UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 1995
Commission File Number 33-11479
SYNTHETIC INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 58-1049400
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
309 LaFayette Road, Chickamauga, Georgia 30707
(Address of principal executive offices) (Zip Code)
(706) 375-3121
(Registrant's telephone number, including area code)
Indicate by check mark whether 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 ____
State the aggregate market value of the voting stock held by non-affiliates
of the registrant at May 10, 1995.
Common Stock, $1.00 par value -- $0
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date:
Outstanding at
Class May 11, 1995
Common Stock, $1.00 par value 49.95
PART I-FINANCIAL INFORMATION SYNTHETIC INDUSTRIES, INC.
ITEM 1. FINANCIAL INFORMATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)
MARCH 31, SEPTEMBER 30,
ASSETS 1995 1994
CURRENT ASSETS:
Cash $ 105 $ 117
Accounts receivable, net of allowance for
doubtful accounts of $1,258 and $1,201 44,756 39,094
Inventory (Note 3) 46,452 32,520
Other current assets (Note 4) 11,500 10,859
------- -------
TOTAL CURRENT ASSETS 102,813 82,590
PROPERTY, PLANT AND EQUIPMENT, net (Note 5) 117,600 115,050
DEFERRED FINANCING AND ORGANIZATION COSTS,
net of accumulated amortization
of $5,157 and $4,788 7,073 7,246
EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED
AND OTHER INTANGIBLES (Note 6) 81,798 83,047
-------- --------
$309,284 $287,933
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $23,614 $ 18,767
Accrued expenses and other current
liabilities 6,299 6,944
Income taxes payable 453 482
Interest payable 6,627 6,247
Current maturities of long-term
debt (Note 7) 6,038 6,036
------ ------
TOTAL CURRENT LIABILITIES 43,031 38,476
LONG-TERM DEBT LESS CURRENT PORTION (Note 7) 188,239 172,490
DEFERRED INCOME TAXES 21,483 21,150
------- -------
252,753 232,116
======= =======
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY:
Common stock, $1 par value:
Authorized, issued and outstanding
49.95 shares - -
Additional paid-in capital 69,300 69,300
Cumulative translation adjustments 64 26
Deficit (12,833) (13,509)
-------- --------
TOTAL STOCKHOLDER'S EQUITY 56,531 55,817
-------- --------
$309,284 $287,933
======== ========
See notes to consolidated financial statements
SYNTHETIC INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31 MARCH 31
1995 1994 1995 1994
Net sales $63,570 $54,837 $121,582 $ 106,531
Costs and expenses:
Cost of sales 44,056 35,644 86,083 69,451
Selling expenses 5,509 4,788 10,964 9,771
General and administrative
expenses 4,902 4,390 9,510 8,115
Amortization of organization
costs and intangibles 635 615 1,270 1,249
------- ------ ------- -------
55,102 45,437 107,827 88,586
------- ------ ------- -------
Operating income 8,468 9,400 13,755 17,945
Other expenses:
Interest expense 5,763 5,089 11,181 10,168
Amortization of deferred
financing costs 187 185 369 372
----- ----- ------ ------
5,950 5,274 11,550 10,540
Income before
income tax provision 2,518 4,126 2,205 7,405
Income tax provision
(Note 8) 1,558 2,112 1,529 3,595
------- ------- ------- -------
NET INCOME $ 960 $ 2,014 $ 676 $ 3,810
======= ======= ======= =======
See notes to consolidated financial statements
SYNTHETIC INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
SIX MONTHS ENDED MARCH 31,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 676 $ 3,810
Adjustments to reconcile net income
to net cash (used in) provided
by operations:
Depreciation 5,677 4,622
Amortization of deferred financing
and organization
costs and intangibles 1,639 1,621
Provision for bad debts 90 40
Deferred income taxes 296 1,183
Change in assets and liabilities:
(Increase) decrease in
accounts receivable (5,752) 1,117
Increase in inventory (13,932) (4,738)
Increase in other current assets (604) (779)
(Increase) decrease in deferred
financing costs (196) 267
(Increase) decrease in intangibles (21) 40
Increase in accounts payable 4,847 2,248
(Decrease) increase in accrued expenses
and other current liabilities (645) 1,048
(Decrease) increase in income
taxes payable (29) 1,813
Increase in interest payable 380 45
------- -------
Cash (used in) provided by
operating activities (7,574) 12,337
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (8,227) (16,304)
------- -------
Cash used in investing activities (8,227) (16,304)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan 11,000 -
Repayments under term loan (3,000) (3,000)
Net borrowings under revolving
credit line 7,769 7,322
Repayments of other long
term obligations (18) (17)
------ ------
Cash provided by financing
activities 15,751 4,305
------ ------
Effect of exchange rate changes
on cash 38 8
------ ------
NET (DECREASE) INCREASE IN CASH (12) 346
CASH AT BEGINNING OF PERIOD 117 253
CASH AT END OF PERIOD $ 105 $ 599
======= ========
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 10,801 $ 10,123
Income taxes 1,112 133
See notes to consolidated financial statements
SYNTHETIC INDUSTRIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS)
(INFORMATION AS OF MARCH 31, 1995 AND FOR THE
PERIODS ENDING MARCH 31, 1995 AND 1994 IS UNAUDITED)
1.ORGANIZATION
Synthetic Industries, Inc. (the "Company"), a wholly owned subsidiary of
Synthetic Industries L.P., a Delaware limited partnership (the "Partnership"),
manufactures and markets a wide range of polypropylene-based industrial
textiles. These include primary and secondary carpet backing,
construction/civil engineering products and technical textiles.
2.INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements as of March 31, 1995 and for the periods
ended March 31, 1995 and 1994 included herein have been prepared, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the financial position at March
31, 1995 and 1994, and the results of operations for the three and six months
then ended have been made on a consistent basis. Certain information and
footnote disclosures included in consolidated financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although management believes
that the disclosures herein are adequate to make the information presented not
misleading. Certain reclassifications have been made to previous years'
consolidated financial statements to conform to current classifications. It is
suggested that these consolidated financial statements be read in conjunction
with management's discussion and analysis of financial condition and results of
operations and the consolidated financial statements of the Company's Form 10-K
for the fiscal year ended September 30, 1994. Operating results for the three
and six months ended March 31, 1995 may not necessarily be indicative of the
results that may be expected for the full year.
3.INVENTORY
March 31, September 30,
1995 1994
Finished goods $27,807 $ 20,580
Work in process 6,122 5,263
Raw materials 12,523 6,677
-------- --------
$ 46,452 $ 32,520
======== ========
4.OTHER CURRENT ASSETS
March 31, September 30,
1995 1994
Prepaid supplies $ 6,944 $ 6,416
Income tax receivable 400 550
Deferred income tax
benefits 3,122 3,085
Other 1,034 808
-------- --------
$ 11,500 $ 10,859
======== ========
5.PROPERTY, PLANT AND EQUIPMENT
March 31, September 30,
1995 1994
Land $ 3,061 $ 3,061
Buildings and
improvements 21,183 21,183
Machinery and equipment
and leasehold
improvements 149,559 141,332
------- -------
173,803 165,576
Accumulated
depreciation 56,203 50,526
------- -------
$ 117,600 $ 115,050
========= =========
6.EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED AND OTHER
INTANGIBLES
March 31, September 30,
1995 1994
Excess of purchase
price over net
assets acquired $ 99,818 $ 99,818
Intangible assets 4,506 4,485
------- -------
104,324 104,303
Accumulated amortization 22,526 21,256
--------- --------
$ 81,798 $ 83,047
========= ========
Excess of purchase price over net assets acquired is assessed for recoverability
on a regular basis. In evaluating the value and future benefits of goodwill,
its carrying value will be reduced by the excess, if any, of the balance over
management's best estimate of undiscounted future operating income before
amortization of the related intangible assets over the remaining amortization
period.
7.LONG-TERM DEBT
March 31, September 30,
1995 1994
Secured revolving credit facility
Secured revolving credit
portion $ 23,898 $ 16,129
Term loan portion 29,000 21,000
12 3/4% Senior subordinated
debentures 140,000 140,000
Other 1,379 1,397
------- -------
194,277 178,526
Less current portion 6,038 6,036
--------- ---------
Total long term portion $ 188,239 $ 172,490
========= =========
A.THE SECURED REVOLVING CREDIT FACILITY
On January 13, 1995, the Company and its lenders entered into a Third
Amended and Restated Revolving Credit Agreement (the "Amended Credit
Facility"). The Company's term loan portion of the Amended Credit
Facility increased to $30 million from $19 million. Such term loan
borrowing is payable over a 60-month period which began on February 1,
1995, in equal installments of $500, plus interest calculated at a rate
equal to the bank's base rate (8.75% at March 31, 1995) plus 1%. In
connection with the Amended Credit Facility, $196 was incurred and is
included within the deferred financing and organizational costs.
The revolving credit loan portion of the Amended Credit Facility (the
"Revolver") provides for availability based on a borrowing formula
consisting of 85% of eligible accounts receivable and 50% of eligible
inventory, subject to certain limitations. The maximum amount available
for borrowing under the Revolver is $35 million. At March 31, 1995, the
Company had $10,070 available under the Revolver. Interest on borrowings
is at the bank's base rate plus .75%.
The Company may, at its option and with certain restrictions, convert a
portion of its advances under the term or revolving credit loan portion of
the Amended Credit Facility into borrowings in Eurodollars. Interest on
Eurodollar borrowings is calculated based on the Interbank Eurodollar rate
plus 2.75% for term loan advances. The interest rate on Eurodollar
borrowings for revolving credit advances is one-quarter of a percent less
than the term loan advance rate.
The Amended Credit Facility provides for borrowings of up to $3 million
under letters of credit. Such borrowings reduce the amounts otherwise
available under the revolving credit loan portion of the Amended Credit
Facility. The Company is required to pay a .375% fee on the unused
portion of the commitment and an agency fee of $150 per annum.
8.INCOME TAXES
The provision for income taxes is as follows:
Three Months Ended Six Months Ended
March 31, March 31,
1995 1994 1995 1994
Current:
Federal $ 1,011 $ 772 $ 1,052 $ 1,852
State 180 330 180 560
----- ----- ----- -----
1,191 1,102 1,232 2,412
Deferred:
Federal 361 1,028 503 1,194
State 6 (18) (206) (11)
----- ----- ----- -----
367 1,010 297 1,183
Total taxes on
income $ 1,558 $ 2,112 $ 1,529 $ 3,595
======== ======= ======= =======
The federal income tax provision for the three months and six months ended
March 31, 1995 and 1994 reflect the non-deductibility of certain expenses for
income tax purposes such as amortization of goodwill. Deferred income taxes
result from temporary differences between tax bases of assets and liabilities
and their reported amounts in the financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1995, there was $10,070 available for borrowing under the Amended
Credit Facility. During the six months ended March 31, 1995, cash used in
operations was $7,574. The Company has planned capital expenditures of $13
million during fiscal 1995 to be financed through operations and bank
borrowings. Of this amount, $8,227 has been incurred through March 31, 1995,
including $4,750 related to the purchase of previously leased equipment.
Inventory has increased $13,932 during the six months ended March 31, 1995.
Approximately half of this increase is attributable to a buildup of
construction/civil engineering products in preparation for the summer season.
The remaining increase was primarily due to the increase of polypropylene cost
and to higher levels of raw material inventory to guard against tight supply
conditions in the market.
The average market cost of polypropylene according to Chemical Data Inc.
was $.425 per pound in the first six months of fiscal 1995 compared to $.280 per
pound in the first six months of fiscal 1994. The Company believes this
increase was primarily due to higher demand throughout the polypropylene market
coupled with inadequate expansion of polypropylene manufacturing capacity. The
Company expects that polypropylene costs will further increase during fiscal
1995. Polypropylene costs are approximately 50% of cost of goods sold;
accordingly, higher prices of polypropylene without offsetting selling price
increases could have a significant negative effect on the Company's results of
operations and financial condition. As a result of the level of competition, the
Company, to date, has been able to pass through only a portion of the
polypropylene cost increases through higher selling prices of certain product
lines. To date, the Company has not experienced any shortage of supply of
polypropylene; however, continued increases in demand or major supply
disruptions without offsetting increases in manufacturing capacities could cause
the Company future supply shortages. Management anticipates that additional
polypropylene manufacturing facilities will be completed and commence production
during calendar years 1995 through 1997. Historically, the creation of
additional facilities has helped to relieve supply pressures.
Management's plans indicate that current and future operations will provide
sufficient cash flow to satisfy the debt service requirements of the long-term
debt obligations, including the Amended Credit Facility and lease commitments.
RESULTS OF OPERATIONS FOR THE SECOND QUARTER
Net sales for the three months ended March 31, 1995 were $63,570 compared to
$54,837 for the three months ended March 31, 1994, an increase of 16%. The
increase was principally due to a 17% increase in the sale of carpet backing, a
19% increase in sales of construction/civil engineering products and an 11%
increase in the sales of technical textiles.
Carpet backing sales were $33,149 for the second quarter of fiscal 1995, an
increase of $4,756 or 17% over the second quarter of fiscal 1994. This increase
was due to both higher selling prices and increased sales volumes.
Construction/civil engineering product sales were $14,884 for the second
quarter of fiscal 1995, up from $12,495 for the same period in fiscal 1994, an
increase of $2,389 or 19%. The increase was primarily attributable to increased
sales of geotextiles. Additionally, there was a 10% increase in Fibermesh sales
during the second quarter of fiscal 1995 compared to the same period in fiscal
1994.
Technical textiles sales were $15,537 for the second quarter of fiscal 1995
compared to $13,949 for the same period of last year for an increase of $1,588
or 11%. This was due to increased sales of fabrics to the furniture and bedding
markets.
Gross profit for the second quarter of fiscal 1995 increased to $19,514 from
$19,193 or 2% from the second quarter of fiscal 1994. As a percent of sales,
gross profit decreased to 31% from 35% primarily due to higher raw material
costs.
Direct selling expenses were $5,509 (9% of net sales) in the second quarter of
fiscal 1995 compared to $4,788 (9% of net sales) in the second quarter of fiscal
1994. This increase was due to increased activities associated with higher
sales volumes. General and administrative expenses of $4,902 (8% of net sales)
for the second quarter of fiscal 1995 increased $511 over the second quarter of
fiscal 1994. This increase was primarily in support of increased sales.
Operating income decreased to $8,468 during the second quarter of fiscal 1995
(13% of net sales) from $9,400 during the second quarter of fiscal 1994 (17% of
net sales). This decrease was primarily due to the change in gross profit and
increases in direct selling and general and administrative costs.
Total interest expense for the second quarter of fiscal 1995 increased by $674
from the second quarter of fiscal 1994 due to higher average total debt
outstanding and a higher base rate for the Amended Credit Facility.
Net income for the second quarter of fiscal 1995 was $960 compared to net
income of $2,014 for the second quarter of fiscal 1994 due primarily to higher
sales offset by increased raw material costs discussed above.
RESULTS OF OPERATIONS FOR THE FIRST SIX MONTHS
Net sales for the six months ended March 31, 1995 were $121,582 compared to
$106,531 for the first six months ended March 31, 1994, an increase of 14%.
This increase was primarily due to increased sales of carpet backing and
construction/civil engineering products.
Carpet backing sales were $64,307 for the first six months of fiscal 1995, an
increase of $8,597 or 15% over the six months of fiscal 1994. This increase in
sales was the result of higher selling prices of both primary and secondary
backing and increased sales volumes of secondary backing.
Construction/civil engineering product sales were $30,354 for the first six
months of fiscal 1995, up from $24,770 for the same period in fiscal 1994, an
increase of $5,584 or 23%. This was due to an 18% increase in Fibermesh sales
and a 28% increase in sales of geotextiles and erosion control fabrics during
the first six months of 1995 compared to the same period in 1994.
Technical textiles sales were $26,921 for the first six months of fiscal 1995
compared to $26,051 for the same period of fiscal 1994, an increase of $870 or
3%. This increase was primarily due to increased sales of fabrics to the
furniture and bedding market.
Gross profit for the first six months of fiscal 1995 decreased to $35,499 from
$37,080 during the first six months of fiscal 1994. As a percentage of sales,
gross profit decreased to 29% from 35%. This was primarily attributable to
higher raw material costs.
Direct selling expenses were $10,964 (9% of net sales) in the first six months
of fiscal 1995 compared to $9,771 (9% of net sales) in the first six months of
fiscal 1994. This increase was attributable to the enhanced selling activities
of the construction/civil engineering products and increased sales volumes.
General and administrative expenses of $9,510 (8% of net sales) for the first
six months of fiscal 1995 increased $1,394 or 17% over the first six months of
fiscal 1994. This increase was primarily in support of higher sales and future
growth plans.
Operating income decreased to $13,755 during the first six months of fiscal
1995 (11% of net sales) from $17,945 during the first six months of fiscal 1994
(17% of net sales) due primarily to higher raw material costs. This decrease
was primarily due to the change in gross profit and increased direct selling and
general and administrative costs.
Total interest expense for the first six months of fiscal 1995 increased by
$1,013 from the first six months of fiscal 1994 due primarily to higher average
total debt outstanding and a higher base rate for the Amended Credit Facility.
Net income for the first six months of fiscal 1995 was $676 compared to a net
income of $3,810 for the first six months of fiscal 1994 primarily due to higher
sales offset by increased raw material costs.
OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports of Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SYNTHETIC INDUSTRIES, INC.
By:/s/ Leonard Chill
Leonard Chill
President
Dated: May 11,1995
By:/s/ Jon P. Beckman
Jon P. Beckman
Chief Financial Officer
Dated: May 11, 1995
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THIRD AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
Dated as of January 13, 1995
Among
SYNTHETIC INDUSTRIES, INC.
as the Borrower
and
THE FINANCIAL INSTITUTIONS
PARTY HERETO FROM TIME TO TIME
as the Lenders
and
THE FIRST NATIONAL BANK OF BOSTON
as the Agent
TABLE OF CONTENTS*
Page
EXHIBITS AND SCHEDULES
Exhibit A Form of Third Amended and Restated Revolving
Credit Note
Exhibit B-1 Form of Term Note A
Exhibit B-2 Form of Term Note B
Exhibit C-1 Form of Opinion of Counsel for Borrower
(Watson & Dana)
Exhibit C-2 Form of Opinion of Counsel for Borrower
(Gordon Altman Butowsky Weitzen Shalov
& Wein)
Exhibit D Financial Certificate
Exhibit E Form of Borrowing Base Certificate
Exhibit F Form of Notice of Borrowing
Exhibit G Form of Notice of Conversion or Continuation
Exhibit H Form of Assignment and Acceptance
Schedule 1.1 Mortgages
Permitted Liens
Foreign Facilities
Schedule 5.1(a) Jurisdictions in which Qualified
Schedule 5.1(b) Subsidiaries
Schedule 5.1(d) Conflicts
Schedule 5.1(f) Governmental Approvals
Schedule 5.1(g) Title Exceptions
Schedule 5.1(h) Liens
Schedule 5.1(i) Indebtedness for Money Borrowed and Guarantees
Schedule 5.1(j) Litigation
Schedule 5.1(k) Patents and Trademarks
Schedule 5.1(l) Tax Returns, etc.
Schedule 5.1(m) Burdensome Provisions
Schedule 5.1(p) Plans
Schedule 5.1(t) Principal Office and Location of Books and Records
Schedule 5.1(u) Location of Inventory
Schedule 5.1(v) Location of Equipment
Schedule 5.1(w) Real Property
Schedule 5.1(x) Corporate and Fictitious Names
Schedule 8.9 Use of Proceeds
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
Dated as of January 13, 1995
SYNTHETIC INDUSTRIES, INC., a Delaware corporation, as the
Borrower, hereby agrees with the financial institutions party to this
Agreement from time to time as the Lenders and THE FIRST NATIONAL BANK
OF BOSTON, a national banking association, as agent for the Lenders,
as follows:
PRELIMINARY STATEMENT
The Borrower, as borrower, SouthTrust Bank of Georgia,
N.A., The First National Bank of Boston ("Bank of Boston"), and, as
the assignee of Bank of Boston, Sanwa Business Credit Corporation, as
lenders, and Bank of Boston, as agent for the lenders, are parties to
a Second Amended and Restated Revolving Credit and Security Agreement
dated as of March 15, 1993, as amended by First Amended Schedule I
dated as of April 15, 1993, Amendment No. 2 dated as of May 10, 1993,
Second Amended Schedule I dated September 3, 1993, Amendment No. 4
dated as of October 1, 1993, Amendment No. 5 dated as of February 25,
1994, Amendment No. 6 dated as of August 10, 1994, Amendment No. 7
dated as of December 28, 1994 and Third Amended Schedule I dated as of
December 28, 1994 (said Agreement, as so amended, the "Existing Credit
Agreement"). As of the date of this Agreement, the aggregate
outstanding principal balance of the Revolving Credit Loans, under and
as defined in the Existing Credit Agreement, is approximately
$30,541,500, the aggregate principal balance of the Term Loan
outstanding under (and as defined in) the Existing Credit Agreement,
is $19,000,000, the aggregate outstanding principal amount of Foreign
Facility Debt as defined in the Existing Credit Agreement is
approximately $60,000, and the aggregate face amount of outstanding
Letters of Credit as defined in the Existing Credit Agreement is
$1,734,000.
The Borrower has requested certain modifications to the
terms of the Existing Credit Agreement, and the Lenders have agreed to
such requested modifications, all upon and subject to the terms,
provisions and conditions hereinafter set forth. The Borrower, the
Lenders and the Agent have further agreed, in connection with making
such modifications to the Existing Credit Agreement and for the
convenience of the parties and others, to amend and restate, in its
entirety, the Existing Credit Agreement, including all such agreed
modifications thereto.
NOW, THEREFORE, in consideration of the foregoing, the
modifications to the Existing Credit Agreement and the mutual promises
hereinafter set forth, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties
hereto hereby agree that the Existing Credit Agreement is hereby
amended and restated in its entirety, subject to the applicable
conditions set forth in Article 4, as follows:
ARTICLE 1 - DEFINITIONS
SECTION 1.1. Definitions. For the purposes of this Agreement:
"Account Debtor" means a Person who is obligated on a
Receivable.
"Acquire" or "Acquisition", as applied to any Business Unit or
Investment, means the acquiring or acquisition of such Business Unit
or Investment by purchase, exchange, issuance of stock or other
securities, or by merger, reorganization or any other method.
"Advance" means an advance by a Lender to the Borrower pursuant
to ARTICLE 2 or ARTICLE 2A and refers to a Base Rate Advance or a
Eurodollar Advance.
"Affiliate" means, with respect to a Person, any other Person
(other than a Subsidiary) that, (a) directly or indirectly through one
or more intermediaries, controls, or is controlled by, or is under
common control with, such given Person, (b) directly or indirectly
beneficially owns or holds ten percent (10%) or more of any class of
voting stock or partnership or other interest of such Person or any
Subsidiary of such Person, or (c) ten percent (10%) or more of the
voting stock or partnership or other interest of which is directly or
indirectly beneficially owned or held by such Person or a Subsidiary
of such Person. 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 ownership of
voting securities, partnership or other interests by contract or
otherwise. SI Management, Synthetic Management and Synthetic L.P.
each shall be deemed to be an Affiliate of the Borrower.
"Agency Account" means an account of the Borrower maintained by
it with a Clearing Bank pursuant to an Agency Account Agreement.
"Agency Account Agreement" means an agreement among the
Borrower, the Agent on behalf of the Lenders and a Clearing Bank
concerning the collection of payments which represents the proceeds of
Receivables or of any other Collateral.
"Agent" means Bank of Boston and any successor Agent appointed
pursuant to SECTION 12.7.
"Agent's Office" means the office of the Agent designated as
such from time to time as provided in SECTION 13.1(C).
"Agreement" means and includes the Existing Credit Agreement as
amended and restated by this Third Amended and Restated Revolving
Credit and Security Agreement, including all Schedules, Exhibits and
other attachments hereto, and all amendments, modifications and
supplements thereto and hereto.
"Agreement Date" means the date as of which this Agreement is
dated.
"Applicable Law" means all applicable provisions of
constitutions, statutes, rules, regulations and orders of all
governmental bodies and all orders and decrees of all courts and
arbitrators, including, without limitation, all Environmental Laws.
"Applicable Margin" means (a) as to the Base Rate, 0.75% as to
each Base Rate Advance made as part of a Borrowing under the Revolving
Credit Facility and 1% as to each Base Rate Advance made as part of a
Borrowing under the Term Loan Facility, and (b) as to the Eurodollar
Rate, 2.50% as to each Eurodollar Advance made as part of a Borrowing
under the Revolving Credit Facility and 2.75% as to each Eurodollar
Advance made as part of a Borrowing under the Term Loan Facility.
"Assignment and Acceptance" means an assignment and acceptance
in the form attached hereto as EXHIBIT H assigning all or a portion of
a Lender's interests, rights and obligations under this Agreement
pursuant to SECTION 13.11.
"Authorized Officer" means those officers of the Borrower
authorized to execute and deliver Loan Documents and to request
Borrowings and identified in the certificate described in SECTION
4.1(A)(III) or from time to time thereafter pursuant to authorizations
in form and substance satisfactory to the Agent.
"Bank of Boston" means The First National Bank of Boston,
Boston, Massachusetts, and its successors and assigns.
"Base Rate" means at any time the greater of (i) the rate of
interest announced from time to time by Bank of Boston at its head
office at 100 Federal Street, Boston, Massachusetts 02110, as its
"base rate" at such time (or the comparable rate of any successor
Agent acting as such at such time) and (ii) 1/2 of 1% per annum over
the Federal Funds Effective Rate at such time (rounded upwards, if
necessary, to the next higher 1/8 of 1%).
"Base Rate Advance" means an Advance bearing interest determined
with reference to the Base Rate.
"Borrower" means Synthetic Industries, Inc., a Delaware
corporation, and its successors and assigns.
"Borrowing" means all Advances of the same Type made by the
Lenders, or converted or continued by the Borrower (or otherwise in
accordance with the provisions of SECTION 3.7) on the same date for
the same Interest Period (if applicable).
"Borrowing Base" means, at any time, an amount equal to the
lesser of
(a) the Revolving Credit Facility in effect at such time
MINUS the Letter of Credit Reserve MINUS the Foreign Facility Reserve,
and
(b) the sum of
(i) 85% (or such lesser percentage as the Majority
Lenders in their sole discretion determine from time to time) of
the face value of Eligible Receivables due and owing at such
time, PLUS
(ii) the lesser of
(A) $15,000,000, and
(B) 50% (or such lesser percentage as the
Majority Lenders in their sole discretion determine from
time to time) of the lesser of cost (on a full absorption
basis), determined on a first-in-first-out or FIFO
accounting basis, and fair market value of Eligible
Inventory at such time, MINUS
(iii) the Letter of Credit Reserve MINUS
(iv) the Foreign Facility Reserve.
"Borrowing Base Certificate" means a certificate in the form
attached hereto as EXHIBIT E.
"Business Day" means any day other than a Saturday, Sunday or
other day on which banks in Boston, Massachusetts, New York, New York
or Atlanta, Georgia are authorized to close, and, with respect to all
notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Advances, any day that is also a
day for trading by and between banks in Dollar deposits in the
interbank Eurodollar market.
"Business Unit" means the assets constituting the business or a
division or operating unit thereof of any Person.
"Capital Expenditures" means, with respect to any Person, all
expenditures made or liabilities incurred for the acquisition of
assets (other than an Acquisition of assets which constitute a
Business Unit) which are not, in accordance with GAAP, treated as
expense items for such Person in the year made or incurred or as a
prepaid expense applicable to a future year or years.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP, and the amount
of such Indebtedness shall be the capitalized amount of such
obligations determined in accordance with GAAP.
"Chief Financial Officer" means the Chief Financial Officer of
the Borrower, who currently is Jon P. Beckman.
"Clearing Bank" means a banking institution with which an Agency
Account has been established pursuant to an Agency Account Agreement.
"Collateral" means and includes all of the Borrower's right,
title and interest in and to each of the following, wherever located
and whether now or hereafter existing or now owned or hereafter
acquired or arising:
(a) all Receivables,
(b) all Inventory,
(c) all Equipment,
(d) all Foreign Subsidiary Stock,
(e) all Foreign Subsidiary Debt,
(f) all General Intangibles,
(g) all Patent Collateral,
(h) all Trademark Collateral,
(i) all goods and other property, whether or not delivered,
(i) the sale or lease of which gives or purports to give rise
to any Receivable, including, but not limited to, all merchandise returned
or rejected by or repossessed from customers, or
(ii) securing any Receivable,
including, without limitation, all rights as an unpaid vendor or
lienor (including, without limitation, stoppage in transit, replevin
and reclamation) with respect to such goods and other properties,
(j) All mortgages, deeds to secure debt and deeds of trust on real
or personal property, guaranties, leases, security agreements, and
other agreements and property which secure or relate to any
Receivable, or other Collateral, or are acquired for the purpose of
securing and enforcing any item thereof,
(k) all documents of title, policies and certificates of insurance,
securities, chattel paper and other documents and instruments
evidencing or pertaining to any and all items of Collateral,
(l) all files, correspondence, computer programs, tapes, discs and
related data processing software which contain information identifying
or pertaining to any of the Collateral, including, without being
limited to, any Receivables or any Account Debtor, or showing the
amounts thereof or payments thereon or otherwise necessary or helpful
in the realization thereon or the collection thereof,
(m) all cash deposited with a Lender or any Affiliate of a Lender
or in any Agency Account or which a Lender or such Affiliate is entitled
to retain or otherwise possess as Collateral pursuant to the
provisions of this Agreement or any of the Security Documents,
(n) all general intangibles, including, without limitation, all tax
refunds, trademarks, trade names, patents, patent applications, trade
secrets and proprietary information, and
(o) any and all products and proceeds of the foregoing (including,
but not limited to, any claims to any items referred to in this
definition, and any claims against third parties for loss of, damage
to or destruction of any or all of the Collateral or for proceeds
payable under or unearned premiums with respect to policies of
insurance) in whatever form, including, but not limited to, cash,
negotiable instruments and other instruments for the payment of money,
chattel paper, security agreements and other documents.
"Commitment" means, as to each Lender, the amount set forth
opposite such Lender's name on ANNEX A hereto under the caption
"Commitment," as such amount may be reduced pursuant to SECTION 3.6 or
otherwise modified as reflected in the Register (as defined in
SECTION 13.11(D) below).
"Commitment Percentage" of any Lender means the percentage set
forth opposite the name of such Lender on ANNEX A hereto.
"Consolidated" means the consolidation in accordance with GAAP
of the accounts or items as to which such term applies.
"Consolidated Subsidiaries" means the Foreign Subsidiaries and
such other Subsidiaries whose Consolidation with the Borrower is
consented to from time to time in writing by the Majority Lenders.
"Controlled Disbursement Account" means the account maintained
by and in the name of the Borrower with the Disbursing Bank for the
purposes of disbursing Revolving Credit Loan proceeds and amounts
deposited thereto pursuant to SECTION 7.1(B).
"Current Assets" means, with respect to any Person, the
aggregate amount of assets of such Person which should properly be
classified as current assets in accordance with GAAP.
"Current Liabilities" means, with respect to any Person, the
aggregate amount of all Indebtedness of such Person which should
properly be classified as current liabilities in accordance with GAAP.
"Default" means any of the events specified in SECTION 11.1
which with the passage of time or giving of notice or both would
constitute an Event of Default.
"Designated Deposit Account" means a deposit account to be
maintained by the Borrower with the Agent at the Agent's Office, as
from time to time designated by the Borrower by written notification
to the Agent.
"Disbursing Bank" means any United States commercial bank with
which a Controlled Disbursement Account is maintained.
"Dollar" and "$" means freely transferrable United States
dollars.
"Dollar Equivalent" of the principal or face amount of any
Foreign Facility Debt means, at any time, the amount in Dollars for
which such principal or face amount could be exchanged as determined
by the spot rate quoted by the principal office of the Agent's
Affiliate in London at 11:00 A.M. (London time) two Business Days
prior to the date on which such equivalent is to be determined.
"EBITDA" means, for any period, Consolidated Net Income of the
Borrower and its Consolidated Subsidiaries for such period, PLUS any
amount in respect of federal or state income taxes, interest expense,
depreciation expense or amortization expense in connection with
intangible assets, and MINUS any amount in respect of federal or state
income tax refunds or interest income, in each case of the Borrower
and its Consolidated Subsidiaries for the same period, to the extent
deducted or included, as the case may be, in computing such
Consolidated Net Income.
"Effective Date" means the later of:
(a) the Agreement Date, and
(b) the date on which the applicable conditions set forth
in ARTICLE 4 shall first have been fulfilled.
"Effective Interest Rate" means the rate of interest per annum
on the Loans in effect from time to time pursuant to the provisions of
SECTIONS 3.1(A), (B), (C) AND (D).
"Eligible Assignee" means (i) a commercial bank organized under
the laws of the United States, or any State thereof, having total
assets in excess of $1,000,000,000 or any commercial finance or asset-
based lending affiliate of any such commercial bank; (ii) a savings
and loan association or savings bank organized under the laws of the
United States, or any State thereof, having a net worth of at least
$250,000,000 calculated in accordance with GAAP; (iii) any Person,
having a net worth of at least $250,000,000 calculated in accordance
with GAAP, whose primary business is asset-based lending; and (iv) any
Lender listed on the signature page of this Agreement; PROVIDED in
each case that the representation contained in SECTION 12.4 hereof
shall be applicable with respect to such institution or Lender.
"Eligible Inventory" means Inventory which the Majority Lenders
in their sole discretion determine to meet all of the following
requirements:
(a) such Inventory is owned by the Borrower, is subject to
the Security Interest, which is perfected as to such Inventory, and is
subject to no other Lien whatsoever other than a Permitted Lien,
(b) such Inventory consists of either raw materials or
finished goods (but does not include supplies and packaging used or
consumed in packaging, packing, shipping, advertising, selling or
leasing such raw materials or finished goods),
(c) such Inventory is in good condition and meets all
standards imposed by any governmental agency, or department or
division thereof, having regulatory authority over such goods, their
use or sale,
(d) such Inventory is currently either usable or salable,
at prices approximating at least cost, in the normal course of the
Borrower's business,
(e) such Inventory is located at one of the locations set
forth in the most recent Schedule of Inventory and, if such location
is premises leased by the Borrower, the landlord at such location has
agreed in writing, in form and substance satisfactory to the Agent, to
waive any lien such landlord may have on the Inventory,
(f) such Inventory does not exceed six months' sales
determined on the basis of average monthly sales for the 12 months
immediately preceding the date of determination and does not include
any item of a product line or type of Inventory of which no sales have
been made during the 90 days immediately preceding the date of
determination,
(g) such Inventory is not Inventory of the Borrower's
Lumite Division, and
(h) such Inventory is not determined by the Majority
Lenders to be ineligible for any other reason based upon such credit
and collateral considerations as the Majority Lenders may deem
appropriate.
"Eligible Receivable" means a Receivable which the Majority
Lenders in their sole discretion determine to meet all of the
following requirements:
(a) such Receivable is owned by the Borrower and represents
a complete bona fide transaction which requires no further act under
any circumstances on the part of the Borrower to make such Receivable
payable by the Account Debtor,
(b) such Receivable is not past due more than 60 days from
the due date of the original invoice,
(c) the goods the sale of which gave rise to such
Receivable were shipped or delivered to the Account Debtor on an
absolute sale basis and not on a bill and hold sale basis, a
consignment sale basis, a guaranteed sale basis, a sale or return
basis, or on the basis of any other similar understanding and no
material part of such goods has been returned or rejected,
(d) such Receivable is not evidenced by chattel paper or an
instrument of any kind unless such chattel paper or instrument has
been delivered to and is in the possession of the Agent,
(e) the Account Debtor with respect to such Receivable is
not insolvent or the subject of any bankruptcy or insolvency
proceedings of any kind or of any other proceeding or action,
threatened or pending, which might have a Materially Adverse Effect on
such Account Debtor,
(f) such Receivable is not owing by an Account Debtor
having 50% or more in face value of its then-existing Receivables
owing to the Borrower past due more than 60 days from the due date of
the original invoice,
(g) such Receivable is not owing by an Account Debtor whose
then-existing Receivables owing to the Borrower exceed in face amount
25% of the Borrower's total Eligible Receivables (PROVIDED that only
such excess shall be excluded from Eligible Receivables pursuant to
this CLAUSE (G)),
(h) if such Receivable arises from the performance of
services, such services have been fully rendered,
(i) such Receivable is a valid, legally enforceable
obligation of the Account Debtor with respect thereto and is not
subject to any present, or contingent, and no facts exist which are
the basis for any future, offset, deduction or counterclaim, dispute
or other defense on the part of such Account Debtor,
(j) such Receivable is subject to the Security Interest,
which is perfected as to such Receivable, and is subject to no other
Lien whatsoever other than a Permitted Lien,
(k) such Receivable is evidenced by an invoice or other
documentation in form acceptable to the Majority Lenders,
(l) such Receivable does not arise out of any transaction
with any Subsidiary or Affiliate of the Borrower,
(m) such Receivable is not subject to the Assignment of
Claims Act of 1940, as amended from time to time, or any Applicable
Law now or hereafter existing similar in effect thereto, or to any
provision prohibiting its assignment or requiring notice of or consent
to such assignment, unless all such required notices have been given,
all such required consents have been received and all other procedures
have been complied with such that such Receivable shall have been duly
and validly assigned to the Agent on behalf of the Lenders pursuant to
ARTICLE 6,
(n) the goods giving rise to such Receivable were not, at
the time of the sale thereof, subject to any Lien except the Security
Interest and Permitted Liens,
(o) if the Account Debtor with respect to such Receivable
is not located in Canada or the United States of America, the face
value of such Receivable when added to the aggregate face value of all
other Receivables the Account Debtors in respect of which are not
located in Canada or the United States of America, does not exceed 15%
of the Borrower's total Eligible Receivables, and
(p) neither the Account Debtor with respect to such
Receivable, nor such Receivable, is determined by the Majority Lenders
to be ineligible for any other reason based upon such credit and
collateral considerations as the Majority Lenders may deem
appropriate.
"Environmental Laws" means all federal, state, local and foreign
laws now or hereafter in effect relating to pollution or protection of
the environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into
the environment (including, without limitation, ambient air, surface
water, ground water, or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes, and
any and all regulations, codes, plans, orders, decrees, judgments,
injunctions, notices or demand letters issued, entered, promulgated or
approved thereunder.
"Equipment" means and includes, all machinery, apparatus, equip
ment, fittings, fixtures and other tangible personal property (other
than Inventory) of every kind and description used in a Person's
business operations or owned by a Person or in which a Person has an
interest, and all parts, accessories and special tools and all
increases and accessions thereto and substitutions and replacements
therefor and shall include, without limitation, all property that
would be included in the term "equipment" or "fixture" as defined in
the UCC.
"ERISA" means the Employee Retirement Income Security Act of
1974, as in effect from time to time.
"Eurocurrency Liability" has the meaning specified in Regulation
D (or any successor regulation) of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Advance" means an Advance bearing interest at a rate
determined with reference to the Eurodollar Rate.
"Eurodollar Rate" means for the Interest Period for each
Eurodollar Advance made as part of the same Borrowing, a rate of
interest determined by Bank of Boston to be the prevailing rate per
annum at which deposits in Dollars are offered to Bank of Boston by
first-class banks in the interbank Eurodollar market in which it
regularly participates on or about 10:00 a.m. (Boston time) two
Business Days before the first day of such Interest Period in an
amount approximately equal to the principal amount of such Borrowing
for a period approximately equal to such Interest Period.
"Eurodollar Reserve Percentage" applicable to any Interest
Period as to each Lender, means the rate (expressed as a decimal)
applicable to such Lender during such Interest Period under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System for determining the reserve requirement
(including, without limitation, any basic, supplemental, emergency or
marginal reserve requirement) of such Lender with respect to
Eurocurrency Liabilities.
"Event of Default" means any of the events specified in SECTION
11.1, provided that any requirement for notice or lapse of time or any
other condition has been satisfied.
"Existing Guaranties" means the Guaranties outstanding on the
Agreement Date to the extent set forth on SCHEDULE 5.1(I).
"Existing Indebtedness" means Indebtedness issued and outstand
ing on the Agreement Date to the extent set forth on SCHEDULE 5.1(I)
and any renewals, extensions or refundings thereof, but not any
increases in principal amounts thereof outstanding on the date of such
renewal, extension or refunding.
"Existing Liens" means the Liens outstanding on the Agreement
Date to the extent set forth on SCHEDULE 5.1(H).
"FINL" means Fibermesh Northern Ireland Limited (f/k/a Fibermesh
(Europe) Limited), a corporation organized under the laws of Northern
Ireland, wholly owned by SIE, and its successors and assigns.
"Federal Funds Effective Rate" means for any day, the 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 (or, if
such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by
the Agent.
"Financing Statements" means any and all Uniform Commercial Code
financing statements executed and delivered by the Borrower to the
Agent, naming the Agent on behalf of the Lenders as secured party and
the Borrower as debtor, in connection with this Agreement and the
Mortgages.
"Foreign Facilities" means any and all loan facilities,
guarantees, letters of credit or other financial accommodations,
listed on SCHEDULE 1.1 - FOREIGN FACILITIES or made at any time and
from time to time on or after the Effective Date, in each case made by
any of the Lenders or any Affiliate of a Lender directly to or for the
benefit of any of the Foreign Subsidiaries.
"Foreign Facility Agreements" means any and all notes, letters
of credit, guarantees, instruments, agreements and other documents
given as evidence of, as security for or in extension or renewal of,
or otherwise executed in connection with, the Foreign Facilities.
"Foreign Facility Debt" means the aggregate amount determined
from time to time to be the Dollar Equivalent of the Indebtedness
outstanding from time to time under the Foreign Facilities.
"Foreign Facility Reserve" means, on any date, the aggregate
amount of all Foreign Facility Debt outstanding and unpaid on the last
day of the calendar month next preceding the date of determination.
"Foreign Subsidiaries" means, collectively, SIE, Fibermesh
Canada, Ltd., Fibermesh GmbH and FINL.
"Foreign Subsidiary Debt" means all Indebtedness at any time and
from time to time of each of the Foreign Subsidiaries to the Borrower
and all instruments, documents and agreements evidencing, securing or
otherwise relating thereto.
"Foreign Subsidiary Stock" means all of the issued and
outstanding capital stock of SIE.
"GAAP" means generally accepted accounting principles
consistently applied and maintained throughout the period indicated
and, when used with reference to the Borrower or its Consolidated
Subsidiaries, consistent with the prior financial practice of the
Borrower; PROVIDED, HOWEVER, that, in the event that changes shall be
mandated by the Financial Accounting Standards Board or any similar
accounting authority of comparable standing, or shall be recommended
by Borrower's certified public accountants, such changes shall be
included in GAAP only from and after such date as the Borrower and the
Majority Lenders shall have amended this Agreement to the extent
necessary to reflect any such changes in the financial covenants set
forth in ARTICLE 10.
"General Intangibles" means any and all of the Borrower's rights
under contracts not yet earned by performance and not evidenced by an
instrument or chattel paper and all of the Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of
action and all other intangible personal property of the Borrower of
every kind and nature (other than Receivables), including, without
limitation, all Patent Collateral, Trademark Collateral, corporate or
other business records, inventions, designs, blueprints, plans,
specifications, goodwill, computer software, customer lists,
registrations, licenses, franchises, tax refund claims, reversions or
any rights thereto and any other amounts payable to the Borrower from
any Plan or other employee benefit plan, rights and claims against
carriers and shippers, rights to indemnification, business
interruption insurance and proceeds thereof, property, casualty or any
similar type of insurance and any proceeds thereof, proceeds of
insurance covering the lives of key employees on which the Borrower is
beneficiary and any letter of credit, guarantee, claims, security
interest or other security held by or granted to the Borrower to
secure payment by an Account Debtor of any of the Receivables.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with,
and reports to, all governmental bodies, whether federal, state,
foreign, national, provincial or local, and all agencies thereof.
"Guaranteed Foreign Facility Obligations" means any and all
obligations Guaranteed by the Borrower pursuant to ARTICLE 14 hereof.
"Guaranty", "Guaranteed" or to "Guarantee" as applied to any
obligation of another Person shall mean and include
(a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business),
directly or indirectly, in any manner, of any part or all of such
obligation of such other Person, and
(b) an agreement, direct or indirect, contingent or
otherwise, and whether or not constituting a guaranty, the practical
effect of which is to assure the payment or performance (or payment of
damages in the event of nonperformance) of any part or all of such
obligation of such other Person whether by
(i) the purchase of securities or obligations,
(ii) the purchase, sale or lease (as lessee or
lessor) of property or the purchase or sale of services primarily
for the purpose of enabling the obligor with respect to such
obligation to make any payment or performance (or payment of
damages in the event of nonperformance) of or on account of any
part or all of such obligation, or to assure the owner of such
obligation against loss,
(iii) the supplying of funds to or in any other
manner investing in the obligor with respect to such obligation,
(iv) repayment of amounts drawn down by beneficiaries
of letters of credit, or
(v) the supplying of funds to or investing in a
Person on account of all or any part of such Person's obligation
under a Guaranty of any obligation or indemnifying or holding
harmless, in any way, such Person against any part or all of such
obligation.
"Indebtedness" as applied to a Person means, without
duplication,
(a) all items (except items of capital stock, additional
paid-in capital or retained earnings, or of general contingency) which
in accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of such
Person as at the date as of which Indebtedness is to be determined,
(b) all obligations for money borrowed or for the deferred
purchase price of property or services,
(c) all obligations (including, during the noncancellable
term of any lease in the nature of a title retention agreement, all
future payment obligations under such lease discounted to their
present value in accordance with GAAP) secured by any Lien to which
any property or asset owned or held by such Person is subject, whether
or not the obligation secured thereby shall have been assumed or is
non-recourse,
(d) all obligations of other Persons which such Person has
Guaranteed, including, but not limited to, all obligations of such
Person consisting of recourse liability with respect to accounts
receivable sold or otherwise disposed of by such Person, and
(e) in the case of the Borrower (without duplication) all
obligations under the Loans and the Senior Subordinated Debt.
"Indenture" means the Indenture dated as of December 14, 1992,
between the Borrower and United States Trust Company of New York,
Trustee, pursuant to which the Senior Subordinated Debentures are
issued, as the same may be amended, modified or supplemented from time
to time as permitted hereby.
"Initial General Partners" means, collectively, Leonard Chill,
Jon P. Beckman, W. Gardner Wright, Jr., Ralph Kenner and W. Wayne
Freed, together with all members of their immediate families.
"Installment Payment Date" means the first day of each calendar
month, the first of which is February 1, 1995.
"Interest Payment Date" means the first day of each calendar
month, commencing February 1, 1995 and continuing thereafter until the
Secured Obligations have been irrevocably paid in full.
"Interest Period" means as to each Borrowing consisting of
Eurodollar Advances, the period commencing on the date of the making
or continuation of or conversion to such Borrowing and ending one,
two, three or six months thereafter, as the Borrower may elect in the
applicable Notice of Borrowing or Notice of Conversion or
Continuation, provided that:
(a) no Interest Period applicable to a Borrowing under the
Revolving Credit Facility shall end after the Termination Date;
(b) no Interest Period applicable to a Borrowing
constituting part of a Term Loan shall end after the final maturity
date of such Term Loan nor end after any applicable Installment
Payment Date unless an aggregate principal amount of Borrowings
constituting part of such Term Loan at least equal to the principal
amount due on such Installment Payment Date shall consist of Base Rate
Advances or of other Borrowings consisting of Eurodollar Advances
having Interest Periods that end on or before such Installment Payment
Date;
(c) any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in the next calendar month
or such extension would conflict with clause (a) or (b) above, in
which case such Interest Period shall end on the immediately preceding
Business Day;
(d) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period)
shall end on the last Business Day of a calendar month; and
(e) no Interest Period shall be available for a duration
of less than one month.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended.
"Inventory" means and includes,
(a) all goods intended for sale or lease by a Person, or
for display or demonstration, including, without limitation, in the
case of the Borrower, all primary and secondary carpet backing, bale
wrap, intermediate bulk containers, geo-textiles, yarns, concrete
additives and industrial fabrics,
(b) all work in process,
(c) all raw materials and other materials and supplies of
every nature and description used or which might be used in connection
with the manufacture, packing, shipping, advertising, selling, leasing
or furnishing of such goods or otherwise used or consumed in a
Person's business,
(d) all documents evidencing and General Intangibles
relating to any of the foregoing, and
(e) shall include, without limitation, all property that
would be included in the term "inventory" of a Person as defined in
the UCC.
"Investment" means, with respect to any Person:
(a) any share of capital stock, partnership interest,
evidence of Indebtedness or other security issued by any other Person,
(b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person,
(c) any Guaranty of the obligation of any other Person,
(d) any other investment (other than the Acquisition of a
Business Unit) in any other Person, and
(e) any commitment or option to make an Investment if, in
the case of an option, the consideration therefor exceeds $100.
"Lender" means, at any time, any financial institution party to
this Agreement as a "Lender" at such time, including any such Person
becoming a party hereto pursuant to assignment from another Lender,
and each of their respective successors and assigns.
"Lender's Office" means the office of each Lender specified in
or determined in accordance with the provisions of SECTION 13.1.
"Letter of Credit" means any letter of credit outstanding on the
Effective Date as a "Letter of Credit" under the Existing Credit
Agreement or issued by Bank of Boston for the account of the Borrower
pursuant to the provisions of ARTICLE 2B.
"Letter of Credit Facility" means at any time obligations
arising under Letters of Credit in the aggregate face amount of up to
the lesser of (a) the excess of the Borrowing Base (before deduction
of the Letter of Credit Reserve) over the sum of the principal amount
of the Revolving Credit Loan outstanding at such time, and (b)
$3,000,000.
"Letter of Credit Reserve" means at any time an amount equal to
the sum of the aggregate face amount of all Letters of Credit PLUS
unsatisfied reimbursement obligations in respect of Letters of Credit,
outstanding at such time.
"Lien" as applied to the property of any Person means:
(a) any mortgage, deed to secure debt, deed of trust,
lien, pledge, charge, lease constituting a Capitalized Lease
Obligation, conditional sale or other title retention agreement, or
other security interest, security title or encumbrance of any kind in
respect of any property of such Person, or upon the income or profits
therefrom,
(b) any arrangement, express or implied, under which any
property of such Person is transferred, sequestered or otherwise
identified for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person,
(c) any Indebtedness which is unpaid more than 30 days
after the same shall have become due and payable and which if unpaid
might by law (including but not limited to bankruptcy and insolvency
laws), or otherwise, be given any priority whatsoever over general
unsecured creditors of such Person, and
(d) the filing of, or any agreement to give, any financing
statement under the Uniform Commercial Code or its equivalent in any
jurisdiction.
"Loan" means any of the Revolving Credit Loans or the Term
Loans, and "Loans" means more than one such Loan.
"Loan Documents" means collectively this Agreement, the Notes,
the Security Documents and each other instrument, agreement or
document executed by the Borrower or any Affiliate or Subsidiary of
the Borrower in connection with this Agreement.
"Loan Party" means the Borrower and each Subsidiary and
Affiliate of the Borrower that is a party to one or more of the Loan
Documents.
"Lockbox" means a U. S. Post Office Box specified in, or
pursuant to, an Agency Account Agreement.
"Majority Lenders" means Lenders whose outstanding Loans
aggregate at least 66-2/3% of all outstanding Loans or, if no Loans
are outstanding, Lenders whose Commitments represent at least 66-2/3%
of the Commitments of all Lenders.
"Materially Adverse Effect" means, with respect to any Person, a
materially adverse effect upon such Person's business, assets,
liabilities, condition (financial or otherwise), results of operations
or business prospects.
"Money Borrowed" means, as applied to Indebtedness,
(a) Indebtedness for money borrowed,
(b) Indebtedness, whether or not in any such case the same
was for money borrowed,
(i) represented by notes payable, and drafts
accepted, that represent extensions of credit,
(ii) constituting obligations evidenced by
bonds, debentures, notes or similar instruments, or
(iii) upon which interest charges are customarily
paid or that was issued or assumed as full or partial payment for
property,
(c) Indebtedness that constitutes a Capitalized Lease
Obligation, and
(d) Indebtedness that is such by virtue of CLAUSE (D) of
the definition thereof, but only to the extent that the obligations
Guaranteed are obligations that would constitute Indebtedness for
Money Borrowed.
"Mortgages" means and includes any and all of the mortgages,
deeds of trust, deeds to secure debt and other instruments (including
any and all assignments of any of the foregoing) executed and
delivered by the Borrower to or for the benefit of the Lenders in
connection with this Agreement, including, without limitation, each of
such instruments listed on SCHEDULE 1.1 - MORTGAGES hereto, as the
same may be modified from time to time.
"Multiemployer Plan" has the meaning set forth in Sec
tion 4001(a)(3) of ERISA, as amended or revised from time to time.
"Net Amount" means, with respect to any Investments made by any
Person, the gross amount of all such Investments MINUS the aggregate
amount of all cash received and the fair value, at the time of receipt
by such Person, of all property received as payments of principal or
premiums, returns of capital, liquidating dividends or distributions,
proceeds of sale or other dispositions with respect to such
Investments.
"Net Income" means, as applied to any Person, the net income (or
net loss) of such Person for the period in question after giving
effect to deduction of or provision for all operating expenses, all
taxes and reserves (including reserves for deferred taxes) and all
other proper deductions, all determined in accordance with GAAP
provided that there shall be excluded:
(a) any restoration of any contingency reserve, except to
the extent that provision for such reserve was made out of income
during such period,
(b) any net gains or losses on the sale or other dispo
sition, not in the ordinary course of business, of Investments,
Business Units and other capital assets, provided that there shall
also be excluded any related charges for taxes thereon,
(c) any net gain arising from the collection of the
proceeds of any insurance policy,
(d) any write-up of any asset, and
(e) any other extraordinary item.
"Net Worth" means, with respect to any Person, such Person's
total shareholders' equity (including capital stock, additional paid-
in capital and retained earnings, after deducting treasury stock)
which would appear as such on a balance sheet of such Person prepared
in accordance with GAAP.
"Note" means any of the Revolving Credit Notes or the Term
Notes, and "Notes" means more than one such Note.
"Notice of Borrowing" has the meaning specified in
SECTION 2.2(A).
"Notice of Conversion or Continuation" has the meaning specified
in SECTION 3.7(B).
"Operating Cash Flow" means, for any period, EBITDA for such
period, MINUS
(a) the amount of any federal or state income taxes paid in
cash by the Borrower and its Consolidated Subsidiaries during such
period (net of any cash refunds of federal or state income taxes
received during such period), MINUS
(b) an amount equal to the lesser of Capital Expenditures
during such period and $6,000,000.
"Operating Lease" means any lease (other than a lease
constituting a Capitalized Lease Obligation) of real or personal
property, having a stated term of 12 months or more, including
specified renewals and extensions exercisable at the option of the
Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor agency.
"Patent Assignment" means the Assignment for Security, dated
December 4, 1986, by the Borrower to the Agent, for the benefit of the
Lenders, with respect to certain patents owned by the Borrower, as
such document may have been or may be amended or supplemented from
time to time.
"Patent Collateral" means and includes, in each case whether now
existing or hereafter arising,
(a) any and all patents and patent applications, together
with any reissue, continuation, continuation-in-part or extension of
any thereof,
(b) the inventions which are the subject matter thereof,
and
(c) all proceeds of any of the foregoing.
"Pending Borrowing" has the meaning specified in
SECTION 3.10(A).
"Permitted Investments" means:
(a) Investments of the Borrower in:
(i) negotiable certificates of deposit, time deposits
and banker's acceptances issued by a Lender or an Affiliate of a
Lender or by any United States bank or trust company having
capital, surplus and undivided profits in excess of $100,000,000,
(ii) any direct obligation of the United States of
America or any agency or instrumentality thereof which has a
remaining maturity at the time of purchase of not more than one
year and repurchase agreements relating to the same,
(iii) sales on credit and employee or similar
advances in the ordinary course of business,
(iv) notes, accepted in the ordinary course of
business, evidencing overdue accounts payable arising in the
ordinary course of business, and
(v) existing Investments in Foreign Subsidiaries, and
Investments in Foreign Subsidiaries arising after the Effective
Date, including those in connection with the Foreign Facilities,
not in excess of $100,000 in the aggregate at any time;
(b) other Investments of the Borrower, the Net Amount of
which does not at any time exceed $100,000; and
(c) Investments of any Subsidiary of the Borrower in notes
made to such Subsidiary by the Borrower or by any other Subsidiary of
the Borrower.
"Permitted Liens" means:
(a) Liens securing taxes, assessments and other govern
mental charges or levies (excluding any Lien imposed pursuant to any
of the provisions of ERISA) or the claims of materialmen, mechanics,
carriers, warehousemen or landlords for labor, materials, supplies or
rentals incurred in the ordinary course of business, but (i) in all
cases only if payment shall not at the time be required to be made in
accordance with SECTION 8.6 and (ii) in the case of landlords, only if
such liens are junior to the Security Interest in any of the
Collateral,
(b) Liens consisting of deposits or pledges made in the
ordinary course of business in connection with, or to secure payment
of, obligations under workers' compensation, unemployment insurance or
similar legislation,
(c) Liens constituting encumbrances in the nature of
zoning restrictions, easements, and rights or restrictions of record
on the use of real property, which in the sole judgment of the
Majority Lenders do not materially detract from the value of such
property or impair the use thereof in the business of the Borrower,
(d) Liens shown on SCHEDULE 1.1 - PERMITTED LIENS,
(e) Purchase Money Liens, and
(f) Liens of the Agent and the Lenders arising under this
Agreement and the other Loan Documents.
"Permitted Purchase Money Indebtedness" means Purchase Money
Indebtedness of the Borrower incurred after the Agreement Date
(a) which is secured by a Purchase Money Lien,
(b) the aggregate principal amount of which does not
exceed an amount equal to 80% of the lesser of
(i) the cost (including the principal amount of such
indebtedness, whether or not assumed) of the property subject to
such Lien, and
(ii) the fair value of such property at the time of
its acquisition, and
(c) which, when aggregated with the principal amount of
all other such Indebtedness and Capitalized Lease Obligations of the
Borrower incurred after the Agreement Date does not exceed $2,000,000.
For the purposes of this definition, the principal amount of any
Purchase Money Indebtedness consisting of Capitalized Leases shall be
computed as a Capitalized Lease Obligation.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or unincorporated organization,
or a government or any agency or political subdivision thereof.
"Plan" means an employee benefit plan maintained for employees
of the Borrower that is covered by Title IV of ERISA, including such
plans as may be established after the Agreement Date.
"Pledge Agreement" means the Pledge Agreement, dated as of
December 4, 1986, made by the Borrower in favor of the Agent for the
account of the Lenders, pursuant to which the Borrower has pledged to
the Agent, for the benefit of the Lenders, as security for the Secured
Obligations, the Foreign Subsidiary Stock and the Foreign Subsidiary
Debt, as amended, modified or supplemented from time to time.
"Purchase Money Indebtedness" means
(a) Indebtedness created to secure the payment of all or
any part of the purchase price of any property,
(b) any Indebtedness incurred at the time of or within 10
days prior to or after the acquisition of any property for the purpose
of financing all or any part of the purchase price thereof, and
(c) any renewals, extensions or refinancings thereof, but
not any increases in the principal amounts thereof outstanding at the
time.
"Purchase Money Liens" means Liens securing Permitted Purchase
Money Indebtedness, but only if such Lien shall at all times be
confined solely to the property the purchase price of which was
financed through the incurrence of the Purchase Money Indebtedness
secured by such Lien.
"Real Estate" means the real property, including land and build
ings and improvements thereon, covered by or described in the
Mortgages.
"Receivables" means and includes
(a) any and all rights to the payment of money or other
forms of consideration of any kind (whether classified under the UCC
as accounts, contract rights, chattel paper, general intangibles, or
otherwise) including, but not limited to, accounts receivable, letters
of credit and the right to receive payment thereunder, chattel paper,
tax refunds, insurance proceeds, contract rights, notes, drafts,
instruments, documents, acceptances, and all other debts, obligations
and liabilities in whatever form from any Person,
(b) all guarantees, security and Liens for payment
thereof,
(c) all goods, whether now owned or hereafter acquired,
and whether sold, delivered, undelivered, in transit or returned,
which may be represented by, or the sale or lease of which may have
given rise to, any such right to payment or other debt, obligation or
liability, and
(d) all proceeds of any of the foregoing.
"Register" has the meaning set forth in SECTION 13.11(D).
"Reportable Event" has the meaning set forth in Section 4043(b)
of ERISA, but shall not include a Reportable Event as to which the
provision for 30 days' notice to the PBGC is waived under applicable
regulations.
"Restricted Dividend Payment" means any dividend, distribution
or payment on or with respect to any shares of a Person's capital
stock (other than dividends payable solely in shares of its capital
stock), excluding, however, any such dividend, distribution or payment
by any Wholly Owned Subsidiary of the Borrower to any shareholder of
such Subsidiary.
"Restricted Payment" means any redemption or prepayment, prior
to the stated maturity or any regularly scheduled installment or
amortization payment date with respect to such Indebtedness, of any
Subordinated Indebtedness or other Indebtedness that is junior and
subordinate to the Loans or to any Foreign Facility Debt.
"Restricted Purchase" means any payment on account of the
purchase, redemption or other acquisition or retirement of any shares
of a Person's capital stock (except shares acquired on the conversion
thereof into other shares of capital stock of such Person).
"Revolving Credit Facility" means, an amount equal to
$35,000,000.
"Revolving Credit Loan" means each loan outstanding on the
Effective Date as a "Revolving Credit Loan" evidenced by the Second
Amended and Restated Revolving Credit Notes dated September 3, 1993 or
December 28, 1994 made by the Borrower to the order of a "Lender"
under the Existing Credit Agreement, and the Borrowings made pursuant
to ARTICLE 2.
"Revolving Credit Note" means each Third Amended and Restated
Revolving Credit Note made by the Borrower to the order of a Lender
evidencing the obligation of the Borrower to pay the aggregate unpaid
principal amount of all Revolving Credit Loans made to it by such
Lender (and any promissory note or notes that may be issued from time
to time in substitution, renewal, extension, replacement or exchange
therefor, whether payable to such Lender or a different lender and
whether issued in connection with a Person becoming a Lender after the
Effective Date or otherwise) substantially in the form of EXHIBIT A
hereto, with all blanks properly completed, either as originally
executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or refinanced, and "Revolving
Credit Notes" means more than one such Revolving Credit Note.
"SIE" means Synthetic Industries Europe Limited (Reg. No.
2772124), a registered English limited liability company, wholly owned
by the Borrower.
"SI Management" means SI Management L.P., a Delaware limited
partnership, which is the general partner of Synthetic L.P., and its
successors and assigns.
"Schedule of Equipment," "Schedule of Inventory" and "Schedule
of Receivables" mean the Schedules described in SECTION 7.14.
"Secured Obligations" means, in each case whether now in
existence or hereafter arising,
(a) the principal of, and interest on, the Loans,
(b) the Guaranteed Foreign Facility Obligations, and
(c) all indebtedness, liabilities, fees, charges,
obligations, covenants and duties of the Borrower to the Agent or any
Lender, of every kind, nature and description, direct or indirect,
absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note,
and whether or not for the payment of money, under or in respect of
this Agreement or any of the Loan Documents.
"Security Documents" means each of the following:
(a) the Mortgages,
(b) the Patent Assignment,
(c) the Trademark Assignment,
(d) the Pledge Agreement,
(e) the Financing Statements, and
(f) this Agreement and each other agreement or instrument
from time to time securing the Secured Obligations.
"Security Interest" means the Liens of the Agent on behalf of
the Lenders now or hereafter existing on and in the Collateral or the
Real Estate effected hereby or by any of the Security Documents or
pursuant to the terms hereof or thereof.
"Senior Debt" means with respect to the Borrower and any
Consolidated Subsidiary of the Borrower, the Indebtedness from time to
time outstanding under the Loans and the Foreign Facility Debt and any
other Indebtedness for Money Borrowed which is senior in right of
payment to the Senior Subordinated Debentures.
"Senior Subordinated Debentures" means the Senior Subordinated
Debentures Due 2002 in an original aggregate principal amount of
$140,000,000, issued by the Borrower pursuant to the Indenture.
"Senior Subordinated Debt" means the Indebtedness of the
Borrower under the Senior Subordinated Debentures.
"Subordinated Indebtedness" means, at any time, Indebtedness of
the Borrower at such time evidenced by the Senior Subordinated
Debentures or otherwise subordinated to the Loans and Notes upon terms
and conditions satisfactory to the Majority Lenders.
"Subsidiary"
(a) when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of 50% or more of
the stock of any class or classes or 50% or more of other ownership
interests is owned of record or beneficially by such other Person, or
by one or more Subsidiaries of such other Person, or by such other
Person and one or more Subsidiaries of such Person,
(i) if the holders of such stock, or other ownership
interests, (A) are ordinarily, in the absence of contingencies,
entitled to vote for the election of a majority of the directors
(or other individuals performing similar functions) of such
Person, even though the right so to vote has been suspended by
the happening of such a contingency, or (B) are entitled, as such
holders, to vote for the election of a majority of the directors
(or individuals performing similar functions) of such Person,
whether or not the right so to vote exists by reason of the
happening of a contingency, or
(ii) in the case of such other ownership interests,
if such ownership interests constitute a majority voting
interest, and
(b) when used with respect to a Plan, ERISA or a provision
of the Internal Revenue Code pertaining to employee benefit plans,
also means any corporation, trade or business (whether or not
incorporated) which is under common control with the Borrower and is
treated as a single employer with the Borrower under Section 414(b) or
(c) of the Internal Revenue Code and the regulations thereunder.
"Synthetic L.P." means Synthetic Industries L.P., a Delaware
limited partnership, which owns all of the outstanding capital stock
of the Borrower, and its successors and assigns.
"Synthetic Management" means Synthetic Management G.P., a
Georgia general partnership, the general partners of which are five
separate corporations, wholly owned, respectively, by the Initial
General Partners.
"Tangible Net Worth" means, as applied to any Person, the Net
Worth of such Person at the time in question, after deducting
therefrom the amount of all intangible items reflected therein,
including all unamortized debt discount and expense, unamortized
research and development expense, unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights,
unamortized excess cost of investment in Subsidiaries over equity at
dates of acquisition, and all similar items which should properly be
treated as intangibles in accordance with GAAP.
"Term Loan" means Term Loan A and Term Loan B.
"Term Loan A" means the advances outstanding and unpaid under
the Existing Credit Agreement on the Effective Date (immediately
before giving effect to the Advances to be made under this Agreement
on the Effective Date), made as the principal amount of the "Term
Loan" thereunder, as evidenced, from and after the Effective Date, by
promissory notes substantially in the form of Term Note A in the
aggregate original principal amount of $19,000,000.
"Term Loan B" means the Advances made by the Lenders to the
Borrower on the Effective Date pursuant to SECTION 2A.1, evidenced by
promissory notes substantially in the form of Term Note B in the
aggregate original principal amount of $11,000,000.
"Term Loan Facility" means an amount equal to $30,000,000.
"Term Note" means any Term Note A or Term Note B.
"Term Note A" means each promissory note made by the Borrower to
the order of a Lender evidencing the obligation of the Borrower to pay
the aggregate unpaid principal amount of the Advances made by such
Lender as part of Term Loan A (and any promissory note or notes that
may be issued from time to time in substitution, renewal, extension,
replacement or exchange therefor, whether payable to such Lender or a
different lender and whether issued in connection with a Person
becoming a Lender after the Effective Date or otherwise) substantially
in the form of EXHIBIT B-1 hereto, with all blanks properly completed,
either as originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or refinanced, and
"Term Notes A" means more than one such Term Note A.
"Term Note B" means each promissory note made by the Borrower to
the order of a Lender evidencing the obligation of the Borrower to pay
the aggregate unpaid principal amount of the Advances made by such
Lender as part of Term Loan B (and any promissory note or notes that
may be issued from time to time in substitution, renewal, extension,
replacement or exchange therefor, whether payable to such Lender or a
different lender and whether issued in connection with a Person
becoming a Lender after the Effective Date or otherwise) substantially
in the form of EXHIBIT B-2 hereto, with all blanks properly completed,
either as originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or refinanced, and
"Term Notes B" means more than one such Term Note B.
"Termination Date" means January 1, 2000, or such earlier date
as all Secured Obligations shall have been irrevocably paid in full
and this Agreement shall have been terminated at the election of the
Borrower, or such later date to which the same may be extended by
agreement of the Borrower, the Agent and the Lenders.
"Termination Event" means
(a) a Reportable Event, or
(b) the filing of a notice of intent to terminate a Plan
or the treatment of a Plan amendment as a termination under Section
4041 of ERISA, or
(c) the institution of proceedings to terminate a Plan by
the PBGC under Section 4042 of ERISA, or the appointment of a trustee
to administer any Plan.
"Total Interest Expense" means, with respect to the Borrower or
any Consolidated Subsidiary, the total interest expense expressed in
Dollars paid or accrued by the Borrower or such Consolidated
Subsidiary, as the case may be, during a given period on Indebtedness
for Money Borrowed determined in accordance with GAAP.
"Total Unsubordinated Debt" means, with respect to the Borrower
or any Consolidated Subsidiary, all Indebtedness of the Borrower or
such Consolidated Subsidiary, as the case may be, other than
Subordinated Indebtedness.
"Trademark Assignment" means, collectively, the Assignment for
Security dated as of December 2, 1986, the Assignment for Security
dated as of December 17, 1990, and the Assignment for Security dated
as of March 12, 1992, each made by the Borrower in favor of the Agent,
for the benefit of the Lenders, with respect to certain trademarks
owned by the Borrower, as such documents may be amended or
supplemented from time to time.
"Trademark Collateral" means and includes in each case, whether
now existing or hereafter arising,
(a) any and all marks, trademarks, trade names and
trademark applications, and the goodwill of the business symbolized
thereby, and
(b) all proceeds of any of the foregoing.
"Type" means a type of Advance and refers to a Base Rate Advance
or a Eurodollar Advance.
"UCC" means the Uniform Commercial Code as in effect from time
to time in the State of Georgia.
"Unfunded Vested Accrued Benefits" means with respect to any
Plan at any time, the amount (if any) by which
(a) the present value of all vested nonforfeitable
benefits under such Plan exceeds
(b) the fair market value of all Plan assets allocable to
such benefits,
all determined as of the then most recent valuation date for such
Plan.
"Unused Facility" means, at any time, the Revolving Credit
Facility in effect at such time LESS the sum at such time of (i) the
aggregate outstanding principal amount of the Revolving Credit Loan
and (ii) the Letter of Credit Reserve.
"Wholly Owned Subsidiary" when used to determine the
relationship of a Subsidiary to a Person or Persons, means a
Subsidiary all of the issued and outstanding shares (other than
directors' qualifying shares) of the capital stock of which shall at
the time be owned by such Person or Persons or one or more of such
Person's Wholly Owned Subsidiaries or by such Person or Persons and
one or more of its respective Wholly Owned Subsidiaries.
"Working Capital" means with respect to any Person the amount by
which the Current Assets of such Person exceed the Current Liabilities
of such Person at the time of determination thereof.
SECTION 1.2. General. All terms of an accounting nature not
specifically defined herein shall have the meaning ascribed thereto by
GAAP. The terms accounts, chattel paper, contract rights, documents,
equipment, instruments, general intangibles and inventory, as and when
used in this Agreement or the Security Documents, shall have the
meanings given those terms in the UCC. Unless otherwise specified, a
reference in this Agreement to a particular article, section or
subsection is a reference to that article, section or subsection of
this Agreement. Wherever from the context it appears appropriate,
each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine, feminine or
neuter gender shall include the masculine, the feminine and the
neuter.
ARTICLE 2 - REVOLVING CREDIT FACILITY
SECTION 2.1. Revolving Credit Loan. Upon the terms and subject
to the conditions of, and in reliance upon the representations and
warranties made under, this Agreement, each Lender severally and not
jointly agrees to make Advances, ratably according to such Lender's
Commitment Percentage, to the Borrower from time to time from and
after the Effective Date to the Termination Date, as requested by the
Borrower in accordance with the terms of SECTION 2.2, in such amounts
as the Borrower shall request, up to an aggregate principal amount at
any one time outstanding equal to the result obtained by multiplying
such Lender's Commitment Percentage by the Borrowing Base in effect at
such time; PROVIDED, HOWEVER, that it is agreed that should such
Advances made by any Lender exceed the maximum amount so determined or
any other limitation set forth in this Agreement, such Advances shall
nevertheless constitute Secured Obligations and, as such, shall be
entitled to all benefits thereof and security therefor. Each
Borrowing under the Revolving Credit Facility shall consist of
Advances of the same Type made on the same day by the Lenders ratably
according to their respective Commitment Percentages and each
Borrowing comprised of (i) Base Rate Advances and requested pursuant
to SECTION 2.2(A)(I) shall be in an aggregate amount of $100,000 or an
integral multiple thereof or (ii) Eurodollar Rate Advances shall be in
an aggregate amount of $3,000,000 or an integral multiple of $500,000
in excess thereof. Within the limits of each Lender's Commitment, the
principal amount of any Advance which is repaid may be reborrowed
subject to the terms of this SECTION 2.1. The Agent's and each
Lender's books and records reflecting the date and the amount of each
Borrowing under the Revolving Credit Facility and each repayment of
principal thereof shall constitute PRIMA FACIE evidence of the
accuracy of the information contained therein, subject to the
provisions of SECTION 3.14.
SECTION 2.2. Manner of Borrowing. Borrowings under the
Revolving Credit Facility shall be made as follows:
(a) Requests for Borrowing. A request for a Borrowing
shall be made, or shall be deemed to be made, in the following manner:
(i) The Borrower may give the Agent written notice,
which shall be irrevocable, of its intention to make a
Borrowing specifying the amount of the proposed Borrowing
and the proposed Borrowing date not later than 2:00 p.m.
(Boston time), at least two Business Days prior to the date
of a proposed Borrowing comprised of Base Rate Advances or
10:00 a.m. (Boston time) at least three Business Days prior
to the date of a proposed Borrowing comprised of Eurodollar
Rate Advances. Each such notice (a "Notice of Borrowing")
shall, in addition, specify the Type of Advances and, if
applicable, the Interest Period applicable to such Advances,
and shall be substantially in the form of EXHIBIT F hereto.
The Agent may in its sole and absolute discretion permit any
such notice to be made by telephone, telecopier or telex by
an Authorized Officer in which case the Borrower shall
confirm the same by mailing a written Notice of Borrowing to
the Agent within 48 hours thereafter.
(ii) Whenever a check is presented to the Disbursing
Bank for payment against the Controlled Disbursement Account
in an amount greater than the then available balance in such
account, the Disbursing Bank shall, and is hereby
irrevocably authorized by the Borrower to, give the Agent
notice thereof, which notice shall be deemed to be a request
for a Borrowing comprised of Base Rate Advances on the date
of such notice in an amount equal to the excess of such
check over such available balance.
(iii) Whenever a drawing occurs under a Letter of
Credit, Bank of Boston shall, and is hereby irrevocably
authorized by the Borrower to, give the Agent notice
thereof, which notice shall be deemed to be a request for a
Borrowing comprised of Base Rate Advances on the date of
such notice (or on the next succeeding Business Day if such
notice is given after 11:00 a.m. (Boston time) on such date)
in an amount equal to the amount of such drawing.
(iv) Unless the Borrower shall have otherwise
notified the Agent, the becoming due of any amount required
to be paid under this Agreement as interest shall be deemed
to be a request for a Borrowing comprised of Base Rate
Advances on the due date in the amount required to pay such
interest.
(v) The becoming due of any other Secured Obligation
shall be deemed to be a request for a Borrowing comprised of
Base Rate Advances on the due date in the amount then so
due, and such request shall be irrevocable.
(b) Disbursement. Promptly following receipt of a Notice
of Borrowing under the Revolving Credit Facility, the Agent shall
notify each Lender by telephone, telecopier or telex of the date and
amount of the Borrowing, the Type of Advances comprising such
Borrowing and, if such Borrowing is comprised of Eurodollar Advances,
the interest rate and Interest Period applicable thereto. Not later
than 12:00 noon (Boston time) on the date specified for any Borrowing,
each Lender shall make available its ratable portion of the Borrowing
in immediately available funds to the Agent at the Agent's Office.
Upon fulfillment of the applicable conditions set forth in ARTICLE 4,
the Borrower hereby irrevocably authorizes the Agent on behalf of the
Lenders to disburse the proceeds of the Advances made upon each
Borrowing requested, or deemed to be requested, pursuant to this
SECTION 2.2 as follows:
(i) the proceeds of each Borrowing requested under
SECTIONS 2.2(A)(I) and (II) shall be disbursed by the Agent
in lawful money of the United States of America in
immediately available funds, (A) in the case of the initial
Borrowing, in accordance with the terms of the letter from
the Borrower to the Agent referred to in SECTION 4.1(A)(XIV)
and (B) in the case of each subsequent Borrowing, by wire
transfer to the Controlled Disbursement Account or, in the
absence of a Controlled Disbursement Account, by credit to
the Designated Deposit Account or by wire transfer to such
other account as may be agreed upon by the Borrower and the
Agent from time to time, and
(ii) the proceeds of each Borrowing requested under
SECTION 2.2(A)(III), (IV) or (V) shall be disbursed by the
Agent on behalf of the Lenders by way of direct payment of
the relevant Secured Obligation.
(c) Assumption by Agent. Unless the Agent shall have
received notice from a Lender prior to the date of any Borrowing that
such Lender will not make available to the Agent such Lender's ratable
portion of such Borrowing, the Agent may assume that such Lender has
made such portion available to the Agent on the date of such Borrowing
in accordance with SECTION 2.2(B) and the Agent may, in reliance upon
such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent such Lender shall not have
so made such ratable portion available to the Agent, such Lender and
the Borrower severally agree to repay to the Agent forthwith on demand
such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the
date such amount is repaid to the Agent, if repaid by the Borrower, at
the interest rate applicable at the time to Advances comprising such
Borrowing or, if paid by such Lender, at the Federal Funds Effective
Rate, for each such day. If such Lender shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this
Agreement. The failure of any Lender to make its Advance available
shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance available on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender
to make its Advance available on the date of any Borrowing.
SECTION 2.3. Repayment of Advances. The Advances under the
Revolving Credit Facility will be repaid as follows:
(a) whether or not any Default or Event of Default has
occurred, the outstanding principal amount of all Advances under the
Revolving Credit Facility is due and payable, and shall be repaid by
the Borrower, on the Termination Date;
(b) if at any time the aggregate outstanding principal
amount of all Advances under the Revolving Credit Facility exceeds the
Borrowing Base in effect at such time, the Borrower shall pay to the
Agent, upon demand by the Agent, for the ratable account of the
Lenders for application to the repayment of the Advances under the
Revolving Credit Facility made by them, an amount equal to such
excess; and
(c) the Borrower hereby irrevocably instructs the Agent to
pay to the Lenders ratably for application to the repayment of the
Advances under the Revolving Credit Facility outstanding on any day,
an amount equal to the amount received by the Agent for the account of
the Lenders on such day pursuant to SECTION 7.1(B).
Amounts received pursuant to SUBSECTION (B) OR (C) above shall be
applied first to the repayment of all Base Rate Advances and then to
the repayment of Eurodollar Advances, in each case outstanding under
the Revolving Credit Facility.
SECTION 2.4. Revolving Credit Note. Each Lender's Advances
under the Revolving Credit Facility and the obligations of the
Borrower to repay such Advances shall also be evidenced by, and be
repayable in accordance with the terms of, a single Revolving Credit
Note payable to the order of such Lender. Each Revolving Credit Note
shall be dated the Effective Date (or the later "Effective Date" of
any Assignment and Acceptance, if issued pursuant thereto) and be duly
and validly executed and delivered by the Borrower.
ARTICLE 2A - TERM LOAN FACILITY
SECTION 2A.1. Term Loans. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties
made under, this Agreement, each Lender, severally and not jointly,
agrees to make a Base Rate Advance as part of a single Borrowing under
the Term Loan Facility to the Borrower on the Effective Date, in a
principal amount equal to the excess of (a) such Lender's Commitment
Percentage multiplied by the Term Loan Facility, over (b) the amount
outstanding from such Lender to the Borrower as principal of the "Term
Loan" under and as defined in the Existing Credit Agreement, on the
Effective Date, immediately before the Advances contemplated to be
made under this Agreement on the Effective Date are made. Each
Lender's Commitment Percentage of $19,000,000 (which is the aggregate
principal amount so outstanding as the "Term Loan" under the Existing
Credit Agreement on the Effective Date) shall be such Lender's ratable
share of Term Loan A, and each Lender's Commitment Percentage of
$11,000,000 (which is the aggregate principal amount advanced pursuant
to this SECTION 2A.1 on the Effective Date) shall be such Lender's
ratable share of Term Loan B. The Lenders agree to accept from the
Borrower, in exchange for (but not in extinguishment of Indebtedness
outstanding under) the "Term Notes" issued under and as defined in the
Existing Credit Agreement, Term Notes A conforming to the requirements
of this Agreement, in the aggregate original principal amount of
$19,000,000.
SECTION 2A.2. Manner of Borrowing Term Loans. Provided that
the Borrower has given the Agent (a) at least two Business Days' prior
notice of the occurrence of the Effective Date, then, not later than
12:00 noon (Boston time) on the Effective Date, each Lender shall make
available to the Agent in Dollars in same day funds, an amount equal
to such Lender's Base Rate Advance under the Term Loan Facility to be
made on such date in the amount determined in accordance with the
provisions of SECTION 2A.1. Upon the Agent's receipt thereof and the
occurrence of the Effective Date, the Agent shall make such funds
available to the Borrower in accordance with the terms of the letter
from the Borrower to the Agent referred to in SECTION 4.1(A)(XIV).
SECTION 2A.3. Repayment of Term Loans. The Advances
constituting the Term Loans are due and payable, and shall be repaid
by the Borrower, in consecutive monthly installments of $500,000 each,
on successive Installment Payment Dates, beginning, with respect to
Term Loan B, on February 1, 1995, and with respect to Term Loan A, on
December 1, 1996, PROVIDED, that the final installments of Term Loan B
payable on November 1, 1996, and of Term Loan A payable on January 1,
2000 shall be in the respective amounts of the then-outstanding unpaid
balances of such Term Loans.
SECTION 2A.4. Term Notes. Each Lender's Advances under the
Term Loan Facility and the obligation of the Borrower to repay such
Advances shall also be evidenced by, and be repayable in accordance
with the terms of, two Term Notes payable to the order of each such
Lender, one such Term Note evidencing Advances made by such Lender and
outstanding under Term Loan A, and the other such Term Note evidencing
Advances made by such Lender and outstanding under Term Loan B. Each
Term Note shall be dated the Effective Date (or the later "Effective
Date" of any Assignment and Acceptance, if issued pursuant thereto),
and all of such Term Notes shall be duly and validly executed and
delivered by the Borrower.
ARTICLE 2B - LETTER OF CREDIT FACILITY
SECTION 2B.1. Letters of Credit. Upon the written request of
the Borrower from time to time, the Bank of Boston may in its
discretion, provided no Default or Event of Default has occurred and
is continuing, issue Letters of Credit for the account of the Borrower
in an aggregate face amount at any time outstanding not to exceed the
Letter of Credit Facility, pursuant to Bank of Boston's customary
application and other letter of credit procedures in effect from time
to time. Upon the issuance of any such Letter of Credit, each other
Lender shall automatically and without further action acquire an
undivided participation in such Letter of Credit in an amount equal to
such Lender's Commitment Percentage multiplied by the face amount of
such Letter of Credit. Promptly upon the issuance thereof, Bank of
Boston shall provide to the Agent and the Agent shall thereafter
provide to each other Lender, a copy of each Letter of Credit issued
pursuant to this SECTION 2B.1. The Borrower's obligations in respect
of each Letter of Credit, including, without being limited to, its
obligations to reimburse Bank of Boston and the other Lenders for the
amount of any drawing thereunder and to pay the fees, charges and
expenses provided for herein or in any other document related to such
Letter of Credit, shall constitute Secured Obligations.
SECTION 2B.2. Payments under Letters of Credit. Bank of Boston
shall notify the Agent of each drawing under a Letter of Credit and
the Borrower hereby irrevocably instructs the Agent (a) to consider
each such notification by Bank of Boston as a request for a Borrowing
pursuant to SECTION 2.2(A)(III) and (b) to pay to Bank of Boston, from
the proceeds of the Advances made in accordance with the provisions of
SECTION 2.2(B), an amount equal to the amount of such drawing. All
such Advances shall constitute a Borrowing under the Revolving Credit
Facility made at the time of such payment. Notwithstanding the
provisions of SECTION 2.2 and the foregoing provisions of this SECTION
2B.2, each Lender shall be obligated directly to Bank of Boston as a
participant in each Letter of Credit to pay directly to Bank of Boston
an amount equal to such Lender's Commitment Percentage multiplied by
the amount of each drawing under a Letter of Credit. Each other
Lender shall pay to Bank of Boston, on demand, its ratable share, in
accordance with its Commitment Percentage, of each such drawing,
without regard to whether the Lenders have any obligation to make
Advances under the Revolving Credit Facility or any Lender shall have
failed or refused to make an Advance in the amount of its Commitment
Percentage of any drawing.
SECTION 2B.3. Letter of Credit Expiration Date. No Letter of
Credit issued under this ARTICLE 2B shall have an expiration date
later than the earlier of (a) the first anniversary of the issuance of
such Letter of Credit and (b) the Termination Date, PROVIDED, that, a
Letter of Credit may provide for automatic extensions of the
expiration date thereof for successive periods of one year (but not
beyond the Termination Date).
SECTION 2B.4. Letter of Credit Fees. The Borrower shall pay to
the Agent for the account of the Lenders such periodic fees for
maintaining any standby Letter of Credit at the rate of 1-1/2% per
annum of the face amount of such Letter of Credit outstanding from
time to time and as to any other type of Letter of Credit, such fee as
Bank of Boston and the Borrower shall agree (which agreement will be
reflected in the application relating to each such Letter of Credit),
but shall pay to Bank of Boston directly and for its own account, on
demand, Bank of Boston's charges for administering each Letter of
Credit, including any fee charged in connection with opening,
transferring or processing drawings under such Letter of Credit.
Letter of Credit fees payable to the Agent for the account of the
Lenders shall be paid quarterly in arrears on the first day of each
January, April, July and October so long as any Letter of Credit is
outstanding.
ARTICLE 3 - GENERAL LOAN PROVISIONS
SECTION 3.1. Interest.
(a) Base Rate Advances. The Borrower shall pay interest
on the unpaid principal amount of each Base Rate Advance for each day
from the day such Advance is made (including, in respect of amounts
outstanding on the Effective Date as "Loans" under the Existing Credit
Agreement, from the date of the last payment of interest on such Loans
under the Existing Credit Agreement) until the date such Advance is
due or converted to an Advance of a different Type, at a rate per
annum equal to the Base Rate, PLUS the Applicable Margin, which rate
shall change contemporaneously with any change in the Base Rate. Such
interest shall be payable in arrears on each Interest Payment Date,
when such Base Rate Advance is due (whether at maturity, by reason of
acceleration or otherwise) and upon any conversion of the principal
amount of such Base Rate Advance (or any portion thereof) into an
Advance of a different Type, on the date of such conversion on the
principal amount so converted.
(b) Eurodollar Advances.
(i) The Borrower shall pay interest on the unpaid
principal amount of each Eurodollar Advance for each Interest
Period applicable thereto, at a rate per annum equal to the
Eurodollar Rate, PLUS the Applicable Margin. Such interest
shall be payable on the last day of such Interest Period and, if
such Interest Period is longer than one month, on each Interest
Payment Date after the first day thereof, and when such
Eurodollar Advance is due (whether at maturity, by reason of
acceleration or otherwise).
(ii) Additional interest on the unpaid principal
amount of each Eurodollar Advance of each Lender shall also be
payable from the date of such Advance until such principal
amount is paid in full, so long as such Lender shall be required
under regulations of the Board of Governors of the Federal
Reserve System to maintain reserves with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities,
at an interest rate per annum equal at all times to the
remainder obtained by subtracting (A) the Eurodollar Rate for
the Interest Period for such Advance from (B) the rate obtained
by dividing such Eurodollar Rate by a percentage (expressed as a
decimal) equal to 1.00 minus the Eurodollar Reserve Percentage
of such Lender for such Interest Period, payable on each date on
which interest is payable on such Advance. Such additional
interest shall be determined by such Lender and notified to the
Borrower through the Agent.
(c) Late Payment, etc. If the Borrower shall fail to pay when
due (whether at maturity, by reason of acceleration or otherwise) all
or any portion of the principal amount of any Advance or if there
shall occur an Event of Default, from and after the date on which the
Agent shall give the Borrower notice thereof, the unpaid principal
amount of each Advance shall no longer bear interest in accordance
with the terms of SECTION 3.1(A) or 3.1(B), as applicable, but shall
bear interest for each day from the date of such failure to pay or
Event of Default, as the case may be, until such failure to pay or
Event of Default shall have been cured or waived, at a rate per annum
equal to 2% per annum above the otherwise applicable interest rate,
payable on demand.
(d) Basis of Computation. The interest rates provided for in
SECTIONS 3.1(A), (B) and (C) shall be computed on the basis of a year
of 360 days and the actual number of days elapsed and shall be
adjusted automatically as of the opening of business on the effective
date of each change in the Base Rate, if applicable.
(e) Maximum Rate. It is not intended by the Agent or the
Lenders, and nothing contained in this Agreement or any Note shall be
deemed, to establish or require the payment of a rate of interest in
excess of the maximum rate permitted by Applicable Law (the "Maximum
Rate"). If, in any month, the Effective Interest Rate, absent such
limitation, would have exceeded the Maximum Rate, then the Effective
Interest Rate for that month shall be the Maximum Rate, and, if in
future months, the Effective Interest Rate would otherwise be less
than the Maximum Rate, then the Effective Interest Rate shall remain
at the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been paid if
the same had not been limited by the Maximum Rate. In the event, upon
payment in full of the Secured Obligations, the total amount of
interest paid or accrued under the terms of this Agreement and the
Notes is less than the total amount of interest which would have been
paid or accrued if the Effective Interest Rate had at all times been
in effect, then the Borrower shall, to the extent permitted by
Applicable Law, pay to the Agent for the account of the Lenders an
amount equal to the excess of (i) the lesser of (A) the amount of
interest which would have been charged if the Maximum Rate had, at all
times, been in effect or (B) the amount of interest which would have
accrued had the Effective Interest Rate, at all times, been in effect
over (ii) the amount of interest actually paid or accrued under this
Agreement and the Notes. In the event any Lender ever receives,
collects or applies as interest any sum in excess of the Maximum Rate,
such excess amount shall be applied to the reduction of the principal
balance of the Secured Obligations, and if no such principal is then
outstanding, such excess or part thereof remaining, shall be paid to
the Borrower.
SECTION 3.2. Agent's Fee and Arrangement Fee. In connection
with the transactions contemplated by this Agreement and the amendment
and restructuring of the credit facilities outstanding under the
Existing Credit Agreement and as compensation to the Agent for its
part therein, and in consideration of the ongoing administration of
the Revolving Credit Facility, the Borrower will pay to Bank of Boston
such fees as are separately agreed to by them.
SECTION 3.3. Closing Fee. In consideration of the
establishment of the facilities and the making of Loans hereunder, the
Borrower shall pay to the Agent on the Effective Date, for the ratable
account of the Lenders a fee in the amount of $81,250, which shall be
fully earned when due and payable and shall not be subject to refund
or rebate by reason of prepayment, acceleration of the maturity of any
Loans upon Default or any other circumstance.
SECTION 3.4. Commitment Fee. In consideration of the holding
available for the use of the Borrower hereunder the Unused Facility,
the Borrower shall pay to the Agent for the ratable account of the
Lenders, a fee which shall accrue and be fully earned at the time due
and payable and shall not be subject to refund or rebate by reason of
prepayment, acceleration of any Loans upon Default or any other
circumstance, on the average daily Unused Facility for each day from
the Effective Date until the Termination Date at the rate of 3/8 of 1%
per annum, payable monthly in arrears on each Interest Payment Date on
the average daily Unused Facility for each day of the calendar month
(or portion thereof) preceding such Interest Payment Date.
SECTION 3.5. Computation of Fees, Etc. All fees stated as a
percentage rate per annum shall be computed on the basis of a year of
360 days and the actual number of days elapsed and are not, and shall
not be deemed to be, interest or a charge for the use of money, but
shall constitute other charges as contemplated by O.C.G.A. 7-4-
2(a)(1).
SECTION 3.6. Voluntary Reductions of Facility. The Borrower
shall have the right, at any time and from time to time, to reduce the
amount of the Unused Facility upon at least three Business Days'
written notice to the Agent, specifying the amount of such reduction,
which shall be an integral multiple of $1,000,000, and the effective
date of such reduction, which shall be a Business Day. On the date
specified in such notice, the Revolving Credit Facility shall
automatically be reduced by the amount specified in such notice (and
each Lender's Commitment shall also automatically be reduced by such
Lender's Commitment Percentage of such reduction) and the Borrower
shall pay to the Agent for the ratable account of the Lenders any
accrued and unpaid commitment fee, determined in accordance with the
provisions of SECTION 3.4, on the amount by which the Revolving Credit
Facility is reduced.
SECTION 3.7. Conversion or Continuation of Advances.
(a) Provided that no Default or Event of Default shall have
occurred and be continuing, the Borrower may convert or continue all
or any part (subject to the restrictions applicable to Borrowings
comprised of each Type of Advance set forth in SECTION 2.1 and to the
provisions of SECTIONS 3.8 and 3.10) of any outstanding Borrowing
which is part of the Revolving Credit Loan or a Term Loan and is
comprised of Advances of one Type (i) into a Borrowing or Borrowings
comprised of Advances of a different Type available hereunder or (ii)
as a Borrowing or Borrowings comprised of Advances of the same Type
for a subsequent Interest Period, in the same aggregate principal
amount, on any Business Day (which, in the case of conversion into or
continuation as a Borrowing comprised of Eurodollar Advances, shall be
the last day of the applicable Interest Period), upon notice given in
accordance with SECTION 3.7(B)).
(b) Whenever the Borrower desires to convert an outstanding
Borrowing into a Borrowing comprised of Advances of a different Type
available hereunder or to continue an outstanding Borrowing comprised
of Eurodollar Advances for a subsequent Interest Period, the Borrower
shall give notice to the Agent (which notice shall be irrevocable) not
later than 10:00 a.m. (Boston time) on the date one Business Day
before the day on which a proposed conversion of a Borrowing into a
Borrowing comprised of Base Rate Advances or three Business Days prior
to the day on which a proposed conversion or continuation of a
Borrowing into or as a Borrowing comprised of Eurodollar Advances is
to be effective (and if the Borrowing to be converted or continued is
comprised of Eurodollar Advances, such effective date shall be the
last day of the Interest Period for such Borrowing). Each such notice
(each a "Notice of Conversion or Continuation") shall (i) identify the
Borrowing to be converted or continued, including the Type of Advances
comprising such Borrowing, the aggregate principal balance thereof
and, if applicable, the last day of the Interest Period therefor,
(ii) specify the effective date of conversion or continuation,
(iii) specify the principal amount of such Borrowing to be converted
or continued and, if converted, the Type or Types of Advances into
which conversion of such principal amount (or specified portions
thereof) is to be made, and (iv) in the case of any conversion into or
continuation as a Borrowing comprised of Eurodollar Advances, the
Interest Period to be applicable to such converted or continued
Borrowing. Each such Notice of Conversion or Continuation shall be
substantially in the form of EXHIBIT G hereto. The Agent may in its
sole and absolute discretion permit any such notice to be given by
telephone, telecopier or telex by an Authorized Officer, in which case
the Borrower shall confirm the same by mailing a written Notice of
Conversion or Continuation to the Agent within 48 hours thereafter.
No provision of this Agreement shall be deemed or construed to permit
the "conversion" of any Term Loan (or portion thereof) into a
Revolving Credit Loan or the reverse.
SECTION 3.8. Duration of Interest Periods; Number of
Borrowings.
(a) Subject to the provisions of the definition of
Interest Period, the duration of each Interest Period applicable to
the Advances comprising a Borrowing shall be as specified in the
relevant Notice of Borrowing or Notice of Conversion or Continuation.
The Borrower shall have the option to elect a subsequent Interest
Period to be applicable to such Borrowing by giving notice of such
election in accordance with the provisions of SECTION 3.7(B).
(b) If the Agent does not receive, in accordance with the
provisions of SECTION 3.7(B), a Notice of Conversion or Continuation
specifying a subsequent Interest Period for any outstanding Borrowing
comprised of Eurodollar Advances, or if, when such Notice must be
given, a Default or Event of Default exists, then the Borrower shall
be deemed to have elected to convert such Borrowing in whole into a
Borrowing comprised of Base Rate Advances on the last day of the
Interest Period applicable to such outstanding Borrowing.
(c) The Borrower may not elect an Interest Period which,
when added to the number of Interest Periods then applicable, would
result in there being, at any one time (and treating all Base Rate
Advances outstanding under the Revolving Credit Facility as one
Borrowing and all Base Rate Advances outstanding under the Term Loan
Facility as one Borrowing), more than eleven Borrowings outstanding.
SECTION 3.9. Voluntary Prepayments; Termination of Agreement.
(a) The Borrower shall have the right, at any time and from
time to time, upon at least two Business Days' notice to the Agent
specifying the date and amount of such prepayment, to prepay any Term
Loan and the Revolving Credit Loan in whole or in part and, if the
Loans are prepaid in full, to terminate this Agreement, without
penalty (it being understood and acknowledged by all parties that
application of Collateral proceeds to repay Advances under the
Revolving Credit Facility pursuant to SECTION 2.3(B) is not and shall
not be deemed to be a voluntary prepayment of the Revolving Credit
Loan for purposes of this SECTION 3.9) but subject to the provisions
of SECTION 3.11; PROVIDED, that any partial prepayment of the Loans
shall be applied first to the prepayment of the principal amount of
Term Loan B, and, after payment in full of the principal amount of
Term Loan B, to the prepayment of the principal amount of Term Loan A,
and, after payment in full of the principal amount of Term Loan A, to
the prepayment of the outstanding principal amount of the Revolving
Credit Loan and all other amounts payable then due under this
Agreement and the Notes; PROVIDED, FURTHER, that if the Loans are
prepaid in whole or in part pursuant to this SECTION 3.9
(i) prior to January 1, 1998, the Borrower shall pay to
the Agent, for the ratable account of the Lenders, on the date
of such prepayment, a fee as liquidated damages therefor and not
as a penalty, as follows:
(A) $650,000 in connection with the
prepayment in full of the Loans from the proceeds of
Indebtedness for Money Borrowed, or
(B) an amount equal to 1% of the principal
amount so prepaid in connection with any prepayment made
from any source other than proceeds of Indebtedness for
Money Borrowed or internal cash flow of the Borrower, and
(ii) on or after January 1, 1998 and prior to
January 1, 2000, an amount equal to 1% of the principal amount
so prepaid.
(b) Each partial prepayment of the Loans shall be in an
aggregate principal amount equal to $500,000 or an integral multiple
of $100,000 in excess thereof and, to the extent such prepayment is a
prepayment of a Term Loan, as applicable, shall be applied to the
principal installments of such Term Loan in inverse order of maturity.
Interest on the amount prepaid, accrued to the prepayment date, and
all other amounts then due and payable by the Borrower to the Agent or
to the Agent for the account of the Lenders under this Agreement or
the Notes shall be paid on such date. Any notice of prepayment given
by the Borrower hereunder shall be irrevocable, and the amount to be
prepaid (including accrued interest thereon) shall be due and payable
on the date, which shall be a Business Day, specified in such notice.
(c) On any date on which the aggregate principal amount of the
Loans is to be prepaid in full or substantially in full, the Borrower
shall also pay to the Agent (i) the principal amount of the Foreign
Facilities, together with interest accrued thereon to the date of such
prepayment, (ii) an amount in cash, to be held by the Agent for the
benefit of the Lenders as cash collateral pursuant to such agreement
as the Agent and the Lenders shall reasonably specify, equal to the
aggregate face amount of all Letters of Credit outstanding (or the
Borrower may satisfy its obligations under this clause (ii) by causing
all outstanding Letters of Credit to be returned to Bank of Boston for
cancellation in a manner and pursuant to agreements and other
documents in form and substance satisfactory to the Agent and the
Lenders), and (iii) any and all other amounts accrued or due and
payable to the Agent and the Lenders hereunder and under the Notes,
including, without being limited to, any and all accrued fees, amounts
payable pursuant to SECTIONS 2B.4, 3.4 and 13.2, any amounts payable
under the separate agreement referred to in SECTION 3.2, and the
applicable prepayment fee determined in accordance with the provisions
of SECTION 3.9(A). Upon receipt by the Agent of an amount equal to
the aggregate unpaid principal amount of all Loans and interest
accrued thereon, an amount equal to the aggregate amount of all
Foreign Facility Debt and accrued interest thereon, an amount equal to
the aggregate stated amount of all outstanding Letters of Credit or
the return of such Letters of Credit, as the case may be, and all such
other amounts, this Agreement shall be terminated and none of the
Agent, the Lenders or the Borrower shall have any further obligations
to any other party hereto except for the Borrower's obligations to the
Agent and the Lenders pursuant to SECTIONS 13.2 and 13.14.
(d) Notwithstanding the foregoing provisions of this SECTION
3.9, if the Majority Lenders shall have determined that Inventory of
the Borrower is not Eligible Inventory solely pursuant to the
provisions of SUBPARAGRAPH (H) of the definition of Eligible Inventory
or that Receivables of the Borrower are not Eligible Receivables
solely pursuant to the provisions of SUBPARAGRAPH (P) of the
definition of Eligible Receivables and (i) the result of such
determination or determinations is to reduce the Borrowing Base to an
amount which is less than 80% of the average monthly principal amount
of the Revolving Credit Loan outstanding during the 12 months
(determined for each such month based on average daily principal
outstanding during such month) immediately preceding the date of such
determination (or of the last of such determinations) and (ii) within
60 days thereafter the Borrower prepays the outstanding principal
amount of the Loans in full, together with accrued interest thereon
and the other amounts required to be paid pursuant to SECTION 3.9(C),
the prepayment fee otherwise required to be paid pursuant to SECTION
3.9(A) shall not be payable.
SECTION 3.10. Changed Circumstances.
(a) In the event that:
(i) on any date on which the Eurodollar Rate would
otherwise be set, Bank of Boston shall have determined in good
faith (which determination shall be final and conclusive) that
adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate, or
(ii) the Majority Lenders shall notify the Agent that
they have determined in good faith (which determination shall be
final and conclusive) that the Eurodollar Rate shall no longer
represent the effective cost to the Majority Lenders of making
or maintaining Eurodollar Advances to be made by them, or
(iii) any Lender shall notify the Agent that it has
determined in good faith (which determination shall be final and
conclusive) that the making or continuation of or conversion of
any Advance of such Lender to a Eurodollar Advance has been made
impracticable or unlawful by (A) the occurrence of a contingency
that materially and adversely affects the interbank Eurodollar
market or (B) compliance by such Lender in good faith with any
Applicable Law or interpretation or change thereof by any
governmental authority charged with the interpretation or
administration thereof or with any request or directive of any
such governmental authority (whether or not having the force of
law);
then, and in any such event, the Agent shall forthwith so notify the
Borrower thereof and:
(A) Until the Agent notifies the
Borrower that the circumstances giving rise to any
notice given pursuant to SECTION 3.10(A) no longer
apply, the obligation of the Lenders to allow
selection by the Borrower of Eurodollar Advances
shall be suspended. If at the time the Agent so
notifies the Borrower, the Borrower has previously
given the Agent a Notice of Borrowing or a Notice of
Conversion or Continuation with respect to one or
more Borrowings to be made as or to be converted into
or continued as Borrowings comprised of Eurodollar
Advances (each, a "Pending Borrowing") but such
Pending Borrowings have not yet been so made,
converted or continued, each such Notice shall be
deemed to be an election by the Borrower of
Borrowings comprised of Base Rate Advances.
(B) On such date as is specified in any
notice to the Borrower from the Agent pursuant to SECTION
3.10(A) (which date shall not be earlier than the date such
notice is given), the Borrower shall prepay the outstanding
principal amount of all Eurodollar Advances, together with
interest thereon and any amount required to be paid
pursuant to SECTION 3.11, or convert all such outstanding
Eurodollar Advances into Base Rate Advances by giving a
Notice of Conversion or Continuation pursuant to SECTION
3.7(B).
(b) In case of any change in law, regulation, treaty or
official directive or the interpretation or application thereof by any
court or by any governmental authority charged with the administration
thereof or the compliance with any guideline or request of any central
bank or other governmental authority (whether or not having the force
of law):
(i) subjects any Lender to any tax with respect to
payments of principal or interest or any other amounts payable
hereunder by the Borrower or otherwise with respect to the
transactions contemplated hereby (except for taxes on the
overall net income of such Lender imposed by the United States
of America or any political subdivision thereof), or
(ii) imposes, modifies or deems applicable any
deposit insurance, reserve, special deposit or similar
requirement against assets held by, or deposits in or for the
account of, or loans by, any Lender (other than such
requirements as are already provided for in SECTION 3.1(B)(II)),
or
(iii) imposes upon any Lender any other condition with
respect to its performance under this Agreement,
and the result of any of the foregoing is to increase the cost to such
Lender, reduce the income receivable by such Lender or impose any
expense upon such Lender with respect to any Advances, such Lender
shall notify the Agent and the Borrower thereof. The Borrower agrees
to pay to such Lender the amount of such increase in cost, reduction
in income or additional expense as and when such cost, reduction or
expense is incurred or determined, upon presentation by such Lender of
a statement of the amount and setting forth such Lender's calculation
thereof, which statement shall be deemed true and correct absent
manifest error, PROVIDED, that no Lender shall be entitled to charge
nor shall the Borrower be obligated to pay any such amount relating to
a period more than 90 days prior to the date on which such statement
is presented.
(c) If any Lender determines that (i) the adoption of or
change in, in each case after the date hereof, any law, rule,
regulation or guideline regarding capital requirements for banks or
bank holding companies, or any change after the date hereof in the
interpretation or application thereof by any governmental authority
charged with the administration thereof, or (ii) compliance by such
Lender with any guideline, request or directive of any such entity
regarding capital adequacy (whether or not having the force of law)
promulgated after the date hereof, has the effect of reducing the
return on such Lender's capital as a consequence of its Commitment to
make Advances hereunder to a level below that which such Lender could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's then-existing policies with respect to
capital adequacy and assuming the full utilization of such Lender's
capital) by any amount deemed by such Lender to be material, then such
Lender shall notify the Agent and the Borrower thereof. The Borrower
agrees to pay to such Lender the amount of such reduction of capital
as and when such reduction is determined, upon presentation by such
Lender of a statement of the amount and setting forth such Lender's
calculation thereof, which statement shall be deemed true and correct
absent manifest error, PROVIDED, that no Lender shall be entitled to
charge nor shall the Borrower be required to pay any such amount
relating to a period more than 90 days prior to the date on which such
statement is presented. In determining such amount, a Lender may use
any reasonable averaging and attribution methods.
SECTION 3.11. Payments Not at End of Interest Period; Failure
to Borrow. If for any reason any payment of principal of Eurodollar
Advances is made other than on the last day of the Interest Period
applicable to the Borrowing comprised of such Advances or the Borrower
fails to borrow or to convert or continue any Borrowing comprised of
Eurodollar Advances after giving a Notice of Borrowing or a Notice of
Conversion or Continuation with respect thereto, then the Borrower
shall pay to the Agent for the ratable account of the Lenders an
amount computed pursuant to the following formula:
L = (R - T) x P x D
360
L = amount payable to the Agent
R = interest rate on Eurodollar Advances comprising such
Borrowing
T = effective interest rate per annum at which any readily
marketable bond or other obligation of the United States,
selected at the Agent's sole discretion, maturing on or
near the last day of the Interest Period applicable to such
Borrowing and in approximately the same amount as such
Borrowing can be purchased by the Agent on the day of such
payment of principal or failure to borrow or convert or
continue
P = the amount of principal prepaid or the amount of the
requested Borrowing
D = the number of days remaining in the applicable
Interest Period as of the date of such payment or the
number of days of the requested Interest Period
The Borrower shall pay such amount upon presentation by the Agent of a
statement setting forth the amount and the Agent's calculation thereof
pursuant hereto, which statement shall be deemed true and correct
absent manifest error.
SECTION 3.12. Manner of Payment.
(a) Each payment (including prepayments) by the Borrower
on account of the principal of or interest on the Loans or of any
other amounts payable to the Agent or to the Agent for the account of
any or all Lenders under this Agreement or any Note shall be made not
later than 12:00 noon (Boston time) on the date specified for payment
under this Agreement to the Agent at the Agent's Office, in Dollars,
in immediately available funds and shall be made without any setoff,
counterclaim or deduction whatsoever. Any payment received on such day
after such time shall be deemed a payment on such date for the
purposes of SECTION 11.1, but for all other purposes shall be deemed
to have been made on the next succeeding Business Day. Settlement
among the Agent and the Lenders will be made in accordance with
SECTION 3.13.
(b) The Borrower hereby irrevocably authorizes each Lender
and each Affiliate of each Lender to charge any account of the
Borrower maintained with such Lender or Affiliate with such amounts as
may be necessary from time to time to pay any Secured Obligations
(whether or not owed to the Agent or such Lender) which are not paid
when due.
(c) If any payment under this Agreement or any Note shall
be specified to be made on a day which is not a Business Day, it shall
be made on the next succeeding Business Day and such extension of time
shall in such case be included in computing interest, if any, in
accordance with such payment, PROVIDED, that if such payment is a
payment of principal of or interest on a Eurodollar Advance and such
extension of time would cause the payment date to fall in the next
calendar month, such payment shall be made on the next preceding
Business Day.
SECTION 3.13. Pro Rata Treatment; Settlement between Agent and
Lenders.
(a) Each Borrowing under the Revolving Credit Facility
shall be made pro rata from the Lenders on the basis of their
respective Commitment Percentages. Each payment or prepayment of
principal and interest on the Loans shall be made to the Agent for the
account of the Lenders, and shall be applied by the Agent, pro rata on
the basis of the respective Commitment Percentages of the Lenders in
effect immediately prior to such payment or prepayment; PROVIDED,
HOWEVER, that if any Lender shall fail or refuse to make available to
the Agent the Advance to be made by such Lender as part of any
Borrowing under the Revolving Credit Facility and the provisions of
SECTION 2.2(C) are not applicable, then all amounts thereafter
received by the Agent for application to repayment of the principal of
or payment of interest on the outstanding Revolving Credit Loan shall
be paid by the Agent (i) as to principal, to the Lender, if any, the
aggregate principal amount of whose outstanding Advances under the
Revolving Credit Facility exceeds such Lender's Commitment Percentage
of the total principal amount of the outstanding Revolving Credit Loan
until such excess is eliminated and (ii) as to interest, to the
Lenders ratably in the same proportion that the Advances under the
Revolving Credit Facility outstanding from each of them bears to the
total outstanding Revolving Credit Loan.
(b) The Agent shall pay to each Lender such Lender's pro
rata share of all payments received by the Agent hereunder in respect
of the principal of, or interest on, the Loans, and such Lender's
share of any other Secured Obligation owed to such Lender, by wire
transfer of same day funds not later than the first Business Day after
such payment is received. Any such amount which is not paid by the
Agent to such Lender on the day such payment is received by the Agent,
provided such payment is received by the Agent prior to 12:00 noon
(Boston time) on such day, shall bear interest for each day until paid
in full at the Federal Funds Effective Rate in effect on such day,
payable by the Agent.
SECTION 3.14. Loan Account.
(a) Each Lender shall open and maintain on its books a
loan account in the Borrower's name. Such loan account shall show as
debits thereto each Advance made by such Lender under this Agreement
and as credits thereto all payments received by such Lender and
applied to repayment or prepayment of the principal of each such
Advance, so that the balance of the loan account at all times reflects
the principal amount due such Lender from the Borrower.
(b) The Agent shall maintain on its books a control
account for the Borrower in which shall be recorded (i) the amount of
each disbursement made hereunder (ii) the amount of any principal or
interest due or to become due from the Borrower hereunder, and (iii)
the amount of any sum received by the Agent hereunder from the
Borrower and each Lender's ratable share thereof. The Agent shall
also maintain on its books a control account for the Borrower in which
shall be recorded the amount of any fees due from the Borrower to the
Agent and each Lender hereunder and the amount of any fees received by
the Agent from the Borrower and each Lender's share thereof.
(c) The entries made in the accounts pursuant to
SECTIONS 3.14(A) and (B) shall be PRIMA FACIE evidence, in the absence
of manifest error, of the existence and amounts of the obligations of
the Borrower therein recorded and in case of discrepancy between such
accounts, in the absence of manifest error, the accounts maintained
pursuant to SECTION 3.14(B) shall be controlling.
(d) The Agent on behalf of the Lenders will account to the
Borrower monthly with a statement of Borrowings, of the aggregate
outstanding principal balance, if any, of the Loans and of charges and
payments made pursuant to this Agreement, and such account rendered by
the Agent shall be deemed final, binding and conclusive unless the
Agent is notified by the Borrower in writing to the contrary within 20
days after the date the account was so rendered. Such notice by the
Borrower shall be deemed an objection only to those items specifically
objected to therein. Failure of the Agent to render such account
shall in no way affect its or any Lender's rights hereunder.
ARTICLE 4 - CONDITIONS PRECEDENT
SECTION 4.1. Conditions Precedent to Effectiveness.
Notwithstanding any other provision of this Agreement, this Agreement
shall not become effective and the Lenders shall not be obligated to
make the Advances under the Term Loan Facility contemplated by SECTION
2A.1 or under the Revolving Credit Facility until each of the
following conditions has been fulfilled prior to or contemporaneously
with the making of such Advances:
(a) Closing Documents. The Agent shall have received each
of the following documents, all of which shall be satisfactory in form
and substance to the Agent and its special counsel and the Lenders:
(i) certified copies of the certificate of
incorporation and by-laws of the Borrower as in effect on the
Effective Date,
(ii) certified copies of all corporate action,
including stockholder or partner approval, if necessary, taken by
the Borrower to authorize the execution, delivery and performance
of this Agreement, the Loan Documents and the Borrowings under
this Agreement,
(iii) certificates of incumbency and specimen signa
tures with respect to each of the Authorized Officers of the
Borrower or other Persons authorized to execute and deliver this
Agreement and the Loan Documents on behalf of the Borrower or
other Person executing any document to be delivered in connection
with this Agreement and to request Borrowings under this
Agreement,
(iv) a certificate evidencing the good standing of
the Borrower in the jurisdiction of its incorporation and in
each other jurisdiction in which it is qualified to transact
business,
(v) copies of all the financial statements referred
to in SECTION 5.1(N) and meeting the requirements thereof,
(vi) signed opinions of Watson & Dana, counsel for
the Borrower, and of Gordon Altman Butowsky Weitzen Shalov &
Wein, special New York counsel for the Borrower, substantially in
the form of EXHIBITS C-1 and C-2, respectively, and opining as to
such other matters in connection with this Agreement as the Agent
or its special counsel may reasonably request,
(vii) any Financing Statements (including amendments
thereto) necessary or appropriate in connection with the
transactions contemplated by this Agreement, duly executed by the
Borrower, and searches of the Uniform Commercial Code (or
equivalent) records of each office in which the filing of a
Financing Statement naming the Borrower as debtor and the Agent
for the benefit of the Lenders as secured party is necessary or
appropriate to perfect the Security Interest as security for the
Secured Obligations, evidencing the filing of such Financing
Statements and no others affecting the Collateral,
(viii) copies of a modification agreement with
respect to each Mortgage, duly executed and delivered by the
Borrower and evidence of the recording of such instrument in the
appropriate jurisdiction for the recording of a mortgage (or
equivalent) on the Real Estate subject thereto,
(ix) as to each Mortgage, a fully paid endorsement to
each of the mortgagee title insurance policies issued to the
Agent in respect of such Mortgage, or, in each case, at the
option of the Agent, unconditional commitments for the issuance
thereof with all requirements and conditions to the issuance of
the final policy or endorsement, as the case may be, deleted or
marked satisfied, issued by a title insurance company
satisfactory to the Agent, each in an amount equal to not less
than the fair market value of the Real Estate subject to the
Mortgage insured thereby, insuring each Mortgage, as modified, to
create a valid first Lien on, and security title to, all Real
Estate described therein with no exceptions which the Agent shall
not have approved in writing and no survey exceptions,
(x) copies of each of the other Loan Documents duly
executed by the parties thereto, together with evidence
satisfactory to the Agent of the due authorization and binding
effect of each such Loan Document on such party,
(xi) a certification from the Borrower as to such
factual matters as shall be requested by the Agent,
(xii) certificates of insurance relating to (i) each
of the policies of insurance covering any of the Collateral
together with loss payable clauses which comply with the terms of
SECTION 7.9(B) and (ii) each of the policies of insurance
required by the Mortgages, in each case together with loss
payable clauses satisfactory to the Agent,
(xiii) a Certificate of the President or Chief Finan
cial Officer of the Borrower stating that, to the best of his
knowledge and based on an examination sufficient to enable him to
make an informed statement,
(A) all of the representations and
warranties made or deemed to be made under this Agreement
are true and correct as of the Effective Date, both with and
without giving effect to the Loans to be made at such time
and the application of the proceeds thereof, and
(B) no Default or Event of Default exists,
(xiv) a letter from the Borrower to the Agent request
ing the Advances under the Term Loan Facility and, if any, the
Revolving Credit Facility contemplated to be made on the
Effective Date and specifying the method of disbursement,
(xv) duly executed amendments or modifications to or
confirmations of the Agency Account Agreements, the Patent
Assignment, the Trademark Assignments, and the Pledge Agreement
duly executed and delivered by the Borrower, as the Agent may
reasonably request, each in form and substance satisfactory to
the Agent and the Lenders,
(xvi) such assignments of lease and landlord's waiver
and consent agreements, or confirmations thereof, duly executed
on behalf of each landlord of real property on which any
Collateral is located, as the Agent may request,
(xvii) a Borrowing Base Certificate prepared as of
the last day of the month immediately preceding the Effective
Date, and
(xviii) such other documents and instruments as the
Agent or any Lender may reasonably request.
(b) Notes. Each Lender shall have received a Revolving
Credit Note and Term Notes complying with the terms of SECTIONS 2.4
AND 2A.4, respectively,
(c) No Material Adverse Change. As of the Effective Date,
no change shall have occurred which is materially adverse to the
assets, liabilities, businesses, operations, condition (financial or
otherwise) or prospects of the Borrower and its Consolidated
Subsidiaries taken as a whole from those presented by the audited
financial statements for the Borrower and its Consolidated
Subsidiaries as of September 30, 1994 and for the fiscal year of the
Borrower ended on such date, copies of which have been delivered to
Lenders, and the Agent shall be provided with a certificate of the
Chief Financial Officer of the Borrower to such effect.
(d) No Litigation. As of the Effective Date, no action or
proceeding, excluding those listed on SCHEDULE 5.1(J), shall have been
instituted against the Borrower or any of its Subsidiaries in which an
adverse outcome is likely to have a Materially Adverse Effect on the
Borrower and its Subsidiaries taken as a whole and the Agent shall be
provided with a certificate of the Chief Financial Officer of the
Borrower to such effect.
(e) Commitment Percentages. The Lenders shall have taken
such actions and sold or purchased such amounts of the Revolving
Credit Loans as shall satisfy the Agent that the principal amount of
the Revolving Credit Loans outstanding to each Lender is in an amount
equal to such Lender's Commitment Percentage times the aggregate
outstanding principal balance of such Revolving Credit Loans.
SECTION 4.2. Subsequent Borrowings.
(a) At the time of making of each Borrowing:
(i) all of the representations and
warranties made or deemed to be made under SECTIONS 5.1(A)
(insofar as it pertains to continued existence of the Borrower),
5.1(G), 5.1(H), 5.1(J), 5.1(O), 5.1(Q) AND 5.1(S) shall be true
and correct at such time both with and without giving effect to
the Borrowing to be made at such time and the application of the
proceeds thereof, and
(ii) the corporate actions of the Borrower
referred to in SECTION 4.1(A)(II) shall remain in full force and
effect and the incumbency of the officers or other persons
authorized to act on behalf of the Borrower shall be as stated in
the certificates of incumbency delivered pursuant to SECTION
4.1(A)(III) or as subsequently modified and reflected in a
certificate of incumbency delivered to the Agent.
(b) Each Notice of Borrowing shall constitute a
certification to the effect set forth in CLAUSES (A)(I) and (II) above
by the Borrower to the Agent for the benefit of the Lenders and the
Agent may, without waiving either condition, consider the conditions
specified in SECTION 4.2(A)(I) and (II) fulfilled and a certification
by the Borrower to such effect made, if no written notice to the
contrary is received by the Agent prior to the making of the Borrowing
then to be made.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BORROWER
SECTION 5.1. Representations and Warranties. The Borrower
represents and warrants to the Agent and each Lender as follows:
(a) Organization; Power; Qualification. The Borrower is
duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, has the power and authority
to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and
authorized to do business in each jurisdiction in which the failure to
be so qualified would have a Materially Adverse Effect on the
Borrower. The jurisdictions in which the Borrower is qualified to do
business are listed on SCHEDULE 5.1(A).
(b) Subsidiaries and Capital Structure. SCHEDULE 5.1(B)
correctly sets forth the name of each Subsidiary of the Borrower, its
jurisdiction of incorporation, the name of its immediate parent or
parents, and the percentage of its issued and outstanding securities
owned by the Borrower or any other Subsidiary of the Borrower and
indicating whether such Subsidiary is a Consolidated Subsidiary.
Except as set forth on SCHEDULE 5.1(B),
(i) no Subsidiary of the Borrower has issued any
securities convertible into shares of such Subsidiary's capital stock
or any options, warrants or other rights to acquire any shares or
securities convertible into such shares,
(ii) the outstanding stock and securities of each
such Subsidiary are owned by the Borrower or a Wholly Owned Subsidiary
of the Borrower, or by the Borrower and one or more of its Wholly
Owned Subsidiaries, free and clear of all Liens, warrants, options and
rights of others of any kind whatsoever, and
(iii) the Borrower has no Subsidiaries.
The outstanding capital stock of the Borrower and each of its
Subsidiaries has been duly and validly issued and is fully paid and
nonassessable by the issuer, and the owners of such shares of capital
stock of the Borrower and each of its Subsidiaries are set forth on
SCHEDULE 5.1(B). The sole general partner of Synthetic L.P. is SI
Management and the sole general partner of SI Management is Synthetic
Management.
(c) Authorization of Agreement and Loan Documents and
Borrowing. Each Loan Party has the right and power, and has taken all
necessary action to authorize it, to execute, deliver and perform the
Loan Documents to which it is a party in accordance with their
respective terms and to make Borrowings hereunder. This Agreement and
each of the Loan Documents have been duly executed and delivered by
the duly Authorized Officers of the appropriate Loan Party and each
is, or each when executed and delivered in accordance with this
Agreement will be, a legal, valid and binding obligation of such Loan
Party, enforceable in accordance with its terms.
(d) Compliance of Agreement, Loan Documents and Borrowing
with Laws, etc. Except as provided in SCHEDULE 5.1(D), the execution,
delivery and performance of this Agreement and each of the Loan
Documents in accordance with their respective terms and the Borrowings
hereunder do not and will not, by the passage of time, the giving of
notice or otherwise,
(i) require any Government Approval or violate any
Applicable Law relating to the Borrower or any Subsidiary of the
Borrower,
(ii) conflict with, result in a breach of or
constitute a default under the certificate of incorporation or by-
laws of the Borrower or any Subsidiary of the Borrower, any
indenture, agreement or other instrument to which the Borrower or
any Subsidiary of the Borrower is a party or by which the
Borrower or any Subsidiary of the Borrower or any property of the
Borrower or any Subsidiary of the Borrower may be bound or any
Governmental Approval relating to the Borrower or any Subsidiary
of the Borrower, or
(iii) result in or require the creation or imposition
of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower or any Subsidiary of the
Borrower other than the Security Interest.
(e) Business. The Borrower is presently engaged
principally in the business of converting polypropylene resins into
woven and non-woven non-apparel products.
(f) Compliance with Law; Governmental Approvals. Except
as set forth in SCHEDULE 5.1(F), the Borrower and each of its
Subsidiaries (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in
full force and effect, is final and not subject to review on appeal
and is not the subject of any pending or threatened attack by direct
or collateral proceeding, except as would not, singly or in the
aggregate, cause a Default or Event of Default or have a Materially
Adverse Effect on the Borrower or such Subsidiary and in respect of
which adequate reserves have been established on the books of the
Borrower or such Subsidiary, and (ii) is in compliance with each
Governmental Approval and in compliance with all other Applicable Law
relating to it, except for such noncompliance which would not, singly
or in the aggregate, cause a Default or Event of Default or have a
Materially Adverse Effect on the Borrower or such Subsidiary and in
respect of which adequate reserves have been established on the books
of the Borrower or such Subsidiary.
(g) Titles to Properties. Except as set forth in SCHEDULE
5.1(G), the Borrower and each Subsidiary has good, marketable and
legal title to, or a valid leasehold interest in, its real properties
and valid and legal title to all personal property and assets,
including but not limited to, those reflected on the balance sheet
delivered pursuant to SECTION 5.1(N), except those which have been
disposed of by the Borrower or such Subsidiary subsequent to such date
in the ordinary course of business.
(h) Liens. Except for Permitted Liens (including Existing
Liens set forth on SCHEDULE 5.1(H)), none of the respective properties
and assets of the Borrower or its Subsidiaries is, as of the Agreement
Date, subject to any Lien. No financing statement under the Uniform
Commercial Code or other instrument evidencing a Lien which names the
Borrower or any Subsidiary as debtor (other than the Financing
Statements) which has not been terminated has been filed in any State
or other jurisdiction and neither the Borrower nor any Subsidiary has
signed any such financing statement or other instrument or any
security agreement authorizing any secured party thereunder to file
any such financing statement or instrument, except to perfect those
Liens listed on SCHEDULE 5.1(H).
(i) Indebtedness and Guarantees. SCHEDULE 5.1(I) is a
complete and correct listing of all (i) Indebtedness for Money
Borrowed and (ii) Guarantees of the Borrower and each of its
Subsidiaries as of the Agreement Date. The Borrower and each
Subsidiary has performed and is in compliance with all of the terms of
such Indebtedness and Guarantees and all instruments and agreements
relating thereto, and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute
such a default or event of default, exists as of the Agreement Date
with respect to any such Indebtedness or Guarantee.
(j) Litigation. Except as set forth on SCHEDULE 5.1(J),
there are no actions, suits or proceedings pending (nor, to the
knowledge of the Borrower, are there any actions, suits or proceedings
threatened, nor is there any basis therefor) against or in any other
way relating adversely to or affecting the Borrower or any Subsidiary
of the Borrower or any of its respective properties in any court or
before any arbitrator of any kind or before or by any governmental
body, except actions, suits or proceedings of the character normally
incident to the kind of business conducted by the Borrower and such
Subsidiaries which, if adversely determined, would not singly or in
the aggregate (together with those described in SCHEDULE 5.1(J)) have
a Materially Adverse Effect on the Borrower or any such Subsidiary and
there are no strikes or walkouts in progress relating to any labor
contracts to which the Borrower or any such Subsidiary is a party.
(k) Patents and Trademarks. The Borrower owns or
possesses all patents, patent rights or licenses, patent applications,
trademarks, trademark rights, trade names, trade name rights, copy
rights and rights with respect to the foregoing which are required to
conduct the business of the Borrower and its Subsidiaries as now and
presently planned to be conducted without conflict with the rights of
others and SCHEDULE 5.1(K) lists all patents and trademarks owned by
the Borrower on the Agreement Date or to be acquired and owned on the
Effective Date.
(l) Tax Returns and Payments. All United States federal,
state and local as well as foreign national, provincial and local, tax
returns of the Borrower and each Subsidiary of the Borrower required
by Applicable Law to be filed have been duly filed, and all federal,
state foreign national, provincial and local taxes, assessments and
other governmental charges or levies upon the Borrower and each
Subsidiary of the Borrower and its respective property, income,
profits and assets which are due and payable have been paid, except
any such nonpayment which is at the time permitted under SECTION 8.6.
Federal income tax returns for the Borrower and its Consolidated
Subsidiaries have been examined and reported on by the Internal
Revenue Service (or closed by applicable statutes), and all
deficiencies satisfied as reflected on SCHEDULE 5.1(L). Foreign
national and provincial tax returns of the Foreign Subsidiaries have
been settled and agreed with the foreign taxing authorities as
reflected on SCHEDULE 5.1(L). The charges, accruals and reserves on
the books of the Borrower and its Subsidiaries in respect of federal,
state, foreign national, provincial and local taxes for all fiscal
years and portions thereof since the organization of such companies
are in the judgment of the Borrower adequate, and the Borrower knows
of no reason to anticipate any additional assessments for any of such
years which, singly or in the aggregate, might have a Materially
Adverse Effect on the Borrower or its Subsidiaries.
(m) Burdensome Provisions. Except as set forth on
SCHEDULE 5.1(M), neither the Borrower nor any Subsidiary of the
Borrower is a party to any indenture, agreement, lease or other
instrument, or subject to any charter or corporate restriction,
Governmental Approval or Applicable Law compliance with the terms of
which might have a Materially Adverse Effect on the Borrower or such
Subsidiary.
(n) Financial Statements. The Borrower has furnished to
the Agent and each Lender copies of the audited Consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of
September 30, 1994 and the related audited Consolidated statements of
income, cash flow and shareholders' equity of the Borrower and its
Consolidated Subsidiaries for the fiscal year of the Borrower ended on
such date, certified, without qualification, by Deloitte & Touche.
Such financial statements are complete and correct, and present fairly
in accordance with GAAP the financial position of the Borrower and its
Consolidated Subsidiaries as at, and results of operations of the
Borrower and its Consolidated Subsidiaries for the periods ended on,
the respective dates thereof. Except as disclosed or reflected in
such financial statements and except as disclosed in writing to the
Lenders prior to the Effective Date, as at the Effective Date the
Borrower had no material liabilities, contingent or otherwise, and
there were no material unrealized or anticipated losses of the
Borrower.
(o) Adverse Change. Since September 30, 1994,
(i) no material adverse change in the business,
assets, liabilities, financial condition, results of operations
or business prospects of the Borrower and its Subsidiaries taken
as a whole has occurred, and
(ii) no event has occurred or failed to occur which
has had, or may have, a Materially Adverse Effect on the Borrower
and its Subsidiaries taken as a whole.
(p) ERISA. Except as set forth on SCHEDULE 5.1(P), as
supplemented from time to time, the Borrower has no Plans. Each Plan
is in compliance with ERISA in all material respects. No material
liability to the PBGC or to a Multiemployer Plan has been, or is
expected by the Borrower to be, incurred by the Borrower.
(q) Absence of Defaults. Neither the Borrower nor any
Subsidiary of the Borrower is in default under its certificate of
incorporation, charter, other incorporation documents or by-laws and
no event has occurred, which has not been remedied, cured or waived,
(i) which constitutes a Default or an Event of
Default, or
(ii) which constitutes, or which with the passage of
time or giving of notice or both would constitute, a default or
event of default by the Borrower or any Subsidiary of the
Borrower under any material agreement (other than this Agreement)
or judgment, decree or order to which the Borrower or any
Subsidiary of the Borrower is a party or by which the Borrower or
any Subsidiary of the Borrower or any of their respective
properties may be bound, except, in the case only of any such
agreement, for alleged defaults which are being contested in good
faith by appropriate proceedings and with respect to which
adequate reserves have been established on the books of the
Borrower or the relevant Subsidiary.
(r.) Accuracy and Completeness of Information. All
written information, reports and other papers and data produced by or
on behalf of the Borrower and furnished to the Agent were, to the best
of the Borrower's knowledge, at the time the same were so furnished,
complete and correct in all material respects, to the extent necessary
to give the recipient a true and accurate knowledge of the subject
matter. No fact is known to the Borrower which has had, or may in the
future have (so far as the Borrower can foresee), a Materially Adverse
Effect upon the Borrower and its Subsidiaries taken as a whole which
has not been set forth in the financial statements referred to in
SECTION 5.1(N) or in such information, reports or other papers or data
or otherwise disclosed in writing to the Agent prior to the Agreement
Date. No document furnished or written statement made to the Agent in
connection with the negotiation, preparation or execution of this
Agreement or any of the Loan Documents contains or will contain any
untrue statement of a fact material to the creditworthiness of the
Borrower or its Subsidiaries or omits or will omit to state a material
fact necessary in order to make the statement contained therein not
misleading.
(s) Solvency. In each case after giving effect to the
Indebtedness represented by the Loans outstanding and to be incurred,
the Senior Subordinated Debt and the other transactions contemplated
by this Agreement, the Borrower is solvent, having assets of a fair
salable value which exceeds the amount required to pay its debts and
the Borrower is able to and anticipates that it will be able to meet
its debts as they mature and has adequate capital to conduct the
business in which it is or proposes to be engaged.
(t) Receivables.
(i) Status. The Borrower has no knowledge of any
fact or circumstance not disclosed to the Agent in writing which
would impair the validity or collectibility of any Receivable.
(ii) Principal Executive Offices. The principal
executive office of the Borrower and the books and records
relating to the Receivables are located at the address or
addresses set forth on SCHEDULE 5.1(T) and, except as shown on
such schedule, have been located there for the five years
immediately preceding the Agreement Date or for the duration of
such Person's existence, whichever is less.
(u) Inventory.
(i) Condition. All Inventory is in good condition,
meets all standards imposed by any governmental agency, or
department or division thereof, having regulatory authority over
such goods, their use or sale, and is currently either usable or
salable in the normal course of the Borrower's business, except
to the extent reserved against in the financial statements
referred to in SECTION 5.1(N) or delivered pursuant to ARTICLE 9.
(ii) Location. All Inventory is located on the
premises set forth on SCHEDULE 5.1(U) or is Inventory in transit
to one of such locations, except as otherwise disclosed in
writing to the Agent, and has been so located for the last five
years.
(v) Equipment. All Equipment of the Borrower is in good
order and repair in all material respects and is located on the
premises set forth on SCHEDULE 5.1(V) and no Equipment of the Borrower
has been located on other premises during the last five years.
(w) Real Property. The Borrower owns no real property
other than the Real Estate and leases no real property other than that
described on SCHEDULE 5.1(W) and, except as otherwise disclosed on
SCHEDULE 5.1(W) such Real Property and leaseholds constitute all of
the real property employed in the business of the Borrower.
(x) Corporate and Fictitious Names. Except as otherwise
disclosed on SCHEDULE 5.1(X), during the five-year period preceding
the Agreement Date, neither the Borrower nor any predecessor thereof
has been known as or used any corporate or fictitious name other than
the corporate name on the Effective Date.
(y) Federal Regulations. Neither the Borrower nor any of
its Subsidiaries is engaged or will engage, principally or as one of
its important activities, in the business of extending credit for the
purposes of "purchasing" or "carrying" any "margin stock" (as each of
the quoted terms is defined or used in Regulations G and U of the
Board of Governors of the Federal Reserve System). No part of the
proceeds of any of the Loans will be used for so purchasing or
carrying margin stock or for any purpose which violates, or which
would be inconsistent with, the provisions of Regulation G, T, U or X
of such Board of Governors. If requested by any Lender or the Agent,
the Borrower will furnish to the Agent, with a counterpart for each
Lender, a statement in conformity with the requirements of said
Regulation G, T, U or X to the foregoing effect.
(z) Investment Company Act. The Borrower is not an
"investment company" or a company "controlled" by an "investment
company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended).
(aa) Hazardous Waste and Substances; Environmental
Requirements. Without limiting the generality of SECTION 5.1(F), the
Borrower is in compliance with all Environmental Laws and occupational
health and safety laws applicable to the Borrower or its properties,
including the Real Estate. The Borrower shall promptly notify the
Agent of its receipt of any notice of a violation of any such law,
standard or regulation. The Borrower hereby agrees to indemnify and
hold the Agent and each of the Lenders harmless from all loss, cost,
damage, claim and expense incurred by the Agent or such Lender on
account of the Borrower's failure to perform the obligations of this
subparagraph.
SECTION 5.2. Survival of Representations and Warranties, Etc.
All representations and warranties set forth in this ARTICLE 5 and all
statements contained in any certificate, financial statement, or other
instrument, delivered by or on behalf of the Borrower pursuant to or
in connection with this Agreement or any of the Loan Documents
(including but not limited to any such made in or in connection with
any amendment thereto) shall constitute representations and warranties
made under this Agreement. All representations and warranties made
under this Agreement shall (unless otherwise provided) be made or
deemed to be made at and as of the Agreement Date and at and as of the
Effective Date and to the extent provided in SECTION 4.2(B) as of the
date of each Borrowing made after the Effective Date. All
representations and warranties made or deemed to be made under this
Agreement shall survive and not be waived by the execution and
delivery of this Agreement, any investigation made by or on behalf of
the Agent or any Lender, or any Borrowing hereunder.
ARTICLE 6 - SECURITY INTEREST
SECTION 6.1. Security Interest.
(a) To secure the payment, observance and performance of
the Secured Obligations, the Borrower hereby confirms the mortgage,
pledge and assignment pursuant to the Existing Credit Agreement and re-
mortgages, re-pledges and re-assigns all of the Collateral to the
Agent on behalf, and for the account, of the Lenders and confirms the
grant pursuant to the Existing Credit Agreement and re-grants to the
Agent on behalf, and for the account, of the Lenders a continuing
security interest in, and a continuing Lien upon, all of the
Collateral.
(b) As additional security for all of the Secured
Obligations, the Borrower hereby confirms the grant pursuant to the
Existing Credit Agreement and re-grants to the Agent on behalf, and
for the account, of the Lenders a security interest in, and assigns to
the Agent on behalf, and for the account, of the Lenders all of the
Borrower's right, title and interest in and to, any deposits or other
sums at any time credited by or due from each Lender, or Affiliate of
such Lender, to the Borrower, or credited by or due from any
participant to the Borrower, with the same rights therein as if the
deposits or other sums were credited by or due from such Lender. The
Borrower hereby authorizes each Lender and each Affiliate of each
Lender and each participant to pay or deliver to the Agent for the
account of the Lenders, without any necessity on the Agent's or any
Lender's part to resort to other security or sources of reimbursement
for the Secured Obligations, at any time upon the occurrence of any
Event of Default or in the event that the Agent on behalf of the
Lenders should make demand for payment hereunder and without further
notice to the Borrower (such notice being expressly waived), any of
the aforesaid deposits (general or special, time or demand,
provisional or final) or other sums for application to any Secured
Obligation, irrespective of whether any demand has been made or
whether such Secured Obligation is mature, and the rights given the
Agent, the Lenders, their Affiliates and participants hereunder are
cumulative with such Person's other rights and remedies, including
other rights of set-off. The Agent will promptly notify the Borrower
of its receipt of any such funds for application to the Secured
Obligations, but failure to do so will not affect the validity or
enforceability thereof. The Agent may give notice of the above grant
of a security interest in and assignment of the aforesaid deposits and
other sums, and authorization to, and make any suitable arrangements
with, any such Lender, Affiliate or participant of a Lender for
effectuation thereof, and the Borrower hereby irrevocably appoints the
Agent as its attorney to collect any and all such deposits or other
sums to the extent any such payment is not made to the Agent or any
Lender by such Lender, Affiliate or participant.
SECTION 6.2. Continued Priority of Security Interest.
(a) The Security Interest granted by the Borrower shall at
all times be valid, perfected and enforceable against the Borrower and
all third parties in accordance with the terms of this Agreement, as
security for the Secured Obligations, and the Collateral shall not at
any time be subject to any Liens that are prior to, on a parity with
or junior to the Security Interest, other than Permitted Liens.
(b) The Borrower shall, at its sole cost and expense, take
all action that may be necessary or desirable, or that the Agent may
reasonably request, so as at all times to maintain the validity,
perfection, enforceability and rank of the Security Interest in the
Collateral in conformity with the requirements of SECTION 6.2(A), or
to enable the Agent and the Lenders to exercise or enforce their
rights hereunder, including but not limited to:
(i) paying all taxes, assessments and other claims
lawfully levied or assessed on any of the Collateral, except to
the extent that such taxes, assessments and other claims
constitute Permitted Liens,
(ii) obtaining, after the Agreement Date, landlords',
mortgagees' or mechanics' releases, subordinations or waivers,
(iii) delivering to the Agent, endorsed or accom
panied by such instruments of assignment as the Agent may
specify, and stamping or marking, in such manner as the Agent may
specify, any and all chattel paper, instruments, letters and
advices of guaranty and documents evidencing or forming a part of
the Collateral, and
(iv) executing and delivering financing statements,
pledges, designations, mortgages, deeds to secure debt, deeds of
trust, hypothecations, notices and assignments, in each case in
form and substance satisfactory to the Agent, relating to the
creation, validity, perfection, maintenance or continuation of
the Security Interest under the Uniform Commercial Code or other
Applicable Law.
(c) The Agent is hereby authorized to file one or more
financing or continuation statements or amendments thereto without the
signature of or in the name of the Borrower for any purpose
contemplated in this SECTION 6.2. The Agent will give the Borrower
notice of the filing of any such statements or amendments, which
notice shall specify the locations where such statements or amendments
were filed. A carbon, photographic, xerographic or other reproduction
of this Agreement or of any of the Security Documents or of any
financing statement filed in connection with this Agreement is
sufficient, to the extent permitted by law, as a financing statement.
(d) The Borrower shall mark its books and records as
directed by the Agent and as may be necessary or appropriate to
evidence, protect and perfect the Security Interest and shall cause
its financial statements to reflect the Security Interest.
ARTICLE 7 - COLLATERAL COVENANTS
Until this Agreement has been terminated and all the Secured
Obligations have been irrevocably paid in full, unless the Majority
Lenders shall otherwise consent in the manner provided in SECTION
13.12:
SECTION 7.1. Collection of Receivables.
(a) The Borrower will cause all moneys, checks, notes,
drafts and other payments relating to or constituting proceeds of
Receivables, or of any other Collateral, to be forwarded to a Lockbox
for deposit in an Agency Account in accordance with the procedures set
out in the corresponding Agency Account Agreement, and in particular
the Borrower will:
(i) advise each Account Debtor to address all
remittances with respect to amounts payable on account of any
Receivables to a specified Lockbox, and
(ii) stamp all invoices relating to any such amounts
with a legend satisfactory to the Agent indicating that payment
is to be made to the Borrower via a specified Lockbox.
(b) Each Agency Account Agreement shall provide that all
deposits in each Agency Account be transmitted daily by wire transfer
or depository transfer check in accordance with procedures set forth
in such Agency Account Agreement to the Agent at the Agent's Office:
(i) for credit on account of the Secured Obligations,
as provided in SECTIONS 2.3(C), 11.2 AND 11.4, such credits to be
entered as of the Business Day after receipt and to be
conditional upon final payment in cash or solvent credits of the
items giving rise to them, and
(ii) with respect to the balance, so long as no
Default or Event of Default has occurred and is continuing, for
transfer by wire transfer or depository transfer check to the
Controlled Disbursement Account or, in the absence of a
Controlled Disbursement Account, to the Designated Deposit
Account.
(c) Any moneys, checks, notes, drafts or other payments
referred to in SUBSECTION (A) of this SECTION 7.1 which are received
by or on behalf of the Borrower will be held in trust for the Agent
and will be delivered to a Clearing Bank, as promptly as possible, in
the exact form received, together with any necessary endorsements for
deposit in the Agency Account maintained with such Clearing Bank and
processing in accordance with the terms of the corresponding Agency
Account Agreement.
SECTION 7.2. Verification and Notification. The Agent shall
have the right,
(a) at any time and from time to time, in the name of the
Agent, the Lenders or the Borrower, to verify the validity, amount or
any other matter relating to any Receivables by mail, telephone,
telegraph or otherwise, and
(b) from and after the occurrence of a Default or Event of
Default, to notify the Account Debtors or obligors under any
Receivables of the assignment of such Receivables to the Agent on
behalf of the Lenders and to direct such Account Debtor or obligors to
make payment of all amounts due or to become due thereunder directly
to the Agent on behalf of the Lenders and, upon such notification and
at the expense of the Borrower, to enforce collection of any such
Receivables, and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as the Borrower
might have done.
SECTION 7.3. Disputes, Returns and Adjustments.
(a) In the event any amounts due and owing under any
Receivable for an amount in excess of $200,000 are in dispute between
the Account Debtor and the Borrower, the Borrower shall provide the
Agent with prompt written notice thereof.
(b) The Borrower shall notify the Agent promptly of all
material returns and credits in respect of any Receivables which
notice shall specify the Receivables affected.
(c) The Borrower may, in the ordinary course of business
and prior to a Default or an Event of Default, grant any extension of
time for payment of any Receivable or compromise, compound or settle
the same for less than the full amount thereof, or release wholly or
partly any Person liable for the payment thereof, or allow any credit
or discount whatsoever thereon, PROVIDED that (i) no such action
results in the reduction of more than $100,000 in the amount payable
with respect to any Receivable, and (ii) the Agent is promptly
notified of the amount of any such adjustments in excess of $100,000
and the Receivable affected thereby.
SECTION 7.4. Invoices.
(a) The Borrower will not use any invoices except invoices
in the forms delivered to the Agent prior to the Agreement Date,
unless the Borrower shall have given the Agent 30 days prior notice of
their intended use.
(b) Upon the request of the Agent, the Borrower shall
deliver to the Agent copies of customers' invoices or the equivalent,
original shipping and delivery receipts or other proof of delivery,
customers' statements, the original copy of all documents, including,
without limitation, repayment histories and present status reports,
relating to Receivables and such other documents and information
relating to the Receivables as the Agent shall specify.
SECTION 7.5. Delivery of Instruments. In the event any
Receivable becomes evidenced by a promissory note, trade acceptance or
any other instrument for the payment of money, the Borrower will
immediately thereafter deliver such instrument to the Agent,
appropriately endorsed to the Agent on behalf of the Lenders.
SECTION 7.6. Sales of Inventory. All sales of Inventory will
be made in compliance with all requirements of Applicable Law.
SECTION 7.7. Work in Process. The Security Interest in the
Inventory shall continue through all stages of manufacture (to the
extent, in the case of goods being manufactured for the Borrower by
others, of the Borrower's interest in such goods) and shall, without
further act, attach to raw materials, to work in process, to the
finished goods and to the proceeds resulting from the sale or other
disposition thereof and to all Inventory which is returned to the
Borrower by customers or is otherwise recovered.
SECTION 7.8. Ownership and Defense of Title.
(a) Except for Permitted Liens, the Borrower shall at all
times be the sole owner of each and every item of Collateral and shall
not create any lien on, or sell, lease, exchange, assign, transfer,
pledge, hypothecate, grant a security interest or security title in or
otherwise dispose of, any of the Collateral or any interest therein,
except for sales of Inventory in the ordinary course of business, for
cash or on open account or on terms of payment ordinarily extended to
its customers, except for the disposition of Equipment no longer used
or deemed useful in the business of the Borrower in an amount of up to
$250,000 in aggregate fair market value (net of the cost of any
substitute or replacement Equipment) during any 12-month period. The
inclusion of "proceeds" of the Collateral under the Security Interest
shall not be deemed a consent by the Agent or the Lenders to any other
sale or other disposition of any part or all of the Collateral.
(b) The Borrower shall defend its title in and to, and the
Security Interest in, the Collateral against the claims and demands of
all Persons.
SECTION 7.9. Insurance.
(a) The Borrower shall at all times maintain insurance on
the Inventory and Equipment against loss or damage by fire, theft,
burglary, pilferage, loss in transit and such other hazards as the
Agent or any Lender shall reasonably specify, in amounts and under
policies issued by the Borrower's present insurers or other insurers
reasonably acceptable to the Majority Lenders. All premiums on such
insurance shall be paid by the Borrower and copies of the policies
delivered to the Agent. The Borrower will not use or permit the
Inventory or Equipment owned or used by it to be used unlawfully or
outside of any insurance coverage.
(b) All insurance policies required under SECTION 7.9(A)
shall contain loss payable clauses in the form submitted to the
Borrower by the Agent or in other form and substance satisfactory to
the Majority Lenders, naming the Agent, on behalf of the Lenders, as
loss payee as their interests may appear, and providing
(i) that all proceeds thereunder shall be payable to
the Agent on behalf of the Lenders,
(ii) that no such insurance shall be affected by any
act or neglect of the insurer or owner of the property described
in such policy, and
(iii) that such policy and loss payable clauses may
not be canceled, amended or terminated unless at least 30 days'
prior written notice is given to the Agent.
(c) Any proceeds of insurance referred to in this SECTION
7.9 which are paid to the Agent shall be, at the sole option of the
Majority Lenders, either (i) applied to rebuild, restore or replace
the damaged or destroyed property, or (ii) applied to the payment or
prepayment of the Secured Obligations; PROVIDED, HOWEVER, that if the
total loss is $10,000,000 or less, and at the time no Event of Default
has occurred and is continuing, then the Borrower may reborrow under
the terms of this Agreement the amount of any such proceeds applied to
repay Secured Obligations to rebuild, restore or replace the damaged
or destroyed property, subject to reasonable conditions as would
ordinarily be applied by the Lenders in making construction loans.
(d) With respect to the Real Estate, the Borrower shall
maintain insurance as provided in the Mortgages.
SECTION 7.10. Location of Offices and Collateral.
(a) The Borrower will not change the location of its chief
executive office or its books and records relating to the Collateral
or change its name, its identity or corporate structure without giving
the Agent 60 days prior written notice thereof.
(b) All Inventory, other than Inventory in transit, to any
such location, and all Equipment will at all times be kept by the
Borrower at the locations set forth in SCHEDULES 5.1(U) AND 5.1(V),
respectively, and shall not, without the prior written approval of the
Agent, be removed therefrom except, prior to an Event of Default, for
sales of Inventory permitted under SECTIONS 7.6 and 7.8.
(c) If any Inventory is in the possession or control of
any of the Borrower's agents or processors, the Borrower shall notify
such agents or processors of the Security Interest and, upon the
occurrence of an Event of Default shall instruct them to hold all such
Inventory for the account of the Lenders, subject to the instructions
of the Agent.
SECTION 7.11. Records Relating to Collateral.
(a) The Borrower will at all times
(i) keep complete and accurate records of Inventory
on a FIFO basis, itemizing and describing the kind, type and
quantity of Inventory and the Borrower's cost therefor and a
current price list for such Inventory, and
(ii) keep complete and accurate records of all other
Collateral.
(b) The Borrower will take, or cause to be taken, a
complete physical listing of all Inventory, wherever located, at least
annually.
SECTION 7.12. Inspection. The Agent and each Lender (by any of
its officers, employees or agents) shall have the right, to the extent
that the exercise of such right shall be within the control of the
Borrower, at any reasonable time or times during normal business hours
and at their own expense to inspect the Collateral, all files relating
thereto and the premises upon which any of the Collateral is located,
to discuss the Borrower's affairs and finances, insofar as the same
are reasonably related to the rights of the Agent and each Lender
hereunder or under any of the Loan Documents, with any Person (except
that any such discussion with any member of the media or any
competitor who is not also a supplier shall be conducted only in
accordance with the Agent's or such Lender's standard operating
procedures), to verify the amount, quantity, value and condition of,
or any other matter relating to, any of the Collateral and in this
connection to review, audit and make extracts from all records and
files related to any of the Collateral. The Borrower will deliver to
the Agent and each Lender any instrument necessary for it to obtain
records from any service bureau maintaining records on behalf of the
Borrower.
SECTION 7.13 Maintenance of Equipment. The Borrower shall
maintain all physical property that constitutes Equipment in good and
workable condition in all material respects, with reasonable allowance
for wear and tear, and shall exercise proper custody over all such
property.
SECTION 7.14. Information and Reports.
(a) Schedule of Receivables. The Borrower shall deliver
to the Agent and each Lender by the first day and the 15th day of each
month a Schedule of Receivables which
(i) shall be as of the 15th day and the last Business
Day, respectively, of the immediately preceding accounting month
of the Borrower,
(ii) shall, in the case of the Schedule delivered not
later than the 15th day of each calendar month, be reconciled to
the Borrowing Base Certificate as of the last Business Day of the
immediately preceding month,
(iii) shall set forth a detailed aged trial balance
of all its then existing Receivables, specifying the names,
addresses and balance due for each Account Debtor obligated on a
Receivable so listed, and
(iv) shall set forth a detailed report of balances
due from and rebates owing to Account Debtors, specifying the
names and addresses of each Account Debtor, the balance due on
each Account Debtor's Account and the amount of any rebate owed
to that Account Debtor in the ordinary course of the Borrower's
business.
(b) Schedule of Inventory. The Borrower shall deliver to
the Agent and each Lender by the 15th day of each month a Schedule of
Inventory as of the last Business Day of the immediately preceding
accounting month of the Borrower, itemizing and describing the kind,
type and quantity of Inventory and the Borrower's cost thereof
together with a current price list for such Inventory.
(c) Schedule of Equipment. The Borrower shall deliver to
the Agent and each Lender on such dates as may be requested by the
Agent or any Lender, a Schedule of Equipment describing each item of
Equipment having an original purchase price in excess of $250,000 and
the appraised value, if any, and the cost thereof.
(d) Borrowing Base Certificate. The Borrower shall
deliver to the Agent and each Lender not later than the 15th day of
each calendar month a Borrowing Base Certificate prepared as of the
close of business on the last Business Day of the immediately
preceding month.
(e) Notice of Diminution of Value. The Borrower shall
give prompt notice to the Agent and each Lender of any matter or event
which has resulted in, or may result in, the actual or potential
diminution in excess of $200,000 in the value of any of its
Collateral.
(f) Other Information. The Agent may in its discretion
from time to time require the Borrower to deliver the schedules
described in SECTIONS 7.14(A), (B), (C) and (D) more or less often and
on different schedules. Additionally the Borrower shall furnish to
the Agent and each Lender such other information with respect to the
Collateral as the Agent or any Lender may reasonably request.
SECTION 7.15 Power of Attorney. The Borrower hereby appoints
the Agent, as its attorney, with power
(a) to endorse the name of the Borrower on any checks,
notes, acceptances, money orders, drafts or other forms of payment or
security that may come into the Agent's or a Lender's possession, and
(b) to sign the name of the Borrower on any invoice or
bill of lading relating to any Receivables, Inventory or other
Collateral, on any drafts against customers related to letters of
credit, on schedules and assignments of Receivables furnished to the
Agent by the Borrower, on notices of assignment, financing statements
and other public records relating to the perfection or priority of the
Security Interest, or verifications of account and on notices to or
from customers.
SECTION 7.16. Leaseholds. The Borrower shall execute and
deliver to the Agent on behalf of the Lenders, promptly after request
by the Agent, such duly executed leasehold mortgages, assignments of
leases, financing statements and landlords consents with respect to
real property leased by the Borrower as the Agent may request, subject
however to the ability of the Borrower to obtain necessary consents
from the landlord to such leasehold mortgages, assignments of leases,
financing statements and consents after employing its good faith best
efforts to do so. In addition, the Borrower shall cause to be
furnished to the Agent on behalf of the Lenders, at the Borrower's
expense, fully-paid mortgagee title insurance with respect to the
property covered by such leasehold mortgages, in form, substance and
amount and from an insurer satisfactory to the Agent. The Borrower
shall pay all fees, costs, expenses (including, without limitation,
recording and filing fees and fees of counsel) incurred in connection
with the preparation, recording and filing of such leasehold
mortgages, assignments of leases and financing statements.
SECTION 7.17. Motor Vehicle Title Certificates. The Borrower
shall deliver to the Agent promptly after the Agent's request
therefor, certificates of title for each vehicle included in the
Equipment, together with duly executed applications to the appropriate
State authorities requesting that each such certificate of title be
reissued with the Security Interest noted thereon.
SECTION 7.18. Title Insurance. In the event that the
conditions of SECTION 4.1(A)(IX) are met by the delivery to the Agent
on or prior to the Effective Date of commitments for the issuance of
endorsements to mortgagee title insurance policies, the Borrower
agrees that fully-paid endorsements meeting the requirements set forth
in SECTION 4.1(A)(IX) shall be delivered to the Agent within 45 days
after the Effective Date.
ARTICLE 8 - AFFIRMATIVE COVENANTS
Until this Agreement has been terminated and all the Secured
Obligations have been irrevocably paid in full, unless the Majority
Lenders shall otherwise consent in the manner provided for in SECTION
13.12, the Borrower will, and will cause each of its Subsidiaries to:
SECTION 8.1. Preservation of Legal Existence and Similar
Matters. Preserve and maintain its corporate existence, rights,
franchises, licenses and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified as a foreign entity
and authorized to do business in each jurisdiction in which the
failure to be so qualified would have a Materially Adverse Effect on
the Borrower or such Subsidiary.
SECTION 8.2 Compliance with Applicable Law.
(a) Comply with all Applicable Law relating to the Bor
rower or such Subsidiary where the failure to so comply would have a
Materially Adverse Effect on the Borrower or such Subsidiary.
(b) Whenever, subsequent to the Agreement Date, a material
Governmental Approval shall be required by Applicable Law and is not
routine in nature, deliver to the Agent on behalf of the Lenders a
listing of such Governmental Approval and a copy thereof.
SECTION 8.3. Maintenance of Property. In addition to, and not
in derogation of, the requirements of SECTION 7.8 and of any of the
Security Documents,
(a) protect and preserve all properties material to its
business, including copyrights, patents, trade names and trademarks,
and maintain in good repair, working order and condition in all
material respects all tangible properties, and
(b) from time to time make or cause to be made all needed
and appropriate repairs, renewals, replacements and additions to such
properties necessary for the conduct of its business, so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times.
SECTION 8.4. Conduct of Business. At all times carry on its
business in an efficient manner and engage only in businesses in
substantially the same fields as the businesses conducted on the
Agreement Date.
SECTION 8.5 Insurance. Maintain, in addition to that required
by SECTION 7.9 or any of the Security Documents, insurance with
responsible insurance companies against such risks and in such amounts
as is customarily maintained by similar businesses or as may be
required by Applicable Law, and from time to time deliver to the Agent
or any Lender upon its request a detailed list of the insurance then
in effect, stating the names of the insurance companies, the amounts
and rates of the insurance, the dates of the expiration thereof and
the properties and risks covered thereby.
SECTION 8.6. Payment of Taxes and Claims. Pay or discharge
when due
(a) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or upon any
properties belonging to it, and
(b) all lawful claims of materialmen, mechanics, carriers,
warehousemen and landlords for labor, materials, supplies and rentals
before the same become a Lien on any properties of the Borrower or
such Subsidiary;
except that this SECTION 8.6 shall not require the payment or
discharge of any such tax, assessment, charge, levy or claim which is
being contested in good faith by appropriate proceedings and for which
adequate reserves have been established on the appropriate books.
SECTION 8.7. Accounting Methods and Financial Records.
Maintain a system of accounting, and keep such books, records and
accounts (which shall be true and complete), as may be required or as
may be necessary to permit the preparation of financial statements in
accordance with GAAP consistently applied and maintain October 1 -
September 30 as its fiscal year unless the Majority Lenders shall have
agreed to a change in the Borrower's fiscal year.
SECTION 8.8. Visits and Inspections. Permit representatives of
the Agent or any Lender, from time to time, as often as may be
reasonably requested, but only during normal business hours and at
their own expense, to
(a) visit and inspect its properties,
(b) inspect and make extracts from its relevant books and
records, including but not limited to management letters prepared by
independent accountants, and
(c) discuss with its principal officers and its inde
pendent accountants, its business, assets, liabilities, financial
condition, results of operations and business prospects.
The rights granted the Agent and the Lenders by the Borrower under
this Section are in addition to and not in derogation of the rights of
the Agent and the Lenders under SECTION 7.12 and nothing in this
Section shall be construed as imposing any requirement of notice or
any other limitation on the rights of the Agent or the Lenders under
SECTIONS 7.2 OR 7.3.
SECTION 8.9. Use of Proceeds.
(a) Use the proceeds of all Advances made on the Effective
Date for the purposes set forth on SCHEDULE 8.9,
(b) use the proceeds of all subsequent Advances only for
working capital and general business purposes of the Borrower,
including Capital Expenditures, and
(c) not use any part of such proceeds to purchase or
carry, or to reduce or retire or refinance any credit incurred to
purchase or carry, any margin stock (within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System) or for any
other purpose which would involve a violation of such Regulation U or
Regulations G, T or X of such Board of Governors, or for any other
purpose prohibited by law or by the terms and conditions of this
Agreement.
SECTION 8.10. Hazardous Waste and Substances; Environmental
Requirements. In addition to, and not in derogation of, the
requirements of SECTION 8.2 and of any of the Security Documents,
comply with all laws, governmental standards and regulations
applicable to the Borrower or to the Real Estate in respect of
occupational health and safety and Environmental Laws, promptly notify
the Agent and each Lender of its receipt of any notice of a violation
of any such law, standard or regulation, and indemnify and hold the
Agent and each Lender harmless from all loss, cost, damage, claim and
expense incurred by the Agent or such Lender on account of the
Borrower's failure to perform the obligations of this subparagraph.
SECTION 8.11 Loans to Foreign Subsidiaries. In the event that
the Majority Lenders consent to the Borrower making any loans to any
Foreign Subsidiaries, require and cause such loans, if requested by
the Majority Lenders, to be secured by a charge against all assets of
such Foreign Subsidiary, and assign and pledge (pursuant to the Pledge
Agreement or otherwise) to the Agent on behalf of the Lenders all such
loans and charges as security for the Secured Obligations together
with all instruments and other documents evidencing such loans and
charges.
ARTICLE 9 - INFORMATION
Until this Agreement has been terminated and all the Secured
Obligations have been irrevocably paid in full, unless the Majority
Lenders shall otherwise consent in the manner set forth in SECTION
13.12, the Borrower will furnish to the Agent at its office then
designated for notices pursuant to SECTION 13.1:
SECTION 9.1. Financial Statements.
(a) Monthly Financial Statements. As soon as available
after the end of each month, but in any event within 20 days after the
end of each month, copies of (i) the unaudited Consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as at the end
of such month and the related unaudited Consolidated statement of
income for the Borrower and its Consolidated Subsidiaries for such
month, for the fiscal quarter of the Borrower then ended (if such
month is the last month in any such fiscal quarter) and for the
portion of the fiscal year of the Borrower through such month,
certified by the Chief Financial Officer as presenting fairly the
Consolidated financial condition and results of operations of the
Borrower and its Consolidated Subsidiaries taken as a whole (subject
to normal year-end audit adjustments), (ii) if such month is the last
month in any fiscal quarter of the Borrower, the unaudited
Consolidated statement of cash flow of the Borrower and its
Consolidated Subsidiaries for such fiscal quarter and for the portion
of the fiscal year of the Borrower through such fiscal quarter,
certified by the Chief Financial Officer as presenting fairly the cash
flow of the Borrower and its Consolidated Subsidiaries taken as a
whole (subject to normal year-end audit adjustments), (iii) the
unaudited consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries as at the end of such month and the related
unaudited consolidating statement of income for the portion of the
fiscal year through such month, in each case showing intercompany
eliminations, certified by the Chief Financial Officer as being fairly
stated in all material respects (subject to normal year-end
adjustments) when considered in relation to the Consolidated financial
statements of the Borrower and its Consolidated Subsidiaries, (iv) a
forecast of cash flow from operations for the ensuing six months, and
(v) if such month is the last month of a fiscal quarter, a forecast of
consolidating and Consolidated sales and operating earnings for the
next succeeding fiscal quarter, which forecast shall be furnished only
to the Agent and such of the Lenders as shall specifically request to
be furnished with a copy of thereof; and
(b) Audited Year-End Statements. As soon as available,
but in any event within 90 days after the end of each fiscal year of
the Borrower, copies of (i) the Consolidated balance sheets of the
Borrower and its Subsidiaries as at the end of such fiscal year and
the related Consolidated statements of income, shareholders' equity
and cash flow for such fiscal year, in each case setting forth in
comparative form the figures for the previous year of the Borrower
(unless there is no previous full year), certified, without
qualification as to the scope of the audit, by independent certified
public accountants of nationally recognized standing, whose
certificates shall be in scope and substance satisfactory to the Agent
and the Majority Lenders and who shall have authorized the Borrower to
deliver such financial statements and certifications thereof to the
Agent and Lenders pursuant to this Agreement, and (ii) the
consolidating balance sheet of the Borrower and its Consolidated
Subsidiaries as at the end of such fiscal year and the related
consolidating statement of income for such fiscal year, in each case
showing intercompany eliminations, certified by the Chief Financial
Officer as being fairly stated in all material respects when
considered in relation to the Consolidated financial statements of the
Borrower and its Consolidated Subsidiaries;
all such financial statements to be complete and correct in all
material respects and, except for forecasts, prepared in accordance
with GAAP (except, with respect to interim financial statements, for
the omission of footnotes and for the effect of normal year-end audit
adjustments) applied consistently throughout the periods reflected
therein.
SECTION 9.2. Accountants' Certificate. Together with the
financial statements referred to in SECTION 9.1(B), the Borrower shall
deliver a certificate of such accountants addressed to the Agent
(a) stating that in making the examination necessary for
the certification of such financial statements, nothing has come to
their attention to lead them to believe that any Default or Event of
Default exists and, in particular, they have no knowledge of any
Default or Event of Default or, if such is not the case, specifying
such Default or Event of Default and its nature, and
(b) having attached the calculations, prepared by the
Borrower and reviewed by such accountants, required to establish
whether or not the Borrower is in compliance with the covenants
contained in SECTIONS 10.1, 10.2, 10.5, 10.10 and 10.11, as at the
date of such financial statements.
SECTION 9.3. Officer Certificate. At the time the
financial statements are furnished pursuant to SECTION 9.1(A), the
Borrower shall also furnish a certificate of its President or Chief
Financial Officer in the form of EXHIBIT D hereto
(a) setting forth as at the end of such month the
calculations required to establish whether or not the Borrower was in
compliance with the requirements of SECTIONS 10.1, 10.2, 10.5, 10.10
and 10.11, as at the end of each respective period, and
(b) stating that, based on an examination sufficient to
enable him to make an informed statement, no Default or Event of
Default exists, or, if such is not the case, specifying such Default
or Event of Default and its nature, when it occurred, whether it is
continuing and the steps being taken by the Borrower with respect to
such event or failure.
SECTION 9.4. Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports,
if any, submitted to the Borrower or any Subsidiary or Affiliate of
the Borrower, or their respective Boards of Directors by their
independent public accountants, including, without limitation, any
management report.
(b) As soon as practicable, copies of all financial
statements and reports as the Borrower or any Subsidiary or Affiliate
of the Borrower shall send to its stockholders, and of all
registration statements and all regular or periodic reports which the
Borrower or any Subsidiary or Affiliate of the Borrower shall file
with the Securities and Exchange Commission or any successor
commission.
(c) At the same time as the monthly or annual financial
statements are delivered pursuant to SECTIONS 9.1, a statement setting
forth the cash flows of the Borrower and each Consolidated Subsidiary
of the Borrower for the period covered by such statements.
(d) From time to time and promptly upon each request, such
forecasts, data, certificates, reports, statements, opinions of
counsel, documents or further information regarding the business,
assets, liabilities, financial condition, results of operations or
business prospects of the Borrower and each Subsidiary as the Agent or
any Lender may request and that the Borrower or any Subsidiary has or
(except in the case of legal opinions relating to the perfection or
priority of the Security Interest) without unreasonable expense can
obtain. The rights of the Agent and each Lender under this SECTION
9.4(D) are in addition to and not in derogation of its rights under
any other provision of this Agreement or any of the Security
Documents.
(e) If requested by the Agent or any Lender, the Borrower
will furnish to the Agent or such Lender statements in conformity with
the requirements of Federal Reserve Form FR G-3 or FR U-1 referred to
in Regulations G or U of the Board of Governors of the Federal Reserve
System.
SECTION 9.5. Notice of Litigation and Other Matters. Prompt
notice of:
(a) to the extent the Borrower is aware of the same, the
commencement of all proceedings and investigations by or before any
governmental or nongovernmental body and all actions and proceedings
in any court or before any arbitrator against or in any other way
relating adversely to, or adversely affecting, the Borrower or any
Subsidiary or Affiliate of the Borrower or any of their respective
property, assets or businesses, which might, singly or in the
aggregate, cause a Default or an Event of Default or have a Materially
Adverse Effect on the Borrower or such Subsidiary,
(b) any amendment of the certificate of incorpora-tion, or
the charter documents, by-laws or partnership certificate or agreement
of the Borrower or any Subsidiary or Affiliate of the Borrower,
(c) any change in the business, assets, liabilities,
financial condition, results of operations or business prospects of
the Borrower or any Subsidiary or Affiliate of the Borrower which has
had or may foreseeably have any Materially Adverse Effect on the
Borrower or any such Subsidiary and any change in the executive
officers of the Borrower or any such Subsidiary, and
(d) any Default or Event of Default or any event which
constitutes or which with the passage of time or giving of notice or
both would constitute a default or event or default by the Borrower or
any Subsidiary of the Borrower under any material agreement other than
this Agreement to which such Borrower or any such Subsidiary is a
party or by which the Borrower or any such Subsidiary or any of their
respective properties may be bound, including, without limitation, the
Indenture.
SECTION 9.6. ERISA. As soon as possible and in any event
within 30 days after the Borrower knows, or has reason to know, that:
(a) any Termination Event with respect to a Plan has
occurred or will occur, or
(b) the aggregate present value of the Unfunded Vested
Accrued Benefits under all Plans has increased to an amount in excess
of $0, or
(c) the Borrower or any of its Subsidiaries is in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan required by reason of its complete or
partial withdrawal (as described in Section 4203 or 4205 of ERISA)
from such Plan, a certificate of the President or Chief Financial
Officer of the Borrower setting forth the details of such of the
events described in CLAUSES (A) through (C) as applicable and the
action which is proposed to be taken with respect thereto, together
with any notice or filing which may be required by the PBGC or other
agency of the United States government with respect to such of the
events described in CLAUSES (A) through (C) as applicable.
SECTION 9.7. Accuracy of Information. All written information,
reports, statements and other papers and data furnished to the Agent
or any Lender, whether pursuant to this ARTICLE 9 or any other
provision of this Agreement, or any of the Security Documents, shall
be, at the time the same is so furnished, complete and correct in all
material respects to the extent necessary to give the Agent and the
Lenders true and accurate knowledge of the subject matter.
SECTION 9.8. Revisions or Updates to Schedules. Should any of
the information or disclosures provided on any of the Schedules
originally attached hereto become outdated or incorrect in any
material respect, Borrower promptly shall provide to the Agent and
each Lender such revisions or updates to such Schedule(s) as may be
necessary or appropriate to update or correct such Schedule(s),
PROVIDED that no such revisions or updates to any Schedule(s) shall be
deemed to have amended, modified or superseded such Schedule(s) as
originally attached hereto, or to have cured any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any
such Schedule(s), unless and until the Majority Lenders, in their sole
and absolute discretion, shall have accepted in writing such revisions
or updates to such Schedule(s).
ARTICLE 10 - NEGATIVE COVENANTS
Until this Agreement has been terminated and all the Secured
Obligations have been irrevocably paid in full, unless the Majority
Lenders shall otherwise consent in the manner set forth in SECTION
13.12, the Borrower will not directly or indirectly, and in the case
of SECTION 10.2 through 10.16 will not permit its Subsidiaries to:
SECTION 10.1. Financial Ratios. Permit:
(a) Working Capital. Current Assets minus Current
Liabilities (excluding the amount of Indebtedness outstanding under
the Revolving Credit Facility) of the Borrower and its Consolidated
Subsidiaries to be less than $35,000,000 at any time;
(b) Total Interest Coverage. The ratio of EBITDA to
Consolidated Total Interest Expense (plus capitalized interest in
connection with Capital Expenditures, but excluding therefrom any
amortization of bond discount in connection with the Senior
Subordinated Debentures) of the Borrower and its Consolidated
Subsidiaries, for any period of 12 consecutive months ending
(i) on the last day of any month ending after the
Effective Date and on or before March 31, 1995, shall be not less
than 2.00 to 1;
(ii) on the last day of any month ending after March
31, 1995 and on or before June 30, 1995, shall be not less than
1.70 to 1;
(iii) on the last day of any month ending after June
30, 1995 and on or before February 29, 1996 to be less than 1.40
to 1;
(iv) on the last day of any month ending after
February 29, 1996 and on or before August 31, 1996 to be less
than 1.60 to 1; and
(v) on the last day of any month ending after August
31, 1996 to be less than 2.00 to 1.
(c) Total Debt Service Coverage. The ratio of Operating
Cash Flow for any period described below to the sum of the aggregate
amount of Total Interest Expense PLUS principal of Indebtedness for
Money Borrowed paid (or payable as regularly scheduled principal
repayments thereof) by the Borrower and its Consolidated Subsidiaries
during the same period, to be less than:
(i) 1.05 to 1 for any period of four consecutive
fiscal quarters ending after the Effective Date and on or before March
31, 1996;
(ii) 1.10 to 1 for any period of four consecutive
fiscal quarters ending after March 31, 1996 and on or before March 31,
1997; and
(iii) 1.20 to 1 for any period of four consecutive
fiscal quarters ending after March 31, 1997.
(d) Total Debt Coverage. The ratio of Indebtedness for
Money Borrowed to EBITDA of the Borrower and its Consolidated
Subsidiaries to be greater than:
(i) 6.25 to 1 for any period of four consecutive
fiscal quarters ending after the Effective Date and on or before March
31, 1996;
(ii) 5.50 to 1 for any period of four consecutive
fiscal quarters ending after March 31, 1996 and on or before March 31,
1997; and
(iii) 5.00 to 1 for any period of four consecutive
fiscal quarters ending after March 31, 1997.
(e) Debt to Worth. The ratio of Consolidated Total
Unsubordinated Debt (other than deferred taxes) of the Borrower and
its Consolidated Subsidiaries to the sum of Consolidated Tangible Net
Worth PLUS Subordinated Indebtedness to be greater than 0.90 to 1 at
any time after the Effective Date.
SECTION 10.2. Indebtedness for Money Borrowed. Create, assume,
or otherwise become or remain obligated in respect of, or permit or
suffer to exist or to be created, assumed or incurred or to be
outstanding any Indebtedness for Money Borrowed, except that this
SECTION 10.2 shall not apply to:
(a) Indebtedness of the Borrower for Money Borrowed
represented by the Loans and the Senior Subordinated Debentures,
(b) without duplication of such Indebtedness specifically
listed in the foregoing SUBSECTION (A), Existing Indebtedness for
Money Borrowed,
(c) Permitted Purchase Money Indebtedness,
(d) Indebtedness for Money Borrowed of any Consolidated
Subsidiary (i) arising under a Foreign Facility Agreement in an
aggregate principal amount not greater than $4,000,000 or the Dollar
Equivalent of such amount, or (ii) which is not secured by any Lien on
the assets of such Consolidated Subsidiary or any of its Affiliates or
Subsidiaries or Guaranteed by any Affiliate or Subsidiary of such
Consolidated Subsidiary, and
(e) other Indebtedness of the Borrower and its
Subsidiaries for Money Borrowed, excluding Capitalized Lease
Obligations, the aggregate principal amount of which outstanding at
any time does not exceed $250,000.
SECTION 10.3. Guaranties. Become or remain liable with respect
to any Guaranty of any obligation of any other Person, except for
Existing Guaranties and the guaranty of the Borrower under ARTICLE 14.
SECTION 10.4. Investments. Acquire, after the Agreement Date,
any Business Unit or Investment or, after such Agreement Date, permit
any Investment to be outstanding, except that this SECTION 10.4 shall
not apply to Permitted Investments.
SECTION 10.5. Capital Expenditures. Make or incur any Capital
Expenditures, except that this SECTION 10.5 shall not apply to Capital
Expenditures in any fiscal year of the Borrower which, together with
all other such Capital Expenditures by the Borrower and its
Subsidiaries made during such fiscal year, would not exceed, in the
aggregate:
(a) for the fiscal year of the Borrower ending
September 30, 1995, $13,000,000;
(b) for the fiscal year of the Borrower ending
September 30, 1996, $6,000,000 PLUS the lesser of $4,000,000 and the
amount, if any, by which $13,000,000 exceeds the actual amount of
Capital Expenditures of the Borrower and its Consolidated Subsidiaries
made during the fiscal year of the Borrower ending September 30, 1995;
and
(c) for any fiscal year of the Borrower ending after
September 30, 1996, $6,000,000.
SECTION 10.6. Restricted Payments and Purchases, Etc. Declare
or make any Restricted Dividend Payment, Restricted Payment or
Restricted Purchase.
SECTION 10.7. Merger, Consolidation and Sale of Assets. Merge
or consolidate with any other Person or sell, lease or transfer or
otherwise dispose of all or a substantial portion of its assets to any
Person, except that the provisions of this SECTION 10.7 shall not
apply to sales or other transfers of assets by any Subsidiary of the
Borrower to the Borrower or to any other Subsidiary of the Borrower.
SECTION 10.8. Transactions with Affiliates. Effect any trans
action with any Affiliate on a basis less favorable to the Borrower or
such Subsidiary than would be the case if such transaction had been
effected with a Person not an Affiliate, except that the provisions of
this SECTION 10.8 shall not apply to transactions entirely between (a)
the Borrower and any Subsidiary of the Borrower or (b) Subsidiaries of
the Borrower.
SECTION 10.9. Liens. Create, assume or permit or suffer to
exist or to be created or assumed any Lien on any of the property or
assets of the Borrower or any of its Subsidiaries, real, personal or
mixed, tangible or intangible, other than Permitted Liens.
SECTION 10.10. Capitalized Lease Obligations. Incur after the
Agreement Date any Capitalized Lease Obligation if such Capitalized
Lease Obligation when added to other Capitalized Lease Obligations and
Permitted Purchase Money Indebtedness of the Borrower and its
Subsidiaries incurred after the Agreement Date shall exceed
$2,000,000.
SECTION 10.11 Operating Leases. Enter into any Operating Lease
if the aggregate annual rental under all Operating Leases of the
Borrower and its Subsidiaries would exceed $4,500,000 at the Effective
Date or at any time thereafter; PROVIDED, FURTHER, that a purchase of
equipment by the Borrower for which the Borrower is reimbursed by a
leasing company shall be deemed to be an Operating Lease and subject
to this SECTION 10.11 and shall not be deemed to be a sale and
leaseback.
SECTION 10.12 Plans. Permit, or take any action which would
result in, the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans of the Borrower and its Subsidiaries to
exceed $-0-.
SECTION 10.13 Sales and Leasebacks. Enter into any arrangement
with any Person providing for its leasing from such Person of real or
personal property which has been or is to be sold or transferred,
directly or indirectly, by the Borrower or any Subsidiary of the
Borrower to such Person.
SECTION 10.14 Prepayments of Indebtedness for Money Borrowed.
Make any prepayments (other than regularly scheduled installment or
amortization payments), directly or indirectly, on account of the
principal of any Indebtedness for Money Borrowed (except the Loans and
the Foreign Facilities in accordance with the other provisions of this
Agreement or of the applicable Foreign Facility Agreements, as the
case may be), or amend in any way the interest rate or principal
amount or schedule of payments of principal and interest with respect
to any such Indebtedness.
SECTION 10.15 Change in Business. Engage in any line of
business other than that engaged in on the Effective Date.
SECTION 10.16. Issuance of Stock by Subsidiaries. Permit any
Subsidiary (either directly or indirectly by issuance of rights or
options for, or securities convertible into, such shares) to issue,
sell or otherwise dispose of any shares of any class of its capital
stock (other than directors' qualifying shares).
SECTION 10.17. No Amendment. Amend in any material respect any
term or provision contained in the Indenture, the Senior Subordinated
Debentures, or consent to or enter into any agreement providing for
the designation of any Indebtedness for Money Borrowed of the Borrower
or any of its Subsidiaries, other than Indebtedness represented by the
Loans, the Notes and the Foreign Facilities, as "Designated Senior
Indebtedness," as such term is defined in the Indenture.
ARTICLE 11 - DEFAULT
SECTION 11.1. Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or
any order, rule or regulation of any governmental or nongovernmental
body:
(a) Default in Payment. The Borrower or any Foreign
Subsidiary shall default in any payment of principal of, or interest
on, any Loan, Note or any Foreign Facility when and as due (whether
upon demand, at maturity, by reason of acceleration or otherwise) or
in the reimbursement on demand (including by a Borrowing if permitted
hereunder) of any amount drawn under a Letter of Credit.
(b) Other Payment Default. The Borrower or any Foreign
Subsidiary shall default in the payment, as and when due, of principal
of or interest on, any other Secured Obligation or obligation under
the Foreign Facilities, and such default shall continue for a period
of five days after written notice thereof has been given to the
Borrower by the Agent on behalf of the Lenders.
(c) Misrepresentation. Any representation or warranty
made or deemed to be made by the Borrower under this Agreement or any
Loan Document or by a Foreign Subsidiary under any Foreign Facility
Agreement, or any amendment hereto or thereto, shall at any time prove
to have been incorrect or misleading in any material respect when
made.
(d) Default in Performance. The Borrower shall default in
the performance or observance of any term, covenant, condition or
agreement contained in
(i) ARTICLES 6, 7 OR 10 OR SECTIONS 8.1 (insofar as
it requires the preservation of the corporate existence of the
Borrower and the Foreign Subsidiaries), 8.9, 9.5 OR 9.6, or
(ii) this Agreement (other than any such term,
covenant, condition or agreement a default in the performance or
observance of which is dealt with specifically elsewhere in this
SECTION 11.1) and such default shall continue for a period of 30
days after written notice thereof has been given to the Borrower
by the Agent.
(e) Indebtedness Cross-Default.
(i) There shall have occurred any default or event of
default or other event, including, without limitation, a "Change
in Control Triggering Event" as defined in the Indenture, which
then permits any holder or holders, or any trustee or agent
acting on behalf of such holder or holders, or any other Person
to accelerate (without regard to any subordination or other
agreements restricting such right) the maturity of, or require
the purchase of, Indebtedness outstanding under the Senior
Subordinated Debentures, or
(ii) The Borrower or any Subsidiary shall fail to pay
when due and payable the principal of or interest on any
Indebtedness for Money Borrowed in an amount in excess of
$500,000 (other than the Loans or Note and other as described in
CLAUSE (I) above), or
(iii) The maturity of any Indebtedness described in
CLAUSE (II) above shall have (A) been accelerated in accordance
with the provisions of any indenture, contract or instrument
providing for the creation of or concerning such Indebtedness or
(B) been required to be prepaid prior to the stated maturity
thereof.
(f) Other Cross-Defaults. The Borrower or any Subsidiary
shall default in the payment when due, or in the performance or
observance, of any material obligation or condition of any material
contract or lease (other than one of the Security Documents or one
relating to Indebtedness for Money Borrowed), unless, but only as long
as the existence of any such default is being contested by the
Borrower or such Subsidiary, as the case may be, in good faith by
appropriate proceedings and adequate reserves in respect thereof have
been established on the books of the Borrower or such Subsidiary, as
the case may be.
(g) Voluntary Bankruptcy Proceeding. The Borrower or any
Subsidiary of the Borrower shall
(i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect),
(ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for
adjustment of debts,
(iii) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an invol
untary case under such bankruptcy laws or other laws,
(iv) apply for or consent to, or fail to contest in a
timely and appropriate manner, the appointment of, or the taking
of possession by, a receiver, custodian, trustee, or liquidator
of itself or of a substantial part of its property, domestic or
foreign,
(v) admit in writing its inability to pay its debts
as they become due,
(vi) make a general assignment for the benefit of
creditors, or
(vii) take any formal corporate or partnership action
for the purpose of effecting any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against the Borrower or any Subsidiary
of the Borrower in any court of competent jurisdiction seeking
(i) relief under the federal bankruptcy laws (as now
or hereafter in effect) or under any other laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization,
winding up or adjustment of debts, or
(ii) the appointment of a trustee, receiver, custo
dian, liquidator or the like of the Borrower or any such
Subsidiary or of all or any substantial part of the assets, domes
tic or foreign, of the Borrower or any such Subsidiary,
and such case or proceeding shall continue undismissed or unstayed for
a period of 60 consecutive calendar days, or an order granting the
relief requested in such case or proceeding against any Borrower or
any such Subsidiary (including, but not limited to, an order for
relief under such federal bankruptcy laws) shall be entered.
(i) Litigation. Except for good faith disputes regarding
the interpretation of this Agreement, neither the Borrower nor any
Subsidiary or any Affiliate of the Borrower shall challenge or contest
in any action, suit or proceeding in any court or before any
arbitrator or governmental body the validity or enforceability of this
Agreement or any Loan Document or the perfection or priority of the
Security Interest or any Lien granted to the Agent on behalf of the
Lenders under any Security Document.
(j) Judgment. A judgment or order for the payment of
money shall be entered against the Borrower or any Subsidiary of the
Borrower by any court which is $500,000 or more in excess of the
amount of the insurance proceeds payable with respect to such judgment
and such judgment or order shall continue undischarged or unstayed for
30 days.
(k) Attachment. A warrant or writ of attachment or execu
tion or similar process shall be issued against any property of the
Borrower or any Subsidiary of the Borrower which exceeds $100,000 in
value and such warrant or process shall continue undischarged or
unstayed for 10 days.
(l) Loan Documents. Any "Event of Default" as defined in
any Mortgage shall occur.
(m) ERISA.
(i) Any Termination Event with respect to a Plan
shall occur that results in an Unfunded Vested Accrued Benefit in
excess of $0, or
(ii) any Plan shall incur an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302
of ERISA) for which a waiver has not been obtained in accordance
with the applicable provisions of the Code and ERISA, or
(iii) the Borrower or any Subsidiary of the Borrower
is in "default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan resulting from the
Borrower's or any Subsidiary's complete or partial withdrawal (as
described in Section 4203 or 4205 of ERISA) from such plan.
(n) Cross-default with Foreign Facilities. Any Foreign
Subsidiary shall default in the performance or observance of any
terms, covenants, conditions or agreements contained in, or the
payment of any other sums covenanted to be paid by such Foreign
Subsidiary under, any Foreign Facility Agreement (other than any such
default which is specifically provided for elsewhere in this SECTION
11.1).
(o) Change in Management. Leonard Chill and Jon P.
Beckman shall cease to be the Chief Executive Officer and Chief
Financial Officer, respectively, of the Borrower or to be actively
involved in the day-to-day management of the Borrower.
(p) Change in Ownership. (i) The Initial General Partners
(or any of them) shall cease to be, directly or indirectly, the sole
general partners of Synthetic Management, or (ii) Synthetic Management
shall cease to be the sole general partner of SI Management, or (iii)
SI Management shall cease to be the sole general partner of Synthetic
L.P., or (iv) Synthetic L.P. shall cease to be the record and
beneficial owner of at least 51% of the issued and outstanding capital
stock of the Borrower (or such ownership shall not entitle Synthetic
L.P. to elect a majority of the directors of the Borrower), except to
the extent such event occurs as a result of a public offering of
equity securities of the Borrower.
SECTION 11.2. Remedies.
(a) Automatic Acceleration and Termination of Facilities.
Upon the occurrence of an Event of Default specified in SECTION
11.1(G) OR (H), (i) the principal of and the interest on the Loans and
the Notes at the time outstanding, all other amounts owed to the Agent
and the Lenders under this Agreement or any of the Loan Documents and
all other Secured Obligations (including, without limitation, any fees
accrued under ARTICLE 3) shall thereupon become due and payable
without presentment, demand, protest, or other notice of any kind, all
of which are expressly waived, anything in this Agreement or any of
the Loan Documents to the contrary notwithstanding, and (ii) the
Commitments and any obligation of the Lenders to make Loans hereunder
shall immediately terminate.
(b) Other Remedies. If any Event of Default shall have
occurred, during the continuance of any such Event of Default, the
Agent may, and at the direction of the Majority Lenders, in their sole
and absolute discretion, shall do any of the following:
(i) declare the principal of and interest on the
Loans and the Notes at the time outstanding, all other amounts
owed to the Agent or any Lender under this Agreement or any of
the Loan Documents and all other Secured Obligations (including,
without limitation, any fees accrued under ARTICLE 3) to be
forthwith due and payable, whereupon the same shall immediately
become due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived,
anything in this Agreement or the Loan Documents to the contrary
notwithstanding;
(ii) terminate the Commitments and any obligation of
the Lenders to make Advances hereunder;
(iii) notify, or request the Borrower to notify, in
writing or otherwise, any Account Debtor or obligor with respect
to any one or more of the Receivables to make payment to the
Agent on behalf of the Lenders or any agent or designee of the
Agent, at such address as may be specified by the Agent (if,
notwithstanding the giving of any notice, any Account Debtor or
other such obligor shall make payments to the Borrower, the
Borrower shall hold all such payments it receives in trust for
the Agent on behalf of the Lenders, without commingling the same
with other funds or property of, or held by, the Borrower, and
shall deliver the same to the Agent or any such agent or designee
immediately upon receipt by the Borrower in the identical form
received, together with any necessary endorsements);
(iv) settle or adjust disputes and claims directly
with Account Debtors and other obligors on Receivables for
amounts and on terms which the Agent considers advisable and in
all such cases only the net amounts received by the Agent on
behalf of the Lenders in payment of such amounts, after deduc
tions of costs and attorney's fees which the Agent shall be
entitled to apply to such costs and fees and only such net amount
shall constitute Collateral, and the Borrower shall not have any
further right to make any such settlements or adjustments or to
accept any returns of merchandise;
(v) enter upon any premises in which Inventory or
Equipment may be located and, without resistance or interference
by the Borrower, take physical possession of any or all thereof
and maintain such possession on such premises or move the same or
any part thereof to such other place or places as the Agent shall
choose, without being liable to the Borrower on account of any
loss, damage or depreciation that may occur as a result thereof,
so long as the Agent shall act in a commercially reasonable
manner and in good faith (as such term is defined in the UCC);
(vi) require the Borrower to and the Borrower shall,
without charge to the Agent or any Lender, assemble the Inventory
and Equipment and maintain or deliver it into the possession of
the Agent or any agent or representative of the Agent at such
place or places as the Agent may designate and as are reasonably
convenient to both the Agent and the Borrower;
(vii) at the expense of the Borrower, cause any of
the Inventory and Equipment to be placed in a public or field
warehouse and neither the Agent nor any Lender shall be liable to
the Borrower on account of any loss, damage or depreciation that
may occur as a result thereof, so long as the Agent or such
Lender shall act in a commercially reasonable manner and in good
faith (as such term is defined in the UCC);
(viii) without notice, demand or other process, and
without payment of any rent or any other charge enter any of the
Borrower's premises and, without breach of the peace, until the
Agent on behalf of the Lenders completes the enforcement of its
rights in the Collateral, take possession of such premises or
place custodians in exclusive control thereof, remain on such
premises and use the same and any of the Borrower's equipment,
for the purpose of (A) completing any work in process, preparing
any Inventory and Equipment for disposition and disposing thereof
and (B) collecting any Receivable;
(ix) in the exercise of the rights of the Agent or
the Lenders under this Agreement, without payment of compensation
of any kind, use any and all trademarks, trade styles, trade
names, patents, patent applications, licenses, franchises and the
like to the extent of the rights of the Borrower therein,
subject, in the case of any federally registered trademark, to
any control over the quality of the goods manufactured,
advertised or sold under such trademark necessary to preserve
such registration, and the Borrower hereby grants a nonexclusive
license to the Agent on behalf of the Lenders for this purpose;
(x) exercise any and all of its rights under any and
all of the Security Documents;
(xi) apply any cash Collateral to the payment of the
Secured Obligations in any order in which the Agent on behalf of
the Lenders may elect or use such cash in connection with the
exercise of any of its other rights hereunder or under any of the
Security Documents;
(xii) establish or cause to be established one or
more Lockboxes or other arrangement for the deposit of proceeds
of Receivables, and, in such case, the Borrower shall cause to be
forwarded to the Agent at the Agent's Office, on a daily basis,
copies of all checks and other items of payment and deposit slips
related thereto deposited in such Lockboxes, together with
collection reports in form and substance satisfactory to the
Agent; and
(xiii) exercise all of the rights and remedies of a
secured party under the UCC and under any other Applicable Law,
including, without limitation, the right, without notice except
as specified below and with or without taking the possession
thereof, to sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any location chosen by
the Agent, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as the Agent may
deem commercially reasonable. The Borrower agrees that, to the
extent notice of sale shall be required by law, at least 10 days'
notice to the Borrower of the time and place of any public sale
or the time after which any private sale is to be made shall
constitute reasonable notification, but notice given in any other
reasonable manner or at any other reasonable time shall
constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or
private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
SECTION 11.3. Control by Majority Lenders. The Majority
Lenders shall have the right, at any time after the occurrence of and
during the continuance of an Event of Default,
(a) to require the Agent to proceed to enforce the
remedies contained in this Agreement, to the extent permitted by
Applicable Law, by the exercise of the powers hereby conferred on the
Agent, and
(b) to direct the time, place and method of conducting any
proceeding for any remedy available to the Agent or exercising any
trust or power conferred upon it under this Agreement.
SECTION 11.4 Application of Proceeds. All proceeds from each
sale of, or other realization upon, all or any part of the Collateral
following an Event of Default shall be applied or paid over as
follows:
(a) First: to the payment of all costs and expenses
incurred in connection with such sale or other realization, including
attorneys' fees,
(b) Second: to the payment of the Secured Obligations
(with the Borrower remaining liable for any deficiency) in any order
which the Majority Lenders may elect, and
(c) Third: the balance (if any) of such proceeds shall be
paid to the Borrower, subject to any duty imposed by law or otherwise
to whomsoever will be entitled thereto.
The Borrower shall remain liable and will pay, on demand, any
deficiency remaining in respect of the Secured Obligations, together
with interest thereon at a rate per annum equal to the highest rate
then payable hereunder on such Secured Obligations, which interest
shall constitute part of the Secured Obligations.
SECTION 11.5. Power of Attorney. In addition to the authoriza
tions granted to the Agent under SECTION 7.15 or under any other
provision of this Agreement or any of the Loan Documents, upon and
after an Event of Default and for so long as such Event of Default
shall be continuing, the Borrower hereby irrevocably designates,
makes, constitutes and appoints the Agent (and all Persons designated
by the Agent from time to time) as the Borrower's true and lawful
attorney, and agent in fact, and the Agent, or any agent of the Agent,
may, without notice to the Borrower, and at such time or times as the
Agent or any such agent in its sole discretion may determine, in the
name of the Borrower or the Agent or the Lenders,
(i) demand payment of the Receivables,
(ii enforce payment of the Receivables by legal
proceedings or otherwise,
(iii) exercise all of the Borrower's rights and remedies
with respect to the collection of Receivables,
(iv) settle, adjust, compromise, extend or renew any or
all of the Receivables,
(v) settle, adjust or compromise any legal proceedings
brought to collect the Receivables,
(vi) discharge and release the Receivables or any of them,
(vii) prepare, file and sign the name of the Borrower on
any proof of claim in bankruptcy or any similar document against any
Account Debtor,
(viii) prepare, file and sign the name of the Borrower on
any notice of Lien, assignment or satisfaction of Lien, or similar
document in connection with any of the Collateral,
(ix) endorse the name of the Borrower upon any chattel
paper, document, instrument, notice, freight bill, bill of lading or
similar document or agreement relating to the Receivables, the
Inventory or any other Collateral,
(x) use the stationery of the Borrower and sign the name
of the Borrower to verifications of the Receivables and on any notice
to the Account Debtors,
(xi) open the Borrower's mail,
(xii) notify the post office authorities to change the
address for delivery of the Borrower's mail to an address designated
by the Agent, and
(xiii) use the information recorded on or contained in any
data processing equipment and computer hardware and software relating
to the Receivables, Inventory or other Collateral to which the
Borrower has access.
SECTION 11.6. Miscellaneous Provisions Concerning Remedies.
(a) Rights Cumulative. The rights and remedies of the
Agent and the Lenders under this Agreement and each of the other Loan
Documents shall be cumulative and not exclusive of any rights or
remedies which it or they would otherwise have. In exercising their
rights and remedies the Agent and the Lenders may be selective and no
failure or delay by the Agent or any Lender in exercising any right
shall operate as a waiver thereof, nor shall any single or partial
exercise of any power or right preclude its other or further exercise
or the exercise of any other power or right.
(b) Waiver of Marshalling. The Borrower hereby waives any
right to require any marshalling of assets and any similar right.
(c) Limitation of Liability. Nothing contained in this
ARTICLE 11 or elsewhere in this Agreement or in any of the Loan
Documents shall be construed as requiring or obligating the Agent, any
Lender or any agent or designee of the Agent or any Lender to make any
demand, or to make any inquiry as to the nature or sufficiency of any
payment received by it, or to present or file any claim or notice or
take any action, with respect to any Receivable, or any other
Collateral or the moneys due or to become due thereunder or in
connection therewith, or to take any steps necessary to preserve any
rights against prior parties, and neither of the Agent, any Lender nor
any of their respective agents or designees shall have any liability
to the Borrower for actions taken pursuant to this ARTICLE 11, any
other provision of this Agreement or any of the Loan Documents so long
as the Agent or such Lender shall act in a commercially reasonable
manner and in good faith (as defined in the UCC).
(d) Appointment of Receiver. In any action under this
ARTICLE 11, the Agent shall be entitled to the appointment of a
receiver, without notice of any kind whatsoever, to take possession of
all or any portion of the Collateral and to exercise such power as the
court shall confer upon such receiver.
ARTICLE 12 - AGENT
SECTION 12.1. Grant of Authority. Each Lender and each holder
of a Note by its acceptance thereof hereby appoints and authorizes the
Agent to take such action and exercise such powers hereunder as are
specifically delegated to the Agent by the terms of this Agreement and
the other Loan Documents, together with such other powers as are
reasonably incidental thereto.
SECTION 12.2. Action on Instructions. The Agent shall in all
cases (including, without limitation, enforcement or collection of any
Notes) be fully protected in acting or refraining from acting under
this Agreement and any of the Loan Documents upon written instructions
signed by the Majority Lenders, and such instructions and any action
taken or any failure to act pursuant thereto shall be binding on all
the Lenders, all holders of the Notes and their respective successors
and assigns. The Agent shall not have any duty to exercise any right,
power or remedy under this Agreement or any of the Loan Documents or
to take any affirmative action hereunder unless directed to do so by
the Majority Lenders. The Agent shall not be required to take any
action under ARTICLE 11, nor shall any other provision of this
Agreement be deemed to impose a duty on the Agent to take any action,
if the Agent has been advised by legal counsel that such action is
contrary to the terms of this Agreement or is otherwise contrary to
any Applicable Law or could expose the Agent to liability.
SECTION 12.3. Responsibility of the Agent. Neither the Agent
nor any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken under or in
connection with this Agreement or any of the other Loan Documents,
except for its or their gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Agent:
(a) shall not be responsible to the Borrower or any other
Person as a result of any failure or delay in performance by, or any
breach by, any Lender of any of its obligations under this Agreement
or any of the Loan Documents,
(b) shall not be responsible to any Lender or the holder
of any Note as a result of any failure or delay in performance by, or
any breach by, the Borrower of any of its obligations under this
Agreement or any of the Loan Documents,
(c) shall not be responsible to any Lender for
any statements, representations or warranties in this Agreement or any
of the Loan Documents or for the validity, effectiveness,
enforceability or sufficiency of this Agreement or any of the Loan
Documents or any document or instrument delivered in connection with
the transactions contemplated by this Agreement, including, without
limitation, any documents that may be delivered pursuant to ARTICLE 4,
(d) shall not be bound to ascertain or inquire as to the
performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the Loan Documents on the part
of the Borrower,
(e) shall be entitled to rely upon any writing, statement
or notice or any telegraphed, telexed or teletyped message believed by
it to be genuine and correct and to have been signed or sent by the
proper Person,
(f) may consult with counsel and shall be fully protected
in any action taken or omitted to be taken in accordance with the
advice or opinion of such counsel,
(g) may employ agents and attorneys-in-fact and shall not
be liable for the default or misconduct of any such selected by the
Agent with reasonable care, and
(h) may treat the payee of a Note as the holder thereof
until it receives written notice of the assignment or transfer thereof
signed by such payee and in form satisfactory to the Agent.
SECTION 12.4. Representations by the Lenders. Each Lender
hereby represents and warrants to each other Lender and the Agent that
its decision to enter into this Agreement and to make its Advances was
made on the basis of its own credit judgment and in making such
decision it did not rely upon any representation by the Agent or any
other Lender as to the creditworthiness or financial position of the
Borrower. Each Lender also acknowledges that it will, independently
and without reliance upon the Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking any action under this Agreement.
SECTION 12.5. Expenses and Indemnification. To the extent that
the Borrower fails to do so, each Lender and each subsequent holder of
a Note, by its acceptance thereof, agree to reimburse the Agent upon
demand in proportion to the respective Commitment Percentage of each
Lender, or, in the case of any such subsequent holder, in proportion
that the outstanding balance of such holder's Note bears to the total
balance outstanding under all Notes, and to indemnify and hold the
Agent harmless in such proportion against any and all losses,
liabilities or expenses incurred by the Agent arising out of or in
connection with the administration of this Agreement, including the
costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers
and duties hereunder and of taking any action hereunder, provided that
neither the Lenders nor the holder of any Note shall be liable for any
portion of such losses, liabilities or expenses incurred by the Agent
as a result of the Agent's gross negligence or willful misconduct.
SECTION 12.6. Rights of Agent. The Bank of Boston (or any
successor as "Agent") and any of its Affiliate may accept deposits
from, lend money to, and generally engage in any kind of lending,
banking or trust business with, the Borrower and any of its
Subsidiaries and Affiliates as if it were not the Agent or such
Affiliate.
SECTION 12.7. Right to Resign. The Agent may resign at any
time by giving 30 days written notice thereof to each Lender and the
Borrower. Upon any such resignation, the Majority Lenders shall have
the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Majority Lenders and shall have accepted
such appointment within 30 days after any such notice of resignation,
then the retiring entity may, on behalf of the Lenders, appoint a
successor which shall be another Lender, if any other Lender is
willing to serve in such capacity, or, if not, a commercial bank
organized under the laws of the United States of America or any State
thereof having a combined capital and surplus of at least
$100,000,000. After any such resignation, the provisions of this
ARTICLE 12 shall continue in effect for the benefit of the retiring
entity with respect to any actions taken or omitted by it while acting
as Agent.
SECTION 12.8. Reliance by Borrower. The Borrower shall not be
bound to ascertain the authority of the Agent to act on behalf of the
Lenders in connection with any of the matters governed or contemplated
by this Agreement, or to inquire as to the satisfaction of any
conditions precedent to the exercise of such authority. The Borrower
shall be entitled to rely, and shall be fully protected in relying,
upon any writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the
Agent on behalf of the Lenders.
ARTICLE 13 - MISCELLANEOUS
SECTION 13.1. Notices.
(a) Method of Communication. Except as specifically
provided in this Agreement or in any of the Loan Documents, all
notices and the communications hereunder and thereunder shall be in
writing or by telephone or facsimile, subsequently confirmed in
writing. Notices in writing shall be delivered personally (including
by any reputable overnight courier) or sent by certified or registered
mail postage pre-paid or by telegraph or telex and shall be deemed
received in the case of personal delivery, when delivered, in the case
of mailing, on the third day after mailing, in the case of telegraph,
on the day after delivery to the telegraph office and in the case of
telex, upon transmittal, provided that in the case of notices to the
Agent, notice shall be deemed to have been given only when such notice
is actually received by the Agent. A telephonic notice to the Agent,
as understood by the Agent, will be deemed to be the controlling and
proper notice in the event of a discrepancy with or failure to receive
a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be
sent to it at the following addresses, or any other address of which
all the other parties are notified in writing
If to the Borrower: Synthetic Industries, Inc.
309 LaFayette Road
Chickamauga, Georgia 30707
Attn: Jon P. Beckman
Telecopier No.: (706) 375-7842
If to the Agent: The First National Bank of
Boston
Suite 745
400 Perimeter Center Terrace
Atlanta, Georgia 30346
Attn: James A. Mahoney
Stephen Y. McGehee
Telecopier No.: (404) 393-4166
If to a Lender: At the address of such Lender set
forth on ANNEX A hereto.
(c) Agent's Office. The Agent hereby designates its
office located at 100 Federal Street, Boston, Massachusetts 02110, or
any subsequent office which shall have been specified for such purpose
by written notice to the Borrower, as the office to which payments due
are to be made and at which Advances will be disbursed.
SECTION 13.2. Expenses. The Borrower will pay all reasonable
out-of-pocket expenses of the Agent and any Affiliate of the Agent in
connection with
(a) the preparation, execution and delivery of this Agree
ment and each of the Loan Documents and each of the Foreign Facility
Agreements, whenever the same shall be executed and delivered,
including appraisers' fees, fees in connection with environmental site
assessments, search fees, recording fees, taxes, title insurance
premium and the fees and disbursements of special counsel for the
Agent and of each local counsel retained by the Agent,
(b) the preparation, execution and delivery of any waiver,
amendment or consent relating to this Agreement, the Notes or any of
the Loan Documents or any Foreign Facility Agreements or the process
of a Person becoming a Lender hereunder, including reasonable
attorneys' fees and disbursements, search fees, recording fees, taxes
and title insurance premiums,
(c) consulting with one or more Persons, including
appraisers, accountants and lawyers, concerning or related to the
nature, scope or value of any right or remedy hereunder or under any
of the Loan Documents or under any of the Foreign Facility Documents,
including any review of factual matters in connection therewith, which
expenses shall include the fees and disbursements of such Persons, and
(d) prosecuting or defending any claim in any way arising
out of, related to, or connected with, or enforcing any provision of,
this Agreement or any of the Loan Documents or any of the Foreign
Facility Documents, which expenses shall include the fees and disburse
ments of counsel and of experts and other consultants retained by the
Agent.
SECTION 13.3. Stamp and Other Taxes. The Borrower will pay any
and all stamp, registration, recordation and similar taxes, fees or
charges and shall indemnify the Agent and the Lenders against any and
all liabilities with respect to or resulting from any delay in the
payment or omission to pay any such taxes, fees or charges, which may
be payable or determined to be payable in connection with the
execution, delivery, performance or enforcement of this Agreement and
any of the Loan Documents or the perfection of any rights or security
interest thereunder.
SECTION 13.4. Setoff. In addition to any rights now or here
after granted under Applicable Law and not by way of limitation of any
such rights, upon and after the occurrence of any Default or Event of
Default, each Lender and any participant with any Lender in the Loans
are hereby authorized by the Borrower at any time or from time to
time, without notice to the Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate
and to apply any and all deposits (general or special, including, but
not limited to, indebtedness evidenced by certificates of deposit,
whether matured or unmatured) and any other indebtedness at any time
held or owing by such Lender or any Affiliate of such Lender, or any
participant to or for the credit or the account of the Borrower
against and on account of the Secured Obligations irrespective or
whether or not
(a) the Agent or such Lender shall have made any demand
under this Agreement or any of the Loan Documents, or
(b) the Agent or such Lender shall have declared any or
all of the Secured Obligations to be due and payable as permitted by
SECTION 11.2 and although such Secured Obligations shall be contingent
or unmatured.
SECTION 13.5. Pro-Rata Participation.
(a) Each Lender agrees that
(i) if it or any of its Affiliates shall exercise any
right of counterclaim, set-off, banker's lien or similar right,
or if under any applicable bankruptcy, insolvency or other
similar law it receives a secured claim the security for which is
a debt owed by it to the Borrower, it shall apportion the amount
thereof, on a pro rata basis, between (A) the amount at the time
owed to it by the Borrower under this Agreement, and (B) amounts
otherwise owed to it by the Borrower, and
(ii) if, as a result of the exercise of a right or
the receipt of a secured claim and the apportionment thereof
described in CLAUSE (I) of this SECTION 13.5(A) or otherwise, it
shall receive payment of a proportion of the aggregate amount of
principal and interest due with respect to the Indebtedness owed
to it under this Agreement such that the aggregate remaining
amount of principal and interest owed to it under this Agreement
is less than the proportion of such amounts then owed to any
other Lender, such Lender shall purchase participations (which it
shall be deemed to have purchased simultaneously upon the receipt
of such payment) in the Indebtedness then held by the other
Lenders so that after giving effect to all such recoveries of
principal and interest with respect to all Indebtedness owed to
each Lender, the aggregate amount of principal and interest owing
to each Lender under this Agreement shall be pro rata on the
basis of its respective Commitment Percentage, PROVIDED that if
all or part of such payment received by such purchasing Lender is
thereafter recovered by or on behalf of the Borrower from such
Lender, such purchases shall be rescinded and the purchase prices
paid for such participations shall be returned to such Lender to
the extent of such recovery, but without interest.
(b) Each Lender which receives such a secured claim shall
exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this SECTION
13.5 to share in the benefits of any recovery on such secured claim.
(c) The Borrower expressly consents to the foregoing
arrangements and agrees that any holder of a participation in any
indebtedness so purchased or otherwise acquired may exercise any and
all rights of banker's lien, set-off or counterclaim with respect to
any and all monies owing by the borrower to such holder as fully as if
such holder were a holder of such indebtedness in the amount of the
participation held by such holder.
SECTION 13.6. Litigation. EACH OF THE BORROWER, THE AGENT AND
EACH LENDER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF
ANY KIND OR NATURE IN ANY COURT IN WHICH AN ACTION MAY BE COMMENCED BY
OR AGAINST THE BORROWER, THE AGENT OR ANY LENDER ARISING OUT OF THIS
AGREEMENT, THE COLLATERAL OR ANY ASSIGNMENT THEREOF OR BY REASON OF
ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN THE BORROWER AND THE
AGENT OR ANY LENDER OF ANY KIND OR NATURE. THE BORROWER AND THE AGENT
AND THE LENDERS HEREBY AGREE THAT THE FEDERAL COURT OF THE NORTHERN
DISTRICT OF GEORGIA OR, AT THE OPTION OF THE AGENT OR ANY LENDER, ANY
COURT IN WHICH THE AGENT OR ANY LENDER SHALL INITIATE LEGAL OR
EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER
THE MATTER IN CONTROVERSY, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR
AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE BORROWER AND THE
AGENT OR ANY LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT OR THE LOAN DOCUMENTS OR TO ANY MATTER ARISING THEREFROM.
THE BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS,
HEREBY WAIVING PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER
PROCESS OR PAPERS ISSUED THEREIN, AND AGREEING THAT SERVICE OF SUCH
SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE BORROWER AT THE ADDRESS
OF THE BORROWER SET FORTH ABOVE. SHOULD THE BORROWER FAIL TO APPEAR
OR ANSWER ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN
THIRTY (30) DAYS AFTER THE MAILING THEREOF, IT SHALL BE DEEMED IN
DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED AGAINST IT AS
DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS.
THE EXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE THE
SAME IN ANY APPROPRIATE JURISDICTION.
_________ (Initial)
SECTION 13.7. Consent to Advertising and Publicity. The
Borrower hereby consents and agrees that the Agent on behalf of the
Lenders may issue and disseminate to the public, subject to the
Borrower's approval, information describing the credit accommodation
entered into pursuant to this Agreement, including the names and
addresses of the Borrower and its Subsidiaries and Affiliates, the
amount, interest rate, maturity, collateral, and a general description
of the Borrower's and its Subsidiaries' business.
SECTION 13.8. Reversal of Payments. The Agent and each Lender
shall have the continuing and exclusive right to apply, reverse, and
reapply any and all payments to any portion of the Secured
Obligations. To the extent the Borrower makes a payment or payments
to the Agent on behalf of the Lenders or to a Lender or the Agent or a
Lender receives any payment or proceeds of the Collateral for the
Borrower's benefit, which payment(s) or proceeds or any part thereof
are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the Secured Obligations or part thereof
intended to be satisfied shall be revived and continued in full force
and effect, as if such payment or proceeds had not been received by
the Agent or such Lender.
SECTION 13.9. Injunctive Relief. The Borrower recognizes that,
in the event the Borrower fails to perform, observe or discharge any
of its obligations or liabilities under this Agreement, any remedy of
law may prove to be inadequate relief to the Agent and the Lenders;
therefore, the Borrower agrees that the Agent or any Lender, if the
Agent or such Lender so requests, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of
proving actual damages.
SECTION 13.10 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose
relating to this Agreement, including, without limitation, all
computations utilized by the Borrower in complying with any covenant
contained herein, shall, unless there is an express agreement among
the parties to the contrary, be performed in accordance with GAAP
consistently applied.
SECTION 13.11 Participations; Assignments.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Agent, all future holders of
the Notes, and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of
each Lender.
(b) Subject to the consent of the Agent and the Borrower,
which consent shall not be unreasonably withheld, each Lender may
assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including,
without limitation, all or a portion of the Loans at the time owing to
it and the Notes held by it); PROVIDED, HOWEVER, that (i) each such
assignment shall be of a constant, and not a varying, percentage of
all the assigning Lender's rights and obligations under this
Agreement, (ii) the amount of the Commitment of the assigning Lender
that is subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered
to the Agent) shall in no event be less than $5,000,000, (iii) in the
case of a partial assignment, the amount of the Commitment that is
retained by the assigning Lender (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered
to the Agent) shall in no event be less than $5,000,000, (iv) the
parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register (as
hereinafter defined) an Assignment and Acceptance, together with any
Note or Notes subject to such assignment, and a processing and
recording fee in an amount equal to $2,500, (v) such assignment shall
not, without the consent of the Borrower, require the Borrower to file
a registration statement with the Securities and Exchange Commission
or apply to or qualify the Loans or the Notes under the blue sky laws
of any state, and (vi) the representation contained in SECTION 12.4
hereof shall be true with respect to any such proposed assignee. Upon
such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the
execution thereof, (x) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder, and (y) the Lender
assignor thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement, from and after
the effective date of such assignment.
(c) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (i) other than the representation and warranty that it is
the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim, such Lender assignor makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; (ii) such
Lender assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower
or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the
financial statements referred to in SECTION 5.1(N) and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such Lender assignor or any other Lender, and
based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the other Loan Documents
as are delegated to the Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the
names and addresses of the Lenders and the Commitment Percentage of,
and principal amount of the Loans owing to, each Lender from time to
time (the "Register"). The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Agent and the Lenders may treat each person whose name is recorded in
the Register as a Lender hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Eligible Assignee together with
any Note or Notes subject to such assignment and the written consent
to such assignment, the Agent shall, if such Assignment and Acceptance
has been completed and is in the form of EXHIBIT H, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register, (iii) give prompt notice thereof to the
Lenders and the Borrower, and (iv) promptly deliver a copy of such
Acceptance and Assignment to the Borrower. Within five Business Days
after receipt of notice, the Borrower shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note or
Notes to the order of such Eligible Assignee in amounts equal to the
Commitment Percentage assumed by such Eligible Assignee pursuant to
such Assignment and Acceptance and a new Note or Notes to the order of
the assigning Lender in an amount equal to the Commitment retained by
it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the
form of the assigned Notes delivered to the assignor Lender. Each
surrendered Note or Notes shall be canceled and returned to the
Borrower.
(f) Each Lender may, without the consent of the Borrower
or the Agent, sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its
Commitment hereunder and the Loans owing to it and the Notes held by
it); PROVIDED, HOWEVER, that (i) each such participation shall be in
an amount not less than $5,000,000, (ii) such Lender's obligations
under this Agreement (including, without limitation, its Commitment
hereunder) shall remain unchanged, (iii) such Lender shall remain
solely responsible to the other parties hereto for the performance of
such obligations, (iv) such Lender shall remain the holder of the
Notes held by it for all purposes of this Agreement, (v) the Borrower,
the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement; PROVIDED, that such Lender may agree
with any participant that such Lender will not, without such
participant's consent, agree to or approve any waivers or amendments
which would reduce the principal of or the interest rate on any Loans,
extend the term or increase the amount of the commitments of such
participant, reduce the amount of any fees to which such participant
is entitled, extend any scheduled payment date for principal or
release Collateral securing the Loans (other than Collateral disposed
of pursuant to SECTION 7.8 hereof or otherwise in accordance with the
terms of this Agreement or the Security Documents), and (vi) any such
disposition shall not, without the consent of the Borrower, require
any Borrower to file a registration statement with the Securities and
Exchange Commission to apply to qualify the Loans or the Notes under
the blue sky law of any state. The Lender selling a participation to
any bank or other entity that is not an Affiliate of such Lender shall
give prompt notice thereof to the Borrower, the Agent and the other
Lenders.
(g) Any Lender may, in connection with any assignment,
proposed assignment, participation or proposed participation pursuant
to this SECTION 13.11, disclose to the assignee, participant, proposed
assignee or proposed participant, any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower;
PROVIDED that, prior to any such disclosure, each such assignee,
proposed assignee, participant or proposed participant shall agree
with the Borrower or such Lender (which in the case of an agreement
with only such Lender, the Borrower shall be recognized as a third
party beneficiary thereof) to preserve the confidentiality of any
confidential information relating to the Borrower received from such
Lender.
SECTION 13.12. Amendments. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing signed by the Majority Lenders and, in the
case of an amendment, by the Borrower, and then such waiver or consent
shall be effective only in the specified instance and for the specific
purpose for which given; PROVIDED, HOWEVER, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders and,
in the case of an amendment, by the Borrower, do any of the following:
(a) waive any of the conditions specified in ARTICLE 4, (b) increase
the Commitments or Commitment Percentages of the Lenders or subject
the Lenders to any additional obligations, (c) reduce the principal
of, or interest on, or rate of interest applicable to, the Notes or
reduce any fees or other amounts payable to the Lenders hereunder, (d)
postpone any date fixed for any payment of principal of, or interest
on, the Notes or of any fees or other amounts payable to the Lenders
hereunder, (e) release any material Collateral or any Real Estate,
other than in accordance with the provisions of this Agreement or the
applicable Mortgage, as the case may be, (f) change the percentage of
the aggregate unpaid principal amount of the Loans or the Commitments
which shall be required for the Lenders or any of them to take any
action hereunder, (g) amend the definition "Borrowing Base" or
increase any advance rate thereunder or (h) amend the provisions of
SECTION 13.11(B) or of this SECTION 13.12; and PROVIDED, FURTHER, that
no amendment, waiver or consent shall, unless in writing and signed by
the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Agent under this Agreement
or any Note or any other Loan Document.
SECTION 13.13 Performance of Borrower's Duties.
(a) The Borrower's obligations under this Agreement and
each of the Loan Documents shall be performed by the Borrower at its
sole cost and expense.
(b) If the Borrower shall fail to do any act or thing
which it has covenanted to do under this Agreement or any of the Loan
Documents, the Agent on behalf of the Lenders may (but shall not be
obligated to) do the same or cause it to be done either in the name of
the Agent or the Lenders or in the name and on behalf of the Borrower
and the Borrower hereby irrevocably authorizes the Agent so to act.
SECTION 13.14. Indemnification. The Borrower agrees to
reimburse the Agent and each Lender and their respective directors,
officers, employees, agents and representatives for all costs and
expenses, including counsel fees and disbursements, incurred, and to
indemnify, defend and hold the Agent and each Lender harmless from and
against all losses suffered by, the Agent or any Lender in connection
with
(a) the exercise by the Agent or any Lender of any right
or remedy granted to it under this Agreement or any of the Loan
Documents,
(b) any claim, and the prosecution or defense thereof,
arising out of or in any way connected with this Agreement or any of
the Loan Documents, and
(c) the collection or enforcement of the Secured
Obligations or any of them;
except that the Borrower shall not be required to indemnify the Agent
or any Lender, respectively, for any losses resulting from the gross
negligence or willful misconduct on the part of the Agent or such
Lender, respectively.
SECTION 13.15. All Powers Coupled with Interest. All powers of
attorney and other authorizations granted to the Agent and the Lenders
and any Persons designated by the Agent or any Lender pursuant to any
provisions of this Agreement or any of the Loan Documents shall be
deemed coupled with an interest and shall be irrevocable so long as
any of the Secured Obligations remain unpaid or unsatisfied or any
Lender has any obligation to extend any financial accommodation to the
Borrower hereunder.
SECTION 13.16. Survival. Notwithstanding any termination of
this Agreement,
(a) until all Secured Obligations have been irrevocably
paid in full or otherwise satisfied and the Commitment of each Lender
has been terminated, the Agent on behalf of the Lenders shall retain
its Security Interest and shall retain all rights under this Agreement
and each of the Security Documents with respect to such Collateral as
fully as though this Agreement had not been terminated, and
(b) the indemnities to which the Agent and the Lenders are
entitled under the provisions of this ARTICLE 13 and any other
provision of this Agreement and the Loan Documents shall continue in
full force and effect and shall protect the Agent and the Lenders
against events arising after such termination as well as before.
SECTION 13.17. Titles and Captions. Titles and captions of
Articles, Sections and subsections in this Agreement are for
convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 13.18 Severability of Provisions. Any provision of
this Agreement or any Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining
provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 13.19 Governing Law. This Agreement and the Notes
shall be construed in accordance with and governed by the law of the
State of Georgia (without regard to conflicts of law principles) other
than the provisions of SECTION 13.6 as to waiver of jury trial which
shall be governed by the internal laws (without regard to conflicts of
law principles) of the jurisdiction in which suit is brought.
SECTION 13.20 Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and shall be binding upon all parties, their successors and
assigns, and all of which taken together shall constitute one and the
same agreement.
SECTION 13.21 Reproduction of Documents. This Agreement, each
of the Loan Documents and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may
hereafter be executed, (b) documents received by the Agent or the
Lenders and (c) financial statements, certificates and other
information previously or hereafter furnished to the Agent or the
Lenders, may be reproduced by the Agent or any Lender by any
photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and such Person may destroy any
original document so produced. Each party hereto stipulates that, to
the extent permitted by Applicable Laws, any such reproduction shall
be as admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original shall be in
existence and whether or not such reproduction was made by such Lender
in the regular course of business), and any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible
in evidence.
SECTION 13.22 Term of Agreement. This Agreement shall remain
in effect from the Effective Date through the Termination Date and
thereafter until all Secured Obligations shall have been irrevocably
paid and satisfied in full and the Commitment of each Lender has
terminated. No termination of this Agreement shall affect the rights
and obligations of the parties hereto arising prior to such
termination.
SECTION 13.23 Effect of Effectiveness of Agreement.
(a) From and after the Effective Date, all references in
this Agreement or in any other Loan Document (whether delivered
pursuant to this Agreement or pursuant to the Existing Credit
Agreement) to this Agreement or the "Credit Agreement," and the words
"herein," "hereof" and words of like import referring to this
Agreement, shall mean and be references to the Existing Credit
Agreement as amended and restated in its entirety by this Agreement,
and all references in this Agreement, in any other Loan Document
(whether delivered pursuant to this Agreement or pursuant to the
Existing Credit Agreement) or in any Revolving Credit Note or Term
Note to a "Revolving Credit Note" or to a "Term Note," and the words
"herein," "hereof" and words of like import referring to any such
Note, shall mean and be references to the Third Amended and Restated
Revolving Credit Notes and, as applicable, the Third Amended and
Restated Term Notes and the Term Notes, respectively, in the forms
attached hereto as EXHIBITS A, B-1 and B-2, respectively,
appropriately completed and duly executed and delivered by the
Borrower.
(b) Without limiting the generality of the foregoing, from
and after the Effective Date, the Commitments and the Commitment
Percentages of the Lenders shall be as set forth on Annex A attached
hereto.
ARTICLE 14 - GUARANTY OF FOREIGN FACILITY DEBT
SECTION 14.1. Guaranty. In consideration of the Foreign
Facilities provided by the Lenders or their Affiliates, the Borrower,
as primary obligor and not as surety merely, hereby irrevocably
guarantees absolutely and unconditionally to each Lender and each
Affiliate thereof the due and punctual payment, when and as due
(whether upon demand, at maturity, by reason of acceleration or
otherwise) and performance, of the Foreign Facility Debt and all other
obligations arising under the Foreign Facility Agreements
(collectively, the Guaranteed Obligations) and agrees to pay any and
all expenses (including, but not limited to, reasonable legal fees and
disbursements) which may be incurred by the Agent or such Lender in
collecting any or all of such amounts or in enforcing any rights under
this Guaranty or any of the Foreign Facility Agreements. The liabil
ity of the Borrower under this Guaranty shall be unlimited and uncondi
tional, and this Guaranty shall be a continuing guaranty of all
obligations of the Foreign Subsidiaries under the Foreign Facility
Debt and Foreign Facility Agreements.
SECTION 14.2. Payment by Borrower. If any Foreign Subsidiary
shall fail to pay, when due and payable, any amount due to any Lender
or any Affiliate of such Lender under any Foreign Facility, the
Borrower will, without demand or notice, immediately pay the same to
the Agent for the account of such Lender or Affiliate. If any Foreign
Facility would be subject to acceleration, but such acceleration is
enjoined or stayed, the Borrower will to the extent permitted by
Applicable Law, purchase such Foreign Facility for a price equal to
the outstanding principal amount thereof, plus such accrued interest
and other amounts as would have been payable had such Foreign Facility
been paid or prepaid at the time of such purchase. All payments by
the Borrower under this Guaranty shall be made without any setoff,
counterclaim, or deduction whatsoever, and in the same currency and
funds as are required to be paid by the Foreign Subsidiaries.
SECTION 14.3. Waiver. The Borrower, to the extent permitted by
Applicable Law,
(a) waives (i) diligence, presentment, demand, protest and
notice of any kind whatsoever, (ii) any requirement that the Agent or
any Lender or any Affiliate of any Lender exhaust any right or remedy
or take any action against any Foreign Subsidiary or any other Person
which may be or become liable in respect of all or any part of such
amounts or obligations, or against any assets of any Foreign
Subsidiary or collateral security or guaranty therefor or right of
offset with respect thereto, and (iii) the benefit of all principles
or provisions of Applicable Law which are or might be in conflict with
the terms of this Guaranty, including, without limitation, Section 10-
7-24 of the Official Code of Georgia Annotated, and
(b) consents that the time of payment of any Foreign
Facility may be extended or any provision of the Foreign Facility
Agreements may be amended, waived or modified without notice to or
further assent from the Borrower and the Borrower will remain bound
under this Guaranty notwithstanding such changes, extensions,
amendments, waivers or modifications or any other circumstances,
whether or not referred to above, which might otherwise constitute a
legal or equitable discharge of a guaranty.
SECTION 14.4. Absolute Obligation. To the extent permitted by
law, the obligations of the Borrower hereunder are irrespective of and
shall not be dependent upon or affected by
(a) the validity, legality, regularity or enforceability
of the Foreign Facility Agreements or any of the obligations in
respect thereof or any collateral security or guaranty thereof,
(b) the existence, value or condition of any of the assets
of any Foreign Subsidiary,
(c) the validity, perfection or priority of any charge on
or security interest in the assets of any Foreign Subsidiary,
(d) any action or failure to take action by the Agent, any
Lender or any Affiliate of any Lender under, or with respect to, any
of the Foreign Facility Agreements,
(e) any right of offset with respect to Foreign Subsidiary
Debt or other obligations under the Foreign Facilities at any time or
from time to time held by the Agent or any Lender or any Affiliate
thereof and without regard to any defense, setoff or counterclaim
which may at any time be available to or be asserted by the Borrower
or any of the Foreign Subsidiaries against the Agent or any Lender or
any Affiliate thereof,
(f) any other dealings among the Agent, the Lenders, any
Affiliate thereof, the Borrower and the Foreign Subsidiaries,
(g) any present or future law or order of any government
agency thereof purporting to reduce, amend or otherwise affect any
obligations of the Foreign Subsidiaries, or
(h) any other circumstance whatsoever (with or without
notice to or knowledge of the Borrower or any Foreign Subsidiary)
which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower or such Foreign Subsidiary for any
Foreign Subsidiary Debt or other obligations of such Foreign
Subsidiary under any Foreign Facility Agreements, in bankruptcy or in
any other instance.
SECTION 14.5. Payments Free and Clear of Taxes, Etc.
(a) All payments under this Guaranty shall be made free
and clear of and without deduction for any and all present and future
taxes, levies, imposts, deductions, charges, withholdings, and all
liabilities with respect thereto, excluding income and franchise taxes
of the United States and of the jurisdiction of the lending office of
the appropriate Lender or Affiliate and any political subdivision of
either thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). Within 10 days after the date of each such
payment hereunder, the Borrower will also furnish to the appropriate
Lender or Affiliate the original or a certified copy of either a
receipt for payment of each of the Taxes payable in respect of such
payment hereunder or, if no Taxes are payable in respect of such
payment, a certificate from each appropriate taxing authority, or an
opinion of counsel acceptable to such Lender or Affiliate, in either
case stating that such payment is exempt from or not subject to Taxes.
(b) In addition, the Borrower will pay any United States
taxes on the acquisition of debt obligations of a Foreign Subsidiary
and any stamp or other taxes of any jurisdiction with respect to the
execution, delivery, registration, performance and enforcement of this
Guaranty, Taxes specified in CLAUSE (A) above and taxes of all
jurisdictions with respect to any amounts paid under this CLAUSE (B).
If any Taxes specified in CLAUSE (A) above or any taxes mentioned in
this CLAUSE (B) are paid by a Lender or such Lender's Affiliate, the
Borrower will, upon demand of such Lender or Affiliate, and whether or
not such Taxes or taxes shall be correctly or legally asserted,
indemnify such Lender or Affiliate for such payments, together with
any interest, penalties and expenses in connection therewith plus
interest thereon at the rate specified in SECTION 3.1 of this
Agreement (calculated as if such payments constituted overdue amounts
of principal as of the date of the making of such payments).
SECTION 14.6. Currency Changes. The Borrower shall be liable
to pay any amount due hereunder in the currency in which, and at the
place where, the Foreign Subsidiaries are to pay that amount under the
terms of the respective Foreign Facility Agreement. If for the
purposes of obtaining judgment in any court in any country it becomes
necessary to convert into any other currency (the "Judgment
Currency"), any amount in the currency due hereunder (the "Guaranteed
Currency"), then the conversion shall be made at the rate of exchange
prevailing either on the date when the guaranteed obligation shall
have become due or on the Business Day before the day on which
judgment is given, whichever shall be the more favorable to Lender or
its Affiliate. In the event that there is a change in the rate of
exchange prevailing between the date when the guaranteed obligation
became due (or, as the case may be, the Business Day before the day on
which the judgment is given) and the date of payment of the guaranteed
obligation, whether such payment is by the Foreign Subsidiary or by
the Borrower, the Borrower will pay such additional amount (if any,
but in any event not a lesser amount) as may be necessary to insure
that the amount paid on such date is the amount in the Judgment
Currency which, when converted at the rate of exchange prevailing on
the date of payment, is the amount then due in accordance with this
Guaranty in the Guaranteed Currency. Any amount due from the Borrower
under this SECTION 14.6 will be due as a separate debt and shall not
be affected by a judgment's being obtained for any other sums due
under or in respect of this Guaranty. For purposes of this SECTION
14.6, the rate of exchange shall be the rate at which a Lender or its
Affiliate is able on the relevant date to purchase the Guaranteed
Currency with the Judgment Currency and includes any premiums and
costs of exchange.
SECTION 14.7. Recovery of Payments. In the event that any or
all of the amounts guaranteed by the Borrower are or were paid by a
Foreign Subsidiary or are or were paid or reduced by application of
the proceeds of any assets of the Foreign Subsidiary, and all or any
part of such payment is rescinded or must otherwise be restored or
recovered from any Lender or any Affiliate of a Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
any of the Foreign Subsidiaries, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, such Foreign Subsidiary or any substantial part
of its property, or otherwise, then all as though such payment had not
been made, the liability of the Borrower under this Guaranty shall con
tinue, or be reinstated, and shall remain in full force and effect to
the extent permitted by law.
SECTION 14.8. Subrogation. Any and all rights of subrogation
or similar rights which the Borrower may have against any Foreign
Subsidiary or any assets of any Foreign Subsidiary or against any
other guarantor or any collateral security held by the Agent or any
Lender or any Affiliate of a Lender for the payment of the obligations
in respect of any Foreign Facility or otherwise shall be subordinate
to any and all rights which the Agent or any Lender or any such
Affiliate may have against such Foreign Subsidiary or any assets of
such Foreign Subsidiary or against such other guarantor or collateral
security pursuant to any Foreign Facility Agreement or otherwise and
the Borrower will not enforce any such right of subrogation or any
similar right until all amounts guaranteed by it hereunder have been
paid in full.
SECTION 14.9. Consent to Amendments, Etc. The Borrower hereby
consents that, without the necessity of any reservation of rights
against the Borrower and without notice to or further assent by the
Borrower, any demand for payment of any of the obligations in respect
of any Foreign Facility made by the Agent or any Lender or any
Affiliate thereof may be rescinded and any of such obligations
continued and such obligations, or the liability of any of the Foreign
Subsidiaries in respect thereof or any other Person upon or for any
part thereof, or any collateral security or guaranty therefor or right
of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Agent or any
Lender or any Affiliate thereof and any obligation under any Foreign
Facility, Foreign Facility Debt or Foreign Facility Agreement, any
collateral security documents or guaranties or documents in connection
herewith or therewith may be amended, modified, supplemented or
terminated, in whole or in part, in accordance with the terms thereof,
as the Agent and the Lenders and their respective Affiliates may deem
advisable from time to time, and any collateral security or guaranty
or right of offset at any time held by the Agent or any Lender or any
such Affiliate for the payment of such obligations may be sold,
exchanged, waived, surrendered or released, all without the necessity
of any reservation of rights against the Borrower and without notice
to or further assent by the Borrower, which will remain bound under
this SECTION 14.9, notwithstanding any such renewal, extension,
modification, acceleration, compromise, amendment, supplement,
termination, sale, exchange, waiver, surrender or release. Neither
the Agent nor any Lender nor any of their respective Affiliates shall
have any obligation to protect, secure, perfect or insure any other
collateral security documents or property subject thereto at any time
held as security for such obligations. The Borrower waives any and
all notice of the creation, renewal, extension or accrual of any of
the obligations and notice of or proof of reliance by the Agent or any
Lender or any such Affiliate upon this SECTION 14.9, and such
obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred in reliance upon this SECTION
14.9, and all dealings between such Foreign Subsidiary, the Borrower,
the Agent, the Lenders and such Affiliates shall likewise be
conclusively presumed to have been had or consummated in reliance upon
this SECTION 14.9.
SECTION 14.10. Binding Nature of Certain Adjudications. Upon
written notice of the institution by the Agent or any Lender of any
action or proceedings, legal or otherwise, for the adjudication of any
controversy with any Foreign Subsidiary, the Borrower will be
conclusively bound by the adjudication in any such action or
proceedings and by any judgment, award or decree entered therein. The
Borrower waives the right to assert in any action or proceeding
brought by the Agent or any Lender or any Affiliate thereof, upon any
of the Foreign Facility Agreements, any offsets or counterclaims which
the Borrower may have with respect thereto; provided, however, that
this SECTION 14.10 shall not prohibit the Borrower from bringing any
action in its own name under any Foreign Facility Agreement or from
asserting any mandatory counterclaim required to be asserted by
Applicable Law.
SECTION 14.11. Validity and Enforceability of Guaranty. The
Borrower agrees that at any time and from time to time upon the
written request of the Agent or any Lender, the Borrower will execute
and deliver such further documents and do such further acts and things
as the Agent or such Lender may reasonably request in order to effect
the purposes of this ARTICLE 14 and will take all action required so
that this Guaranty will at all times be a binding obligation of the
Borrower enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers in several
counterparts all as of the day and year first written above.
BORROWER:
SYNTHETIC INDUSTRIES,
INC.
By: _/s/ Leonard
Chill____ ___
[Corporate Seal] Name: _Leonard Chill____
Title:
____President___ ___
Attest: __/s/ Jon P. Beckman ______
Name: __Jon P. Beckman___ _____
Title: ___Secretary______________
AGENT:
THE FIRST NATIONAL BANK
OF BOSTON
By: _/s/ William C.
Puriton______
William C. Purinton
Vice President
LENDERS:
THE FIRST NATIONAL BANK OF BOSTON
By: _/s/ William C.
Puriton_ __
William C. Purinton
Vice President
SOUTHTRUST BANK OF GEORGIA, N.A.
By: _/s/ Melinda M. Bergbom___
Name: Melinda M. Bergbom
Title: Vice President
SANWA BUSINESS CREDIT CORPORATION
By: _/s/ Peter L. Skavla_______
Name: Peter L. Skavla
Title: Vice President
ANNEX A
Proportionate
Share of Proportionate Proportionate
Commitment Revolving Share of Share of
Lender Percentage Commitment Credit Term Loan Term Loan
Facility A B
The First
National
Bank of
Boston 46.154% $30,000,100 $16,153,900 $8,769,260 $5,076,940
SouthTrust
Bank of
Georgia,
N.A. 30.769% $19,999,850 $10,769,150 $5,846,110 $3,384,590
Sanwa
Business
Credit
Corp 23.077% $15,000,050 $ 8,076,950 $4,384,630 $2,538,470
TOTALS 100.000% $65,000,000 $35,000,000 $19,000,000 $11,000,000
[EXECUTION COPY]
EXHIBIT A
FORM OF THIRD AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$________________ Atlanta, Georgia
January __, 1995
FOR VALUE RECEIVED, the undersigned SYNTHETIC INDUSTRIES,
INC., a Delaware corporation (the "Borrower"), hereby unconditionally
promises to pay to the order of __________________________ (the
"Lender"), on January 1, 2000 the principal amount of
_____________________ AND NO/100 DOLLARS ($_______________), or, if
less, the aggregate unpaid balance of all Advances under the Revolving
Credit Facility (each term as defined in the Credit Agreement referred
to below) made by the Lender to the Borrower pursuant to the Credit
Agreement (as hereinafter defined), the provisions of which are hereby
incorporated herein by reference. All payments made under this Third
Amended and Restated Revolving Credit Note (as further amended, this
"Revolving Credit Note") shall be made in lawful money of the United
States of America, in federal or other immediately available funds.
The Borrower also unconditionally promises to pay interest
on the unpaid principal amount of this Revolving Credit Note for each
day from the date hereof until such principal amount is paid in full
at the rates per annum and on the dates specified in the Credit
Agreement applicable from time to time in accordance with the
provisions thereof. Nothing contained in this Revolving Credit Note
or in the Credit Agreement shall be deemed to establish or require the
payment of a rate of interest in excess of the maximum rate permitted
by any Applicable Law. In the event that any rate of interest
required to be paid hereunder exceeds the maximum rate permitted by
Applicable Law, the provisions of the Credit Agreement relating to the
payment of interest under such circumstances shall control.
Both principal and interest are payable in lawful money of
the United States of America to the Agent for the account of the
Lender at the Agent's office at 100 Federal Street, Boston,
Massachusetts 02110, in federal or other immediately available funds.
This Revolving Credit Note is made by the Borrower and given
to the Lender in substitution for that certain Second Amended and
Restated Revolving Credit Note dated [September 3, 1993/December 28,
1994] in the original principal amount of $_____________ payable to
the Lender but not in extinguishment of the debt evidenced thereby.
For the purposes of this Revolving Credit Note, "Credit
Agreement" means the Third Amended and Restated Revolving Credit and
Security Agreement dated as of January 13, 1995 among the Borrower,
the Agent, the Lender and the other lenders identified therein, as the
same may be amended, modified, supplemented or restated from time to
time.
Reference is made to the Credit Agreement for the
definitions of other terms used in this Revolving Credit Note.
Presentment for payment, demand, protest and notice of
demand, notice of dishonor and notice of non-payment and all other
notices are hereby waived by the Borrower.
This Revolving Credit Note is one of the Revolving Credit
Notes under, is secured in accordance with the terms of, and is
entitled to the benefits of, the Credit Agreement, which, among other
things, contains provisions with respect to security for the
indebtedness evidenced hereby, the acceleration of the maturity and
prepayments of the principal of this Revolving Credit Note prior to
maturity, all upon the terms and conditions therein specified.
The Borrower hereby agrees to pay on demand all costs and
expenses incurred in collecting the Borrower's obligations hereunder
or in enforcing or attempting to enforce any of the Lender's rights
hereunder, including, but not limited to, reasonable attorneys' fees
and expenses if collected by or through an attorney, whether or not
suit is filed.
This Revolving Credit Note shall be governed by and
construed in accordance with the laws of the State of Georgia.
SYNTHETIC INDUSTRIES, INC.
[CORPORATE SEAL]
By __________________________
Name:
Title:
ATTEST:
By:________________________
Name:
Title:
EXHIBIT B-1
FORM OF TERM NOTE A
$_______________ Atlanta, Georgia
January __, 1995
FOR VALUE RECEIVED, the undersigned SYNTHETIC INDUSTRIES,
INC., a Delaware corporation (the "Borrower"), hereby promises to pay
to the order of _________________________ (the "Lender"), the
principal sum of _________________________ AND NO/100 DOLLARS
($_______________) constituting the aggregate Advances made by the
Lender under the Term Loan Facility as part of Term Loan A (each term
as defined in the Credit Agreement referred to below), in 38
consecutive monthly installments each equal to the result obtained by
multiplying $500,000 by a fraction, the numerator of which is equal to
the outstanding principal amount of the Lender's Advances evidenced by
this Term Note A (as amended from time to time, this "Note") and the
denominator of which is equal to the total outstanding principal
amount of Term Loan A before giving effect to such installment, such
payments to be made on successive Installment Payment Dates, beginning
December 1, 1996, PROVIDED that the final installment payable on
January 1, 2000 shall be in the amount of the then-outstanding
aggregate unpaid balance of such Advances.
The Borrower will also pay interest on the unpaid principal
amount outstanding from time to time hereunder until such principal
amount is paid in full, at such interest rates and payable at such
times as are specified in the Credit Agreement. Nothing in this Note
shall be deemed to establish or require the payment of a rate of
interest in excess of the maximum rate permitted by any Applicable Law
(as defined in the Credit Agreement). In the event that any rate of
interest required to be paid hereunder exceeds the maximum rate
permitted by Applicable Law, the provisions of the Credit Agreement
relating to the payment of interest under such circumstances shall
control.
Both principal and interest are payable in lawful money of
the United States of America to the Agent for the account of the
Lender at the Agent's office at 100 Federal Street, Boston,
Massachusetts 02110, in federal or other immediately available funds.
This Note is made by the Borrower and given to the Lender in
substitution for that certain Second Amended and Restated Term Note
dated [September 3, 1993/December 28, 1994], in the original principal
amount of $___________________ payable to the Lender but not in
extinguishment of the debt evidenced thereby.
For the purposes of this Note, "Credit Agreement" means the
Third Amended and Restated Revolving Credit and Security Agreement
dated as of January 13, 1995, among the Borrower, the Agent, the
Lender and the other lenders identified therein, as the same may be
amended, modified, supplemented or restated from time to time.
Reference is made to the Credit Agreement for the
definitions of other terms used in this Note.
Presentment for payment, demand, protest and notice of
demand, notice of dishonor and notice of non-payment and all other
notices are hereby waived by the Borrower.
This Note is one of the Term Notes referred to in, and is
entitled to the benefits of, the Credit Agreement, which, among other
things, contains provisions with respect to security for the
indebtedness evidenced hereby, the acceleration of the maturity and
prepayments of the principal of this Note prior to maturity, all upon
the terms and conditions therein specified.
The Borrower hereby agrees to pay on demand all costs and
expenses incurred in collecting the Borrower's obligations hereunder
or in enforcing or attempting to enforce any of the Lender's rights
hereunder, including, but not limited to, reasonable attorneys' fees
and expenses if collected by or through an attorney, whether or not
suit is filed.
This Note shall be governed by and construed in accordance
with the laws of the State of Georgia.
SYNTHETIC INDUSTRIES, INC.
[CORPORATE SEAL]
By __________________________
Name:
Title:
ATTEST:
By:________________________
Name:
Title:
EXHIBIT B-2
FORM OF TERM NOTE B
$_______________ Atlanta, Georgia
January __, 1995
FOR VALUE RECEIVED, the undersigned SYNTHETIC INDUSTRIES,
INC., a Delaware corporation (the "Borrower"), hereby promises to pay
to the order of _________________________ (the "Lender"), the
principal sum of _________________________ AND NO/100 DOLLARS
($_______________) constituting the aggregate Advances made by the
Lender under the Term Loan Facility as part of Term Loan B (each term
as defined in the Credit Agreement referred to below), in 22
consecutive monthly installments each equal to the result obtained by
multiplying $500,000 by a fraction, the numerator of which is equal to
the outstanding principal amount of the Lender's Advances evidenced by
this Term Note B (as amended from time to time, this "Note") and the
denominator of which is equal to the total outstanding principal
amount of Term Loan B before giving effect to such installment, such
payments to be made on successive Installment Payment Dates, beginning
February 1, 1995, PROVIDED that the final installment payable on
November 1, 1996 shall be in the amount of the then-outstanding
aggregate unpaid balance of such Advances.
The Borrower will also pay interest on the unpaid principal
amount outstanding from time to time hereunder until such principal
amount is paid in full, at such interest rates and payable at such
times as are specified in the Credit Agreement. Nothing in this Note
shall be deemed to establish or require the payment of a rate of
interest in excess of the maximum rate permitted by any Applicable Law
(as defined in the Credit Agreement). In the event that any rate of
interest required to be paid hereunder exceeds the maximum rate
permitted by Applicable Law, the provisions of the Credit Agreement
relating to the payment of interest under such circumstances shall
control.
Both principal and interest are payable in lawful money of
the United States of America to the Agent for the account of the
Lender at the Agent's office at 100 Federal Street, Boston,
Massachusetts 02110, in federal or other immediately available funds.
For the purposes of this Note, "Credit Agreement" means the
Third Amended and Restated Revolving Credit and Security Agreement
dated as of January 13, 1995 among the Borrower, the Agent, the
Lender and the other lenders identified therein, as the same may be
amended, modified, supplemented or restated from time to time.
Reference is made to the Credit Agreement for the
definitions of other terms used in this Note.
Presentment for payment, demand, protest and notice of
demand, notice of dishonor and notice of non-payment and all other
notices are hereby waived by the Borrower.
This Note is one of the Term Notes referred to in, and is
entitled to the benefits of, the Credit Agreement, which, among other
things, contains provisions with respect to security for the
indebtedness evidenced hereby, the acceleration of the maturity and
prepayments of the principal of this Note prior to maturity, all upon
the terms and conditions therein specified.
The Borrower hereby agrees to pay on demand all costs and
expenses incurred in collecting the Borrower's obligations hereunder
or in enforcing or attempting to enforce any of the Lender's rights
hereunder, including, but not limited to, reasonable attorneys' fees
and expenses if collected by or through an attorney, whether or not
suit is filed.
This Note shall be governed by and construed in accordance
with the laws of the State of Georgia.
SYNTHETIC INDUSTRIES, INC.
[CORPORATE SEAL]
By __________________________
Name:
Title:
ATTEST:
By:________________________
Name:
Title:
EXHIBIT C-1
[Letterhead of Watson & Dana]
January __, 1995
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
SouthTrust Bank of Georgia, N.A.
600 West Peachtree Street
22nd Floor
Atlanta, Georgia 30308
Sanwa Business Credit Corporation
500 Glenpointe Centre West
4th Floor
Teaneck, New Jersey 07666
Ladies and Gentlemen:
We have acted as counsel to Synthetic Industries, Inc., a
Delaware corporation ("Synthetic"), in connection with the
negotiation, execution and delivery of:
( i) the Third Amended and Restated Revolving Credit and Security
Agreement dated as of January 13, 1995 (the "Credit Agreement"),
amending and restating in its entirety that certain Second Amended and
Restated Revolving Credit and Security Agreement dated as of March 15,
1993, as heretofore amended by First Amended Schedule I dated as of
April 15, 1993, Amendment No. 2 dated as of May 10, 1993, Second
Amended Schedule I dated as of September 3, 1993, Amendment No. 4
dated as of October 1, 1993, Amendment No. 5 dated as of February 25,
1994, Amendment No. 6 dated as of August 10, 1994, Amendment No. 7
dated as of December 28, 1994 and Third Amended Schedule I dated as of
December 28, 1994 (the "Existing Credit Agreement"), by and among
Synthetic, the lenders set forth on Schedule I hereto (the "Lenders")
and The First National Bank of Boston, as agent for the Lenders (the
"Agent");
( ii) the Third Amended and Restated Revolving Credit Notes and
the Third Amended and Restated Term Notes made by Synthetic to the
Lenders pursuant to the Credit Agreement (the "Notes");
(iii) the modification agreements set forth on
Exhibit A, Part II of this opinion letter, each dated January ___,
1995 (the "Deed Modifications") and amending the deeds to secure debt,
deeds of trust or similar security documents set forth on Exhibit A,
Part I of this opinion letter (the "Deeds");
( iv) such other documents, certificates and instruments as we
have deemed necessary or advisable in order to render the following
opinions (the "Other Documents").
For the purpose of this opinion, we have examined fully-
executed copies of the Credit Agreement, the Notes, the Deed
Modifications and the Other Documents (all of the foregoing,
collectively, the "Financing Documents") as well as the Deeds and the
UCC financing statements previously delivered by Synthetic to the
Agent (the "Existing Financing Statements"), the certificate of
incorporation and bylaws of Synthetic as in effect on the date hereof,
and such other documents and records, and have made such inquiries, as
we have considered necessary.
We have relied on certificates of, or telegraphic
communications from, public officials as to the corporate good
standing of Synthetic. We have assumed the authenticity of all
documents examined by us. We have relied upon the certificate of an
executive officer of Synthetic, a copy of which is attached hereto, as
to matters of fact on which this opinion is based. We have made no
independent investigation with respect to any such factual matters nor
have we inquired with third parties other than Synthetic and its
officers. We are members of the Bar of the State of Georgia and our
opinions expressed herein are limited to matters of law of the State
of Georgia, the General Corporation Law of the State of Delaware, and
the applicable federal laws of the United States. Our opinion,
insofar as it relates to such laws, is subject to the qualifications
and assumptions set forth in the aforesaid opinion and limited by any
exceptions which are set forth therein.
Based upon the foregoing we are of the opinion that:
1. Synthetic is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its properties and to carry on
its business as now being and hereafter proposed to be conducted and
is duly qualified and authorized to do business in each jurisdiction
in which the character of its properties or the nature of its business
requires such qualification or authorization, except jurisdictions in
which failure to be so duly qualified or authorized will have no
Materially Adverse Effect on the business, operations, properties,
assets or financial condition of Synthetic.
2. Synthetic has the corporate power, and has taken all
necessary action to authorize it, to execute, deliver and perform the
Financing Documents in accordance with their respective terms. Each
of the Financing Documents has been duly executed and delivered by
Synthetic by its duly authorized officers and, assuming as to
Financing Documents to which the Agent or the Lenders are signatories,
the due authorization, execution and delivery thereof by the Agent and
the Lenders, each constitutes a legal, valid and binding obligation of
Synthetic, enforceable against Synthetic in accordance with its terms,
subject to (i) the effect of applicable bankruptcy, insolvency,
moratorium, reorganization and similar laws affecting the
enforceability of creditors' rights generally and (ii) general
equitable principles (whether considered in a case in equity or at
law).
3. The execution, delivery and performance in accordance with
its terms of each of the Financing Documents by Synthetic do not and
will not, by the passage of time, the giving of notice or otherwise,
(i) to the best of our knowledge, after due inquiry,
require any Governmental Approvals or violate any Applicable Law
relating to Synthetic,
(ii) result in a breach of or constitute a default under
(A) the certificate of incorporation or bylaws of Synthetic as now in
effect or any Governmental Approvals applicable to Synthetic, or (B)
any indenture, agreement or other instrument to which Synthetic is a
party or by which Synthetic or any of its properties may be bound, or
(iii) result in or require the creation or imposition of
any Lien upon or with respect to any property now owned or hereafter
acquired by Synthetic, other than the Security Interest, the Lien of
the Deeds and the security interests granted pursuant to the Security
Documents.
4. No provision of any law, rule or regulation, and no decision
or order of any court or other tribunal, of the State of Georgia would
in any way limit the right of the Agent or any Lender to bring any
action or proceeding against Synthetic in any court of general
jurisdiction in such State to enforce its rights under the Financing
Documents.
5. To the best of our knowledge, after due inquiry, except as
disclosed in Exhibit B attached hereto, there are no actions, suits or
proceedings pending against or in any other way relating adversely to
or affecting Synthetic or any of its properties in any court or before
any arbitrator of any kind or before or by any governmental body.
6. Each Deed Modification is in appropriate form so as upon
payment of the applicable intangible recording tax and recording
charges to (i) be accepted for recording in the real estate records of
the Office of the Clerk of the Superior Court of each of Catoosa,
Walker, Whitfield and Banks Counties, Georgia, and (ii) be cross-
indexed as fixture filings to the UCC records in such offices.
7. The Security Interest in the personal property portion of
the Collateral and in the personal property and fixtures described in
the Deeds remains perfected and uninterrupted as before execution and
delivery of the Financing Documents and recording of the Deed
Modifications without any change in priority and secures the Secured
Obligations.
8. The Liens of the Deeds remain in effect and uninterrupted as
before execution and delivery of the Deed Modifications and, upon the
recording of the Deed Modifications in the appropriate offices under
the laws of the applicable jurisdiction, the same will each maintain
in favor of the Agent, for the benefit of the Lenders, a Lien on all
the property subject thereto as security for the Term Notes A.
9. The execution and delivery by the Agent and the Lenders of
the Credit Agreement, the making of any Advances to Synthetic under
the Credit Agreement and the other Loan Documents, the execution and
delivery by Synthetic of the Deed Modifications and the commencement
and prosecution by the Agent of any action or proceeding in any court
in the State of Georgia in connection with enforcement of the
provisions of the Credit Agreement, the Notes, the Deeds or the other
Loan Documents, as the case may be, would not, alone or in the
aggregate, under the law of such State as presently construed,
constitute transacting business in such State for purposes of
requiring the Agent or any of the Lenders to obtain a certificate of
authority or other authorization to transact business in such State,
PROVIDED that neither the Agent nor any Lender is otherwise required
to obtain such a certificate or authorization.
10. All stamp, documentary and other taxes and governmental
charges and assessments required to be paid by Applicable Law in
connection with the execution, delivery, filing or recordation of, or
as a condition to the enforcement of, the Financing Documents have
been duly and validly paid.
This opinion is delivered to you in connection with the
requirements of Section 4.1(a)(vi) of the Credit Agreement and it may
be relied upon by you and your counsel in connection therewith, but
may not be relied upon by any other person or for any other purpose.
Very truly yours,
JOSEPH F. DANA
Exhibit A
Part I
Georgia
Georgia Deed to Secure Debt, Security Agreement and
Assignment of Leases and Rents dated December 4, 1986, recorded in the
office of the Clerk of Superior Court, Catoosa County, Georgia on
December 8, 1986 in Deed Book 334, page 763 (and modifications thereof
recorded on January 24, 1989 in Deed Book 368, page 31, on December
17, 1990 in Deed Book 398, page 52, on March 13, 1992 in Deed Book
423, page 336 and on March 18, 1993 in Deed Book 451, page 39); in the
office of the Clerk of Superior Court, Walker County, Georgia on
December 5, 1986 in Deed Book 562, page 584 (and modifications thereof
recorded on January 24, 1989 in Deed Book 604, page 15, on December
17, 1990 in Deed Book 642, page 480, on March 13, 1992 in Deed Book
670, page 434 and on March 18, 1993 in Deed Book 698, page 637);
office of the Clerk of Superior Court, Whitfield County, Georgia on
December 8, 1986 in Deed Book 973, page 57 (and modifications thereof
recorded on January 24, 1989 in Deed Book 2042, page 135 on December
17, 1990 in Deed Book 2182, page 77, on March 13, 1992 in Deed Book
2284, page 303 and on March 19, 1993 in Deed Book 2378, page 348).
Georgia Deed to Secure Debt, Security Agreement and
Assignment of Leases and Rents dated October 27, 1989, recorded in the
office of the Clerk of Superior Court, Whitfield County, Georgia on
October 30, 1989 in Deed Book 2096, page 276 (and modifications
thereof recorded on March 13, 1992 in Deed Book 2284, page 294 and on
March 19, 1993 in Deed Book 2379, page 1).
Georgia Deed to Secure Debt, Security Agreement and
Assignment of Leases and Rents dated March 12, 1992, recorded in the
office of the Clerk of Superior Court, Walker County, Georgia on March
13, 1992 in Deed Book 670, page 448 (and modifications thereof
recorded on March 18, 1993 in Deed Book 698, page 629); in the office
of the Clerk of Superior Court, Catoosa County, Georgia on March 13,
1992 in Deed Book 423, page 350 (and modifications thereof recorded on
March 18, 1993 in Deed Book 451, Page 52); in the office of the Clerk
of Superior Court, Banks County, Georgia on March 13, 1992 in Deed
Book 70, page 213 (and modifications thereof recorded on March 19,
1993 in Deed Book 78, page 135).
EXHIBIT A
Part II
Georgia
Modification of Georgia Deed to Secure Debt, Security
Agreement and Assignment of Leases and Rents dated December 4, 1986
Modification of Georgia Deed to Secure Debt, Security
Agreement and Assignment of Leases and Rents dated October 27, 1989
Modification of Georgia Deed to Secure Debt, Security
Agreement and Assignment of Leases and Rents dated March 12, 1992
Schedule I
1. The First National Bank of Boston
2. SouthTrust Bank of Georgia, N.A.
3. Sanwa Business Credit Corporation
EXHIBIT C-2
[letterhead of Gordon Altman Weitzen Shalov & Wein]
January ___, 1995
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
SouthTrust Bank of Georgia, N.A.
600 West Peachtree Street
22nd Floor
Atlanta, Georgia 30308
Sanwa Business Credit Corporation
500 Glenpointe Centre West
4th Floor
Teaneck, New Jersey 07666
Ladies and Gentlemen:
We have acted as special counsel to Synthetic Industries, Inc.
(the "Borrower"), the issuer of $140,000,000 in aggregate principal
amount of 12-3/4% Senior Subordinated Debentures due December 1, 2002
(the "Senior Subordinated Debt") under that certain indenture dated as
of December 1, 2002 (the "Indenture") between the Borrower and United
States Trust Company of New York, as trustee (the "Trustee"), in
connection with the execution and delivery of the Third Amended and
Restated Revolving Credit and Security Agreement dated as of January
13, 1995 (the "Credit Agreement") amending and restating in its
entirety that certain Second Amended and Restated Revolving Credit and
Security Agreement dated as of March 15, 1993, as heretofore amended
by First Amended Schedule I dated as of April 15, 1993, Amendment No.
2 dated as of May 10, 1993, Second Amended Schedule I dated as of
September 3, 1993, Amendment No. 4 dated as of October 1, 1993,
Amendment No. 5 dated as of February 25, 1994, Amendment No. 6 dated
as of August 10, 1994, Amendment No. 7 dated as of December 28, 1994
and Third Amended Schedule I dated as of December 28, 1994 (the
"Existing Credit Agreement"), among the Borrower, the lenders set
forth on Schedule I hereto (the "Lenders"), and The First National
Bank of Boston ("Bank of Boston"), as agent on behalf of the Lenders
(the "Agent"). Unless otherwise indicated, capitalized terms used
herein shall have the meanings specified in the Credit Agreement.
In that regard, and for the purpose of rendering the opinions
contained herein, we have examined the following agreements and
documents:
1. the Credit Agreement;
2. the Notes;
3. the Indenture;
5. the Existing Credit Agreement; [and]
6. the mortgage modification agreements set
forth on Exhibit A, Part II of this opinion letter,
each dated on or about the date of the Credit
Agreement, between the Borrower and the Agent (the
"Mortgage Modifications"), amending the real property
security documents set forth on Exhibit A, Part I of
this opinion letter[; and
7. a certificate (the "Certificate") provided to
us by an executive officer of the Borrower, a copy of
which is attached hereto as Exhibit B].
In addition, for the purpose of rendering the opinions contained
herein, we have examined the Certificate of Incorporation and By-laws
of the Borrower. We have also investigated such questions of law as
we have deemed necessary or appropriate. In rendering the opinions
contained herein we have assumed the authenticity of all documents
submitted to us as originals, the conformity with original documents
of all documents submitted to us as copies and the genuineness of all
signatures. [ASSUMPTIONS AS TO FACTUAL MATTERS; RELIANCE ON
CERTIFICATE]
Based upon the foregoing, we are of the opinion that the
execution, delivery and performance by the Borrower of the Credit
Agreement, the Notes, and the Mortgage Modifications do not:
(i) pursuant to the Indenture, require the consent or
approval of or notice to the Trustee or any holder of the Senior
Subordinated Debt;
(ii) result in a breach of any provision of, or
constitute a default, or an event which with the passage of time
or the giving of notice or both, would constitute a default,
under the Indenture;
(iii) affect in any manner the status of the Senior
Subordinated Debt as indebtedness subordinate, as provided in
Article ___ of the Indenture, to principal of and unpaid interest
and premium, if any, on the Loans or any guarantee by the
Borrower of any Foreign Facilities; or
(iv) pursuant to the Indenture, result in or require
the creation or imposition of any lien, charge or other
encumbrance upon or with respect to any property of the Borrower
for the benefit of any holder of the Senior Subordinated Debt.
We are qualified to practice law only in the State of New York,
and we are not expert in and express no opinion as to the laws of any
jurisdictions (domestic or foreign) other than the Federal law of the
United States and the laws of the State of New York. This opinion
letter has been delivered to you in connection with the execution and
delivery of the Credit Agreement, the Notes, and the Mortgage
Modifications, and it may be relied upon by you and your counsel in
connection therewith, but may not be relied upon, quoted or used by
any other person for any other purpose.
Very truly yours,
Exhibit A
Part I
Georgia
Georgia Deed to Secure Debt, Security Agreement and
Assignment of Leases and Rents dated December 4, 1986, recorded in the
office of the Clerk of Superior Court, Catoosa County, Georgia on
December 8, 1986 in Deed Book 334, page 763 (and modifications thereof
recorded on January 24, 1989 in Deed Book 368, page 31, on December
17, 1990 in Deed Book 398, page 52, on March 13, 1992 in Deed Book
423, page 336 and on March 18, 1993 in Deed Book 451, page 39); in the
office of the Clerk of Superior Court, Walker County, Georgia on
December 5, 1986 in Deed Book 562, page 584 (and modifications thereof
recorded on January 24, 1989 in Deed Book 604, page 15, on December
17, 1990 in Deed Book 642, page 480, on March 13, 1992 in Deed Book
670, page 434 and on March 18, 1993 in Deed Book 698, page 637);
office of the Clerk of Superior Court, Whitfield County, Georgia on
December 8, 1986 in Deed Book 973, page 57 (and modifications thereof
recorded on January 24, 1989 in Deed Book 2042, page 135 on December
17, 1990 in Deed Book 2182, page 77, on March 13, 1992 in Deed Book
2284, page 303 and on March 19, 1993 in Deed Book 2378, page 348).
Georgia Deed to Secure Debt, Security Agreement and
Assignment of Leases and Rents dated October 27, 1989, recorded in the
office of the Clerk of Superior Court, Whitfield County, Georgia on
October 30, 1989 in Deed Book 2096, page 276 (and modifications
thereof recorded on March 13, 1992 in Deed Book 2284, page 294 and on
March 19, 1993 in Deed Book 2379, page 1).
Georgia Deed to Secure Debt, Security Agreement and
Assignment of Leases and Rents dated March 12, 1992, recorded in the
office of the Clerk of Superior Court, Walker County, Georgia on March
13, 1992 in Deed Book 670, page 448 (and modifications thereof
recorded on March 18, 1993 in Deed Book 698, page 629); in the office
of the Clerk of Superior Court, Catoosa County, Georgia on March 13,
1992 in Deed Book 423, page 350 (and modifications thereof recorded on
March 18, 1993 in Deed Book 451, Page 52); in the office of the Clerk
of Superior Court, Banks County, Georgia on March 13, 1992 in Deed
Book 70, page 213 (and modifications thereof recorded on March 19,
1993 in Deed Book 78, page 135).
Tennessee
Tennessee Deed of Trust, Security Agreement and Assignment
of Leases and Rents dated December 4, 1986, recorded in Register's
Office, Hamilton County, Tennessee on December 8, 1986 in Deed Book
Vol. 3281, page 922 (and modifications thereof recorded on January 24,
1989 in Deed Book 3575, page 572, on December 17, 1990 in Deed Book
3800, page 564, on March 16, 1992 in Deed Book 3957, page 977 and on
March 30, 1993 in Deed Book 4124, page 922).
EXHIBIT A
Part II
Georgia
Modification of Georgia Deed to Secure Debt, Security
Agreement and Assignment of Leases and Rents dated December 4, 1986
Modification of Georgia Deed to Secure Debt, Security
Agreement and Assignment of Leases and Rents dated October 27, 1989
Modification of Georgia Deed to Secure Debt, Security
Agreement and Assignment of Leases and Rents dated March 12, 1992
Tennessee
Modification of Tennessee Deed of Trust, Security Agreement
and Assignment of Leases and Rents dated December 4, 1986
Schedule I
1. The First National Bank of Boston
2. SouthTrust Bank of Georgia, N.A.
3. Sanwa Business Credit Corporation
EXHIBIT D
FORM OF
COVENANT COMPLIANCE CERTIFICATE
The undersigned, _______________________, the
[President] [Chief Financial Officer] of Synthetic Industries, Inc.,
hereby certifies to the Agent and the Lenders, under and as defined in
the Third Amended and Restated Revolving Credit and Security Agreement
dated as of January 13, 1995, as amended and in effect on the date
hereof (the "Credit Agreement"), to which Synthetic Industries, Inc.,
among others, is a party, in accordance with the provisions of SECTION
9.3 of the Credit Agreement, that:
1. As of _____________________ [date of last day of accounting
month or fiscal year], the Borrower was/was not in compliance with the
covenants set forth in SECTIONS 10.1, 10.2, 10.5, 10.10 and 10.11 of
the Credit Agreement, as detailed on the worksheet attached; and
2. Based on an examination sufficient to enable [him/her] to
make an informed statement, no Default or Event of Default exists as
of the date hereof [other than: 1].
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Certificate as of ___________, 199__.
__________________________________
[President]
[Chief Financial Officer]
Specify such Default or Event of Default and its nature, when it
occurred, whether it is continuing and the steps being taken by the
Borrower with respect to such Default or Event of Default.
EXHIBIT E
FORM OF BORROWING BASE CERTIFICATE
Reference is made to the Third Amended and Restated
Revolving Credit and Security Agreement dated as of January 13, 1995
(said Agreement, as amended, modified, supplemented, restated or
extended from time to time, the "Credit Agreement"; capitalized terms
defined therein, unless otherwise defined herein, being used herein as
therein defined), among Synthetic Industries, Inc., (the "Borrower"),
the Lenders and The First National Bank of Boston, as agent (the
"Agent") for the Lenders.
This Certificate is furnished to the Agent and the Lenders
in accordance with the provisions of SECTION 4.1(A)(XVII) or 7.14(D)
of the Credit Agreement. The Borrower, by execution and delivery of
this Certificate, certifies that (a) the computation of the Borrowing
Base set forth below complies with the applicable provisions of the
Credit Agreement and (b) the computations have been made based on data
from the books of account and records of the Borrower in accordance
with GAAP applied on a consistent basis and present fairly and
accurately the status of the Borrower's financial accounts as at
__________ __, 199_ (the "Certificate Date").
[Computation of Eligible Receivables and Eligible Inventory, in such
format, consistent with the requirements of the definitions of such
terms set forth in the Credit Agreement, as may from time to time be
acceptable to the Agent and the Lenders.]
Borrowing Base
1. Eligible Receivables x .85, $
PLUS
2. The lesser of $15,000,000 and
(Eligible Inventory x .5), MINUS
3. Letter of Credit Reserve, MINUS < >
4. Foreign Facility Reserve < >
5. Revolving Credit Facility
TOTAL BORROWING BASE (lesser of
((lines 1 + 2) - (lines 3 + 4)) and
line 5) $
5. Outstanding Revolving Credit Loans
on Certificate Date < >
6. Amount available to be borrowed
(or to be prepaid). $
Date: ______________________
SYNTHETIC INDUSTRIES, INC.
EXHIBIT F
FORM OF NOTICE OF BORROWING
[Date]
The First National Bank of Boston, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
100 Federal Street
Boston, Massachusetts 02110
Attention: William C. Purinton
Gentlemen:
The undersigned, Synthetic Industries, Inc., refers to the
Third Amended and Restated Revolving Credit and Security Agreement,
dated as of January 13, 1995 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the
undersigned, certain Lenders parties thereto and The First National
Bank of Boston, as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 2.2(a) of the Credit
Agreement that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the
information relating to such borrowing (the "Proposed Borrowing") as
required by Section 2.2(a) of the Credit Agreement:
(1) The Business Day of the Proposed Borrowing is
__________, 199__.
(2) The Type of Advances comprising the Proposed Borrowing
is [Eurodollar] [Base Rate] Advances.
(3) The aggregate amount of the Proposed Borrowing is
$___________.
[(4) The Interest Period for each Eurodollar Advance made
as part of the Proposed Borrowing is [1, 2, 3, or 6] month(s).]
As to each Proposed Borrowing, the undersigned hereby certifies
that the following statements are true on the date hereof, and will be
true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in
Section 5.1(a) (insofar as it pertains to continued existence of the
Borrower), 5.1(g), 5.1(h), 5.1(j), 5.1(o), 5.1(q) and 5.1(s) of the
Credit Agreement are true and correct, before and after giving effect
to the Proposed Loan and to the application of the proceeds therefrom,
as though made on and as of such date; and
(B) no event has occurred and is continuing, or would
result from such Proposed Borrowing or from the application of the
proceeds therefrom, which constitutes a Default or Event of Default.
Very truly yours,
SYNTHETIC INDUSTRIES, INC.
By:_______________________________
Name:__________________________
Title:_________________________
By: ________________________
Name:
Title:
EXHIBIT G
FORM OF CONFIRMATION OF NOTICE
OF CONVERSION OR CONTINUATION
[Date]
The First National Bank of Boston, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
100 Federal Street
Boston, Massachusetts 02110
Attention: William C. Purinton
Gentlemen:
The undersigned, Synthetic Industries, Inc., refers to the
Third Amended and Restated Revolving Credit and Security Agreement
dated as of January 13, 1995 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the
undersigned, certain Lenders parties thereto and The First National
Bank of Boston, as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 3.7 of the Credit Agreement
that the undersigned hereby requests [the conversion] [the
continuation] of Advances of one Type comprising a Borrowing (the
"Existing Borrowing") [into Advances of another Type available under
the Credit Agreement] and in that connection sets forth below the
information relating to such [conversion] [continuation] (the
"Proposed [Conversion] [Continuation]") as required by Section 3.7 of
the Credit Agreement:
(1) The Type of Advances comprising the Existing Borrowing
is [Base Rate Advances] [Eurodollar Advances].
(2) The last day of the Interest Period applicable to the
Eurodollar Advances comprising the Existing Borrowing is __________,
199__, which is the date of the Proposed [Continuation] [Conversion].]
(3) The aggregate outstanding principal amount of the
Advances comprising the Existing Borrowing is $_____________.
(4) The Advances comprising the Existing Borrowing are to
be [converted into] [continued as] [Base Rate Advances] [Eurodollar
Advances] [in their entirety] [to the extent of $__________ of the
principal amount thereof] [and [converted into] [continued as] [Base
Rate Advances] [Eurodollar Advances] to the extent of $__________ of
the principal amount thereof].
(5) The Interest Period for each Advance [converted into]
[continued as] [Eurodollar Advances] is [1, 2, 3 or 6] month(s).
As to each Proposed [Conversion] [Continuation] of any Advances
[into] [as] [Eurodollar Advances], the Borrower hereby represents and
warrants that as of the date hereof no Default or Event of Default has
occurred and is continuing.
Very truly yours,
SYNTHETIC INDUSTRIES, INC.
By:_______________________________
Name:__________________________
Title:_________________________
EXHIBIT G
FORM OF CONFIRMATION OF NOTICE
OF CONVERSION OR CONTINUATION
[Date]
The First National Bank of Boston, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
100 Federal Street
Boston, Massachusetts 02110
Attention: William C. Purinton
Gentlemen:
The undersigned, Synthetic Industries, Inc., refers to the
Third Amended and Restated Revolving Credit and Security Agreement
dated as of January 13, 1995 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the
undersigned, certain Lenders parties thereto and The First National
Bank of Boston, as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 3.7 of the Credit Agreement
that the undersigned hereby requests [the conversion] [the
continuation] of Advances of one Type comprising a Borrowing (the
"Existing Borrowing") [into Advances of another Type available under
the Credit Agreement] and in that connection sets forth below the
information relating to such [conversion] [continuation] (the
"Proposed [Conversion] [Continuation]") as required by Section 3.7 of
the Credit Agreement:
(1) The Type of Advances comprising the Existing Borrowing
is [Base Rate Advances] [Eurodollar Advances].
(2) The last day of the Interest Period applicable to the
Eurodollar Advances comprising the Existing Borrowing is __________,
199__, which is the date of the Proposed [Continuation] [Conversion].]
(3) The aggregate outstanding principal amount of the
Advances comprising the Existing Borrowing is $_____________.
(4) The Advances comprising the Existing Borrowing are to
be [converted into] [continued as] [Base Rate Advances] [Eurodollar
Advances] [in their entirety] [to the extent of $__________ of the
principal amount thereof] [and [converted into] [continued as] [Base
Rate Advances] [Eurodollar Advances] to the extent of $__________ of
the principal amount thereof].
(5) The Interest Period for each Advance [converted into]
[continued as] [Eurodollar Advances] is [1, 2, 3 or 6] month(s).
As to each Proposed [Conversion] [Continuation] of any Advances
[into] [as] [Eurodollar Advances], the Borrower hereby represents and
warrants that as of the date hereof no Default or Event of Default has
occurred and is continuing.
Very truly yours,
SYNTHETIC INDUSTRIES, INC.
By:_______________________________
Name:__________________________
Title:_________________________
SCHEDULE 1.1
Mortgages
Georgia Deed to Secure Debt, Security Agreement and Assignment of
Leases and Rents dated December 4, 1986 by the Borrower to the Agent,
as modified (properties located in Catoosa, Walker and Whitfield
Counties, Georgia).
Security Deed dated October 27, 1989 by the Borrower to the Agent, as
modified (property located in Whitfield County, Georgia)
Georgia Deed to Secure Debt, Security Agreement and Assignment of
Leases and Rents dated March 12, 1992 by the Borrower to the Agent
(property located in Catoosa, Walker and Banks Counties, Georgia).
Tennessee Deed of Trust, Security Agreement and Assignment of Leases
and Rents, dated December 4, 1986 by the Borrower to Thomas J.
Sherrard, III, as Trustee, for the benefit of the Agent, as modified
(property located in Hamilton County, Tennessee).
SCHEDULE 1.1
Permitted Liens
Schedule 5.1(h) is hereby incorporated by reference.
SCHEDULE 1.1
Foreign Facilities
Borrowers: Synthetic Industries Europe Limited, a corporation
organized under the laws of the State of Great Britain
Lender: The First National Bank of Boston (London Branch)
Facility: Unsecured revolving credit facility in the amount
of up to $4,000,000 (Dollar Equivalent)
SCHEDULE 5.1(a)
Jurisdictions in Which Qualified
Delaware
Georgia
Tennessee
SCHEDULE 5.1(b)
Subsidiaries
Percentage of
Securities Owned
Jurisdiction by Borrower or
in Which Any Subsidiary
Subsidiary Incorporated Parent of Borrower
Synthetic England Borrower 100%
Industries
Europe Limited
Fibermesh GmbH Germany Synthetic 100%
Industries
Europe Limited
All of the aforementioned Subsidiaries are Consolidated Subsidiaries
of the Borrower.
Synthetic Industries L.P., a Delaware limited partnership, of which SI
Management L.P., a Delaware limited partnership, is the general
partner, is the owner of 100% of the issued and outstanding capital
stock of the Borrower. The general partner of SI Management L.P. is
Synthetic Management G.P., a Georgia general partnership.
SCHEDULE 5.1(d)
Conflicts
None
SCHEDULE 5.1(f)
Governmental Approvals
None
SCHEDULE 5.1(g)
Title Exceptions
1. Title exceptions set out in Ticor Title Insurance Company of
California Loan Policy No. L337598, as amended by four
endorsements.
2. Title exceptions set out in Ticor Title Insurance Company of
California Loan Policy No. L4 030128, as amended by three
endorsements.
3. Title exceptions set out in Ticor Title Insurance Company of
California Loan Policy No. 11 4342 92 000057, as amended by one
endorsement.
4. Title exceptions set out in Chicago Title Insurance Company Loan
Policy No. 43 0001 02 029439, as amended by five endorsements.
SCHEDULE 5.1(h)
Liens
See Annex A attached hereto.
SCHEDULE 5.1(i)
Indebtedness for Money Borrowed and Guarantees
Mortgage debt to Atlantic American
Properties, Inc. $1,520,000
original principal amount
$1,387,713.16 principal amount
as of Effective Date
Senior Subordinated Debt $140,000,000
Foreign Facility Debt
SCHEDULE 5.1(j)
Litigation
1. Unspecified damages relating to business dealings with Fibermesh
Suisse, SA, a former distributor for the Fibermesh Division of
Synthetic Industries. Currently no formal proceedings have been
filed. At this time we do not have sufficient factual
information to form an opinion as to liability or damage issues.
Synthetic Industries expects to receive formal notice of the
initiation of arbitration proceedings during the month of
January, 1995.
SCHEDULE 5.1(k)
Patents and Trademarks
PATENTS
Description Patent No.
Sliver Knit Process 3,894,407
Sliver Knit Product 3,894,409
Process for Reducing Dust in
Fibrillated Yarn 4,065,538
Shaped Barrier for Erosion
Control and Sediment Collection 5,007,766
TRADEMARKS
Mark Registration/Serial No.
FIBRON logo 987,958
FIBRILON 1,138,804
FIBRON 1,138,805
SI logo 1,300,707
FIBERMIX logo 1,318,212
FIBERMESH logo 1,327,048
S FIBRIDS logo 1,332,240
LUMITE 414,821
LUMITE 428,892
PROP-A-LITE 781,125
MAKING GOOD CONCRETE BETTER 1,558,003
FIBERGRIDS 1,656,874
S FIBERMAT (and design) 1,619,901
FIBERMAT 1,617,650
LANDSTRAND 1,622,590
LANDSTRAND (and design) 1,622,589
FIBERGRIDS (and design) 1,659,225
BIOTECHNICAL COMPOSITES 74-217-984
LANDLOK 74-217,009
ECTOFLEX 74-202,864
HARBOURITE 74-127-554
FIBERMESH 74-127,553
FIBERMIX 74/281,901
SILT CHEK 74/319,903
EROSION 74/319,905
TURFGRIDS & Design 74/263,445
HARBOURITE & Design 74/281,245
POLYJUTE 74/287,697
TURFGRIDS 74/263,450
REINFORCER 74/319,902
LANDSTRAND & Design 1,747,156
SCHEDULE 5.1(l)
Tax Returns, Etc.
None
SCHEDULE 5.1(m)
Burdensome Provisions
None
SCHEDULE 5.1(p)
Plans
The Borrower maintains a trusteed profit-sharing plan (the
"Plan"), which is qualified under Section 401(k) of the Internal
Revenue Code. The Borrower may, but is not required to, contribute a
portion of its profits to the Plan, as determined by the Board of
Directors. Employer contributions vest over three to seven years.
The Borrower matches employee contributions to the Plan on a 50% basis
up to 3.0% of the employee's annual compensation. All full-time
employees over the age of 21 who have been employed continuously for
at least one year are eligible for participation in the Plan. The
Plan provides for the Borrower to bear the expense of the
administration of the Plan.
SCHEDULE 5.1(t)
Principal Office and Location of Books and Records
309 LaFayette Road
Chickamauga, Georgia 30707
SCHEDULE 5.1(u)
Location of Inventory
OWNED OR LEASED FACILITIES
309 LaFayette Road
Chickamauga, Georgia 30707
Church Street
Chickamauga, GA 30707
1409 Coronet Drive
Dalton, Georgia
325 Smith Industrial Boulevard
Dalton, Georgia 30720
1400 Lafayette Highway
Dalton, Georgia
2926 Dug Gap Road
Dalton, GA
110 Florence Avenue
Dalton, GA
1406 Coronet Drive
Dalton, GA
1408 Coronet Drive
Dalton, GA
2100 Atlanta Highway
Gainesville, Georgia 30501
Lee Street
Cornelia, Georgia 30531
4019 Industry Drive
Chattanooga, Tennessee 37416
42nd Street and Divine Street
Chattanooga, Tennessee 37407
1410 Hamil Road
Chattanooga, TN
Route 1 Box 810
Rollings Industrial Boulevard
Ringgold, GA 30736
Highway 13 at Yonah Road
Route 2, Box 255
Alto, Georgia 30510
2908 South Dug Gap Road
Dalton, Georgia 30720
278 Highway 178
Tupelo, Mississippi 38801
CONVERTERS
Dixie Packaging, Inc.
P.O. Box 2700
Roberts and Rutherford Roads
Greenville, South Carolina 29602
WAREHOUSES
Jacobson Warehouse Company
4701 W. Jefferson
Phoenix, Arizona 85043
Continental Warehouse Inc.
Suite C, 5800 Alder Avenue
Sacramento, California 95828
Wazee Transfer and Storage
P. O. Box 16828
4902-B Smith Road
Denver, Colorado 80216
WPS Warehouse, Inc.
191 Park Avenue
East Hartford, Connecticut 06108
Channel Distribution
1925 West Thorndale
Itascal, Illinois 60143
Central States Warehouses
3019 Roosevelt Avenue
Indianapolis, Indiana 46218
USCO
9700 Lackman Road
Lexexa, Kansas 66219
Ace Storage, Inc.
1624 Wyoming
Baton Rouge, Louisiana 70802
Master Builders
9903 Webber Road
Brighton, Michigan 48116
Distribution Centers, Inc.
600 30th Avenue, N.E.
Minneapolis, Minnesota 55418
Central Detroit Warehouse Co.
18765 Feaway Drive
Melvindale, Michigan 48122
Distributec
2700 Burlington Avenue
Delanco, New Jersey 08075
Pioneer Warehouse Dist.
7640 Edgecomb Drive
P. O. Box 2074
Syracuse, New York 13220
Itel Distribution System
19400 Holland Road
Brookpark, Ohio 44142
Tennessee Commercial Warehouse
22 Stanley Street
Nashville, Tennessee 37210
Southern Merchandise & Storage
3232 North Panam Expressway
San Antonio, Texas 78208
Lile Moving and Storage
20413 87th Avenue, South
Kent, Washington 98031
DISTRIBUTORS AND GARAGE INVENTORY
A.S.P. Enterprises
1505 Fenpark Drive
Fenton, Missouri 63026
Jan Wanstreet
#1 March Court
Columbia, Illinois 62236
AADF
1414 12th Street, N.W.
Albuguerque, New Mexico 85125
Advanced Distribution
2995 Interstate 85
Charlotte, N.C. 28208
Co-Operative Transportation, Inc.
3640 Indianaola Avenue
Columbia, Ohio 43214
Texas Star Warehouse Dist., Inc.
5200 E. Grand Avenue
Building 4
Dallas, Texas 75223
KD Delivery System
3225 W. California Avenue
Suite 101
Salt Lake City, Utah 84104
Ralph Robinson
2123 FM 1960W, Suite 357
Houston, Texas 77090
Gene Williams
6908 Mattews-Mint Hill Road
Charlotte, North Carolina 28227
CANADA
Cain Cartage Express
c/o Hoover Canada
4181 North Service Road
Burlington, Ontario L7R 4A8
Canada
Inland Containers, Ltd.
9300 Van Horne Way
Richmond, British Columbia V6X 1W3
Rawlinson Moving & Storage, Ltd.
5605 McAdam Road
Mississauga, Ontario 642 1N9
HAWAII-DISTRIBUTION
Kimo Scott
c/o hardware Construction Supply
94-200 Pupuoli Street
Unit 1
Warpaher, Hawaii 96797
Mid West Fly Ash Materials
2220 Hawbeye Drive
Sioux City, Iowa 51105
Midwest Fly Ash Materials
29 Lakewood Villa
Council Bluffs, Iowa 51501
SCHEDULE 5.1(v)
Location of Equipment
309 LaFayette Road
Chickamauga, Georgia 30707
Church Street
Chickamauga, GA 30707
1409 Coronet Drive
Dalton, Georgia 30720
325 Smith Industrial Boulevard
Dalton, Georgia 30720
1400 Lafayette Highway
Dalton, Georgia
2926 Dug Gap Road
Dalton, GA
110 Florence Avenue
Dalton, GA
1406 Coronet Drive
Dalton, GA
1408 Coronet Drive
Dalton, GA
2100 Atlanta Highway
Gainesville, Georgia 30501
Lee Street
Cornelia, Georgia 30531
4019 Industrial Drive
Chattanooga, Tennessee 37416
42nd Street and Divine Street
Chattanooga, Tennessee 37407
1410 Hamil Road
Chattanooga, Tennessee
Route 1, Box 610
Rollins Industrial Boulevard
Ringgold, Georgia 30736
Highway 13 at Yonah Road
Route 2, Box 255
Alto, Georgia 30510
2908 South Dug Gap Road
Dalton, Georgia 30720
278 Highway 178
Tupelo, Mississippi 38801
SCHEDULE 5.1(w)
Real Estate
Same locations as listed on Schedule 5.1(v)
SCHEDULE 5.1(x)
Corporate and Fictitious Names
Fibermesh Company
Lumite
Fibron
SCHEDULE 8.9
Use of Proceeds
The First National Bank of Boston
to pay Arrangement Fee and the Agent's
Fee pursuant to separate letter agreement
The Lenders to pay closing fees pursuant
to Section 3.3 of Credit Agreement
Balance to the account of Borrower
ANNEX A
TO SCHEDULE 5.1(H)
LIEN SUMMARY
SYNTHETIC INDUSTRIES, INC.
JURISDICTION: Banks County, Georgia
UCC FILINGS - as of 12-7-94
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Fixture filing
File number: 9495
File Date: 3-13-92
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Mortgage filing
File number 9496
File Date: 3-13-92
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Fixture filing
File Number: 10011
File Date: 1-19-93
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Mortgage filing
File Number: 10012
File Date: 3-19-93
STATE TAX LIENS - Clear
FEDERAL TAX LIEN - Clear
JUDGEMENTS - Clear
PENDING SUITS - Clear
JURISDICTION: Catoosa County, Georgia
UCC FILINGS - as of 12-6-94
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent
for itself and certain other lenders
Collateral: Fixture filing
File number: 86-1205 Date filed: 12-2-86
91-10201 Continuation 10-15-91
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent
for itself and certain other lenders
Collateral AIE
File number: 86-1206 Date filed: 12-2-86
91-10206 Continuation 10-15-91
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Mortgage filing
File Number: 92-20086
File Date: 3-13-92
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Mortgage filing
File Number: 21795
File Date: 3-18-93
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing Corp.
Collateral: Office equipment
File Number: 22626
File Date: 3-23-94
STATE TAX LIENS - Clear
FEDERAL TAX LIENS - Clear
JUDGEMENTS - Clear
PENDING SUITS - Clear
JURISDICTION: Habersham County, Georgia
UCC FILINGS - as of 11-21-94
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, (as agent
for the Lenders)
Collateral: AIE
File number: 5509
File Date: 12-14-90
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, (as agent
for the Lenders)
Collateral AIE
File number: 7167
File Date: 3-16-92
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: AIE
File Number: 8650
File Date: 3-19-93
STATE TAX LIENS - Clear
FEDERAL TAX LIENS - Clear
JUDGEMENTS - Clear
PENDING SUITS - Clear
JURISDICTION: Hall County, Georgia
UCC FILINGS - as of 12-8-94
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, (as agent
for the Lenders)
Collateral: AIE
File number: 126117
File Date: 12-14-90
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, (as agent
for the Lenders)
Collateral: Fixture filing
File number: 126118
File Date: 12-14-90
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston (as agent
for the Lenders)
Collateral: Fixture filing
File number: 134699
File Date: 3-16-92
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston (as agent
for the Lenders)
Collateral: Mortgage filing
File number: 134700
File Date: 3-16-92
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Fixture filing
File Number: 141565
File Date: 3-19-93
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Mortgage filing
File Number: 141566
File Date: 3-19-93
STATE TAX LIENS - Clear
FEDERAL TAX LIENS - Clear
JUDGEMENTS - Clear
PENDING SUITS - Clear
JURISDICTION: Walker County, Georgia
UCC FILINGS - as of 12-9-94
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent
for itself and certain other lenders
Collateral: Fixture filing
File number: 86-1311 Date filed: 12-2-86
Partial Release 10-24-88
Amendment 1-27-89
Release 11-16-89
Release 3-19-90
Continuation 10-16-91
Lessee: Synthetic Industries
Lessor: General Electric Capital Corporation fka
General Electric Credit Corporation
Collateral: 1 RCA Camera Security System
File number: 88-334 File Date: 3-22-88
Continuation 1-13-93
Lessee: Synthetic Industries
Lessor: General Electric Capital Corporation fka
General Electric Credit Corporation
Collateral: 10 Great Dane Van Trailers
File number: 88-335 File Date: 3-22-88
Continuation 1-13-93
Lessee: Synthetic Industries
Lessor: General Electric Capital Corporation
Collateral: 3 Kenworth Tractors
File number: 88-1189 File Date: 9-19-88
Continuation 4-15-93
Lessee: Synthetic Industries
Lessor: General Electric Capital Corporation fka
General Electric Credit
Collateral: 16 Weaving Machines and Accessories
File number: 88-1330 File Date: 10-24-88
Continuation 4-27-93
Lessee: Synthetic Industries
Lessor: General Electric Capital Corporation
Collateral: 1 Kenworth Tractor
File number: 89-17 File Date: 1-9-89
Continuation 8-4-93
Lessee: Synthetic Industries
Lessor: General Electric Capital Corporation
Collateral: 1 International Tractor
File number: 89-1342 File Date: 6-26-89
Continuation 3-29-94
Debtor: Synthetic Industries
Secured Party: Clarklift of Dalton, Inc.
Assignee: Clark Equipment Credit
Collateral: Specific equipment
File number: 89-9
File Date: 1-5-89
Lessee: Synthetic Industries
Lessor: Chrysler Capital Corporation
Assignee: General Electric Capital Corporation
Collateral: Specific equipment
File number: 89-2208 File Date: 12-14-89
Amendment 4-9-91
Assignment 11-6-92
Continuation 11-16-94
Assignment 12-2-94
Continuation 12-2-94
Lessee: Synthetic Industries
Lessor: Chrysler Capital Corporation
Assignee: General Electric Capital Corporation
Collateral: Fixture Filing - Specific equipment
File number: 90-133 Date filed: 1-26-90
Amendment 4-9-91
Assignment 11-6-92
Assignment 12-2-94
Continuation 12-2-94
Debtor: Synthetic Industries
Secured Party: IBM Credit Corporation
Collateral: IBM Equipment
File number: 90-875
File Date: 6-26-90
Lessee: Synthetic Industries
Lessor: Hyster Credit Company
Collateral: 1 Hyster
File number: 90-1007
File Date: 7-20-90
Lessee: Synthetic Industries
Lessor: MDFC Equipment Leasing Corp.
Collateral: Fixture Filing - Specific equipment
File number: 90-1124
File Date: 8-8-90
Lessee: Synthetic Industries
Lessor: MDFC Equipment Leasing Corp.
Collateral: Specific equipment
File number: 90-1125
File Date: 8-8-90
Lessee: Synthetic Industries
Lessor: Bera Leasing, Inc.
Collateral: 1 Copier
File number: 90-1199
File Date: 8-21-90
Debtor: Synthetic Industries
Secured Party: IBM Credit Corporation
Collateral: IBM Equipment
File number: 90-1385
File Date: 9-28-90
Lessee: Synthetic Industries
Lessor: MDFC Equipment Leasing Corp.
Collateral: Specific equipment
File number: 90-1807
File Date: 12-7-90
Debtor: Synthetic Industries
Secured Party: Circle Business Credit, Inc.
Collateral: Specific equipment
File number: 91-344
File Date: 3-26-91
Lessee: Synthetic Industries
Lessor: Toyota Motor Credit Corp.
Collateral: 2 Forklifts
File number: 91-1205
File Date: 8-7-91
Debtor: Synthetic Industries
Secured Party: IBM Credit Corporation
Collateral: IBM Equipment
File number: 91-1211
File Date: 8-8-91
Lessee: Synthetic Industries
Lessor: Toyota Motor Credit Corp.
Collateral: 1 Forklift
File number: 91-1394
File Date: 9-19-91
Lessee: Synthetic Industries
Lessor: Toyota Motor Credit Corp.
Collateral: 1 Forklift
File number: 91-1395
File Date: 9-19-91
Debtor: Synthetic Industries
Secured Party: IBM Credit Corporation
Collateral: IBM Equipment
File number: 91-1780
File Date: 12-30-91
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: AIE
File number: 92-316
File Date: 03-13-92
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent
Collateral: Mortgage
File number: 92-317
File Date: 03-13-92
Debtor: Synthetic Industries
Secured Party: IBM Credit Corporation
Collateral: IBM equipment
File number: 92-326
File Date: 03-16-92
Debtor: Synthetic Industries
Secured Party: Caterpillar Financial Services Corporation
Collateral: 1 Rider Pallet Jack; 2 GNB Battery MDL
File number: 92-451
File Date: 04-13-92
Lessee: Synthetic Industries
Lessor: World Omni Leasing, Inc.
Collateral: 1 Toyota F/L
File number: 92-650
File Date: 06-02-92
Lessee: Synthetic Industries
Lessor: World Omni Leasing, Inc.
Collateral: 2 Toyota Forklift
File number: 92-651
File Date: 06-02-92
Lessee: Synthetic Industries
Lessor: World Omni Leasing, Inc.
Collateral: 1 Toyota F/L
File number: 92-652
File Date: 06-02-92
Lessee: Synthetic Industries
Lessor: General Electric Capital Corporation
Collateral: 1 ROLM 9751 Model 10 Phonemail
File number: 92-47
File Date: 01-11-93
Lessee: Synthetic Industries
Lessor: IBM Credit Corporation
Collateral: IBM equipment
File number: 92-145
File Date: 02-05-93
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Fixture filing
File Number: 93-256
File Date: 3-18-93
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Mortgage filing
File Number: 93-257
File Date: 3-18-93
Debtor: Synthetic Industries, Inc.
Secured Party: Cherokee Warehouses, Inc.
Collateral: 4 Toyota Forklifts
File Number: 93-286
File Date: 3-25-93
Debtor: Synthetic Industries, Inc.
Secured Party: Springs Leasing Corporation
Collateral: Leased equipment
File Number: 93-534
File Date: 5-25-93
Debtor: Synthetic Industries, Inc.
Secured Party: Caterpillar Financial Services Corporation
Collateral: Specific equipment
File Number: 93-619
File Date: 6-17-93
Debtor: Synthetic Industries, Inc.
Secured Party: Cherokee Warehouses, Inc.
Collateral: 3 Toyota Forklifts
File Number: 93-679
File Date: 7-2-93
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing Corp.
Collateral: Office Equipment
File Number: 93-832
File Date: 8-5-93
Debtor: Synthetic Industries, Inc.
Secured Party: Caterpillar Financial Services
Corporation
Collateral: Specific equipment
File Number: 93-894
File Date: 8-17-93
Debtor: Synthetic Industries, Inc.
Secured Party: Aloha Leasing
Collateral: Office equipment
File Number: 93-1092
File Date: 10-5-93
Debtor: Synthetic Industries, Inc.
Secured Party: Cherokee Material Handling Inc.
Collateral: 2 Toyota forklifts
File Number: 93-1180
File Date: 10-29-93
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing
Collateral: Office equipment
File Number: 93-1291
File Date: 11-29-93
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing Corp.
Collateral: Office equipment
File Number: 94-47
File Date: 1-19-94
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing Corp.
Collateral: Office equipment
File Number: 94-89
File Date: 1-31-94
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing
Collateral: Office equipment
File Number: 92-182
File Date: 2-25-94
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing Corp.
Collateral: Office equipment
File Number: 94-281
File Date: 3-24-94
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing Corp.
Collateral: Office equipment
File Number: 94-811
File Date: 8-16-94
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing Corp.
Collateral: Office equipment
File Number: 94-862
File Date: 8-29-94
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing Corp.
Collateral: Office equipment
File Number: 94-962
File Date: 9-26-94
Debtor: Synthetic Industries, Inc.
Secured Party: General Electric Capital Computer
Leasing Corporation
Collateral: Office equipment
File Number: 94-986
File Date: 10-3-94
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing Corp.
Collateral: Office equipment
File Number: 94-1058
File Date: 10-28-94
Debtor: Synthetic Industries, Inc.
Secured Party: General Electric Capital Corporation
Collateral: Fixture filing
File Number: 94-1140
File Date: 11-23-94
STATE TAX LIENS - Clear
FEDERAL TAX LIENS - Clear
JUDGEMENTS - Clear
PENDING SUITS - Clear
JURISDICTION: Whitfield County, Georgia
UCC FILINGS - as of 12-9-94
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent for
itself and certain other lenders
Collateral: Fixture Filing
File number: 71627 File Date: 12-2-86
Amendment 1-26-89
Continuation 10-15-91
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent for
itself and certain other lenders
Collateral: AIE
File Number: 71628 File Date: 12-2-86
Amendment 1-26-89
Continuation 10-15-91
Lessee: Synthetic Industries
Lessor: Fidelity Savings Bank
Collateral: Toyota Forklift
File number: 89-454
File Date: 8-29-92
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: AIE
File number: 91294
File Date: 03-13-92
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Mortgage filing
File number: 91295
File Date: 03-13-92
Lessor: Synthetic Industries
Lessee: Action Material Handling, Inc.
Collateral: 1 Komatsu Forklift
File number: 92053
File Date: 05-27-92
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Fixture filing
File Number: 95181
File Date: 3-19-93
Debtor: Synthetic Industries, Inc.
Secured Party: The First National Bank of Boston, as agent
for the lenders
Collateral: Mortgage filing
File Number: 95182
File Date: 3-19-93
Debtor: Synthetic Industries, Inc.
Secured Party: Associates Leasing Inc.
Collateral: 1 TCM Forklift
File Number: 99051
File Date: 2-25-94
STATE TAX LIENS - Clear
FEDERAL TAX LIEN - Clear
JUDGEMENTS - Clear
PENDING SUITS - Clear
JURISDICTION: Secretary of State of Tennessee
UCC FILINGS - as of 12-8-94
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent for
itself and certain other lenders
Collateral: AIE
File number: 387378 Date filed: 12-2-86
967586 Amendment 03-18-92
972128 Continuation 04-02-92
180792 Amendment 04-05-93
Lessee: Synthetic Industries
Lessor: Chrysler Capital Corporation
Collateral: Volkman two-for-one Twister
File number: 722447
File Date: 12-14-89
Lessee: Synthetic Industries
Lessor: Advanced Office Systems
Assignee: First American National Bank
Collateral: Xerox Telecopier
File number: 795507
File Date: 7-30-90
Debtor: Synthetic Industries
Secured Party: IBM Credit Corporation
Collateral: IBM Equipment
File number: 888948
File Date: 6-11-91
Debtor: Synthetic Industries
Secured Party: Pitney Bowes Credit Corporation
Collateral: Specific equipment
File number: 947135
File Date: 1-8-92
Lessor: Synthetic Industries
Lessee: General Electric Capital Corporation
Collateral: 1 ROLM 9751 Model 10 with Phonemail
File number: 152163
File Date: 01-05-93
Debtor: Synthetic Industries, Inc.
Secured Party: Advantage Leasing Corp.
Collateral: Office equipment
File Number: 288126
File Date: 3-11-94
STATE TAX LIENS - Clear
FEDERAL TAX LIENS - Clear
JURISDICTION: Hamilton County, Tennessee
UCC FILINGS - as of 12-13-94
Debtor: Synthetic Industries
Secured Party: The First National Bank of Boston, as agent for
itself and certain other lenders
Collateral: Fixture Filing
File number: C24424 Date filed: 12-3-86
C67235 Continuation 12-13-91
C72518 Continuation 11-09-92
Amendment 3-30-93
STATE TAX LIENS - Clear
FEDERAL TAX LIENS - Clear
JUDGEMENTS - Clear
PENDING SUIT -
(WORKERS' COMPENSATION)
Debtor: Synthetic Industries, Inc.
Through Date: December 13, 1994
Case Number: 94CV1802
File Date: 9-23-94
Plaintiff: Jacqueline Marie Redden
_______________________________
* This Table of Contents is included for reference purposes only and
does not constitute part of the Third Amended and Restated
Revolving Credit and Security Agreement.
