investment in the Company or any other
Subsidiary not being simultaneously disposed of.
SECTION 7.14 Guaranties. The Company will not, and will not
----------
permit any Subsidiary to, become or be liable in respect of any
Guaranty except Guaranties which are limited in amount to a
stated maximum dollar exposure and are incurred in compliance
with this Agreement to guaranty obligations permissible under
this Agreement.
SECTION 7.15 Compliance with Applicable Law. The Company
------------------------------
will comply, and cause each Subsidiary to comply, in all material
respects with all laws, rules and regulations binding or
affecting the Company or such Subsidiary (but excluding all
Environmental Laws), the failure to comply with which would be
reasonably expected to have a materially adverse effect on the
financial condition of the Company and its Subsidiaries taken as
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<PAGE> 59
a whole or the ability of the Company to perform its obligations
under any of the Loan Documents; and the Company shall obtain and
maintain, and cause each Subsidiary to obtain and maintain, all
permits, licenses and approvals (collectively, "Permits")
-------
necessary to construct, own, operate, use and maintain their
respective property and assets to conduct their respective
businesses, except where the failure to obtain or maintain such
Permit would not reasonably be expected to have a materially
adverse effect on the financial condition of the Company and its
Subsidiaries taken as a whole or the ability of the Company to
perform its obligations under any of the Loan Documents.
SECTION 7.16 Transactions with Affiliates. The Company will
----------------------------
not, and will not permit any Subsidiary to, enter into or be a
party to any transaction or arrangement with any Affiliate
(including, without limitation, the purchase from, sale to or
exchange of property with, or the rendering of any service by or
for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in
a comparable arm's-length transaction with a Person other than an
Affiliate.
SECTION 7.17 EROSE Compliance.
----------------
(a) The Company will not permit the present value of
all employee benefits vested under all "employee pension
benefit plans," as such term is defined in Section 3 of
EROSE, maintained by the Company or any of its Subsidiaries
to exceed the present value of the assets allocable to such
vested benefits.
(b) All assumptions and methods used to determine the
present value of vested employee benefits under employee
benefit plans and the present value of assets of employee
pension benefit plans shall be reasonable in the good faith
judgment of the Company and shall comply with all
requirements of law.
(c) Neither the Company nor any Subsidiary will cause
any employee pension benefit plan maintained or participated
in by it to:
(i) engage in any "prohibited transaction," as
such term is defined in Section 4975 of
the Code, which, either itself or because
of any excise tax or other penalty which
may be imposed, involves the possibility
of materially affecting the business,
prospects, profits, properties or
condition (financial or otherwise) of the
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<PAGE> 60
Company and its Subsidiaries taken as a
whole;
(ii) incur any "accumulated funding
deficiency," as such term is defined in
Section 302 of EROSE, whether or not
waived; or
(iii) terminate in a manner which results in the
imposition of a lien or charge of any kind
on the property or assets of the Company
or any Subsidiary pursuant to Section 4068
of EROSE.
SECTION 7.18 Reports and Rights of Inspection. The Company
--------------------------------
will keep, and will cause each Subsidiary to keep, proper books
of record and account in which full and correct entries will be
made of all dealings or transactions of or in relation to the
business and affairs of the Company or such Subsidiary, in
accordance with GAAP (except for changes in application disclosed
in the financial statements furnished to the Agent and each
Lender pursuant to this Section 7.18 and not resulting in an
------------
Impermissible Qualification by the independent public accountants
referred to in Section 7.18(b)) and will furnish to the Agent and
---------------
each Lender (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in
--------------------
any event within 45 days after the end of each quarterly
fiscal period (except the last) of each fiscal year of the
Company, duplicate copies of:
(i) a consolidated balance sheet of the
Company and its Subsidiaries as of the
close of such quarterly fiscal period,
(ii) consolidated statements of income and
retained earnings of the Company and its
Subsidiaries for such quarterly fiscal
period and for the portion of the fiscal
year ending with such quarterly fiscal
period, and
(iv) consolidated statements of cash flows of
the Company and its Subsidiaries for such
quarterly fiscal period and for the
portion of the fiscal year ending with
such quarterly fiscal period, in each case
setting forth in comparative form the
consolidated figures for the preceding
fiscal year, all in reasonable detail and
accompanied by a certificate of an
authorized financial officer of the
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<PAGE> 61
Company to the effect that the
consolidated financial statements have
been prepared in accordance with GAAP and
present fairly the financial condition of
the Company and its Subsidiaries;
(b) Annual Statements. As soon as available and in
-----------------
any event within 120 days after the close of each fiscal
year of the Company, duplicate copies of:
(i) a consolidated balance sheet of the
Company and its Subsidiaries, as of the
close of such fiscal year, and
(ii) consolidated statements of income and
shareowners' equity and cash flows of the
Company and its Subsidiaries, for such
fiscal year, setting forth in comparative
form the consolidated figures for the
preceding fiscal year, all in reasonable
detail and accompanied by a report thereon
of a firm of independent public
accountants of recognized national
standing selected by the Company to the
effect that the consolidated financial
statements have been prepared in
accordance with GAAP and present fairly
the financial condition of the Company and
its Subsidiaries and of the Company and
its consolidated subsidiaries, and that
the examination of such accountants in
connection with such financial statements
has been made in accordance with GAAP and
accordingly includes such tests of the
accounting records and such other auditing
procedures as were considered necessary in
the circumstances;
(c) Annual Consolidating Summary. As soon as
----------------------------
available and in any event within 120 days after the close
of each fiscal year of the Company, a consolidating summary
of business unit sales, operating income, assets and
investments of the Company and its Material Subsidiaries
prepared by an authorized financial officer of the Company
and substantially in the form set forth in Exhibit O hereto;
---------
(d) Audit Reports. Promptly upon receipt thereof, one
-------------
copy of each interim or special audit, if any, made by
independent accountants of the books of the Company or any
Subsidiary;
(e) SEC and Other Reports. Promptly upon their
---------------------
becoming available, one copy of each financial statement,
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<PAGE> 62
report, notice or proxy statement sent by the Company to
stockholders generally and of each regular or periodic
report, and any registration statement or prospectus filed
by the Company or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any
successor agency, and copies of any orders in any
proceedings to which the Company or any of its Subsidiaries
is a party, issued by any governmental agency, Federal or
state, having jurisdiction over the Company or any of its
Subsidiaries;
(f) [Reserved];
(g) Notice of Litigation and Judgment. Promptly upon
---------------------------------
any officer of the Company becoming aware thereof, written
notice of any proceedings threatened or pending against or
affecting the Company or any Subsidiary in any court or
before any governmental authority or arbitration board or
tribunal which claim, if decided against the Company or any
Subsidiary, could reasonably be expected to expose the
Company or any Subsidiary to liability in an amount equal to
$2,000,000 or more;
(h) Officers' Certificates. Within the periods
----------------------
provided in paragraphs (a) and (b) above, a certificate of
-------------- ---
an authorized financial officer of the Company stating that
such officer has reviewed the provisions of this Agreement
and (i) setting forth the information and computations (in
sufficient detail), to the extent applicable, required in
order to establish whether the Company was in compliance
with the requirements of Sections 7.6 through 7.17,
------------ ----
inclusive, at the end of the period covered by the financial
statements then being furnished, and (ii) stating whether
there existed as of the end of such fiscal period and
whether, to the best of such officer's knowledge, there
exists on the date of the certificate or existed at any time
during such fiscal period any Default and, if any such
condition or event existed during such period or exists on
the date of the certificate, specifying the nature and
period of existence thereof and the action the Company has
taken or is taking and proposes to take with respect
thereto;
(i) Accountants' Certificates. Within the period
-------------------------
provided in paragraph (b) above, a certificate of the
-------------
accountants who render an opinion with respect to such
financial statements, stating that they have reviewed this
Agreement and stating further whether, in making their
audit, such accountants have become aware of any Default
under any of the terms or provisions of this Agreement
insofar as any such terms or provisions pertain to
accounting matters or determinations and, if any such
condition or event then exists, specifying the nature and
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<PAGE> 63
period of existence thereof;
(j) Notice of Default. As soon as possible and in any
-----------------
event within three (3) days after any officer of the Company
shall have become aware of the occurrence of each Default, a
statement of a Responsible Officer of the Company setting
forth the details of such Default and the action which the
Company has taken and proposes to take with respect thereto;
(k) Notices Regarding Pension Plans. Immediately upon
-------------------------------
becoming aware of the institution of any steps by the
Company or any other Person to terminate any Pension Plan,
or the failure to make a required contribution to any
Pension Plan if such failure is sufficient to give rise to a
Lien under Section 302(f) of EROSE, or the taking of any
action with respect to a Pension Plan which could result in
the requirement that the Company furnish a bond or other
security to the PBGC or such Pension Plan, or the occurrence
of any event with respect to any Pension Plan which could
result in the incurrence by the Company of any material
liability, fine or penalty, or any material increase in the
contingent liability of the Company with respect to any
post-retirement Welfare Plan benefit, notice thereof and
copies of all documentation relating thereto;
(l) Notices Regarding Subsidiaries. Promptly from
------------------------------
time to time, upon request of the Agent, a written report of
any change in the list of Material Subsidiaries set forth on
Exhibit H hereto or any change in the designation of any
---------
Subsidiary as or to "Material";
(m) Notice of Material Adverse Change. Immediately
---------------------------------
upon becoming aware of the occurrence of a material adverse
change in the financial condition, operations, business,
prospects or properties of the Company and its Subsidiaries
taken as a whole or the occurrence of any event which
materially and adversely impairs the prospect of payment or
performance of the Obligations, notice thereof and copies of
all documentation relating thereto; and
(n) Requested Information. With reasonable
---------------------
promptness, such other data and information as the Agent or
any Lender may reasonably request.
Without limiting the foregoing, the Company will permit the Agent
and each Lender (or such Persons as may be designated by the
Agent or any Lender) to visit and inspect any of the properties
of the Company or any Subsidiary, to examine all their books of
account, records, reports and other papers, to make copies and
extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers, employees,
and independent public accountants (and by this provision the
Company authorizes said accountants to discuss with the Agent and
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<PAGE> 64
each Lender the finances and affairs of the Company and its
Subsidiaries) all at such reasonable times and as often as may be
reasonably requested. The Company shall be required to pay or
reimburse the Agent and each Lender for all reasonable expenses
which the Agent or such Lender may incur in connection with any
such visitation or inspection if an Event of Default shall exist
or be continuing at the time of such visitation or inspection.
SECTION 7.19 Environmental Covenant. The Company will, and
----------------------
will cause each of its Subsidiaries to,
(a) use and operate all of its facilities and
properties in Material Compliance with all Environmental
Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental
matters in effect and remain in Material Compliance
therewith, and handle all Hazardous Materials in Material
Compliance with all applicable Environmental Laws;
(b) immediately notify the Agent and provide copies
upon receipt of all written claims, complaints or notices
relating to the failure of the Company to be in Material
Compliance with Environmental Laws, and shall promptly cure
or settle and have dismissed with prejudice any actions and
proceedings relating to the failure of the Company to be in
Material Compliance with Environmental Laws; provided that
--------
nothing in the preceding clause shall be deemed to prohibit
the Company from contesting any such action expeditiously,
in good faith and through appropriate proceedings, so long
as (i) the Company sets aside on its books such reserves as
are required by GAAP in connection with such matters and
(ii) such contest shall not impair the validity or
enforceability of this Agreement; and
(c) provide such information which the Agent may
reasonably request from time to time to evidence compliance
with this Section 7.19.
------------
ARTICLE 8
EVENTS OF DEFAULT
SECTION 8.1 Listing of Events of Default. Each of the
----------------------------
following events, occurrences or conditions described in this
Section 8.1 shall constitute an "Event of Default."
- - ----------- ----------------
SECTION 8.1.1 Non-Payment of Obligations. The Company shall
--------------------------
default in the payment or prepayment when due of any principal of
any Loan, or the Company shall default (and such default shall
continue unremedied for a period of three (3) Business Days) in
the payment when due of any non-use or other fee or of any
interest on any Loan and/or other Obligation.
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<PAGE> 65
SECTION 8.1.2 Breach of Warranty. Any representation or
------------------
warranty of the Company made or deemed to be made hereunder or in
any other Loan Document or any other writing or certificate
furnished by or on behalf of the Company to the Agent or any
Lender for the purposes of or in connection with this Agreement
or any such other Loan Document (including any certificates
delivered pursuant to Article 5) is or shall be incorrect when
---------
made in any material respect.
SECTION 8.1.3 Non-Performance of Covenants and Obligations.
--------------------------------------------
The Company shall default in the due performance and observance
of any other agreement contained herein or in any other Loan
Document, and such default shall continue unremedied for a period
of thirty (30) days after the earlier of (x) notice thereof shall
have been given to the Company by the Agent or any Lender, or (y)
any Responsible Officer of the Company shall have obtained
knowledge of the occurrence of such default.
SECTION 8.1.4 Default on Other Indebtedness.
-----------------------------
(a) (i) A default shall have occurred and be
continuing, for the grace period, if any, applicable
thereto, in the payment when due, whether by acceleration or
otherwise, of (A) any Indebtedness (other than any
Obligation constituting Indebtedness) of, (B) any
reimbursement obligation in respect of any letter of credit
issued for the account of, or (C) any payment obligation in
respect of any Guaranty issued by, the Company or any of its
Subsidiaries, which Indebtedness is in a principal amount,
individually or in the aggregate for all of the foregoing
items in clauses (A) through (C), at any one time in default
----------- ---
equal to or in excess of Five Million Dollars ($5,000,000),
or (ii) a default shall occur in the performance or
observance of any obligation or condition with respect to
any Indebtedness (other than any Obligation constituting
Indebtedness), any letter of credit or any Guaranty, which,
in the case of any such Indebtedness, letter of credit or
Guaranty, is in a principal amount, individually or in the
aggregate for all such Indebtedness, letters of credit and
Guaranties, at any time equal to or in excess of Five
Million Dollars ($5,000,000), if the effect of such default
is (1) (x) to accelerate the maturity of any such
Indebtedness or any obligation which is supported by any
such Guaranty or (y) to require the advance payment or cash
collateralization of any such letter of credit reimbursement
obligation, or (2) such default shall continue unremedied
for any applicable period of time sufficient to permit the
holder or holders of any such Indebtedness or obligation, or
the issuer of any such letter of credit, or any trustee or
agent for any such Person, to cause such Indebtedness or
obligation to become due and payable prior to its expressed
maturity or to cause the advance payment or cash
collateralization of any such letter of credit reimbursement
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<PAGE> 66
obligation;
(b) Any default, termination event or like event by or
relating to the Company or any of its Subsidiaries shall
have occurred under any agreement (other than any Loan
Document) that involves a commitment of Five Million Dollars
($5,000,000) or more and provides for (i) the sale,
assignment or factoring of accounts receivable or (ii) any
other structured financing or off-balance sheet financing
and, in the case of any such default, termination event or
like event, shall have continued for the grace period, if
any, applicable thereto, and as a result (A) in the case of
clause (i) next above, the obligation to purchase, take by
----------
assignment or factor such receivables shall have been
terminated or the transferee of receivables shall have the
right (with or without the passage of time or the giving of
notice, or both) to terminate such obligation prior to the
stated maturity date therefor or (B) in the case of clause
------
(ii) next above, the obligations of the other party or
----
parties to such other structured financing or off-balance
sheet financing shall terminate or such other party or
parties shall have the right to terminate obligations prior
to the stated maturity date therefor;
SECTION 8.1.5 Judgments. Any final judgment or judgments
---------
for the payment of money aggregating in excess of $2,000,000 is
or are outstanding against the Company or any Subsidiary or
against the property or assets of either and any one of such
judgments has remained unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of 30 days from the date of its
entry; provided that in lieu of such 30-day period, a period of
--------
90 days shall apply to any such judgment that is fully insured
against by a reputable insurance company which has acknowledged
its obligation for such judgment and which is accorded a rating
by A.M. Best Company, Inc. of A+.
SECTION 8.1.6 Pension Plans. Any of the following events
-------------
shall occur with respect to any Pension Plan
(a) the institution of any steps by the Company, any
member of its Controlled Group or any other Person to
terminate a Pension Plan if, as a result of such
termination, the Company or any such member could be
required to make a contribution to such Pension Plan, or
could reasonably expect to incur a liability or obligation
to such Pension Plan, in excess of $5,000,000; or
(b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a Lien under Section
302(f) of EROSE.
SECTION 8.1.7 Bankruptcy, Insolvency, etc. The Company or
---------------------------
any of its Material Subsidiaries shall:
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<PAGE> 67
(a) become insolvent or generally fail to pay, or
admit in writing its inability to pay, debts as they become
due;
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver or other custodian for
the Company or any of its Material Subsidiaries or any
property of any thereof, or make a general assignment for
the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for the
Company or any of its Material Subsidiaries or for a
substantial part of the property of any thereof, and such
trustee, receiver, sequestrator or other custodian shall not
be discharged within thirty (30) days; provided that the
--------
Company and each Material Subsidiary hereby expressly
authorizes the Agent and each Lender to appear in any court
conducting any relevant proceeding during such thirty-day
period to preserve, protect and defend their rights under
the Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case
or proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in
respect of the Company or any of its Material Subsidiaries,
and, if any such case or proceeding is not commenced by the
Company or such Material Subsidiary, such case or proceeding
shall be consented to or acquiesced in by the Company or
such Material Subsidiary or shall result in the entry of an
order for relief or shall remain for sixty (60) days
undismissed; provided that the Company and each Material
--------
Subsidiary hereby expressly authorizes the Agent and each
Lender to appear in any court conducting any such case or
proceeding during such sixty-day period to preserve, protect
and defend their rights under the Loan Documents; or
(e) take any corporate action authorizing, or in
furtherance of, any of the foregoing.
SECTION 8.1.8 Change of Control Event. A Change of Control
-----------------------
Event shall occur.
SECTION 8.1.9 Environmental Matters. The Company or any of
---------------------
its Subsidiaries shall be the subject of any proceeding or
investigation pertaining to the release by the Company or any of
its Subsidiaries, or any other Person, of any Hazardous Material,
or any violation of or non-compliance with any Environmental
Laws, which would, in either case, have a materially adverse
effect on the Company and its Subsidiaries taken as a whole or
the ability of the Company to perform any of the Loan Documents.
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<PAGE> 68
SECTION 8.2 Action if Bankruptcy. If any Event of Default
--------------------
described in clauses (a) through (d) of Section 8.1.7 shall
----------- --- -------------
occur, the Commitments (if not theretofore terminated) shall
automatically terminate and the outstanding principal amount of
all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without
notice or demand.
SECTION 8.3 Action if Other Event of Default. If any Event
--------------------------------
of Default (other than any Event of Default described in clauses
-------
(a) through (d) of Section 8.1.7) shall occur for any reason,
- - --- --- -------------
whether voluntary or involuntary, and be continuing, the Agent,
upon the direction of the Required Lenders, shall declare the
outstanding principal amount of the Loans and other Obligations
to be due and payable and the Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other Obligations shall be and become immediately
due and payable, and the Commitments shall immediately terminate,
all without notice, demand or presentment. The Agent shall
promptly advise the Company of any such declaration, but failure
to do so shall not impair the effect of such declaration.
ARTICLE 9
THE AGENT
SECTION 9.1 Actions. Each Lender hereby appoints
-------
Scotiabank as its Agent under and for purposes of this Agreement,
the Notes and each other Loan Document. Each Lender authorizes
the Agent to act on behalf of such Lender under this Agreement,
the Notes and each other Loan Document and, in the absence of
other written instructions from the Required Lenders received
from time to time by the Agent (with respect to which the Agent
agrees that it will comply, except as otherwise provided in this
Section or as otherwise advised by counsel), to exercise such
powers hereunder and thereunder as are specifically delegated to
or required of the Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental
thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Agent, pro rata
--- ----
according to such Lender's Percentage, from and against any and
all liabilities, obligations, losses, damages, claims, costs or
expenses of any kind or nature whatsoever which may at any time
be imposed on, incurred by, or asserted against, the Agent in any
way relating to or arising out of this Agreement, the Notes and
any other Loan Document, including reasonable attorneys' fees,
and as to which the Agent is not reimbursed by the Company;
provided that no Lender shall be liable for the payment of any
- - --------
portion of such liabilities, obligations, losses, damages,
claims, costs or expenses which have resulted solely from the
Agent's gross negligence or willful misconduct. Without limiting
the generality of the foregoing, each Lender hereby agrees, to
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the extent of such Lender's Percentage, to reimburse the Agent
promptly following the Agent's demand, for any reasonable out-of-
pocket expenses (including attorneys' fees and expenses) incurred
by the Agent in connection with the administration and
enforcement of the Loan Documents, and not reimbursed to the
Agent by the Company except to the extent such expenses are
caused by the gross negligence or willful misconduct of the
Agent. If and to the extent that the foregoing undertaking may
be unenforceable for any reason, each Lender hereby agrees to
make the maximum contribution, to the extent of such Lender's
Percentage, to the payment and satisfaction of each of such
amounts which is permissible under applicable law.
Notwithstanding any other provision hereof, each Lender's
obligations under this Section 9.1 shall survive the termination
-----------
of such Lender's Commitment and this Agreement and the discharge
of the Company's obligations hereunder but only with respect to
such matters which occurred prior to the time such Lender ceased
to be a Lender hereunder. The Agent shall not be required to
take any action hereunder, under the Notes or under any other
Loan Document, or to prosecute or defend any suit in respect of
this Agreement, the Notes or any other Loan Document, unless it
is indemnified hereunder to its satisfaction. If any indemnity
in favor of the Agent shall be or become, in the Agent's
determination, inadequate, the Agent may call for additional
indemnification from the Lenders and cease to do the acts
indemnified against hereunder until such additional indemnity is
given.
SECTION 9.2 Funding Reliance, etc. Unless the Agent shall
---------------------
have been notified by telephone, confirmed in writing, by any
Lender by 12:00 noon, Atlanta time, on the day of a Borrowing
that such Lender will not make available the amount which would
constitute its Percentage of such Borrowing on the date specified
therefor, the Agent may assume that such Lender has made such
amount available to the Agent and, in reliance upon such
assumption, make available to the Company a corresponding amount.
If and to the extent that such Lender shall not have made such
amount available to the Agent, such Lender and the Company
severally agree to repay the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day
from the date the Agent made such amount available to the Company
to the date such amount is repaid to the Agent, at the Federal
Funds Effective Rate.
SECTION 9.3 Exculpation. Neither the Agent nor any of its
-----------
directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it under
this Agreement or any other Loan Document, or in connection
herewith or therewith, except for its own willful misconduct or
gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan
Document, nor to make any inquiry respecting the performance by
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<PAGE> 70
the Company of its obligations hereunder or under any other Loan
Document. Any such inquiry which may be made by the Agent shall
not obligate it to make any further inquiry or to take any
action. The Agent shall be entitled to rely upon advice of
counsel concerning legal matters and upon any notice, consent,
certificate, statement or writing which the Agent believes to be
genuine and to have been presented by a proper Person.
SECTION 9.4 Successor. The Agent may resign as such at any
---------
time upon at least thirty (30) days' prior notice to the Company
and all Lenders. If the Agent at any time shall resign, the
Required Lenders may appoint another Lender as a successor Agent
(which prior to the occurrence and continuation of a Default
shall be acceptable to the Company) which shall thereupon become
the Agent hereunder. If no successor Agent so acceptable to the
Company shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within thirty (30) days
after the retiring Agent's giving notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State
thereof) or a U.S. branch or agency of a commercial banking
institution, and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall
be entitled to receive from the retiring Agent such documents of
transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's
resignation hereunder as the Agent, the provisions of:
(a) this Article 9 shall inure to its benefit as to
---------
any actions taken or omitted to be taken by it while it was
the Agent under this Agreement; and
(b) Section 10.3 and Section 10.4 shall continue to
------------ ------------
inure to its benefit.
SECTION 9.5 Loans by Scotiabank. Scotiabank shall have the
-------------------
same rights and powers with respect to (x) the Loans made by it
or any of its affiliates, and (y) the interest in the Notes held
by it or any of its affiliates as any other Lender and may
exercise the same as if it were not the Agent. Scotiabank and
its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Company or any
Subsidiary or affiliate of the Company as if Scotiabank were not
the Agent hereunder.
SECTION 9.6 Credit Decisions. Each Lender acknowledges
----------------
that it has, independently of the Agent and each other Lender,
and based on such Lender's review of the financial information of
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<PAGE> 71
the Company, this Agreement, the other Loan Documents (the terms
and provisions of which being satisfactory to such Lender) and
such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to
extend its Commitment. Each Lender also acknowledges that it
will, independently of the Agent and each other Lender, and based
on such other documents, information and investigations as it
shall deem appropriate at any time, continue to make its own
credit decisions as to exercising or not exercising from time to
time any rights and privileges available to it under this
Agreement or any other Loan Document.
SECTION 9.7 Copies, etc. The Agent shall give prompt
-----------
notice to each Lender of each notice or request required or
permitted to be given to the Agent by the Company pursuant to the
terms of this Agreement (unless concurrently delivered to the
Lenders by the Company). Upon request by any Lender, the Agent
will distribute to each Lender each document or instrument
received for its account and copies of all other communications
received by the Agent from the Company for distribution to the
Lenders by the Agent in accordance with the terms of this
Agreement.
ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.1 Waivers, Amendments, etc. The provisions of
------------------------
this Agreement and of each other Loan Document may from time to
time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by the
Company and the Required Lenders; provided that no such
--------
amendment, modification or waiver which would:
(a) modify any requirement hereunder that any
particular action be taken by all the Lenders or by the
Required Lenders shall be effective unless consented to by
each Lender;
(b) modify Section 4.10 or this Section 10.1, change
------------ ------------
the definitions of "Applicable Eurodollar Margin,"
----------------------------
"Applicable Facility Fee Percentage" and "Required Lenders,"
---------------------------------- ----------------
increase the Commitment Amount or the Commitment or
Percentage of any Lender, reduce any fees described in
Article 3, or extend the Stated Maturity Date shall be made
---------
without the consent of each Lender and each holder of the
Notes;
(c) extend the due date for, or reduce the amount of,
any scheduled repayment or prepayment of principal of or
interest on any Loan (or reduce the principal amount of
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<PAGE> 72
accrued interest or rate of interest on any Loan) shall be
made without the consent of the Lender holding such Loan; or
(d) affect adversely the interests, rights or
obligations of the Agent qua the Agent without consent of
---
the Agent.
No failure or delay on the part of the Agent, any Lender or any
holder of any Note in exercising any power or right under this
Agreement or any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
power or right preclude any other or further exercise thereof or
the exercise of any other power or right. No notice to or demand
on the Company in any case shall entitle it to any notice or
demand in similar or other circumstances. No waiver or approval
by the Agent, any Lender or any holder of any Note under this
Agreement or any other Loan Document shall, except as may be
otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
SECTION 10.2 Notices. All notices and other communications
-------
provided to any party hereto under this Agreement or any other
Loan Document shall be in writing or by facsimile. Any notice,
if mailed and properly addressed with postage prepaid or if
properly addressed and sent by prepaid courier service, shall be
deemed given when received; any notice, if transmitted by
facsimile, shall be deemed given when transmitted. Unless
otherwise specified in a notice in writing sent in accordance
with the foregoing provisions of this Section 10.2, notices and
------------
other communications shall be given to or made upon the
respective parties hereto at their respective addresses (or to
their respective facsimile numbers) shown on Schedule I hereto.
----------
SECTION 10.3 Payment of Costs and Expenses. The Company
-----------------------------
agrees to pay on demand all reasonable expenses of the Agent
(including the reasonable fees and other expenses of counsel to
the Agent and of local counsel, if any, who may be retained by
counsel to the Agent) in connection with
(a) the negotiation, preparation, execution and
delivery of this Agreement and of each other Loan Document,
including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to
this Agreement or any other Loan Document as may from time
to time hereafter be required, whether or not the
transactions contemplated hereby are consummated,
(b) the preparation and review of the form of any
document or instrument relevant to this Agreement or any
other Loan Document, and
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<PAGE> 73
(c) the negotiation of any restructuring or "work-
out," whether or not consummated, of any Obligations.
The Company further agrees to pay, and to save the Agent and the
Lenders harmless from all liability for, any stamp or other taxes
which may be payable in connection with the execution or delivery
of this Agreement, the borrowings hereunder, or the issuance of
the Notes or any other Loan Documents. The Company also agrees
to reimburse the Agent and each Lender upon demand for all
reasonable expenses (including reasonable attorneys' fees and
other expenses) incurred by the Agent or such Lender in
connection with any "workout," whether or not consumated, of any
Obligations or the enforcement of any Obligations.
SECTION 10.4 Indemnification. In consideration of the
---------------
execution and delivery of this Agreement by each Lender and the
extension of the Commitments, the Company hereby indemnifies,
exonerates and holds the Agent and each Lender and each of their
respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") free and harmless from
-------------------
and against any and all actions, causes of action, suits, losses,
costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such
Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
-----------
Liabilities"), incurred by the Indemnified Parties or any of them
- - -----------
as a result of, or arising out of, or relating to:
(a) this Agreement or any Loan Document or any
transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan;
(b) any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by the
Company or any of its Subsidiaries of all or any portion of
the stock or assets of any Person, whether or not the Agent
or such Lender is party thereto;
(c) any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or
other matter relating to the protection of the environment
or the Release by the Company or any of its Subsidiaries of
any Hazardous Material; or
(d) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or
releasing from, any real property owned or operated by the
Company or any Subsidiary thereof of any Hazardous Material
(including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or
within the control of, the Company or such Subsidiary,
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<PAGE> 74
except for any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the
relevant Indemnified Party's gross negligence or willful
misconduct. If and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under
applicable law.
SECTION 10.5 Survival. The obligations of the Company
--------
under Sections 4.1, 4.5, 4.6, 4.7, 10.3 and 10.4, and the
------------ --- --- --- ---- ----
obligations of the Lenders under Section 9.1, shall in each case
-----------
survive any termination of this Agreement, the payment in full of
all Obligations and the termination of all Commitments. The
representations and warranties made by the Company in this
Agreement and in each other Loan Document shall survive the
execution and delivery of this Agreement and each such other Loan
Document.
SECTION 10.6 Severability. Any provision of this Agreement
------------
or any other Loan Document which is prohibited or unenforceable
in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7 Headings. The various headings of this
--------
Agreement and of each other Loan Document are inserted for
convenience only and shall not affect the meaning or
interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8 Execution in Counterparts, Effectiveness, etc.
---------------------------------------------
This Agreement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and
all of which shall constitute together but one and the same
agreement.
SECTION 10.9 Governing Law; Entire Agreement. THIS
-------------------------------
AGREEMENT, THE NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK. This Agreement, the Notes and the
other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and
supersede any prior agreements, written or oral, with respect
thereto.
SECTION 10.10 Successors and Assigns. This Agreement shall
----------------------
be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns; provided
--------
that:
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<PAGE> 75
(a) the Company may not assign or transfer its rights
or obligations hereunder without the prior written consent
of the Agent and all Lenders; and
(b) the rights of sale, assignment and transfer of the
Lenders are subject to Section 10.11.
-------------
SECTION 10.11 Sale and Transfer of Loans; Participations in
---------------------------------------------
Loans. Each Lender may make assignments of, or have outstanding
- - -----
at any time participations in, its Loans and Commitment to one
other Person in accordance with this Section 10.11; provided that
------------- --------
the provisions of this Section shall not apply to any
participations purchased or sold pursuant to Section 4.9.
-----------
SECTION 10.11.1 Assignments. Any Lender (including without
-----------
limitation any Assignee Lender):
(a) with the written consents of the Company and the
Agent (which consents shall not be unreasonably delayed or
withheld and which consent, in the case of the Company,
shall be deemed to have been given in the absence of a
written notice delivered by the Company to the Agent, on or
before the fifth Business Day after receipt by the Company
of such Lender's written request for consent) may at any
time assign and delegate to a commercial bank or other
Person (other than a mutual fund or insurance company), and
(b) with notice to the Company and the Agent, but
without the consent of the Company or the Agent, may assign
and delegate to any of its affiliates or to any other Lender
(each Person described in either of the foregoing clauses as
being the Person to whom such assignment and delegation is to be
made, being hereinafter referred to as an "Assignee Lender"), a
---------------
fraction of such Lender's total Committed Loans and Commitment
such that the amount of such assignment shall be in a minimum
amount of $2,000,000 (or if less the total amount of such
Lender's Committed Loans and Commitment); provided that any such
--------
Assignee Lender will comply, if applicable, with the provisions
contained in the last sentence of Section 4.7; and provided
----------- --------
further, that the Company and the Agent shall be entitled to
- - -------
continue to deal solely and directly with such Lender in
connection with the interests so assigned and delegated to an
Assignee Lender until
(x) such Assignee Lender shall have executed and
delivered to the Agent and if appropriate, the Company, a
Lender Assignment Agreement, accepted by the Agent, and such
Lender and Assignee Lender and
(y) the processing fees described below shall have
been paid to the Agent, and the Agent shall have so notified
the Company.
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<PAGE> 76
From and after the date that the Agent accepts such Lender
Assignment Agreement, (i) the Assignee Lender thereunder shall be
deemed automatically to have become a party hereto and to the
extent that rights and obligations hereunder have been assigned
and delegated to such Assignee Lender in connection with such
Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan
Documents, and (ii) the assignor Lender, to the extent that
rights and obligations hereunder have been assigned and delegated
by it in connection with such Lender Assignment Agreement, shall
be released from its obligations hereunder and under the other
Loan Documents. Promptly after the recording of such Lender
Assignment Agreement, the Company, at its own expense, shall
execute and deliver to the Agent in exchange for the surrendered
Note or Notes a new Committed Note payable to the order of such
Assignee Lender in an amount equal to the Commitment assumed by
it pursuant to such Lender Assignment Agreement and a Bid Note
for such Assignee Lender, and, if the assigning Lender has
retained a Commitment hereunder, a new Committed Note payable to
the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder in substitution for such
assigning Lender's old Committed Note and not in payment thereof.
Such Committed Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered
Committed Note, and together with the Bid Note for such Assignee
Lender shall be dated the effective date of such Lender
Assignment Agreement (or such earlier date as shall be acceptable
to such Persons) and shall otherwise be in substantially the form
of Exhibit A-1 and Exhibit A-2, as appropriate. Such assignor
----------- -----------
Lender or such Assignee Lender must also pay a processing fee to
the Agent upon delivery of any Lender Assignment Agreement in the
amount of $2,500 (for which the Company shall have no
reimbursement obligation). Any attempted assignment and
delegation not made in accordance with this Section 10.11.1 shall
---------------
be null and void.
Notwithstanding anything contained in this Section 10.11.1
---------------
to the contrary, each Lender shall have the unrestricted right to
assign its rights hereunder to any Federal Reserve Bank to secure
such Lender's borrowing from such Federal Reserve Bank.
SECTION 10.11.2 Participations. Any Lender may at any time
--------------
sell to a commercial bank or other Person (other than a mutual
fund or insurance company) (each of such commercial banks and
other Persons being herein called a "Participant") participating
-----------
interests in any of the Loans, its Commitment, or other interests
of such Lender hereunder in the aggregate amount of $2,000,000 or
greater; provided that:
--------
(a) no participation contemplated in this
Section 10.11 shall relieve such Lender from its Commitment
-------------
or its other obligations hereunder or under any other Loan
Document,
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(b) such Lender shall remain solely responsible for
the performance of its Commitment and such other
obligations,
(c) the Company and the Agent shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and
each of the other Loan Documents,
(d) no Participant, unless such Participant is an
affiliate of such Lender, or is itself a Lender, shall be
entitled to require such Lender to take or refrain from
taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any
Participant that such Lender will not, without such
Participant's consent, take any actions of the type
described in clause (b) or (c) of Section 10.1,
---------- --- ------------
(e) the Company shall not be required to pay any
amount under Section 4.7 that is greater than the amount
which it would have been required to pay had no
participating interest been sold, and
(f) no Participant may further participate in any
interest hereunder (and each participation agreement shall
contain a restriction to the effect).
The Company acknowledges and agrees, subject to the foregoing
provisions of this Section 10.11.2, that each Participant, for
---------------
purposes of Sections 4.1, 4.5, 4.6, 4.7, 4.9, 4.10, 10.3 and
------------ --- --- --- --- ---- ----
10.4, shall be considered a Lender; provided that no Participant
- - ---- --------
shall receive any payment under such Sections greater than the
Lender from whom such Participant purchased such participation
would have received if such Lender had not sold such
participation.
SECTION 10.12 Confidentiality. The Lenders shall hold all
---------------
non-public information (which has been identified as such by the
Company) obtained pursuant to the requirements of this Agreement
in accordance with their customary procedures for handling
confidential information of this nature and in accordance with
safe and sound banking practices, and in any event the Lenders
may make disclosure (i) to any of their examiners, affiliates,
outside auditors, counsel and other professional advisors who
have a need to know such information in connection with this
Agreement, or (ii) as required by any governmental agency or
representative thereof or pursuant to legal process, or (iii) in
order to preserve, protect or enforce any of the Lenders' rights
and remedies hereunder or under any of the other Loan Documents,
or (iv) to any actual or prospective transferee or assignee;
provided that
- - --------
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<PAGE> 78
(a) unless specifically prohibited by applicable law
or court order, each Lender shall notify the Company of any
request by any governmental agency or representative thereof
(other than any such request in connection with an
examination of the financial condition of such Lender by
such governmental agency) or other requests made pursuant to
legal process for disclosure of any such non-public
information prior to disclosure of such information;
(b) each Lender shall give prompt notice to the
Company after any disclosure given by such Lender pursuant
to clause (iii) above;
(c) prior to any such disclosure to an actual or
prospective transferee or assignee or participant pursuant
to this Section 10.12, each Lender shall require any such
-------------
transferee, assignee or participant receiving a disclosure
of non-public information to execute a letter substantially
in the form of Exhibit Q hereto; and
---------
(d) except as may be required by an order of a court
of competent jurisdiction and to the extent set forth
therein, upon the request of the Company each Lender shall
be obligated or required to return any such materials
furnished by the Company or any Subsidiary unless such
Lender informs the Company upon such request, that such
Lender is required to retain such materials pursuant to any
applicable law, regulation or internal policy of such
Lender.
SECTION 10.13 Other Transactions. Nothing contained herein
------------------
shall preclude the Agent or any other Lender from engaging in any
transaction, in addition to those contemplated by this Agreement
or any other Loan Document, with the Company or any of its
Affiliates in which the Company or such Affiliate is not
restricted hereby from engaging with any other Person.
SECTION 10.14 CHOICE OF FORUM; CONSENT TO SERVICE OF
--------------------------------------
PROCESS AND JURISDICTION. ANY SUIT, ACTION OR PROCEEDING AGAINST
- - ------------------------
THE COMPANY WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE
OTHER LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY A COURT IN
RESPECT THEREOF, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AS THE LENDERS AND THE AGENT IN THEIR
DISCRETION MAY ELECT AND THE COMPANY HEREBY SUBMITS TO THE NON-
EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUCH
SUIT, ACTION OR PROCEEDING. THE COMPANY HEREBY AGREES THAT
SERVICE OF ALL WRITS, PROCESS AND SUMMONSES IN ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN THE STATE OF NEW YORK MAY BE
BROUGHT UPON THE PROCESS AGENT, AND THE COMPANY HEREBY
IRREVOCABLY APPOINTS THE PROCESS AGENT, AS ITS TRUE AND LAWFUL
ATTORNEY-IN-FACT IN THE NAME, PLACE AND STEAD OF THE COMPANY TO
ACCEPT SUCH SERVICE OF ANY AND ALL SUCH WRITS, PROCESS AND
-72-
<PAGE> 79
SUMMONSES. THE COMPANY HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID
COURT BY THE MAILING THEREOF BY THE AGENT BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY'S PROCESS AGENT.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTIONS WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN
DOCUMENTS BROUGHT IN THE COURTS FOR THE STATE OF NEW YORK OR THE
SOUTHERN DISTRICT OF NEW YORK AND HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 10.15 WAIVER OF JURY TRIAL. THE COMPANY, THE
--------------------
AGENT, AND EACH LENDER HEREBY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM OR
RELATING TO ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREE, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
SECTION 10.16 Process Agent. The Company agrees to keep
-------------
appointed the Process Agent as its process agent to collect
service of process in the State of New York during the term of
this Agreement.
-73-
<PAGE> 80
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
KELLWOOD COMPANY
By /s/ James C. Jacobsen
-------------------------------------
Name: James C. Jacobsen
Title: Executive Vice President
Administration
THE BANK OF NOVA SCOTIA,
individually and as Agent
By /s/ F.C.H. Ashby
-------------------------------------
Name: F.C.H. Ashby
Title: Senior Assistant Agent
THE BOATMEN'S NATIONAL BANK OF ST.
LOUIS
By /s/ C. Susan Taylor
-------------------------------------
Name: C. Susan Taylor
Title: Vice President
CHEMICAL BANK
By /s/ Susan H. Atha
-------------------------------------
Name: Susan H. Atha
Title: Vice President
CONTINENTAL BANK N.A.
By /s/ Barry Watters
-------------------------------------
Name: Barry Watters
Title: Vice President
-74-
<PAGE> 81
CREDIT SUISSE
By /s/ William P. Murray
-------------------------------------
Name: William P. Murray
------------------------------
Title: Member of Senior Management
------------------------------
By /s/ Kristinn R. Kristinsson
-------------------------------------
Name: Kristinn R. Kristinsson
------------------------------
Title: Associate
------------------------------
THE DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By /s/ Masami Tsuboi
-------------------------------------
Name: Masami Tsuboi
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Jeanette Ganousis
-------------------------------------
Name: Jeanette Ganousis
Title: Vice President
MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION
By /s/ Edward A. Cheney
-------------------------------------
Name: Edward A. Cheney
Title: Vice President
NATIONSBANK OF NORTH CAROLINA, N.A.
By /s/ Louise Comiskey
-------------------------------------
Name: Louise Comiskey
Title: Vice President
-75-
<PAGE> 82
UNION BANK OF SWITZERLAND
By /s/ Michelle Moreno
-------------------------------------
Name: Michelle Moreno
Title: Vice President
By /s/ Robert H. Riley III
-------------------------------------
Name: Robert H. Riley III
Title: First Vice President
WACHOVIA BANK OF GEORGIA, N. A.
By /s/ Terry Akins
-------------------------------------
Name: Terry Akins
Title: Senior Vice President
-76-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Kellwood
Company and Subsidiaries Condensed Consolidated Balance Sheet at July 31, 1994,
and from the Condensed Consolidated Statement of Earnings and Condensed Consol-
idated Statement of Cash Flows for the three months ended July 31, 1994, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1994
<PERIOD-START> MAY-01-1994
<PERIOD-END> JUL-31-1994
<CASH> 11,183
<SECURITIES> 0
<RECEIVABLES> 198,726
<ALLOWANCES> 4,418
<INVENTORY> 233,266
<CURRENT-ASSETS> 458,707
<PP&E> 178,181
<DEPRECIATION> 110,897
<TOTAL-ASSETS> 693,157
<CURRENT-LIABILITIES> 196,913
<BONDS> 149,514
0
0
<COMMON> 92,476
<OTHER-SE> 223,664
<TOTAL-LIABILITY-AND-EQUITY> 693,157
<SALES> 300,937
<TOTAL-REVENUES> 300,937
<CGS> 234,618
<TOTAL-COSTS> 234,618
<OTHER-EXPENSES> 44,291
<LOSS-PROVISION> 20
<INTEREST-EXPENSE> 3,917
<INCOME-PRETAX> 18,111
<INCOME-TAX> 7,400
<INCOME-CONTINUING> 10,711
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,711
<EPS-PRIMARY> .51
<EPS-DILUTED> .50
</TABLE>
