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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 2, 1997 (August 27, 1997)
DYERSBURG CORPORATION
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(Exact name of registrant as specified in its charter)
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Tennessee 1-11126 62-1363247
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(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
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1315 Phillips Street, Dyersburg, Tennessee 38024
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (901) 285-2323
Not Applicable
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
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On August 27, 1997, the Company consummated the transactions
contemplated by that certain Stock Purchase Agreement dated July 15, 1997 by and
among the Company, Alamac Sub Holdings Inc. ("Seller"), AIH Inc. ("Alamac") and
WestPoint Stevens Inc. ("WestPoint Stevens") pursuant to which the Company
acquired all of the outstanding capital stock of Alamac (the "Acquisition").
Through its four manufacturing facilities located in North Carolina, Alamac
manufactures and sells knitted fabrics primarily to manufacturers of men's,
women's and children's apparel. The cash purchase price (the "Purchase Price")
paid by the Company in the Acquisition was $126.0 million, which is subject to
adjustment for changes in working capital and certain other items related to
pension assets and liabilities subsequent to December 31, 1996. Prior to
consummation of the Acquisition, Alamac transferred all of its cash and assets
related to its Whitmire, South Carolina spinning plant to an affiliate of
WestPoint Stevens and, accordingly, such assets will not be owned by Alamac
following the Acquisition. In addition, under its financing arrangements, Alamac
sold its accounts receivable and, as a result, the Company did not acquire
Alamac's accounts receivable. Accordingly, the Company estimates that, in
addition to the Purchase Price, it will be required to finance approximately
$40.0 to $45.0 million of additional working capital.
Pursuant to the Stock Purchase Agreement, the Company and WestPoint
Stevens entered into an Interim Services Agreement pursuant to which WestPoint
Stevens will provide certain information, credit, accounts receivable, accounts
payable, purchasing and other corporate services for a period of up to nine
months following the closing.
The Company used the net proceeds from a private placement of $125.0
million in aggregate principal amount of 9 3/4% Senior Subordinated Notes due
2007 (the "Notes"), together with borrowings under a $160.0 million revolving
credit and term loan agreement (the "New Credit Facility"), to finance the
Purchase Price and working capital needs, repay amounts outstanding under the
Company's existing credit facility and certain other indebtedness and pay
related fees and expenses.
The Notes bear interest at the rate of 9 3/4% per annum, are payable
semi-annually in arrears on March 1 and September 1 of each year, commencing
March 1, 1998, and mature on September 1, 2007. The Notes are not redeemable at
the option of the Company prior to September 1, 2002. Commencing September 1,
2002, the Notes are subject to redemption at the option of the Company, in whole
or in part, at 104.875% of the principal amount redeemed, declining each
September 1 thereafter to 100% beginning September 1, 2005. The Notes are
general unsecured obligations of the Company and are subordinated in right of
payment to all existing and future senior indebtedness of the Company.
The New Credit Facility with SunTrust Bank, Atlanta ("SunTrust") and
one or more other financial institutions consists of a five-year revolver
(the "Revolver") providing up to $110.0 million of availability and a
five-year $50.0 million term loan (the "Term
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Loan"). The Term Loan provides for scheduled quarterly principal amortization
such that $7.5 million of principal is paid during each of the first and second
years following the closing; $10.0 million during the third year following the
closing; and $12.5 million during each of the fourth and fifth years following
the closing. The Revolver will be available in multiple drawings from time to
time on and following the closing, subject to certain limitations, including a
requirement that amounts outstanding under the Revolver (including certain
letters of credit) will at all times be less than a borrowing base based on 50%
of the Company's eligible inventory and 85% of the Company's eligible
receivables, and amounts borrowed and repaid may be reborrowed until the fifth
anniversary of the closing date.
Amounts outstanding under the Revolver and the Term Loan bear
interest, at the Company's option, at either LIBOR (adjusted for any reserves)
plus a specified margin ranging from 0.75% to 2.75% (based on certain financial
ratios) for interest periods of one, two, three or six months, or the base rate,
which is the higher of SunTrust's prime lending rate and the overnight federal
funds rate plus 0.50% plus a margin of 0.25% if certain financial ratios are
not maintained.
The Term Loan is subject to the following mandatory prepayments: (i)
100% of the net cash proceeds of an equity issuance by the Company, (ii) 50% of
annual excess cash flow (as defined in the New Credit Facility) and (iii) 100%
of net cash proceeds from asset sales (as defined in the New Credit Facility),
subject to certain exceptions contained therein.
All amounts owing under the New Credit Facility are secured by security
interests in substantially all of the assets of the Company and its subsidiaries
(including the assets of Alamac and its subsidiaries).
The Company and each of its existing and future subsidiaries are
subject to certain affirmative and negative covenants contained in the New
Credit Facility, including without limitation covenants that restrict, subject
to specified exceptions: (i) the incurrence of additional indebtedness and other
obligations and the granting of additional liens; (ii) mergers, acquisitions,
investments and acquisitions and dispositions of assets; (iii) the incurrence of
capitalized lease obligations; (iv) dividends; (v) prepayments or repurchase of
other indebtedness and amendments to certain agreements governing indebtedness,
including the Notes; (vi) engaging in transactions with affiliates and formation
of subsidiaries; (vii) the use of proceeds; and (viii) change of lines of
business. In addition, the New Credit Facility requires the Company to
maintain compliance with certain specified financial covenants, including
covenants relating to minimum net worth, minimum interest coverage ratio,
minimum fixed charge coverage ratio and maximum total debt.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements of Business to be Acquired (Incorporated by
reference to the Company's Quarterly Report on Form 10-Q for the
quarter ended July 5, 1997):
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Report of Independent Auditors
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 1995 and
December 31, 1996
Consolidated Statements of Operations for the years ended
December 31, 1994, December 31, 1995 and December 31, 1996
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, December 31, 1995 and December 31, 1996
Notes to Consolidated Financial Statements
Interim Condensed Consolidated Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets as of December 31, 1996
and June 30, 1997
Condensed Consolidated Statements of Operations for the six
months ended June 30, 1996 and June 30, 1997
Condensed Consolidated Statements of Cash Flows for the six
months ended June 30, 1996 and June 30, 1997
Notes to Condensed Consolidated Financial Statements
(b) Pro Forma Financial Information (Incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the quarter ended July 5, 1997):
Unaudited Pro Forma Condensed Consolidated Financial Statements:
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended September 28, 1996
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the nine months ended July 5, 1997
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the twelve months ended July 5, 1997
Notes to Unaudited Pro Forma Condensed Consolidated Statements
of Operations
Unaudited Pro Forma Condensed Consolidated Balance Sheet as
of July 5, 1997
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Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
(c) Exhibits:
2.1 Stock Purchase Agreement by and among Dyersburg Corporation,
Alamac Sub Holdings Inc., AIH Inc. and WestPoint Stevens Inc. (Incorporated
by reference to the Company's Current Report on Form 8-K dated July 18,
1997)
10.1 Purchase Agreement dated August 20, 1997 by and among Dyersburg
Corporation, Dyersburg Fabrics Inc., Dyersburg Fabrics Limited Partnership,
I, DFIC, Inc., IQUE, Inc., IQUEIC, Inc., IQUE Limited Partnership, I,
United Knitting Inc., UKIC, Inc., United Knitting Limited Partnership, I,
Bear, Stearns & Co. Inc. and Prudential Securities Incorporated
10.2 Indenture dated as of August 27, 1997 by and among Dyersburg
Corporation, Dyersburg Fabrics Inc., Dyersburg Fabrics Limited Partnership,
I, DFIC, Inc., IQUE, Inc., IQUEIC, Inc, IQUE Limited Partnership, I, United
Knitting Inc., UKIC, Inc., United Knitting Limited Partnership, I, Alamac
Knit Fabrics Inc., Alamac Enterprises Inc., AIH Inc., and State Street Bank
and Trust Company
10.3 Registration Rights Agreement dated as of August 27, 1997 by and
among Dyersburg Corporation, the Guarantors named therein, Bear, Stearns &
Co. Inc. and Prudential Securities Incorporated
10.4 Credit Agreement dated as of August 27, 1997 among Dyersburg
Corporation, Dyersburg Fabrics Limited Partnership, I, United Knitting
Limited Partnership, I, IQUE Limited Partnership, I, Alamac Knit Fabrics,
Inc., the Lenders listed therein, SunTrust Bank, Atlanta, as Agent, and
SunTrust Bank, Atlanta, as Collateral Agent (The Company agrees to furnish
supplementally a copy of any omitted schedules to the Commission upon
request)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DYERSBURG CORPORATION
Date: September 2, 1997 By: /s/ William S. Shropshire, Jr.
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William S. Shropshire, Jr.
Chief Financial Officer
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EXHIBIT INDEX
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NO. EXHIBIT
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10.1 Purchase Agreement dated August 20, 1997 by and
among Dyersburg Corporation, Dyersburg Fabrics
Inc., Dyersburg Fabrics Limited Partnership, I,
DFIC, Inc., IQUE, Inc., IQUEIC, Inc., IQUE
Limited Partnership, I, United Knitting Inc., UKIC,
Inc., United Knitting Limited Partnership, I, Bear,
Stearns & Co. Inc. and Prudential Securities
Incorporated
10.2 Indenture dated as of August 27, 1997 by and
among Dyersburg Corporation, Dyersburg Fabrics
Inc., Dyersburg Fabrics Limited Partnership, I,
DFIC, Inc., IQUE, Inc., IQUEIC, Inc, IQUE
Limited Partnership, I, United Knitting Inc., UKIC,
Inc., United Knitting Limited Partnership, I, Alamac
Knit Fabrics Inc., Alamac Enterprises Inc., AIH Inc.,
and State Street Bank and Trust Company
10.3 Registration Rights Agreement dated as of August
27, 1997 by and among Dyersburg Corporation, the
Guarantors named therein, Bear, Stearns & Co. Inc.
and Prudential Securities Incorporated
10.4 Credit Agreement dated as of August 27, 1997
among Dyersburg Corporation, Dyersburg Fabrics
Limited Partnership, I, United Knitting Limited
Partnership, I, IQUE Limited Partnership, I, Alamac
Knit Fabrics, Inc., the Lenders listed therein,
SunTrust Bank, Atlanta, as Agent, and SunTrust
Bank, Atlanta, as Collateral Agent (The Company agrees
to furnish supplementally a copy of any omitted
schedules to the Commission upon request)
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EXECUTION COPY
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DYERSBURG CORPORATION
AND
THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO
$125,000,000
9 3/4% Senior Subordinated Notes due 2007
Purchase Agreement
August 20, 1997
BEAR, STEARNS & CO. INC.
PRUDENTIAL SECURITIES INCORPORATED
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DYERSBURG CORPORATION
$125,000,000
9 3/4% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
August 20, 1997
New York, New York
BEAR, STEARNS & CO. INC.
PRUDENTIAL SECURITIES INCORPORATED
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies & Gentlemen:
Dyersburg Corporation, a Tennessee corporation (the "Company"), proposes
to issue and sell to Bear, Stearns & Co. Inc. and Prudential Securities
Incorporated (together, the "Initial Purchasers") $125,000,000 in aggregate
principal amount of 9 3/4% Series A Senior Subordinated Notes due 2007 (the
"Series A Notes"), subject to the terms and conditions set forth herein. The
Series A Notes will be issued pursuant to an indenture (the "Indenture"), to be
dated the Closing Date (as defined), among the Company, the Guarantors (as
defined) and State Street Bank & Trust Company, as trustee (the "Trustee"). The
Notes (as defined) will be fully and unconditionally guaranteed (the
"Guarantees") as to payment of principal, interest, liquidated damages and
premium, if any, on an unsecured senior subordinated basis, jointly and
severally, by each entity listed on Exhibit A hereto (collectively, the
"Dyersburg Guarantors") and by each entity listed on Exhibit B hereto
(collectively, the "Alamac Guarantors" and, together with the Dyersburg
Guarantors, the "Guarantors") that will be acquired by the Company pursuant to
the Acquisition (as defined). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Indenture.
The offering of the Series A Notes is being made in connection with
the acquisition (the "Acquisition") by the Company of AIH Inc., a Delaware
corporation ("Alamac"), pursuant to that certain Stock Purchase Agreement by and
among the Company, Alamac Sub Holdings Inc., AIH Inc. and WestPoint Stevens Inc.
(the "Acquisition Agreement").
1. Issuance of Securities. The Company proposes, upon the terms and subject
to the conditions set forth herein, to issue and sell to the Initial Purchasers
an aggregate of $125,000,000 in principal amount of Series A Notes. The Series A
Notes and the Series B Notes (as defined) issuable in exchange therefor are
collectively referred to herein as the "Notes."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Act"), the Series A Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
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"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER SECURITY FOR THE ACCOUNT OR BENEFIT OF A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO
THE COMPANY, (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
2. Offering. The Series A Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Act. The Company has prepared a preliminary offering memorandum, dated August 4,
1997 (the "Preliminary Offering Memorandum"), and a final offering memorandum,
dated August 20, 1997 (the "Offering Memorandum"), relating to the Company,
Alamac, their respective subsidiaries and the Series A Notes.
The Initial Purchasers have advised the Company that the Initial Purchasers
will make offers (the "Exempt Resales") of the Series A Notes on the terms set
forth in the Offering Memorandum, as amended or supplemented, solely to (i)
persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBs"), (ii) a
limited number of persons who have represented to the Company that they are
institutional "Accredited Investors" referred to in Rule 501(a)(1), (2), (3) or
(7) under the Act (each, an "Accredited Investor") and (iii) non-U.S. persons
outside the United States in reliance upon Regulation S ("Regulation S") under
the Act (each, a "Reg S Investor"). The QIBs, Accredited Investors and Reg S
Investors are collectively referred to herein as the "Eligible
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Purchasers." The Initial Purchasers will offer the Series A Notes to such
Eligible Purchasers initially at a price equal to 100.0% of the principal amount
thereof. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will have
the registration rights set forth in the registration rights agreement relating
thereto (the "Registration Rights Agreement"), to be dated the Closing Date, for
so long as such Series A Notes constitute "Transfer Restricted Securities" (as
defined in the Registration Rights Agreement). Pursuant to the Registration
Rights Agreement, the Company and the Guarantors will agree to file with the
Securities and Exchange Commission (the "Commission"), under the circumstances
set forth therein, (i) a registration statement under the Act (the "Exchange
Offer Registration Statement") relating to the 9 3/4% Series B Notes due 2007
(the "Series B Notes") to be offered in exchange for the Series A Notes (the
"Exchange Offer") and (ii) under certain circumstances, a shelf registration
statement pursuant to Rule 415 under the Act (the "Shelf Registration Statement"
and, together with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the Series A Notes,
and to use their best efforts to cause such Registration Statements to be
declared effective and to consummate the Exchange Offer. This Agreement, the
Notes, the Guarantees, the Indenture, the Registration Rights Agreement, the
Acquisition Agreement and the New Credit Facility (as defined in the Offering
Memorandum) are hereinafter referred to collectively as the "Operative
Documents."
3. Purchase, Sale and Delivery. (a) On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to its terms
and conditions, the Company agrees to issue and sell to each Initial Purchaser,
and each Initial Purchaser agrees, severally and not jointly, to purchase from
the Company, the principal amount of Series A Notes set forth opposite its name
on Schedule I hereto. The purchase price for the Series A Notes will be $975.0
per $1,000 principal amount Series A Note.
(b) Delivery of the Series A Notes shall be made, against payment of the
purchase price therefor, at the offices of Latham & Watkins, New York, New York
or such other location as may be mutually acceptable. Such delivery and payment
shall be made at 9:00 a.m., New York City time, on August 27, 1997 or at such
other time as shall be agreed upon by the Initial Purchasers and the Company.
The time and date of such delivery and payment are herein called the "Closing
Date."
(c) On the Closing Date, one or more Series A Notes in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), having an aggregate amount corresponding to the aggregate amount of the
Series A Notes sold pursuant to Exempt Resales to Eligible Purchasers (the
"Global Note") shall be delivered by the Company to the Initial Purchasers (or
as the Initial Purchasers direct), against payment by the Initial Purchasers of
the purchase price therefor, by wire transfer of same day funds, to an account
designated by the Company, provided that the Company shall give at least two
business days' prior written notice to the Initial Purchasers of the information
required to effect such wire transfer. The Global Note shall be made available
to the Initial Purchasers for inspection not later than 9:30 a.m. on the
business day immediately preceding the Closing Date.
4. Agreements of the Company and the Guarantors. The Company and the
Dyersburg Guarantors, jointly and severally, covenant and agree with the Initial
Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Notes for offering or
sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory authority
and (ii) of the happening of any event that makes any statement of a
material fact made in the Preliminary Offering Memorandum or the Offering
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Memorandum untrue or that requires the making of any additions to or
changes in the Preliminary Offering Memorandum or the Offering Memorandum
in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading. The Company and the Dyersburg
Guarantors shall use their best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption of any Notes under
any state securities or Blue Sky laws and, if at any time any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption of any Notes or Guarantees of
Notes under any state securities or Blue Sky laws, the Company and the
Dyersburg Guarantors shall use their best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Company, without charge, as many copies of
the Preliminary Offering Memorandum and the Offering Memorandum, including
all documents incorporated therein by reference, and any amendments or
supplements thereto, as the Initial Purchasers may reasonably request. The
Company and the Dyersburg Guarantors consent to the use of the Preliminary
Offering Memorandum and the Offering Memorandum, and any amendments and
supplements thereto required pursuant hereto, by the Initial Purchasers in
connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering Memorandum or
the Offering Memorandum prior to the Closing Date unless the Initial
Purchasers shall previously have been advised thereof and shall not have
objected thereto within a reasonable time after being furnished a copy
thereof (unless in the opinion of counsel to the Company such amendment or
supplement is necessary, in the judgement of counsel to the Company, to
make the statements made therein not misleading). The Company and the
Dyersburg Guarantors shall promptly prepare, upon the Initial Purchasers'
reasonable request, any amendment or supplement to the Preliminary Offering
Memorandum or the Offering Memorandum that may be necessary or advisable in
connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any Exempt
Resale, any event shall occur as a result of which, in the judgment of the
Company and the Dyersburg Guarantors or in the reasonable opinion of
counsel for the Company and the Dyersburg Guarantors or counsel for the
Initial Purchasers, it becomes necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum in
order to make the statements therein, in the light of the circumstances
when such Offering Memorandum is delivered to an Eligible Purchaser which
is a prospective purchaser, not misleading, or if it is necessary or
advisable to amend or supplement the Preliminary Offering Memorandum or
Offering Memorandum to comply with applicable law, (i) to notify the
Initial Purchasers and (ii) forthwith to prepare an appropriate amendment
or supplement to such Preliminary Offering Memorandum or Offering
Memorandum so that the statements therein as so amended or supplemented
will not, in the light of the circumstances when it is so delivered, be
misleading, or so that such Preliminary Offering Memorandum or Offering
Memorandum will comply with applicable law.
(e) To cooperate with the Initial Purchasers and counsel for the
Initial Purchasers in connection with the qualification or registration of
the Series A Notes under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may reasonably request and to
continue such qualification in effect so long as required for the Exempt
Resales; provided, however, that none of the Company or the Dyersburg
Guarantors shall be required in connection therewith to register or qualify
as a foreign corporation where it is not now so qualified or to take any
action that would subject it to service of process in suits or taxation,
in each case, other than as to matters and transactions relating to the
Preliminary Offering Memorandum, the Offering Memorandum or Exempt Resales,
in any jurisdiction where it is not now so subject.
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(f) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, to pay
all costs, expenses, fees and taxes incident to the performance of the
obligations of the Company and the Dyersburg Guarantors hereunder,
including in connection with: (i) the preparation, printing, filing and
distribution of the Preliminary Offering Memorandum and the Offering
Memorandum (including, without limitation, financial statements) and all
amendments and supplements thereto required pursuant hereto, (ii) the
preparation (including, without limitation, duplication costs) and delivery
of all agreements, correspondence and all other documents prepared and
delivered in connection herewith and with the Exempt Resales, (iii) the
issuance, transfer and delivery of the Notes and the Guarantees to the
Initial Purchasers, (iv) the qualification or registration of the Notes and
the Guarantees for offer and sale under the securities or Blue Sky laws of
the several states (including, without limitation, the cost of printing and
mailing a preliminary and final Blue Sky Memorandum and the reasonable fees
and disbursements of counsel for the Initial Purchasers relating thereto),
(v) furnishing such copies of the Preliminary Offering Memorandum and the
Offering Memorandum, and all amendments and supplements thereto, as may be
requested for use in connection with Exempt Resales, (vi) the preparation
of certificates for the Notes and the Guarantees (including, without
limitation, printing and engraving thereof), (vii) the fees, disbursements
and expenses of the Company's and the Dyersburg Guarantors' counsel and
accountants, (viii) all fees and expenses (including fees and expenses of
counsel) of the Company in connection with the approval of the Notes by DTC
for "book-entry" transfer, (ix) rating the Notes by rating agencies, (x)
the reasonable fees and expenses of the Trustee and its counsel, (xi) the
performance by the Company and the Dyersburg Guarantors of their other
obligations under this Agreement and the other Operative Documents and
(xii) "roadshow" travel and other expenses incurred in connection with the
marketing and sale of the Notes.
(g) To use the proceeds from the sale of the Series A Notes in the
manner described in the Offering Memorandum under the caption "Use of
Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts to
claim, the benefit of any usury laws against the holders of any Notes.
(i) To do and perform all things required to be done and performed
under this Agreement by them prior to or after the Closing Date and to
satisfy all conditions precedent on their part to the delivery of the
Series A Notes and the Guarantees.
(j) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Series A Notes in a manner that would
require the registration under the Act of the sale to the Initial
Purchasers or the Eligible Purchasers of the Series A Notes or to take any
other action that would result in the Exempt Resales not being exempt from
registration under the Act.
(k) For so long as any of the Notes remain outstanding and during any
period in which the Company and the Guarantors are not subject to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available to any holder or beneficial owner of
Series A Notes in connection with any sale thereof and any prospective
purchaser of such Notes from such holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Act.
(l) To cause the Exchange Offer to be made in the appropriate form to
permit registered Series B Notes to be offered in exchange for the Series A
Notes and to comply with all applicable federal and state securities laws
in connection with the Exchange Offer.
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(m) To comply with all of their agreements set forth in the
Registration Rights Agreement and all agreements set forth in the
representation letters of the Company to DTC relating to the approval of
the Notes by DTC for "book-entry" transfer.
(n) To effect the inclusion of the Notes in PORTAL and to obtain
approval of the Series A Notes by DTC for "book-entry" transfer.
(o) During a period of three years following the Closing Date, to
deliver without charge to the Initial Purchasers, as they may reasonably
request, promptly upon their becoming available, copies of (i) all reports
or other publicly available information that the Company shall mail or
otherwise make available to its securityholders and (ii) all reports,
financial statements and proxy or information statements filed by the
Company with the Commission or any national securities exchange and such
other publicly available information concerning the Company or any of its
subsidiaries, including without limitation, press releases.
(p) Prior to the Closing Date, to furnish to the Initial Purchasers,
as soon as they have been prepared in the ordinary course by the Company
and each Dyersburg Guarantor, copies of any unaudited interim financial
statements for any period subsequent to the periods covered by the
financial statements appearing in the Offering Memorandum.
(q) Not to take, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company or any of the
Dyersburg Guarantors to facilitate the sale or resale of the Notes. Except
as permitted by the Act, none of the Company or the Dyersburg Guarantors
will distribute any (i) preliminary offering memorandum, including, without
limitation, the Preliminary Offering Memorandum, (ii) offering memorandum,
including, without limitation, the Offering Memorandum, or (iii) other
offering material in connection with the offering and sale of the Notes.
(r) To cause the Alamac Guarantors to authorize, execute and deliver
the Registration Rights Agreement, the Guarantees and the Indenture.
(s) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Series A Notes and the Guarantees.
5. Representations and Warranties. (a) The Company and the Dyersburg
Guarantors, jointly and severally, represent and warrant to the Initial
Purchasers that:
(i) All of the representations and warranties of the parties to the
Acquisition Agreement made in the Acquisition Agreement are true and
correct as if made on and as of the date hereof and the Closing Date.
(ii) The Preliminary Offering Memorandum as of its date does not, and
the Offering Memorandum as of its date and as of the Closing Date does not
and will not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties contained in
this paragraph shall not apply to statements in or omissions from the
Preliminary Offering Memorandum and the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in conformity
with information relating to either Initial Purchaser furnished to the
Company in writing by such Initial Purchaser
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expressly for use therein. No stop order preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, or any
amendment or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued.
(iii) (A) The documents incorporated by reference in the Offering
Memorandum, when they became effective or were filed with the Commission,
as the case may be, did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; (B) the documents
incorporated by reference in the Offering Memorandum when they became
effective or were filed with the Commission, as the case may be, conformed
in all material respects to the requirements of the Exchange Act; and (C)
any further documents so filed and incorporated by reference in the
Offering Memorandum or any further amendment or supplement hereto, when
such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of
the Exchange Act.
(iv) Each of the Company and the Dyersburg Guarantors (A) has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, (B) has all requisite
corporate power and authority to carry on its business as it is currently
being conducted and as described in the Offering Memorandum and to own,
lease and operate its properties, and (C) is duly qualified and in good
standing as a foreign corporation, authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified could reasonably be expected to (x) result, individually
or in the aggregate, in a material adverse effect on the properties,
business, results of operations or condition (financial or otherwise) of
the Company and its subsidiaries, taken as a whole, (y) interfere with or
adversely affect the issuance of the Notes or the issuance of the
Guarantees pursuant hereto or (z) in any manner draw into question the
validity of this Agreement or any other Operative Document or the
transactions described in the Offering Memorandum under the caption "Use of
Proceeds" (any of the events set forth in clauses (x), (y) or (z), a
"Material Adverse Effect").
(v) The Company has no subsidiaries other than the Dyersburg
Guarantors; after giving effect to the Acquisition, the Company will have
no subsidiaries other than the Guarantors.
(vi) All of the outstanding capital stock of each subsidiary of the
Company is owned by the Company, free and clear of any security interest,
claim, lien, limitation on voting rights or encumbrance, except for any
such security interest, claim, lien, limitation on voting rights or
encumbrance pursuant to the New Credit Facility; and all such securities
have been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights.
(vii) There are not currently any outstanding subscriptions, rights,
warrants, calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any capital stock or other equity
interest of the Company's subsidiaries.
(viii) When the Series A Notes and the Guarantees are issued and
delivered pursuant to this Agreement, no Series A Note or Guarantee will be
of the same class (within the meaning of Rule 144A under the Act) as
securities of the Company or of any of the Guarantors that are listed on a
national securities exchange registered under Section 6 of the Exchange Act
or that are quoted in a United States automated inter-dealer quotation
system.
(ix) Each of the Company and the Guarantors has all requisite
corporate power and
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<PAGE> 9
authority to execute, deliver and perform its obligations under this
Agreement and each of the other Operative Documents to which it is a party
and to consummate the transactions contemplated hereby and thereby,
including, without limitation, the corporate power and authority to issue,
sell and deliver the Notes and to issue and deliver the Guarantees as
provided herein and therein.
(x) This Agreement has been duly and validly authorized, executed and
delivered by each of the Company and the Dyersburg Guarantors and is the
legal, valid and binding agreement of each of the Company and the Dyersburg
Guarantors, enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity.
(xi) The Indenture has been duly and validly authorized by each of the
Company and the Dyersburg Guarantors and, when duly executed and delivered
by each of the Company and the Dyersburg Guarantors, will be the legal,
valid and binding obligation of each of the Company and the Dyersburg
Guarantors, enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity. On the Closing Date, the
Indenture will conform in all material respects to the requirements of the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission applicable to an indenture
which is qualified thereunder. The Offering Memorandum contains a summary
of the terms of the Indenture, which is accurate in all material respects.
(xii) The Registration Rights Agreement has been duly and validly
authorized by each of the Company and the Dyersburg Guarantors and, when
duly executed and delivered by each of the Company and the Dyersburg
Guarantors, will be the legal, valid and binding obligation of each of the
Company and the Dyersburg Guarantors, enforceable against each of them in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the rights
of creditors generally and subject to general principles of equity. The
Offering Memorandum contains a summary of the terms of the Registration
Rights Agreement, which is accurate in all material respects.
(xiii) The New Credit Facility has been duly and validly authorized by
each of the Company and its subsidiaries party thereto and, when duly
executed and delivered by each of the Company and such subsidiaries, will
be the legal, valid and binding obligation of each of the Company and such
subsidiaries, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity. The Offering Memorandum
contains a summary of the terms of the New Credit Facility, which is
accurate in all material respects.
(xiv) The Acquisition Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and binding
obligation of the Company, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity. The Offering Memorandum
contains a summary of the terms of the Acquisition Agreement, which is
accurate in all material respects.
(xv) The Series A Notes have been duly and validly authorized by the
Company for issuance and sale to the Initial Purchasers pursuant to this
Agreement and, when issued and
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<PAGE> 10
authenticated in accordance with the terms of the Indenture and delivered
against payment therefor in accordance with the terms hereof and thereof,
will be the legal, valid and binding obligations of the Company,
enforceable against it in accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the rights
of creditors generally and subject to general principles of equity. The
Offering Memorandum contains a summary of the terms of the Notes, which is
accurate in all material respects.
(xvi) The Series B Notes have been duly and validly authorized for
issuance by the Company and, when issued and authenticated in accordance
with the terms of the Exchange Offer and the Indenture, will be the legal,
valid and binding obligations of the Company, enforceable against it in
accordance with their terms and entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity.
(xvii) The Guarantees of the Series A Notes have been duly and validly
authorized by each of the Dyersburg Guarantors and, when executed and
delivered in accordance with the terms of the Indenture and when the Series
A Notes have been issued and authenticated in accordance with the terms of
the Indenture and delivered against payment therefor in accordance with the
terms hereof and thereof, will be the legal, valid and binding obligations
of each of the Dyersburg Guarantors, enforceable against each of them in
accordance with their terms and entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity. The Offering Memorandum
contains a summary of the terms of the Guarantees, which is accurate in all
material respects.
(xviii) The Guarantees of the Series B Notes have been duly and
validly authorized by each of the Dyersburg Guarantors and, when executed
and delivered in accordance with the terms of the Indenture and when the
Series B Notes have been issued and authenticated in accordance with the
terms of the Exchange Offer and the Indenture, will be the legal, valid and
binding obligations of each of the Dyersburg Guarantors, enforceable
against each of them in accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the rights
of creditors generally and subject to general principles of equity.
(xix) The statistical and market-related data included in the Offering
Memorandum are based on or derived from sources which the Company believes
to be reliable and accurate in all material respects.
(xx) Each of the Company and its subsidiaries is not and, after giving
effect to the Offering and the Acquisition, will not be, (A) in violation
of its charter or bylaws, (B) in default in the performance of any bond,
debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which it is a party or by which it is bound or to which any
of its properties is subject, which singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, or (C) in
violation of any local, state, federal or foreign law, statute, ordinance,
rule, regulation, requirement, judgment or court decree (including, without
limitation, environmental laws, statutes, ordinances, rules, regulations,
judgments or court decrees) applicable to it or any of its subsidiaries or
any of its or their assets or properties (whether owned or leased), which
singly or in the aggregate, could reasonably be expected to have a Material
Adverse Effect. To the best knowledge of the Company and the Dyersburg
Guarantors, there exists no condition that, with notice, the passage of
time or otherwise, would constitute a default under any such document or
instrument.
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(xxi) None of (A) the execution, delivery or performance by the
Company or any of the Guarantors of this Agreement or any of the other
Operative Documents to which it is a party, (B) the consummation of the
Acquisition, (C) the issuance and sale of the Notes and the issuance of the
Guarantees and (D) consummation by the Company of the transactions
described in the Offering Memorandum under the caption "Use of Proceeds,"
violates, conflicts with or constitutes a breach of any of the terms or
provisions of, or, after giving effect to the Acquisition, will violate,
conflict with or constitute a breach of any of the terms or provisions of,
or a default under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under, or result in
the imposition of a lien or encumbrance on any properties of the Company or
any of its subsidiaries, or an acceleration of any indebtedness of the
Company or any of its subsidiaries pursuant to, (1) the charter or bylaws
of the Company or any of its subsidiaries, (2) any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which any of
them or their property is or may be bound, (3) any statute, rule or
regulation applicable to the Company or any of its subsidiaries or any of
their assets or properties or (4) any judgment, order or decree of any
court or governmental agency or authority having jurisdiction over the
Company or any of its subsidiaries or any of their assets or properties,
except in each case, in the case of clauses (2), (3) and (4), for those
violations, conflicts or breaches that could not reasonably be expected to
have a Material Adverse Effect. No consent, approval, authorization or
order of, or filing, registration, qualification, license or permit of or
with, (A) any court or governmental agency, body or administrative agency
or (B) any other person is required for (1) the execution, delivery and
performance by the Company or any of the Guarantors of this Agreement or
any of the other Operative Documents to which it is a party, (2) the
Acquisition or (3) the issuance and sale of the Notes and the issuance of
the Guarantees and the transactions contemplated hereby and thereby, except
such as have been or will be obtained and made on or prior to the Closing
Date (or, in the case of the Registration Rights Agreement, will be
obtained and made under the Act, the Trust Indenture Act, and state
securities or Blue Sky laws and regulations).
(xxii) There is and, after giving effect to the Acquisition, will be
(A) no action, suit, investigation or proceeding before or by any court,
arbitrator or governmental agency, body or official, domestic or foreign,
now pending or, to the best knowledge of the Company and the Dyersburg
Guarantors, threatened or contemplated to which the Company or any of its
subsidiaries is or may be a party or to which the business or property of
the Company or any of its subsidiaries, is or, after giving effect to the
Acquisition, may be subject, (B) no statute, rule, regulation or order that
has been enacted, adopted or issued by any governmental agency or that has
been proposed by any governmental body and (C) no injunction, restraining
order or order of any nature by a federal or state court or foreign court
of competent jurisdiction to which the Company or any of its subsidiaries
is or may be subject or to which the business, assets or property of the
Company or any of its subsidiaries is or may be subject, that, in the case
of clauses (A), (B) and (C) above, (1) is required to be disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum and that is not
so disclosed, or (2) could reasonably be expected to result in a Material
Adverse Effect.
(xxiii) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency that
prevents the issuance of the Notes or the Guarantees or prevents or
suspends the use of the Offering Memorandum; no injunction, restraining
order or order of any nature by a federal or state court of competent
jurisdiction has been issued that prevents the issuance of the Notes or the
Guarantees or prevents or suspends the sale of the Notes in any
jurisdiction referred to in Section 4(e) hereof; and every request of any
securities authority or agency of any jurisdiction for additional
information has been complied with in all material respects.
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(xxiv) The Company has delivered to the Initial Purchasers true and
correct copies of all documents and agreements related to the Acquisition
and the New Credit Facility, including all amendments, alterations,
modifications or waivers thereto and all exhibits or schedules thereto.
(xxv) There is and, after giving effect to the Acquisition, will be
(A) no unfair labor practice complaint pending against the Company or any
of its subsidiaries nor, to the best knowledge of the Company and the
Dyersburg Guarantors, threatened against any of them, before the National
Labor Relations Board, any state or local labor relations board or any
foreign labor relations board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Company or any of its subsidiaries or, to the best knowledge of
the Company and the Dyersburg Guarantors, threatened against any of them,
(B) no strike, labor dispute, slowdown or stoppage pending against the
Company or any of its subsidiaries nor, to the best knowledge of the
Company and the Dyersburg Guarantors, threatened against the Company or any
of its subsidiaries and (C) to the best knowledge of the Company and the
Dyersburg Guarantors, no union representation question existing with
respect to the employees of the Company or any of its subsidiaries, except
for those complaints, grievances, arbitration proceedings, strikes, labor
disputes slowdowns, stoppages or representation questions, as applicable,
that could not reasonably be expected to have a Material Adverse Effect. To
the best knowledge of the Company and the Dyersburg Guarantors, no
collective bargaining organizing activities are taking place with respect
to the Company or any of its subsidiaries. None of the Company or any of
its subsidiaries has violated (A) any federal, state or local law or
foreign law relating to discrimination in hiring, promotion or pay of
employees, (B) any applicable wage or hour laws or (C) any provision of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
the rules and regulations thereunder, except in each case for those
violations that could not reasonably be expected to have a Material Adverse
Effect.
(xxvi) None of the Company or any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws") which could reasonably be expected to have a Material Adverse
Effect.
(xxvii) There is no alleged liability, or to the best knowledge of the
Company and the Dyersburg Guarantors, potential liability (including,
without limitation, alleged or potential liability or investigatory costs,
cleanup costs, governmental response costs, natural resource damages,
property damages, personal injuries or penalties) of the Company or any of
its subsidiaries arising out of, based on or resulting from (a) the
presence or release into the environment of any Hazardous Material (as
defined) at any location, whether or not owned by the Company or such
subsidiary, as the case may be, or (b) any violation or alleged violation
of any Environmental Law, which alleged or potential liability is required
to be disclosed in the Offering Memorandum, other than as disclosed
therein, or could reasonably be expected to have a Material Adverse Effect.
The term "Hazardous Material" means (i) any "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, (ii) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act, as amended, (iii) any petroleum
or petroleum product, (iv) any polychlorinated biphenyl, and (v) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of any
other law relating to protection of human health or the environment or
imposing liability or standards of conduct concerning any such chemical
material, waste or substance.
(xxviii) Each of the Company and its subsidiaries has and, after
giving effect to the Acquisition, will have such permits, licenses,
franchises and authorizations of governmental or
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regulatory authorities ("permits"), including, without limitation, under
any applicable Environmental Laws, as are necessary to own, lease and
operate their respective properties and to conduct their businesses except
where the failure to have such permits could not reasonably be expected to
result in a Material Adverse Effect; each of the Company and its
subsidiaries has fulfilled and performed all of its obligations with
respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other impairment of the rights of the holder of any such
permit, except where the failure to fulfill or perform its obligations or
the occurrence of such event, as applicable, could not reasonably be
expected to have a Material Adverse Effect.
(xxix) Each of the Company and its subsidiaries has and, after giving
effect to the Acquisition, will have (A) good and marketable title to all
of the properties and assets described in the Offering Memorandum as owned
by it, free and clear of all liens, charges, encumbrances and restrictions
(except for Permitted Liens (as defined in the Indenture) and taxes not yet
payable), (B) peaceful and undisturbed possession under all material leases
to which any of them is a party as lessee and each of which lease is valid
and binding and no default exists thereunder, except for defaults that
could not reasonably be expected to have a Material Adverse Effect, (C) all
licenses, certificates, permits, authorizations, approvals, franchises and
other rights from, and has made all declarations and filings with, all
federal, state and local authorities, all self-regulatory authorities and
all courts and other tribunals (each, an "Authorization") necessary to
engage in the business conducted by any of them in the manner described in
the Offering Memorandum, except where the failure to have such
Authorization could not reasonably be expected to have a Material Adverse
Effect and (D) no reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any such Authorization, except
where such limitation, suspension or revocation could not reasonably be
expected to have a Material Adverse Effect. All such Authorizations are
and, after giving effect to the Acquisition, will be valid and in full
force and effect and each of the Company and its subsidiaries is in
compliance in all respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto, except where the
failure to comply could not reasonably be expected to have a Material
Adverse Effect. All material leases to which the Company or any of its
subsidiaries is a party are valid and binding and no default by the Company
or such subsidiary, as the case may be, has occurred and is continuing
thereunder and, to the best knowledge of the Company and the Dyersburg
Guarantors, no material defaults by the landlord are existing under any
such lease, except as could not reasonably be expected to have a Material
Adverse Effect.
(xxx) Each of the Company and its subsidiaries owns, possesses or has
the right to employ all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, software, systems or
procedures), trademarks, service marks and trade names, inventions,
computer programs, technical data and information (collectively, the
"Intellectual Property") presently employed by it in connection with the
businesses now operated by it or that are proposed to be operated by it
free and clear of and without violating any right, claimed right, charge,
encumbrance, pledge, security interest, restriction or lien of any kind of
any other person, except for any rights, claimed rights, charges,
encumbrances, pledges, security interests, restrictions or liens that could
not reasonably be expected to have a Material Adverse Effect, and none of
the Company or any of its subsidiaries has received any written notice of
infringement of or conflict with asserted rights of others with respect to
any of the foregoing. The use of the Intellectual Property in connection
with the business and operations of the Company or any of its subsidiaries
does not infringe on the rights of any person, except as could not
reasonably be expected to have a Material Adverse Effect.
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(xxxi) All material tax returns required to be filed by the Company or
any of its subsidiaries in all jurisdictions have been so filed. All taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due or claimed to be due from such entities or that are due
and payable have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently
payable without penalty or interest. To the knowledge of the Company and
the Dyersburg Guarantors, there are no material proposed additional tax
assessments against the Company or any of its subsidiaries, or the assets
or property of the Company or any of its subsidiaries, except those tax
assessments for which adequate reserves have been established.
(xxxii) None of the Company or any of its subsidiaries is and, after
giving effect to the Acquisition, will be an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(xxxiii) There are no holders of securities of the Company or any of
its subsidiaries who, by reason of the execution by the Company and the
Dyersburg Guarantors of this Agreement or any other Operative Document or
the consummation by the Company and the Guarantors of the transactions
contemplated hereby and thereby, have the right to request or demand that
the Company or any of its subsidiaries register under the Act or analogous
foreign laws and regulations securities held by them.
(xxxiv) Each of the Company and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that: (A) transactions are executed in accordance with management's general
or specific authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(xxxv) Each of the Company and its subsidiaries maintains insurance
covering its properties, operations, personnel and businesses, insuring
against such losses and risks as are consistent with industry practice to
protect the Company and its subsidiaries and their respective businesses.
None of the Company or any of its subsidiaries has received notice from any
insurer or agent of such insurer that substantial capital improvements or
other expenditures will have to be made in order to continue such
insurance.
(xxxvi) None of the Company or any of its subsidiaries has (A) taken,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price
of any security of the Company or any of its subsidiaries to facilitate the
sale or resale of the Notes or (B) since the date of the Preliminary
Offering Memorandum (1) sold, bid for, purchased or paid any person any
compensation for soliciting purchases of the Notes or (2) paid or agreed to
pay to any person any compensation for soliciting another to purchase any
other securities of the Company or any of its subsidiaries.
(xxxvii) No registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial Purchasers as
contemplated hereby or for the Exempt Resales assuming (A) that the
purchasers who buy the Series A Notes in the Exempt Resales are Eligible
Purchasers and (B) the accuracy of the Initial Purchasers' representations
contained herein. No form of general solicitation or general advertising
(as defined in Regulation D under the Act) was used by the Company, any of
the Dyersburg Guarantors or any of their respective representatives
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(other than the Initial Purchasers, as to which the Company and the
Dyersburg Guarantors make no representation or warranty) in connection with
the offer and sale of any of the Series A Notes or in connection with
Exempt Resales, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Notes or the Guarantees
have been issued and sold by the Company or any of its subsidiaries within
the six-month period immediately prior to the date hereof.
(xxxviii) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Series A Notes to be purchased by
Eligible Purchasers will not involve any prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue
Code of 1986. The representation made by the Company and the Dyersburg
Guarantors in the preceding sentence is made in reliance upon and subject
to the accuracy of, and compliance with, the representations and covenants
made or deemed made by Eligible Purchasers as set forth in the Offering
Memorandum under the caption "Notice to Investors."
(xxxix) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as of
its date, contains the information specified in, and meets the requirements
of, Rule 144A(d)(4) under the Act.
(xl) Prior to the effectiveness of any Registration Statement, the
Indenture is not required to be qualified under the Trust Indenture Act.
(xli) None of the Company, the Dyersburg Guarantors or any of their
respective affiliates or any person acting on its or their behalf (other
than the Initial Purchasers, as to whom the Company and the Dyersburg
Guarantors make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with respect to
the Series A Notes or the Guarantees.
(xlii) The Series A Notes offered and sold in reliance on Regulation
S have been and will be offered and sold only in offshore transactions.
(xliii) The sale of the Series A Notes pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions
of the Act.
(xliv) The Company, the Dyersburg Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial
Purchasers, as to whom the Company and the Dyersburg Guarantors make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering
of the Series A Notes outside the United States and, in connection
therewith, the Preliminary Offering Memorandum and the Offering Memorandum
contains or will contain the disclosure required by Rule 902(h).
(xlv) Subsequent to the respective dates as of which information is
given in the Offering Memorandum and up to the Closing Date, except as set
forth in the Offering Memorandum, (A) none of the Company or any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, which are or, after giving effect to the Acquisition, will be
material, individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole, nor entered into any transaction not in the
ordinary course of business, (B) there has not been any change or
development which, singly or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect and (C) there has been no dividend
or distribution of any kind declared,
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<PAGE> 16
paid or made by the Company on any class of its capital stock.
(xlvi) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Notes, the issuance of the
Guarantees, the application of the proceeds from the issuance and sale of
the Notes and the consummation of the transactions contemplated thereby as
set forth in the Offering Memorandum, will violate Regulations G, T, U or X
promulgated by the Board of Governors of the Federal Reserve System or
analogous foreign laws and regulations.
(xlvii) The accountants who have certified or will certify the
financial statements included or to be included as part of the Offering
Memorandum are independent accountants as required by the Act. The
historical financial statements of the Company, together with related
schedules and notes thereto, comply as to form in all material respects
with the requirements applicable to registration statements on Form S-2
under the Act and the historical financial statements of the Company and
Alamac present fairly in all material respects the financial position and
results of operations of the Company and its subsidiaries, or of Alamac and
its subsidiaries, as the case may be, at the dates and for the periods
indicated. Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods presented except as noted therein. The pro forma
financial statements included in the Offering Memorandum have been prepared
on a basis consistent with such historical statements of the Company,
except for the pro forma adjustments specified therein, and give effect to
assumptions made on a reasonable basis and present fairly in all material
respects the historical and proposed transactions contemplated by this
Agreement and the other Operative Documents; and such pro forma financial
statements comply as to form in all material respects with the requirements
applicable to pro forma financial statements included in registration
statements on Form S-2 under the Act, except as expressly stated therein.
The other financial and statistical information and data included in the
Offering Memorandum derived from the historical and pro forma financial
statements are accurately presented in all material respects and prepared
on a basis consistent with the financial statements, historical and pro
forma, included in the Offering Memorandum and the books and records of the
Company and its subsidiaries.
(xlviii) None of the Company or any of the Dyersburg Guarantors
intends to, nor does it believe that it will, incur debts beyond its
ability to pay such debts as they mature. The present fair saleable value
of the assets of each of the Company and the Dyersburg Guarantors exceeds
the amount that will be required to be paid on or in respect of its
existing debts and other liabilities (including contingent liabilities) as
they become absolute and matured. The assets of each of the Company and the
Dyersburg Guarantors do not constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Upon the
issuance of the Notes and consummation of the Acquisition, the present fair
saleable value of the assets of each of the Company and the Dyersburg
Guarantors will exceed the amount that will be required to be paid on or in
respect of its existing debts and other liabilities (including contingent
liabilities) as they become absolute and matured. Upon the issuance of the
Notes and the consummation of the Acquisition, the assets of each of the
Company and the Dyersburg Guarantors will not constitute unreasonably small
capital to carry out its business as now conducted, including the capital
needs of each of the Company and the Dyersburg Guarantors, taking into
account the projected capital requirements and capital availability.
(xlix) Except pursuant to this Agreement, there are no contracts,
agreements or understandings between the Company and its subsidiaries and
any other person that would give rise to a valid claim against the Company
or any of its subsidiaries or the Initial Purchasers for a brokerage
commission, finder's fee or like payment in connection with the issuance,
purchase and sale of the Notes or the issuance of the Guarantees.
16
<PAGE> 17
(l) There exist no conditions that would constitute a default (or an
event which with notice or the lapse of time, or both, would constitute a
default) under any of the Operative Documents.
(li) Each of the Company and its subsidiaries has complied with all of
the provisions of Florida H.B. 1771, codified as Section 517.075 of the
Florida statutes, and all regulations promulgated thereunder relating to
doing business with the Government of Cuba or with any person or any
affiliate located in Cuba.
(lii) Each certificate signed by any officer of the Company or any of
the Guarantors and delivered to the Initial Purchasers or counsel for the
Initial Purchasers pursuant to this Agreement shall be deemed to be a
representation and warranty by the Company or such Guarantor, as the case
may be, to the Initial Purchasers as to the matters covered thereby.
The Company and the Dyersburg Guarantors acknowledge that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 8 hereof, counsel for the Company and the
Dyersburg Guarantors and counsel for the Initial Purchasers, will rely upon the
accuracy and truth of the foregoing representations and hereby consent to such
reliance.
(b) Each of the Initial Purchasers, severally and not jointly, represents,
warrants and covenants to the Company and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.
(ii) Such Initial Purchaser (A) is not acquiring the Series A Notes
with a view to any distribution thereof that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Series A Notes
only to QIBs in reliance on the exemption from the registration
requirements of the Act provided by Rule 144A, to Accredited Investors in a
private placement exempt from the registration requirements of the Act and
in offshore transactions in reliance upon Regulation S under the Act.
(iii) No form of general solicitation or general advertising (within
the meaning of Regulation D under the Act) has been or will be used by such
Initial Purchaser or any of its representatives in connection with the
offer and sale of any of the Series A Notes, including, but not limited to,
articles, notices or other communications published in any newspaper,
magazine, or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(iv) Each of the Initial Purchasers agrees that, in connection with
the Exempt Resales, it will solicit offers to buy the Series A Notes only
from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Each of the Initial Purchasers further (A) agrees that it will
offer to sell the Series A Notes only to, and will solicit offers to buy
the Series A Notes only from (1) Eligible Purchasers that the Initial
Purchasers reasonably believes are QIBs, (2) Accredited Investors who make
the representations contained in, and execute and return to the Initial
Purchasers, a certificate in the form of Annex A attached to the Offering
Memorandum and (3) Reg S Investors and (B) that, in the case of such QIBs,
such Accredited Investors and such Reg S Investors, acknowledges and agrees
that such Series A Notes will not have been registered under the Act and
may be resold, pledged or otherwise transferred only (x)(I) to a person
whom the seller reasonably believes is a QIB purchasing for its own account
or for the account of a QIB in a
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<PAGE> 18
transaction meeting the requirements of Rule 144A, (II) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the requirements
of Rule 904 under the Act, (III) in a transaction meeting the requirements
of Rule 144 under the Act, (IV) to an Accredited Investor that, prior to
such transfer, furnishes the Trustee a signed letter containing certain
representations and agreements relating to the registration of transfer of
such Series A Notes (the form of which is substantially the same as Annex A
to the Offering Memorandum) and, if such transfer is in respect of an
aggregate principal amount of Series A Notes less than $250,000, an opinion
of counsel acceptable to the Company that such transfer is in compliance
with the Act or (V) in accordance with another exemption from the
registration requirements of the Act (and based upon an opinion of counsel
if the Company so requests), (y) to the Company or any of its subsidiaries,
(z) pursuant to an effective registration statement under the Act and, in
each case, in accordance with any applicable securities laws of any state
of the United States or any other applicable jurisdiction and (C) that the
holder will, and each subsequent holder is required to, notify any
purchaser of the security evidenced thereby of the resale restrictions set
forth in (B) above.
(v) Such Initial Purchaser agrees that it has offered the Series A
Notes and will offer and sell the Series A Notes (A) as part of its
distribution at any time and (B) otherwise until 40 days after the later of
the commencement of the offering of the Series A Notes pursuant hereto and
the Closing Date, only in accordance with Rule 903 of Regulation S or
another exemption from the registration requirements of the Act. Such
Initial Purchaser agrees that, during such 40-day restricted period, it
will not cause any advertisement with respect to the Series A Notes
(including any "tombstone" advertisement") to be published in any newspaper
or periodical or posted in any public place and will not issue any circular
relating to the Series A Notes, except such advertisements as are permitted
by and include the statements required by Regulation S.
(vi) Such Initial Purchaser agrees that it has not offered or sold and
will not offer or sell the Series A Notes sold pursuant hereto in reliance
on Regulation S (A) as part of its distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the offering
of the Series A Notes pursuant hereto and the Closing Date, to a U.S.
person (as defined in Rule 902 of the Act) or for the account or benefit of
a U.S. person (other than a distributor (as defined in Rule 902 of the
Act)).
(vii) Such Initial Purchaser agrees that, at or prior to confirmation
of a sale of Series A Notes by it to any distributor, dealer or person
receiving a selling concession, fee or other remuneration during the 40-day
restricted period referred to in Rule 903(c)(2) under the Act, it will send
to such distributor, dealer or person receiving a selling concession, fee
or other remuneration a confirmation or notice to substantially the
following effect:
"The Series A Notes covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered and sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as part
of your distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the
Closing Date, except in either case in accordance with Regulation
S under the Securities Act (or Rule 144A or to Accredited
Investors in transactions that are exempt from the registration
requirements of the Securities Act), and in connection with any
subsequent sale by you of the Series A Notes covered hereby in
reliance on Regulation S during the period referred to above to
any distributor, dealer or person receiving a selling concession,
fee or other remuneration, you must deliver a notice to
substantially the foregoing effect. Terms used above have the
meanings assigned to them in Regulation S."
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<PAGE> 19
The Initial Purchasers understand that the Company and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 8
hereof, counsel for the Company and the Dyersburg Guarantors and counsel for the
Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
6. Indemnification.
(a) The Company and the Dyersburg Guarantors, jointly and severally,
agree, and will cause the Alamac Guarantors to agree, to indemnify and hold
harmless (i) each of the Initial Purchasers, (ii) each person, if any, who
controls either of the Initial Purchasers within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act and (iii) the respective
officers, directors, partners, employees, representatives and agents of
each of the Initial Purchasers or any controlling person to the fullest
extent lawful, from and against any and all losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any supplement thereto or amendment thereof, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company and the
Guarantors will not be liable in any such case to the extent, but only to
the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and
in conformity with information relating to either of the Initial Purchasers
furnished to the Company in writing by or on behalf of such Initial
Purchaser expressly for use therein; provided, further, that such indemnity
with respect to the Preliminary Offering Memorandum shall not inure to the
benefit of either Initial Purchaser (or any persons controlling such
Initial Purchaser) from whom the person asserting such loss, claim, damage
or liability purchased the Notes which are the subject thereof if such
person did not receive a copy of the Offering Memorandum (or the Offering
Memorandum as amended or supplemented) at or prior to the confirmation of
the sale of such Notes to such person (and the Offering Memorandum or any
such amended or supplemented Offering Memorandum, as applicable, shall have
been delivered by the Company to such Initial Purchaser a reasonable amount
of time prior to the mailing or delivery, as applicable, of such
confirmation) and any such untrue statement or omission or alleged untrue
statement or omission of a material fact contained in such Preliminary
Offering Memorandum was corrected in the Offering Memorandum (or the
Offering Memorandum as amended or supplemented). This indemnity agreement
will be in addition to any liability which the Company and the Guarantors
may otherwise have, including under this Agreement.
(b) Each of the Initial Purchasers, severally and not jointly, agrees
to indemnify and hold harmless (i) the Company and the Dyersburg
Guarantors, (ii) each person, if any, who controls the Company and the
Dyersburg Guarantors within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, and (iii) the respective officers, directors,
partners, employees, representatives and agents of the Company and the
Dyersburg Guarantors, against any losses, liabilities, claims, damages and
expenses whatsoever (including but not limited to reasonable attorneys'
fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any investigation or litigation, commenced
or threatened, or any
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<PAGE> 20
claim whatsoever and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that any such loss, liability, claim,
damage or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with information relating to such Initial
Purchaser furnished to the Company in writing by or on behalf of such
Initial Purchaser expressly for use therein; provided, however, that in no
case shall either of the Initial Purchasers be liable or responsible for
any amount in excess of the discounts and commissions received by such
Initial Purchaser, as set forth on the cover page of the Offering
Memorandum. This indemnity will be in addition to any liability which the
Initial Purchasers may otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not
relieve it from any liability which it may have under this Section 6 except
to the extent that it has been prejudiced in any material respect by such
failure or from any liability which it may otherwise have). In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have
the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such indemnified
party or parties unless (i) the employment of such counsel shall have been
authorized in writing by the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall not have
employed counsel to take charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional
to those available to one or all of the indemnifying parties (in which case
the indemnifying party or parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses of counsel shall be borne by the
indemnifying parties; provided, however, that the indemnifying party under
subsection (a) or (b) above shall only be liable for the legal expenses of
one counsel (in addition to any local counsel) for all indemnified parties
in each jurisdiction in which any claim or action is brought. Anything in
this subsection to the contrary notwithstanding, an indemnifying party
shall not be liable for any settlement of any claim or action effected
without its prior written consent, provided that such consent was not
unreasonably withheld.
7. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 6 is for any reason held to be
unavailable from the Company and the Guarantors or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Guarantors, on the
one hand, and each Initial Purchaser, on the other hand, shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such
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<PAGE> 21
indemnification provision (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claims asserted, but after deducting in
the case of losses, claims, damages, liabilities and expenses suffered by the
Company and the Guarantors, any contribution received by the Company and the
Guarantors from persons, other than the Initial Purchasers, who may also be
liable for contribution, including persons who control the Company and the
Guarantors within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act) to which the Company, the Guarantors and such Initial Purchaser
may be subject, in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors, on one hand, and such
Initial Purchaser, on the other hand, from the offering of the Series A Notes
or, if such allocation is not permitted by applicable law or indemnification is
not available as a result of the indemnifying party not having received notice
as provided in Section 6, in such proportion as is appropriate to reflect not
only the relative benefits referred to above but also the relative fault of the
Company and the Guarantors, on one hand, and such Initial Purchaser, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Guarantors, on one hand, and each Initial Purchaser, on the other hand,
shall be deemed to be in the same proportion as (i) the total proceeds from the
offering of Series A Notes (net of discounts but before deducting expenses)
received by the Company and the Guarantors and (ii) the discounts and
commissions received by such Initial Purchaser, respectively, in each case as
set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company and the Guarantors, on one hand, and of each
Initial Purchaser, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Guarantors or such Initial Purchaser
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Guarantors and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7, (i) in no case shall either of the Initial Purchasers be
required to contribute any amount in excess of the amount by which the discounts
and commissions applicable to the Series A Notes purchased by such Initial
Purchaser pursuant to this Agreement exceeds the amount of any damages which
such Initial Purchaser has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7, (A)
each person, if any, who controls either of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B)
the respective officers, directors, partners, employees, representatives and
agents of each of the Initial Purchasers or any controlling person shall have
the same rights to contribution as such Initial Purchaser, and (A) each person,
if any, who controls the Company and the Guarantors within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and (B) the
respective officers, directors, partners, employees, representatives and agents
of the Company and the Guarantors shall have the same rights to contribution as
the Company and the Guarantors, subject in each case to clauses (i) and (ii) of
this Section 7. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section 7, notify such party or parties from whom
contribution may be sought, but the failure to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 7 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its prior written consent, provided that such written consent was not
unreasonably withheld.
8. Conditions of Initial Purchasers' Obligations. The obligations of the
Initial Purchasers to purchase and pay for the Series A Notes, as provided
herein, shall be subject to the satisfaction of the
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<PAGE> 22
following conditions:
(a) All of the representations and warranties of the Company and the
Dyersburg Guarantors contained in this Agreement shall be true and correct
on the date hereof and on the Closing Date (after giving effect to the
Acquisition) with the same force and effect as if made on and as of the
date hereof and the Closing Date, respectively. Each of the Company and the
Dyersburg Guarantors shall have performed or complied with all of the
agreements herein contained and required to be performed or complied with
by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New York
City time, on the day following the date of this Agreement or at such later
date and time as to which the Initial Purchasers may agree, and no stop
order suspending the qualification or exemption from qualification of the
Series A Notes in any jurisdiction referred to in Section 4(e) shall have
been issued and no proceeding for that purpose shall have been commenced or
shall be pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency which would, as of the Closing Date, prevent the issuance of the
Series A Notes or the Guarantees or the consummation of the Acquisition; no
action, suit or proceeding shall have been commenced and be pending against
or affecting or, to the best knowledge of the Company and the Dyersburg
Guarantors, threatened against, the Company or any of its subsidiaries
before any court or arbitrator or any governmental body, agency or official
that, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect; and no stop order shall have been issued
preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or which could reasonably be expected to have a
Material Adverse Effect.
(d) Since the dates as of which information is given in the Offering
Memorandum, (i) there shall not have been any material adverse change, or
any development that is reasonably likely to result in a material adverse
change, in the capital stock or the long-term debt, or material increase in
the short-term debt, of the Company or any of its subsidiaries from that
set forth in the Offering Memorandum, (ii) no dividend or distribution of
any kind shall have been declared, paid or made by the Company or any of
its subsidiaries on any class of its capital stock and (iii) none of the
Company or any of its subsidiaries shall have incurred any liabilities or
obligations, direct or contingent, that are or, after giving effect to the
Acquisition, will be material, individually or in the aggregate, to the
Company and its subsidiaries, taken as a whole, and that are required to be
disclosed on a balance sheet or notes thereto in accordance with generally
accepted accounting principles and are not disclosed on the latest balance
sheet or notes thereto included in the Offering Memorandum. Since the date
hereof and since the dates as of which information is given in the Offering
Memorandum, there shall not have occurred any material adverse change in
the business, prospects, financial condition or results of operation of the
Company and its subsidiaries, taken as a whole.
(e) The Initial Purchasers shall have received certificates, dated the
Closing Date, signed on behalf of the Company and the Dyersburg Guarantors,
in form and substance satisfactory to the Initial Purchasers, confirming,
as of the Closing Date, the matters set forth in paragraphs (a), (b), (c)
and (d) of this Section 8 and that, as of the Closing Date, the obligations
of the Company and the Dyersburg Guarantors to be performed hereunder on or
prior thereto have been duly performed.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers and counsel for the
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<PAGE> 23
Initial Purchasers, of Bass, Berry & Sims PLC, counsel for the Company and
the Dyersburg Guarantors, to the effect set forth in Exhibit C hereto.
(g) At the time this Agreement is executed and at the Closing Date,
the Initial Purchasers shall have received from Ernst & Young LLP,
independent public accountants, dated as of the date of this Agreement and
as of the Closing Date, customary comfort letters addressed to the Initial
Purchasers and in form and substance satisfactory to the Initial Purchasers
and counsel for the Initial Purchasers with respect to the financial
statements and certain financial information of the Company and its
subsidiaries, and of Alamac and its subsidiaries, contained in the Offering
Memorandum and/or incorporated therein by reference.
(h) The Initial Purchasers shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, of Latham & Watkins, counsel for the Initial Purchasers,
covering such matters as are customarily covered in such opinions.
(i) The Initial Purchasers shall have received a certificate of the
Company, dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers and counsel for the Initial Purchasers, as to the
solvency of the Company following consummation of the Acquisition.
(j) Latham & Watkins shall have been furnished with such documents, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
this Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations,
warranties or conditions herein contained.
(k) Prior to the Closing Date, the Company and the Guarantors shall
have furnished to the Initial Purchasers such further information,
certificates and documents as the Initial Purchasers may reasonably
request.
(l) The Company, the Guarantors and the Trustee shall have entered
into the Indenture and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(m) The Company and the Guarantors shall have entered into the
Registration Rights Agreement and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
(n) The Acquisition and the New Credit Facility shall be consummated
prior to, or simultaneously with, the Closing of the Offering on
substantially the terms described in the Offering Memorandum and the
Initial Purchasers shall have received counterparts, conformed as executed,
of the Acquisition Agreement and the New Credit Facility and such other
documentation as they deem necessary to evidence the consummation thereof.
(o) All of the opinions to be delivered by the Company and the
Dyersburg Guarantors pursuant to the New Credit Facility and the
Acquisition Agreement shall be addressed and delivered to the Initial
Purchasers.
(p) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of
Rule 463(g) under the Securities Act, that (i) it is downgrading its rating
assigned to any class of securities of the Company or (ii) it is reviewing
its ratings assigned to any class of securities of the Company with a view
to possible downgrading, or with negative implications, or direction not
determined.
23
<PAGE> 24
(q) The Notes shall have been approved for trading on PORTAL.
All opinions, certificates, letters and other documents required by
this Section 8 to be delivered by the Company and the Dyersburg Guarantors will
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchasers. The Company and
the Dyersburg Guarantors shall furnish the Initial Purchasers with such
conformed copies of such opinions, certificates, letters and other documents as
they shall reasonably request.
9. Initial Purchasers' Information. The Company and the Dyersburg
Guarantors acknowledge that the statements with respect to the offering of the
Series A Notes set forth in the last paragraph of the cover page and the third
paragraph and the third sentence of the fourth paragraph under the caption "Plan
of Distribution" in the Offering Memorandum constitute the only information
relating to any of the Initial Purchasers furnished to the Company in writing by
or on behalf of any of the Initial Purchasers expressly for use in the Offering
Memorandum.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchasers, the Company and
the Dyersburg Guarantors contained in this Agreement, including the agreements
contained in Sections 4(f) and 11(d), the indemnity agreements contained in
Section 6 and the contribution agreements contained in Section 7, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of either of the Initial Purchasers, any controlling person
thereof, or by or on behalf of the Company and the Dyersburg Guarantors or any
controlling person thereof, and shall survive delivery of and payment for the
Series A Notes to and by the Initial Purchasers. The representations contained
in Section 5 and the agreements contained in Sections 4(f), 6, 7 and 11(d) shall
survive the termination of this Agreement, including any termination pursuant
to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and delivery
of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Company
from the Initial Purchasers, without liability (other than with respect to
Sections 6 and 7) on the Initial Purchasers' part to the Company or any of
the Dyersburg Guarantors if, on or prior to such date, (i) the Company or
any of the Dyersburg Guarantors shall have failed, refused or been unable
to perform in any material respect any agreement on their part to be
performed hereunder, (ii) any other condition to the obligations of the
Initial Purchasers hereunder as provided in Section 8 is not fulfilled when
and as required in any material respect, (iii) in the reasonable judgment
of the Initial Purchasers, any material adverse change shall have occurred
since the respective dates as of which information is given in the Offering
Memorandum in the condition (financial or otherwise), business, properties,
assets, liabilities, prospects, net worth, results of operations or cash
flows of the Company and its subsidiaries, taken as a whole, other than as
set forth in the Offering Memorandum, or (iv)(A) any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the Initial Purchasers will in the immediate future
materially disrupt, the market for the Company's securities or for
securities in general; or (B) trading in securities generally on the New
York or American Stock Exchange shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for securities shall have been
required, on such exchange, or by such exchange or other regulatory body or
governmental authority having jurisdiction; or (C) a banking moratorium
shall have been declared by federal or state authorities, or a moratorium
in foreign exchange trading by major international banks or persons shall
have been declared; or (D) there is an outbreak or escalation
24
<PAGE> 25
of armed hostilities involving the United States on or after the date
hereof, or if there has been a declaration by the United States of a
national emergency or war, the effect of which shall be, in the Initial
Purchasers' judgment, to make it inadvisable or impracticable to proceed
with the offering or delivery of the Series A Notes on the terms and in the
manner contemplated in the Offering Memorandum; or (E) there shall have
been such a material adverse change in general economic, political or
financial conditions or if the effect of international conditions on the
financial markets in the United States shall be such as, in the Initial
Purchasers' judgment, makes it inadvisable or impracticable to proceed with
the delivery of the Series A Notes as contemplated hereby.
(c) Any notice of termination pursuant to this Section 11 shall be by
telephone or telephonic facsimile and, in either case, confirmed in writing
by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to clause (iv) of Section 11(b),
in which case each party will be responsible for its own expenses), the
Company and the Dyersburg Guarantors shall reimburse the Initial Purchasers
for all out-of-pocket expenses (including the reasonable fees and expenses
of the Initial Purchasers' counsel), reasonably incurred by the Initial
Purchasers in connection herewith.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, telecopied and confirmed in writing or
sent by a nationally recognized overnight courier service guaranteeing delivery
on the next business day to Bear, Stearns & Co. Inc., 245 Park Avenue, New York,
New York 10167, Attention: Corporate Finance Department, telecopy number: (212)
272-3092, with a copy to Latham & Watkins, 885 Third Avenue, Suite 1000, New
York, New York 10022, Attention: Ian B. Blumenstein, telecopy number: (212)
751-4864; and if sent to the Company or any of the Dyersburg Guarantors, shall
be mailed, delivered, telecopied and confirmed in writing or sent by a
nationally recognized overnight courier service guaranteeing delivery on the
next business day to Dyersburg Corporation, 1315 Phillips Street, Dyersburg,
Tennessee 38024, Attention: Chief Financial Officer, telecopy number: (901)
286-3411, with a copy to Bass, Berry & Sims PLC, 2700 First American Center,
Nashville, Tennessee 37238, Attention: J. Page Davidson, telecopy number: (615)
742-6298.
13. Parties. This Agreement shall inure solely to the benefit of, and shall
be binding upon, the Initial Purchasers, the Company and the Dyersburg
Guarantors and the controlling persons and agents referred to in Sections 6 and
7, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Notes from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance with the
internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are included solely
for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various counterparts
which together shall constitute one and the same instrument.
[Signature page to follow]
25
<PAGE> 26
If the foregoing correctly sets forth the understanding among
the Initial Purchasers, the Company and the Dyersburg Guarantors please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us.
Very truly yours,
DYERSBURG CORPORATION
By: /s/ W. S. Shropshire, Jr.
-----------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
DYERSBURG FABRICS INC.
By: /s/ W. S. Shropshire, Jr.
-----------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
DYERSBURG FABRICS LIMITED PARTNERSHIP, I
By: /s/ W. S. Shropshire, Jr.
-----------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer of
General Partner
DFIC, INC.
By: /s/ Paul L. Hallock
-----------------------------------
Name: Paul L. Hallock
Title: Vice President and
Treasurer
IQUE, INC.
By: /s/ W. S. Shropshire, Jr.
-----------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
IQUEIC, INC.
By: /s/ Paul L. Hallock
-----------------------------------
Name: Paul L. Hallock
Title: Vice President and
Treasurer
<PAGE> 27
IQUE LIMITED PARTNERSHIP, I
By: /s/ W. S. Shropshire, Jr.
---------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
of General Partner
UNITED KNITTING INC.
By: /s/ W. S. Shropshire, Jr.
---------------------------------
Name: W. S. Shropshire, Jr.
Title: Secretary and Treasurer
UKIC, INC.
By: /s/ Paul L. Hallock
---------------------------------
Name: Paul L. Hallock
Title: Vice President and
Treasurer
UNITED KNITTING LIMITED PARTNERSHIP, I
By: /s/ W. S. Shropshire, Jr.
---------------------------------
Name: W. S. Shropshire, Jr.
Title: Secretary and Treasurer
of General Partner
<PAGE> 28
Accepted and agreed to as of
the date first above written:
BEAR, STEARNS & CO. INC.
By: /s/ Philip E. Bernay
-------------------------------
Name: Philip E. Bernay
Title: Senior Managing Director
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Steven C. Benfield
------------------------------
Name: Steven C. Benfield
Title: Managing Director
<PAGE> 29
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount
Initial Purchaser of Series A Notes
- ----------------- -----------------
<S> <C>
Bear, Stearns & Co. Inc. $ 62,500
Prudential Securities Incorporated $ 62,500
------
Total $ 125,000
</TABLE>
<PAGE> 30
EXHIBIT A
List of Dyersburg Guarantors
Dyersburg Fabrics Inc., a Tennessee corporation
Dyersburg Fabrics Limited Partnership, I, a Tennessee limited partnership
DFIC, Inc., a Delaware corporation
IQUE, Inc., a Tennessee corporation
IQUEIC, Inc., a Delaware corporation
IQUE Limited Partnership, I, a Tennessee limited partnership
United Knitting Inc., a Tennessee corporation
UKIC, Inc., a Delaware corporation
United Knitting Limited Partnership, I, a Tennessee limited partnership
A-1
<PAGE> 31
EXHIBIT B
List of Alamac Guarantors
Alamac Knit Fabrics Inc., a Delaware corporation
Alamac Enterprises Inc., a Delaware corporation
AIH Inc., a Delaware corporation
B-1
<PAGE> 32
EXHIBIT C
Form of Opinion of Bass, Berry & Sims PLC
1. Each of the Company and the Dyersburg Guarantors (a) is duly
incorporated (if it is a corporation) and is validly existing as a corporation
or partnership, as the case may be, in good standing under the laws of its
jurisdiction of organization, (b) has all requisite corporate or partnership
power and authority to carry on its business as it is currently being conducted
and as described in the Offering Memorandum and to own, lease and operate its
properties, and (c) is duly qualified and in good standing as a foreign
corporation, authorized to do business in each jurisdiction listed on Exhibit 1
attached hereto, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect.
2. Each of the Company and the Dyersburg Guarantors has all requisite
corporate or partnership power and authority to enter into and perform its
obligations under this Agreement and each of the other Operative Documents to
which it is a party.
3. To the knowledge of such counsel, all of the outstanding capital stock
of each subsidiary of the Company is owned by the Company or a subsidiary of the
Company, and except as set forth on Schedule 2 attached hereto, to the knowledge
of such counsel, is owned free and clear of any security interest, claim, lien,
limitation on voting rights or encumbrance; and all such securities have been
duly authorized, validly issued, and are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights.
4. This Agreement has been duly authorized by all necessary corporate or
partnership action on the part of each of the Company and the Dyersburg
Guarantors, and has been duly executed and delivered by each of the Company and
the Dyersburg Guarantors.
5. The Registration Rights Agreement has been duly authorized by all
necessary corporate or partnership action on the part of each of the Company and
the Guarantors, and has been duly executed and delivered by each of the Company
and the Guarantors, and is the valid and binding obligation of each of the
Company and the Guarantors, enforceable against each of them in accordance with
its terms, (a) subject to (i) the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent conveyance, fraudulent
transfer and other similar laws relating to or affecting the rights of creditors
and (ii) general principles of equity (including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance, injunctive relief and other equitable
remedies), regardless of whether considered in a proceeding at law or in equity;
and (b) except to the extent that the enforceability of indemnification and
contribution provisions may be limited by Federal and state securities laws and
the policies underlying such laws.
6. The Indenture has been duly authorized by all necessary corporate or
partnership action on the part of each of the Company and the Guarantors, and
has been duly executed and delivered by each of the Company and the Guarantors,
and is the valid and binding obligation of each of the Company and the
Guarantors, enforceable against each of them in accordance with its terms
(assuming the due authorization, execution and delivery of the Indenture by the
Trustee), (a) subject to (i) the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent conveyance, fraudulent
transfer and other similar laws relating to or affecting the rights of creditors
and (ii) general principles of equity (including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance, injunctive relief and other equitable
remedies), regardless of whether considered in
C-1
<PAGE> 33
a proceeding at law or in equity; and (b) except to the extent that the waiver
contained in Section 4.06 of the Indenture may be deemed unenforceable.
7. The New Credit Facility has been duly authorized by all necessary
corporate or partnership action on the part of each of the Company and each of
the Guarantors party thereto, and has been duly executed and delivered by each
of the Company and the Guarantors, and is the valid and binding obligation of
each of the Company and the Guarantors, enforceable against each of them in
accordance with its terms, subject to (a) the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent conveyance, fraudulent
transfer and other similar laws relating to or affecting the rights of creditors
and (b) general principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance, injunctive relief and other equitable
remedies), regardless of whether considered in a proceeding at law or in equity.
8. The Acquisition Agreement has been duly authorized by all necessary
corporate action on the part of the Company, and has been duly executed and
delivered by the Company, and is the valid and binding obligation of the
Company, enforceable against it in accordance with its terms, subject to (a) the
effect of bankruptcy, insolvency, reorganization, arrangement, moratorium,
fraudulent conveyance, fraudulent transfer and other similar laws relating to or
affecting the rights of creditors and (b) general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific performance,
injunctive relief and other equitable remedies), regardless of whether
considered in a proceeding at law or in equity.
9. The Series A Notes have been duly authorized by all necessary corporate
action on the part of the Company, and have been duly executed by the Company
for issuance and sale to the Initial Purchasers pursuant to this Agreement, and,
when authenticated in accordance with the terms of the Indenture and delivered
against payment therefor in accordance with the terms hereof and thereof, the
Series A Notes will be the valid and binding obligations of the Company,
enforceable against it in accordance with their terms and entitled to the
benefits of the Indenture, (a) subject to (i) the effect of bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent conveyance,
fraudulent transfer and other similar laws relating to or affecting the rights
of creditors and (ii) general principles of equity (including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance, injunctive relief and
other equitable remedies), regardless of whether considered in a proceeding at
law or in equity; and (b) except to the extent that the waiver contained in
Section 4.06 of the Indenture may be deemed unenforceable. The Offering
Memorandum contains a summary of the terms of the Series A Notes, which is
accurate in all material respects.
10. The Series B Notes have been duly authorized by all necessary corporate
action on the part of the Company for issuance by the Company, and, when issued
and authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be the valid and binding obligations of the
Company, enforceable against it in accordance with their terms and entitled to
the benefits of the Indenture, (a) subject to (i) the effect of bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent conveyance,
fraudulent transfer and other similar laws relating to or affecting the rights
of creditors and (ii) general principles of equity (including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance, injunctive relief and
other equitable remedies), regardless of whether considered in a proceeding at
law or in equity; and (b) except to the extent that the waiver contained in
Section 4.06 of the Indenture may be deemed unenforceable. The Offering
Memorandum contains a summary of the terms of the Series B
C-2
<PAGE> 34
Notes, which is accurate in all material respects.
11. The Guarantees of the Series A Notes have been duly authorized by all
necessary corporate or partnership action on the part of each of the Guarantors,
and have been duly executed by each of the Guarantors, and when the Series A
Notes have been issued and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with the terms
hereof and thereof, the Guarantees of the Series A Notes will be the valid and
binding obligations of each of the Guarantors, enforceable against each of them
in accordance with their terms and entitled to the benefits of the Indenture,
(a) subject to (i) the effect of bankruptcy, insolvency, reorganization,
arrangement, moratorium, fraudulent conveyance, fraudulent transfer and other
similar laws relating to or affecting the rights of creditors and (ii) general
principles of equity (including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance, injunctive relief and other equitable remedies),
regardless of whether considered in a proceeding at law or in equity; and (b)
except to the extent that the waiver contained in Section 4.06 of the Indenture
may be deemed unenforceable. The Offering Memorandum contains a summary of the
terms of the Guarantees of the Series A Notes, which is accurate in all material
respects.
12. The Guarantees of the Series B Notes have been duly authorized by all
necessary corporate or partnership action on the part of each of the Guarantors,
and when executed and delivered in accordance with the terms of the Indenture,
and when the Series B Notes have been issued and authenticated in accordance
with the terms of the Exchange Offer and the Indenture, the Guarantees of the
Series B Notes will be the valid and binding obligations of each of the
Guarantors, enforceable against each of them in accordance with their terms and
entitled to the benefits of the Indenture, (a) subject to (i) the effect of
bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent
conveyance, fraudulent transfer and other similar laws relating to or affecting
the rights of creditors and (ii) general principles of equity (including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance, injunctive
relief and other equitable remedies), regardless of whether considered in a
proceeding at law or in equity; and (b) except to the extent that the waiver
contained in Section 4.06 of the Indenture may be deemed unenforceable. The
Offering Memorandum contains a summary of the terms of the Guarantees of the
Series B Notes, which is accurate in all material respects.
13. The Offering Memorandum contains a summary of the terms of each of the
Indenture, the Registration Rights Agreement, the New Credit Facility and the
Acquisition Agreement which, in each case, is accurate in all material respects.
The statements under the captions "Description of Notes," "Notice to Investors"
and "Plan of Distribution" in the Offering Memorandum, insofar as such
statements constitute a summary of the legal matters, documents or proceedings
referred to therein, present fairly in all material respects, such legal
matters, documents and proceedings.
14. To such counsel's knowledge, neither the Company nor any of its
subsidiaries is (a) in violation of its charter or bylaws or (b) in default in
the performance of any bond, debenture, note, indenture, mortgage, deed of trust
or other agreement or instrument to which it is a party or by which it is bound
that has been filed or incorporated by reference as an exhibit to any filing by
the Company or any of its subsidiaries with the Commission , which default, in
the case of clause (b), singly or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
15. No registration under the Act of the Series A Notes is required for the
sale of the
C-3
<PAGE> 35
Series A Notes to the Initial Purchasers as contemplated hereby or for the
Exempt Resales assuming (a) that each of the Initial Purchasers is a QIB, (b)
that the purchasers who buy the Series A Notes in the Exempt Resales are either
QIBs, Accredited Investors or Reg S Investors, (c) the accuracy of the Initial
Purchasers' representations contained herein, (d) the accuracy of the Company's
and the Dyersburg Guarantors' representations contained herein and (e) with
respect to Accredited Investors, the accuracy of the representations made by
each Accredited Investor as set forth in the letters of representation executed
by such Accredited Investor in the form of Annex A to the Offering Memorandum.
16. Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as of its
date (except for the financial statements and related notes, the financial
statement schedules and other financial and statistical data included or
required to be included therein, as to which no opinion need be expressed),
complies as to form in all material respects with the requirements of Rule
144A(d)(4) under the Act.
17. When the Series A Notes and the Guarantees are issued and delivered
pursuant to this Agreement, no Series A Note or Guarantee will be of the same
class (within the meaning of Rule 144A under the Act) as securities of the
Company or of any of the Guarantors that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are quoted in a
United States automated inter-dealer quotation system.
18. None of (a) the execution, delivery or performance by the Company or
any of the Dyersburg Guarantors of this Agreement or any of the other Operative
Documents to which it is a party, (b) the consummation of the Acquisition, (c)
the issuance and sale of the Notes and the issuance of the Guarantees and (d)
consummation by the Company of the transactions described in the Offering
Memorandum under the caption "Use of Proceeds," violates, conflicts with or
constitutes a breach of any of the terms or provisions of, or a default under
(or an event that with notice or the lapse of time, or both, would constitute a
default), or requires consent under (which consent has not been obtained), or
results in the imposition of a lien or encumbrance on any properties of the
Company or any of its subsidiaries (except as described in the Offering
Memorandum), or an acceleration of any indebtedness of the Company or any of its
subsidiaries pursuant to, (i) the charter or bylaws of the Company or any of its
subsidiaries, (ii) any bond, debenture, note, indenture, mortgage, deed of trust
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which any of them or their property is bound that has been
filed or incorporated by reference as an exhibit to any filing by the Company or
any of its subsidiaries with the Commission, (iii) to such counsel's knowledge,
any statute, rule or regulation applicable to the Company or any its
subsidiaries or (iv) to such counsel's knowledge, any judgment, order or decree
of any Federal or Tennessee court or governmental agency or authority having
jurisdiction over the Company or any of its subsidiaries. Assuming compliance
with applicable state securities and Blue Sky laws, as to which such counsel
need express no opinion, and except for the filing of a registration statement
under the Act and qualification of the Indenture under the Trust Indenture Act,
or in connection with the Registration Rights Agreement, to such counsel's
knowledge, no consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with (which has not been
obtained or made), (a) any Federal or Tennessee court or governmental agency,
body or administrative agency or (b) any other person is required for (i) the
execution, delivery and performance by the Company or any of the Dyersburg
Guarantors of this Agreement or any of the other Operative Documents to which it
is a party, (ii) the Acquisition or (iii) the issuance and sale of the Notes and
the issuance of the Guarantees and the transactions contemplated hereby and
thereby, except such as have been obtained and made or have been disclosed in
the Offering Memorandum.
C-4
<PAGE> 36
19. To such counsel's knowledge, there is (a) no litigation or other legal
proceeding pending before any court, arbitrator or governmental agency, or
overtly threatened in writing against the Company or any of its subsidiaries or
their properties, (b) no statute, rule, regulation or order of any Federal or
Tennessee governmental agency and (c) no injunction, restraining order or order
of any nature by any Federal or Tennessee court to which the Company or any of
its subsidiaries is subject or to which the business, assets, or property of the
Company or any of its subsidiaries is subject, that, in the case of clauses (a),
(b) and (c) above, is required to be disclosed in the Preliminary Offering
Memorandum and the Offering Memorandum and that is not so disclosed.
20. None of the Company or any of its subsidiaries is an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act.
21. To such counsel's knowledge, there are no holders of securities of the
Company or any of its subsidiaries who, by reason of the execution by the
Company and the Dyersburg Guarantors of this Agreement or any other Operative
Document or the consummation by the Company and the Dyersburg Guarantors of the
transactions contemplated hereby and thereby, have the right to request or
demand that the Company or any of its subsidiaries register under the Act or
analogous foreign laws and regulations securities held by them.
22. To such counsel's knowledge, there are not currently any outstanding
subscriptions, rights, warrants, calls, commitments of sale or options to
acquire, or instruments convertible into or exchangeable for, any capital stock
or other equity interest of any subsidiary of the Company.
23. To such counsel's knowledge, no stop order preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, or any amendment or
supplement thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act, has been issued.
24. The documents incorporated by reference in the Offering Memorandum,
when they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of the
Exchange Act.
25. The Indenture complies as to form in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder. Prior to
the Exchange Offer or the effectiveness of the Shelf Registration Statement, the
Indenture is not required to be qualified under the Trust Indenture Act.
In addition, such counsel shall state that it has participated in conferences
with officers and other representatives of the Company and the Dyersburg
Guarantors, representatives of the independent certified public accountants
of the Company and the Dyersburg Guarantors and the Initial Purchasers and
their representatives at which the contents of the Preliminary Offering
Memorandum and the Offering Memorandum and related matters were discussed
and, although it has not undertaken to investigate or verify independently,
and does not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Preliminary Offering Memorandum
or the Offering Memorandum (except as indicated above), on the basis of the
foregoing (relying as to materiality to the extent such counsel deems
appropriate upon facts provided to such
C-5
<PAGE> 37
counsel by officers or other representatives of the Company and the
Dyersburg Guarantors and without independent verification of such facts),
no facts have come to its attention which led it to believe that the
Preliminary Offering Memorandum or the Offering Memorandum (in each case,
including the documents incorporated by reference therein), as of its date
or the Closing Date, contained an untrue statement of a material fact or
omitted to state any fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading (except as to financial statements and
related notes, the financial statement schedules and other financial and
statistical data included or required to be included therein).
C-6
<PAGE> 1
EXECUTION COPY
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DYERSBURG CORPORATION
SERIES A AND SERIES B
9 3/4% SENIOR SUBORDINATED NOTES DUE 2007
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INDENTURE
Dated as of August 27, 1997
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State Street Bank and Trust Company
Trustee
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CROSS-REFERENCE TABLE*
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Trust Indenture
Act Section Indenture Section
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310 (a)(1)............................................................ 7.10
(a)(2)............................................................ 7.10
(a)(3) ........................................................... N.A.
(a)(4)............................................................ N.A.
(a)(5)............................................................ 7.10
(b) .............................................................. 7.10
(c) .............................................................. N.A.
311 (a) .............................................................. 7.11
(b) .............................................................. 7.11
(c) .............................................................. N.A.
312 (a)............................................................... 2.05
(b)............................................................... 13.03
(c) .............................................................. 13.03
313 (a) .............................................................. 7.06
(b)(2) ........................................................... 7.07
(c) .............................................................. 7.06; 13.02
(d)............................................................... 7.06
314 (a) .............................................................. 4.03; 13.02
(c)(1) ........................................................... 13.04
(c)(2) ........................................................... 13.04
(c)(3) ........................................................... N.A.
(e) ............................................................. 13.05
(f)............................................................... N.A.
315 (a)............................................................... 7.01
(b)............................................................... 7.05, 13.02
(c) ............................................................. 7.01
(d)............................................................... 7.01
(e)............................................................... 6.11
316 (a)(last sentence) ............................................... 2.09
(a)(1)(A)......................................................... 6.05
(a)(1)(B) ........................................................ 6.04
(a)(2) ........................................................... N.A.
(b) .............................................................. 6.07
(c) .............................................................. 2.12
317 (a)(1) ........................................................... 6.08
(a)(2)............................................................ 6.09
(b) .............................................................. 2.04
318 (a)............................................................... 13.01
(b)............................................................... N.A.
(c)............................................................... 13.01
N.A. means not applicable.
</TABLE>
*This Cross-Reference Table is not part of the Indenture.
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<TABLE>
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
<S> <C>
Section 1.01. Definitions............................................................... 1
Section 1.02. Other Definitions......................................................... 14
Section 1.03. Incorporation by Reference of Trust Indenture Act......................... 15
Section 1.04. Rules of Construction..................................................... 16
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating........................................................... 16
Section 2.02. Execution and Authentication.............................................. 17
Section 2.03. Registrar and Paying Agent................................................ 17
Section 2.04. Paying Agent to Hold Money in Trust....................................... 18
Section 2.05. Holder Lists.............................................................. 18
Section 2.06. Transfer and Exchange..................................................... 18
Section 2.07. Replacement Notes......................................................... 29
Section 2.08. Outstanding Notes......................................................... 30
Section 2.09. Treasury Notes............................................................ 30
Section 2.10. Temporary Notes........................................................... 30
Section 2.11. Cancellation.............................................................. 31
Section 2.12. Defaulted Interest........................................................ 31
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee........................................................ 31
Section 3.02. Selection of Notes to Be Redeemed......................................... 31
Section 3.03. Notice of Redemption...................................................... 32
Section 3.04. Effect of Notice of Redemption............................................ 33
Section 3.05. Deposit of Redemption Price............................................... 33
Section 3.06. Notes Redeemed in Part.................................................... 33
Section 3.07. Optional Redemption....................................................... 33
Section 3.08. Mandatory Redemption...................................................... 34
Section 3.09. Offer to Purchase by Application of Excess Proceeds....................... 34
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.......................................................... 36
Section 4.02. Maintenance of Office or Agency........................................... 36
Section 4.03. Reports................................................................... 36
Section 4.04. Compliance Certificate.................................................... 37
Section 4.05. Taxes..................................................................... 38
Section 4.06. Stay, Extension and Usury Laws............................................ 38
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Section 4.07. Restricted Payments....................................................... 38
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries............ 40
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock................ 41
Section 4.10. Asset Sales............................................................... 43
Section 4.11. Transactions with Affiliates.............................................. 43
Section 4.12. Liens..................................................................... 44
Section 4.13. Corporate Existence....................................................... 44
Section 4.14. Offer to Repurchase Upon Change of Control................................ 44
Section 4.15. Limitation on Other Senior Subordinated Debt.............................. 45
Section 4.16. Additional Subsidiary Guarantees.......................................... 45
Section 4.17. Payments for Consent...................................................... 46
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.................................. 46
Section 5.02. Successor Corporation Substituted......................................... 46
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default......................................................... 47
Section 6.02. Acceleration.............................................................. 49
Section 6.03. Other Remedies............................................................ 49
Section 6.04. Waiver of Past Defaults................................................... 50
Section 6.05. Control by Majority....................................................... 50
Section 6.06. Limitation on Suits....................................................... 50
Section 6.07. Rights of Holders of Notes to Receive Payment............................. 51
Section 6.08. Collection Suit by Trustee................................................ 51
Section 6.09. Trustee May File Proofs of Claim.......................................... 51
Section 6.10. Priorities................................................................ 51
Section 6.11. Undertaking for Costs..................................................... 52
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee......................................................... 52
Section 7.02. Rights of Trustee......................................................... 53
Section 7.03. Individual Rights of Trustee.............................................. 54
Section 7.04. Trustee's Disclaimer...................................................... 54
Section 7.05. Notice of Defaults........................................................ 54
Section 7.06. Reports by Trustee to Holders of the Notes................................ 54
Section 7.07. Compensation and Indemnity................................................ 55
Section 7.08. Replacement of Trustee.................................................... 55
Section 7.09. Successor Trustee by Merger, etc.......................................... 56
Section 7.10. Eligibility; Disqualification............................................. 56
Section 7.11. Preferential Collection of Claims Against Company......................... 57
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.................. 57
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Section 8.02. Legal Defeasance and Discharge............................................ 57
Section 8.03. Covenant Defeasance....................................................... 58
Section 8.04. Conditions to Legal or Covenant Defeasance................................ 58
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions..................................... 59
Section 8.06. Repayment to Company...................................................... 60
Section 8.07. Reinstatement............................................................. 60
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes....................................... 60
Section 9.02. With Consent of Holders of Notes.......................................... 61
Section 9.03. Compliance with Trust Indenture Act....................................... 62
Section 9.04. Revocation and Effect of Consents......................................... 62
Section 9.05. Notation on or Exchange of Notes.......................................... 63
Section 9.06. Trustee to Sign Amendments, etc........................................... 63
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate................................................. 63
Section 10.02. Liquidation; Dissolution; Bankruptcy..................................... 63
Section 10.03. Default on Designated Senior Debt........................................ 64
Section 10.04. Acceleration of Notes.................................................... 65
Section 10.05. When Distribution Must Be Paid Over...................................... 65
Section 10.06. Notice by Company........................................................ 65
Section 10.07. Subrogation.............................................................. 65
Section 10.08. Relative Rights.......................................................... 66
Section 10.09. Subordination May Not Be Impaired by Company............................. 66
Section 10.10. Distribution or Notice to Representative................................. 66
Section 10.11. Rights of Trustee and Paying Agent....................................... 66
Section 10.12. Authorization to Effect Subordination.................................... 67
Section 10.13. Amendments............................................................... 67
ARTICLE 11
GUARANTEE OF NOTES
Section 11.01. Guarantee................................................................ 67
Section 11.02. Execution and Delivery of Guarantee...................................... 68
Section 11.03. Release Following Sale of Assets or Designation as
Unrestricted Subsidiary.................................................. 69
Section 11.04. Additional Guarantors.................................................... 69
Section 11.05. Limitation on Guarantor Liability........................................ 69
Section 11.06. "Trustee" to Include Paying Agent........................................ 69
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ARTICLE 12
SUBORDINATION OF GUARANTEE
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Section 12.01. Agreement to Subordinate................................................. 70
Section 12.02. Liquidation; Dissolution; Bankruptcy..................................... 70
Section 12.03. Default on Designated Guarantor Senior Debt.............................. 70
Section 12.04. Acceleration of Notes ................................................... 71
Section 12.05. When Distribution Must Be Paid Over...................................... 71
Section 12.06. Notice by Guarantor ..................................................... 72
Section 12.07. Subrogation ............................................................. 72
Section 12.08. Relative Rights ......................................................... 72
Section 12.09. Subordination May Not Be Impaired by Guarantor .......................... 73
Section 12.10. Distribution or Notice to Representative ................................ 73
Section 12.11. Rights of Trustee and Paying Agent ...................................... 73
Section 12.12. Authorization to Effect Subordination ................................... 74
Section 12.13. Amendments .............................................................. 74
ARTICLE 13
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls ............................................ 74
Section 13.02. Notices ................................................................. 74
Section 13.03. Communication by Holders of Notes with Other Holders of Notes ........... 75
Section 13.04. Certificate and Opinion as to Conditions Precedent ...................... 76
Section 13.05. Statements Required in Certificate or Opinion ........................... 76
Section 13.06. Rules by Trustee and Agents ............................................. 76
Section 13.07. No Personal Liability of Directors, Officers, Employees and Stockholders 76
Section 13.08. Governing Law ........................................................... 77
Section 13.09. No Adverse Interpretation of Other Agreements ........................... 77
Section 13.10. Successors .............................................................. 77
Section 13.11. Severability ............................................................ 77
Section 13.12. Counterpart Originals ................................................... 77
Section 13.13. Table of Contents, Headings, etc ........................................ 77
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EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of August 27, 1997 among Dyersburg
Corporation, a Tennessee corporation (the "Company"), the guarantors listed on
the signature pages hereto (each a "Guarantor" and, collectively, the
"Guarantors") and State Street Bank and Trust Company, as trustee (the
"Trustee").
The Company, the Guarantors and the Trustee agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the 9 3/4% Series A Senior Subordinated Notes due 2007 (the "Series A
Notes") and the 9 3/4% Series B Senior Secured Subordinated Notes due 2007 (the
"Series B Notes" and, together with the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means the global note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquisition" means the acquisition by the Company of all of the
outstanding Capital Stock of AIH Inc. pursuant to the Stock Purchase Agreement
by and among the Company, Alamac Sub Holdings Inc., AIH Inc. and WestPoint
Stevens Inc.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback), excluding sales of services and ancillary products in the
ordinary course of business consistent with past practices (provided that the
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sale, lease, conveyance or other disposition of all or substantially all of the
assets of the Company and its Restricted Subsidiaries taken as a whole will be
governed by the provisions of this Indenture described in Section 4.14 hereof
and/or Section 5.01 hereof and not by the provisions of Section 4.10 hereof),
and (ii) the issue or sale by the Company or any of its Subsidiaries of Equity
Interests of any of the Company's Subsidiaries, in the case of either clause (i)
or (ii), whether in a single transaction or a series of related transactions (a)
that have a fair market value in excess of $1.0 million or (b) for net proceeds
in excess of $1.0 million. Notwithstanding the foregoing, the following will be
deemed not to be Asset Sales: (i) a transfer of assets by the Company to a
Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary to
the Company or to another Wholly Owned Restricted Subsidiary; (ii) an issuance
of Equity Interests by a Wholly Owned Restricted Subsidiary to the Company or to
another Wholly Owned Restricted Subsidiary; (iii) the transfer of obsolete
equipment in the ordinary course of business; (iv) a sale and leaseback
transaction in which the lease is a Capital Lease Obligation that is permitted
by Section 4.09 hereof; and (v) a Restricted Payment that is permitted by
Section 4.07 hereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) any evidence
of Indebtedness issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof (providing the full
faith and credit of the United States government is behind such obligation)
having maturities of not more than six months from the date of acquisition,
(iii) certificates of deposit and eurodollar time deposits with maturities of
six months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any domestic commercial bank that is a member of the Federal Reserve System
and having capital and surplus in excess of $500.0 million and a Keefe Bank
Watch Rating of "B" or better, or whose short-term debt has the highest rating
obtainable from Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's
Corporation ("S&P"), (iv) any money market deposit account issued or offered by
a domestic commercial bank that is a member of the Federal Reserve System and
having capital and surplus in excess of $500.0 million and a Keefe Bank Watch
Rating of "B" or better, or whose short-term debt has the highest rating
obtainable from Moody's or S&P, (v) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the
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qualifications specified in clause (iii) above and (vi) commercial paper having
the highest rating obtainable from Moody's or S&P, and in each case maturing
within six months after the date of acquisition.
"Cedel" means Cedel Bank, societe anonyme.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than Texmaco or its Affiliates; (ii) the adoption of a
plan relating to the liquidation or dissolution of the Company; (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than Texmaco or its Affiliates, becomes the "beneficial owner" (as such
term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 25% of the Voting Stock of the
Company (measured by voting power rather than number of shares); or (iv) the
first day on which two-thirds or less of the members of the Board of Directors
of the Company are Continuing Directors.
"Company" means Dyersburg Corporation, and any and all successors
thereto.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus, to the
extent deducted in computing such Consolidated Net Income, (i) an amount equal
to any extraordinary loss plus any net loss realized in connection with an Asset
Sale, (ii) provision for taxes based on income or profits, (iii) consolidated
interest expense whether paid or accrued and whether or not capitalized
(including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations) and (iv)
depreciation and amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) in each case, on a consolidated basis and determined in
accordance with GAAP. Notwithstanding the foregoing, the provision for taxes
based on the income or profits of, and the depreciation and amortization of, a
Restricted Subsidiary of a Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent (and in the same proportion)
that the Net Income of such Restricted Subsidiary was included in calculating
the Consolidated Net Income of such Person and only if a corresponding amount
would be permitted at the date of determination to be dividended to the Company
by such Restricted Subsidiary without prior approval (that has not been
obtained) pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting
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shall be included only to the extent of the amount of dividends or distributions
paid in cash to the referent Person or a Wholly Owned Restricted Subsidiary
thereof, (ii) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar distributions
by that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles
shall be excluded, (v) the Net Income (but not loss) of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the Company or one
of its Restricted Subsidiaries and (vi) any non-cash compensation expense in
connection with the issuance of employee stock options shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (a) the consolidated equity of the common stockholders of such
Person and its consolidated Restricted Subsidiaries as of such date, plus (b)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (i) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the date of this Indenture
in the book value of any asset owned by such Person or a consolidated Restricted
Subsidiary of such Person, (ii) all investments as of such date in
unconsolidated Subsidiaries and in Persons that are not Restricted Subsidiaries
and (iii) all unamortized debt discount and expense and unamortized deferred
charges as of such date, in each case determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of more than
two-thirds of the Continuing Directors who were members of such Board at the
time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 13.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof, in the
form of Exhibit A hereto except that such Note shall not bear the Global Note
Legend and shall not have the ASchedule of Exchanges of Interests in the Global
Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
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"Designated Guarantor Senior Debt" means, with respect to any
Guarantor, (i) any Indebtedness of such Guarantor now or hereafter outstanding
under the New Credit Agreement or any Guarantee thereof and (ii) any other
Senior Debt of such Guarantor permitted under this Indenture the principal
amount of which is $15.0 million or more and that has been designated by such
Guarantor as "Designated Guarantor Senior Debt."
"Designated Senior Debt" means (i) any Indebtedness of the Company
now or hereafter outstanding under the New Credit Agreement and (ii) any other
Senior Debt of the Company permitted under this Indenture the principal amount
of which is $15.0 million or more and that has been designated by the Company
as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary that
is not incorporated in any jurisdiction outside of the United States.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f).
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness in existence on the date
of this Indenture, until such Indebtedness is repaid.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations), (ii) the
consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period, (iii) any interest expense on
Indebtedness of another Person that is Guaranteed by such
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<PAGE> 12
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries (whether or not such Guarantee
or Lien is called upon) and (iv) the product of (a) all dividend payments,
whether or not in cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividend payments on Equity Interests
payable solely in Equity Interests of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person and its Restricted Subsidiaries for
such period. In the event that the Company or any of its Restricted Subsidiaries
incurs, assumes, Guarantees or redeems any Indebtedness (other than revolving
credit borrowings) or issues preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period. In addition, for purposes of
making the computation referred to above, (i) acquisitions that have been made
by the Company or any of its Restricted Subsidiaries, including through mergers
or consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and Consolidated Cash Flow for such
reference period shall be calculated without giving effect to clause (iii) of
the proviso set forth in the definition of Consolidated Net Income, (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
6
<PAGE> 13
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Guarantee Obligations" means all principal of and premium, interest
(including interest accruing after the filing of a petition initiating any
proceeding under any state, federal or foreign bankruptcy or insolvency laws,
whether or not allowable as a claim in such proceedings), penalties, fees,
indemnifications, reimbursements, gross-ups, damages and other liabilities
payable under the documentation governing any Guarantee, actually or
contingently.
"Guarantor" means each Person named as a Guarantor in the preamble to
this Indenture, each other Person that executes a Guarantee of the Notes
pursuant to the terms of this Indenture, and all successors of each of the
foregoing.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates, currency exchange rates or commodity prices.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means the global Note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any Person, (i) any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability upon
a balance sheet of such Person prepared in accordance with GAAP, (ii) all
indebtedness of others secured by a Lien on any asset of such Person (whether or
not such indebtedness is assumed by such Person) and (iii) to the extent not
otherwise included, the Guarantee by such Person of any indebtedness of any
other Person.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Institutional Accredited Investor" means an institution that is an
Aaccredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of
7
<PAGE> 14
Indebtedness or other obligations), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If the Company or any Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Subsidiary not
sold or disposed of in an amount determined as provided in the final paragraph
of Section 4.07 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or the city in which the principal
Corporate Trust Office of the Trustee is located or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale or (b) the disposition of
any securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets that were
the subject of such Asset Sale and any reserve for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP.
8
<PAGE> 15
"New Credit Agreement" means, collectively, (i) that certain credit
agreement, dated as of August 27, 1997, by and among the Company, the
Subsidiaries of the Company named therein, the lenders from time to time party
thereto and SunTrust Bank, Atlanta, as Agent and Collateral Agent, and (ii) that
certain Second Amended and Restated Letter of Credit Agreement, dated as of July
1, 1990, by and among the Company, the Subsidiaries of the Company named therein
and SunTrust Bank, Atlanta, in each case as such agreements may be amended,
restated, extended, modified, renewed, refunded, replaced, substituted,
restructured or refinanced in whole or in part from time to time (including,
without limitation, any successive renewals, extensions, substitutions,
refinancings, restructurings, replacements, supplements or modifications of the
foregoing), whether with the Company or with one or more of its Subsidiaries,
and whether with the present lenders or any other lenders.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise) or (c) constitutes the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes) of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (iii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of the Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Obligations" means all principal of and premium, interest (including
interest accruing after the filing of a petition initiating any proceeding under
any state, federal or foreign bankruptcy or insolvency laws, whether or not
allowable as a claim in such proceedings), penalties, fees, indemnifications,
reimbursements, gross-ups, damages and other liabilities payable under the
documentation governing any Indebtedness, actually or contingently.
"Offering Memorandum" means the Offering Memorandum, dated August 20,
1997, relating to the Notes.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to
9
<PAGE> 16
the Trustee, that meets the requirements of Sections 13.04 and 13.05 hereof. The
counsel may be an employee of or counsel to the Company, any Subsidiary of the
Company or the Trustee.
"Participant" means, with respect to DTC, Euroclear or Cedel, a
Person who has an account with DTC, Euroclear or Cedel, respectively (and, with
respect to DTC, shall include Euroclear and Cedel).
"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Permitted Investments" means (i) any Investment in the Company or in
a Wholly Owned Restricted Subsidiary of the Company; (ii) any Investment in Cash
Equivalents; (iii) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (a) such Person
becomes a Wholly Owned Restricted Subsidiary of the Company and a Guarantor or
(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Wholly Owned Restricted Subsidiary of the Company; (iv) any
Restricted Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with Section 4.10
hereof; (v) any Investment acquired solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company; (vi)
Investments existing on the date of this Indenture; (vii) loans to employees and
vendors in the ordinary course of business in an amount not to exceed $3.0
million; and (viii) other Investments in any Person (measured on the date each
such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this
clause (viii) that are at the time outstanding, not to exceed $10.0 million.
"Permitted Junior Securities" means Equity Interests in the Company
or debt securities that are subordinated to all Senior Debt of the Company
(including Designated Senior Debt) and any debt securities issued in exchange
for Senior Debt of the Company (including Designated Senior Debt) to
substantially the same extent (including with respect to the giving of Payment
Blockage Notices) as, or to a greater extent than, the Notes are subordinated to
Senior Debt of the Company (including Designated Senior Debt) pursuant to
Article 10 hereof, and Guarantees of any such debt by any Guarantor that are
subordinated to all Senior Debt of such Guarantor (including Designated
Guarantor Senior Debt) and any debt securities issued in exchange for Senior
Debt of such Guarantor (including Designated Guarantor Senior Debt) to
substantially the same extent (including with respect to the giving of Guarantor
Payment Blockage Notices) as, or to a greater extent than, the Guarantees of the
Notes are subordinated to Senior Debt of such Guarantor (including Designated
Guarantor Senior Debt) pursuant to Article 12 hereof.
"Permitted Liens" means (i) Liens securing Senior Debt of the Company
and its Restricted Subsidiaries that was permitted by the terms of this
Indenture to be incurred; (ii) Liens in favor of the Company or any of its
Restricted Subsidiaries; (iii) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company; (iv) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vi) Liens to secure Indebtedness (including
Capital Lease Obligations)
10
<PAGE> 17
permitted by clause (iv) of the second paragraph of Section 4.09 hereof covering
only the assets acquired with such Indebtedness; (vii) Liens existing, or
created pursuant to obligations existing, on the date of this Indenture; (viii)
Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefore; (ix) statutory or common law Liens of landlords, and Liens
of carriers, warehousemen, mechanics and materialmen, and other Liens imposed by
law created in the ordinary course of business for amounts not yet due or which
are being contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained, (x) Liens incurred or deposits
made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money bonds
and other similar obligations (other than the payment for the payment of
borrowed money); (xi) easements, rights-of-way, restrictions and other similar
Liens not materially interfering with the ordinary conduct of the business of
the Company or its Restricted Subsidiaries or any of their respective
properties; (xii) Liens for judgments which are being actively appealed in good
faith by appropriate proceedings in an aggregate amount not to exceed $2.0
million; (xiii) Liens incurred in the ordinary course of business of the Company
or any Restricted Subsidiary of the Company with respect to obligations that do
not exceed $2.0 million at any one time outstanding and that (a) are not
incurred in connection with the borrowing of money or the obtaining of advances
or credit (other than trade credit in the ordinary course of business) and (b)
do not in the aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of business by the Company or
such Restricted Subsidiary; and (xiv) extensions, renewals or replacements of
any Lien referred to in clauses (i) through (xiii) of this paragraph, provided
that the principal amount of the Indebtedness or Obligation secured thereby is
not increased and that any such extension, renewal or replacement is limited to
the property originally encumbered by the Lien.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accredit value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accredit value, if applicable), plus accrued interest on, the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable expenses incurred in connection therewith); (ii) such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity at least
equal to the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness is subordinated in right of payment to the Notes on terms at least
as favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or by the Restricted Subsidiary that is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
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<PAGE> 18
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 27, 1997, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a global Note bearing the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Department of the Trustee (or any
successor group of the Trustee) or any other officer or employee of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
12
<PAGE> 19
"Senior Debt" of a Person means (i) all Indebtedness of such Person
outstanding under the New Credit Agreement and all Hedging Obligations with
respect thereto, (ii) any other Indebtedness of such Person permitted to be
incurred under the terms of this Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is subordinated in
right of payment to any Senior Debt of such Person and (iii) all Obligations of
such Person with respect to the foregoing. Notwithstanding anything to the
contrary in the foregoing, Senior Debt of a Person will not include (a) any
liability for federal, state, local or other taxes owed or owing by such Person,
(b) any Indebtedness of such Person to any of its Subsidiaries or other
Affiliates, (c) any trade payables or (d) any Indebtedness that is incurred in
violation of this Indenture.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a Asignificant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Act, as such Regulation is in effect on the
date hereof.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Texmaco" shall have the meaning assigned to it in the Offering
Memorandum.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note in the form
of Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated
by the Board of
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<PAGE> 20
Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but only
to the extent that such Subsidiary: (a) has no Indebtedness other than
Non-Recourse Debt; (b) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; (c) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (1) to
subscribe for additional Equity Interests or (2) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; (d) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries; and (e) has at least one director on its board of
directors that is not a director or executive officer of the Company or any of
its Restricted Subsidiaries and has at least one executive officer that is not a
director or executive officer of the Company or any of its Restricted
Subsidiaries.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Restricted Subsidiary
of such Person all of the outstanding Capital Stock or other ownership interests
of which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
<S> <C>
"Affiliate Transaction"........................................ 4.11
"Asset Sale Offer"............................................. 3.09
"Bankruptcy Law"............................................... 4.01
"Change of Control Offer"...................................... 4.14
"Change of Control Payment".................................... 4.14
"Change of Control Payment Date"............................... 4.14
"Covenant Defeasance".......................................... 8.03
"Custodian".................................................... 4.13
"Event of Default"............................................. 6.01
"Excess Proceeds".............................................. 4.10
"Guarantor Non-payment Default"................................ 12.03
"Guarantor Payment Blockage Notice"............................ 12.03
"Guarantor Payment Blockage Period"............................ 12.03
"incur"........................................................ 4.09
"Legal Defeasance" ............................................ 8.02
</TABLE>
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<PAGE> 21
<TABLE>
<S> <C>
"Non-payment Default".......................................... 10.03
"Offer Amount"................................................. 3.09
"Offer Period"................................................. 3.09
"Paying Agent"................................................. 2.03
"Payment Blockage Notice"...................................... 10.03
"Payment Blockage Period"...................................... 10.03
"Payment Default".............................................. 6.01
"Permitted Debt"............................................... 4.09
"Permitted Refinancing"........................................ 4.09
"Purchase Date"................................................ 3.09
"Refinancing Indebtedness"..................................... 4.09
"Registrar".................................................... 2.03
"Restricted Payments".......................................... 4.07
</TABLE>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, each Guarantor and any
successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
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(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections
or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage.
Each Note shall be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the Global Note Legend and the "Schedule of
Exchanges in the Global Note" attached thereto). Notes issued in definitive form
shall be substantially in the form of Exhibit A attached hereto (but without the
Global Note Legend and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Note Custodian, at the direction of the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.06
hereof.
The provisions of the "Operating Procedures of the Euroclear System"
and ATerms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Global Notes
that are held by the Agent Members through Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and
may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The
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signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Notes for original issue up to the aggregate principal
amount stated in paragraph 4 of the Notes. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company or any Guarantor in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
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SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company and/or the Guarantors shall furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Company and the Guarantors shall otherwise
comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee. Upon the occurrence of either of
the preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary or the Company shall instruct the Trustee. Global
Notes also may be exchanged or replaced, in whole or in part, as provided in
Sections 2.07 and 2.11 hereof. Every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
Section 2.07 or 2.11 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period transfers of
beneficial interests in the Regulation S Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Beneficial interests in any Unrestricted Global Note
may be transferred only to Persons who take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note. No written orders
or instructions shall be required to be delivered to the Registrar to
effect
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the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests (other than a transfer of a beneficial interest in a Global Note
to a Person who takes delivery thereof in the form of a beneficial
interest in the same Global Note), the transferor of such beneficial
interest must deliver to the Registrar either (A) (1) a written order from
a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant
or an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above. Upon an Exchange Offer by the Company
in accordance with Section 2.06(f) hereof, the requirements of this
Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by
the Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in this
Indenture, the Notes and otherwise applicable under the Securities Act,
the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of clause (ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver (x) a certificate in the form of Exhibit B hereto, including
the certifications and certificates and an Opinion of Counsel required
by item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of clause (ii) above and:
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(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer, is
not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(a) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are not required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraph
(B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof in the
form of a Definitive Note, then, upon receipt by the Registrar of the following
documentation:
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(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note, a certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(b) thereof;
or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the certifications
in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall
be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Notwithstanding 2.06(c)(i) hereof, a holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial interest for
an Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance
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with the Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or the transferee, in
the case of a transfer, is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(b) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Company, to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are not required in order to
maintain compliance with the Securities Act.
(iii) If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon satisfaction
of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee
shall cause the aggregate principal amount of the applicable Global Note
to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to
the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this Section
2.06(c)(iii) shall not bear the Private Placement Legend. A beneficial
interest in an Unrestricted Global Note cannot be exchanged for a
Definitive Note bearing the Private Placement Legend or transferred to a
Person who takes delivery thereof in the form of a Definitive Note bearing
the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
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(i) If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in a Restricted Global Note, then, upon
receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Definitive Note is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such Definitive Note is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule
904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Definitive Note is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such Definitive Note is being transferred to the Company
or any of its Subsidiaries, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(b) thereof;
or
(G) if such Definitive Note is being transferred pursuant to an
effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cancel the Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Note, in the case of clause (B)
above, the 144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI Global Note.
(ii) A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, is not (1) a broker-dealer, (2) a Person
participating in
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the distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof;
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein
and in the Private Placement Legend are not required in order to
maintain compliance with the Securities Act, and such Definitive
Notes are being exchanged or transferred in compliance with any
applicable blue sky securities laws of any State of the United
States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) A Holder of an Unrestricted Definitive Note may exchange such
Note for a beneficial interest in an Unrestricted Global Note or transfer
such Definitive Notes to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee shall
cancel the applicable Unrestricted Definitive Note and increase or cause
to be increased the aggregate principal amount of one of the Unrestricted
Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of
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transfer or exchange, the requesting Holder shall present or surrender to the
Registrar the Definitive Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney, duly authorized in writing. In addition, the
requesting Holder shall provide any additional certifications, documents and
information, as applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Definitive Notes may be transferred to and registered
in the name of Persons who take delivery thereof if the Registrar receives
the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver (x) a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(ii) Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted Definitive
Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof;
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
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(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company
to the effect that such exchange or transfer is in compliance
with the Securities Act, that the restrictions on transfer
contained herein and in the Private Placement Legend are not
required in order to maintain compliance with the Securities Act,
and such Restricted Definitive Note is being exchanged or
transferred in compliance with any applicable blue sky securities
laws of any State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request for such a
transfer, the Registrar shall register the Unrestricted Definitive
Notes pursuant to the instructions from the Holder thereof.
Unrestricted Definitive Notes cannot be exchanged for or transferred
to Persons who take delivery thereof in the form of a Restricted
Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance
with the Registration Rights Agreement, the Company shall issue and, upon
receipt of an authentication order in accordance with Section 2.02, the Trustee
shall authenticate (i) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial interests in
the Restricted Global Notes tendered for acceptance by persons that are not (x)
broker-dealers, (y) Persons participating in the distribution of the Exchange
Notes or (z) Persons who are affiliates (as defined in Rule 144) of the Company
and accepted for exchange in the exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrent with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company and the Guarantors shall execute and the Trustee shall authenticate
and deliver to the Persons designated by the Holders of Definitive Notes so
accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (b) below, each Global Note
and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following
form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
(A "QIB"), (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR
THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
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ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT)
(AN "IAI"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED
TO UNDER RULE 144(k) UNDER THE SECURITIES ACT (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) AS IN
EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF
THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES
AT THE TIME OF TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and
all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE
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TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO
SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY
BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note, by the
Trustee or by the Depositary at the direction of the Trustee, to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note, by the Trustee or by the
Depositary at the direction of the Trustee, to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 4.10, 4.14 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global Notes
or Definitive Notes surrendered upon such registration of transfer or
exchange.
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(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange Notes during a period beginning at the opening
of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business
on the day of selection, (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part or (C) to register
the transfer of or to exchange a Note between a record date and the next
succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a transfer or exchange may be submitted by facsimile.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by two Officers of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company, any Guarantor or an
Affiliate of the Company or any Guarantor holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to
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be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any Guarantor, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
Guarantor, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that a Trustee knows are so owned
shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
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SECTION 2.12. DEFAULTED INTEREST.
If the Company or any Guarantor defaults in a payment of interest on
the Notes, it shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Note and the date of the proposed payment. The Company shall fix or cause
to be fixed each such special record date and payment date, provided that no
such special record date shall be less than 10 days prior to the related payment
date for such defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Trustee in
the name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate; provided, however, that no Note of $1,000 in
principal amount or less shall be redeemed in part. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 45 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
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SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
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SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07, the
Notes shall not be redeemable at the Company's option prior to September 1,
2002. Thereafter, the Notes will be subject to redemption at any time at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on September 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2002 .................................................... 104.875%
2003 .................................................... 103.250
2004 .................................................... 101.625
2005 and thereafter...................................... 100.000%
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this Section 3.07,
prior to September 1, 2000, the Company may redeem up to an aggregate of $25.0
million in principal amount of Notes at a redemption price of 109.75% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the redemption date, with the net cash proceeds of
one or more public offerings of common stock of the Company; provided that (i)
at least $100.0 million in principal amount of the Notes remain outstanding
immediately after the occurrence of such redemption and (ii) such redemption
shall occur within 90 days of the date of the consummation of each such public
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offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.14 hereof, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an offer to all Holders to purchase Notes
(an AAsset Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the AOffer Period"). No
later than five Business Days after the termination of the Offer Period (the
APurchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the AOffer Amount")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may
not elect to have only a portion of such Note purchased;
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<PAGE> 41
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have such
Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Company shall select the Notes to
be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee, upon written request from the Company shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Asset Sale Offer on the
Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
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ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the office of the Trustee located at 61
Broadway, Concourse Level, Corporate Trust Window, New York, New York 10006, as
one such office or agency of the Company in accordance with Section 2.03.
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SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the
SEC, so long as any Notes are outstanding, the Company shall furnish to the
Holders of Notes (i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file such forms, including a AManagement's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of the Company and
its consolidated Subsidiaries (showing in reasonable detail, either on the face
of the financial statements or in the footnotes thereto and in Management's
Discussion and Analysis of Financial Condition and Results of Operations, the
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial information and results of operations
of the Unrestricted Subsidiaries of the Company) and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, the
Company shall file a copy of all such information and reports with the SEC for
public availability (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA Section 314(a).
(b) For so long as any Notes remain outstanding, the Company
and its Restricted Subsidiaries shall furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, the year-end
financial statements delivered pursuant to Section 4.03(a) above shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to believe
that the Company has violated any provisions of Article Four or Article Five
hereof or, if any such violation has occurred, specifying the nature and period
of existence
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thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes
to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries
to pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each Guarantor covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it shall
not, by resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the execution
of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to any direct or indirect holders of the
Company's Equity Interests in their capacity as such (other than dividends or
distributions (a) payable in Equity Interests (other than Disqualified Stock) of
the Company or (b) to the Company or any Wholly Owned Restricted Subsidiary of
the Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company (other than any such Equity Interests owned by
the Company or any Wholly Owned Restricted Subsidiary of the Company); (iii)
make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness of the Company or any
Restricted Subsidiary that is subordinated to the Notes or any Guarantee
thereof, except a payment of interest or principal at Stated Maturity; or (iv)
make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as ARestricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro
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forma effect thereto as if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of Section 4.09
hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of this Indenture (excluding Restricted
Payments permitted by clause (ii) through (v) of the next succeeding
paragraph), is less than the sum of (i) 50% of the cumulative Consolidated
Net Income of the Company for the period (taken as one accounting period)
from the beginning of the first fiscal quarter commencing after the date of
this Indenture to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the time
of such Restricted Payment (or, if such Consolidated Net Income for such
period is a deficit, less 100% of such deficit), plus (ii) 100% of (A) the
aggregate net cash proceeds received by the Company from the issue or sale
since the date of this Indenture of Equity Interests of the Company (other
than Disqualified Stock), other than Equity Interests sold to a Subsidiary
of the Company, and (B) the amount by which Indebtedness or Disqualified
Stock of the Company and its Restricted Subsidiaries is reduced on the
balance sheet of the Company upon the conversion or exchange (other than by
a Subsidiary of the Company) subsequent to the date of this Indenture of
any such Indebtedness or Disqualified Stock for Equity Interests (other
than Disqualified Stock) of the Company, plus (iii) 50% of any dividends
received by the Company or a Wholly Owned Restricted Subsidiary after the
date of this Indenture from an Unrestricted Subsidiary of the Company, to
the extent that such dividends were not otherwise included in Consolidated
Net Income of the Company for such period, plus (iv) $5.0 million.
The foregoing provisions shall not prohibit (i) the payment of
any dividend within 60 days after the date of declaration thereof, if at the
date of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
or any Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company)
of, other Equity Interests of the Company (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (c)(ii) of the preceding paragraph; (iii) the
defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness; (iv) the repurchase, redemption or other acquisition
or retirement for value of any Equity Interests of the Company or any Restricted
Subsidiary of the Company held by any member of the Company's (or any of its
Restricted Subsidiaries') management or board of directors pursuant to any
management equity subscription agreement, stock option agreement or other
similar agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not exceed
$250,000 in any twelve-month period and no Default or Event of Default shall
have occurred and be continuing immediately after such transaction; and (v) the
payment of dividends on the Company's common stock in an amount not to exceed
$.01 per share per fiscal quarter of the Company.
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined in
good faith by the
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Board of Directors whose resolution with respect thereto shall be delivered to
the Trustee. Not later than 90 days following the end of each fiscal quarter of
the Company, the Company shall deliver to the Trustee an Officers' Certificate
setting forth the Restricted Payments made by the Company during such quarter
stating that such Restricted Payments were permitted and setting forth the basis
upon which the calculations required by this Section 4.07 were computed;
provided, however, that no such Officers' Certificate need be delivered with
respect to any quarter in which no Restricted Payments, other than the payment
of up to $.01 per share dividend on the Company's common stock, were made.
The Board of Directors may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if such designation would not cause a Default.
For purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated shall be deemed to be Restricted Payments at the
time of such designation and shall reduce the amount available for Restricted
Payments under the first paragraph of this covenant. All such outstanding
Investments shall be deemed to constitute Investments in an amount equal to the
greatest of (i) the net book value of such Investments at the time of such
designation, (ii) the fair market value of such Investments at the time of such
designation and (iii) the original fair market value of such Investments at the
time they were made. Such designation shall only be permitted if such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.
Any such designation by the Board of Directors shall be evidenced
to the Trustee by filing with the Trustee a certified copy of the Board
Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions. If, at
any time, any Unrestricted Subsidiary would fail to meet the definition of an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such covenant). The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (i) such
Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period, and (ii) no Default or Event of Default would be in existence
following such designation.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the date of this Indenture, (b) the New Credit
Agreement as in effect as of the date of this Indenture, and any amendments,
modifications,
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restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacement or
refinancings are no more restrictive with respect to such dividend and other
payment restrictions affecting Restricted Subsidiaries than those contained in
the New Credit Agreement as in effect on the date of this Indenture, (c) this
Indenture and the Notes, (d) applicable law, (e) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (f) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, (g) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, or (h) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, Aincur") any Indebtedness (including Acquired
Debt) and the Company shall not permit any of its Subsidiaries to issue any
shares of preferred stock; provided, however, that the Company and the
Guarantors may incur Indebtedness (including Acquired Debt) and the Guarantors
may issue preferred stock if the Fixed Charge Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such preferred stock is issued would have been at
least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the preferred stock had been issued at the beginning of
such four-quarter period.
The provisions of the first paragraph of this Section 4.09 shall
not apply to the incurrence of any of the following (collectively,
"Permitted Debt"):
(i) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness under the New Credit Agreement in an aggregate amount not to exceed
at any one time outstanding the sum of (a) $50.0 million less the aggregate
amount of all Net Proceeds of Asset Sales applied to repay Indebtedness pursuant
to clause (i) of the second paragraph of Section 4.10 hereof (but the amount
available under this subsection (a) shall not be reduced to less than zero) plus
(b) the greater of (1) $110.0 million and (2) the sum of (A) 85% of the
Company's accounts receivable as shown on the Company's most recent consolidated
balance sheet, plus (B) 50% of the Company's inventories as shown on the
Company's most recent consolidated balance sheet;
(ii) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness represented by the Notes, any Guarantee of the Notes and this
Indenture;
(iii) the incurrence by the Company and its Restricted Subsidiaries of
the Existing
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Indebtedness;
(iv) the incurrence by the Company and the Guarantors of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvement of property, plant
or equipment used in the business of the Company or such Guarantor, in an
aggregate amount not to exceed $5.0 million at any time outstanding;
(v) the incurrence by the Company or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace Indebtedness that was permitted
to be incurred by the first paragraph, or by clauses (ii) through (x) of the
second paragraph of this Section 4.09;
(vi) the incurrence of Indebtedness between or among the Company and
any of its Wholly Owned Restricted Subsidiaries; provided, however, that any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Wholly Owned
Restricted Subsidiary, and any sale or other transfer of any such Indebtedness
to a Person that is not either the Company or a Wholly Owned Restricted
Subsidiary, shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case may be;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are (a) incurred for the purpose of
fixing or hedging interest rate risk with respect to any Indebtedness that is
permitted by the terms of this Indenture to be outstanding or (b) incurred for
the purpose of fixing or hedging currency exchange rates or prices of
commodities used in the business of the Company and its Restricted Subsidiaries;
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of obligations relating to letters of credit to support workers
compensation obligations, bankers acceptances and performance bonds, surety
bonds and performance guarantees of the Company or such Restricted Subsidiary,
in each case incurred in the ordinary course of business;
(ix) the incurrence by the Company or any Guarantor of Indebtedness in
an amount not to exceed $20.0 million at any one time outstanding; and
(x) the guarantee by the Company or any of the Guarantors of
Indebtedness that was permitted to be incurred by another provision of this
Section 4.09.
For purposes of determining compliance with this Section 4.09, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (x) above or is
entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Company shall, in its sole discretion, classify such item of Indebtedness in
any manner that complies with this Section 4.09, and such item of Indebtedness
shall be treated as having been incurred pursuant to only one of such clauses or
pursuant to the first paragraph hereof. Accrual of interest, the accretion of
accredit value and the payment of interest in the form of additional
Indebtedness shall not be deemed to be an incurrence of Indebtedness for
purposes of this Section 4.09.
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SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests of Subsidiaries
issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash; provided that the amount of (a) any liabilities (as shown
on the Company's or such Restricted Subsidiary's most recent balance sheet) of
the Company or such Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any guarantee
thereof) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (b) any securities, notes or other
obligations received by the Company or such Restricted Subsidiary from such
transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received) shall be deemed to be
cash for purposes of this Section 4.10.
Within 270 days of the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option, (i) to repay
Senior Debt or (ii) to the acquisition of a controlling interest in another
business, the making of a capital expenditure or the acquisition of other
long-term assets. Pending the final application of any such Net Proceeds, the
Company may temporarily reduce Senior Debt or otherwise invest such Net Proceeds
in any manner that is not prohibited by this Indenture. Any Net Proceeds from
Asset Sales that are not applied or invested as provided in the first sentence
of this paragraph shall be deemed to constitute AExcess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $5.0 million, the Company shall be
required to make an Asset Sale Offer to all Holders of Notes to purchase the
maximum principal amount of Notes that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date of purchase, in accordance with the procedures set forth in
Section 3.09 hereof. To the extent that the aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
may use any remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on
a pro rata basis. Upon completion of an Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an AAffiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or such Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series related Affiliate
Transactions involving aggregate consideration in excess of $3.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to
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any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, other than the purchase or
sale of inventory from or to Texmaco in the ordinary course of business, an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing.
The foregoing provisions shall not prohibit (i) any
transaction with an employee of the Company (in his or her capacity as such)
entered into in the ordinary course of business, including entering into
employment agreements, indemnification agreements and compensation and employee
benefit plans; (ii) transactions between or among the Company and/or its
Restricted Subsidiaries; and (iii) any Restricted Payment that is permitted by
the provisions of Section 4.07 hereof.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien securing Indebtedness or trade payables on any asset now owned or
hereafter acquired, or any income or profits therefrom or assign or convey any
right to receive income therefrom, except Permitted Liens.
SECTION 4.13. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the Holders
of the Notes.
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall
be obligated to make an offer (a "Change of Control Offer") to each Holder of
Notes to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes at an offer price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (the "Change of Control
Payment").
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Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder stating a description of the transaction or
transactions that constitute the Change of Control and: (1) that the Change of
Control Offer is being made pursuant to this Section 4.14 and that all Notes
tendered will be accepted for payment; (2) the purchase price and the purchase
date, which date shall be no earlier than 30 days and no later than 60 days from
the date such notice is mailed (the A Change of Control Payment Date"); (3) that
any Note not tendered will continue to accrue interest; (4) that, unless the
Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; (5) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled AOption of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (7) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes in
connection with a Change of Control.
On the Change of Control Payment Date, the Company shall, to
the extent lawful, (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (iii) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof. Prior to complying
with the provisions of this Section 4.14, but in any event within 90 days
following a Change of Control, the Company shall either repay all outstanding
Senior Debt or obtain the requisite consents, if any, under all agreements
governing outstanding Senior Debt to permit the repurchase of Notes required by
this covenant. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
SECTION 4.15. LIMITATION ON OTHER SENIOR SUBORDINATED DEBT.
Notwithstanding the provisions of Section 4.09 hereof, neither
the Company nor any Restricted Subsidiary shall incur any Indebtedness that is
subordinate or junior in right of payment to any Senior Debt of the Company or
such Restricted Subsidiary, as the case may be, and senior in any respect in
right of payment to the Notes or such Restricted Subsidiary's Guarantee thereof.
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SECTION 4.16. ADDITIONAL SUBSIDIARY GUARANTEES.
If the Company or any of the Guarantors shall acquire or
create a Domestic Restricted Subsidiary after the date of this Indenture, or any
Unrestricted Subsidiary shall cease to be an Unrestricted Subsidiary and become
a Domestic Restricted Subsidiary, then such Subsidiary shall execute a Guarantee
of the Notes and deliver an Opinion of Counsel in accordance with Section 13.05
of this Indenture.
SECTION 4.17. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Restricted Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder of any Notes for or
as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture, the Notes or the Guarantees of the Notes unless
such consideration is offered to be paid or is paid to all Holders of the Notes
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
Neither the Company nor any Restricted Subsidiary may
consolidate or merge with or into (whether or not the Company or such Restricted
Subsidiary, as the case may be, is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company or such Restricted
Subsidiary, as the case may be, is the surviving corporation or the entity or
the Person formed by or surviving any such consolidation or merger (if other
than the Company or such Restricted Subsidiary) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the entity or Person formed
by or surviving any such consolidation or merger (if other than the Company or
such Restricted Subsidiary) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company or such Restricted Subsidiary,
as the case may be, under the Notes or such Restricted Subsidiary's Guarantee
thereof and this Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; (iii) immediately after such transaction
no Default or Event of Default exists; and (iv) except in the case of a merger
of the Company with or into a Wholly Owned Restricted Subsidiary of the Company,
the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (a) shall have Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (b) shall, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of Section 4.09 hereof.
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SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company or any Restricted Subsidiary in accordance with
Section 5.01 hereof, the successor corporation formed by such consolidation or
into or with which the Company or such Restricted Subsidiary is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" or such "Restricted
Subsidiary" shall refer instead to the successor corporation and not to the
Company or such Restricted Subsidiary), and may exercise every right and power
of the Company or such Restricted Subsidiary under this Indenture with the same
effect as if such successor Person had been named as the Company or such
Restricted Subsidiary herein; provided, however, that the predecessor Company or
Guarantor which is a Restricted Subsidiary shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's or such Guarantor's assets that meets the
requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest
on, or Liquidated Damages, if any, with respect to, the Notes and
such default continues for a period of 30 days (whether or not
prohibited by Article 10 hereof);
(b) the Company defaults in the payment when due of the
principal of or premium, if any, on the Notes (whether or not
prohibited by the Article 10 hereof);
(c) the Company fails to comply with any of the provisions
of Section 4.07, 4.09, 4.10, 4.14 or 5.01 hereof;
(d) the Company fails to observe or perform any other
covenant, representation, warranty or other agreement in this
Indenture or the Notes for 30 days after written notice to the
Company by the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding;
(e) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by
the Company or any of its Restricted Subsidiaries (or the payment
of which is guaranteed by the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or guarantee now exists,
or is created after the date of this Indenture, which default (i)
is caused by a failure to pay principal of or premium, if any, or
interest on such indebtedness at final maturity (a "Payment
Default") or (ii) results in the acceleration of such
Indebtedness prior to its express maturity and, in
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each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $5.0 million or more;
(f) a final judgment or final judgments aggregating in
excess of $5.0 million are entered by a court or courts of
competent jurisdiction against the Company or any of its
Restricted Subsidiaries and either (i) any creditor commences
enforcement proceedings upon any such judgment or (ii) such
judgment or judgments are not paid, discharged or stayed for a
period of 60 days;
(g) except as permitted by this Indenture, any Guarantee of
the Notes shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Restricted Subsidiary, or any Person
acting on behalf of any Restricted Subsidiary, shall deny or
disaffirm its obligations under its Guarantee of the Notes;
(h) the Company or any of its Significant Subsidiaries or
any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary pursuant to or within
the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a Custodian of it
or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become
due; or
(i) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary or for all or substantially all of
the property of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of
its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary;
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and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default
specified in clause (h) or (i) of Section 6.01 hereof) occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Upon any such declaration, the Notes shall become due and payable immediately.
If an Event of Default specified in clause (h) or (i) of Section 6.01 hereof
occurs, all outstanding Notes shall be due and payable immediately without
further action or notice. The Holders of a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal, interest or premium that has
become due solely because of the acceleration) have been cured or waived.
If an Event of Default occurs on or after September 1, 2002
solely by reason of any willful action (or inaction) taken (or not taken) by or
on behalf of the Company with the intention of avoiding payment of the premium
that the Company would have had to pay if the Company then had elected to redeem
the Notes pursuant to Section 3.07 hereof, then, upon acceleration of the Notes,
an equivalent premium shall also become and be immediately due and payable, to
the extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to September 1,
2002 solely by reason of any willful action (or inaction) taken (or not taken)
by or on behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable in an amount, for each of the years beginning on September 1 of the
years set forth below, as set forth below (expressed as a percentage of the
accreted value to the date of payment that would otherwise be due but for the
provisions of this sentence):
YEAR PERCENTAGE
1997................................................ 113.000%
1998................................................ 111.375%
1999................................................ 109.750%
2000................................................ 108.125%
2001................................................ 106.500%
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
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SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by written notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of interest on, or principal of, the Notes (including in connection
with an offer to purchase) (provided, however, that the Holders of a majority in
aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration). Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture, the Notes or the Guarantees of the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
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SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
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Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any and
interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
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(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c), (e) and (f) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company or any Guarantor shall be
sufficient if signed by an Officer of the Company or such Guarantor, as
applicable.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
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SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, the
Guarantors or any Affiliate of the Company or the Guarantors with the same
rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Notes or the Guarantees
thereof, it shall not be accountable for the Company's use of the proceeds from
the Notes or any money paid to the Company or upon the Company's direction under
any provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or interest on any Note, the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
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SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Guarantors shall pay to the Trustee from time to
time reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
The Company and the Guarantors shall indemnify the Trustee against
any and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantor or any
Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee shall notify the Company and the Guarantors promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company and the Guarantors shall not relieve the Company of its obligations
hereunder. The Company and the Guarantors shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company and the Guarantors shall pay the reasonable fees and expenses of such
counsel. The Company and the Guarantors need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this Section
7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Company's and the Guarantors' payment obligations in
this Section, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
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(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
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This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes and
Guarantees thereof upon compliance with the conditions set forth below in this
Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each Guarantor shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
deemed to have been discharged from its obligations with respect to all
outstanding Notes and Guarantees thereof on the date the conditions set forth
below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company and each Guarantor shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding Notes
and Guarantees thereof, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and Guarantees and this Indenture (and the Trustee,
on demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive payments in respect of the principal of and
premium, interest and Liquidated Damages, if any, on the Notes when such
payments are due from the trust fund described in Section 8.04 hereof, and as
more fully set forth in such Section, (b) the Company's obligations with respect
to the Notes under Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
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SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and each Guarantor shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from its obligations under the covenants contained in Sections 3.09,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.14 and 4.16 hereof with respect to the
outstanding Notes and Guarantees thereof on and after the date the conditions
set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Notes and the Guarantees thereof shall thereafter be deemed not Aoutstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder
(it being understood that such Notes and Guarantees shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Notes and the Guarantees thereof,
the Company and the Guarantors may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes and Guarantees shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(d) through 6.01(f) hereof shall not
constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes and Guarantees thereof:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee,
in trust, for the benefit of the Holders of the Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of and premium, interest and Liquidated Damages, if
any, on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be and the Company must
specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(b) in the case of an election under Section 8.02 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming
that (A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal
Defeasance had not occurred;
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(c) in the case of an election under Section 8.03 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied
to such deposit) or insofar as Sections 6.01(h) or 6.01(i) hereof is
concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under,
any material agreement or instrument (other than this Indenture) to
which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that after the 91st day following
the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
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Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture, the Notes and the Guarantees thereof shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium, if
any, or interest on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Notes or
any Guarantee thereof without the consent of any Holder of Notes:
(a) to cure any ambiguity, defect or inconsistency;
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(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's or any Restricted
Subsidiary's obligations to Holders of Notes in the case of a merger or
consolidation pursuant to Article Five hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the
legal rights hereunder of any such Holder; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02 and Articles 10 and 12
hereof, the Company, the Guarantors and the Trustee may amend or supplement this
Indenture (including Sections 3.09, 4.10 and 4.14 hereof), the Notes and the
Guarantees thereof with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture, the Notes or the Guarantees
thereof may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes (including consents obtained in connection
with a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company and the Guarantors in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the
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amendment, supplement or waiver. Any failure of the Company to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any such amended or supplemental Indenture or waiver. Subject to
Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal
amount of the Notes then outstanding may waive compliance in a particular
instance by the Company or the Guarantors with any provision of this Indenture,
the Notes or the Guarantees thereof. However, without the consent of each Holder
affected, an amendment or waiver may not (with respect to any Notes or
Guarantees thereof held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes except
as provided above with respect to Sections 3.09, 4.10 and 4.14 hereof;
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium interest or Liquidated Damages, if any, on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the outstanding Notes and a
waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or premium, interest or Liquidated Damages, if
any, on the Notes;
(g) waive a redemption payment with respect to any Note (other than a
payment required by Sections 3.09, 4.10 or 4.14 hereof;
(h) release any Restricted Subsidiary from its Guarantee of the Notes;
or
(i) make any change in the foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Notes or the
Guarantees thereof shall be set forth in a amended or supplemental Indenture
that complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent
Holder of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
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SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01) shall be
fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior payment
in full of all Senior Debt of the Company (whether outstanding on the date
hereof or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
In the event of any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or its assets, or
any liquidation, dissolution or other winding-up of the Company, whether
voluntary or involuntary, and whether or not involving insolvency or bankruptcy,
or any assignment for the benefit of creditors or marshalling of assets or
liabilities of the Company, the holders of Senior Debt of the Company must be
paid in full in cash or Cash Equivalents with respect to all Obligations due in
respect of such Senior Debt before any direct or indirect payment or
distribution (excluding distributions of Permitted Junior Securities of the
Company) is made on account of the principal of, or premium, if any or interest
on, the Notes or on account of the purchase, redemption, defeasance or other
acquisition or, or in respect of, the Notes (other than payments previously made
from any defeasance trust created pursuant to Section 8.01 hereof).
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SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
Upon the occurrence and during the continuance of any default in the
payment of any Obligation with respect to Designated Senior Debt, when the same
becomes due (whether due to lapse of time or at maturity, whether by
acceleration or otherwise), and after receipt by the Trustee and the Company
from representatives of holders of such Designated Senior Debt of written notice
of such default, no direct or indirect payments (other than payments previously
made from any defeasance trust created pursuant to Section 8.01 hereof) may be
made by or on behalf of the Company of any kind or character (excluding
distributions of Permitted Junior Securities of the Company) on account of the
principal of, or premium, if any, or interest on, or the purchase, redemption,
defeasance or other acquisition of, the Notes unless and until such default had
been cured or waived or has ceased to exist or such Designated Senior Debt shall
have been discharged or paid in full in cash or Cash Equivalents.
In addition, upon the occurrence and during the continuance of any other
default in respect of any Designated Senior Debt pursuant to which the maturity
thereof may be accelerated (a "Non-payment Default") and upon the earlier to
occur of (a) the receipt by the Trustee from the representatives of holders of
such Designated Senior Debt of a written notice of such Non-payment Default (a
"Payment Blockage Notice") or (b) if such Non-payment Default results from the
acceleration of the Notes, the date of such acceleration, no payment (other than
payments previously made from any defeasance trust created pursuant to Section
8.01 hereof) or distribution of any assets of the Company of any kind or
character (excluding distributions of Permitted Junior Securities of the
Company) may be made by the Company on account of the principal of, premium, if
any, or interest on, or the purchase, redemption, defeasance or other
acquisition of, the Notes for the period specified below (the "Payment Blockage
Period").
The Payment Blockage Period shall commence upon the receipt of the Payment
Blockage Notice by the Trustee from the representatives of holders of Designated
Senior Debt or the date of the acceleration referred to in clause (b) of the
preceding paragraph, as the case may be, and shall end on the earliest to occur
of the following events (a) 179 days has elapsed since the receipt of such
Payment Blockage Notice or the date of such acceleration (provided such
Designated Senior Debt shall not theretofore have been accelerated), (b) such
default is cured or waived or ceases to exist or such Designated Senior Debt is
discharged or paid in full in cash or Cash Equivalents (provided than no other
Non-payment Default has occurred and is then continuing after giving effect to
such cure or waiver), or (c) such Payment Blockage Period shall have been
terminated by written notice to the Company or the Trustee from the
representatives of holders of Designated Senior Debt initiating such Payment
Blockage Period, after which the Company shall promptly resume making any and
all required payments in respect of the Notes. No Non-payment Default with
respect to Designated Senior Debt that existed or was continuing on the date of
the commencement of any Payment Blockage Period with respect to the Designated
Senior Debt initiating such Payment Blockage Period will be, or can be, made the
basis of the commencement of a second Payment Blockage Period, unless such
default has been cured for a period of not less than 30 consecutive days. In no
event will a Payment Blockage Period extend beyond 179 days from the receipt by
the Trustee of the Payment Blockage Notice or the date of the acceleration
initiating such Payment Blockage Period (provided that such Designated Senior
Debt shall not theretofore have been accelerated) and there must be at least a
186 consecutive day period in each 365-day period during which no Payment
Blockage Period is in effect.
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SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the Company
of the acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Notes at a time when the Trustee or such
Holder, as applicable, has actual knowledge that such payment is prohibited by
Section 10.04 hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to, the holders of Senior Debt of the Company as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which such Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of all
Obligations with respect to such Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
such Senior Debt.
With respect to the holders of Senior Debt of the Company, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of such Senior Debt shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt of the Company, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders or the Company or any other Person money or assets to which
any holders of such Senior Debt shall be entitled by virtue of this Article 10,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt of the
Company as provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Debt of the Company is paid in full and until the
Notes are paid in full, Holders of Notes shall be subrogated (equally and
ratably with all other Indebtedness pari passu with the Notes) to the rights of
holders of such Senior Debt to receive distributions applicable to such Senior
Debt to the extent that distributions otherwise payable to the Holders of Notes
have been applied to the payment of such Senior Debt. A distribution made under
this Article 10 to holders of Senior Debt of the Company that otherwise would
have been made to Holders of Notes is not, as between the Company and Holders, a
payment by the Company on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt of the Company. Nothing in this Indenture shall:
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(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior Debt
of the Company; or
(3) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt of the Company to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of
or interest on a Note on the due date, the failure is still a Default or Event
of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt of the Company to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt of the Company, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of Senior Debt of the Company and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt of the Company with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
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SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, a Representative of Designated Senior Debt is hereby authorized to
file an appropriate claim for and on behalf of the Holders of the Notes.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt of the Company.
Notwithstanding the foregoing, any amendment to the provisions of this Article
10 shall require the consent of the Holders of at least 75% in aggregate
principal amount of the Notes then outstanding if such amendment would adversely
affect the rights of Holders of the Notes.
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ARTICLE 11
GUARANTEE OF NOTES
SECTION 11.01. GUARANTEE OF THE NOTES.
Subject to Section 11.06 hereof, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes and the Obligations of the Company hereunder and thereunder, that: (a)
the principal of and premium, interest and Liquidated Damages, if any, on the
Notes will be promptly paid in full when due, subject to any applicable grace
period, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal, premium, interest on any interest (to the
extent permitted by law), and Liquidated Damages, if any, on the Notes, and all
other payment Obligations of the Company to the Holders or the Trustee hereunder
or thereunder will be promptly paid in full and performed, all in accordance
with the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other Obligations, the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, subject to any applicable grace period, whether at
stated maturity, by acceleration, redemption or otherwise. Failing payment when
so due of any amount so guaranteed or any performance so guaranteed for whatever
reason the Guarantors will be jointly and severally obligated to pay the same
immediately. An Event of Default under this Indenture or the Notes shall
constitute an event of default under the Guarantees of the Notes, and shall
entitle the Holders to accelerate the Obligations of the Guarantors hereunder in
the same manner and to the same extent as the Obligations of the Company. The
Guarantors hereby agree that their Obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that this
Guarantee of the Notes will not be discharged except by complete performance of
the Obligations contained in the Notes and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Company, the
Guarantors, or any Note Custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or the Guarantors, any amount paid by
either to the Trustee or such Holder, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor agrees
that it shall not be entitled to, and hereby waives, any right of subrogation in
relation to the Holders in respect of any Obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6 hereof, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Guarantee. The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Guarantees of the Notes.
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SECTION 11.02. EXECUTION AND DELIVERY OF GUARANTEE.
To evidence its Guarantee of the Notes set forth in Section 11.01,
each Guarantor hereby agrees that a notation of such Guarantee substantially in
the form of Exhibit E shall be endorsed by an Officer of such Guarantor on each
Note authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of such Guarantor, by manual or facsimile signature, by an
Officer of such Guarantor.
Each Guarantor hereby agrees that its Guarantee of the Notes set
forth in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Guarantee.
If an Officer whose signature is on this Indenture or on the
Guarantee of the Notes no longer holds that office at the time the Trustee
authenticates the Note on which such Guarantee is endorsed, such Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee of the Notes
set forth in this Indenture on behalf of the Guarantors.
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SECTION 11.03. RELEASE FOLLOWING SALE OF ASSETS OR DESIGNATION AS UNRESTRICTED
SUBSIDIARY.
Concurrently with (a) any sale of all or substantially all of the
assets of any Guarantor or all of the Capital Stock of any Guarantor or (b) the
Board of Director's designation of any Guarantor to be an Unrestricted
Subsidiary in accordance with Section 4.07 hereof, then such Guarantor (in the
event of a sale or other disposition of all of the Capital Stock of such
Guarantor or any such designation of such Guarantor as an Unrestricted
Subsidiary) or the Person acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of a Guarantor)
shall be released from and relieved of its Obligations under its Guarantee of
the Notes; provided that (i) in the event of an Asset Sale, the Net Proceeds
from such sale or other disposition are treated in accordance with the
provisions of Section 4.10 hereof and (ii) the Company is in compliance with all
other provisions of this Indenture applicable to such disposition. Upon delivery
by the Company to the Trustee of an Officers' Certificate to the effect of the
foregoing, the Trustee shall execute any documents reasonably required in order
to evidence the release of any Guarantor from its Obligation under its Guarantee
of the Notes. Any Guarantor not released from its Obligations under its
Guarantee of the Notes shall remain liable for the full amount of principal of,
premium, if any, interest and Liquidated Damages, if any, on the Notes and for
the other Obligations of such Guarantor under the Indenture as provided in this
Article 11.
SECTION 11.04. ADDITIONAL GUARANTORS.
Any Person that was not a Guarantor on the date of this Indenture may
become a Guarantor by executing and delivering to the Trustee (a) a supplemental
indenture in substantially the form of Exhibit H and (b) an Opinion of Counsel
to the effect that such supplemental indenture has been duly authorized and
executed by such Person and constitutes the legal, valid, binding and
enforceable obligation of such Person (subject to such customary exceptions
concerning creditors rights', fraudulent transfers, public policy and equitable
principles as may be acceptable to the Trustee in its discretion).
SECTION 11.05. LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Notes and this Indenture and (ii) the amount, if any, which would not have (A)
rendered such Guarantor "insolvent" (as such term is defined in the United
States Bankruptcy Code and in the Debtor and Creditor Law of the State of New
York) or (B) left such Guarantor with unreasonably small capital at the time its
Guarantee of the Notes was entered into; provided that, it will be a presumption
in any lawsuit or other proceeding in which a Guarantor is a party that the
amount guaranteed pursuant to the Guarantee of the Notes is the amount set forth
in clause (i) above unless any creditor, or representative of creditors of such
Guarantor, or debtor in possession or trustee in bankruptcy of the Guarantor,
otherwise proves in such a lawsuit that the aggregate liability of the Guarantor
is the amount set forth in clause (ii) above. In making any determination as to
solvency or sufficiency of capital of a Guarantor in accordance with the
previous sentence, the right of such Guarantor to contribution from other
Guarantors, and any other rights such Guarantor may have, contractual or
otherwise, shall be taken into account.
SECTION 11.06. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
ATrustee" as used in this Article 11 shall in each case
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(unless the context shall otherwise require) be construed as extending to and
including such Paying Agent within its meaning as fully and for all intents and
purposes as if such Paying Agent was named in this Article 11 in place of the
Trustee.
ARTICLE 12
SUBORDINATION OF GUARANTEE
SECTION 12.01. AGREEMENT TO SUBORDINATE.
The Guarantors agree, and each Holder by accepting a Note agrees,
that all Guarantee Obligations shall be subordinated in right of payment, to the
extent and in the manner provided in this Article 12, to the prior payment in
full of all Senior Debt of the Guarantors (whether outstanding on the date
hereof or hereafter created, incurred assumed or guaranteed).
SECTION 12.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
In the event of any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to any Guarantor or its assets, or
any liquidation, dissolution or other winding-up of such Guarantor, whether
voluntary or involuntary, and whether or not involving insolvency or bankruptcy,
or any assignment for the benefit of creditors or marshalling of assets or
liabilities of such Guarantor, the holders of Senior Debt of such Guarantor must
be paid in full in cash or Cash Equivalents with respect to all Obligations due
in respect of such Senior Debt of such Guarantor before any direct or indirect
payment or distribution (excluding distributions of Permitted Junior Securities
of such Guarantor) is made under the Guarantee of the Notes of such Guarantor or
on account of the purchase, redemption, defeasance or other acquisition or, or
in respect of, the Guarantee of the Notes of such Guarantor (other than payments
previously made from any defeasance trust created pursuant to Section 8.01
hereof).
SECTION 12.03. DEFAULT ON DESIGNATED GUARANTOR SENIOR DEBT.
Upon the occurrence and during the continuance of any default in the
payment of any Obligation with respect to Designated Guarantor Senior Debt of
any Guarantor, when the same becomes due (whether due to lapse of time or at
maturity, whether by acceleration or otherwise), and after receipt by the
Trustee and the Company from representatives of holders of such Designated
Guarantor Senior Debt of written notice of such default, no direct or indirect
payments (other than payments previously made from any defeasance trust created
pursuant to Section 8.01 hereof) by or on behalf of the Company of any kind or
character (excluding distributions of Permitted Junior Securities of such
Guarantor) on account of such Guarantor's Guarantee of the Notes unless and
until such default had been cured or waived or has ceased to exist or such
Designated Guarantor Senior Debt shall have been discharged or paid in full in
cash or Cash Equivalents.
In addition, upon the occurrence and during the continuance of any other
default in respect of any Designated Guarantor Senior Debt of any Guarantor
pursuant to which the maturity thereof may be accelerated (a "Guarantor
Non-payment Default") and upon the earlier to occur of (a) the receipt by the
Trustee from the representatives of holders of such Designated Guarantor Senior
Debt of a written notice of such Guarantor Non-payment Default (a "Guarantor
Payment Blockage Notice") or (b) if such Guarantor Non-payment Default results
from the acceleration of the Notes, the date of such acceleration, no payment
(other than payments previously made from any defeasance trust created
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pursuant to Section 8.01 hereof) or distribution of any assets of such Guarantor
of any kind or character (excluding distributions of Permitted Junior Securities
of such Guarantor) may be made by such Guarantor on account of such Guarantor's
Guarantee of the Notes for the period specified below (the "Guarantor Payment
Blockage Period").
The Guarantor Payment Blockage Period shall commence upon the receipt of
the Guarantor Payment Blockage Notice by the Trustee from the representatives of
holders of such Designated Guarantor Senior Debt or the date of the acceleration
referred to in clause (b) of the preceding paragraph, as the case may be, and
shall end on the earliest to occur of the following events (a) 179 days has
elapsed since the receipt of such Guarantor Payment Blockage Notice or the date
of such acceleration (provided such Designated Guarantor Senior Debt shall not
theretofore have been accelerated), (b) such default is cured or waived or
ceases to exist or such Designated Guarantor Senior Debt is discharged or paid
in full in cash or Cash Equivalents (provided than no other Guarantor
Non-payment Default has occurred and is then continuing after giving effect to
such cure or waiver), or (c) such Guarantor Payment Blockage Period shall have
been terminated by written notice to the Company or the Trustee from the
representatives of holders of Designated Guarantor Senior Debt initiating such
Guarantor Payment Blockage Period, after which such Guarantor shall promptly
resume making any and all required payments in respect of its Guarantee of the
Notes. No Guarantor Non-payment Default with respect to Designated Guarantor
Senior Debt that existed or was continuing on the date of the commencement of
any Guarantor Payment Blockage Period with respect to the Designated Guarantor
Senior Debt initiating such Guarantor Payment Blockage Period will be, or can
be, made the basis of the commencement of a second Guarantor Payment Blockage
Period, unless such default has been cured for a period of not less than 30
consecutive days. In no event will a Guarantor Payment Blockage Period extend
beyond 179 days from the receipt by the Trustee of the Guarantor Payment
Blockage Notice or the date of the acceleration initiating such Guarantor
Payment Blockage Period (provided that such Designated Guarantor Senior Debt
shall not theretofore have been accelerated) and there must be at least a 186
consecutive day period in each 365-day period during which no Guarantor Payment
Blockage Period is in effect.
SECTION 12.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, the Guarantor shall provide the names of the Representatives of the
Senior Debt of such Guarantor to the Trustee and the Trustee shall promptly
notify such Representatives of such Senior Debt of such Guarantor of the
acceleration.
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee receives any payment of any Guarantee
Obligations with respect to a Guarantor at a time when the Trustee has actual
knowledge that such payment is prohibited by Section 12.02 or 12.03 hereof, such
payment shall be held by the Trustee, in trust for the benefit of, and shall be
paid forthwith over and delivered, upon written request to, the holders of
Senior Debt of such Guarantor as their interest may appear or their
Representative under the indenture or other agreement (if any) pursuant to which
such Senior Debt of such Guarantor may have been issued, as their interest may
appear, for application to the payment of all Obligations with respect to such
Senior Debt of such Guarantor remaining unpaid to the extent necessary to pay
such Obligations in full in accordance with their terms, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior Debt
of such Guarantor.
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In the event that any Holder receives any payment of any Guarantee
Obligations of a Guarantor at a time when such payment is prohibited by Section
12.02 or 12.03 hereof, such payment shall be held by such Holder, in trust for
the benefit of, and shall be paid forthwith over and delivered, upon written
request to, the holders of Senior Debt of such Guarantor as their interest may
appear or their Representative under the indenture or other agreement (if any)
pursuant to which such Senior Debt of such Guarantor may have been issued, as
their interest may appear, for application to the payment of all Obligations
with respect to such Senior Debt of such Guarantor remaining unpaid to the
extent necessary to pay such Obligations in full in accordance with their terms,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Debt of such Guarantor.
With respect to the holders of Senior Debt of the Guarantors, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of Senior Debt of the Guarantors shall
be read into this Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Debt of any Guarantor, and
shall not be liable to any such holders if the Trustee shall pay over or
distribute to or on behalf of Holders or the Guarantors or any other Person
money or assets to which any holders of Senior Debt of any Guarantor shall be
entitled by virtue of this Article 12, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
SECTION 12.06. NOTICE BY GUARANTOR.
Each Guarantor shall promptly notify the Trustee and the Paying Agent
of any facts known to such Guarantor that would cause a payment of any Guarantee
Obligations to violate this Article 12, but failure to give such notice shall
not affect the subordination of the Guarantees of the Notes to the Senior Debt
of the Guarantors as provided in this Article 12.
SECTION 12.07. SUBROGATION.
After all Senior Debt of the Guarantors is paid in full and until the
Guarantees of the Notes are paid in full, Holders shall be subrogated (equally
and ratably with all other Indebtedness pari passu with the Guarantees of the
Notes) to the rights of holders of Senior Debt of the Guarantors to receive
distributions applicable to such Senior Debt to the extent that distributions
otherwise payable to the Holders have been applied to the payment of such Senior
Debt. A distribution made under this Article 12 to holders of Senior Debt of the
Guarantors that otherwise would have been made to Holders is not, as between the
Guarantors and Holders, a payment by the Guarantors on the Guarantees of the
Notes.
SECTION 12.08. RELATIVE RIGHTS.
This Article 12 defines the relative rights of the Holders and
holders of Senior Debt of the Guarantors. Nothing in this Indenture shall:
(i) impair, as between the Guarantors and the Holders, the obligation
of the Guarantors, which is absolute and unconditional, to pay
principal of, premium, if any, interest and Liquidated Damages,
if any, on the Notes in accordance with the terms of the
Guarantees of the Notes;
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(ii) affect the relative rights of Holders and creditors of the
Guarantors other than their rights in relation to holders of
Senior Debt of the Guarantors; or
(iii) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or an Event of Default, subject to the
rights of holders and owners of Senior Debt of the Guarantors to
receive distributions and payments otherwise payable to Holders.
If any Guarantor fails because of this Article 12 to pay its
Guarantee Obligations in accordance with its Guarantee of the Notes on the due
date, the failure is still a Default or an Event of Default.
SECTION 12.09. SUBORDINATION MAY NOT BE IMPAIRED BY GUARANTOR.
No right of any holder of Senior Debt of the Guarantors to enforce
the subordination of the Guarantee Obligations shall be prejudiced or impaired
by any act or failure to act by the Guarantors or any Holder or by the failure
of the Guarantors or any Holder to comply with this Indenture.
SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt of the Guarantors, the distribution may be made and the notice given
to their Representative.
Upon any payment or distribution of assets of a Guarantor referred to
in this Article 12, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Debt of the Guarantors and other
Indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 12.
SECTION 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 12 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Guarantees of the Notes, unless the Trustee shall have
received at its Corporate Trust Office at least five Business Days prior to the
date of such payment written notice that the payment of any Obligations with
respect to the Guarantees of the Notes would violate this Article 12. Only the
Guarantors or a Representative may give the notice. Nothing in this Article 12
shall impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt of the Guarantors with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
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SECTION 12.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 12, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, a Representative of Designated Guarantor Senior Debt is hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
SECTION 12.13. AMENDMENTS.
Any amendment to the provisions of this Article 12 shall require the
consent of the Holders of at least 75% in aggregate amount of the Notes then
outstanding if such amendment would adversely affect the rights of the Holders
of Notes.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 13.02. NOTICES.
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company:
Dyersburg Corporation
1315 Phillips Street
Dyersburg, Tennessee 38025
Telecopier No.: (901) 286-3411
Attention: Treasurer
With a copy to:
Bass, Berry & Sims PLC
2700 First American Center, 25th Floor
Nashville, Tennessee 37238
Telecopier No.: (615) 742-6298
Attention: J. Page Davidson, Esq.
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If to the Trustee:
State Street Bank and Trust Company
777 Main Street
Hartford, Connecticut 06115
Telecopier No.: (860) 986-7920
Attention: Corporate Trust Department
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 13.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection
of TIA Section 312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
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SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions
of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 13.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 13.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company or any Restricted Subsidiary (other than the Company and its Restricted
Subsidiaries), as such, shall have any liability for any obligations of the
Company or such Restricted Subsidiary under the Notes, any Guarantee thereof,
this Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
SECTION 13.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES THEREOF.
SECTION 13.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
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SECTION 13.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 13.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
78
<PAGE> 85
SIGNATURES
Dated as of August 27, 1997
DYERSBURG CORPORATION
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
DYERSBURG FABRICS INC.
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
DYERSBURG FABRICS LIMITED PARTNERSHIP, I
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
of General Partner
DFIC, INC.
By: /s/ Paul L. Hallock
------------------------------------
Name: Paul L. Hallock
Title: Vice President and Treasurer
IQUE, INC.
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
<PAGE> 86
IQUEIC, INC.
By: /s/ Paul L. Hallock
------------------------------------
Name: Paul L. Hallock
Title: Vice President and Treasurer
IQUE LIMITED PARTNERSHIP, I
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer of
General Partner
UNITED KNITTING INC.
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Vice President, Secretary
and Treasurer
UKIC, INC.
By: /s/ Paul L. Hallock
------------------------------------
Name: Paul L. Hallock
Title: Vice President and Treasurer
UNITED KNITTING LIMITED PARTNERSHIP, I
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Vice President, Secretary
and Treasurer of General Partner
ALAMAC KNIT FABRICS INC.
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Vice President and Secretary
<PAGE> 87
ALAMAC ENTERPRISES INC.
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Vice President and Secretary
AIH INC.
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Vice President and Secretary
2
<PAGE> 88
Dated as of August 27, 1997
STATE STREET BANK AND TRUST COMPANY
By: /s/ Michael M. Hopkins
--------------------------
Name: Michael M. Hopkins
Title: Vice President
<PAGE> 89
EXHIBIT A
(Face of Note)
- --------------------------------------------------------------------------------
CUSIP/CINS ____________
9:% Series A Senior Subordinated Notes due 2007
No. ___ $__________
DYERSBURG CORPORATION
promises to pay to _________________________________________________
or registered assigns,
the principal sum of ________________________________________________
Dollars on September 1, 2007.
Interest Payment Dates: March 1, and September 1
Record Dates: February 15, and August 15
Dated: August 27, 1997
DYERSBURG CORPORATION
By:______________________________
Name: T. Eugene McBride
Title: Chief Executive Officer
By:______________________________
Name: William S. Shropshire, Jr.
Title: Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
(SEAL)
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:__________________________________
- --------------------------------------------------------------------------------
A-1
<PAGE> 90
(Back of Note)
9 3/4% Series A Senior Subordinated Notes due 2007
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) (A "QIB"), (B) IT IS NOT A U.S. PERSON, IS NOT
ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT
WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER
THE SECURITIES ACT (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
UNDER THE SECURITIES ACT, IF APPLICABLE) AS IN EFFECT ON THE DATE OF
THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON
WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER
THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER
OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN
THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE
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<PAGE> 91
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
OF THE FOREGOING RESTRICTIONS."
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF
THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Dyersburg Corporation, a Tennessee corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
9 3/4% per annum from August 27, 1997 until maturity and shall pay the
Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually on March 1 and September 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be March 1, 1998.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
and Liquidated Damages (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the February 15 or
August 15 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes will be payable as to principal, premium and Liquidated
Damages, if any, and interest at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of [immediately
available/next] day funds will be required with respect to principal of and
interest, premium and Liquidated Damages on, all Global Notes and all other
Notes the Holders of which shall have provided wire transfer instructions to the
Company or the Paying Agent. Such
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<PAGE> 92
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and
Trust Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated
as of August 27, 1997 ("Indenture") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the indenture shall govern and be
controlling. The Notes are unsecured obligations of the Company limited to
$125.0 million in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Paragraph 5, the Notes
will not be redeemable at the Company's option prior to September 1, 2002.
Thereafter, the Notes will be subject to redemption at any time at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest and Liquidated Damages, if
any, thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on September 1 of the years indicated below:
YEAR PERCENTAGE
2002 ................................................ 104.875%
2003 ................................................ 103.250
2004 ................................................ 101.625
2005 and thereafter.................................. 100.00%
(b) Notwithstanding the provisions of clause (a) of this Paragraph 5,
prior to September 1, 2000, the Company may redeem up to an aggregate of $25.0
million in principal amount of Notes at a redemption price of 109.75% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the redemption date, with the net cash proceeds of
one or more public offerings of common stock of the Company; provided that (i)
at least $100.0 million in principal amount of the Notes remain outstanding
immediately after the occurrence of such redemption and (ii) such redemption
shall occur within 90 days of the date of the consummation of each such public
offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
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<PAGE> 93
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to each Holder of Notes
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of such Holder's Notes at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any, thereon
to the date of purchase (the "Change of Control Payment"). Within 30 days
following a Change of Control, the Company shall mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, within five days of each date on which the aggregate amount of Excess
Proceeds exceeds $5.0 million, the Company shall commence an offer to all
Holders of Notes (as "Asset Sale Offer") pursuant to Section 3.09 of the
Indenture to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase, in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notices of redemption will be mailed by
first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. SUBORDINATION. Each Holder by accepting a Note agrees that the
payment of principal of and premium, interest and Liquidated Damages, if any, on
each Note is subordinated in right of payment, to the extent and in the manner
provided in Article 10 of the Indenture, to the prior payment in full of all
Senior Debt of the Company (whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed), and the subordination is
for the benefit of the holders of such Senior Debt.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner
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<PAGE> 94
for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Notes and the Guarantees thereof may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes, and any existing default or compliance
with any provision of the Indenture or the Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes.
Without the consent of any Holder of a Note, the Company and the Trustee may
amend or supplement the Indenture, the Notes or any Guarantee thereof to cure
any ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Company's or any Restricted Subsidiary's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on, or Liquidated Damages, if any,
with respect to the Notes (whether or not prohibited by Article 10 of the
Indenture); (ii) default in payment when due of principal of or premium, if any,
on the Notes (whether or not prohibited by Article 10 of the Indenture); (iii)
failure by the Company to comply with Section 4.07, 4.09, 4.10, 4.14 or 5.01 of
the Indenture; (iv) failure by the Company for 60 days after written notice by
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes to observe or perform any other covenant, representation,
warranty or other agreement in the Indenture or the Notes; (v) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on such indebtedness at final maturity (a "Payment
Default") or (b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $5.0 million or more; (vi) failure by the Company or
any of its Restricted Subsidiaries to pay final judgments aggregating in excess
of $5.0 million of more and either (a) any creditor commences enforcement
proceedings upon any such judgment or (b) such judgments are not paid,
discharged or stayed for a period of 60 days; (vii) except as permitted by the
Indenture, any guarantee of the Notes shall be held in any judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in full force
and effect or any Restricted Subsidiary, or any Person acting on behalf of any
Restricted Subsidiary, shall deny or disaffirm its obligations under its
guarantee; and (viii) certain events of bankruptcy or insolvency with respect to
the Company or any of its Restricted Subsidiaries. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive
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<PAGE> 95
any existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes. The Company is required to deliver
to the Trustee annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of any Default or Event of Default,
to deliver to the Trustee a statement specifying such Default or Event of
Default.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator
or stockholder, of the Company, as such, shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of August 27, 1997, between the Company and the parties named on the
signature pages thereof (the "Registration Rights Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Dyersburg Corporation
1315 Phillips Street
Dyersburg, Tennessee 38025
Attention: Treasurer
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:____________________________________________________
Your Signature: __________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
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<PAGE> 97
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
[ ]1 Section 4.10 [ ]2 Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $___________
Date: _______________ Your Signature: _______________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.: _________________
Signature Guarantee.
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<PAGE> 98
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
<TABLE>
<S> <C> <C> <C> <C>
Date of Exchange Amount of decrease in Amount of increase in Principal Amount Signature of
---------------- Principal Amount of Principal Amount of of this Global Note authorized officer of
this Global Note this Global Note following such decrease Trustee or Note
----------------------- ------------------------ (or increase) Custodian
----------------------- ---------------------
</TABLE>
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<PAGE> 99
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Dyersburg Corporation
1315 Phillips Street
Dyersburg, Tennessee 38025
[Registrar address block]
Re: 9 3/4% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of August 27,
1997 (the "Indenture"), between Dyersburg Corporation, as issuer (the
"Company"), and State Street Bank and Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or scheme
to evade the
B-1
<PAGE> 100
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
Transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note and/or the Definitive Note and in the Indenture and the Securities
Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION
OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global Note or
Restricted Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of
a principal amount of Notes at the time of transfer of less than $250,000, an
Opinion of Counsel provided by the Transferor or the Transferee (a copy of which
the Transferor has attached to this certification), to the effect that such
Transfer is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the IAI Global
Note and/or the Definitive Notes and in the Indenture and the Securities Act.
B-2
<PAGE> 101
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
---------------------------
[Insert Name of Transferor]
By:
----------------------------
Name:
Title:
Dated: ,
------------------ -----
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<PAGE> 102
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP 267575AA6), or
(ii) [ ] Regulation S Global Note (CUSIP U26730AA6), or
(iii) [ ] IAI Global Note (CUSIP 267575AB4); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP 267575AA6), or
(ii) [ ] Regulation S Global Note (CUSIP U26730AA6), or
(iii) [ ] IAI Global Note (CUSIP 267575AB4); or
(iv) [ ] Unrestricted Global Note (CUSIP ); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
<PAGE> 103
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Dyersburg Corporation
1315 Phillips Street
Dyersburg, Tennessee 38025
[Registrar address block]
Re: 9 3/4% Senior Subordinated Notes due 2007
(CUSIP____________)
Reference is hereby made to the Indenture, dated as of August 27, 1997
(the "Indenture"), between Dyersburg Corporation, as issuer (the "Company"), and
State Street Bank and Trust Company, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
_________________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount
of $____________ in such Note[s] or interests (the "Exchange"). In connection
with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST
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<PAGE> 104
IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for a beneficial interest in an Unrestricted Global
Note, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.
C-2
<PAGE> 105
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
----------------------
[Insert Name of Owner]
By:
------------------------------
Name
Title:
Dated: ,
------------------ ------
C-3
<PAGE> 106
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Dyersburg Corporation
1315 Phillips Street
Dyersburg, Tennessee 38025
[Registrar address block]
Re: 9 3/4% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of August
27, 1997 (the "Indenture"), between Dyersburg Corporation, as issuer (the
"Company"), and State Street Bank and Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of a principal amount of Notes, at the time of transfer
of less than $250,000, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144 under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Note or beneficial interest in a Global Note
from us in a transaction meeting the requirements of clauses (A) through (E) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
D-1
<PAGE> 107
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
----------------------------------
[Insert Name of Accredited Investor]
By:
--------------------------------
Name:
Title:
Dated: ,
------------------ ------
D-2
<PAGE> 108
Exhibit E
GUARANTEE
Subject to Section 11.06 of the Indenture, each Guarantor hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of the Indenture,
the Notes and the Obligations of the Company under the Notes or under the
Indenture, that: (a) the principal of, premium, if any, interest and Liquidated
Damages, if any, on the Notes shall be promptly paid in full when due, subject
to any applicable grace period, whether at maturity, by acceleration, redemption
or otherwise, and interest on overdue principal, premium, if any, (to the extent
permitted by law) interest on any interest, if any, and Liquidated Damages, if
any, on the Notes and all other payment Obligations of the Company to the
Holders or the Trustee under the Indenture or under the Notes shall be promptly
paid in full and performed, all in accordance with the terms thereof; and (b) in
case of any extension of time of payment or renewal of any Notes or any of such
other payment Obligations, the same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration,
redemption or otherwise. Failing payment when so due of any amount so guaranteed
or any performance so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately.
The obligations of the Guarantors to the Holders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
11 and Article 12 of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Guarantee. The terms of Articles 11 and
12 of the Indenture are incorporated herein by reference. This Guarantee is
subject to release as and to the extent provided in Section 11.04 of the
Indenture. The obligations of the Guarantors to the Holders and to the Trustee
pursuant to the Guarantee and the Indenture are expressly subordinated to the
extent set forth in Article 12 of the Indenture and reference is hereby made to
such Indenture for the precise terms of such subordination.
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon each Guarantor and its respective successors
and assigns to the extent set forth in the Indenture until full and final
payment of all of the Company's Obligations under the Notes and the Indenture
and shall inure to the benefit of the successors and assigns of the Trustee and
the Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. This is a Guarantee of
payment and not a guarantee of collection.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Note upon which this Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Notes and the Indenture and (ii) the amount, if any, which would not have (A)
rendered such Guarantor "insolvent" (as such term is defined in the United
States Bankruptcy Code and in the Debtor and Creditor Law of the State of New
York) or (B) left such Guarantor with unreasonably small capital at the time its
Guarantee of the Notes was entered into; provided that, it will be a presumption
in any lawsuit or other proceeding in which a Guarantor is a party that the
amount guaranteed pursuant to the Guarantee is the amount set forth in clause
(i) above unless any creditor, or representative of creditors of such Guarantor,
or debtor in possession or trustee
E-1
<PAGE> 109
in bankruptcy of such Guarantor, otherwise proves in such a lawsuit that the
aggregate liability of the Guarantor is limited to the amount set forth in
clause (ii) above. The Indenture provides that, in making any determination as
to the solvency or sufficiency of capital of a Guarantor in accordance with the
previous sentence, the right of such Guarantor to contribution from other
Guarantors and any other rights such Guarantor may have, contractual or
otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
E-2
<PAGE> 110
DYERSBURG FABRICS INC.
By:
-------------------------------------
Name:
Title:
DYERSBURG FABRICS LIMITED PARTNERSHIP, I
By:
-------------------------------------
Name:
Title:
DFIC, INC.
By:
-------------------------------------
Name:
Title:
IQUE, INC.
By:
-------------------------------------
Name:
Title:
E-3
<PAGE> 111
IQUEIC, INC.
By:
-------------------------------------
Name:
Title:
IQUE LIMITED PARTNERSHIP, I
By:
-------------------------------------
Name:
Title:
UNITED KNITTING INC.
By:
-------------------------------------
Name:
Title:
UKIC, INC.
By:
-------------------------------------
Name:
Title:
UNITED KNITTING LIMITED PARTNERSHIP, I
By:
-------------------------------------
Name:
Title:
ALAMAC KNIT FABRICS INC.
By:
-------------------------------------
Name:
Title:
E-4
<PAGE> 112
ALAMAC ENTERPRISES INC.
By:
-------------------------------------
Name:
Title:
AIH INC.
By:
-------------------------------------
Name:
Title:
E-5
<PAGE> 113
Exhibit F
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______ __, ____ between [Guarantor], a ___________ corporation (the "New
Guarantor") and State Street Bank and Trust Company, as trustee under the
indenture referred to below (the "Trustee"). Capitalized terms used herein and
not defined herein shall have the meaning ascribed to them in the Indenture (as
defined below).
W I T N E S S E T H
WHEREAS, Dyersburg Corporation, a Tennessee corporation (the "Company")
has heretofore executed and delivered to the Trustee an indenture (the
"Indenture"), dated as of August 27, 1997, providing for the issuance of an
aggregate principal amount of $125,000,000 of 9 3/4% Senior Subordinated Notes
due 2007 (the "Notes");
WHEREAS, Section 11.05 of the Indenture provides that under certain
circumstances the Company may cause, and Section 11.03 of the Indenture provides
that under certain circumstances the Company must cause, certain of its
subsidiaries to execute and deliver to the Trustee a supplemental indenture
pursuant to which such subsidiaries shall unconditionally guarantee all of the
Company's Obligations under the Notes pursuant to a Guarantee on the terms and
conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The New Guarantor hereby agrees, jointly and
severally with all other Guarantors, to guarantee the Company's Obligations
under the Notes and the Indenture on the terms and subject to the conditions set
forth in Article 11 and Article 12 of the Indenture and to be bound by all other
applicable provisions of the Indenture.
3. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of any Guarantor, as such, shall have any liability
for any obligations of the Company, any Restricted Subsidiary or any Guarantor
under the Notes, any Guarantee thereof, the Indenture or this Supplemental
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture.
5. COUNTERPARTS The parties may sign any number of copies of this
Supplemental
F-1
<PAGE> 114
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Guarantor.
F-2
<PAGE> 115
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed and attested, all as of the date first above written.
Dated: ________________
[NEW GUARANTOR]
By: ____________________________
Name:
Title:
Dated: ________________
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: ____________________________
Name:
Title:
F-3
<PAGE> 1
EXECUTION COPY
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of August 27, 1997
by and among
Dyersburg Corporation,
the Guarantors Named on the Signature Pages Hereto
and
Bear, Stearns & Co. Inc.,
Prudential Securities Incorporated
- --------------------------------------------------------------------------------
<PAGE> 2
This Registration Rights Agreement (this "Agreement") is made and
entered into as of August 27, 1997 by and among Dyersburg Corporation, a
Tennessee corporation (the "Company"), the guarantors named on the signature
pages hereto (collectively, the "Guarantors"), and Bear, Stearns & Co. Inc. and
Prudential Securities Incorporated (the "Initial Purchasers"), who have agreed
to purchase the Company's 9 3/4% Series A Senior Subordinated Notes due 2007
(the "Series A Notes") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
August 20, 1997 (the "Purchase Agreement"), by and among the Company, Dyersburg
Fabrics Inc., Dyersburg Fabrics Limited Partnership, I, DFIC, Inc., IQUE, Inc.,
IQUEIC, Inc., IQUE Limited Partnership, I, United Knitting Inc., UKIC, Inc. and
United Knitting Limited Partnership, I and the Initial Purchasers. In order to
induce the Initial Purchasers to purchase the Series A Notes, the Company and
the Guarantors have agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers set forth in Section 3 of the Purchase
Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b) the
maintenance of such Registration Statement as continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (c) the delivery by the Company to
the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Series A Notes, each
Interest Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act of the
Series B Notes pursuant to the Exchange Offer Registration Statement pursuant to
which the Company offers the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer Restricted
Securities held by such Holders for Series B Notes in an aggregate principal
amount equal to
1
<PAGE> 3
the aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Series A Notes to (a) certain other "qualified institutional
buyers," as such term is defined in Rule 144A under the Act, (b) certain
institutional "accredited investors," as such term is defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Act ("Accredited Institutions"), and
(c) non-U.S. persons outside the United States in reliance upon Regulation S
under the Act.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of August 27, 1997, among the
Company and State Street Bank & Trust Company, as trustee (the "Trustee"), and
the Guarantors, pursuant to which the Notes are to be issued, as such Indenture
is amended or supplemented from time to time in accordance with the terms
thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Series A Notes and the Series B Notes.
Person: An individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
Record Holder: With respect to any Damages Payment Date relating to
Notes, each Person who is a Holder of Notes on the record date with respect to
the Interest Payment Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Series B pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, which is filed pursuant to the provisions of this
Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Series B Notes: The Company's 9 3/4% Series B Senior Subordinated
Notes due 2007 to be issued pursuant to the Indenture (a) in the Exchange Offer
or (b) pursuant to a Shelf Registration Statement, in each case, in exchange for
Series A Notes.
Shelf Filing Deadline: As defined in Section 4 hereof.
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Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to
occur of (a) the date on which such Note is exchanged in the Exchange Offer and
entitled to be resold to the public by the Holder thereof without complying with
the prospectus delivery requirements of the Act, (b) the date on which such Note
has been effectively registered under the Act and disposed of in accordance with
a Shelf Registration Statement and (c) the date on which such Note is
distributed to the public pursuant to Rule 144 under the Act or by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein).
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company and the Guarantors shall (i)
cause to be filed with the Commission as soon as practicable after the Closing
Date, but in no event later than 30 days after the Closing Date, the Exchange
Offer Registration Statement, (ii) use their reasonable best efforts to cause
such Exchange Offer Registration Statement to become effective at the earliest
possible time, but in no event later than 90 days after the Closing Date, (iii)
in connection with the foregoing, file (A) all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause such
Exchange Offer Registration Statement to become effective, (B) if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings in connection
with the registration and qualification of the Series B Notes to be made under
the Blue Sky laws of such jurisdictions as are necessary to permit Consummation
of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, use their reasonable best efforts to commence and
Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate
form permitting registration of the Series B Notes to be offered in exchange for
the Transfer Restricted Securities and to permit resales of Notes held by
Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company shall use its reasonable best efforts to cause the
Exchange Offer Registration Statement to be effective continuously and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 business days. The Company shall cause the Exchange Offer to comply with
all applicable federal and state securities laws.
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No securities other than the Notes shall be included in the Exchange Offer
Registration Statement. The Company shall use its reasonable best efforts to
cause the Exchange Offer to be Consummated on the earliest practicable date
after the Exchange Offer Registration Statement has become effective, but in no
event later than 30 business days thereafter.
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Series A Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company) may exchange such
Series A Notes pursuant to the Exchange Offer; however, such Broker-Dealer may
be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the Series B Notes received by such Broker-Dealer
in the Exchange Offer, which prospectus delivery requirement may be satisfied by
the delivery by such Broker-Dealer of the Prospectus contained in the Exchange
Offer Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such resales by Broker-Dealers
that the Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer
or disclose the amount of Notes held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy after the
date of this Agreement.
The Company and the Guarantors shall use their best efforts to keep
the Exchange Offer Registration Statement continuously effective, supplemented
and amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for resales of Notes acquired by
Broker-Dealers for their own accounts as a result of market-making activities or
other trading activities, and to ensure that it conforms with the requirements
of this Agreement, the Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of six months from the
date on which the Exchange Offer Registration Statement is declared effective.
The Company shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon request at any time during such
one-year period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company and the Guarantors are not
required to file an Exchange Offer Registration Statement or permitted to
consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with) or (ii) if any Holder of Transfer Restricted
Securities notifies the Company on or prior to the 20th business day following
the Consummation of the Exchange Offer (A) that such Holder is prohibited by
applicable law or Commission policy from participating in the Exchange Offer, or
(B) that such Holder may not resell the Series B Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is not
available for such resales by such Holder, or (C) that such Holder is a
Broker-Dealer and holds Series A Notes acquired directly from the Company or one
of its affiliates, then the Company and the Guarantors shall:
(x) Use their reasonable best efforts to file a shelf
registration statement with the Commission pursuant to Rule 415 under the
Act, which may be an amendment to the Exchange Offer Registration
Statement (in either event, the "Shelf Registration Statement") on or
prior to the earliest to occur of (1) the 30th day after the date on which
the Company and the Guarantors
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<PAGE> 6
determine that they are not required to file the Exchange Offer
Registration Statement and (2) the 30th day after the date on which the
Company receives notice from a Holder of Transfer Restricted Securities as
contemplated by clause (ii) above (such earliest date being the "Shelf
Filing Deadline"), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Securities the Holders of which shall
have provided the information required pursuant to Section 4(b) hereof; and
(y) Use their reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on or
prior to the 90th day after the Shelf Filing Deadline; provided, however,
that the Company and the Guarantors may delay filing such Shelf
Registration Statement for an aggregate period not to exceed 60 days.
The Company and the Guarantors shall use their reasonable best efforts to keep
such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Notes by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of two years following the Closing
Date; provided, however, that the Company and the Guarantors may delay filing
such supplements and amendments for an aggregate period not to exceed 60 days
(including any period of delay in filing the Shelf Registration Statement
permitted by Section 4(a)(y) above).
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information as the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus included
therein. No Holder of Transfer Restricted Securities shall be entitled to
Liquidated Damages pursuant to Section 5 hereof unless and until such Holder
shall have used its best efforts to provide all such reasonably requested
information. Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
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<PAGE> 7
SECTION 5. LIQUIDATED DAMAGES
If (a) any of the Registration Statements required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (b) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (c) the
Exchange Offer has not been Consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (d) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself immediately declared effective (each such event referred to
in clauses (a) through (d), a "Registration Default"), the Company and the
Guarantors hereby jointly and severally agree to pay liquidated damages to each
Holder of Transfer Restricted Securities with respect to the first 90-day period
immediately following the occurrence of the first Registration Default, in an
amount equal to one-half of one percentage point (0.5%) per annum of the
principal amount of Transfer Restricted Securities held by such Holder. The
amount of the liquidated damages shall increase by an additional one-half of one
percent (0.5%) per annum of the principal amount of Transfer Restricted
Securities with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of liquidated damages of two
percent (2.0%) per annum of the principal amount of Transfer Restricted
Securities. All accrued liquidated damages shall be paid by the Company on each
Damages Payment Date to Record Holders by wire transfer of immediately available
funds or by federal funds check and to Holders of Certificated Securities by
wire transfers to the accounts specified by them or by mailing checks to their
registered addresses if no such accounts have been specified on each Damages
Payment Date, as provided in the Indenture. Following the cure of all
Registration Defaults relating to any particular Transfer Restricted Securities,
the accrual of liquidated damages with respect to such Transfer Restricted
Securities will cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their reasonable best efforts to
effect such exchange to permit the sale of Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof,
and shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company there
is a question as to whether the Exchange Offer is permitted by applicable
law, the Company and the Guarantors hereby agree to seek a no-action
letter or other favorable decision from the Commission allowing the
Company and the Guarantors to Consummate an Exchange Offer for such Series
A Notes. Each of the Company and the Guarantors hereby agrees to pursue
the issuance of such a decision to the Commission staff level but shall
not be required to take commercially unreasonable action to effect a
change of Commission policy. Each of the Company and the Guarantors hereby
agrees, however, to (A) participate in telephonic conferences with the
Commission staff, (B) deliver to the Commission staff an analysis prepared
by counsel to the Company setting forth the legal bases, if any, upon
which such
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<PAGE> 8
counsel has concluded that such an Exchange Offer should be permitted and
(C) diligently pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the Company
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company or any Guarantor, (B) it is not engaged in, and
does not intend to engage in, and has no arrangement or understanding with
any person to participate in, a distribution of the Series B Notes to be
issued in the Exchange Offer and (C) it is acquiring the Series B Notes in
its ordinary course of business. In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the Company's
preparations for the Exchange Offer. Each Holder hereby acknowledges and
agrees that any Broker-Dealer and any such Holder using the Exchange Offer
to participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on the
date of this Agreement rely on the position of the Commission enunciated
in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and similar
no-action letters (including any no-action letter obtained pursuant to
clause (i) above), and (2) must comply with the registration and
prospectus delivery requirements of the Act in connection with a secondary
resale transaction and that such a secondary resale transaction should be
covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of Series B Notes obtained by such
Holder in exchange for Series A Notes acquired by such Holder directly
from the Company.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available May
13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above and
(B) including a representation that neither the Company nor any of the
Guarantors has entered into any arrangement or understanding with any
Person to distribute the Series B Notes to be received in the Exchange
Offer and that, to the best of the Company's and the Guarantors'
information and belief, each Holder participating in the Exchange Offer is
acquiring the Series B Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Series B Notes received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, if any, the Company and the Guarantors shall comply with
all the provisions of Section 6(c) below and shall use their reasonable best
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto the Company will as
expeditiously as possible prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act,
which form shall be available for the sale of the Transfer Restricted Securities
in accordance with the intended method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration Statement
and any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Notes by
Broker-Dealers), the Company and the Guarantors shall:
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<PAGE> 9
(i) use their reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements (including, if required by the Act or any regulation
thereunder, financial statements of the Guarantors) for the period
specified in Section 3 or 4 hereof, as applicable; upon the occurrence of
any event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain a material misstatement or
omission or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this Agreement, the
Company shall file promptly an appropriate amendment to such Registration
Statement, in the case of clause (A), correcting any such misstatement or
omission, and, in the case of either clause (A) or (B), use their best
efforts to cause such amendment to be declared effective and such
Registration Statement and the related Prospectus to become usable for
their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as applicable, or such shorter
period as will terminate when all Transfer Restricted Securities covered
by such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement under the Act or of the suspension by any
state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to make
the statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws,
the Company and the Guarantors shall use their best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or Prospectus
(including all documents incorporated by reference after the initial
filing of such Registration Statement), documents incorporated by
reference after the initial filing of such Registration Statement),
documents incorporated by reference after the initial filing of such
Registration Statement), which
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documents will be subject to the review and comment ofsuch Holders and
underwriter(s), if any, for a period of at least five business days, and
the Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which a selling Holder of Transfer Restricted Securities covered by such
Registration Statement or the underwriter(s), if any, shall reasonably
object within five business days after the receipt thereof. A selling
Holder or underwriter, if any, shall be deemed to have reasonably objected
to such filing if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission or fails to comply with the applicable
requirements of the Act;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Company's representatives available (and
representatives of the Guarantors) for discussion of such document and
other customary due diligence matters, and include such information in
such document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Company and
the Guarantors and cause the Company's and the Guarantors' officers,
directors and employees to supply all information reasonably requested by
any such Holder, underwriter, attorney or accountant in connection with
such Registration Statement subsequent to the filing thereof and prior to
its effectiveness;
(vii) if requested by any selling Holders or the underwriter(s),
if any, promptly include in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to the principal
amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other terms
of the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Company is
notified of the matters to be included in such Prospectus supplement or
post-effective amendment;
(viii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies,
if so requested by the Holders of a majority in aggregate principal amount
of Notes covered thereby or the underwriter(s), if any;
(ix) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Company and
the Guarantors hereby consent to the use of the Prospectus and any
amendment or supplement thereto by each of the selling Holders and each of
the underwriter(s), if any, in connection with the offering and the sale
of the
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Transfer Restricted Securities covered by the Prospectus or any amendment
or supplement thereto;
(xi) enter into such agreements (including an underwriting
agreement), and make such representations and warranties, and take all
such other actions reasonably required in connection therewith in order to
expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any Registration Statement contemplated by this
Agreement, all to such extent as may be reasonably requested by the
Initial Purchasers or by any Holder of Transfer Restricted Securities or
underwriter in connection with any sale or resale pursuant to any
Registration Statement contemplated by this Agreement; and whether or not
an underwriting agreement is entered into and whether or not the
registration is an Underwritten Registration, the Company and the
Guarantors shall:
(A) furnish to each of the Initial Purchasers, each selling
Holder and each underwriter, if any, in such substance and scope as
they may reasonably request and as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the date of the
Consummation of the Exchange Offer and, if applicable, the
effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed by (x) the
President or any Vice President and (y) a principal financial or
accounting officer of each of the Company and the Guarantors,
confirming, as of the date thereof, the matters set forth in
paragraphs (a), (b), (c) and (d) of Section 8 of the Purchase
Agreement and such other matters as such parties may reasonably
request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors, covering the matters set forth in
paragraphs (1) through (25) of Exhibit C to the Purchase
Agreement and such other matters as such parties may reasonably
request, and in any event including a statement to the effect
that such counsel has participated in conferences with officers
and other representatives of the Company and the Guarantors,
representatives of the independent public accountants for the
Company, the Initial Purchasers' representatives and the Initial
Purchasers' counsel in connection with the preparation of such
Registration Statement and the related Prospectus and have
considered the matters required to be stated therein and the
statements contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness of
such statements; and that such counsel advises that, on the
basis of the foregoing (relying as to materiality to a large
extent upon facts provided to such counsel by officers and other
representatives of the Company and the Guarantors and without
independent check or verification), no facts came to such
counsel's attention that caused such counsel to believe that the
applicable Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective, and, in the case of the Exchange Offer Registration
Statement, as of the date of Consummation, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus
contained in such Registration Statement as of its date and, in
the case of the opinion dated the date of Consummation of the
Exchange Offer, as of the date of Consummation, contained an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading. Without limiting the foregoing, such counsel may
state further that such
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counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other
financial data included, or required to be included, in any
Registration Statement contemplated by this Agreement or the
related Prospectus; and
(3) a customary comfort letter, dated as of the date of
Consummation of the Exchange Offer or the date of effectiveness
of the Shelf Registration Statement, as the case may be, from
the Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters by underwriters in connection with primary underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 8 of the Purchase
Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (xi), if any.
If at any time the representations and warranties of the Company and
the Guarantors contemplated in clause (A)(1) above cease to be true and
correct, the Company or the Guarantors shall so advise the Initial
Purchasers and the underwriter(s), if any, and each selling Holder
promptly and, if requested by such Persons, shall confirm such advice in
writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities
or Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s) may request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Transfer Restricted Securities covered by the Shelf Registration
Statement; provided, however, that neither the Company nor any of the
Guarantors shall be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that
would subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xiii) shall issue, upon the request of any Holder of Series A
Notes covered by the Shelf Registration Statement, Series B Notes, having
an aggregate principal amount equal to the aggregate principal amount of
Series A Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Series B Notes to be
registered in the name of such Holder or in the name of the purchaser(s)
of such Notes, as the case may be; in return, the Series A Notes held by
such Holder shall be surrendered to the Company for cancellation;
(xiv) cooperate with the selling Holders and the underwriter(s),
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
11
<PAGE> 13
(xv) use their best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s),
if any, to consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in clause (viii) above;
(xvi) if any fact or event contemplated by clause (c)(iii)(D)
above shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading;
(xvii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration Statement
and provide the Trustee under the Indenture with printed certificates for
the Transfer Restricted Securities which are in a form eligible for
deposit with the Depositary Trust Company;
(xviii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by
any underwriter (including any "qualified independent underwriter") that
is required to be retained in accordance with the rules and regulations of
the NASD, and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies
or authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
(xix) otherwise use their best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) for the twelve-month period (A) commencing at the end of any
fiscal quarter in which Transfer Restricted Securities are sold to
underwriters in a firm or best efforts Underwritten Offering or (B) if not
sold to underwriters in such an offering, beginning with the first month
of the Company's first fiscal quarter commencing after the effective date
of the Registration Statement;
(xx) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the
terms of the TIA; and execute and use their best efforts to cause the
Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
(xxi) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which
any Notes are then listed if requested by the Holders of a majority in
aggregate principal amount of Series A Notes or the managing
underwriter(s), if any; and
(xxii) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of Section
13 and Section 15 of the Exchange Act.
12
<PAGE> 14
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(c)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's or the Guarantors'
performance of or compliance with this Agreement will be borne by the Company
and the Guarantors, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filings made by any Initial Purchasers or Holder with
the NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including printing certificates for the Series B Notes to be issued in the
Exchange Offer and printing of Prospectuses), messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Company, the
Guarantors and, subject to Section 7(b) below, the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing Notes on a national securities exchange or automated quotation system
pursuant to the requirements hereof; and (vi) all fees and disbursements of
independent certified public accountants of the Company and the Guarantors
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Company and the Guarantors will, in any event, bear their
internal expenses (including, without limitation, all salaries and expenses of
their officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or resold pursuant to the
"Plan of Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Latham & Watkins or such other counsel as may be chosen by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities for
whose benefit such Registration Statement is being prepared.
13
<PAGE> 15
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder, (ii) each person, if any, who
controls any Holder within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and (iii) the respective officers, directors, partners,
employees, representatives and agents of each Holder or any controlling person
to the fullest extent lawful, from and against any and all losses, liabilities,
claims, damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or Prospectus, or in
any supplement thereto or amendment thereof, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company and the Guarantors will not be liable in any such case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with information relating to any Holder furnished to the
Company in writing by or on behalf of such Holder expressly for use therein.
This indemnity agreement will be in addition to any liability which the Company
and the Guarantors may otherwise have, including, under this Agreement.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless (i) the Company and the Guarantors, (ii) each person, if any, who
controls the Company and the Guarantors within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act and (iii) the respective officers,
directors, partners, employees, representatives and agents of the Company and
the Guarantors, against any losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any investigation or litigation, commenced or threatened, or any claim
whatsoever and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with information relating to any Holder furnished to the Company in
writing by or on behalf of such Holder expressly for use therein; provided,
however, that in no case shall any Holder be liable or responsible for any
amount in excess of the dollar amount of the proceeds received by such Holder
upon the sale of the Notes giving rise to such indemnification obligation. This
indemnity will be in addition to any liability which any Holder may otherwise
have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made
14
<PAGE> 16
against the indemnifying party under such subsection, notify each party against
whom indemnification is to be sought in writing of the commencement thereof (but
the failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses of counsel shall be borne by the indemnifying
parties; provided, however, that the indemnifying party under subsection (a) or
(b) above shall only be liable for the legal expenses of one counsel (in
addition to any local counsel) for all indemnified parties in each jurisdiction
in which any claim or action is brought. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its prior written consent;
provided, however, that such consent was not unreasonably withheld.
(d) In order to provide for contribution in circumstances in which
the indemnification provided for in this Section 8 is for any reason held to be
unavailable from the Company and the Guarantors or is insufficient to hold
harmless a party indemnified hereunder, the Company and the Guarantors, on the
one hand, and each Holder, on the other hand, shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and expenses
suffered by the Company and the Guarantors, any contribution received by the
Company and the Guarantors from persons, other than the Holders, who may also be
liable for contribution, including persons who control the Company and the
Guarantors within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act) to which the Company, the Guarantors and such Holder may be
subject, in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Guarantors, on one hand, and such Holder, on the
other hand, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in this Section 8, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Guarantors, on the one hand, and such
Holder, on the other hand, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Guarantors, on one hand, and each Holder, on the other hand,
shall be deemed to be in the same proportion as (i) the total proceeds from the
offering of the Notes (net of discounts but before deducting expenses) received
by the Company and the Guarantors and (ii) the total proceeds received by such
Holder upon the sale of the Notes giving rise to such indemnification
obligation. The relative fault of the Company and the Guarantors, on the one
hand, and of each Holder, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
15
<PAGE> 17
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Guarantors or such Holder
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Guarantors and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 8(d), (i) in no case shall any Holder be required to contribute
any amount in excess of the dollar amount by which the proceeds received by such
Holder upon the sale of the Notes exceeds the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8(d), (A) each
person, if any, who controls any Holder within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act and (B) the respective officers,
directors, partners, employees, representatives and agents of each Holder or any
controlling person shall have the same rights to contribution as such Holder,
and each person, if any, who controls the Company and the Guarantors within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as the Company and the Guarantors, subject in
each case to clauses (i) and (ii) of this Section 8(d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section
8(d), notify such party or parties from whom contribution may be sought, but the
failure to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 8(d) or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent; provided, however, that such written consent was not
unreasonably withheld.
SECTION 9. RULE 144A
The Company and the Guarantors hereby agree with each Holder, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
16
<PAGE> 18
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company and the Guarantors agree that monetary
damages (including the liquidated damages contemplated hereby) would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company and the Guarantors will
not, on or after the date of this Agreement, enter into any agreement with
respect to their respective securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. Neither of the Company nor any of the Guarantors has
previously entered into any agreement granting any registration rights with
respect to its securities to any Person. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's securities under any agreement in
effect on the date hereof.
(c) Adjustments Affecting the Notes. Neither the Company nor any
Guarantor will take any action with respect to the Notes that would materially
and adversely affect the ability of the Holders to Consummate any Exchange
Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records
of the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and
17
<PAGE> 19
(ii) if to the Company or any of the Guarantors:
Dyersburg Corporation
1315 Phillips Street
Dyersburg, Tennessee 38024
Telecopy No.: (901) 286-3411
Attention: Chief Financial Officer
With copies to:
Bass, Berry & Sims PLC
2700 First American Center
Nashville, Tennessee 37238
Telecopy No.: (615) 742-2763
Attention: J. Page Davidson, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, first class, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement, together with the other
Operative Documents (as defined in the Purchase Agreement), is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
18
<PAGE> 20
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by the
Company with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
[signature page follows]
19
<PAGE> 21
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
DYERSBURG CORPORATION
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
DYERSBURG FABRICS INC.
By: /s/ W. S. Shropshire, Jr.
-----------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
DYERSBURG FABRICS LIMITED PARTNERSHIP, I
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
DFIC, INC.
By: /s/ Paul L. Hallock
------------------------------------
Name: Paul L. Hallock
Title: Vice President and Treasurer
IQUE, INC.
By: /s/ W. S. Shropshire, Jr.
------------------------------------
Name: W. S. Shropshire, Jr.
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
IQUEIC, INC.
By: /s/ Paul L. Hallock
------------------------------------
Name: Paul L. Hallock
Title: Vice President and Treasurer
<PAGE> 22
IQUE LIMITED PARTNERSHIP, I
By:
----------------------------------
Name:
Title:
UNITED KNITTING INC.
By:
----------------------------------
Name:
Title:
UKIC, INC.
By:
----------------------------------
Name:
Title:
UNITED KNITTING LIMITED PARTNERSHIP, I
By:
----------------------------------
Name:
Title:
ALAMAC KNIT FABRICS INC.
By:
----------------------------------
Name:
Title:
ALAMAC ENTERPRISES INC.
By:
----------------------------------
Name:
Title:
21
<PAGE> 23
AIH INC.
By:
----------------------------------
Name:
Title:
BEAR, STEARNS & CO. INC.
By:
--------------------------------
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By:
--------------------------------
Name:
Title:
<PAGE> 1
Exhibit 10.4
EXECUTION COUNTERPART
================================================================================
CREDIT AGREEMENT
dated as of August 27, 1997
among
DYERSBURG CORPORATION,
DYERSBURG FABRICS LIMITED PARTNERSHIP, I,
UNITED KNITTING LIMITED PARTNERSHIP, I,
IQUE LIMITED PARTNERSHIP, I,
ALAMAC KNIT FABRICS, INC.,
THE LENDERS LISTED HEREIN,
SUNTRUST BANK, ATLANTA,
AS AGENT
and
SUNTRUST BANK, ATLANTA,
AS COLLATERAL AGENT
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1. DEFINITIONS; CONSTRUCTION............................................................2
Section 1.01. Definitions....................................................................2
Section 1.02. Accounting Terms and Determination............................................26
Section 1.03. Other Definitional Terms......................................................27
Section 1.04. Exhibits and Schedules........................................................27
ARTICLE 2. TERM LOANS..........................................................................27
Section 2.01. Amount of Term Loans..........................................................27
Section 2.02. Notes; Repayment of Principal.................................................28
Section 2.03. Mandatory Prepayments.........................................................28
Section 2.04. Use of Proceeds...............................................................29
ARTICLE 3. REVOLVING LOANS.....................................................................29
Section 3.01. Description of Revolving Credit Facilities....................................29
Section 3.02. Revolving Loans...............................................................30
Section 3.03. Swing Line Loans..............................................................30
Section 3.04. L/C Subcommitment.............................................................32
Section 3.05. Notice of Issuance of Letter of Credit; Agreement to Issue....................32
Section 3.06. Payment of Amounts drawn under Letter of Credit...............................33
Section 3.07. Payment by Lenders............................................................34
Section 3.08 Obligations Absolute..........................................................34
Section 3.09. Indemnification; Nature of Agent's Duties.....................................35
Section 3.10. Reductions of Revolving Loan Commitments......................................36
Section 3.11. Mandatory Prepayments of Revolving Loans......................................36
Section 3.12. Use of Proceeds...............................................................37
ARTICLE 4. GENERAL LOAN TERMS..................................................................37
Section 4.01. Funding Notices...............................................................37
Section 4.02. Disbursement of Funds.........................................................39
Section 4.03. Interest......................................................................41
Section 4.04. Interest Periods..............................................................42
Section 4.05. Fees..........................................................................43
Section 4.06. Voluntary Prepayments of Borrowings...........................................44
Section 4.07. Payments, etc.................................................................45
Section 4.08. Interest Rate Not Ascertainable, etc..........................................46
Section 4.09. Illegality....................................................................47
Section 4.10. Increased Costs...............................................................47
Section 4.11. Lending Offices...............................................................49
Section 4.12. Funding Losses................................................................49
</TABLE>
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<TABLE>
<CAPTION>
PAGE
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<S> <C>
Section 4.13. Assumptions Concerning Funding of Eurodollar Advances.........................50
Section 4.14. Apportionment of Payments.....................................................50
Section 4.15. Sharing of Payments, Etc......................................................50
Section 4.16. Capital Adequacy..............................................................50
Section 4.17. Limitation on Certain Payment Obligations.....................................51
Section 4.18. Benefits to Guarantors........................................................52
Section 4.19. Application of Loan Proceeds to Maturing Loans................................52
ARTICLE 5. CONDITIONS TO BORROWINGS............................................................52
Section 5.01. Conditions Precedent to Initial Loans and Letters of Credit...................52
Section 5.02. Conditions to All Loans and Letters of Credit.................................56
ARTICLE 6. REPRESENTATIONS AND WARRANTIES......................................................57
Section 6.01. Organizational Existence; Compliance with Law.................................57
Section 6.02. Organizational Power; Authorization...........................................57
Section 6.03. Enforceable Obligations.......................................................58
Section 6.04. No Legal Bar..................................................................58
Section 6.05. No Material Litigation........................................................58
Section 6.06. Investment Company Act, Etc...................................................58
Section 6.07. Margin Regulations............................................................58
Section 6.08. Compliance With Environmental Laws............................................58
Section 6.09. Insurance.....................................................................59
Section 6.10. No Default....................................................................59
Section 6.11. No Burdensome Restrictions....................................................59
Section 6.12. Taxes.........................................................................60
Section 6.13. Subsidiaries..................................................................60
Section 6.14. Financial Statements..........................................................60
Section 6.15. ERISA.........................................................................61
Section 6.16. Patents, Trademarks, Licenses, Etc............................................62
Section 6.17. Ownership of Property.........................................................63
Section 6.18. Indebtedness..................................................................63
Section 6.19. Financial Condition...........................................................63
Section 6.20. Intercompany Loans............................................................63
Section 6.21. Labor Matters.................................................................64
Section 6.22. Payment or Dividend Restrictions..............................................64
Section 6.23. Alamac Acquisition............................................................64
Section 6.24 Continuing Business of Alamac Holdings........................................64
Section 6.25. Consents to Alamac Acquisition................................................65
Section 6.26. Obligations Constitute Designated Senior Debt.................................65
Section 6.27. Representations and Warranties Relating to Accounts...........................65
</TABLE>
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<PAGE> 4
<TABLE>
<CAPTION>
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<S> <C>
Section 6.28. Representations and Warranties Relating to Inventory..........................66
Section 6.29. Disclosure....................................................................66
ARTICLE 7. AFFIRMATIVE COVENANTS...............................................................66
Section 7.01. Organizational Existence, Etc.................................................66
Section 7.02. Compliance with Laws, Etc.....................................................66
Section 7.03. Payment of Taxes and Claims, Etc..............................................67
Section 7.04. Keeping of Books..............................................................67
Section 7.05. Visitation, Inspection, Etc...................................................67
Section 7.06. Insurance; Maintenance of Properties..........................................67
Section 7.07. Reporting Covenants...........................................................68
Section 7.08. Alamac Acquisition Agreement..................................................72
Section 7.09. Financial Covenants...........................................................72
Section 7.10. Notices Under Certain Other Indebtedness......................................75
Section 7.11. Additional Credit Parties and Collateral......................................75
Section 7.12. Additional Reports............................................................76
Section 7.13. Post Closing Requirements.....................................................76
ARTICLE 8. NEGATIVE COVENANTS..................................................................76
Section 8.01. Indebtedness..................................................................76
Section 8.02. Liens.........................................................................77
Section 8.03. Mergers, Asset Sales, Etc.....................................................78
Section 8.04. Dividends, Etc................................................................79
Section 8.05. Acquisitions; Investments, Loans, Etc. ......................................80
Section 8.06. Sale and Leaseback Transactions...............................................81
Section 8.07. Transactions with Affiliates..................................................81
Section 8.08. Prepayments...................................................................82
Section 8.09. Changes in Business...........................................................82
Section 8.10. ERISA.........................................................................82
Section 8.11. Additional Negative Pledges...................................................82
Section 8.12. Limitation on Payment Restrictions Affecting Consolidated Companies...........82
Section 8.13. Actions Under Certain Documents...............................................83
Section 8.14. Designated Senior Debt; Ability to Incur Additional Senior Debt...............83
Section 8.15. Change of Fiscal Year.........................................................83
Section 8.16. Sale or Discount of Receivables...............................................83
ARTICLE 9. EVENTS OF DEFAULT...................................................................84
Section 9.01. Payments......................................................................84
Section 9.02. Covenants Without Notice......................................................84
</TABLE>
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<PAGE> 5
<TABLE>
<CAPTION>
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<S> <C>
Section 9.03. Other Covenants...............................................................84
Section 9.04. Representations...............................................................84
Section 9.05. Non-Payments of Other Indebtedness............................................84
Section 9.06. Defaults Under Other Agreements...............................................84
Section 9.07. Bankruptcy....................................................................85
Section 9.08. ERISA.........................................................................85
Section 9.09. Judgment......................................................................86
Section 9.10. Ownership of Credit Parties...................................................86
Section 9.11. Change in Control of Parent...................................................86
Section 9.12. Default Under Other Credit Documents..........................................86
Section 9.13. Default Under Interest Rate Contract or Currency Contract.....................86
Section 9.14. Attachments...................................................................86
ARTICLE 10. THE AGENT; COLLATERAL AGENT.........................................................87
Section 10.01 Appointment of Agent.........................................................87
Section 10.02. Appointment of Collateral Agent..............................................87
Section 10.03. Nature of Duties of Agents...................................................88
Section 10.04. Lack of Reliance on the Agents...............................................88
Section 10.05. Certain Rights of the Agents.................................................89
Section 10.06. Reliance by Agents...........................................................89
Section 10.07. Indemnification of Agents....................................................89
Section 10.08. The Agents in their Individual Capacity......................................90
Section 10.09. Holders of Notes.............................................................90
Section 10.10. Successor Agents.............................................................90
ARTICLE 11. MISCELLANEOUS.......................................................................91
Section 11.01. Notices......................................................................91
Section 11.02. Amendments, Etc..............................................................91
Section 11.03. No Waiver; Remedies Cumulative...............................................92
Section 11.04. Payment of Expenses, Etc.....................................................92
Section 11.05. Right of Setoff..............................................................94
Section 11.06. Benefit of Agreement; Assignments; Participations............................94
Section 11.07. Governing Law; Submission to Jurisdiction....................................96
Section 11.08. Confidentiality..............................................................97
Section 11.09. Independent Nature of Lenders' Rights........................................98
Section 11.10. Intent Not To Violate Usury Laws.............................................98
Section 11.11. Counterparts.................................................................99
Section 11.12. Survival.....................................................................99
Section 11.13. Severability.................................................................99
Section 11.14. Independence of Covenants....................................................99
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
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<S> <C>
Section 11.15. Change in Accounting Principles, Fiscal Year or Tax Laws.....................99
Section 11.16. Headings Descriptive; Entire Agreement......................................100
</TABLE>
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<PAGE> 7
EXHIBITS
EXHIBIT A - FORM OF TERM NOTE
EXHIBIT B - FORM OF REVOLVING NOTE
EXHIBIT C - FORM OF SWING LINE NOTE
EXHIBIT D-1 - FORM OF PARENT GUARANTY
EXHIBIT D-2 - FORM OF AFFILIATE GUARANTY
EXHIBIT E-1 - FORM OF BORROWER SECURITY AGREEMENT
EXHIBIT E-2 - FORM OF AFFILIATE SECURITY AGREEMENT
EXHIBIT F-1 - FORM OF PLEDGE AND SECURITY AGREEMENT
EXHIBIT F-2 - FORM OF PARENT PLEDGE AND SECURITY AGREEMENT
EXHIBIT F-3 - FORM OF BOND PLEDGE AGREEMENT
EXHIBIT G - FORM OF CLOSING CERTIFICATE
EXHIBIT H-1 - FORM OF BORROWER'S COUNSEL OPINION
EXHIBIT H-2 - FORM OF NORTH CAROLINA'S COUNSEL OPINION
EXHIBIT I - FORM OF CONTRIBUTION AGREEMENT
EXHIBIT J - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT K - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULES
SCHEDULE 1.01 - REAL PROPERTY
SCHEDULE 2.02 - TERM LOAN AMORTIZATION SCHEDULE
SCHEDULE 5.01 - UCC SEARCH LOCATIONS
SCHEDULE 6.01 - SUBSIDIARIES OF PARENT
SCHEDULE 6.05 - LITIGATION
SCHEDULE 6.08(A) - ENVIRONMENTAL CLAIMS
SCHEDULE 6.08(B) - ENVIRONMENTAL NOTICES
SCHEDULE 6.11 - BURDENSOME RESTRICTIONS
SCHEDULE 6.12 - TAXES
SCHEDULE 6.13 - MATERIAL SUBSIDIARIES
SCHEDULE 6.15 - ERISA MATTERS
SCHEDULE 6.16 - PATENTS AND TRADEMARKS
SCHEDULE 6.20 - INTERCOMPANY LOANS
SCHEDULE 6.21 - LABOR MATTERS
SCHEDULE 6.22 - PAYMENT OR DIVIDEND RESTRICTIONS
SCHEDULE 7.09 - PRO FORMA FINANCIAL COVENANT CALCULATIONS
SCHEDULE 8.01(B) - EXISTING INDEBTEDNESS
SCHEDULE 8.02 - EXISTING LIENS
- vi -
<PAGE> 8
CREDIT AGREEMENT
THIS CREDIT AGREEMENT made and entered into as of August 27,
1997, by and among DYERSBURG CORPORATION, a Tennessee corporation ("Parent"),
DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited partnership
("DFLP"), UNITED KNITTING LIMITED PARTNERSHIP, I, a Tennessee limited
partnership ("UKLP"), IQUE LIMITED PARTNERSHIP, I, a Tennessee limited
partnership ("IQLP"), ALAMAC KNIT FABRICS, INC., a Delaware corporation
("Alamac"; Parent, DFLP, UKLP, IQLP and Alamac referred to collectively herein
as the "Borrowers"), SUNTRUST BANK, ATLANTA, a banking corporation organized
under the laws of the State of Georgia ("STBA"), the other financial
institutions listed on the signatures pages hereof (STBA and such other banks,
lending institutions, and assignees referred to collectively herein as the
"Lenders"), SUNTRUST BANK, ATLANTA, in its capacity as agent for the Lenders and
each successor agent for such Lenders as may be appointed from time to time
pursuant to Article X hereof (the "Agent") and SUNTRUST BANK, ATLANTA, in its
capacity as collateral agent for the Agent and Lenders and each successor
collateral agent as may be appointed from time to time pursuant to Article X
hereof (the "Collateral Agent");
W I T N E S S E T H:
WHEREAS, Parent owns, directly or indirectly, all of the
outstanding shares of capital stock or partnership interests of the DFLP, UKLP
and IQLP;
WHEREAS, simultaneously upon the funding of the initial
advance pursuant to this Agreement, Parent will be (i) consummating the Alamac
Acquisition pursuant to the terms of the Alamac Acquisition Agreement (such
terms and other terms used in these recitals having the meanings assigned
thereto in Section 1.01 of this Agreement), whereupon Parent will own,
indirectly, all of the outstanding shares of capital stock of Alamac, (ii)
issuing the Senior Subordinated Notes, and (iii) repaying all Indebtedness
outstanding pursuant to the Existing Credit Agreement and Existing Senior Notes
(collectively, the "Transaction");
WHEREAS, the Lenders, the Agent, and the Collateral Agent have
agreed to extend certain credit facilities to the Borrowers to allow for, among
other things, (i) the repayment, on the Closing Date, of all amounts outstanding
under the Existing Credit Agreement and the Existing Senior Notes, (ii) the
funding, on the Closing Date, of a portion of the purchase price and expenses
incurred in connection with the Alamac Acquisition, (iii) after the Closing
Date, borrowings for the working capital and general corporate and partnership
purposes of the Borrowers, and (iv) on and after the Closing Date, the issuance
or deemed issuance by the Agent of Letters of Credit on behalf of or for the
benefit of the Borrowers, all on the terms and subject to the conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the Borrowers, the Lenders, the Agent and the
Collateral Agent agree as follows:
<PAGE> 9
ARTICLE 1.
DEFINITIONS; CONSTRUCTION
SECTION 1.01. DEFINITIONS. In addition to the other terms
defined herein, the following terms used herein shall have the meanings herein
specified (to be equally applicable to both the singular and plural forms of the
terms defined):
"Account Debtor" shall mean any Person who is or who may
become obligated to any Revolving Borrower under or on account of a Receivable.
"Acquisition" shall mean any transaction, or any series of
related transactions, by which Parent and/or any of its Subsidiaries directly or
indirectly (a) acquires any ongoing business or all or substantially all of the
assets of any Person or division thereof, whether through purchase of assets,
merger or otherwise, (b) acquires (in one transaction or as the most recent
transaction in a series of transactions) control of at least a majority in
ordinary voting power of the securities of a Person which have ordinary voting
power for the election of directors or (c) otherwise acquires control of a 50%
or more ownership interest in any such Person.
"Adjusted Funded Debt Coverage Ratio" shall mean, as of the
last day of any fiscal quarter of Parent, the ratio of (A) Total Adjusted Funded
Debt as of such date, to (B) Consolidated EBITDAR for the fiscal quarter then
ending and the immediately preceding three fiscal quarters.
"Adjusted LIBO Rate" shall mean, with respect to each Interest
Period for a Eurodollar Advance, the rate obtained by dividing (A) LIBOR for
such Interest Period by (B) a percentage equal to 1 minus the then stated
maximum rate (stated as a decimal) of all reserves requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) applicable to any member bank of the Federal Reserve System in respect
of Eurocurrency liabilities as defined in Regulation D (or against any successor
category of liabilities as defined in Regulation D).
"Adjusted Working Capital" shall mean, as of the date of any
determination (i) the sum of all inventory, prepaid expenses and accounts
receivable of the Consolidated Companies, minus (ii) the sum of all accounts
payable and accrued expenses of the Consolidated Companies, in each case,
determined on a consolidated basis in conformity with GAAP.
"Ad Valorem Bonds" shall mean those certain industrial revenue
bonds issued in connection with that certain lease financing for the
construction and equipping of DFLP's knitting facility in Dyersburg, Tennessee
in the amount of approximately $7,600,000.
"Advance" shall mean any principal amount advanced or to be
advanced and outstanding at any time under (i) the Term Loans or the Revolving
Loans, which Advance shall be made or outstanding as a Base Rate Advance or
Eurodollar Advance, as the case may be, or (ii) the
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<PAGE> 10
Swing Line Loans, which Advance shall be made or outstanding as a Base Rate
Advance or Transaction Rate Advance, as the case may be.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person.
"Affiliate Guaranty Agreement" shall mean that certain
Guaranty Agreement executed by the Guarantors (other than the Parent) in favor
of the Lenders and the Agents, substantially in the form of Exhibit D-2, as the
same may be amended, restated or supplemented from time to time.
"Affiliate Security Agreement" shall mean that certain
Security Agreement executed by each of the Guarantors (other than the Revolving
Borrowers) substantially in the form of Exhibit E-2, granting security interest
in substantially all of the personal property of such Guarantors to the
Collateral Agent, for the benefit of the Lenders, either as originally executed
or as hereafter amended or modified
"Aggregate L/C Outstanding" shall mean, at any time with
respect to all outstanding Letters of Credit, the sum of the L/C Outstanding for
each Letter of Credit.
"Agent" shall mean STBA, acting in the manner and to the
extent described in Article X, and any successor agent appointed pursuant to
Article X hereof.
"Agents" shall mean, collectively, the Agent and the
Collateral Agent.
"Agreement" shall mean this Credit Agreement, as the same may
be further amended, restated, or supplemented from time to time.
"Alamac Holdings" shall mean AIH Inc., a Delaware corporation
and the owner of 100% of the outstanding stock of Alamac Enterprises, Inc.
and Alamac.
"Alamac Acquisition" shall mean the acquisition by Parent of
all the capital stock of Alamac Holdings through the consummation of the
transactions described in the Alamac Acquisition Agreement.
"Alamac Acquisition Agreement" shall mean that certain Stock
Purchase Agreement dated as of July 15, 1997, among Parent, as purchaser, Alamac
Holdings and Alamac Sub Holdings, Inc. and its parent corporation, Westpoint
Stevens Inc. (collectively, the "Sellers"), wherein Parent agreed to purchase
the outstanding capital stock of Alamac Holdings from the Sellers for a cash
purchase price of $126,000,000, as supplemented by that certain Supplemental
Environmental Indemnity, dated as of July 15, 1997, by and among Parent and
Sellers.
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<PAGE> 11
"Applicable Commitment Fee Rate" shall mean, with respect to
any calculation of the Commitment Fee hereunder, (i) through the last day of the
second Fiscal Quarter of 1998, one half of one percent (0.50%) per annum, and
(ii) thereafter, the percentage per annum determined by reference to the
following chart set forth below based on Parent's Adjusted Funded Debt Coverage
Ratio calculated as of the relevant determination date in accordance with
Section 7.09(c):
<TABLE>
<CAPTION>
Adjusted Funded Debt Applicable Commitment
Coverage Ratio Fee Rate
-------------- --------
<S> <C>
Less than or equal to 2.5:1.0 .15%
Greater than 2.5:1.0, but less than
or equal to 3.5:1.0 .25%
Greater than 3.5:1.0, but less than
or equal to 4.00:1.0 .375%
Greater than 4.00:1.0 .50%
</TABLE>
Each change in the Applicable Commitment Fee Rate resulting from a change in the
Adjusted Funded Debt Coverage Ratio shall be effective from and after the date
that any change in the Applicable Margin is effective. Notwithstanding the
foregoing, at any time during which Parent has failed to deliver the financial
statements and certificates when required by Section 7.07(a), (b), and (c), as
applicable, the Applicable Commitment Fee Rate shall be .50%.
"Applicable Margin" shall mean, (i) with respect to all
Eurodollar Advances outstanding through the last day of the second Fiscal
Quarter of 1998, two and one-quarter of one percent (2.25%) per annum, (ii) with
respect to all Base Rate Advances outstanding through the last day of the second
Fiscal Quarter of 1998, zero percent (0.00%) per annum, and (iii) with respect
to all Advances outstanding thereafter, the relevant percentage indicated below
for the Parent's Adjusted Funded Debt Coverage Ratio, as determined quarterly,
based upon the financial statements delivered to the Lenders pursuant to Section
7.07(a) or Section 7.07(b) hereof, as the case may be in accordance with Section
7.09(c), with such Applicable Margin to be effective with respect to
calculations based upon the financial statements delivered pursuant to Section
7.07 as of the first day of the second Fiscal Quarter immediately following the
Fiscal Quarter for which such financial statements are delivered (for example,
the Applicable Margin effective as of the first day of the third Fiscal Quarter
shall be calculated based upon the financial statements delivered for the first
Fiscal Quarter of the Parent):
<TABLE>
<CAPTION>
Adjusted Funded Debt Applicable Margin Applicable Margin
Coverage Ratio for Eurodollar Advances for Base Rate Advances
-------------- ----------------------- ----------------------
<S> <C> <C>
Less than or equal to 2.5:1.0 .75% 0%
</TABLE>
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<PAGE> 12
<TABLE>
<S> <C> <C>
Greater than 2.5:1.0, but less than
or equal to 3.0:1.0 1.00% 0%
Greater than 3.0:1.0, but less than
or equal to 3.5:1.0 1.50% 0%
Greater than 3.5:1.0, but less than
or equal to 4.0:1.0 1.75% 0%
Greater than 4.0:1.0, but less than
or equal to 4.5:1.0 2.25% 0%
Greater than 4.5:1.0 2.75% 0.25%
</TABLE>
Notwithstanding the foregoing, at any time during which Parent has failed to
deliver the financial statements and certificates when required by Section
7.07(a), (b), and (c), as applicable, the Applicable Margin with respect to
Eurodollar Advances then outstanding shall be 2.75% and the Applicable Margin
with respect to Base Rate Advances shall be 0.25%.
"Asset Sale" shall mean any sale or other disposition (or a
series of related sales or other dispositions), including without limitation,
loss, damage, destruction or taking, by any Consolidated Company to any Person
other than a Credit Party, of any property or asset (including capital stock but
excluding the issuance and sale by Parent of its own capital stock) having an
aggregate Asset Value in excess of $100,000, other than sales of inventory made
in the ordinary course of business of any Consolidated Company.
"Asset Value" shall mean, with respect to any property or
asset of any Consolidated Company, an amount equal to the greater of (i) the
book value of such property or asset as established in accordance with GAAP, and
(ii) the fair market value of such property or asset as determined in good faith
by the board of directors or other governing body of such Consolidated Company.
"Assignment of Purchase Agreement" shall mean that certain
assignment of Purchase Agreement executed by the Parent collaterally assigning
its rights under the Alamac Acquisition Agreement to the Collateral Agent, for
the benefit of the Lenders, either as originally executed or as hereafter
amended or modified.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an Eligible Assignee in accordance with
the terms of this Agreement and substantially in the form of Exhibit K.
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as
amended and in effect from time to time (11 U.S.C. ss. 101 et seq.).
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<PAGE> 13
"Base Rate" shall mean (with any change in the Base Rate to be
effective as of the date of change of either of the following rates) the higher
of (a) the rate which the Agent publicly announces from time to time to be its
prime lending rate, as in effect from time to time, and (b) the Federal Funds
Rate, as in effect from time to time, plus one-half of one percent (0.50%) per
annum. The Agent's prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers; the Agent
may make commercial loans or other loans at rates of interest at, above or below
the Agent's prime lending rate.
"Base Rate Advance" shall mean an Advance made or outstanding
as (i) a portion of the Term Loans or Revolving Loans, as the case may be,
bearing interest based on the Base Rate as provided in Section 2.01(b) and
Section 3.02(b) or (ii) Swing Line Loans bearing interest based on the Base Rate
as provided in Section 3.03(b).
"Bond Pledge Agreement" shall mean that certain Pledge
Agreement executed by Parent in favor of the Collateral Agent, for the benefit
of the Lenders, pledging the Ad Valorem Bonds, either as originally executed or
as hereafter amended or modified.
"Borrower Security Agreement" shall mean that certain Security
Agreement executed by each of the Borrowers substantially in the form of Exhibit
E-1, granting a security interest in all of the personal property of the
Borrowers to the Collateral Agent, for the benefit of the Lenders, either as
originally executed or as hereafter amended or modified.
"Borrowers" shall mean, collectively, (i) the Term Borrowers,
and (ii) the Revolving Borrowers, and their respective successors and permitted
assigns.
"Borrowing" shall mean the incurrence by any Borrower under
any Facility of Advances of one Type concurrently having the same Interest
Period (except as otherwise provided in Sections 4.09 and 4.10) or the
continuation or conversion of an existing Borrowing or Borrowings in whole or in
part.
"Borrowing Base" shall mean the sum of (a) eighty-five percent
(85%) of the net amount of Revolving Borrowers' Eligible Receivables; plus (b)
fifty percent (50%) of the net value of the Revolving Borrowers' Eligible
Inventory (calculated on the basis of actual cost and with cost calculated on a
FIFO basis) plus (c) for so long as the IRB LC is outstanding and deemed to be a
utilization of the Borrowing Base, the stated amount of the IRB LC.
"Borrowing Base Certificate" shall mean a certificate of an
authorized officer of the Revolving Borrowers substantially in the form of
Exhibit J attached hereto.
"Business Day" shall mean any day excluding Saturday, Sunday
and any other day on which banks are required or authorized to close in Atlanta,
Georgia and, if the applicable Business Day relates to Eurodollar Advances, any
day on which trading is not carried on by and between banks in deposits of the
applicable currency in the applicable interbank Eurocurrency market.
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<PAGE> 14
"Capital Expenditures" shall mean, for any period, the sum of
(i) expenditures (whether paid in cash or accrued as a liability, including the
portion of capital leases originally incurred during such period that is
capitalized on the consolidated balance sheet of the Consolidated Companies) by
the Consolidated Companies during that period that, in conformity with GAAP, are
included in "capital expenditures", "additions to property, plant or equipment"
or comparable items in the financial statements of the Consolidated Companies,
and (ii) to the extent not included in clause (i) above, expenditures for all
net non-current assets of businesses acquired by the Consolidated Companies
during that period, including all purchase price adjustments, other than such
assets acquired in transactions where all or substantially all of the
consideration paid for such assets consisted of capital stock of a Consolidated
Company.
"Capital Lease" shall mean, as applied to any Person, any
lease of any property (whether real, personal or mixed) by such Person as lessee
which would, in accordance with GAAP, be required to be classified and accounted
for as a capital lease on a balance sheet of such Person, other than, in the
case of Parent or any of its Subsidiaries, any such lease under which Parent or
a wholly-owned Subsidiary of Parent is the lessor.
"Capital Lease Obligation" shall mean, with respect to any
Capital Lease, the amount of the obligation of the lessee thereunder which
would, in accordance with GAAP, appear on a balance sheet of such lessee in
respect of such Capital Lease.
"Cash Taxes Paid" shall mean, for any fiscal period of Parent,
the provision of the Consolidated Companies for taxes paid as shown on the
income statement of Parent for such period minus any increase (or plus any
decrease) in the provision for deferred taxes of the Consolidated Companies as
included in the long-term liabilities of Parent, determined on a consolidated
basis in accordance with GAAP.
"Change in Control" shall mean the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Parent and its
Subsidiaries taken as a whole to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act) ; (ii) the adoption of a plan relating to the
liquidation or dissolution of the Parent or any of its Material Subsidiaries;
(iii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as defined
above), other than Texmaco, becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 25% of the Voting Stock of the
Parent (measured by voting power rather than number of shares); (iv) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that Texmaco, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that Texmaco shall be deemed to have "beneficial ownership" of all
securities that Texmaco has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a
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<PAGE> 15
subsequent condition), directly or indirectly, of more than 51% of the Voting
Stock of the Parent (measured by voting power rather than number of shares); or
(v) the first day on which two-thirds or less of the members of the Board of
Directors of the Parent are Continuing Directors.
"Change in Control Provision" shall mean any term or provision
contained in any indenture, debenture, note, or other agreement or document
evidencing or governing Parent Control Debt which requires, or permits the
holder(s) of such Parent Control Debt to require, that such Parent Control Debt
be redeemed, repurchased, defeased, prepaid or repaid, either in whole or in
part, or the maturity of such Parent Control Debt to be accelerated in any
respect, as a result of a change in ownership of the capital stock of Parent or
voting rights with respect thereto.
"Closing Date" shall mean August 27, 1997 or such later date
on which the initial Loans are made and the conditions set forth in Section 5.01
and 5.02 are satisfied.
"Collateral" shall mean all of the assets of the Credit
Parties subject to a Lien in favor of the Collateral Agent, for the benefit of
the Lenders, pursuant to the Security Documents.
"Collateral Agent" shall mean STBA acting in the capacity as
collateral agent, collateral trustee, pledgee, secured party, or any similar
capacity under any Security Document, any nominee or designee of STBA acting in
such capacity, and any successor collateral agent appointed from time to time
pursuant to Article X.
"Collateral Locations" shall mean all Real Property and all
other locations of Collateral described on Exhibit "B" attached to the Security
Agreements.
"Commitment" shall mean (i) for any Lender at any time, any of
its Term Loan Commitment or Revolving Loan Commitment, and (ii) for the Swing
Line Lender at any time, its Swing Line Commitment, in each case as the context
may require.
"Commitment Fee" shall have the meaning set forth in
Section 4.05(a).
"Consolidated Companies" shall mean, collectively, Parent and
all of its Subsidiaries.
"Consolidated EBIT" shall mean, for any fiscal period of
Parent, an amount equal to (A) the sum for such fiscal period of Consolidated
Net Income (Loss) plus, to the extent subtracted in determining such
Consolidated Net Income (Loss), provisions for taxes based on income, and
Consolidated Interest Expense, minus (B) any items of gain (or plus any items of
loss) which were included in determining such Consolidated Net Income (Loss) and
were (x) not realized in the ordinary course of business or (y) the result of
any sale of assets.
"Consolidated EBITDA" shall mean, for any fiscal period of
Parent, an amount equal to (i) Consolidated EBIT for such period, plus (ii) to
the extent subtracted in determining Consolidated Net Income (Loss) for such
period, the sum of (x) amortization expense and (y)
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<PAGE> 16
depreciation expense of the Consolidated Companies, in each case, determined for
such period in conformity with GAAP.
"Consolidated EBITDAR" shall mean, for any fiscal period of
Parent, an amount equal to (i) Consolidated EBITDA for such period, plus (ii) to
the extent subtracted in determining Consolidated Net Income (Loss) for such
period, Consolidated Rental Expense determined for such period in conformity
with GAAP.
"Consolidated EBITR" shall mean, for any fiscal period of
Parent, an amount equal to (i) Consolidated EBIT for such period, plus (ii) to
the extent subtracted in determining Consolidated Net Income (Loss) for such
period, Consolidated Rental Expense determined for such period in conformity
with GAAP.
"Consolidated Interest Expense" shall mean, for any fiscal
period of Parent, total interest expense of the Consolidated Companies
(including without limitation, interest expense attributable to Capital Leases
in accordance with GAAP, all capitalized interest, all commissions, discounts
and other fees and charges owed with respect to bankers acceptance financing,
and total interest expense (whether shown as interest expense, other expense, or
as loss and expenses on sale of receivables) under a receivables purchase
facility) determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean, for any fiscal
period of Parent, the net income (or loss) of the Consolidated Companies on a
consolidated basis for such period (taken as a single accounting period)
determined in conformity with GAAP, but excluding therefrom (to the extent
otherwise included therein) (i) any gains or losses, together with any related
provision for taxes, realized upon any sale of assets other than in the ordinary
course of business, (ii) any income or loss of any Person accrued prior to the
date such Person becomes a Subsidiary of Parent or is merged into or
consolidated with any Consolidated Company or all or substantially all of such
Person's assets are acquired by any Consolidated Company, and (iii) the income
of any Consolidated Company to the extent that the declaration or payment of
dividends or similar distributions by such Consolidated Company of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation.
"Consolidated Net Worth" shall mean, as of any date of
determination, Shareholders' Equity of Parent, less treasury stock.
"Consolidated Rental Expense" shall mean, as at any date of
determination, total rental expense of the Consolidated Companies determined on
a consolidated basis in accordance with GAAP.
"Continuing Directors" shall mean, as of any date of
determination, any member of the Board of Directors of the Parent who (i) was a
member of such Board of Directors on the date of the Indenture or (ii) was
nominated for election or elected to such Board of Directors with the
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<PAGE> 17
approval of more than two-thirds of the Continuing Directors who were members of
such Board at the time of such nomination or election.
"Contractual Obligation" of any Person shall mean any
provision of any security issued by such Person or of any agreement, instrument
or undertaking under which such Person is obligated or by which it or any of the
property owned by it is bound.
"Contribution Agreement" shall mean the Contribution Agreement
executed by each of the Guarantors and the Borrowers, substantially in the form
of Exhibit I attached hereto, as the same may be amended, restated or
supplemented from time to time.
"Credit Documents" shall mean, collectively, this Agreement,
the Notes, the Letter of Credit Agreement, the Guaranty Agreements, and all
other Security Documents.
"Credit Parties" shall mean, collectively, each of the
Borrowers and the Guarantors (including all Persons that are currently Borrowers
and Guarantors and all Persons who may at any time in the future become
Borrowers and Guarantors), and every other Person who from time to time executes
a Security Document with respect to all or any portion of the Obligations.
"Currency Contracts" shall mean any forward contracts, futures
contracts, foreign exchange contracts, currency swap agreements, and other
similar agreements and arrangements entered into by any Consolidated Company
designed to protect any Consolidated Company against fluctuations in foreign
exchange rates.
"Current Maturities of Long Term Debt" shall have the meaning
afforded such term under GAAP and shall be calculated with respect to the
Consolidated Companies.
"Default" shall mean any condition or event which, with notice
or lapse of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful
money of the United States of America.
"Eligible Inventory" shall mean and include only such
Inventory of the Revolving Borrowers which is scheduled to the Agents in
accordance with Section 7.12 of this Agreement: (a) which consists solely of
Inventory not deemed to be out of condition, stale, obsolete or otherwise
unmerchantable by the Required Lenders or any governmental agency or any
department or division thereof having regulatory authority over the Borrower or
any of its agents or activities; (b) located at one of the Collateral Locations
within the United States or its territories; (c) which is subject to internal
control and management procedures conducted by Borrower which are reasonably
satisfactory to the Required Lenders; (d) which is subject to a first priority
(other than tax liens or landlord liens constituting Permitted Liens) perfected
security interest in favor of the Agent; (e) which is not consigned Inventory;
and (f) which the Required Lenders determine otherwise to be Eligible Inventory,
based on such credit and collateral considerations as the Required Lenders
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<PAGE> 18
determine to be necessary or advisable from time to time under the circumstances
in the reasonable exercise of their credit judgment.
"Eligible Receivables" shall mean and include only such
Receivables consisting of accounts receivable arising in the ordinary course of
Borrower's business which are scheduled to the Agents and the Lenders in
accordance with Section 7.12 of this Agreement and which the Agents otherwise
determine to be Eligible Receivables based on such credit and collateral
considerations as the Agents may deem reasonably necessary or advisable from
time to time under the circumstances. In any event, however, unless the Agents
specifically consent otherwise in writing, no Receivable shall be considered to
be an Eligible Receivable if: (a) it arises out of a sale made by any Revolving
Borrower to an Affiliate of such Borrower or to a Person controlled by an
Affiliate of such Borrower; or (b) it is due more than sixty (60) days after the
original invoice date; or (c) unpaid more than thirty (30) days after the due
date; or (d) ten percent (10%) or more of the Receivables from the Account
Debtor are more than thirty (30) days past due (other than in circumstances
where clause (f) is applicable); or (e) any covenant, representation or warranty
contained in this Agreement or the Security Agreement with respect to such
Receivable has been breached; or (f) the Account Debtor is also Borrower's
creditor or supplier, or the Account Debtor has disputed liability, or the
Account Debtor has made any claim with respect to any other Receivable due from
such Account Debtor to such Borrower, or the Receivable otherwise is or may
become subject to any right of setoff (actual or potential) by the Account
Debtor, whether by virtue of the terms of the contract between such Borrower and
the Account Debtor, or by virtue of any other defense or claim of the Account
Debtor against such Borrower; provided, however, that the Receivables of such
Account Debtor shall only be ineligible to the extent of such offset or
potential offset; or (g) the Account Debtor has commenced a voluntary case under
the Bankruptcy Code, or made an assignment for the benefit of creditors, or if a
decree or order for relief has been entered by a court having jurisdiction in
the premises in respect of the Account Debtor in an involuntary case under the
Bankruptcy Code, or if any other petition or other application for relief under
the Bankruptcy Code has been filed against the Account Debtor, or if the Account
Debtor has failed, suspended business, ceased to be solvent, or consented to or
suffered a receiver, trustee, liquidator or custodian to be appointed for it or
for all or a significant portion of its assets or affairs; or (h) the sale is to
an Account Debtor outside the United States or Canada, unless the sale is on
letter of credit, guaranty or acceptance terms, in each case acceptable to the
Agents; or (i) the sale to the Account Debtor is on a bill-and-hold, guaranteed
sale, sale-and-return, sale on approval, consignment or any other repurchase or
return basis, except for a repurchase and return basis offered by any Borrower
in the ordinary course of business on the date hereof; or (j) the Agents believe
that collection of such Receivable is insecure or that such Receivable may not
be paid by reason of the Account Debtor's financial inability to pay; or (k) the
Account Debtor is the United States of America or any department, agency or
instrumentality thereof, unless the relevant Revolving Borrower assigns its
right to payment of such Receivable to Collateral Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. ss.ss.3727); or (l) the
goods giving rise to such Receivable have not been shipped and delivered to the
Account Debtor (or, if shipped and delivered, any Borrower has received
knowledge or notice of their loss in transit, mis-delivery or their
non-acceptance by the Account Debtor) or the services giving rise to such
Receivable have not been performed by such Borrower with respect thereto (or, if
performed, such Borrower has received knowledge or notice
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<PAGE> 19
of their non-acceptance by the Account Debtor), or the Receivable otherwise does
not represent a final sale; or (m) the Receivables of any Account Debtor exceed
a credit limit determined by the Agents of which such Borrower has received
prior written notice from Agents, to the extent such Receivables exceed such
limit; or (n) the Collateral Agent does not hold a first priority, perfected
security interest in such Receivables; or (o) the Agents otherwise determine
such Receivables to be ineligible for borrowing purposes hereunder in the
reasonable exercise of their credit judgment.
"Eligible Assignee" shall mean any financial institution
reasonably acceptable to Parent and the Agents.
"Environmental Laws" shall mean all federal, state, local and
foreign statutes and codes or regulations, rules or ordinances issued,
promulgated, or approved thereunder, now or hereafter in effect (including,
without limitation, those with respect to asbestos or asbestos containing
material or exposure to asbestos or asbestos containing material), relating to
pollution or protection of the environment and relating to public health and
safety, relating to (i) emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals or industrial toxic or hazardous
constituents, substances or wastes, including without limitation, any Hazardous
Substance, petroleum including crude oil or any fraction thereof, any petroleum
product or other waste, chemicals or substances regulated by any Environmental
Law into the environment (including without limitation, ambient air, surface
water, ground water, land surface or subsurface strata), or (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of any Hazardous Substance, petroleum including
crude oil or any fraction thereof, any petroleum product or other waste,
chemicals or substances regulated by any Environmental Law, and (iii)
underground storage tanks and related piping, and emissions, discharges and
releases or threatened releases therefrom, such Environmental Laws to include,
without limitation (i) the Clean Air Act (42 U.S.C. ss. 7401 et seq.), (ii) the
Clean Water Act (33 U.S.C. ss. 1251 et seq.), (iii) the Resource Conservation
and Recovery Act (42 U.S.C. ss. 6901 et seq.), (iv) the Toxic Substances Control
Act (15 U.S.C. ss. 2601 et seq.), (v) the Comprehensive Environmental Response
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act (42 U.S.C. ss. 9601 et seq.), and (vi) all applicable
national and local building, zoning, environmental control or other similar laws
or regulations.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each
trade or business (whether or not incorporated) which is a member of a group of
which that Person is a member and which is under common control within the
meaning of the regulations promulgated under Section 414 of the Tax Code.
"Eurodollar Advance" shall mean an Advance made or outstanding
in U.S. Dollars as a portion of the Term Loans or Revolving Loans, as the case
may be, bearing interest based on the Adjusted LIBO Rate as provided in Section
2.01(b) and Section 3.02(b).
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<PAGE> 20
"Event of Default" shall have the meaning provided in
Article IX.
"Excess Cash Flow" shall mean, for any fiscal year of Parent
(A) Consolidated EBITDAR for such fiscal year, minus (B) the sum of (i) Capital
Expenditures for such fiscal year, (ii) the amount by which Adjusted Working
Capital as determined on the last day of such fiscal year exceeds (or minus the
amount by which such Adjusted Working Capital is less than) Adjusted Working
Capital as determined on the last day of the preceding fiscal year, (iii)
voluntary and mandatory principal payments on the Funded Debt of the
Consolidated Companies, during such fiscal year, as permitted under the terms of
this Agreement, (iv) Cash Taxes Paid for such fiscal year, (v) Consolidated
Interest Expense paid in cash during such fiscal year, and (vi) Consolidated
Rental Expense paid in cash during such fiscal year, as determined with respect
to the Consolidated Companies in accordance with GAAP.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute thereto.
"Existing Credit Agreement" shall mean, collectively, that
certain Second Amended and Restated Reducing Revolving Credit Agreement, dated
as of April 10, 1996, by and among Parent, DFLP, Dyersburg Fabrics Inc., DFIC,
Inc., STBA, individually and as agent, and the other lenders named therein, as
amended through the Closing Date, and (ii) that certain Second Amended and
Restated Working Capital Agreement, dated as of April 10, 1996 by and among
STBA, DFLP, Parent and various other parties, as amended through the Closing
Date.
"Existing Senior Notes" shall mean those certain $25,000,000
6.78% Senior Notes Due 2005, issued by DFLP and guaranteed by Parent pursuant to
that certain Note Purchase Agreement dated as of September 29, 1993, as amended.
"Facility" or "Facilities" shall mean the credit facilities
made available to the Borrowers pursuant to the Term Loan Commitments, the
Revolving Loan Commitments, the Swing Line Subfacility or the L/C Subcommitment,
as the context may indicate.
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with member banks
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 which 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.
"Fiscal Quarter" shall mean, with respect to the Parent, a
period of 13 (or, if applicable, 14) consecutive week period, in each case,
comprising a portion of the Parent's Fiscal Year.
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<PAGE> 21
"Fiscal Year" shall mean, with respect to the Parent, a period
of 52 (or, if applicable 53) consecutive weeks ending on the Saturday closest to
September 30th of any year; references to a Fiscal Year with a number
corresponding to any calendar year (e.g., "Fiscal Year 1997") refer to the
fiscal year ending on the Saturday closest to September 30th of that year.
"Fiscal Year End" shall mean the last day of any Fiscal Year
of the Parent.
"Fixed Charge Coverage Ratio" shall mean, as of the last day
of any fiscal quarter of the Parent, the ratio of (x) the greater of (i) $0 and
(ii) EBITDA minus Capital Expenditures, to (y) the sum of (i) Current Maturities
of Long Term Debt and (ii) Consolidated Interest Expense, in each case
determined with respect to the Consolidated Companies for the fiscal quarter
ending on such date and the immediately preceding three fiscal quarters.
"Fixed Rate Advance" shall mean a Eurodollar Advance and, to
the extent quoted to and accepted by a Borrower on the basis of a fixed rate of
interest for a specified Interest Period pursuant to Section 4.01(a) (i), a
Transaction Rate Advance.
"Foreign Subsidiary" shall mean each Consolidated Company that
is organized under the laws of a jurisdiction other than the United States of
America or any State thereof.
"Funded Debt" shall mean all Indebtedness of the types
described in clauses (i) - (vii) of the definition thereof.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
"Guarantors" shall mean, collectively, the Parent, Alamac
Holdings, Dyersburg Fabrics Inc., Alamac Enterprises, Inc., United Knitting,
Inc., IQUE, Inc., UKIC, Inc., DFIC, Inc., IQUEIC, Inc., and with respect to the
Term Loans, the Revolving Borrowers, and all other Material Subsidiaries that
are not Foreign Subsidiaries, and their respective successors and permitted
assigns.
"Guaranty" shall mean any contractual obligation, contingent
or otherwise, of a Person with respect to any Indebtedness or other obligation
or liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including contractual obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or any agreement to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial
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<PAGE> 22
condition, or to make any payment other than for value received. The amount of
any Guaranty shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which guaranty is made or, if not
so stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
"Guaranty Agreements" shall mean, collectively, the Parent
Guaranty Agreement and the Affiliate Guaranty Agreement executed by the
Guarantors in favor of the Lenders and the Agents, substantially in the form of
Exhibits D-1 and D-2, respectively, as the same may be amended, restated or
supplemented from time to time.
"Hazardous Substances" shall have the meaning assigned to that
term in the Comprehensive Environmental Response Compensation and Liability Act
of 1980, as amended by the Superfund Amendments and Reauthorization Acts of
1986.
"Indebtedness" of any Person shall mean, without duplication
(i) all obligations of such Person for borrowed money and for the deferred
purchase price of property or services, and obligations evidenced by bonds,
debentures, notes or other similar instruments; (ii) all Capital Lease
Obligations; (iii) all Guaranties of such Person (including contingent
reimbursement obligations under undrawn letters of credit); (iv) Indebtedness of
others secured by any Lien upon property owned by such Person, whether or not
assumed; (v) obligations or other liabilities under Currency Contracts, Interest
Rate Contracts, or similar agreements or combinations thereof; (vi) all
obligations of such Person arising pursuant to any asset securitization
transactions; (vii) Redeemable Capital Stock of such Person valued at the
greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued dividends; and (viii) all other obligations of such Person which in
accordance with GAAP would be shown on the balance sheet of such Person as a
liability (other than reserves required by GAAP). For purposes hereof, the
"maximum fixed repurchase price" of any Redeemable Capital Stock which does not
have a fixed repurchase price shall be calculated in accordance with the terms
of such Redeemable Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to this Agreement, and if such price is based on, or measured by, the
fair market value of such Redeemable Capital Stock, such fair market value shall
be determined in good faith by the board of directors of the issuer of such
Redeemable Capital Stock.
"Intercompany Loan Documents" shall mean, collectively, the
promissory notes and all related loan, subordination, and other agreements
relating in any manner to the Intercompany Loans.
"Intercompany Loans" shall mean, collectively, (i) the loans
more particularly described on Schedule 6.20 and (ii) those loans or other
extensions of credit made by any Consolidated Company to another Consolidated
Company satisfying the terms and conditions set forth in Section 8.01(e) or as
may otherwise be approved in writing by the Agent.
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<PAGE> 23
"Interest Coverage Ratio" shall mean, as of the last day of
any fiscal quarter of the Parent, the ratio of (x) Consolidated EBITR to (y) the
sum of (i) Consolidated Interest Expense and (ii) Consolidated Rental Expense,
in each case as determined for the fiscal quarter ending on such date on the
immediately preceding three fiscal quarters.
"Interest Period" shall have mean, (i) as to any Eurodollar
Advances, the interest period selected by a Borrower pursuant to Section 4.04(a)
hereof, and (ii) as to any Transaction Rate Advance, the interest rate requested
by a Revolving Borrower and agreed to by the Swing Line Lender pursuant to
Section 4.01(a)(ii) hereof.
"Interest Rate Contracts" shall mean any forward contracts,
futures contracts, interest rate exchange agreements, interest rate cap
agreements, interest rate collar agreements, and other similar agreements and
arrangements entered into by any Consolidated Company designed to protect any
Consolidated Company against fluctuations in interest rates.
"Investment" shall mean, when used with respect to any Person,
any direct or indirect advance, loan or other extension of credit (other than
the creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures or other securities issued by
any other Person, in each case, other than an Acquisition. Each Investment shall
be valued as of the date made; provided that any Investment or portion of an
Investment consisting of Indebtedness shall be valued at the outstanding
principal balance thereof as of the date of determination.
"Inventory" shall mean and include all of each Revolving
Borrower's inventory, whether now existing or hereafter acquired or arising or
in which any Revolving Borrower now has or hereafter acquires any rights,
including, without limitation, all cloth, fibers, piece goods, finished goods
and other goods held by any Revolving Borrower for sale or lease or to be
furnished under any contract of service, or so furnished by any Revolving
Borrower, and all other raw materials, work in process, finished goods and
materials and supplies of any kind, nature or description which are or might be
used or consumed in any Revolving Borrower's business or are or might be used in
connection with the manufacture, packing, shipping, advertising, selling or
finishing of such goods, all returned or repossessed goods now, or at any time
or times hereafter, in the possession or under the control of Borrower or the
Collateral Agent, and all documents of title or documents representing the same.
"IRB LC" shall mean the direct pay letter of credit issued
pursuant to the Letter of Credit Agreement.
"L/C Cash Collateral Account" shall mean a cash collateral
account established by Collateral Agent for deposit of cash collateral for the
Aggregate L/C Outstanding, which account shall be designated as the L/C Cash
Collateral Account and shall be subject to the sole dominion and control of the
Collateral Agent.
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<PAGE> 24
"L/C Exposure" shall mean, for each Lender, the sum, for all
Letters of Credit, of the product of (i) the L/C Outstandings for each Letter of
Credit, multiplied by (ii) such Lender's applicable Pro Rata Share for such
Letter of Credit.
"L/C Outstandings" shall mean, as at any date of determination
with respect to an outstanding Letter of Credit, the sum of (i) the maximum
aggregate amount which at such date of determination is available to be drawn
(assuming conditions for drawing thereunder have been met) under such Letter of
Credit then outstanding, plus (ii) the aggregate amount of all drawings under
such Letter of Credit and honored by the Agent not theretofore reimbursed by or
on behalf of the Revolving Borrowers.
"L/C Subcommitment" shall mean, at any time for any Revolving
Lender, the amount of the Letter of Credit Subcommitment set forth opposite such
Revolving Lender's name on the signature page of this Agreement, as the same may
be adjusted from time to time pursuant to the terms of this Agreement, including
without limitation, Section 3.04(b) hereof.
"Lender" or "Lenders" shall mean STBA, the other banks and
lending institutions listed on the signature pages hereof, and each assignee
thereof, if any, pursuant to Section 11.06(c).
"Lending Office" shall mean for each Lender the office such
Lender may designate in writing from time to time to the Borrowers and the
Agents with respect to each Type of Loan.
"Letter of Credit" shall mean any letter of credit issued by
(or deemed issued by) the Agent for the account of a Revolving Borrower pursuant
to the L/C Subcommitment, as the same may be amended, extended or re-issued from
time to time, including without limitation, the IRB LC.
"Letter of Credit Agreement" shall mean the Second Amended and
Restated Letter of Credit Agreement among Parent, DFLP and STBA with respect to
the IRB LC, as amended by the Letter of Credit Amendment and as the same may
hereafter be further amended, restated or supplemented from time to time.
"Letter of Credit Amendment" shall mean that certain Third
Amendment to Second Amended and Restated Letter of Credit Agreement, dated as of
the date hereof.
"LIBOR" shall mean, for any applicable Interest Period, with
respect to Eurodollar Advances the offered rate for deposits in U.S. Dollars,
for a period comparable to the Interest Period and in an amount comparable to
the Agent's portion of such Advances, appearing on the Telerate Page 3750 as of
11:00 A.M. (London, England time) on the day that is two London Business Days
prior to the first day of the Interest Period. If two or more of such rates
appear on the Telerate Page 3750, Page, the rate for that Interest Period shall
be the arithmetic mean of such rates. If the foregoing rate is unavailable from
Telerate Page 3750 for any reason, then such rate shall be determined by the
Agent from the Reuters Screen LIBO Page or, if such rate is also unavailable on
such service, then on any other interest rate reporting service of recognized
standing designated in
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<PAGE> 25
writing by the Agent to Borrowers and the other Lenders; in any such case
rounded, if necessary, to the next higher 1/16 of 1.0%, if the rate is not such
a multiple.
"Lien" shall mean any mortgage, pledge, security interest,
lien, charge, hypothecation, assignment, deposit arrangement, title retention,
preferential right, trust or other arrangement having the practical effect of
the foregoing and shall include the interest of a vendor or lessor under any
conditional sale agreement, capitalized lease or other title retention
agreement.
"Loans" shall mean, collectively, the Term Loans, the
Revolving Loans and the Swing Line Loans.
"Mandatory Reduction Date" shall have the meaning set forth in
Section 2.02(b).
"Margin Regulations" shall mean Regulation G, Regulation T,
Regulation U and Regulation X of the Board of Governors of the Federal Reserve
System, as the same may be in effect from time to time.
"Materially Adverse Effect" shall mean any materially adverse
change in (i) the business, results of operations, financial condition, assets
or prospects of the Consolidated Companies, taken as a whole, (ii) the ability
of the Term Borrowers (taken as a whole) or the ability of the Revolving
Borrowers (taken as a whole) to perform their respective obligations under this
Agreement, (iii) the ability of the other Credit Parties (taken as a whole) to
perform their respective obligations under the Credit Documents, or (iv) the
validity, priority or perfection of any Lien granted pursuant to the Security
Documents.
"Material Subsidiary" shall mean (i) each Credit Party other
than Parent, (ii) each other Consolidated Company listed in the definition of
the term "Pledged Stock" in this Section 1.01, and (iii) each other Subsidiary
of Parent, now existing or hereafter established or acquired, that at any time
prior to the Term Loan Maturity Date or Revolver Termination Date (whichever is
last to occur), has or acquires total assets in excess of $1,000,000 or that
holds any assets material to the operations or business of another Material
Subsidiary or which is a Senior Subordinated Note Guarantor.
"Mortgages" shall mean those certain mortgages, deed to secure
debt, deeds of trust and similar instruments executed by the Credit Parties
granting a Lien on the real property or leasehold estates owned by the Credit
Parties to the Collateral Agent, for the benefit of the Lenders, either as
originally executed or as hereafter amended or modified.
"Multiemployer Plan" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.
"Net Proceeds" shall mean, (a) with respect to any Asset Sale,
all cash, including (i) cash receivables (when received) by way of deferred
payment pursuant to a promissory note, a receivable or otherwise (other than
interest payable thereon), and (ii) with respect to Asset Sales
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resulting from the loss, damage, destruction or taking of property, the proceeds
of insurance settlements and condemnation awards (other than the portion of the
proceeds of such settlements and such awards that are used to repair, replace,
improve or restore the item of property in respect of which such settlement or
award was paid provided that the recipient of such proceeds enters into a
binding contractual obligation to effect such repair, replacement, improvement
or restoration within six (6) months of such loss, damage or destruction and
completes such repair, replacement, improvement or restoration within twelve
(12) months of such loss, damage, destruction or taking) as and when received in
cash, in either case, received by any Consolidated Company as a result of or in
connection with such transaction, net of reasonable sale expenses, fees and
commissions incurred, and taxes paid or expected to be payable within the
succeeding 12-month period in connection therewith, and net of any payment
required to be made with respect to the outstanding principal amount of, premium
or penalty, if any, and interest on any Indebtedness (other than the Loans)
secured by a Lien (to the extent permitted by Section 8.02) upon the asset sold
in such Asset Sale, and (b) with respect to any issuance of equity or securities
convertible into equity, the gross proceeds of such issuance less reasonable and
customary transaction expenses.
"Notes" shall mean, collectively, the Term Notes, the
Revolving Notes and the Swing Line Note.
"Notice of Revolving Borrowing" shall mean the notice given by
a Revolving Borrower to the Agent requesting one or more Revolving Advances as
provided in Section 4.01(a)(i).
"Notice of Revolving Conversion/Continuation" shall mean the
notice given by a Revolving Borrower to the Agent in respect of the conversion
or continuation of an outstanding Revolving Borrowing as provided in Section
4.01(b)(i).
"Notice of Term Loan Conversion/Continuation" shall mean a
notice given by a Term Borrower to the Agent in respect of the conversion or
continuation of an outstanding portion of the Term Loans pursuant to Section
4.01(b)(ii).
"Obligations" shall mean all amounts owing to the Agent, any
Lender, or Collateral Agent pursuant to the terms of this Agreement, the Letter
of Credit Agreement, any Currency Contract or Interest Rate Contract entered
into by a Lender with a Borrower, or any other Credit Document, including
without limitation, all Loans (including all principal and interest payments
(including post-petition interest whether or not allowed as a claim in any
bankruptcy action) due thereunder), fees, expenses, indemnification and
reimbursement payments, indebtedness, liabilities, and obligations of the Credit
Parties, direct or indirect, absolute or contingent, liquidated or unliquidated,
now existing or hereafter arising, together with all renewals, extensions,
modifications or refinancings thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
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"Parent" shall mean Dyersburg Corporation, a Delaware
corporation, its successors and permitted assigns.
"Parent Control Debt" shall mean, at any time, debt of Parent
for borrowed money in an aggregate principal amount outstanding at such time in
excess of $1,000,000 which is subject to Change in Control Provisions, excluding
debt of Parent arising under this Agreement or any Guaranty or Security Document
of Parent delivered pursuant to this Agreement or the Letter of Credit
Agreement.
"Parent Guaranty" shall mean that certain Guaranty Agreement
executed by the Parent in favor of the Agents and the Lenders with respect to
the Obligations, either as originally executed or as hereafter amended or
modified.
"Parent Pledge and Security Agreement" shall mean that certain
Pledge and Security Agreement executed by the Parent in favor of the Collateral
Agent, for the benefit of the Lenders, in connection with the Pledged Stock
owned by the Parent, either as originally executed or as hereafter amended or
modified.
"Patent Security Agreement" shall mean that certain patent
security agreement executed by Alamac Knit Fabrics, Inc. in favor of the
Collateral Agent, either as originally executed or as hereafter amended or
modified.
"Payment Office" shall mean with respect to payments of
principal, interest, fees or other amounts relating to the Revolving Loans,
Swing Line Loans, the Term Loans, the Letters of Credit and all other
Obligations, the office specified as the "Payment Office" for the Agent on the
signature page of the Agent, or such other location as to which the Agent shall
have given written notice to the Borrowers.
"Permitted Liens" shall mean those Liens expressly permitted
by Section 8.02.
"Person" shall mean any individual, partnership, firm,
corporation, association, joint venture, limited liability company, trust or
other entity, or any government or political subdivision or agency, department
or instrumentality thereof.
"Plan" shall mean any "employee benefit plan" (as defined in
Section 3(3) of ERISA), including, but not limited to, any defined benefit
pension plan, profit sharing plan, money purchase pension plan, savings or
thrift plan, stock bonus plan, employee stock ownership plan, Multiemployer
Plan, or any plan, fund, program, arrangement or practice providing for medical
(including post-retirement medical), hospitalization, accident, sickness,
disability, or life insurance benefits.
"Pledge Agreements" shall mean, collectively, that certain
Pledge and Security Agreement, that certain Bond Pledge Agreement and that
certain Parent Pledge and Security Agreement executed in favor of the Collateral
Agent, substantially in the forms of Exhibits F-1
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through F-3, in each case providing for the grant of first priority Liens on the
Pledged Stock and Ad Valorem Bonds, as the same may be further supplemented,
amended or restated from time to time.
"Pledge and Security Agreement" shall mean that certain Pledge
and Security Agreement executed by each of the Credit Parties (other than
Parent) owning shares of a corporate Subsidiary of the Parent in favor of the
Collateral Agent, for the benefit of the Lenders, in connection with the Pledged
Stock owned by such Credit Parties, either as originally executed or as
hereafter amended or modified.
"Pledged Stock" shall mean, collectively, (i) all issued and
outstanding capital stock, together with all warrants, stock options, and other
purchase and conversion rights with respect to such capital stock, of each of
AIH Holdings, Alamac Enterprises, Inc., Alamac, Dyersburg Fabrics Inc., United
Knitting Inc., IQUE, Inc., DFIC, Inc., UKIC, Inc., and IQUEIC, Inc. and all
other Material Subsidiaries of Parent organized in the United States, and (ii)
66% of all issued and outstanding capital stock, together with 66% of all
warrants, stock options, and other purchase and conversion rights with respect
to such capital stock of all other Material Subsidiaries that are Foreign
Subsidiaries directly owned by Parent and/or one or more other Subsidiaries
organized in the United States.
"Pro Rata Share" shall mean, with respect to each of the
Revolving Loan Commitments (including, without limitation the L/C Subcommitment
and Swing Line Exposure) of each Revolving Lender, and with respect to each of
the Term Loan Commitments and Term Loans of each Term Loan Lender, and each Loan
to be made by and each payment (including, without limitation, any payment of
principal, Letter of Credit reimbursement obligation, interest or fees) to be
made to each such Lender, the percentage designated as such Lender's Pro Rata
Share of such Commitments, such Loans or such payments, as applicable, set forth
under the name of such Lender on the respective signature page for such Lender,
in each case as such Pro Rata Share may change from time to time as a result of
assignments, amendments, or reductions made pursuant to this Agreement.
"Real Property" shall mean those pieces of real property owned
or leased by the Credit Parties and described on Schedule 1.01.
"Receivables" shall mean and include all of each Revolving
Borrower's accounts, contract rights, chattel paper and instruments, whether now
existing or hereafter acquired or arising or in which any Revolving Borrower now
has or hereafter acquires any rights, including, without limitation, all present
and future rights to payments for goods, merchandise or Inventory sold or leased
or for services rendered, whether or not represented by instruments or chattel
paper, and whether or not earned by performance; proceeds of any letter of
credit on which any Revolving Borrower is beneficiary; and all forms of
obligations whatsoever owing to any Revolving Borrower, together with all
instruments and documents of title representing any of the foregoing, all rights
in any goods, merchandise or Inventory which any of the foregoing may represent,
all rights in any returned or repossessed goods, merchandise or Inventory, and
all rights, security and guaranties with
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respect to each of the foregoing, including, without limitation, any rights of
stoppage in transit and reclamation.
"Redeemable Capital Stock" shall mean any shares of any class
or series of capital stock that, either by the terms thereof, by the terms of
any security into which it is convertible or exchangeable, or by contract or
otherwise, is or upon the happening of an event or passage of time would be,
required to be redeemed prior to the Term Loan Maturity Date or is redeemable at
the option of the holder thereof at any time prior to the Term Loan Maturity
Date, or is convertible into or exchangeable for debt securities at any time
prior to the Term Loan Maturity Date.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System, as the same may be in effect from time
to time.
"Required Lenders" shall mean at any time prior to the
termination of the Commitments, Lenders holding at least 66-2/3% of the then
aggregate amount of the Revolving Loan Commitments and Term Loan Commitments or
Term Loans, and at any time following the termination of the Commitments,
Lenders holding at least 66-2/3% of the then outstanding Loans.
"Requirement of Law" for any person shall mean the articles or
certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Reuters Screen" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Reuter Monitor
Money Rates Service (or such other page as may replace that page on that service
for the purpose of displaying rates comparable to LIBOR).
"Revolving Advance" shall mean a Borrowing pursuant to Section
3.02 consisting of the aggregate amount of Revolving Loans made by the Revolving
Lenders to Revolving Borrowers at the same time, on the same interest rate basis
and, if made as a Fixed Rate Advance, for the same Interest Period.
"Revolving Borrowers" shall mean, jointly and severally, DFLP,
UKLP, IQLP and Alamac, and their permitted successors and assigns.
"Revolving Borrowing" shall mean a Borrowing consisting or to
consist of a Revolving Advance.
"Revolving Credit Facility" shall mean the credit facility
made available by the Revolving Lenders to the Revolving Borrowers as described
in Section 3.02(a).
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"Revolving Lenders" shall mean, collectively, the Lenders
extending the Revolving Loan Commitments to the Revolving Borrowers pursuant to
Section 3.02(a).
"Revolving Loan Commitments" shall mean, at any time for any
Revolving Lender, the amount of such commitment set forth opposite such
Revolving Lender's name on the signature pages of this Agreement, as the same
may be increased or decreased from time to time as a result of any reduction
thereof pursuant to Section 3.10, any assignment thereof pursuant to Section
11.06, or any amendment thereof pursuant to Section 11.02, such commitment
including, without limitation, such Revolving Lender's L/C Subcommitment.
"Revolving Loans" shall mean, collectively, all Loans made by
the Revolving Lenders to the Revolving Borrowers pursuant to the Revolving Loan
Commitments.
"Revolving Notes" shall mean, collectively, the promissory
notes evidencing the Revolving Loans in the form attached hereto as Exhibit B
duly completed in accordance with the terms hereof.
"Revolver Termination Date" shall mean the earlier of (i)
August 31, 2002, and (ii) the date on which all amounts outstanding under this
Agreement have been declared or have automatically become due and payable
pursuant to the provisions of Article IX.
"Security Agreements" shall mean collectively, the Borrower
Security Agreement and the Affiliate Security Agreement.
"Security Documents" shall mean, collectively, the Guaranty
Agreements, the Pledge Agreements, the Security Agreements, the Mortgages, the
Trademark Security Agreements, the Patent Security Agreements, the Contribution
Agreement, the Assignment of Purchase Agreement and each other guaranty
agreement, mortgage, deed of trust, security agreement, pledge agreement, or
other security or collateral document guaranteeing or securing the Obligations,
as the same may be amended, restated, or supplemented from time to time.
"Senior Subordinated Notes" shall mean, collectively, the
unsecured 9.75% Senior Subordinated Notes Due 2007 issued by Parent, and
guaranteed by certain Subsidiaries of Parent, in the aggregate principal amount
of $125,000,000 pursuant to the Senior Subordinated Notes Indenture.
"Senior Subordinated Notes Guarantor" shall mean each
Subsidiary of Parent that is a "Guarantor" with respect to the Senior
Subordinated Notes as provided in the Senior Subordinated Notes Indenture.
"Senior Subordinated Notes Indenture" shall mean the
Indenture, dated as of August 27, 1997, by and among Parent, the Subsidiaries of
the Parent named therein, and State Street Bank & Trust Company of Connecticut,
N.A., as Trustee, pursuant to which Parent issued its Senior
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Subordinated Notes, as the same has been or may hereafter be amended or
supplemented from time to time.
"Shareholders' Equity" shall mean, with respect to any Person
as at any date of determination, shareholders' equity of such Person determined
on a consolidated basis in conformity with GAAP.
"Subordinated Debt" shall mean (i) Indebtedness outstanding
pursuant to the Senior Subordinated Notes, and (ii) other Indebtedness of Parent
subordinated to all obligations of Parent or any other Credit Party arising
under this Agreement, the Notes, and the Guaranty Agreements on terms and
conditions satisfactory in all respects to the Agent and the Required Lenders,
including without limitation, with respect to interest rates, payment terms,
maturities, amortization schedules, covenants, defaults, remedies, and
subordination provisions, as evidenced by the written approval of the Agent and
the Required Lenders.
"Subsidiary" shall mean, with respect to any Person, any
corporation or other entity (including, without limitation, partnerships, joint
ventures, and associations) regardless of its jurisdiction of organization or
formation, at least a majority of the total combined voting power of all classes
of voting stock or other ownership interests of which shall, at the time as of
which any determination is being made, be owned by such Person, either directly
or indirectly through one or more other Subsidiaries.
"Swing Line Advance" shall mean a Borrowing pursuant to
Section 3.03(a) consisting of a Swing Line Loan (which may be made either as a
Base Rate Advance or as a Transaction Rate Advance) made by the Swing Line
Lender to the a Revolving Borrower on the same date and interest rate basis and,
if made as a Transaction Rate Advance, for the same Interest Period.
"Swing Line Borrowing" shall mean a Borrowing consisting or to
consist of a Swing Line Advance.
"Swing Line Borrowing Notice" shall mean the notice given by
one or more Revolving Borrower to the Agent requesting a Swing Line Advance as
provided in Section 4.01(a) (ii).
"Swing Line Commitment" shall mean the commitment of the Swing
Line Lender to make Swing Line Loans in an aggregate principal amount at any
time outstanding not to exceed $5,000,000.
"Swing Line Exposure" shall mean, with respect to each Lender,
the outstanding principal amount of the Swing Loans multiplied by such Lender's
Pro Rata Share of the Revolving Loan Commitments.
"Swing Line Facility" shall mean the credit facility described
in Section 3.03.
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<PAGE> 32
"Swing Line Lender" shall mean STBA or any subsequent Lender
extending to the Revolving Borrowers the Swing Line Commitment hereunder.
"Swing Line Loans" shall mean, collectively, the loans made to
the Revolving Borrowers by the Swing Line Lender pursuant to Section 3.03.
"Swing Line Note" shall mean the promissory note evidencing
the Swing Line Loans substantially in the form of Exhibit C and duly completed
in accordance with the terms hereof.
"Tax Code" shall mean the Internal Revenue Code of 1986, as
amended and in effect from time to time.
"Taxes" shall mean any present or future taxes, levies,
imposts, duties, fees, assessments, deductions, withholdings or other charges of
whatever nature, including without limitation, income, receipts, excise,
property, sales, transfer, license, payroll, withholding, social security and
franchise taxes now or hereafter imposed or levied by the United States, or any
state, local or foreign government or by any department, agency or other
political subdivision or taxing authority thereof or therein and all interest,
penalties, additions to tax and similar liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Dow Jones
Telerate Service (or such other page as may replace that page on that service
for the purpose of displaying rates comparable to LIBOR).
"Term Borrowers" shall mean, jointly and severally, Parent and
DFLP, and their permitted successors and assigns.
"Term Lenders" shall mean, collectively, those Lenders
extending the Term Loans to the Term Borrowers pursuant to Section 2.01(a).
"Term Loan Commitment" shall mean, at any time for any Term
Lender, the amount of such commitment set forth opposite such Lender's name on
the signature pages hereof, as the same may be increased or decreased from time
to time as a result of any repayment of the Term Loans, any assignment thereof
pursuant to Section 11.06, or any amendment thereof pursuant to Section 11.02.
"Term Loan Maturity Date" shall mean the earlier of (i) August
31, 2002, and (ii) the date on which all amounts outstanding under this
Agreement have been declared or have automatically become due and payable
pursuant to the provisions of Article IX.
"Term Loans" shall mean, collectively, the term loans in the
original aggregate principal amount of $50,000,000 made to the Term Borrowers by
the Term Lenders pursuant to Section 2.01(a).
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"Term Notes" shall mean, collectively, the promissory notes
evidencing the Term Loans substantially in the form of Exhibit A and duly
completed in accordance with the terms hereof.
"Texmaco" shall mean Polysindo Hong Kong Limited, a Hong Kong
corporation under common control with P.T. Polysindo Eka Perkasa and PT.
Texmaco Jaya, and its Affiliates.
"Total Adjusted Funded Debt" shall mean the sum of (i) Funded
Debt and (ii) eight time the total Consolidated Rental Expense for the
Consolidated Companies with respect to operating leases in the next twelve month
period.
"Total Commitment" shall mean, for any Lender at any time, the
sum of such Lender's Term Loan Commitment, Revolving Loan Commitment and, in the
case of the Swing Line Lender, its Swing Line Commitment; and "Total
Commitments" shall mean, for all Lenders at any time, the sum of the Total
Commitment of all Lenders.
"Trademark Security Agreement" shall mean that certain
trademark security agreement executed by each of Dyersburg Fabrics Inc., Alamac
Enterprises Inc., Alamac and United Knitting, Inc., in favor of the Collateral
Agent, either as originally executed or as hereafter amended or modified.
"Transaction" shall have the meaning set forth in the recitals
hereof.
"Transaction Rate" shall mean the rate of interest specified
by the Swing Line Lender to a Revolving Borrower as being applicable to a Swing
Line Loan requested by a Revolving Borrower pursuant to Section 4.01(a)(ii).
"Transaction Rate Advance" shall mean an Advance made or
outstanding as a Swing Line Loan bearing interest based on the Transaction Rate
as provided in Section 4.01(a)(ii).
"Transaction Rate Quote" shall mean an offer by the Swing Line
Lender to make a Swing Line Loan to a Revolving Borrower at the Transaction Rate
specified therein for the Interest Period to be applicable to the Swing Line
Loan as specified therein, pursuant to Section 4.01(a) (ii).
"Type" of Borrowing shall mean a Borrowing consisting of Base
Rate Advances, Eurodollar Advances or Transaction Rate Advances.
"Wachovia Interest Rate Agreement" shall mean that certain
Swap Transaction between Dyersburg Fabrics Inc. and Wachovia Bank of Georgia,
N.A., as of April 24, 1995, evidenced by a Swap Transaction Confirmation
executed pursuant to that certain Master Agreement dated as of April 24, 1995
between said parties for a notational amount of $10,000,000.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATION. Unless
otherwise defined or specified herein, all accounting terms shall be construed
herein, all accounting determinations hereunder shall be made, all financial
statements required to be delivered hereunder shall be
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prepared, and all financial records shall be maintained in accordance with,
GAAP; provided, however, that compliance with the financial covenants and
calculations set forth in Section 7.09, Article VIII, and elsewhere herein, and
in the definitions used in such covenants and calculations, shall be calculated,
made and applied in accordance with GAAP and such generally accepted accounting
principles as in effect on the date of this Agreement applied on a basis
consistent with the preparation of the financial statements referred to in
Section 6.14 unless and until the parties enter into an agreement with respect
thereto in accordance with Section 11.15.
SECTION 1.03. OTHER DEFINITIONAL TERMS. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Article, Section, Schedule, Exhibit and like references are
to this Agreement unless otherwise specified.
SECTION 1.04. EXHIBITS AND SCHEDULES. All Exhibits and
Schedules attached hereto are by reference made a part hereof.
ARTICLE 2.
TERM LOANS
SECTION 2.01. AMOUNT OF TERM LOANS.
(a) Subject to and upon the terms and conditions herein set
forth, each Term Lender severally agrees to make to the Term Borrowers on the
Closing Date a Term Loan in an amount equal to its Term Loan Commitment, such
Term Loans to be repaid as set forth in Section 2.02(b). The Term Borrowers
shall not be entitled to reborrow any amounts repaid with respect to the Term
Loans.
(b) Each Term Loan shall, at the option of the Term Borrowers,
be made or continued as, or converted into, part of one or more Borrowings that
shall consist entirely of Base Rate Advances or Eurodollar Advances. The
aggregate principal amount of each Borrowing of Term Loans consisting of
Eurodollar Advances shall be not less than $1,000,000 or a greater integral
multiple of $500,000, and the aggregate principal amount of each Borrowing of
Term Loans consisting of Base Rate Advances shall not be less than $500,000 or a
greater integral multiple of $100,000. At no time shall the number of Borrowings
outstanding under the Term Loans and the Revolving Loan Commitments exceed seven
in either case (not including Swing Line Borrowings); provided that, for the
purpose of determining the number of Borrowings outstanding and the minimum
amount for Borrowings resulting from conversions or continuations, all
Borrowings under the Term Loans and the Revolving Loan Commitments comprised of
Base Rate Advances shall be considered in each case as one Borrowing.
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SECTION 2.02. NOTES; REPAYMENT OF PRINCIPAL.
(a) The Term Borrowers' joint and several obligation to pay
the principal of, and interest on, the Term Loans to each Term Lender shall be
evidenced by the records of the Agent and such Term Lender and by the respective
Term Note payable to such Term Lender (or the assignor of such Term Lender)
completed in conformity with this Agreement.
(b) The Term Borrowers, jointly and severally, agree to repay
the Term Loans in twenty (20) consecutive quarterly installments, commencing on
November 30, 1997, and continuing on the last day of each February, May, August
and November (each, a "Mandatory Reduction Date") in accordance with the
amortization schedule set forth on Schedule 2.02. All Term Loans, if not sooner
paid, shall be due and payable in full on the Term Loan Maturity Date.
SECTION 2.03. MANDATORY PREPAYMENTS.
(a) Within ten (10) Business Days after each date on which any
Consolidated Company receives any Net Proceeds as a result of or in connection
with any offering of equity or securities convertible into equity of any
Consolidated Company (other than (x) an issuance of equity to a Credit Party, or
(y) an issuance of stock of Parent to Texmaco in connection with an Investment
permitted pursuant to Section 8.05(c) provided that the value of such stock does
not exceed the permitted amount of such Investment), the Term Loans shall be
prepaid by an amount equal to the Net Proceeds of such equity or securities
offering plus interest accrued and unpaid on the amount of such prepayment.
(b) No mandatory prepayment shall be required pursuant to this
Section 2.03(b) until the aggregate amount of Asset Sales occurring after the
Closing Date exceeds $1,000,000 (based on the Asset Values thereof, but
excluding in the foregoing computation (i) Asset Sales resulting from loss,
damage, destruction, or taking where the proceeds thereof are utilized so as to
be excluded from the definition of Net Proceeds, and (ii) Asset Sales occurring
as a part of any sale and leaseback transactions permitted pursuant to Section
8.06). Whenever such Asset Values shall have equaled or exceeded such amount,
then within ten (10) Business Days after each date on which any Consolidated
Company receives any Net Proceeds as a result of or in connection with an Asset
Sale by any Consolidated Company, the Term Loans shall be prepaid on a pro rata
basis by an amount equal to the Net Proceeds of such Asset Sale plus interest
accrued and unpaid on the amount of such prepayment; provided that, in the event
that the Borrowers intend to reinvest the Net Proceeds of such Asset Sale in
other capital assets to be used in the business of the Borrowers, the Borrowers
may deliver to the Agents certificate of the president, chief financial officer
or other senior officer (a "Reinvestment Certificate") of the relevant Borrower
indicating such Borrower's intent to reinvest such Net Proceeds in capital
assets which (x) would reasonably be expected to produce the same or greater
Consolidated Net Income as the assets subject to the Asset Sale, (y) which will
constitute a Capital Expenditure hereunder, and (z) which purchase will take
place within 180 days, then the application of the Net Proceeds of such Asset
Sale to repay the Term Loans hereunder shall not be required. At the end of such
180 day period, any portion of the Net Proceeds of such Asset Sale in excess of
$100,000 which have not been used as set forth in the Reinvestment
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Certificate shall immediately be used to repay the Term Loans in accordance with
this Section. If immediately prior to any Asset Sale the aggregate amount of
prior Asset Sales (determined as aforesaid) is less than $1,000,000, but such
Asset Sale causes the $1,000,000 threshold amount to be exceeded, then only the
portion of the Net Proceeds in excess of the $1,000,000 threshold shall be
applied as set forth in the preceding sentence.
(c) On the date Parent delivers its annual financial
statements pursuant to Section 7.07(a), but in no event later than the date that
occurs ninety (90) days after the last day of each fiscal year of Parent, the
Term Loans shall be prepaid on a pro rata basis by an amount equal to 50% of the
Excess Cash Flow, if any, for such fiscal year plus interest accrued and unpaid
on the amount of such prepayment.
(d) Notwithstanding the provisions of paragraphs (a), (b) and
(c) of this Section 2.03, (i) no mandatory prepayment shall be required to be
made under paragraph (a), (b) or (c) of this Section 2.03 if the amount under
paragraph (a), (b) or (c) is less than $100,000 in any instance, and (ii)
mandatory prepayment amounts otherwise required under said paragraphs (a), (b)
and (c) shall be rounded to nearest multiple of $100,000 (such that, for
example, if the portion of Net Proceeds required to be prepaid pursuant to
paragraph (a) is $250,000 or more, but less than $350,000, the mandatory
prepayment amount under this Section 2.03 shall equal $300,000 plus interest
accrued and unpaid on such amount).
(e) All mandatory prepayments hereunder shall be applied pro
rata to reduce the remaining installments on the Term Loans. Each mandatory
prepayment of Term Loans pursuant to this Section 2.03 shall be applied on a pro
rata basis first to Base Rate Advances outstanding under the Term Loans to the
full extent thereof before application to Fixed Rate Advances outstanding
thereunder.
SECTION 2.04. USE OF PROCEEDS. The proceeds of the Term Loans
will be used by the Term Borrowers to (i) pay a portion of the purchase price in
connection with the Alamac Acquisition, (ii) prepay indebtedness outstanding
pursuant to the Existing Senior Notes and the Existing Credit Agreement, and
(iii) pay expenses arising in connection with the Transaction.
ARTICLE 3.
REVOLVING LOANS
SECTION 3.01. DESCRIPTION OF REVOLVING CREDIT FACILITIES.
Subject to and upon the terms and conditions herein set forth (i) the Revolving
Lenders hereby establish in favor of the Revolving Borrowers a revolving credit
facility pursuant to which such Revolving Lenders agree to make Revolving Loans
to the Revolving Borrowers in accordance with Section 3.02, (ii) the Swing Line
Lender hereby establishes in favor of the Revolving Borrowers a swing line
credit facility pursuant to which the Swing Line Lender agrees to make Swing
Line Loans to the Revolving Borrowers in accordance with Section 3.03, and (iii)
each Revolving Lender agrees to purchase a
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participation interest in the Letters of Credit and Swing Line Loans in
accordance with Section 3.03(e) and Section 3.05(b); provided, however, that in
no event may the aggregate principal amount of all outstanding Revolving Loans,
Swing Line Loans and the Aggregate L/C Outstandings exceed at any time the
lesser of (i) the total Revolving Loan Commitments from time to time in effect,
and (ii) the Borrowing Base, as calculated pursuant to the most recent Borrowing
Base Certificate delivered by the Revolving Borrowers hereunder.
SECTION 3.02. REVOLVING LOANS.
(a) Subject to and upon the terms and conditions herein set
forth (including the limitation set forth in Section 3.01), each Revolving
Lender severally agrees to make to the Revolving Borrowers, from time to time
prior to the Revolver Termination Date, Revolving Loans in an aggregate
principal amount outstanding at any time not to exceed an amount equal to (i)
such Revolving Lender's Revolving Loan Commitment, minus (ii) the sum of such
Revolving Lender's L/C Exposure and Swing Line Exposure. The Revolving Borrowers
shall be entitled to repay and reborrow Revolving Loans in accordance with the
provisions, and subject to the limitations, set forth herein (including the
limitation set forth in Section 3.01).
(b) Each Revolving Loan shall, at the option of Revolving
Borrowers, be made or continued as, or converted into, part of one or more
Borrowings that shall consist entirely of Base Rate Advances, or Eurodollar
Advances. The aggregate principal amount of each Borrowing of Revolving Loans
shall be not less than $1,000,000 or a greater integral multiple of $500,000,
provided that each Borrowing of Revolving Loans comprised of Base Rate Advances
shall be not less than $500,000 or a greater integral multiple of $100,000,
except to the extent otherwise provided with respect to Revolving Loans made
pursuant to Section 3.03(e). At no time shall the total number of Borrowings
outstanding under the Term Loans and the Revolving Loan Commitments exceed
seven; provided that, for purposes of determining the number of Borrowings
outstanding and the minimum amount for Borrowings resulting from conversions or
continuations, all Borrowings of Base Rate Advances under the Term Loans and the
Revolving Loan Commitments shall be considered as one Borrowing.
(c) The Revolving Borrowers' joint and several obligation to
pay the principal of, and interest on, the Revolving Loans to each Revolving
Lender shall be evidenced by the records of the Agent and such Revolving Lender
and by the Revolving Note payable to such Revolving Lender (or the assignor of
such Revolving Lender) completed in conformity with this Agreement.
(d) All outstanding principal amounts under the Revolving
Loans shall be due and payable in full on the Revolver Termination Date.
SECTION 3.03. SWING LINE LOANS.
(a) Subject to and upon the terms and conditions herein set
forth (including the limitation set forth in Section 3.01), the Swing Line
Lender agrees to make to the Revolving Borrowers, from time to time prior to the
Revolver Termination Date, Swing Line Loans in an
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aggregate principal amount outstanding at any time not to exceed the Swing Line
Commitment then in effect. The Revolving Borrowers shall be entitled to repay
and reborrow Swing Line Loans in accordance with the provisions, and subject to
the limitations, set forth herein (including the limitation set forth in Section
3.01).
(b) Each Swing Line Loan shall, at the option of the Revolving
Borrowers, be made as a Base Rate Advance or Transaction Rate Advance. The
aggregate principal amount of each Swing Line Borrowing shall be not less than
$50,000 or a greater integral multiple of $1,000. At no time shall the number of
Swing Line Borrowings outstanding under this Section 3.03 exceed three; provided
that, for purposes of determining the number of Swing Line Borrowings
outstanding, all Swing Line Borrowings consisting of Base Rate Advances shall be
considered as one Swing Line Borrowing.
(c) The Revolving Borrowers' joint and several obligations to
pay the principal of, and interest on, the Swing Line Loans shall be evidenced
by the records of the Agent and the Swing Line Lender and by the Swing Line Note
payable to the Swing Line Lender (or the assignor of such Swing Line Lender)
completed in conformity with this Agreement.
(d) The outstanding principal amount under each Swing Line
Loan shall be due and payable in full (i) on the expiration of the Interest
Period applicable to such Swing Line Loan if outstanding as a Transaction Rate
Advance, and (ii) on the Revolver Termination Date.
(e) At any time on the request of the Swing Line Lender, each
Revolving Lender other than the Swing Line Lender shall purchase a participating
interest in all outstanding Swing Line Loans in an amount equal to its Pro Rata
Share (based upon on its respective Revolving Loan Commitment) of such Swing
Line Loans, and the Swing Line Lender shall furnish each Revolving Lender with a
certificate evidencing such participating interest. Such purchase shall be made
on the third Business Day after such request is made; provided, however, that
unless an Event of Default has occurred and is continuing on the date such
request is made, the purchase of a participating interest in any Swing Line Loan
outstanding as a Transaction Rate Advance shall not be required to be made until
the expiration of the current Interest Period in effect for such Swing Line
Loan. On the date of such required purchase, each Revolving Lender will
immediately transfer to the Swing Line Lender, in immediately available funds,
the amount of its participation. Whenever, at any time after the Swing Line
Lender has received from any such Revolving Lender the funds for its
participating interest in a Swing Line Loan, the Agent receives any payment on
account thereof, the Agent will distribute to such Revolving Lender its
participating interest in such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Revolving
Lender's participating interest was outstanding and funded); provided, however,
that if such payment received by the Agent is required to be returned, such
Revolving Lender will return to the Agent any portion thereof previously
distributed by the Agent to it. Each Revolving Lender's obligation to purchase
such participating interests shall be absolute and unconditional and shall not
be affected by any circumstance, including without limitation (i) any setoff,
counterclaim, recoupment, defense or other right that such Revolving Lender or
any other Person may have against the Swing Line Lender requesting such purchase
or any other Person for any reason whatsoever, (ii)
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the occurrence or continuation of a Default or an Event of Default or the
termination of any of the Commitments, (iii) any adverse change in the condition
(financial or otherwise) of any Revolving Borrower, any of its Subsidiaries, or
any other Person, (iv) any breach of this Agreement by Parent, any other
Borrower, or any other Lender, or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided, however,
that no such obligation shall exist (A) to the extent that the aggregate Swing
Line Loans were advanced in excess of the Swing Line Commitment then in effect,
or (B) with respect to any Swing Line Loan where the Swing Line Lender actually
advanced to any Revolving Borrower net proceeds from the Swing Line Loan (and
therefore was not refunding a previous Swing Line Loan) at a time when (x) the
Swing Line Lender had actual knowledge that an Event of Default had occurred and
then existed, and (y) the Required Lenders had not agreed to waive such Event of
Default for purposes of funding such Swing Line Loan.
SECTION 3.04. L/C SUBCOMMITMENT.
(a) Subject to, and upon the terms and conditions, hereof
(including the limitations of Section 3.01) any Revolving Borrower may request,
in accordance with the provisions of this Section 3.04 and Section 3.05, that on
and after the Closing Date, that the Agent issue a Letter or Letters of Credit
for the account of the Revolving Borrowers; provided that (i) no Letter of
Credit shall have an expiration date that is later than ten days prior to the
Revolver Termination Date; (ii) each Letter of Credit issued by the Agent shall
be in a stated amount of at least $250,000; (iii) the Borrower shall not request
that the Agent issue any Letter of Credit, if, after giving effect to such
issuance, the Aggregate L/C Outstandings would exceed the L/C Subcommitment.
(b) The L/C Subcommitment shall be permanently and immediately
reduced by the stated amount of the IRB LC immediately upon the termination
thereof.
SECTION 3.05. NOTICE OF ISSUANCE OF LETTER OF CREDIT;
AGREEMENT TO ISSUE.
(a) Whenever a Revolving Borrower desires the issuance of a
Letter of Credit, it shall, in addition to any application and documentation
procedures required by the Agent for the issuance of such Letter of Credit,
deliver to the Agent a written notice no later than 11:00 A.M. (Atlanta, Georgia
time) at least ten (10) days in advance of the proposed date of issuance. Each
such notice shall specify (i) the proposed date of issuance (which shall be a
Business Day); (ii) the face amount of the Letter of Credit; (iii) the
expiration date of the Letter of Credit; and (iv) the name and address of the
beneficiary with respect to such Letter of Credit and shall attach a precise
description of the documentation and a verbatim text of any certificate to be
presented by the beneficiary of such Letter of Credit which would require the
Agent to make payment under the Letter of Credit, provided that the Agent may
require changes in any such documents and certificates in accordance with its
customary letter of credit practices, and provided further, that no Letter of
Credit shall require payment against a conforming draft to be made thereunder on
the same Business Day that such draft is presented if such presentation is made
after 11:00 A.M. (Atlanta, Georgia time). In determining whether to pay under
any Letter of Credit, the Agent shall be responsible only to determine that the
documents and certificate required to be delivered under its Letter of Credit
have been delivered, and
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that they comply on their face with the requirements of the Letter of Credit.
Promptly after receiving the notice of issuance of a Letter of Credit, the Agent
shall notify each Lender of such Lender's respective participation therein,
determined in accordance with its respective Pro Rata Share as determined on the
date of the issuance of such Letter of Credit.
(b) The Agent agrees, subject to the terms and conditions set
forth in this Agreement, to issue for the account of the Borrowers a Letter of
Credit in a face amount equal to the face amount requested under paragraph (a)
above, following its receipt of a notice and the application and other documents
required by Section 3.05(a). Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby agrees to, have irrevocably
purchased from the Agent a participation in such Letter of Credit and any
drawing thereunder in an amount equal to such Lender's Pro Rata Share of such
Letter of Credit multiplied by the face amount of such Letter of Credit.
(c) In addition, upon the terms and subject to the conditions
of the Letter of Credit Agreement, the terms of which are expressly incorporated
herein by this reference, the Agent has issued the IRB LC, which for purposes of
this Agreement, shall be deemed to have been issued hereunder pursuant to the
Revolving Loan Commitments, and the Revolving Loan Commitments and L/C
Subcommitment shall be reduced by the stated amount thereof. Each Lender hereby
irrevocably purchases a participation interest in such IRB LC and in any advance
made pursuant to such IRB LC in accordance with subsection (b) above.
Notwithstanding anything in this Agreement to the contrary, the Lenders shall
not be entitled to receive any fees paid with respect to the IRB LC pursuant to
the Letter of Credit Agreement except as specifically provided in Section
4.05(c) hereof.
SECTION 3.06. PAYMENT OF AMOUNTS DRAWN UNDER LETTER OF CREDIT.
(a) In the event of any request for a drawing under any Letter
of Credit by the beneficiary thereof, the Agent shall notify the applicable
Revolving Borrower and the Lenders on or before the date on which the Agent
intends to honor such drawing, and the applicable Revolving Borrower shall
reimburse the Agent on the day on which such drawing is honored in an amount, in
same day funds, equal to the amount of such drawing, provided that anything
contained in this Agreement to the contrary notwithstanding, unless the
applicable Revolving Borrower shall have notified the Agent prior to 11:00 A.M.
(Atlanta, Georgia time) on the Business Day immediately prior to the date on
which such drawing is honored, that the Borrower intends to reimburse the Agent
for the amount of such drawing in funds other than the proceeds of Revolving
Loans, the applicable Revolving Borrower shall be deemed to have timely given a
Notice of applicable Revolving Borrowing to the Agent requesting Revolving Loans
which are Base Rate Advances on the date on which such drawing is honored in an
amount equal to the amount of such drawing, and the Lenders shall by 1:00 P.M.
(Atlanta, Georgia time) on the date of such drawing, make Revolving Loans which
are Base Rate Advances in the amount of such drawing, the proceeds of which
shall be applied directly by the Agent to reimburse the Agent for the amount of
such drawing, provided that for the purposes solely of such Borrowing, the
conditions and precedents set forth in Sections 5.01 and 5.02 hereof shall not
be applicable, and provided further that if for any reason proceeds of the
Revolving Loans are not received by the Agent on such date in the amount equal
to the amount of
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such drawing, the Borrower shall reimburse the Agent on the Business Day
immediately following the date of such drawing in an amount, in Dollars and
immediately available funds, equal to the excess of the amount of such drawing
over the amount of such Revolving Loans, if any, which are so received, plus
accrued interest on the amount at the applicable rate of interest for Base Rate
Advances.
Notwithstanding the foregoing, with respect to the IRB LC, if DFLP's
reimbursement obligations for such draft arise under Section 2A(i) of the Letter
of Credit Agreement, the Agent shall give immediate notice to each of the
Revolving Lenders of such payment by the Agent. If DFLP's reimbursement
obligations for such draft arise under Section 2A(ii) or 2A(iii) of the Letter
of Credit Agreement, the Agent shall give notice to each of the Revolving
Lenders of such payment by the Agent on the next succeeding Business Day unless
such reimbursement obligation is sooner fulfilled by a Borrower.
(b) Notwithstanding any provision of this Agreement to the
contrary, to the extent that any Letter of Credit or portion thereof remains
outstanding on the Revolver Termination Date, the parties hereby agree that the
beneficiary or beneficiaries thereof shall be deemed to have made a drawing of
all available amounts pursuant to such Letters of Credit on the Revolver
Termination Date, which amounts shall be reimbursed to the Agent as set forth
above and thereafter held by the Collateral Agent as cash collateral for its
remaining obligations pursuant to such Letters of Credit in the L/C Cash
Collateral Account.
SECTION 3.07. PAYMENT BY LENDERS. In the event that the
Revolving Borrowers shall fail to reimburse the Agent as provided in Section
3.06 by borrowing Revolving Loans, or otherwise providing an amount equal to the
amount of any drawing honored by the Agent pursuant to any Letter of Credit
issued by it, the Agent shall promptly notify each Lender of the unreimbursed
amount of such drawing and of such Lender's respective participation therein.
Each Lender shall make available to the Agent an amount equal to its respective
participation, in Dollars and in immediately available funds, at the office of
the Agent specified in such notice not later than 1:00 P.M. (Atlanta, Georgia
time) on the Business Day after the date notified by the Agent. In the event
that any such Lender fails to make available to the Agent the amount of such
Lender's participation in such Letter of Credit, the Agent shall be entitled to
recover such amount on demand from such Lender together with interest as
provided for in Section 4.02(d). The Agent shall distribute to each other Lender
which has paid all amounts payable under this Section with respect to any Letter
of Credit, such Lender's Pro Rata Share of all payments received by the Agent
from the Borrower in reimbursement of drawings honored by the Agent under such
Letter of Credit when such payments are received.
SECTION 3.08 OBLIGATIONS ABSOLUTE. The obligation of the
Revolving Borrowers to reimburse the Agent for drawings made under Letters of
Credit issued for the account of the Revolving Borrowers and the Lenders'
obligation to honor their participations purchased therein shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including without limitation,
the following circumstances:
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(a) Any lack of validity or enforceability of any Letter of
Credit;
(b) The existence of any claim, set-off, defense or other
right which the Borrower or any Subsidiary or Affiliate of any
Revolving Borrower may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for whom
any such beneficiary or transferee may be acting), any Lender or any
other Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction
(including without limitation any underlying transaction between any
Revolving Borrower or any of its Subsidiaries and Affiliates and the
beneficiary for which such Letter of Credit was procured); provided
that nothing in this Section shall affect the right of any Revolving
Borrower to seek relief against any beneficiary, transferee, Lender or
any other Person in any action or proceeding or to bring a counterclaim
in any suit involving such Persons;
(c) Any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent
or invalid in any respect or any statement therein being untrue or
inaccurate in any respect;
(d) Payment by the Agent under any Letter of Credit against
presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;
(e) Any other circumstance or happening whatsoever which is
similar to any of the foregoing; or
(f) the fact that a Default or an Event of Default shall have
occurred and be continuing.
Nothing in this Section 3.08 shall prevent an action against the Agent for its
gross negligence or willful misconduct.
SECTION 3.09. INDEMNIFICATION; NATURE OF AGENT'S DUTIES.
(a) In addition to amounts payable elsewhere provided in this
Agreement, without duplication, the Revolving Borrowers, jointly and severally,
hereby agree to protect, indemnify, pay and save the Agent and each Lender
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and reasonable expenses (including reasonable attorney's
fees and disbursements) which the Agent or any Lender may incur or be subject to
as a consequence, direct or indirect, of (i) the issuance of any Letter of
Credit for the account of any Revolving Borrower, other than as a result of the
gross negligence or willful misconduct of the Agent; (ii) the failure of the
Agent to honor a drawing under any Letter of Credit due to any act or omission
(whether rightful or wrongful) of any present or future de jure or de facto
government or governmental authority; or (iii) any confirmation of any Letter of
Credit obtained by the Agent with the consent of the Revolving Borrowers.
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(b) Notwithstanding any other provision contained in this
Agreement, the Agent shall not be obligated to issue any Letter of Credit, nor
shall any Lender be obligated to purchase its participation in any Letter of
Credit to be issued hereunder, if the issuance of such Letter of Credit or
purchase of such participation shall have become unlawful or prohibited by
compliance by Agent or such Lender in good faith with any law, governmental
rule, guideline, request, order, injunction, judgment or decree (whether or not
having the force of law); provided that in the case of the obligation of a
Lender to purchase such participation, such Lender shall have notified the Agent
to such effect in writing at least ten (10) Business Days' prior to the issuance
thereof by the Agent, which notice shall relieve the Agent of its obligation to
issue such Letter of Credit pursuant to Section 3.04 and Section 3.05 hereof.
SECTION 3.10. REDUCTIONS OF REVOLVING LOAN COMMITMENTS.
(a) Upon at least three Business Days' prior telephonic notice
(promptly confirmed in writing) to the Agent, the Revolving Borrowers shall have
the right, without premium or penalty, to terminate the Revolving Loan
Commitments, in part or in whole, provided that (i) any such termination shall
apply to proportionately and permanently reduce the Revolving Loan Commitments
of each of the Revolving Lenders, (ii) any partial termination pursuant to this
Section 3.10(a) shall be in an amount of at least $1,000,000 and integral
multiples of $100,000, and (iii) no such reduction shall be permitted which
would reduce the Revolving Loan Commitments to an amount less than the sum of
(A) the Aggregate L/C Outstandings, (B) the aggregate principal amount
outstanding under the Revolving Loans, and (C) the aggregate principal amount of
the Swing Line Loans.
(b) If any mandatory prepayment shall be due with respect to
the Term Loans pursuant to Section 2.03, but such prepayment cannot be applied,
in whole or in part, because the Term Loans have been, or are then being, paid
in full, then the Revolving Loan Commitments shall automatically and ratably be
reduced by an amount equal to such prepayment or portion thereof which cannot be
so applied; provided, however, that no such reduction pursuant to this Section
3.10(b) shall be required to the extent that the Parent would not otherwise be
required by the terms of the Senior Subordinated Indenture to prepay or offer to
redeem the Senior Subordinated Notes by such amounts. Any such reduction of the
Revolving Loan Commitments shall apply as a proportional and permanent reduction
with respect to the Revolving Loan Commitments of each of the Revolving Lenders.
SECTION 3.11. MANDATORY PREPAYMENTS OF REVOLVING LOANS. If the
sum of the (i) aggregate outstanding principal amount of the Revolving Loans,
(ii) the aggregate outstanding principal amount of the Swing Line Loans and
(iii) the Aggregate L/C Outstandings exceed at any time the lesser of the (x)
Revolving Loan Commitments, as reduced pursuant to Section 3.10 or otherwise,
and (y) the Borrowing Base, as determined pursuant to the most recent Borrowing
Base Certificate delivered pursuant hereto, the Revolving Borrowers shall
immediately repay the Revolving Loans and/or Swing Line Loans by an amount equal
to such excess, together with all accrued but unpaid interest on such excess
amount. Each prepayment of Revolving Loans or Swing Line Loans shall be applied
first to Base Rate Advances to the full extent thereof before application
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to Fixed Rate Advances. In the event that the Aggregate L/C Outstandings at any
time exceed the lesser of the (x) Revolving Loan Commitments, as reduced
pursuant to Section 3.10 or otherwise, and (y) the Borrowing Base, as determined
pursuant to the most recent Borrowing Base Certificate delivered pursuant
hereto, the Revolving Borrowers shall immediately deliver to the Collateral
Agent an amount in Dollars equal to the amount of such excess to be held by the
Collateral Agent in the L/C Cash Collateral Account.
SECTION 3.12. USE OF PROCEEDS. The proceeds of the Revolving
Loans and Swing Line Loans shall be used, initially, to repay Indebtedness
outstanding pursuant to the Existing Credit Agreement and thereafter, as working
capital and for other general corporate purposes of the Revolving Borrowers and
their respective Subsidiaries.
ARTICLE 4.
GENERAL LOAN TERMS
SECTION 4.01. FUNDING NOTICES.
(a) (i) Whenever any Revolving Borrower desires to make a
Borrowing of Revolving Loans with respect to the Revolving Loan Commitments
(other than one resulting from a conversion or continuation pursuant to Section
4.01(b)), it shall give the Agent prior written notice (or telephonic notice
promptly confirmed in writing) of such Borrowing (a "Notice of Revolving
Borrowing"), such Notice of Revolving Borrowing to be given at its Payment
Office prior to 12:00 noon (local time for the Agent) (x) one Business Day prior
to the requested date of such Borrowing in the case of Base Rate Advances, and
(y) three Business Days prior to the requested date of such Borrowing in the
case of Eurodollar Advances. Notices received after 12:00 noon shall be deemed
received on the next Business Day. Each Notice of Revolving Borrowing shall be
irrevocable and shall specify the aggregate principal amount of the Borrowing,
the date of Borrowing (which shall be a Business Day), whether the Borrowing is
to consist of Base Rate Advances or Eurodollar Advances and (in the case of
Eurodollar Advances) the Interest Period to be applicable thereto, and the
Revolving Borrower for whom the proceeds of such Borrowing are requested.
(ii) Whenever any Revolving Borrower desires to make a Swing Line
Borrowing, it shall give the Swing Line Lender (with a copy to the Agent) prior
written notice (or telephonic notice promptly confirmed in writing) of such
Swing Line Borrowing (each a "Swing Line Borrowing Notice") prior to 10:00 a.m.
(Eastern time) on the date of such Swing Line Borrowing. Each Swing Line
Borrowing Notice shall specify the aggregate principal amount of the Swing Line
Borrowing, the date of such Swing Line Borrowing (which shall be a Business
Day), whether a Transaction Rate Quote is being requested and, if so, the
Interest Period to be applicable thereto. If any Revolving Borrower requests a
Transaction Rate Quote as aforesaid, then prior to 12:00 noon (local time for
the Swing Line Lender) on such date, the Swing Line Lender shall furnish such
Revolving Borrower (with a copy to the Agent) with a quotation of the interest
rate being offered with respect to such Swing Line Borrowing (whether expressed
as a fixed rate of interest in effect
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for the Interest Period applicable thereto or as a floating rate of interest
based on a specified interest rate index and applicable margin for the Interest
Period to be applicable thereto; in either case, a "Transaction Rate Quote") by
telephone (promptly confirmed in writing) or by facsimile transmission. The
relevant Revolving Borrower shall immediately inform the Swing Line Lender (with
a copy to the Agent) of its decision as to whether to accept the Transaction
Rate Quote and to confirm the Swing Line Borrowing (which may be done by
telephone, promptly confirmed in writing, and which decision shall be
irrevocable). If any Revolving Borrower has so informed the Swing Line Lender
and confirmed the terms of the Swing Line Borrowing, then no later than 2:00
p.m. (Eastern time) on such date, the Swing Line Lender shall make the principal
amount of the Swing Line Loan available to the Agent in immediately available
funds at the Payment Office of the Agent, and the Agent will make available to
such Revolving Borrower such amount by crediting such amount to the Revolving
Borrower's demand deposit account maintained with the Agent. In the event that
the Swing Line Lender does not make such amount available to the Agent at the
time prescribed above, but such amount is received later that day, such amount
may be credited to such Revolving Borrower in the manner described in the
preceding sentence on the next Business Day (with interest on such amount to
begin accruing hereunder on such next Business Day).
(iii) The Term Borrowers shall notify the Agent at least three (3)
Business Days prior to the Closing Date of the Borrowings which will comprise
the Term Loans.
(b) (i) Whenever any Revolving Borrower desires to convert all
or a portion of an outstanding Borrowing under the Revolving Loan Commitments
consisting of Base Rate Advances into a Borrowing consisting of Eurodollar
Advances, or to continue outstanding a Borrowing consisting of Eurodollar
Advances for a new Interest Period, it shall give the Agent at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of each such Borrowing to be converted into or continued as Eurodollar
Advances. Such notice (a "Notice of Revolving Conversion/Continuation") shall be
given prior to 12:00 noon (local time for the Agent) on the date specified at
the Payment Office of the Agent. Each such Notice of Revolving
Conversion/Continuation shall be irrevocable and shall specify the aggregate
principal amount of the Advances to be converted or continued, the date of such
conversion or continuation and the Interest Period to be applicable thereto. If,
upon the expiration of any Interest Period in respect of any Borrowing
consisting of Eurodollar Advances, the Revolving Borrowers shall have failed to
deliver the Notice of Revolving Conversion/Continuation, the Revolving Borrowers
shall be deemed to have elected to convert or continue such Borrowing to a
Borrowing consisting of Base Rate Advances. So long as any Executive Officer of
any Borrower has knowledge that any Default or Event of Default shall have
occurred and be continuing, no Borrowing may be converted into or continued as
(upon expiration of the current Interest Period) Eurodollar Advances unless the
Agent and each of the Revolving Lenders shall have otherwise consented in
writing. No conversion of any Borrowing of Eurodollar Advances shall be
permitted except on the last day of the Interest Period in respect thereof.
(ii) Whenever any Term Borrower desires to convert all or a
portion of an outstanding Borrowing under the Term Loans consisting of Base Rate
Advances into a Borrowing consisting of Eurodollar Advances, or to continue
outstanding a Borrowing consisting of Eurodollar
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Advances for a new Interest Period, it shall give the Agent at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of each such Borrowing to be converted into or continued as Eurodollar
Advances. Such notice (a "Notice of Term Loan Conversion/Continuation") shall be
given prior to 12:00 noon (local time for the Agent) on the date specified at
the Payment Office of the Agent. Each such Notice of Term Loan
Conversion/Continuation shall be irrevocable and shall specify the aggregate
principal amount of the Advances to be converted or continued, the date of such
conversion or continuation and the Interest Period to be applicable thereto. If,
upon the expiration of any Interest Period in respect of any Borrowing
consisting of Eurodollar Advances, the Term Borrowers shall have failed to
deliver the Notice of Term Loan Conversion/Continuation, the Term Borrowers
shall be deemed to have elected to convert or continue such Borrowing to a
Borrowing consisting of Base Rate Advances. So long as any Executive Officer of
any Borrower has knowledge that any Default or Event of Default shall have
occurred and be continuing, no Borrowing may be converted into or continued as
(upon expiration of the current Interest Period) Eurodollar Advances unless the
Agent and each of the Term Lenders shall have otherwise consented in writing. No
conversion of any Borrowing of Eurodollar Advances shall be permitted except on
the last day of the Interest Period in respect thereof.
(c) Without in any way limiting any Borrower's obligation to
confirm in writing any telephonic notice, the Agent and the Swing Line Lender
may act without liability upon the basis of telephonic notice believed by the
Agent or the Swing Line Lender, as the case may be, in good faith to be from any
Borrower prior to receipt of written confirmation. In each such case, each
Borrower hereby waives the right to dispute the Agent's or the Swing Line
Lender's, as the case may be, record of the terms of such telephonic notice.
(d) The Agent shall promptly (and in any event by the same
time on the next succeeding Business Day as such notice is received) give (i)
each Revolving Lender notice by telephone (confirmed in writing) or by telex,
telecopy or facsimile transmission of the matters covered by the notices given
to the Agent pursuant to this Section 4.01 with respect to the Revolving Loan
Commitments, and (ii) each Term Lender notice by telephone (confirmed in
writing) or by telex, telecopy or facsimile transmission of the matters covered
by the notices given to the Agent pursuant to this Section 4.01 with respect to
the Term Loans.
SECTION 4.02. DISBURSEMENT OF FUNDS.
(a) No later than 12:00 noon (local time for the Agent) in the
case of a Borrowing consisting of Eurodollar Advances and no later than 2:00
p.m. (local time for the Agent) in the case of a Borrowing consisting of Base
Rate Advances on the date of each Borrowing pursuant to the Revolving Loan
Commitments (other than one resulting from a conversion or continuation pursuant
to Section 4.01(b)(i)), each Revolving Lender will make available its Pro Rata
Share of the amount of such Borrowing in immediately available funds at the
Payment Office of the Agent. The Agent will make available to the Revolving
Borrowers the aggregate of the amounts (if any) so made available by the
Revolving Lenders to the Agent in a timely manner by crediting such amounts to
the applicable Revolving Borrower's demand deposit account maintained with the
Agent or at such
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Revolving Borrower's option, by effecting a wire transfer of such amounts to
such Revolving Borrower's account specified by such Revolving Borrower, by the
close of business on such Business Day. In the event that the Revolving Lenders
do not make such amounts available to the Agent by the time prescribed above,
but such amount is received later that day, such amount may be credited to
Borrower in the manner described in the preceding sentence on the next Business
Day (with interest on such amount to begin accruing hereunder on such next
Business Day).
(b) No later than 2:00 p.m. (local time for the Swing Line
Lender) on the date of each Swing Line Loan, the Swing Line Lender shall make
available to the Revolving Borrowers the requested Swing Line Loan by crediting
such amounts to the requesting Revolving Borrower's demand deposit account
maintained with the Agent or at such Revolving Borrower's option, by effecting a
wire transfer of such amounts to the Revolving Borrower's account specified by
such Revolving Borrower, by the close of business on such Business Day.
(c) On the Closing Date, each Term Lender will make available
its Pro Rata Share of the amount of the Term Loans in immediately available
funds at the Payment Office of the Agent by 2:00 p.m. (local time for the
Agent). The Agent will make available to the Term Borrowers the aggregate of the
amounts (if any) so made available by the Term Lenders to the Agent in a timely
manner by crediting such amounts to the Term Borrowers in accordance with their
written instructions by the close of business on such Business Day. In the event
that the Term Lenders do not make such amounts available to the Agent by the
time prescribed above, but such amount is received later that day, such amount
may be credited to the Term Borrowers in the manner described in the preceding
sentence on the next Business Day (with interest on such amount to begin
accruing hereunder on such next Business Day).
(d) Unless the Agent shall have been notified by any Lender
prior to the date of a Borrowing that such Lender does not intend to make
available to the Agent such Lender's portion of the Borrowing to be made on such
date, the Agent may assume that such Lender has made such amount available to
the Agent on such date and the Agent may make available to Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Lender on the date of Borrowing, the Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest at the Federal Funds Rate. If such Lender does not pay
such corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify Borrower, and Borrower shall immediately pay such
corresponding amount to the Agent together with interest at the rate specified
for the Borrowing which includes such amount paid and any amounts due under
Section 4.12 hereof. Nothing in this subsection shall be deemed to relieve any
Lender from its obligation to fund its Commitments hereunder or to prejudice any
rights which Borrower may have against any Lender as a result of any default by
such Lender hereunder.
(e) All Borrowings under the Revolving Loan Commitments,
including the L/C Subcommitment, shall be loaned by the Revolving Lenders on the
basis of their Pro Rata Share on the date of such Borrowing. All Borrowing under
the Term Loan Commitments shall be loaned by the Term Lenders on the basis of
their Pro Rata Share on the Closing Date. No Lender shall be
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responsible for any default by any other Lender in its obligations hereunder,
and each Lender shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fund its Commitment
hereunder.
SECTION 4.03. INTEREST.
(a) Borrower agrees to pay interest in respect of all unpaid
principal amounts of the Revolving Loans and the Term Loans from the respective
dates such principal amounts were advanced to maturity (whether by acceleration,
notice of prepayment or otherwise) at rates per annum equal to the applicable
rates indicated below:
(i) For Base Rate Advances--The Base Rate in effect
from time to time plus the Applicable Margin; and
(ii) For Eurodollar Advances--The relevant Adjusted
LIBO Rate plus the Applicable Margin.
(b) Borrower agrees to pay interest in respect of all unpaid
principal amounts of the Swing Line Loans made to Borrower from the respective
dates such principal amounts were advanced to maturity (whether by acceleration,
notice of prepayment or otherwise) at rates per annum equal to the applicable
rates indicated below:
(i) For Base Rate Advances--The Base Rate in effect
on each day that the Swing Line Loan is outstanding plus the
Applicable Margin; and
(ii) For Transaction Rate Advances--The relevant
Transaction Rate for such Interest Period.
(c) Overdue principal and, to the extent not prohibited by
applicable law, overdue interest, in respect of the Revolving Loans, Swing Line
Loans and Term Loans, and all other overdue amounts owing hereunder, shall bear
interest from each date that such amounts are overdue:
(i) in the case of overdue principal and interest
with respect to all Loans outstanding as Fixed Rate Advances,
at the rate applicable for the then-current Interest Period
plus an additional two percent (2.0%) per annum and, following
the termination of such Interest Period, at the rate in effect
for Base Rate Advances plus an additional two percent (2.0%)
per annum; and
(ii) in the case of overdue principal and interest
with respect to all other Loans outstanding as Base Rate
Advances and all other Obligations hereunder (other than
Loans), at the rate in effect for Base Rate Advances plus an
additional two percent (2.0%) per annum.
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(d) Interest on each Loan shall accrue from and including the
date of such Loan to but excluding the date of any repayment thereof; provided
that, if a Loan is repaid on the same day made, one day's interest shall be paid
on such Loan. Interest on all outstanding Base Rate Advances shall be payable
quarterly in arrears on the last day of each calendar quarter, commencing on
September 30, 1997. Interest on all outstanding Fixed Rate Advances shall be
payable on the last day of each Interest Period applicable thereto, and, in the
case of Fixed Rate Advances having an Interest Period in excess of three months,
on each three month anniversary of the initial date of such Interest Period.
Interest on all Loans shall be payable on any conversion of any Advances
comprising such Loans into Advances of another Type, prepayment (on the amount
prepaid), at maturity (whether by acceleration, notice of prepayment or
otherwise) and, after maturity, on demand.
(e) The Agent, upon determining the Adjusted LIBO Rate for any
Interest Period, shall promptly notify by telephone (confirmed in writing) or in
writing the relevant Borrowers and the relevant Lenders. Any such determination
shall, absent manifest error, be final, conclusive and binding for all purposes.
SECTION 4.04. INTEREST PERIODS.
(a) In connection with the making or continuation of, or
conversion into, each Borrowing of Eurodollar Advances, the requesting Borrower
or Borrowers shall select an Interest Period to be applicable to such Eurodollar
Advances, which Interest Period shall be either a 1, 2, 3 or 6 month period.
(b) In connection with the submission of each Transaction Rate
Request, the requesting Borrower may select an Interest Period to be applicable
to such Swing Line Loan not to exceed ninety (90) days.
(c) Notwithstanding paragraphs (a) and (b) of this
Section 4.04:
(i) The initial Interest Period for any Borrowing of
Fixed Rate Advances shall commence on the date of such
Borrowing (including the date of any conversion from a
Borrowing consisting of Base Rate Advances) and each Interest
Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest
Period expires;
(ii) If any Interest Period would otherwise expire on
a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day, provided that if
any Interest Period in respect of Eurodollar Advances would
otherwise expire on a day that is not a Business Day but is a
day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next
preceding Business Day;
(iii) Any Interest Period in respect of Eurodollar
Advances which begins on a day for which there is no
numerically corresponding day in the calendar month
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at the end of such Interest Period shall, subject to part (iv)
and (v) below, expire on the last Business Day of such
calendar month;
(iv) No Interest Period with respect to the Revolving
Loans or the Swing Line Loans shall extend beyond the Revolver
Termination Date; and
(v) No Interest Period with respect to the Term Loans
shall extend beyond the Term Loan Maturity Date nor shall any
Interest Period with respect to the Term Loans extend beyond
any Mandatory Reduction Date, unless the amount of the Term
Loans outstanding as Base Rate Advances or Fixed Rate Advances
with Interest Periods maturing prior to such Mandatory
Reduction Date exceeds the scheduled principal reduction of
the Term Loans due on such date.
SECTION 4.05. FEES.
(a) The Revolving Borrowers shall pay to the Agent, for the
ratable benefit of each Revolving Lender based upon its respective Pro Rata
Share of the Revolving Loan Commitments, a commitment fee (the "Commitment Fee")
for the period commencing on the Closing Date to and including the Revolver
Termination Date, payable quarterly in arrears on the last day of each calendar
quarter, commencing on September 30, 1997, and on the Revolver Termination Date,
equal to the Applicable Commitment Fee Rate multiplied by the average daily
amount of the unused Revolving Loan Commitments (with the express understanding
that the L/C Obligations and Swing Line Loans shall be deemed to be utilizations
of the Revolving Loan Commitments).
(b) The Revolving Borrowers shall pay to the Agent, for the
account of itself and the Revolving Lenders, a letter of credit fee equal to the
Applicable Margin for Eurodollar Advances multiplied by the average daily
aggregate L/C Exposure with respect to Letters of Credit (other than the IRB LC)
(the "Letter of Credit Fee"). The Letter of Credit Fee shall be payable by the
Borrower quarterly, in arrears, commencing on September 30, 1997 and continuing
thereafter on the last day of each succeeding calendar quarter and on the
Revolver Termination Date. On the date of receipt of the Letter of Credit Fee,
the Agent shall retain an amount equal to one eighth of one percent (0.125%)
multiplied by the average daily Aggregate L/C Obligations with respect to
Letters of Credit (other than the IRB LC) for the Agent's own account and shall
distribute the remaining portion of the Letter of Credit Fee to the Revolving
Lenders, pro rata based upon each Revolving Lender's Pro Rata Share.
(c) With respect to the IRB LC, in lieu of the fee to be paid
to STBA pursuant to Section 1B of the Letter of Credit Agreement, DFLP shall pay
to the Agent, for the account of the Revolving Lenders, a letter of credit fee
which is equal to the Applicable Margin for Eurodollar Advances multiplied by
the Stated Amount of the IRB LC (the "Bond Letter of Credit Fee"). The Bond
Letter of Credit Fee shall be payable by DFLP quarterly, in advance, based upon
the Applicable Margin for Eurodollar Advances for the preceding quarter,
commencing on September 30, 1997 and continuing thereafter on the last day of
each succeeding March, June, September and
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December, and on the Revolver Termination Date. On the date of receipt of the
Bond Letter of Credit Fee, the Agent shall retain an amount equal to one eighth
of one percent (0.125%) of the Stated Amount for the Agent's account and shall
distribute the remaining portion of the Bond Letter of Credit Fee to the
Revolving Lenders, pro rata based upon each Revolving Lender's Pro Rata Share.
(d) Borrower shall pay to the Agents such other administrative
fees in the respective amounts and on the dates as agreed in writing by the
Borrowers with such Agents.
SECTION 4.06. VOLUNTARY PREPAYMENTS OF BORROWINGS.
(a) The relevant Borrowers may, at their option, prepay
Borrowings consisting of Base Rate Advances outstanding as Revolving Loans at
any time in whole, or from time to time in part, in amounts aggregating $500,000
or any greater integral multiple of $100,000, by paying the principal amount to
be prepaid together with interest accrued and unpaid thereon to the date of
prepayment. Borrowings consisting of Eurodollar Advances may be prepaid, at any
Borrower's option, in whole, or from time to time in part, in amounts
aggregating $1,000,000 or any greater integral multiple of $500,000, by paying
the principal amount to be prepaid, together with interest accrued and unpaid
thereon to the date of prepayment, and all compensation payments pursuant to
Section 4.12 if such prepayment is made on a date other than the last day of an
Interest Period applicable thereto. The relevant Borrowers may, at their option,
prepay Borrowings consisting of Base Rate Advances outstanding as Swing Line
Loans at any time in whole, or from time to time in part, in amounts aggregating
$25,000 or any greater integral multiple of $1,000, by paying the principal
amount to be prepaid together with interest accrued and unpaid thereon to the
date of prepayment. Borrowings consisting of Transaction Rate Advances may be
prepaid, at any Borrower's option, in whole, or from time to time in part, in
amounts aggregating $100,000 or any greater integral multiple of $10,000, by
paying the principal amount to be prepaid, together with interest accrued and
unpaid thereon to the date of prepayment, and all compensation payments pursuant
to Section 4.12 if such prepayment is made on a date other than the last day of
an Interest Period applicable thereto. Each such optional prepayment shall be
applied in accordance with Section 4.06(c) below.
(b) The relevant Borrower shall give written notice (or
telephonic notice confirmed in writing) to the Agent of any intended prepayment
of the Loans (i) by 11:00 A.M. (local time for the Agent) on the Business Day of
any prepayment of Base Rate Advances and (ii) not less than three Business Days
prior to any prepayment of Eurodollar Advances or Transaction Rate Advances.
Such notice, once given, shall be irrevocable. Upon receipt of such notice of
prepayment pursuant to the first sentence of this paragraph (b) with respect to
any prepayment of Revolving Loans or Term Loans, the Agent shall promptly (and
in any event by the same time on the next succeeding Business Day as such notice
is received) notify each Lender of the contents of such notice and of such
Lender's Pro Rata Share (as determined pursuant to clause (ii) of such
definition) of each of the Loans subject to such prepayment.
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(c) The relevant Borrower, when providing notice of prepayment
pursuant to Section 4.06(b), may designate the Types of Advances and the
specific Borrowing or Borrowings which are to be prepaid, provided that (i) if
any prepayment of Eurodollar Advances made pursuant to a single Borrowing of the
Loans shall reduce the outstanding Advances made pursuant to such Borrowing to
an amount less than $1,000,000, such Borrowing shall immediately be converted
into Base Rate Advances; and (ii) each prepayment made pursuant to a single
Borrowing shall be applied pro rata among the Loans comprising such Borrowing.
In the absence of a designation by the relevant Borrower, the Agent or, with
respect to the Swing Line Loans, the Swing Line Lender, shall, subject to the
foregoing, make such designation in its discretion but using reasonable efforts
to avoid funding losses to the Lenders pursuant to Section 4.12. All voluntary
prepayments shall be applied to the payment of interest before application to
principal.
SECTION 4.07. PAYMENTS, ETC.
(a) All payments under this Agreement and the other Credit
Documents, unless otherwise specified, shall be made without defense, set-off or
counterclaim to the Agent not later than 12:00 noon (local time for the Agent)
on the date when due and shall be made in Dollars in immediately available funds
at the Agent's Payment Office.
(b) (i) All such payments shall be made free and clear of and
without deduction or withholding for any Taxes in respect of this Agreement, the
Notes or other Credit Documents, or any payments of principal, interest, fees or
other amounts payable hereunder or thereunder (but excluding, except as provided
in paragraph (iii) hereof, any Taxes imposed on the overall net income of the
Lenders pursuant to the laws of (x) the United States, (y) the jurisdiction in
which such Lender is organized, or (z) the jurisdiction in which the principal
executive office or appropriate Lending Office of such Lender is located). If
any Borrower or other Person is required by applicable law to make any deduction
or withholding of any Tax, the Borrowers, jointly and severally, agree (A) to
pay the full amount of such Taxes, and such additional amounts as may be
necessary so that every net payment of all amounts due hereunder and under the
Notes and other Credit Documents, after withholding or deduction for or on
account of any such Taxes (including additional sums payable under this Section
4.07), will not be less than the full amount provided for herein had no such
deduction or withholding been required, (B) to make such withholding or
deduction and (C) to pay the full amount deducted to the relevant authority in
accordance with applicable law. The Borrowers will furnish to the Agent and each
Lender, within 30 days after the date the payment of any Taxes is due pursuant
to applicable law, certified copies of tax receipts evidencing such payment by
Borrowers. Borrowers will indemnify and hold harmless the Agent and each Lender
and reimburse the Agent and each Lender upon written request for the amount of
any Taxes so levied or imposed and paid by the Agent or Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or illegally asserted. A
certificate as to the amount of such payment by such Lender or the Agent, absent
manifest error, shall be final, conclusive and binding for all purposes.
(ii) Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) agrees to
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furnish to Borrowers and the Agent, prior to the time it becomes a Lender
hereunder, two copies of either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 or any successor forms thereto (wherein such
Lender claims entitlement to complete exemption from or reduced rate of U.S.
Federal withholding tax on interest paid by Borrowers hereunder) and to provide
to Borrowers and the Agent a new Form 4224 or Form 1001 or any successor forms
thereto if any previously delivered form is found to be incomplete or incorrect
in any material respect or upon the obsolescence of any previously delivered
form; provided, however, that no Lender shall be required to furnish a form
under this paragraph (ii) after the date that it becomes a Lender hereunder if
it is not entitled to claim an exemption from or a reduced rate of withholding
under applicable law.
(iii) Borrowers shall also reimburse the Agent and each
Lender, upon written request, for any Taxes imposed (including, without
limitation, Taxes imposed on the overall net income of the Agent or Lender or
its applicable Lending Office pursuant to the laws of the jurisdiction in which
the principal executive office or the applicable Lending Office of the Agent or
Lender is located) as the Agent or Lender shall determine are payable by the
Agent or Lender in respect of amounts paid by or on behalf of Borrowers to or on
behalf of the Agent or Lender pursuant to paragraph (i) hereof.
(c) Subject to Section 4.04(c)(ii), whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day which is not
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the applicable rate during such extension.
(d) All computations of interest and fees shall be made on the
basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or fees are payable (to the extent computed on the basis of days elapsed).
Interest on Base Rate Advances shall be calculated based on the Base Rate from
and including the date of such Loan to but excluding the date of the repayment
or conversion thereof. Interest on Eurodollar Advances and Transaction Rate
Advances shall be calculated as to each Interest Period from and including the
first day thereof to but excluding the last day thereof. Each determination by
the Agent of an interest rate or fee hereunder shall be made in good faith and,
except for manifest error, shall be final, conclusive and binding for all
purposes.
(e) Payment by any Borrower to the Agent in accordance with
the terms of this Agreement shall, as to the Borrowers, constitute payment to
the Lenders under this Agreement.
SECTION 4.08. INTEREST RATE NOT ASCERTAINABLE, ETC. In the
event that the Agent shall have determined (which determination shall be made in
good faith and, absent manifest error, shall be final, conclusive and binding
upon all parties) that on any date for determining the Adjusted LIBO Rate for
any Interest Period, by reason of any changes arising after the date of this
Agreement affecting the London interbank market, or the Agent's position in such
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Adjusted LIBO Rate,
then, and in any such event, the Agent shall forthwith give notice (by telephone
confirmed in writing) to Borrowers and to the Lenders, of such determination
and a
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summary of the basis for such determination. Until the Agent notifies Borrowers
that the circumstances giving rise to the suspension described herein no longer
exist, the obligations of the Lenders to make or permit portions of the
Revolving Loans and the Term Loans to remain outstanding past the last day of
the then current Interest Periods as Eurodollar Advances shall be suspended, and
such affected Advances shall bear the same interest as Base Rate Advances.
SECTION 4.09. ILLEGALITY.
(a) In the event that any Lender shall have determined (which
determination shall be made in good faith and, absent manifest error, shall be
final, conclusive and binding upon all parties) at any time that the making or
continuance of any Eurodollar Advance has become unlawful by compliance by such
Lender in good faith with any applicable law, governmental rule, regulation,
guideline or order (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful), then, in any such event, the
Lender shall give prompt notice (by telephone confirmed in writing) to Borrowers
and to the Agent of such determination and a summary of the basis for such
determination (which notice the Agent shall promptly transmit to the other
Lenders).
(b) Upon the giving of the notice to Borrowers referred to in
subsection (a) above, (i) each Borrower's right to request and such Lender's
obligation to make Eurodollar Advances shall be immediately suspended, and such
Lender shall make an Advance as part of the requested Borrowing of Eurodollar
Advances under the Revolving Loan Commitments as a Base Rate Advance, which Base
Rate Advance shall, for all other purposes, be considered part of such
Borrowing, and (ii) if the affected Eurodollar Advance or Advances are then
outstanding, Borrowers shall immediately, or if permitted by applicable law, no
later than the date permitted thereby, upon at least one Business Day's written
notice to the Agent and the affected Lender, convert each such Advance into a
Base Rate Advance or Advances, provided that if more than one Lender is affected
at any time, then all affected Lenders must be treated the same pursuant to this
Section 4.09(b).
SECTION 4.10. INCREASED COSTS.
(a) If, by reason of (x) after the date hereof, the
introduction of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation, or (y) the compliance with any guideline or request
from any central bank or other governmental authority or quasi-governmental
authority exercising control over banks or financial institutions generally
(whether or not having the force of law):
(i) any Lender (or its applicable Lending Office)
shall be subject to any tax, duty or other charge with respect
to its Eurodollar Advances, its participation in Letters of
Credit or its obligation to make Eurodollar Advances or
participate in Letters of Credit, or the basis of taxation of
payments to any Lender of the principal of or interest on its
Eurodollar Advances or its participation in Letters of Credit
or its obligation to make Eurodollar Advances or participate
in Letters of Credit shall
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have changed (except for changes in the tax on the overall net
income of such Lender or its applicable Lending Office imposed
by the jurisdiction in which such Lender is organized or where
such Lender's principal executive office or applicable Lending
Office is located); or
(ii) any reserve (including, without limitation, any
imposed by the Board of Governors of the Federal Reserve
System), special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended
by, any Lender's applicable Lending Office shall be imposed or
deemed applicable or any other condition affecting its
Eurodollar Advances or its participation in Letters of Credit
or its obligation to make Eurodollar Advances or participate
in Letters of Credit shall be imposed on any Lender or its
applicable Lending Office or the London interbank market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Advances
(except to the extent already included in the determination of the applicable
Adjusted LIBO Rate for Eurodollar Advances) or its participation in Letters of
Credit or its obligation to make Eurodollar Advances or participate in Letters
of Credit, or there shall be a reduction in the amount received or receivable by
such Lender or its applicable Lending Office, then Borrowers shall from time to
time (subject, in the case of certain Taxes, to the applicable provisions of
Section 4.07(b)), upon written notice from and demand by such Lender to
Borrowers (with a copy of such notice and demand to the Agent), pay to the Agent
for the account of such Lender within five Business Days after the date of such
notice and demand, additional amounts sufficient to indemnify such Lender
against such increased cost. A certificate as to the amount of such increased
cost, submitted to Borrowers and the Agent by such Lender in good faith and
accompanied by a statement prepared by such Lender describing in reasonable
detail the basis for and calculation of such increased cost, shall, except for
manifest error, be final, conclusive and binding for all purposes.
(b) If any Lender shall advise the Agent that at any time,
because of the circumstances described in clauses (x) or (y) in Section 4.10(a)
or any other circumstances beyond such Lender's reasonable control arising after
the date of this Agreement affecting such Lender or the London interbank market
or such Lender's position in such market, the Adjusted LIBO Rate as determined
by the Agent will not adequately and fairly reflect the cost to such Lender of
funding its Eurodollar Advances, then, and in any such event:
(i) the Agent shall forthwith give notice (by
telephone confirmed in writing) to Borrowers and to the other
Lenders of such advice;
(ii) each Borrower's right to request and such
Lender's obligation to make or permit portions of the Loans to
remain outstanding past the last day of the then current
Interest Periods as Eurodollar Advances shall be immediately
suspended; and
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(iii) such Lender shall make a Loan as part of the
requested Borrowing under the Revolving Loan Commitments or
Term Loans of Eurodollar Advances as a Base Rate Advance,
which such Base Rate Advance shall, for all other purposes, be
considered part of such Borrowing.
SECTION 4.11. LENDING OFFICES.
(a) Each Lender agrees that, if requested by Borrowers, it
will use reasonable efforts (subject to overall policy considerations of such
Lender) to designate an alternate Lending Office with respect to any of its
Eurodollar Advances affected by the matters or circumstances described in
Sections 4.07(b), 4.08, 4.09 or 4.10 to reduce the liability of Borrowers or
avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as reasonably determined by such Lender, which
determination shall be conclusive and binding on all parties hereto. Nothing in
this Section 4.11 shall affect or postpone any of the obligations of Borrowers
or any right of any Lender provided hereunder.
(b) If any Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) issues a public announcement with respect
to the closing of its lending offices in the United States such that any
withholdings or deductions and additional payments with respect to Taxes may be
required to be made by Borrowers thereafter pursuant to Section 4.07(b), such
Lender shall use reasonable efforts to furnish Borrowers notice thereof as soon
as practicable thereafter; provided, however, that no delay or failure to
furnish such notice shall in any event release or discharge Borrowers from its
obligations to such Lender pursuant to Section 4.07(b) or otherwise result in
any liability of such Lender.
SECTION 4.12. FUNDING LOSSES. Borrowers shall compensate each
Lender, upon its written request to Borrowers (which request shall set forth the
basis for requesting such amounts in reasonable detail and which request shall
be made in good faith and, absent manifest error, shall be final, conclusive and
binding upon all of the parties hereto), for all losses, expenses and
liabilities (including, without limitation, any interest paid by such Lender to
lenders of funds borrowed by it to make or carry its Eurodollar Advances or
Transaction Rate Advances, in either case to the extent not recovered by such
Lender in connection with the re-employment of such funds and including loss of
anticipated profits), which the Lender may sustain: (i) if for any reason (other
than a default by such Lender) a borrowing of, or conversion to or continuation
of, Eurodollar Advances or Transaction Rate Advances to any Borrower does not
occur on the date specified therefor on the Closing Date or in a Notice of
Revolving Borrowing, Notice of Swing Line Loan, Notice of Revolving
Conversion/Continuation or Notice of Term Loan Conversion/Continuation of
(whether or not withdrawn), (ii) if any repayment (including mandatory
prepayments and any conversions pursuant to Section 4.09(b)) of any Eurodollar
Advances or Transaction Rate Advances to Borrowers occurs on a date which is not
the last day of an Interest Period applicable thereto, or (iii), if, for any
reason, any Borrower defaults in its obligation to repay its Eurodollar Advances
or Transaction Rate Advances when required by the terms of this Agreement.
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SECTION 4.13. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR
ADVANCES. Calculation of all amounts payable to a Lender under this Article IV
shall be made as though that Lender had actually funded its relevant Eurodollar
Advances through the purchase of deposits in the relevant market bearing
interest at the rate applicable to such Eurodollar Advances in an amount equal
to the amount of the Eurodollar Advances and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar Advances
from an offshore office of that Lender to a domestic office of that Lender in
the United States of America; provided, however, that each Lender may fund each
of its Eurodollar Advances in any manner it sees fit and the foregoing
assumption shall be used only for calculation of amounts payable under this
Article IV.
SECTION 4.14. APPORTIONMENT OF PAYMENTS. Aggregate principal
and interest payments in respect of Loans and payments in respect of Letters of
Credit, Bond Letter of Credit Fees and Commitment Fees shall be apportioned
among all outstanding Commitments and Loans to which such payments relate,
proportionately to the Lenders' respective pro rata portions of such Commitments
and outstanding Loans. The Agent shall promptly distribute to each Lender at its
payment office specified by any Lender its share of all such payments received
by the Agent on the same Business Day as such payment is deemed to be received
by the Agent.
SECTION 4.15. SHARING OF PAYMENTS, ETC. If any Lender shall
obtain any payment or reduction (including, without limitation, any amounts
received as adequate protection of a deposit treated as cash collateral under
the Bankruptcy Code) of the Obligations (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) in excess of its Pro Rata
Share of payments or reductions on account of such obligations obtained by all
the Lenders (other than payments of principal, interest and fees with respect to
the Loans which are payable solely to the Lenders participating therein), such
Lender shall forthwith (i) notify each of the other Lenders and Agent of such
receipt, and (ii) purchase from the other Lenders such participations in the
affected obligations as shall be necessary to cause such purchasing Lender to
share the excess payment or reduction, net of costs incurred in connection
therewith, ratably with each of them, provided that if all or any portion of
such excess payment or reduction is thereafter recovered from such purchasing
Lender or additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or such additional costs,
but without interest unless the Lender obligated to return such funds is
required to pay interest on such funds. Each Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 4.15
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of such Borrower in the amount of such
participation. Any payment received by the Agent or any Lender following the
occurrence and during the continuation of an Event of Default shall be
distributed pro rata amongst the Lenders based upon the percentage obtained by
dividing the Obligations owing to each Lender by the total amount of Obligations
on the date of receipt of such payment, with such amounts to be applied to the
outstanding Obligations in accordance with the terms of this Agreement.
SECTION 4.16. CAPITAL ADEQUACY. Without limiting any other
provision of this Agreement, in the event that any Lender shall have determined
that any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy not currently
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in effect or fully applicable as of the Closing Date, or any change therein or
in the interpretation or application thereof after the Closing Date, or
compliance by such Lender with any request or directive regarding capital
adequacy not currently in effect or fully applicable as of the Closing Date
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) from a central bank or governmental authority or
body having jurisdiction, does or shall have the effect of reducing the rate of
return on such Lender's capital as a consequence of its obligations hereunder to
a level below that which such Lender could have achieved but for such law,
treaty, rule, regulation, guideline or order, or such change or compliance
(taking into consideration such Lender's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then within ten
(10) Business Days after written notice and demand by such Lender (with copies
thereof to the Agent), Borrowers shall from time to time pay to such Lender
additional amounts sufficient to compensate such Lender for such reduction (but,
in the case of outstanding Base Rate Advances, without duplication of any
amounts already recovered by such Lender by reason of an adjustment in the
applicable Base Rate). Each certificate as to the amount payable under this
Section 4.16 (which certificate shall set forth the basis for requesting such
amounts in reasonable detail), submitted to Borrowers by any Lender in good
faith, shall, absent manifest error, be final, conclusive and binding for all
purposes.
SECTION 4.17. LIMITATION ON CERTAIN PAYMENT OBLIGATIONS.
(a) Each Lender or Agent shall make written demand on
Borrowers for indemnification or compensation pursuant to Section 4.07 no later
than one year after the earlier of (i) the date on which such Lender or Agent
makes payment of such Taxes, and (ii) the date on which the relevant taxing
authority or other governmental authority makes written demand upon such Lender
or Agent for payment of such Taxes.
(b) Each Lender or Agent shall make written demand on
Borrowers for indemnification or compensation pursuant to Sections 4.10 and 4.12
no later than one year after the event giving rise to the claim for
indemnification or compensation occurs.
(c) Each Lender or Agent shall make written demand on
Borrowers for indemnification or compensation pursuant to Section 4.16 no later
than one year after such Lender or Agent receives actual notice or obtains
actual knowledge of the promulgation of a law, rule, order or interpretation or
occurrence of another event giving rise to a claim pursuant to such sections.
(d) In the event that the Lenders or Agent fail to give
Borrowers notice within the time limitations prescribed in (a) or (b) above,
Borrowers shall not have any obligation to pay such claim for compensation or
indemnification. In the event that any Lender or Agent fails to give Borrowers
notice within the time limitation prescribed in (c) above, Borrowers shall not
have any obligation to pay any amount with respect to claims accruing prior to
the date which is one year preceding such written demand.
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SECTION 4.18. BENEFITS TO GUARANTORS. In consideration for the
execution and delivery by the Guarantors (other than Parent) of their Guaranty
Agreement, the Borrowers agree to make the benefit of extensions of credit
hereunder available to the Guarantors.
SECTION 4.19. APPLICATION OF LOAN PROCEEDS TO MATURING LOANS.
Notwithstanding the provisions of this Article IV requiring the Lenders to make
available proceeds of their respective Loans to the Agent, in connection with
the Borrowing of Term Loans and Revolving Loans, to the extent that a Loan
previously made by a Lender matures on the date of any such Borrowing of a
requested Loan, such Lender shall apply that portion of the proceeds of the Loan
it is then making sufficient to effect the repayment of principal of the
maturing Loan owing to it, with any excess proceeds to be made available to the
applicable Borrowers as contemplated herein.
ARTICLE 5.
CONDITIONS TO BORROWINGS
The obligations of each Lender to make Advances to the
Borrowers hereunder and to extend the Term Loans and the obligation of the Agent
to issue any Letters of Credit hereunder is subject to the satisfaction of the
following conditions:
SECTION 5.01. CONDITIONS PRECEDENT TO INITIAL LOANS AND
LETTERS OF CREDIT. At the time of the making of the initial Loans hereunder and
issuance or deemed issuance of the Letters of Credit on the Closing Date, all
obligations of Borrowers hereunder incurred prior to the initial Loans
(including, without limitation, any Borrower's obligations to reimburse the fees
and expenses of counsel to the Agents and any fees and expenses payable to the
Agents and the Lenders as previously agreed with any Borrower) for which the
Agent has delivered to any Borrower an invoice not less than five (5) Business
Day prior to the date of such initial Loans, shall have been paid in full, and
the Agents shall have received the following, in form and substance reasonably
satisfactory in all respects to the Agents:
(a) the duly executed counterparts of this Agreement;
(b) the duly completed Revolving Notes evidencing the
Revolving Loan Commitments, the duly executed Term Notes and the duly
executed Swing Line Note;
(c) the duly executed Guaranty Agreements and Contribution
Agreement;
(d) the duly executed Security Agreements and accompanying
Uniform Commercial Code financing statements relating thereto;
(e) the duly executed Trademark Security Agreements and Patent
Security Agreement;
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(f) the duly executed Pledge Agreements accompanied, to the
extent relevant under applicable law, by (i) all stock certificates
representing the Pledged Stock, (ii) stock powers for those shares duly
executed in blank, (iii) Uniform Commercial Code financing statements
relating thereto, and (iv) any other documentation requested by the
Collateral Agent in order to assure the perfection of a first priority
lien in such Pledged Stock in favor of the Collateral Agent for the
benefit of the Lenders;
(g) a duly executed certificate of a senior officer of the
Parent certifying that each of the Credit Parties, after giving effect
to the transactions contemplated by this Agreement, will be Solvent, in
form and substance satisfactory to the Agent;
(h) the duly executed Bond Pledge Agreement accompanied, to
the extent relevant under applicable law, by (i) the original Ad
Valorem Bonds, (ii) bond powers for the Ad Valorem Bonds duly executed
in blank, (iii) Uniform Commercial Code financing statements relating
thereto, and (iv) any other documentation requested by the Collateral
Agent in order to assure the perfection of a first priority lien in
such Ad Valorem Bonds in favor of the Collateral Agent for the benefit
of the Lenders;
(i) duly executed Mortgages with respect to all Real
Property, together with appropriate Uniform Commercial Code financing
statements;
(j) title insurance commitments with respect to the Real
Property subject to the Mortgages in an amount and in a form reasonably
satisfactory to the Collateral Agent;
(k) copies of the as-built surveys of the Real Property
subject to the Mortgages, certified to the Collateral Agent, in a form
reasonably satisfactory to the Collateral Agent, accompanied by
surveyor's certificates in a form reasonably satisfactory to the
Collateral Agent;
(l) copies of the Phase I and Phase II environmental reports
obtained by the Parent with respect to the Real Property owned by
Alamac disclosing only such matters as may be reasonably acceptable to
the Agents and the Lenders;
(m) a duly executed closing certificate of the Borrowers in
substantially the form of Exhibit G attached hereto and appropriately
completed;
(n) certificates of the Secretary or Assistant Secretary of
each of the Credit Parties (or, in the case of any Credit Party which
is a partnership, a comparable officer of its general partner)
attaching and certifying copies of the resolutions of the boards of
directors (or, in the case of any partnership, the comparable governing
body of such entity) of the Credit Parties, authorizing as applicable
(i) the execution, delivery and performance of the Credit Documents,
and (ii) the granting of the pledges and security interests granted
pursuant to the Security Documents;
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(o) certificates of the Secretary or an Assistant Secretary of
each of the Credit Parties (or, in the case of any partnership, a
comparable officer of its general partner) certifying (i) the name,
title and true signature of each officer of such entities executing the
Credit Documents, and (ii) the bylaws or comparable governing documents
of such entities;
(p) certified copies of the certificate or articles of
incorporation of each Credit Party (or comparable organizational
document of each Credit Party which is a partnership), together with
certificates of good standing or existence, as may be available from
the Secretary of State (or comparable office or registry for each
Credit Party which is a partnership) of the jurisdiction of
incorporation or organization of such Credit Party;
(q) examination reports from the Uniform Commercial Code
records of each of the jurisdictions listed on Schedule 5.01 hereto, in
each case showing no outstanding liens or security interests granted by
any Credit Party other than (x) Liens permitted by Section 8.02, and
(y) Liens in favor of the Collateral Agent;
(r) copies of all documents and instruments, including all
consents, authorizations and filings, required or advisable under any
Requirement of Law or by any material Contractual Obligation of the
Credit Parties, in connection with the execution, delivery,
performance, validity and enforceability of the Credit Documents and
the other documents to be executed and delivered hereunder and the
consummation of the Transaction, and such consents, authorizations,
filings and orders shall be in full force and effect and all applicable
waiting periods shall have expired;
(s) certified copies of the Intercompany Loan Documents;
(t) acknowledgments from National Registered Agents, Inc. as
to its appointment as agent for service of process for the various
Credit Parties;
(u) certified copies of indentures, credit agreements,
instruments, and other documents evidencing or securing Indebtedness of
any Consolidated Company described on Schedule 8.01(b), in any single
case in an amount not less than $1,000,000;
(v) certificates, reports and other information as the Agents
may request from any Consolidated Company in order to satisfy the
Lenders as to the absence of any material liabilities or obligations
arising from matters relating to employees of the Consolidated
Companies, including employee relations, collective bargaining
agreements, Plans and other compensation and employee benefit plans;
(w) certificates, reports, environmental audits and
investigations, and other information as the Agents may request from
any Consolidated Company in order to satisfy the Lenders as to the
absence of any material liabilities or obligations arising from
environmental and employee health and safety exposures to which the
Consolidated
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Companies may be subject, and the plans of the Consolidated Companies
with respect thereto;
(x) certificates, reports and other information as the Agents
may request from any Consolidated Company in order to satisfy the
Lenders as to the absence of any material liabilities or obligations
arising from litigation (including without limitation, products
liability and patent infringement claims) pending or threatened against
the Consolidated Companies;
(y) a summary, set forth in format and detail acceptable to
the Agents, of the types and amounts of insurance (property and
liability) maintained by the Consolidated Companies accompanied by the
insurance certificates naming the Collateral Agent as loss payee and
additional insured as may be required by the terms of the Security
Documents;
(z) the favorable opinion of Bass, Berry & Sims PLC, counsel
to the Credit Parties, substantially in the form of Exhibit H-1, and
(ii) Currothers & Roth, P.A. special North Carolina counsel to the
Agents and the Lenders, substantially in the form of Exhibit H-2, in
each case addressed to the Agents and each of the Lenders, and covering
such other matters as either Agent or any Lender may reasonably
request;
(aa) a copy of the Alamac Acquisition Agreement, accompanied
by the certificate of a senior officer of the Parent as to the
consummation of the Alamac Acquisition and the other transactions
contemplated by the Alamac Acquisition Agreement and certain other
matters, together with copies of the documents required to be delivered
pursuant to the Alamac Acquisition Agreement, together with the
certificate of a senior officer of the Parent as to the accuracy
thereof;
(bb) a duly executed Assignment of Purchase Agreement,
acknowledged by the Sellers;
(cc) a letter from Weil Gotshall & Manges, counsel to the
Seller, authorizing the Agents and the Lenders to rely upon the
opinions delivered by such law firm to the Seller in connection with
the Alamac Acquisition;
(dd) a copy of the Senior Subordinated Note Indenture,
accompanied by a certificate of a senior officer of the Parent as to
the consummation of the offering of the Senior Subordinated Notes and
the receipt of gross proceeds thereof in an amount of not less than
$125,000,000;
(ee) a duly executed initial Borrowing Base Certificate;
(ff) written direction from the Borrowers to the Agent
regarding the disbursement of the proceeds of the Term Loans and the
initial Revolving Loans to be made on the Closing Date;
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(gg) evidence satisfactory to the Agent of the repayment of
all other Indebtedness of the Consolidated Companies (including Alamac
Holdings and its Subsidiaries) other than Indebtedness permitted by the
terms of this Agreement;
(hh) the Letter of Credit Agreement Amendment; and
(ii) such other documents, opinions, certificates and
agreements as the Agents may request.
SECTION 5.02. CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT.
At the time of the making of all Loans and issuance of all Letters of Credit
(before as well as after giving effect to such Loans and the proposed use of the
proceeds thereof and the issuance of such Letters of Credit) the following
conditions shall have been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Parent contained
herein, and all representations and warranties by the other Borrowers
contained herein, shall be true and correct in all material respects
with the same effect as though such representations and warranties had
been made on and as of the date of such Loans;
(c) since the date of the financial statements referenced in
Section 6.14 hereof, there shall have been no change which has had or
could reasonably be expected to have a Materially Adverse Effect
(whether or not any notice with respect to such change has been
furnished to the Lenders pursuant to Section 7.07);
(d) there shall be no action or proceeding instituted or
pending before any court or other governmental authority or, to the
knowledge of any Borrower, threatened (i) which reasonably could be
expected to have a Materially Adverse Effect, or (ii) seeking to
prohibit or restrict one or more Credit Party's ownership or operation
of any portion of its business or assets, or to compel one or more
Credit Party to dispose of or hold separate all or any portion of its
businesses or assets, where such portion or portions of such
business(es) or assets, as the case may be, constitute a material
portion of the total businesses or assets of the Consolidated
Companies, taken as a whole;
(e) the Loans to be made and the use of proceeds thereof or
the issuance of such Letters of Credit shall not contravene, violate or
conflict with, or involve the Agents or any Lender in a violation of,
any law, rule, injunction, or regulation, or determination of any court
of law or other governmental authority applicable to any of the
Borrowers; and
(f) the Revolving Borrowers shall have delivered to the Agents
the Borrowing Base Certificate required by Section 7.12 hereof; and
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(g) The Agents shall have received such other documents
(including, without limitation, any necessary Federal Reserve Form U-1
or other similar form required by the Margin Regulations) or legal
opinions as the Agents or any Lender may reasonably request, all in
form and substance reasonably satisfactory to the Agents.
Each request for a Borrowing or issuance of a Letter of Credit
and the acceptance by each Borrower of the proceeds thereof shall constitute a
representation and warranty by such Borrower, as of the date of the Loans
comprising such Borrowing or the issuance of such Letter of Credit, that the
applicable conditions specified in Sections 5.01 and 5.02 have been satisfied.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES
Each of the Parent (as to itself and all other Consolidated
Companies, whether or not the Parent is a Borrower hereunder) and each of the
other Borrowers (as to itself and all of its Subsidiaries) represents and
warrants as follows (and that after giving effect to the Alamac Acquisition, the
following will be true and correct, provided that the representations and
warranties in Sections 6.05, 6.08, 6.12 and 6.15(b) are given with respect to
Alamac Holdings, Alamac Enterprises, Inc. and Alamac to the best knowledge of
the Parent and the other Borrowers):
SECTION 6.01. ORGANIZATIONAL EXISTENCE; COMPLIANCE WITH LAW.
Each of the Consolidated Companies is duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its organization, and each
of the Credit Parties has the corporate or other organizational power and
authority and the legal right to own and operate its property and to conduct its
business. Each of the Consolidated Companies (i) other than the Credit Parties,
has the corporate or other organizational power and authority and the legal
right to own and operate its property and to conduct its business, (ii) is duly
qualified as a foreign corporation or other organization and in good standing
under the laws of each jurisdiction where its ownership of property or the
conduct of its business requires such qualification, and (iii) is in compliance
with all Requirements of Law, where (a) with respect to those Consolidated
Companies that are not Credit Parties, the failure to have such power, authority
and legal right as set forth in clause (i), (b) the failure to be so qualified
or in good standing as set forth in clause (ii), or (c) the failure to comply
with Requirements of Law as set forth in clause (iii), would reasonably be
expected, in the aggregate, to have a Materially Adverse Effect. The
jurisdiction of incorporation or organization, and the ownership of all issued
and outstanding capital stock or other equity interests, for each Subsidiary as
of the date of this Agreement is accurately described on Schedule 6.01.
SECTION 6.02. ORGANIZATIONAL POWER; AUTHORIZATION. Each of the
Credit Parties has the corporate or other organizational power and authority to
make, deliver and perform the Credit Documents to which it is a party and has
taken all necessary corporate or other organizational action to authorize the
execution, delivery and performance of such Credit Documents. No consent or
authorization of, or filing with, any Person (including, without limitation, any
governmental
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authority), is required in connection with the execution, delivery or
performance by any Credit Party, or the validity or enforceability against any
Credit Party, of the Credit Documents, other than (i) such consents,
authorizations or filings which have been made or obtained, and (ii) customary
filings to perfect the Liens in favor of the Collateral Agent.
SECTION 6.03. ENFORCEABLE OBLIGATIONS. This Agreement has been
duly executed and delivered, and each other Credit Document will be duly
executed and delivered, by the respective Credit Parties, and this Agreement
constitutes, and each other Credit Document when executed and delivered will
constitute, legal, valid and binding obligations of the Credit Parties,
respectively, enforceable against the Credit Parties in accordance with their
respective terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
SECTION 6.04. NO LEGAL BAR. The execution, delivery and
performance by the Credit Parties of the Credit Documents will not violate any
Requirement of Law or cause a breach or default under any of their respective
Contractual Obligations.
SECTION 6.05. NO MATERIAL LITIGATION. Except as set forth on
Schedule 6.05 or in any notice furnished to the Lenders pursuant to Section
7.07(i) at or prior to the respective times the representations and warranties
set forth in this Section 6.05 are made or deemed to be made hereunder, no
litigation, investigations or proceedings of or before any courts, tribunals,
arbitrators or governmental authorities are pending or, to the knowledge of any
Borrower, threatened by or against any of the Consolidated Companies, or against
any of their respective properties or revenues, existing or future (a) with
respect to any Credit Document, or any of the transactions contemplated hereby
or thereby, or (b) which, if adversely determined, would reasonably be expected
to have a Materially Adverse Effect.
SECTION 6.06. INVESTMENT COMPANY ACT, ETC. None of the Credit
Parties is 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). None of the Credit Parties is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any foreign, federal or local statute or regulation limiting its
ability to incur indebtedness for money borrowed, guarantee such indebtedness,
or pledge its assets to secure such indebtedness, as contemplated hereby or by
any other Credit Document.
SECTION 6.07. MARGIN REGULATIONS. No part of the proceeds of
any of the Loans will be used for any purpose which violates, or which would be
inconsistent or not in compliance with, the provisions of the applicable Margin
Regulations.
SECTION 6.08. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) The Consolidated Companies have received no notices of
claims or potential liability under, and are in compliance with, all applicable
Environmental Laws, where such claims
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and liabilities under, and failures to comply with, such statutes, regulations,
rules, ordinances, laws or licenses, would reasonably be expected to result in
penalties, fines, claims or other liabilities (including, without limitation,
remediation costs and expenses) to the Consolidated Companies in amounts in
excess of $1,000,000, either individually or in the aggregate, except as set
forth on Schedule 6.08(a) or in any notice furnished to the Lenders pursuant to
Section 7.07(j) at or prior to the respective times the representations and
warranties set forth in this Section 6.08(a) are made or deemed to be made
hereunder.
(b) Except as set forth on Schedule 6.08(b) or in any notice
furnished to the Lenders pursuant to Section 7.07(j) at or prior to the
respective times the representations and warranties set forth in this Section
6.08(b) are made or deemed to be made hereunder, none of the Consolidated
Companies has received any notice of violation, or notice of any action, either
judicial or administrative, from any governmental authority (whether United
States or foreign) relating to the actual or alleged violation of any
Environmental Law, including, without limitation, any notice of any actual or
alleged spill, leak, or other release of any Hazardous Substance, waste or
hazardous waste by any Consolidated Company or its employees or agents, or as to
the existence of any contamination on any properties owned by any Consolidated
Company, where any such violation, spill, leak, release or contamination would
reasonably be expected to result in penalties, fines, claims or other
liabilities (including, without limitation, remediation costs and expenses) to
the Consolidated Companies in amounts in excess of $1,000,000, either
individually or in the aggregate; and
(c) The Consolidated Companies have obtained all necessary
governmental permits, licenses and approvals which are material to the
operations conducted on their respective properties, including without
limitation, all required material permits, licenses and approvals for (i) the
emission of air pollutants or contaminates, (ii) the treatment or pretreatment
and discharge of waste water or storm water, (iii) the treatment, storage,
disposal or generation of hazardous wastes, (iv) the withdrawal and usage of
ground water or surface water, and (v) the disposal of solid wastes.
SECTION 6.09. INSURANCE. The Consolidated Companies currently
maintain insurance with respect to their respective properties and businesses,
with financially sound and reputable insurers, having coverages against losses
or damages of the kinds customarily insured against by reputable companies in
the same or similar businesses, such insurance being in amounts no less than
those amounts which are customary for such companies under similar
circumstances. The Consolidated Companies have paid all material amounts of
insurance premiums now due and owing with respect to such insurance policies and
coverages, and such policies and coverages are in full force and effect.
SECTION 6.10. NO DEFAULT. None of the Consolidated Companies
is in default under or with respect to any Contractual Obligation in any respect
which has had or is reasonably expected to have a Materially Adverse Effect.
SECTION 6.11. NO BURDENSOME RESTRICTIONS. Except as set
forth on Schedule 6.11 or in any notice furnished to the Lenders pursuant to
Section 7.07(p) at or prior to the respective
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times the representations and warranties set forth in this Section 6.11 are made
or deemed to be made hereunder, none of the Consolidated Companies is a party to
or bound by any Contractual Obligation or Requirement of Law which has had or
would reasonably be expected to have a Materially Adverse Effect.
SECTION 6.12. TAXES. Except as set forth on Schedule 6.12,
each of the Consolidated Companies have filed or caused to be filed all
declarations, reports and tax returns which are required to have been filed, and
has paid all taxes, custom duties, levies, charges and similar contributions
("taxes" in this Section 6.12) shown to be due and payable on said returns or on
any assessments made against it or its properties, and all other taxes, fees or
other charges imposed on it or any of its properties by any governmental
authority (other than those the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided in its books); and no tax
liens have been filed and, to the knowledge of Parent or any other Borrower, no
claims are being asserted with respect to any such taxes, fees or other charges;
excluding, however, for purposes of the foregoing portions of this Section, tax
returns not filed or taxes not paid where the aggregate amount of taxes involved
does not exceed $100,000 in the aggregate and the failure to file such returns
or pay such taxes has resulted from the Consolidated Companies being without
knowledge that the respective tax authorities are claiming such taxes to be due.
SECTION 6.13. SUBSIDIARIES. Except as disclosed on Schedule
6.01, on the date of this Agreement, Parent has no Subsidiaries and neither
Parent nor any Subsidiary is a joint venture partner or general partner in any
partnership. After the date of this Agreement, except as disclosed on Schedule
6.13 or in any notice furnished pursuant to Section 7.07(q) at or prior to the
respective times the representations and warranties set forth in this Section
6.13 are made or deemed to be made hereunder, Parent has no Material
Subsidiaries.
SECTION 6.14. FINANCIAL STATEMENTS. The Borrowers have
furnished to the Agent and the Lenders:
(a) Dyersburg Corporation. (i) the audited consolidated
balance sheet of the Parent and the Consolidated Companies as at September 28,
1996 and the related consolidated statements of income, shareholders' equity and
cash flows for the 52-week period then ended, including in each case the related
schedules and notes, and (ii) the unaudited balance sheet of the Consolidated
Companies as at the end of the third fiscal quarter of 1997, and the related
unaudited consolidated statements of income, shareholders' equity, and cash
flows for the period then ended, setting forth in each case in comparative form
the figures for the previous fiscal year and third fiscal quarter, as the case
may be. The foregoing financial statements fairly present in all material
respects the consolidated financial condition of such Consolidated Companies as
at the dates thereof and results of operations for such periods in conformity
with GAAP consistently applied. Such Consolidated Companies taken as a whole do
not have any material contingent obligations, contingent liabilities, or
material liabilities for known taxes, long-term leases or unusual forward or
long-term commitments not reflected in the foregoing financial statements or the
notes thereto.
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Since September 28, 1996, there have been no changes with respect to such
Consolidated Companies which has had or would reasonably be expected to have a
Materially Adverse Effect.
(b) Alamac Holdings. (i) the audited consolidated balance
sheet of Alamac Holdings and its Subsidiaries as at December 31, 1996 and the
related consolidated statements of income, shareholders' equity and cash flows
for the 52-week period then ended, including in each case the related schedules
and notes, and (ii) the unaudited balance sheet of Alamac Holdings and its
Subsidiaries as at the end of the second quarter of 1997, and the related
unaudited consolidated statements of income, shareholders' equity, and cash
flows for the period then ended, setting forth in each case in comparative form
the figures for the previous fiscal year and second fiscal quarter, as the case
may be. The foregoing financial statements fairly present in all material
respects the consolidated financial condition of Alamac Holdings and its
Subsidiaries as at the dates thereof and results of operations for such periods
in conformity with GAAP consistently applied. Alamac Holdings and its
Subsidiaries taken as a whole do not have any material contingent obligations,
contingent liabilities, or material liabilities for known taxes, long-term
leases or unusual forward or long-term commitments not reflected in the
foregoing financial statements or the notes thereto. Since December 31, 1996,
there have been no changes with respect to Alamac Holdings and its Subsidiaries
which has had or would reasonably be expected to have a Materially Adverse
Effect.
(c) Pro Forma Combined Financial Statements. (i) the unaudited
pro forma condensed consolidated balance sheet of Parent (after giving effect to
the Alamac Acquisition) as of July 5, 1997 and (ii) the unaudited pro forma
condensed consolidated statements of operations for the fiscal year ended
September 28, 1996 and the nine and twelve months ending July 5, 1997, set forth
in the Offering Memorandum filed with the Securities Exchange Commission in
connection with the offering of the Senior Subordinated Notes. The foregoing pro
forma financial statements fairly present in all material respects, on a pro
forma consolidated basis, the combined consolidated financial condition of
Parent and Alamac Holdings as at the dates thereof. The Consolidated Companies,
after giving effect to the Alamac Acquisition, taken as a whole, do not have any
material contingent obligations, contingent liabilities, or material liabilities
for known taxes, long-term leases or unusual forward or long-term commitments
not reflected in the foregoing financial statements or the notes thereto.
SECTION 6.15. ERISA. Except as disclosed on Schedule 6.15 or
in any notice furnished to the Lenders pursuant to Section 7.07(k) at or prior
to the respective times the representations and warranties set forth in this
Section 6.15 are made or deemed to be made hereunder:
(a) Identification of Plans. None of the Consolidated
Companies nor any of their respective ERISA Affiliates maintains or contributes
to, or has during the past six years maintained or contributed to, any Plan that
is subject to Title IV of ERISA;
(b) Compliance. Each Plan maintained by the Consolidated
Companies have at all times been maintained, by their terms and in operation, in
compliance with all applicable laws, and the Consolidated Companies have not
incurred and are not likely to incur any tax or penalty with
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respect to any Plan of such Consolidated Company or any ERISA Affiliate thereof,
including without limitation, any tax or penalty under Title I or Title IV of
ERISA or under Chapter 43 of the Tax Code, or any tax or penalty resulting from
a loss of deduction under Sections 162, 404, or 419 of the Tax Code, where the
failure to comply with such laws, and such taxes and penalties, together with
all other liabilities referred to in this Section 6.15 (taken as a whole), would
in the aggregate have a Materially Adverse Effect;
(c) Liabilities. The Consolidated Companies are subject to no
liabilities (including withdrawal liabilities) with respect to any Plans of such
Consolidated Companies or any of their ERISA Affiliates, including without
limitation, any liabilities arising from Titles I or IV of ERISA, other than
obligations to fund benefits under an ongoing Plan and to pay current
contributions, expenses and premiums with respect to such Plans where such
liabilities, together with all other liabilities referred to in this Section
6.15 (taken as a whole), would in the aggregate have a Materially Adverse
Effect;
(d) Funding. The Consolidated Companies and, with respect to
any Plan which is subject to Title IV of ERISA, each of their respective ERISA
Affiliates, have made full and timely payment of all amounts (A) required to be
contributed under the terms of each Plan and applicable law, and (B) required to
be paid as expenses (including PBGC or other premiums) of each Plan, where the
failure to pay such amounts (when taken as a whole, including any penalties
attributable to such amounts) would have a Materially Adverse Effect. No Plan
subject to Title IV of ERISA has an "amount of unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA), determined as if such Plan terminated
on any date on which this representation and warranty is deemed made, in any
amount which, together with all other liabilities referred to in this Section
6.15 (taken as a whole), would have a Materially Adverse Effect if such amount
were then due and payable. The Consolidated Companies are subject to no
liabilities with respect to post-retirement medical benefits in any amounts
which, together with all other liabilities referred to in this Section 6.15
(taken as a whole), would have a Materially Adverse Effect if such amounts were
then due and payable.
SECTION 6.16. PATENTS, TRADEMARKS, LICENSES, ETC. Except as
set forth on Schedule 6.16 or in any notice furnished to the Lenders pursuant to
Section 7.07(p) at or prior to the respective times the representations and
warranties set forth in this Section 6.16 are made or deemed to be made
hereunder, (i) the Consolidated Companies have obtained and hold in full force
and effect all material patents, trademarks, service marks, trade names,
copyrights, licenses and other such rights, free from burdensome restrictions,
which are necessary for the operation of their respective businesses as
presently conducted, and (ii) to the best of the Borrowers' knowledge, no
product, process, method, service or other item presently sold by or employed by
any Consolidated Company in connection with such business infringes any patents,
trademark, service mark, trade name, copyright, license or other right owned by
any other person and there is not presently pending, or to the knowledge of the
Borrowers, threatened, any claim or litigation against or affecting any
Consolidated Company contesting such Person's right to sell or use any such
product, process, method, substance or other item where the result of such
failure to obtain and hold such benefits or such infringement would have a
Materially Adverse Effect.
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SECTION 6.17. OWNERSHIP OF PROPERTY. Each Consolidated Company
has good and marketable fee simple title to or a valid leasehold interest in all
of its real property and good title to, or a valid leasehold interest in, all of
its other property, as such properties are reflected in the consolidated balance
sheets referred to in Section 6.14, other than properties disposed of in the
ordinary course of business since such date or as otherwise permitted by the
terms of this Agreement, subject to no Lien or title defect of any kind, except
Liens permitted hereby and title defects not constituting material impairments
in the intended use for such properties. The Consolidated Companies enjoy
peaceful and undisturbed possession under all of their respective leases.
SECTION 6.18. INDEBTEDNESS. Except for the Indebtedness
outstanding pursuant to the Existing Credit Agreement and the Existing Senior
Notes to be repaid in full or the Closing Date, and as set forth on Schedule
8.01, none of the Consolidated Companies is an obligor in respect of any
Indebtedness for borrowed money, or any commitment to create or incur any
Indebtedness for borrowed money, in an amount not less than $100,000 in any
single case, and such Indebtedness and commitments for amounts less than
$100,000 do not exceed $500,000 in the aggregate for all such Indebtedness and
commitments of the Consolidated Companies.
SECTION 6.19. FINANCIAL CONDITION. On the Closing Date and
after giving effect to the Transaction, including without limitation, the use of
the proceeds of the Term Loans, the Revolving Loans as provided in Articles II
and III (i) assets of each Credit Party at fair valuation and based on their
present fair saleable value (including, without limitation, the fair and
realistic value of (x) any contribution or subrogation rights in respect of any
Guaranty Agreement given by such Credit Party, and (y) any Intercompany Loan
owed to such Credit Party) will exceed such Credit Party's debts, including
contingent liabilities (as such liabilities may be limited under the express
terms of any Guaranty Agreement of such Credit Party), (ii) the remaining
capital of such Credit Party will not be unreasonably small to conduct the
Credit Party's business, and (iii) such Credit Party will not have incurred
debts, or have intended to incur debts, beyond the Credit Party's ability to pay
such debts as they mature. For purposes of this Section 6.19, "debt" means any
liability on a claim, and "claim" means (a) the right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured, or (b) the right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.
SECTION 6.20. INTERCOMPANY LOANS. On the Closing Date, except
as set forth on Schedule 6.20, there are no Intercompany Loans outstanding. The
Intercompany Loans and the Intercompany Loan Documents have been duly authorized
and approved by all necessary corporate and shareholder action on the part of
the parties thereto, and constitute the legal, valid and binding obligations of
the parties thereto, enforceable against each of them in accordance with their
respective terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally, and by general principles of equity.
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SECTION 6.21. LABOR MATTERS. Except as set forth in Schedule
6.21 or in any notice furnished to the Lenders pursuant to Section 7.07(p) at or
prior to the respective times the representations and warranties set forth in
this Section 6.21 are made or deemed to be made hereunder, the Consolidated
Companies have experienced no strikes, labor disputes, slow downs or work
stoppages due to labor disagreements which have had, or would reasonably be
expected to have, a Materially Adverse Effect, and, to the best knowledge of the
Borrowers, there are no such strikes, disputes, slow downs or work stoppages
threatened against any Consolidated Company. The hours worked and payment made
to employees of the Consolidated Companies have not been in violation in any
material respect of the Fair Labor Standards Act or any other applicable law
dealing with such matters. All payments due from the Consolidated Companies, or
for which any claim may be made against the Consolidated Companies, on account
of wages and employee health and welfare insurance and other benefits have been
paid or accrued as liabilities on the books of the Consolidated Companies where
the failure to pay or accrue such liabilities would reasonably be expected to
have a Materially Adverse Effect.
SECTION 6.22. PAYMENT OR DIVIDEND RESTRICTIONS. Except as set
forth in Section 8.12 or described on Schedule 6.22, none of the Consolidated
Companies is party to or subject to any agreement or understanding restricting
or limiting the payment of any dividends or other distributions by any such
Consolidated Company.
SECTION 6.23. ALAMAC ACQUISITION. The Alamac Acquisition
Agreement is in full force and effect, has not been terminated, rescinded or
withdrawn, and no material provision thereof has been amended or waived by any
party; all representations and warranties of the Parent set forth in the Alamac
Acquisition Agreement and, to the best knowledge of the Parent, of Alamac
Holdings and the Sellers contained in the Alamac Acquisition Agreement, are true
and correct as of the Closing Date with the same effect as though made on and as
of the Closing Date; all requisite approvals by governmental authorities and
regulatory bodies having jurisdiction over the Parent, Alamac Holdings and the
Sellers in respect of the transactions contemplated by the Alamac Acquisition
Agreement have been obtained by such entities, as the case may be, and no such
approvals impose any conditions to the consummation of the transactions
contemplated by the Alamac Acquisition Agreement or the continued conduct by the
Parent of the business of Alamac Holdings and its Subsidiaries or otherwise.
SECTION 6.24 CONTINUING BUSINESS OF ALAMAC HOLDINGS. There
exists no actual or threatened termination, cancellation or limitation of, or
any modification or change in, (i) the business relationships of Alamac Holdings
(on a consolidated basis) with any customer or group of customers of Alamac
Holdings whose business individually or in the aggregate is material to the
operations or financial condition of Alamac Holdings (on a consolidated basis),
(ii) the business relationships of Alamac Holdings (on a consolidated basis)
with any of its suppliers or (iii) any contract; and Parent and each Borrower
reasonably anticipates that after the consummation of the transactions
contemplated by the Acquisition Agreement and this Agreement, all such customers
and suppliers will continue a business relationship with Alamac Holdings and its
Subsidiaries on a basis no less favorable to Alamac Holdings (on a consolidated
basis) than as heretofore conducted and there exists no other condition or state
of facts or circumstances which affect the ongoing business
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of Alamac Holdings (on a consolidated basis), which, in the case of (i), (ii) or
(iii) above, would reasonably be expected, either singly or in the aggregate, to
have Materially Adverse Effect.
SECTION 6.25. CONSENTS TO ALAMAC ACQUISITION. No material
consent, authorization or approval of, or declaration, notification, filing or
registration with, any governmental or regulatory authority or any third party,
including without limitation, the filing of any "Pre-merger Notification Report"
with the Federal Trade Commission and the Antitrust Division of the Department
of Justice pursuant to Title II of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended and the regulations promulgated thereunder is necessary
in connection with the consummation of the Alamac Acquisition which has not been
obtained prior to the Closing Date.
SECTION 6.26. OBLIGATIONS CONSTITUTE DESIGNATED SENIOR DEBT.
All of the Obligations outstanding pursuant to this Agreement and the Letter of
Credit Agreement constitute "Designated Senior Debt" pursuant to the terms of
the Senior Subordinated Indenture.
SECTION 6.27. REPRESENTATIONS AND WARRANTIES RELATING TO
ACCOUNTS. With respect to all Accounts listed in any Borrowing Base Certificate
as Eligible Accounts that:
(a) They are genuine and in all respects what they purport to
be, and they are not evidenced by judgments;
(b) They arise out of completed, bona fide sales of goods or
rendition of services by the Revolving Borrowers in the ordinary course of its
business and in accordance with the terms and conditions of all purchase orders,
contracts or other documents relating thereto and forming a part of the contract
between the Revolving Borrowers and the Account Debtors;
(c) They are for liquidated amounts maturing as stated in the
duplicate invoice covering such sale or rendition of services, copies of which
have been furnished or are available to the Agent;
(d) None of the Revolving Borrowers has made an agreement with
any Account Debtor thereunder for any deduction therefrom, except discounts or
allowances which are granted by such Borrower in the ordinary course of its
business for prompt payment or volume purchases and which are reflected in the
calculation of the net amount of each respective invoice related thereto;
(e) There are no facts, events or occurrences of which any
Revolving Borrower has knowledge which in any way impair the validity or
enforceability thereof or which will reduce the amount payable thereunder from
the face amount of the invoice and statements delivered to the Agent with
respect thereto;
(f) To the best of each Revolving Borrower's knowledge, the
Account Debtors thereunder (i) had the capacity to contract at the time any
contract or other document giving rise to the Accounts were executed and (ii)
such Account Debtors are solvent; and
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(g) No Revolving Borrower has any knowledge of any fact or
circumstance which would impair the validity or collectibility of the Accounts,
and to the best of each Revolving Borrower's knowledge there are no proceedings
or actions which are threatened or pending against any Account Debtor thereunder
which might result in any material adverse change in such Account Debtor's
financial condition or the collectibility of such Account.
SECTION 6.28. REPRESENTATIONS AND WARRANTIES RELATING TO
INVENTORY. Except as specifically disclosed to and acknowledged by the Agent in
writing, with respect to all Eligible Inventory, the Agent may rely upon all
statements, warranties, or representations made in any Borrowing Base
Certificate in determining the classification of such Inventory and in
determining which items of Inventory listed in such Borrower Base Certificate
meet the requirements of the definition of Eligible Inventory.
SECTION 6.29. DISCLOSURE. No representation or warranty
contained in this Agreement (including the Schedules attached hereto) or in any
other document furnished from time to time pursuant to the terms of this
Agreement, contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make the statements
herein or therein not misleading as of the date made or deemed to be made.
Except as may be set forth herein (including the Schedules attached hereto) or
in any notice furnished to the Lenders pursuant to Section 7.07 at or prior to
the respective times the representations and warranties set forth in this
Section 6.29 are made or deemed to be made hereunder, there is no fact known to
the Borrowers which has had, or is reasonably expected to have, a Materially
Adverse Effect.
ARTICLE 7.
AFFIRMATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any
Note or other Obligation shall remain unpaid, Parent (whether or not it is a
Borrower hereunder) and each other Borrower will:
SECTION 7.01. ORGANIZATIONAL EXISTENCE, ETC. Preserve and
maintain, and, except as expressly permitted by the terms of this Agreement,
cause each of its Subsidiaries to preserve and maintain, its corporate or other
organizational existence, its material rights, franchises, and licenses, and its
material patents and copyrights (for the scheduled duration thereof),
trademarks, trade names, and service marks, necessary or desirable in the normal
conduct of its business, and its qualification to do business as a foreign
corporation or other organization in all jurisdictions where it conducts
business or other activities making such qualification necessary, where the
failure to be so qualified would reasonably be expected to have a Materially
Adverse Effect.
SECTION 7.02. COMPLIANCE WITH LAWS, ETC. Comply, and cause
each of its Subsidiaries to comply with all Requirements of Law (including,
without limitation, the Environmental Laws subject to the exception set forth in
Section 6.08(a) where the penalties, claims,
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fines, and other liabilities resulting from noncompliance with such
Environmental Laws do not involve amounts in excess of $500,000 in the
aggregate) and Contractual Obligations applicable to or binding on any of them
where the failure to comply with such Requirements of Law and Contractual
Obligations would reasonably be expected to have a Materially Adverse Effect.
SECTION 7.03. PAYMENT OF TAXES AND CLAIMS, ETC. Pay, and cause
each of its Subsidiaries to pay, (i) all taxes, assessments and governmental
charges imposed upon it or upon its property, and (ii) all claims (including,
without limitation, claims for labor, materials, supplies or services) which
might, if unpaid, become a Lien upon its property, unless, in each case, the
validity or amount thereof is being contested in good faith by appropriate
proceedings and adequate reserves are maintained with respect thereto.
SECTION 7.04. KEEPING OF BOOKS. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, containing complete
and accurate entries of all their respective financial and business transactions
which are required to be maintained in order to prepare the consolidated
financial statements of Parent in conformity with GAAP.
SECTION 7.05. VISITATION, INSPECTION, ETC. Permit, and cause
each of its Subsidiaries to permit, any representative of the Agent, the
Collateral Agent or Lender to visit and inspect any of its property, to examine
its books and records and to make copies and take extracts therefrom, and to
discuss its affairs, finances and accounts with its officers, all at such
reasonable times and as often as such Agent, Collateral Agent or Lender may
reasonably request after reasonable prior notice to Parent; provided, however,
that at any time following the occurrence and during the continuance of a
Default or an Event of Default, no prior notice to Parent shall be required and
further provided that the Agent and Lenders shall be bound by the provisions of
Section 11.08 in connection with the exercise of their rights pursuant to this
Section 7.05.
SECTION 7.06. INSURANCE; MAINTENANCE OF PROPERTIES.
(a) Maintain or cause to be maintained with financially sound
and reputable insurers, insurance with respect to its properties and business,
and the properties and business of its Subsidiaries, against loss or damage of
the kinds customarily insured against by reputable companies in the same or
similar businesses, such insurance to be of such types and in such amounts as is
customary for such companies under similar circumstances or as otherwise
required by the terms of any Security Document; provided, however, that in any
event Parent and each other Borrower shall use their best efforts to maintain,
or cause to be maintained, insurance in amounts and with coverages not
materially less favorable to any Consolidated Company as in effect on the date
of this Agreement, except where the costs of maintaining such insurance would,
in the judgment of both Parent and the Agents, be excessive.
(b) Cause, and cause each of the Consolidated Companies to
cause, all properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, settlements and improvements thereof, all as in the
judgment of
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Parent may be necessary so that the business carried on in connection therewith
may be properly and advantageously conducted at all times; provided, however,
that nothing in this Section shall prevent Parent from discontinuing the
operation or maintenance of any such properties if such discontinuance is, in
the judgment of Parent, desirable in the conduct of its business or the business
of any Consolidated Company.
SECTION 7.07. REPORTING COVENANTS. Furnish to each Lender:
(a) Annual Financial Statements. As soon as available and in
any event within 90 days after the end of each fiscal year of Parent,
balance sheets of the Consolidated Companies as at the end of such
year, presented on a consolidated and a consolidating basis, and the
related statements of income, shareholders' equity, and cash flows of
the Consolidated Companies for such fiscal year, presented on a
consolidated and a consolidating basis, setting forth in each case in
comparative form the figures for the previous fiscal year, all in
reasonable detail and, except with respect to the financial statements
prepared on a consolidating basis, accompanied by a report thereon of
Ernst & Young LLP or other independent public accountants of comparable
recognized national standing, which such report shall be unqualified as
to going concern and scope of audit and shall state that such financial
statements present fairly in all material respects the financial
condition as at the end of such fiscal year on a consolidated basis,
and the results of operations and statements of cash flows of the
Consolidated Companies for such fiscal year in accordance with GAAP and
that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with
generally accepted auditing standards;
(b) Quarterly Financial Statements. As soon as available and
in any event within 60 days after the end of each fiscal quarter of
Parent (other than the fourth fiscal quarter), balance sheets of the
Consolidated Companies as at the end of such quarter presented on a
consolidated and a consolidating basis and the related statements of
income, shareholders' equity, and cash flows of the Consolidated
Companies for such fiscal quarter and for the portion of Parent's
fiscal year ended at the end of such quarter, presented on a
consolidated and a consolidating basis setting forth in each case in
comparative form the figures for the corresponding quarter and the
corresponding portion of Parent's previous fiscal year, all in
reasonable detail and certified by the chief financial officer or
principal accounting officer of Parent that such financial statements
fairly present in all material respects the financial condition of the
Consolidated Companies as at the end of such fiscal quarter on a
consolidated and consolidating basis, and the results of operations and
statements of cash flows of the Consolidated Companies for such fiscal
quarter and such portion of Parent's fiscal year, in accordance with
GAAP consistently applied (subject to normal year-end audit adjustments
and the absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the
financial statements required pursuant to subsections (a) and (b)
above, a certificate of the president, chief financial officer or
principal accounting officer of Parent (i) to the effect that, based
upon a
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review of the activities of the Consolidated Companies and such
financial statements during the period covered thereby, there exists no
Event of Default and no Default under this Agreement, or if there
exists an Event of Default or a Default hereunder, specifying the
nature thereof and the proposed response thereto, and (ii)
demonstrating in reasonable detail compliance as at the end of such
fiscal year or such fiscal quarter with Section 7.09 and Sections 8.01
through 8.05;
(d) Excess Cash Flow Certificate. Together with the financial
statements required pursuant to subsection (a) above, a certificate of
the president, chief financial officer or principal accounting officer
of Parent setting forth the calculation of Excess Cash Flow in
reasonable detail for the fiscal year covered by such financial
statements;
(e) Auditor's No Default Certificate. Together with the
financial statements required pursuant to subsection (a) above, a
certificate of the accountants who prepared the report referred to
therein, (i) stating whether anything has come to its attention to
cause it to believe that there existed on the date of such statements
any Default or Event of Default and (ii) confirming the calculations
set forth in the officer's certificate delivered simultaneously
therewith pursuant to clauses (c) and (d) above based upon its audit;
(f) Annual Budget. Within 30 days after the beginning of each
Fiscal Year, commencing with Fiscal Year 1999, an annual financial plan
and forecasted balance sheets and statements of income, shareholders'
equity, and cash flows for such fiscal year for the Consolidated
Companies presented on a consolidated and consolidating basis;
(g) Notice of Default. Promptly after any officer of Parent or
any other Borrower has notice or knowledge of the occurrence of an
Event of Default or a Default, a certificate of the chief financial
officer or principal accounting officer of Parent specifying the nature
thereof and the proposed response thereto;
(h) Asset Sales. Together with the financial statements
required pursuant to subsection (a) above, a certificate of the chief
financial officer or principal accounting officer of Parent reporting
all Asset Sales effected by the Consolidated Companies during the
fiscal year covered by such financial statements which involved Asset
Values in excess of $500,000 in any single transaction or related
series of transactions, including the Asset Value of such assets and
the amounts received by the Consolidated Companies with respect to such
sales, and such other information regarding such transactions as any
Agent or Lender may reasonably request;
(i) Litigation. Promptly after (i) the occurrence thereof,
notice of the institution of or any material adverse development in any
material action, suit or proceeding or any governmental investigation
or any arbitration, before any court or arbitrator or any governmental
or administrative body, agency or official, against any Consolidated
Company, or any material property of any thereof, or (ii) actual
knowledge thereof, notice of the threat of any such action, suit,
proceeding, investigation or arbitration;
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(j) Environmental Notices. Promptly after receipt thereof,
notice of any actual or alleged violation, or notice of any action,
claim or request for information, either judicial or administrative,
from any governmental authority relating to any actual or alleged
claim, notice of potential responsibility under or violation of any
Environmental Law, or any actual or alleged spill, leak, disposal or
other release of any waste, petroleum product, or hazardous waste or
Hazardous Substance by any Consolidated Company which could result in
penalties, fines, claims or other liabilities to any Consolidated
Company in amounts in excess of $1,000,000;
(k) ERISA.
(i) Promptly after any Consolidated Company has
knowledge of the occurrence thereof with respect to any Plan
of any Consolidated Company or any ERISA Affiliate thereof, or
any trust established thereunder, notice of (A) a "reportable
event" described in Section 4043 of ERISA and the regulations
issued from time to time thereunder (other than a "reportable
event" not subject to the provisions for 30-day notice to the
PBGC under such regulations), or (B) any other event which
could subject any Consolidated Company to any tax, penalty or
liability under Title I or Title IV of ERISA or Chapter 43 of
the Tax Code, or any tax or penalty resulting from a loss of
deduction under Sections 162, 404 or 419 of the Tax Code,
where any such taxes, penalties or liabilities exceed or could
exceed $1,000,000 in the aggregate;
(ii) Promptly after such notice must be provided to
the PBGC, or to a Plan participant, beneficiary or alternative
payee, any notice required under Section 101(d), 302(f)(4),
303, 307, 4041(b)(1)(A) or 4041(c)(1)(A) of ERISA or under
Section 401(a)(29) or 412 of the Tax Code with respect to any
Plan of any Consolidated Company or any ERISA Affiliate
thereof;
(iii) Promptly after receipt, any notice received by
any Consolidated Company or any ERISA Affiliate thereof
concerning the intent of the PBGC or any other governmental
authority to terminate a Plan of such Company or ERISA
Affiliate thereof which is subject to Title IV of ERISA, to
impose any liability on such Company or ERISA Affiliate under
Title IV of ERISA or Chapter 43 of the Tax Code;
(iv) Promptly upon the filing thereof with the
Internal Revenue Service ("IRS") or the Department of Labor
("DOL"), a copy of IRS Form 5500 or annual report for each
Plan of any Consolidated Company or ERISA Affiliate thereof
which is subject to Title IV of ERISA;
(v) Upon the request of the Agent, (A) true and
complete copies of any and all documents, government reports
and IRS determination or opinion letters or rulings for any
Plan of any Consolidated Company from the IRS, PBGC or DOL,
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(B) any reports filed with the IRS, PBGC or DOL with respect
to a Plan of the Consolidated Companies or any ERISA Affiliate
thereof, or (C) a current statement of withdrawal liability
for each Multiemployer Plan of any Consolidated Company or any
ERISA Affiliate thereof;
(l) Liens. Promptly upon any Consolidated Company becoming
aware thereof, notice of the filing of any federal statutory Lien, tax
or other state or local government Lien or any other Lien affecting
their respective properties, other than those Liens expressly permitted
by Section 8.02;
(m) Domestication of Subsidiaries. Not less than 30 days
prior thereto, notice of any intended domestication of any Foreign
Subsidiary as a United States corporation, whether by merger, stock
transfer or otherwise;
(n) Public Filings, Etc. Promptly upon the filing thereof or
otherwise becoming available, copies of all financial statements,
annual, quarterly and special reports, proxy statements and notices
sent or made available generally by Parent to its public security
holders, of all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any of them with any
securities exchange, and of all press releases and other statements
made available generally to the public containing material developments
in the business or financial condition of Parent and the other
Consolidated Companies;
(o) Accountants' Reports. Promptly upon receipt thereof,
copies of all financial statements of, and all reports submitted by,
independent public accountants to Parent in connection with each
annual, interim, or special audit of Parent's financial statements,
including without limitation, the comment letter submitted by such
accountants to management in connection with their annual audit;
(p) Burdensome Restrictions, Etc. Promptly upon the existence
or occurrence thereof, notice of the existence or occurrence of (i) any
Contractual Obligation or Requirement of Law described in Section 6.11,
(ii) failure of any Consolidated Company to hold in full force and
effect those trademarks, service marks, patents, trade names,
copyrights, licenses and similar rights necessary in the normal conduct
of its business, the loss or absence of which could have a Materially
Adverse Effect, and (iii) any strike, labor dispute, slow down or work
stoppage as described in Section 6.21;
(q) New Material Subsidiaries. Within 30 days after the
formation or acquisition of any Material Subsidiary, or any other event
resulting in the creation of a new Material Subsidiary, notice of the
formation or acquisition of such Material Subsidiary or such
occurrence, including a description of the assets of such entity, the
activities in which it will be engaged, and such other information as
the Agent may request;
(s) Asset Sales. At any time that the aggregate amount of
Asset Sales made by the Consolidated Companies after the Closing Date
exceeds $500,000 (based on the Asset
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Values), prompt notice of any additional Asset Sale or related series
of Asset Sales involving Asset Values of $500,000 or more; and
(t) Other Information. With reasonable promptness, such
other information about the Consolidated Companies as any Agent or
Lender may reasonably request from time to time.
SECTION 7.08. ALAMAC ACQUISITION AGREEMENT. Comply in all
material respects with the terms of the Alamac Acquisition Agreement and provide
to the Agent and the Lenders copies of all material notices given or received
pursuant thereto.
SECTION 7.09. FINANCIAL COVENANTS.
(a) Fixed Charge Coverage. Maintain as of the last day of each
Fiscal Quarter, commencing with the first Fiscal Quarter of 1998, a minimum
Fixed Charge Coverage Ratio as shown below for each Fiscal Quarter ending on the
dates or during the periods indicated:
<TABLE>
<CAPTION>
Minimum Fixed Charge
Coverage
Period Ratio
------ --------------------
<S> <C>
First Fiscal Quarter 1998 .90:1.00
Second Fiscal Quarter 1998 1.00:1.00
Third Fiscal Quarter 1998 1.25:1.00
Fiscal Year End 1998 1.25:1.00
First Fiscal Quarter 1999 and thereafter 1.50:1.00
</TABLE>
Notwithstanding the definition of Fixed Charge Coverage Ratio, for the first
three Fiscal Quarters of 1998, the Fixed Charge Coverage Ratio shall be
calculated for the period commencing on October 4, 1997 and ending on such date.
(b) Interest Coverage. Maintain as of the last day of each
Fiscal Quarter, commencing with the first Fiscal Quarter of 1998, a minimum
Interest Coverage Ratio as shown below for each Fiscal Quarter ending on the
dates or during the periods indicated:
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<PAGE> 80
<TABLE>
<CAPTION>
Minimum Interest
Coverage
Period Ratio
------ ----------------
<S> <C>
First Fiscal Quarter 1998 1.00:1.00
Second Fiscal Quarter 1998 1.20:1.00
Third Fiscal Quarter 1998 1.50:1.00
Fiscal Year End 1998 and thereafter 1.50:1.00
</TABLE>
Notwithstanding the definition of Interest Coverage Ratio, for the first three
Fiscal Quarters of 1998, the Interest Coverage Ratio shall be calculated for the
period commencing on October 4, 1997 and ending on such date.
(c) Adjusted Funded Debt Coverage. Maintain as of the last day
of each Fiscal Quarter, commencing with the first Fiscal Quarter of 1998, a
maximum Adjusted Funded Debt Coverage Ratio as shown below for each Fiscal
Quarter ending on the dates or during the periods indicated:
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<PAGE> 81
<TABLE>
<CAPTION>
Maximum Adjusted Funded
Debt Coverage
Period Ratio
------ -----------------------
<S> <C>
Last Day of First Fiscal Quarter 1998 4.8:1.00
Last Day of Second Fiscal Quarter 1998 4.8:1.00
Last Day of Third Fiscal Quarter 1998 4.6:1.00
Last Day of Fourth Fiscal Quarter 1998 4.4:1.00
Last Day of First Fiscal Quarter 1999 4.0:1.00
Last Day of Second Fiscal Quarter 1999 3.8:1.00
Last Day of Third Fiscal Quarter 1999 3.6:1.00
First Day of Fourth Fiscal Quarter 1999 through
Last Day of Second Fiscal Quarter 2000 3.4:1.00
First Day of Second Fiscal Quarter 2000
and thereafter 3.2:1.00.
</TABLE>
Notwithstanding the definition of Adjusted Funded Debt Coverage Ratio, for the
first three Fiscal Quarters of 1998, Consolidated EBDITAR shall be calculated on
an annualized basis for the period commencing on October 4, 1997 and ending on
such date (i.e., for the calculation on the last day of the first Fiscal Quarter
of 1998, Consolidated EBITDAR shall be calculated for such period and multiplied
by four, for the calculation on the last day of the second Fiscal Quarter of
1998, Consolidated EBITDAR shall be calculated for such period and multiplied by
two, and for the calculation on the last day of the third Fiscal Quarter of
1998, Consolidated EBITDAR shall be calculated for such period and multiplied by
4/3rds).
(d) Consolidated Net Worth. Maintain (i) as of Fiscal Year End
1997, a Consolidated Net Worth equal to or greater than the sum of (x)
$90,619,550 plus (y) an amount equal to 50% of Consolidated Net Income since
July 5, 1997; and (ii) as of the last day of each Fiscal Quarter of Parent
thereafter, a Consolidated Net Worth equal to or greater than the sum of (x) the
required Consolidated Net Worth of Parent as of the last date measured pursuant
to this subsection (d), plus (y) an amount equal to 50% of the Consolidated Net
Income for the Fiscal Quarter then ending; provided, however, in the event that
the Consolidated Companies suffer a net loss for any Fiscal Quarter,
Consolidated Net Income shall be deemed to be $0, so that in no event shall the
required Consolidated Net Worth at the end of any Fiscal Quarter be less than
the greater of (x) $90,619,550 and (y) the amount required at the end of any
preceding Fiscal Quarter.
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<PAGE> 82
(e) Pro Forma Calculations. Schedule 7.09 sets forth the
calculation of the financial covenant amounts, ratios, and percentages required
by paragraphs (a) through (d) of this Section 7.09 calculated as of July 5, 1995
for the 12 months then ended based upon the pro forma financial statements
described in Section 6.14(c)(ii).
SECTION 7.10. NOTICES UNDER CERTAIN OTHER INDEBTEDNESS.
Immediately upon its receipt thereof, Parent shall furnish the Agents a copy of
any notice received by it or any other Consolidated Company from the holder(s)
of Indebtedness referred to in Section 8.01(b), (c), (e) or (f) (or from any
trustee, agent, attorney, or other party acting on behalf of such holder(s)) in
an amount which, in the aggregate, exceeds $500,000, where such notice states or
claims (i) the existence or occurrence of any default or event of default with
respect to such Indebtedness under the terms of any indenture, loan or credit
agreement, debenture, note, or other document evidencing or governing such
Indebtedness, or (ii) with respect to any Parent Control Debt, the existence or
occurrence of any event or condition which requires or permits such holder(s) to
exercise rights under any Change in Control Provision. Parent agrees to take
such actions as may be necessary to require the holder(s) of Parent Control Debt
(or any trustee or agent acting on their behalf) to furnish copies of all such
notices directly to the Agent simultaneously with the furnishing thereof to
Parent, and that such requirement may not be altered or rescinded without the
prior written consent of the Agent.
SECTION 7.11. ADDITIONAL CREDIT PARTIES AND COLLATERAL.
(a) New Material Subsidiaries. Promptly after (i) the
formation or acquisition of any Material Subsidiary not listed on Schedule 6.13,
(ii) the transfer of assets to any Consolidated Company if notice thereof is
required to be given pursuant to Section 7.07(r) and as a result thereof the
recipient of such assets becomes a Material Subsidiary, (iii) the domestication
of any Foreign Subsidiary that is a Material Subsidiary, or (iv) the occurrence
of any other event creating a new Material Subsidiary, Parent shall execute and
deliver, and cause to be executed and delivered (x) a Pledge Agreement, with
respect to all capital stock of such Material Subsidiary if it is not a Foreign
Subsidiary, or 66% of the capital stock of such Material Subsidiary if it is a
Foreign Subsidiary directly owned by Parent or a Subsidiary that is not, and is
not directly or indirectly controlled by, a Foreign Subsidiary, (y) a Guaranty
Agreement from each such Material Subsidiary that is not a Foreign Subsidiary
(together with an appropriate supplement to the Contribution Agreement), and (z)
a Security Agreement, Mortgage or other Security Document granting a Lien to the
Collateral Agent, for the benefit of the Lenders, on substantially all of the
assets of such Subsidiary, together with related documents of the kind described
in Section 5.01, all in form and substance satisfactory to the Agents.
(b) New Assets. Promptly after the acquisition by any Credit
Party of any assets, whether consisting of general intangibles, real property,
leasehold estates, stock, partnership interests or personal property, with an
aggregate value in excess of $500,000 which do not constitute Collateral, the
relevant Credit Party shall execute and deliver to the Collateral Agent, for the
benefit of the Lenders, a Security Document and any other document which the
Collateral Agent may
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<PAGE> 83
reasonably require, in order to create a first priority perfected security
interest in, or lien on, such asset.
SECTION 7.12. ADDITIONAL REPORTS.
(a) Within twenty (20) days after the end of each fiscal
month, the Revolving Borrowers shall deliver to the Agent and to each Lender
requesting the same, a Borrowing Base Certificate as of the end of such fiscal
month, which shall be in the form of Exhibit J attached hereto or such other
form as shall be satisfactory to the Agent, setting forth the amount of
Inventory owned by the Revolving Borrowers, and specifically setting forth the
amount of Eligible Inventory and the Eligible Accounts as of such month end.
(b) Within twenty (20) days after request of the Agent or any
Lender, the Revolving Borrowers shall deliver to the Agent and to any Lender
requesting the same, in form acceptable to the Agent, a detailed aged trial
balance of all Accounts existing as of the last day of the preceding month,
specifying the names, addresses, face value, dates of invoices and due dates for
each Account Debtor obligated on an Account so listed and all other information
necessary to calculate Eligible Accounts as of such last day of the preceding
month and, upon the Agent's request therefor, copies of proof of delivery and
the original copy of all documents, including, without limitation, repayment
histories and present status reports relating to the Accounts so scheduled and
such other matters and information relating to the status of then existing
Accounts as the Agent shall reasonably request.
SECTION 7.13. POST CLOSING REQUIREMENTS. Promptly, and in any
event within thirty (30) days after the Closing Date, deliver, or cause to be
delivered to the Agent in form and substance satisfactory to the Agent and the
Required Lenders a Phase I environmental report with respect to UKLP's
manufacturing facility, and within a reasonable period of time thereafter, such
additional Phase II reports as the Agents may reasonably request with respect
thereto.
ARTICLE 8.
NEGATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any
Note shall remain unpaid, neither Parent (whether or not it is a Borrower
hereunder) nor any other Borrower will or will permit any Subsidiary to:
SECTION 8.01. INDEBTEDNESS. Create, incur, assume or suffer
to exist any Indebtedness, other than:
(a) Indebtedness under this Agreement and the other Credit
Documents;
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<PAGE> 84
(b) The Senior Subordinated Notes and other Indebtedness
outstanding on the Closing Date and described on Schedule 8.01(b);
provided that, the letters of credit described pursuant on such
Schedule shall be permitted hereunder only through the current maturity
or renewal date thereof (whether or not the issuer elects to renew such
letter of credit);
(c) purchase money Indebtedness to the extent secured by a
Lien permitted by Section 8.02(b);
(d) unsecured current liabilities (other than liabilities for
borrowed money or liabilities evidenced by promissory notes, bonds or
similar instruments) incurred in the ordinary course of business and
either (i) not more than 90 days past due, or (ii) being disputed in
good faith by appropriate proceedings with reserves for such disputed
liability maintained in conformity with GAAP;
(e) the Intercompany Loans described on Schedule 6.20 and any
other loans between Consolidated Companies provided that (i) each loan
or other extension of credit made by a Credit Party to another
Consolidated Company that is not a Credit Party hereunder shall be made
payable on demand and shall not be subordinated to other obligations of
such Consolidated Company and all such loans and extensions of credit
shall not exceed $100,000 in the aggregate at any one time outstanding
unless otherwise agreed in writing by the Required Lenders, (ii) each
loan or other extension of credit made to a Credit Party by another
Consolidated Company that is not a Credit Party hereunder shall be made
on a subordinated basis consistent with the subordinated Intercompany
Loans in existence on the date of this Agreement and no portion of the
principal amount thereof shall be payable prior to the Term Loan
Maturity Date or Revolver Termination Date (whichever is last to
occur), and (iii) such loans or other extensions of credit are
otherwise permitted pursuant to the limitations of Section 8.05 (a) and
(c);
(f) Indebtedness under the Interest Rate Contract(s) and
Currency Contract(s) entered into in the ordinary course of business
consistent with past practices, including without limitation, the
Wachovia Interest Rate Contract;
(g) Indebtedness arising pursuant to certain bonds to be
issued by the City of Dyersburg, Tennessee on behalf of DFLP in an
amount not to exceed $9,500,000, provided that such bonds are purchased
by a Credit Party and pledged to the Collateral Agent hereunder; and
(h) other Indebtedness not to exceed $500,000 at any one time
outstanding.
SECTION 8.02. LIENS. Create, incur, assume or suffer to exist
any Lien on any of its property now owned or hereafter acquired to secure any
Indebtedness other than:
(a) Liens existing on the date hereof disclosed on
Schedule 8.02;
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<PAGE> 85
(b) any Lien on any property securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the acquisition
cost of such property, provided that such Lien does not extend to any
other property, and provided further that the aggregate amount of
Indebtedness secured by all such Liens at any time does not exceed
$1,000,000;
(c) Liens for taxes not yet due, and Liens for taxes or Liens
imposed by ERISA which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained;
(d) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law
created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained;
(e) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(f) easements, rights-of-way, restrictions and other similar
charges or encumbrances not materially interfering with the ordinary
conduct of the business of the Consolidated Companies or any of their
respective properties;
(g) Liens for judgments which are being actively appealed in
good faith by appropriate proceedings in an aggregate amount not to
exceed $500,000;
(h) Liens securing the Wachovia Interest Rate Agreement, which
Liens are pari passu with the Liens in favor of the Collateral Agent
pursuant to the Security Documents;
(i) Liens securing the obligations of the Credit Parties in
connection with the bond transaction permitted by Section 8.01(g);
(j) Liens existing with respect to any Persons acquired by any
Consolidated Company and not created in contemplation of such
Acquisition; and
(k) Liens in favor of the Collateral Agent securing the
Obligations hereunder.
SECTION 8.03. MERGERS, ASSET SALES, ETC. Merge or consolidate
with any other Person, or sell, lease, or otherwise dispose of its accounts,
property or other assets (including capital stock of Subsidiaries), provided,
however, that the foregoing restrictions shall not be applicable to:
(a) (i) any merger of a Borrower with another Borrower, (ii)
any merger of a Credit Party with another Person as long as such Credit
Party is the surviving entity of such
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<PAGE> 86
merger and the Parent continues to hold, directly or indirectly, the
same percentage of the voting securities of such Person, (iii) any
Subsidiary Guarantor may merge with any Borrower or any other
Subsidiary Guarantor, and (iv) any other Subsidiary of the Parent may
merge with any other Subsidiary of the Parent, any Subsidiary Guarantor
or any Borrower provided, however, that no transaction pursuant to
clauses (i), (ii), (iii) or (iv) above shall be permitted if any
Default or Event of Default otherwise exists at the time of such
transaction or would otherwise exist as a result of such transaction.
(b) (i) sales of equipment or other personal property being
replaced by other equipment or other personal property purchased as a
Capital Expenditure item in accordance with Section 2.03, (ii) other
Asset Sales where, on the date of execution of a binding obligation to
make such Asset Sale (provided that if the Asset Sale is not
consummated within six (6) months of such execution, then on the date
of consummation of such Asset Sale rather than on the date of execution
of such binding obligation), the Asset Value of Asset Sales occurring
after the Closing Date pursuant to this clause (ii), taking into
account the Asset Value of the proposed Asset Sale, would not exceed
$2,500,000 in the aggregate, (iii) sales of inventory in the ordinary
course of business, and (vi) Asset Sales occurring as part of any sale
and leaseback transactions permitted pursuant to Section 8.06;
provided, however, that no transaction pursuant to clauses (i), (ii),
or (iv) above shall be permitted if any Default or Event of Default
otherwise exists at the time of such transaction or would otherwise
exist as a result of such transaction and all such Assets Sales shall
be subject to the provisions of Section 2.03 and Section 3.10.
SECTION 8.04. DIVIDENDS, ETC. (a) In the case of the Parent,
declare or pay any dividend on its capital stock, or make any payment to
purchase, redeem, retire, defease or acquire any of its Subordinated Debt or
capital stock or any option, warrant, or other right to acquire such
Subordinated Debt or capital stock, other than:
(i) dividends payable solely in shares of capital
stock; and
(ii) cash dividends declared and paid, and all other
such payments made, after the Closing Date in an aggregate
amount at any time not to exceed, as of the date of
determination, fifty percent (50%) of the cumulative
Consolidated Net Income for the period (taken as one
accounting period) consisting of the twelve most recently
ended Fiscal Quarters of the Parent for which internal
financial statements have been prepared (taking into account
100% of all deficits during such period);
provided, however, no such payment may be made pursuant to clause (ii) above,
unless (x) the full amount of the mandatory prepayment required by Section
2.03(b) or Section 3.10 has been made, and (y) no Default or Event of Default
exists at the time of such declaration or payment, or would exist as a result of
such declaration or payment.
(b) In the case of any of the other Borrowers, declare or pay any
dividend on its capital stock, or make any payment to purchase, redeem, retire,
defease or acquire any of its Subordinated
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<PAGE> 87
Debt or capital stock or any option, warrant, or other right to acquire such
Subordinated Debt or capital stock, other than
(i) dividends payable solely in shares of capital
stock to other Credit Parties; and
(ii) cash dividends declared and paid, and all other
such payments made, directly or indirectly to the Parent,
provided that such payments do not exceed amounts necessary to
allow the Parent to service the Indebtedness outstanding
pursuant to the Senior Subordinated Notes Indenture and to pay
taxes, accounting, legal and central managerial costs and
expenses in a manner and amount consistent with historical
business practices,
provided, however, no such payment may be made pursuant to clause (ii) above,
unless (x) the full amount of the mandatory prepayment required by Section
2.03(b) or Section 3.10 has been made, and (y) no Default or Event of Default
exists at the time of such declaration or payment, or would exist as a result of
such declaration or payment.
SECTION 8.05. ACQUISITIONS; INVESTMENTS, LOANS, ETC. Make,
permit or hold any Investments in any Person, or otherwise make any Acquisitions
or hold any Subsidiaries, other than:
(a) (i) Investments in Subsidiaries that are Credit Parties,
and (ii) any loans to or investments in or from any Credit Party in
connection with an integrated cash management system among the
Consolidated Companies;
(b) Acquisitions made and simultaneously used for the
acquisition of the capital stock of any Person, or all or any
substantial portion of the property or assets of any Person, as long as
(x) such Acquisition occurs more than 18 months after the Closing Date,
and (y) the aggregate consideration paid in connection with such
Acquisition (whether in cash, notes or securities), when combined with
all previous Acquisitions made pursuant to this subsection (b), does
not exceed $10,000,000; provided, however, that no Acquisition may be
made at any time that a Default or Event of Default has occurred and is
continuing or would exist as a result of such Acquisition;
(c) Investments in (x) Subsidiaries, other than those
Subsidiaries that are Guarantors, and (y) joint ventures with Texmaco
entered into after the Closing Date; provided that, (i) the aggregate
amount of such Investments does not in aggregate amount exceed
$10,000,000 at any time outstanding, unless otherwise consented to in
writing by the Required Lenders, and (ii) that any recourse obligation
of any Consolidated Company in connection with such joint venture
(whether contingent or otherwise) is included in the calculation of
Funded Debt for purposes of this Agreement as well as such $10,000,000
limitation; provided, however, that no Investment may be made at any
time that a Default or Event of Default has occurred and is continuing
or would exist as a result of such Investment;
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<PAGE> 88
(d) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof, in each case supported by the full faith and credit of the
United States and maturing within one year from the date of creation
thereof;
(e) commercial paper maturing within one year from the date of
creation thereof rated in the highest grade by a nationally recognized
credit rating agency;
(f) time deposits maturing within one year from the date of
creation thereof with, including certificates of deposit issued by, any
office located in the United States of any bank or trust company which
is organized under the laws of the United States or any state thereof
and has capital, surplus and undivided profits aggregating at least
$500,000,000, including without limitation, any such deposits in
Eurodollars issued by a foreign branch of any such bank or trust
company; and
(g) Investments made by Plans.
SECTION 8.06. SALE AND LEASEBACK TRANSACTIONS. Sell or
transfer any property, real or personal, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which any
Consolidated Company intends to use for substantially the same purpose or
purposes as the property being sold or transferred, except for such transactions
occurring after the date of this Agreement as are (x) described in Section
8.01(g), or (y) permitted by Section 8.01(c).
SECTION 8.07. TRANSACTIONS WITH AFFILIATES.
(a) Enter into any material transaction or series of related
transactions which in the aggregate would be material, whether or not
in the ordinary course of business, with any Affiliate of any
Consolidated Company (but excluding any Affiliate which is also a
Consolidated Company), other than on terms and conditions substantially
as favorable to such Consolidated Company as would be obtained by such
Consolidated Company at the time in a comparable arm's-length
transaction with a Person other than an Affiliate; provided that, the
foregoing provisions shall not apply to transactions in connection with
joint ventures permitted pursuant to Section 8.05(c) to the extent
agreed in writing by the Agent.
(b) Convey or transfer to any other Person (including any
other Consolidated Company) other than to any Revolving Borrower, any
real property, buildings, or fixtures used in the manufacturing or
production operations of any Borrower.
(c) Convey or transfer to any other Person (including any
other Consolidated Company) any real property, buildings, or fixtures
used in the manufacturing or production operations of any Consolidated
Company, or convey or transfer to any other Consolidated Company any
other assets (excluding conveyances or transfers in the ordinary course
of business) owned by a Credit Party if at the time of such conveyance
or transfer any Default or Event of Default exists or would exist as a
result of such conveyance or transfer.
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<PAGE> 89
SECTION 8.08. PREPAYMENTS. (a) Directly or indirectly, prepay,
purchase, redeem, retire, defease or otherwise acquire, or make any optional
payment on account of any principal of, interest on, or premium payable in
connection with the optional prepayment, redemption or retirement of, any of its
Indebtedness, or give a notice of redemption with respect to any such
Indebtedness, or make any payment in violation of the subordination provisions
of any Subordinated Debt, including without limitation, the Senior Subordinated
Notes, except with respect to (i) the Obligations under this Agreement and the
Notes, and Indebtedness arising under the Letter of Credit Agreement, (ii)
permitted prepayments of Indebtedness incurred in connection with industrial
revenue bonds upon the occurrence of a determination of an event of taxability
entitling the holder(s) thereof to receive a higher rate of interest, (iii)
Intercompany Loans made or outstanding pursuant to Section 8.01(c)(i) where
demand for payment has been made in accordance with Section 8.13, and (iv)
Intercompany Loans made or outstanding pursuant to Section 8.01(c)(ii) upon the
prior written consent of the Agent.
(b) Directly or indirectly, take any action requiring the
mandatory prepayment, redemption, defeasance or offer to prepay or
retire any of its Indebtedness arising pursuant to the Senior
Subordinated Notes, or give a notice of redemption or offer to redeem
in connection therewith.
SECTION 8.09. CHANGES IN BUSINESS. Enter into or engage in
any business other than the textile industry and related businesses.
SECTION 8.10. ERISA. Take or fail to take any action with
respect to any Plan of any Consolidated Company or, with respect to its ERISA
Affiliates, any Plans which are subject to Title IV of ERISA or to continuation
health care requirements for group health plans under the Tax Code, including
without limitation (i) establishing any such Plan, (ii) amending any such Plan
(except where required to comply with applicable law), (iii) terminating or
withdrawing from any such Plan, or (iv) incurring an amount of unfunded benefit
liabilities, as defined in Section 4001(a)(18) of ERISA, or any withdrawal
liability under Title IV of ERISA with respect to any such Plan without first
obtaining the written approval of the Required Lenders, where such actions or
failures could reasonably be expected to result in a Material Adverse Effect.
SECTION 8.11. ADDITIONAL NEGATIVE PLEDGES. Create or otherwise
cause or suffer to exist or become effective, directly or indirectly, any
prohibition or restriction on the creation or existence of any Lien upon any
asset of any Consolidated Company, other than pursuant to (i) Section 8.02, (ii)
the terms of any agreement, instrument or other document pursuant to which any
Indebtedness permitted by Section 8.01(b) or 8.01(f) is incurred by any
Consolidated Company, so long as such prohibition or restriction applies only to
the property or asset being financed by such Indebtedness, (iii) any requirement
of applicable law or any regulatory authority having jurisdiction over any of
the Consolidated Companies; and (iv) the terms of the Senior Subordinated Note
Indenture as in effect on the date hereof.
SECTION 8.12. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING
CONSOLIDATED COMPANIES. Create or otherwise cause or suffer to exist or become
effective, any consensual
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encumbrance or restriction on the ability of any Consolidated Company to (i) pay
dividends or make any other distributions on such Consolidated Company's stock,
or (ii) pay any indebtedness owed to Parent or any other Consolidated Company,
or (iii) transfer any of its property or assets to Parent or any other
Consolidated Company, except any consensual encumbrance or restriction existing
under (x) the Credit Documents or (y) the Senior Subordinated Note Indenture as
in effect on the date hereof.
SECTION 8.13. ACTIONS UNDER CERTAIN DOCUMENTS. Without the
prior written consent of the Agent, modify, amend, cancel or rescind:
(a) Intercompany Loan Documents. The Intercompany Loans or
Intercompany Loan Documents (except that a loan between Consolidated
Companies as permitted by Section 8.01(e) may be modified or amended so
long as it otherwise satisfies the requirements of clause (ii) of
Section 8.01(e)), or make demand of payment or accept payment on any
Intercompany Loans permitted by Section 8.01(e)(ii), except that
current interest accrued thereon as of the date of this Agreement and
all interest subsequently accruing thereon (whether or not paid
currently) may be paid unless an Event of Default has occurred and is
continuing.
(b) Texmaco Documents. The Agreement, dated as of April 8,
1997 by and between Polysindo Hong Kong Limited and the Parent.
(c) Senior Subordinated Notes. The Senior Subordinated Notes
Indenture, the Senior Subordinated Notes or any document or agreement
executed in connection therewith.
SECTION 8.14. DESIGNATED SENIOR DEBT; ABILITY TO INCUR
ADDITIONAL SENIOR DEBT. Without the prior written consent of the Agents, (x)
cause any Indebtedness of the Parent or any of its Subsidiaries, other than
Indebtedness owing under this Agreement and the Letter of Credit Agreement, to
become "Designated Senior Debt" as provided in the Senior Subordinated Notes
Indenture, or (y) cease to have an allowance for at least $5,000,000 of
additional Indebtedness pursuant to Section 4.09(ix) of the Senior Subordinated
Notes Indenture.
SECTION 8.15. CHANGE OF FISCAL YEAR. Change the calculation
of the fiscal year of any of the Consolidated Companies.
SECTION 8.16. SALE OR DISCOUNT OF RECEIVABLES. Sell or permit
any Subsidiary to sell with recourse or discount or otherwise sell for less than
the face value thereof, any of its notes or account receivables other than the
sale, in the ordinary course of business, of (x) defaulted receivables for
purposes of collection, and (y) foreign receivables pursuant to factoring
arrangements approved by the Agents.
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ARTICLE 9.
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following specified events (each an "Event of Default"):
SECTION 9.01. PAYMENTS. Any Borrower shall fail to make
promptly when due (including, without limitation, by mandatory prepayment) any
principal payment with respect to the Loans, or any Borrower shall fail to make
within five (5) days after the due date thereof any payment of interest, fee or
other amount payable hereunder;
SECTION 9.02. COVENANTS WITHOUT NOTICE. Parent or any Borrower
shall fail to observe or perform any covenant or agreement contained in Sections
7.07(g), 7.09, 7.12, 8.01 through 8.06, 8.08, 8.09, and 8.11 through 8.15;
SECTION 9.03. OTHER COVENANTS. Parent or any Borrower shall
fail to observe or perform any covenant or agreement contained in this
Agreement, other than those referred to in Sections 9.01 and 9.02, and, if
capable of being remedied, such failure shall remain unremedied for 30 days
after the earlier of (i) Parent's or any Borrower's obtaining knowledge thereof,
or (ii) written notice thereof shall have been given to Parent or any Borrower
by any Agent or Lender;
SECTION 9.04. REPRESENTATIONS. Any representation or warranty
made or deemed to be made by Parent, any other Borrower or any other Credit
Party or by any of its officers under this Agreement or any other Credit
Document (including the Schedules attached thereto), or any certificate or other
document submitted to the Agents or the Lenders by any such Person pursuant to
the terms of this Agreement or any other Credit Document, shall be incorrect in
any material respect when made or deemed to be made or submitted;
SECTION 9.05. NON-PAYMENTS OF OTHER INDEBTEDNESS. Any
Consolidated Company shall fail to make when due (whether at stated maturity, by
acceleration, on demand or otherwise, and after giving effect to any applicable
grace period) any payment of principal of or interest on any Indebtedness (other
than the Obligations) exceeding $1,000,000 in the aggregate;
SECTION 9.06. DEFAULTS UNDER OTHER AGREEMENTS. Any
Consolidated Company shall fail to observe or perform within any applicable
grace period any covenants or agreements contained in any agreements or
instruments relating to any of its Indebtedness exceeding $1,000,000 in the
aggregate, or any other event shall occur if the effect of such failure or other
event is to accelerate, or to permit the holder of such Indebtedness or any
other Person to accelerate, the maturity of such Indebtedness; or any such
Indebtedness shall be required to be prepaid (other than by a regularly
scheduled required prepayment) in whole or in part prior to its stated maturity;
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SECTION 9.07. BANKRUPTCY. Parent or any other Consolidated
Company shall commence a voluntary case concerning itself under the Bankruptcy
Code or applicable foreign bankruptcy laws; or an involuntary case for
bankruptcy is commenced against any Consolidated Company and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) or
similar official under applicable foreign bankruptcy laws is appointed for, or
takes charge of, all or any substantial part of the property of any Consolidated
Company; or any Consolidated Company commences proceedings of its own bankruptcy
or to be granted a suspension of payments or any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction, whether now or
hereafter in effect, relating to any Consolidated Company or there is commenced
against any Consolidated Company any such proceeding which remains undismissed
for a period of 60 days; or any Consolidated Company is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any Consolidated Company suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or any Consolidated
Company makes a general assignment for the benefit of creditors; or any
Consolidated Company shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or any
Consolidated Company shall call a meeting of its creditors with a view to
arranging a composition or adjustment of its debts; or any Consolidated Company
shall by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action is taken by any
Consolidated Company for the purpose of effecting any of the foregoing;
SECTION 9.08. ERISA. A Plan of a Consolidated Company or a
Plan subject to Title IV of ERISA of any of its ERISA Affiliates
(i) shall fail to be funded in accordance with the
minimum funding standard required by applicable law, the terms
of such Plan, Section 412 of the Tax Code or Section 302 of
ERISA for any plan year or a waiver of such standard is sought
or granted with respect to such Plan under applicable law, the
terms of such Plan or Section 412 of the Tax Code or Section
303 of ERISA; or
(ii) is being, or has been, terminated or the subject
of termination proceedings under applicable law or the terms
of such Plan; or
(iii) shall require a Consolidated Company to provide
security under applicable law, the terms of such Plan, Section
401 or 412 of the Tax Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to a Consolidated Company
under applicable law, the terms of such Plan, or Title IV of
ERISA;
and there shall result from any such failure, waiver, termination or other event
a liability to the PBGC or a Plan that would have a Materially Adverse Effect.
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SECTION 9.09. JUDGMENT. A judgment or order for the payment of
money in excess of $1,000,000 or otherwise having a Materially Adverse Effect
shall be rendered against Parent or any other Consolidated Company and such
judgment or order shall continue unsatisfied (in the case of a money judgment)
and in effect for a period of 60 days during which execution shall not be
effectively stayed or deferred (whether by action of a court, by agreement or
otherwise);
SECTION 9.10. OWNERSHIP OF CREDIT PARTIES. If any Borrower
(other than Parent) shall at any time fail to be a wholly owned Subsidiary of
Parent, either directly or indirectly through another wholly owned Subsidiary of
Parent, except where all outstanding Loans made to such Borrower have been paid
in full and the Lenders shall have no further obligation to extend additional
credit to such Borrower;
SECTION 9.11. CHANGE IN CONTROL OF PARENT. (i) Any Change in
Control shall occur or exist, or (ii) any event or condition shall occur or
exist which, pursuant to the terms of any Change in Control Provision, requires
or permits the holder(s) of Parent Control Debt to require that such Parent
Control Debt be redeemed, repurchased, defeased, prepaid or repaid, in whole or
in part, or the maturity of such Parent Control Debt to be accelerated in any
respect;
SECTION 9.12. DEFAULT UNDER OTHER CREDIT DOCUMENTS. There
shall exist or occur any "Event of Default" as provided under the terms of any
other Credit Document, or any Credit Document ceases to be in full force and
effect or the validity or enforceability thereof is disaffirmed by or on behalf
of Parent or any other Credit Party, or at any time it is or becomes unlawful
for Parent or any other Credit Party to perform or comply with its obligations
under any Credit Document, or the obligations of Parent or any other Credit
Party under any Credit Document are not or cease to be legal, valid and binding
on Parent or any such Credit Party;
SECTION 9.13. DEFAULT UNDER INTEREST RATE CONTRACT OR CURRENCY
CONTRACT. Any event or condition shall occur or exist which causes, or permits
any party thereto (other than the Consolidated Company or Companies party
thereto) to cause, the termination or cancellation of the or any Interest Rate
Contract or Currency Contract (excluding any termination or cancellation
effected at the option of Parent in the exercise of Parent's business judgment
or any other termination or cancellation of such Interest Rate Contract or
Currency Contract not resulting from any breach of such agreement or default
thereunder by any Consolidated Company or Companies), and as a result of such
cancellation or termination, any of the Consolidated Companies would be required
to make net payments thereunder in excess of $1,000,000 in the aggregate;
SECTION 9.14. ATTACHMENTS. An attachment or similar action
shall be made on or taken against any of the assets of any Consolidated Company
with an Asset Value exceeding $500,000 in aggregate and is not removed within 90
days of the same being made;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Agent may, with the consent of the Required
Lenders, and upon the written or telecopy request of the Lenders, shall, by
written notice to Borrowers, take any or all of the following
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actions, without prejudice to the rights of the Agents, any Lender or the holder
of any Note to enforce its claims against Borrowers or any other Credit Party:
(i) declare all Commitments terminated, whereupon the pro rata Commitments of
each Lender shall terminate immediately and any commitment fee shall forthwith
become due and payable without any other notice of any kind; and (ii) declare
the principal of and any accrued interest on the Loans, and all other
Obligations owing hereunder, to be, whereupon the same shall become, forthwith
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by Borrowers; provided, that, if an Event
of Default specified in Section 9.07 shall occur, the result which would occur
upon the giving of written notice by the Agent to any Credit Party, as specified
in clauses (i) and (ii) above, shall occur automatically without the giving of
any such notice. Upon any acceleration of the Loans outstanding hereunder, all
outstanding Letters of Credit shall be deemed to have been fully drawn and the
Revolving Borrowers shall be required to deposit cash collateral into the L/C
Cash Collateral Account in accordance with the provisions of Section 3.05(b).
ARTICLE 10.
THE AGENT; COLLATERAL AGENT
SECTION 10.01 APPOINTMENT OF AGENT. Each Lender hereby
designates STBA as Agent to administer all matters concerning the Revolving
Loans (including, without limitation, the L/C Subcommitments) and the Term Loans
and to act as herein specified. Each Lender hereby irrevocably authorizes, and
each holder of any Note by the acceptance of a Note shall be deemed irrevocably
to authorize, the Agent to take such actions on its behalf under the provisions
of this Agreement, the Letter of Credit Agreement, the other Credit Documents,
and all other instruments and agreements referred to herein or therein, and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The Agent
may perform any of its duties hereunder by or through its agents or employees.
SECTION 10.02. APPOINTMENT OF COLLATERAL AGENT.
(a) The Agent and each Lender hereby designates STBA as
Collateral Agent and hereby authorizes the Collateral Agent to enter into each
of the Security Documents substantially in the form attached hereto and to the
Letter of Credit Agreement, and to take all action contemplated thereby. All
rights and remedies under the Security Documents may be exercised by the
Collateral Agent for the benefit of the Agent and the Lenders and the other
beneficiaries thereof upon the terms thereof. The Agent and the Lenders further
agree that the Collateral Agent may assign its rights and obligations as
Collateral Agent under any of the Security Documents to any affiliate of the
Collateral Agent or to any trustee, which assignee in each such case shall
(subject to compliance with any requirements of applicable law governing the
assignment of such Security Documents) be entitled to all the rights of the
Collateral Agent under and with respect to the applicable Security Document.
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(b) In each circumstance where, under any provision of any
Security Document, the Collateral Agent shall have the right to grant or
withhold any consent, exercise any remedy, make any determination or direct any
action by the Collateral Agent under such Security Document, the Collateral
Agent shall act in respect of such consent, exercise of remedies, determination
or action, as the case may be, with the consent of and at the direction of the
Required Lenders; provided, however, that no such consent of the Required
Lenders shall be required with respect to any consent, determination or other
matter that is, in the Collateral Agent's judgment, ministerial or
administrative in nature; provided, further, that in no event shall the
Collateral Agent be required, and in all cases shall be fully justified in
failing or refusing, to take any action under or pursuant to any Security
Document which, in the reasonable opinion of the Collateral Agent, (a) would be
contrary to the terms of any Security Document or would subject it or its
officers, employees, or directors to liability, unless and until the Collateral
Agent shall be indemnified or tendered security to its satisfaction by the
Lenders against any and all loss, cost, expense or liability in connection
therewith, or (b) would be contrary to law, in each case anything herein or
elsewhere contained to the contrary notwithstanding. In each circumstance where
any consent of or direction from the Required Lenders is required, the
Collateral Agent shall send to the Lenders a notice setting forth a description
in reasonable detail of the matter as to which consent or direction is requested
and the Collateral Agent's proposed course of action with respect thereto. In
the event the Collateral Agent shall not have received a response from any
Lender within five (5) Business Days after such Lender's receipt of such notice,
such Lender shall be deemed to have agreed to the course of action proposed by
the Collateral Agent.
SECTION 10.03. NATURE OF DUTIES OF AGENTS. The Agents shall
have no duties or responsibilities except those expressly set forth in this
Agreement, the Letter of Credit Agreement, and the other Credit Documents. None
of the Agents nor any of their respective officers, directors, employees or
agents shall be liable for any action taken or omitted by it as such hereunder
or in connection herewith, unless caused by its or their gross negligence or
willful misconduct. The duties of the Agents shall be ministerial and
administrative in nature; the Agents shall not have by reason of this Agreement
or the Letter of Credit Agreement a fiduciary relationship in respect of any
Lender; and nothing in this Agreement, express or implied, is intended to or
shall be so construed as to impose upon the Agents any obligations in respect of
this Agreement, the Letter of Credit Agreement, or the other Credit Documents
except as expressly set forth herein.
SECTION 10.04. LACK OF RELIANCE ON THE AGENTS.
(a) Independently and without reliance upon the Agents, each
Lender, to the extent it deems appropriate, has made and shall continue to make
(i) its own independent investigation of the financial condition and affairs of
the Credit Parties in connection with the taking or not taking of any action in
connection herewith, and (ii) its own appraisal of the creditworthiness of the
Credit Parties, and, except as expressly provided in this Agreement or the
Letter of Credit Agreement, the Agents shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any credit
or other information with respect thereto, whether coming into its possession
before the making of any Loans, or the issuance of any Letters of Credit, or at
any time or times thereafter.
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(b) The Agents shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes, the
Guaranty Agreements, the Pledge Agreements, the Letter of Credit Agreement, the
Security Documents, or any other documents contemplated hereby or thereby, or
the financial condition of the Credit Parties, or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, the Notes, the Guaranty Agreements,
the Pledge Agreements, the Letter of Credit Agreement, the Security Documents,
or the other documents contemplated hereby or thereby, or the financial
condition of the Credit Parties, or the existence or possible existence of any
Default or Event of Default; provided, however, to the extent the Agents have
been advised that a Lender has not received any information formally delivered
to the Agents pursuant to Section 7.07, the Agents shall deliver or cause to be
delivered such information to such Lender.
SECTION 10.05. CERTAIN RIGHTS OF THE AGENTS. If any Agent
shall request instructions from the Required Lenders with respect to any action
or actions (including the failure to act) in connection with this Agreement or
the Letter of Credit Agreement, such Agent shall be entitled to refrain from
such act or taking such act, unless and until the Agent shall have received
instructions from such Lenders; and the Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against any Agent as a result of such
Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Lenders where required by the terms of this
Agreement or the Letter of Credit Agreement.
SECTION 10.06. RELIANCE BY AGENTS. The Agents shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cable gram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The Agents may
consult with legal counsel (including counsel for any Credit Party), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
SECTION 10.07. INDEMNIFICATION OF AGENTS. To the extent the
Agents are not reimbursed and indemnified by the Credit Parties, each Lender
will reimburse and indemnify (i) each Agent, ratably according to the respective
principal amounts of the Loans and participations in Letters of Credit
outstanding by each Lender (or if no amounts are outstanding, ratably in
accordance with their respective Commitments under the Facilities administered
by such Agent of which such Lender is a part), and (ii) the Collateral Agent,
ratably according to the respective amounts of the Loans and Letters of Credit
outstanding under all Facilities (or if no amounts are outstanding, ratably in
accordance with the Total Commitments), in either case, for and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed
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on, incurred by or asserted against such Agent in performing its duties
hereunder, in any way relating to or arising out of this Agreement or the other
Credit Documents; provided that no Lender shall be liable to any Agent for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct.
SECTION 10.08. THE AGENTS IN THEIR INDIVIDUAL CAPACITY. With
respect to its obligation to lend under this Agreement, the Loans made by it and
the Notes issued to it, and its obligations pursuant to the Letter of Credit
Agreement and the reimbursement obligations to it thereunder, each Agent shall
have the same rights and powers hereunder as any other Lender or holder of a
Note and may exercise the same as though it were not performing the duties
specified herein; and the terms "Lenders", "Required Lenders", "holders of
Notes", or any similar terms shall, unless the context clearly otherwise
indicates, include each of the Agents in its individual capacity. The Agents may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with the Consolidated
Companies or any affiliate of the Consolidated Companies as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Consolidated Companies for services in connection with
this Agreement, the Letter of Credit Agreement, and otherwise without having to
account for the same to the Lenders.
SECTION 10.09. HOLDERS OF NOTES. The Agents may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Agents. Any request, authority or consent of any Person who, at
the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in exchange
therefor.
SECTION 10.10. SUCCESSOR AGENTS.
(a) Any Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrowers and may be removed at any time with or
without cause by the Required Lenders; provided, however, the Collateral Agent
may not resign or be removed except where the Agent is also resigning or being
removed and a successor Collateral Agent has been appointed under this Agreement
and shall have accepted such appointment. Upon any such resignation or removal,
the Required Lenders shall have the right, upon five days' notice to the
Borrowers, to appoint a successor Agent or Agents. If no successor Agent or
Agents shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring Agent's or Agents'
giving of notice of resignation or the Required Lenders' removal of the retiring
Agent or Agents, then, upon five days' notice to the Borrowers, the retiring
Agent or Agents may, on behalf of the Lenders, appoint a successor Agent or
Agents, which shall be a bank which maintains an office in the United States, or
a commercial bank organized under the laws of the United States of America or
any State thereof, or any Affiliate of such bank, having a combined capital and
surplus of at least $100,000,000.
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(b) Upon the acceptance of any appointment as an Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article X shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement or the Letter of Credit Agreement.
ARTICLE 11.
MISCELLANEOUS
SECTION 11.01. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, telecopy or similar teletransmission or writing) and shall be given to
such party at its address or applicable teletransmission number set forth on the
signature pages hereof, or such other address or applicable teletransmission
number as such party may hereafter specify by notice to the Agents and the
Borrowers. Each such notice, request or other communication shall be effective
(i) if given by telex, when such telex is transmitted to the telex number
specified in this Section and the appropriate answerback is received, (ii) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid, (iii) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate confirmation is received, or (iv) if given by any
other means (including, without limitation, by air courier), when delivered or
received at the address specified in this Section; provided that notices to the
Agents shall not be effective until received.
SECTION 11.02. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or the other Credit Documents, nor consent to any
departure by any Credit Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders do any of the following:
(i) waive any of the conditions specified in Sections 5.01 or 5.02 (ii) increase
the Commitments or other contractual obligations of the Lenders to the Borrowers
under this Agreement or the Letter of Credit Agreement, (iii) reduce the
principal of, or interest on, the Notes or any fees hereunder or under the
Letter of Credit Agreement, (iv) postpone any date fixed for the payment in
respect of principal of, or interest on, the Notes or any fees hereunder or
under the Letter of Credit Agreement, (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number or identity of Lenders which shall be required for the Lenders or any of
them to take any action hereunder or under the Letter of Credit Agreement, (vi)
agree to release any of the Collateral from the Lien of the Security Documents,
any funds in the L/C Cash Collateral Account, to the extent securing the
Obligations or to release any Guarantor from its obligations under any Guaranty
Agreement (provided, that no agreement to any such release shall be required
from any Lenders in connection with the transactions described in connection
with an Asset Sale (including a sale of
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Pledged Stock) that is made at a time when Borrowers have satisfied the
requirements set forth in Section 8.03 with respect to such sale), or (vii)
amend this Section 11.02 or Section 11.06. Notwithstanding the foregoing, no
amendment, waiver or consent shall, unless in writing and signed by the Agent,
the Collateral Agent or Swing Line Lender, as the case may be, in addition to
the Lenders required hereinabove to take such action, affect the rights or
duties of the Agent or the Collateral Agent or Swing Line Lender, as the case
may be, under this Agreement, the Letter of Credit Agreement, or under any other
Credit Document.
SECTION 11.03. NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of the Agent, the Collateral Agent, any Lender or any holder
of a Note in exercising any right or remedy hereunder or under the Letter of
Credit Agreement or any other Credit Document, and no course of dealing between
any Credit Party and the Agent, the Collateral Agent, any Lender or the holder
of any Note shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy hereunder or under the Letter of Credit
Agreement or any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right or remedy hereunder or thereunder.
The rights and remedies herein expressly provided are cumulative and not
exclusive of any rights or remedies which the Agent, the Collateral Agent, any
Lender or the holder of any Note would otherwise have. No notice to or demand on
any Credit Party not required hereunder or under the Letter of Credit Agreement
or any other Credit Document in any case shall entitle any Credit Party to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent, the Collateral Agent, the
Lenders or the holder of any Note to any other or further action in any
circumstances without notice or demand.
SECTION 11.04. PAYMENT OF EXPENSES, ETC. Each of Parent and
each other Borrower shall, jointly and severally:
(i) whether or not the transactions hereby
contemplated are consummated, pay all reasonable,
out-of-pocket costs and expenses of the Agents in the
administration (both before and after the execution hereof and
including advice of counsel as to the rights and duties of the
Agents and the Lenders with respect thereto) of, and in
connection with the preparation, execution and delivery of,
preservation of rights under, enforcement of, and, after a
Default or Event of Default, refinancing, renegotiation or
restructuring of, this Agreement, the Letter of Credit
Agreement, and the other Credit Documents and the documents
and instruments referred to therein, and any amendment, waiver
or consent relating thereto (including, without limitation,
the reasonable fees and disbursements of counsel for the
Agents), and in the case of enforcement of this Agreement, the
Letter of Credit Agreement, or any Credit Document after an
Event of Default, all such reasonable, out-of-pocket costs and
expenses (including, without limitation, the reasonable fees
and disbursements of counsel), for any of the Lenders;
(ii) subject, in the case of certain Taxes, to the
applicable provisions of Section 4.07(b), pay and hold each of
the Lenders harmless from and against any and all present and
future stamp, documentary, and other similar Taxes with
respect to
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this Agreement, the Notes, the Letter of Credit Agreement, and
any other Credit Documents, any collateral described therein,
or any payments due thereunder, and save each Lender harmless
from and against any and all liabilities with respect to or
resulting from any delay or omission to pay such Taxes;
(iii) indemnify each Agent and Lender, and their
respective officers, directors, employees, representatives and
agents from, and hold each of them harmless against, any and
all costs, losses, liabilities, claims, damages or expenses
incurred by any of them (whether or not any of them is
designated a party thereto) (an "Indemnitee") arising out of
or by reason of any investigation, litigation or other
proceeding related to any actual or proposed use of the
proceeds of any of the Loans or the Letters of Credit, or any
Credit Party's entering into and performing of the Agreement,
the Notes, the Letter of Credit Agreement, or the other Credit
Documents, including, without limitation, the reasonable fees
and disbursements of counsel (including foreign counsel)
incurred in connection with any such investigation, litigation
or other proceeding; provided, however, the Borrowers shall
not be obligated to indemnify any Indemnitee for any of the
foregoing arising out of such Indemnitee's gross negligence or
willful misconduct, or the violation by such Indemnitee of any
law, rule or regulation, unless such violation occurs directly
or indirectly as a result of an action, inaction,
representation or misrepresentation by or on behalf of any
Credit Party or other Consolidated Company; and
(iv) without limiting the indemnities set forth in
subsection (iii) above, indemnify each Indemnitee for any and
all expenses and costs (including without limitation,
remedial, removal, response, abatement, cleanup,
investigative, closure and monitoring costs), losses, claims
(including claims for contribution or indemnity and including
the cost of investigating or defending any claim and whether
or not such claim is ultimately defeated, and whether such
claim arose before, during or after any Credit Party's
ownership, operation, possession or control of its business,
property or facilities or before, on or after the date hereof,
and including also any amounts paid incidental to any
compromise or settlement by the Indemnitee or Indemnitees to
the holders of any such claim), lawsuits, liabilities,
obligations, actions, judgments, suits, disbursements,
encumbrances, liens, damages (including without limitation
damages for contamination or destruction of natural
resources), penalties and fines of any kind or nature
whatsoever (including without limitation in all cases the
reasonable fees, other charges and disbursements of counsel in
connection therewith) incurred, suffered or sustained by that
Indemnitee based upon, arising under or relating to
Environmental Laws based on, arising out of or relating to in
whole or in part, the existence or exercise of any rights or
remedies by any Indemnitee under this Agreement, the Letter of
Credit Agreement, any other Credit Document or any related
documents (but excluding those incurred, suffered or sustained
by any Indemnitee as a result of any action taken by or on
behalf of the Lenders with respect to any Subsidiary of Parent
owned or controlled by the Lenders,
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the Collateral Agent, or their nominees or designees, as a
result of their acquisition of Pledged Stock pursuant to
exercise of remedies under the Pledge Agreements).
If and to the extent that the obligations of Parent and each other
Borrower under this Section 11.04 are unenforceable for any reason,
Parent and each other Borrower hereby agree to make the maximum
contribution to the payment and satisfaction of such obligations which
is permissible under applicable law.
SECTION 11.05. RIGHT OF SETOFF. In addition to and not in
limitation of all rights of offset that any Lender or other holder of a Note may
have under applicable law, each Lender or other holder of a Note shall, upon the
occurrence of any Event of Default and whether or not such Lender or such holder
has made any demand or any Credit Party's obligations are matured, have the
right to appropriate and apply to the payment of any Credit Party's obligations
hereunder and under the Letter of Credit Agreement and the other Credit
Documents, all deposits of any Credit Party (general or special, time or demand,
provisional or final) then or thereafter held by and other indebtedness or
property then or thereafter owing by such Lender or other holder to any Credit
Party, whether or not related to this Agreement or any transaction hereunder.
SECTION 11.06. BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, provided that the Borrowers may not assign or transfer any of
its interest hereunder without the prior written consent of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for
the account of, any of its branch offices or the office of an Affiliate of such
Lender.
(c) Each Lender may assign all or a portion of its interests,
rights and obligations under this Agreement (including all or a portion of any
of its Commitments and the Loans at the time owing to it and the Notes held by
it) and the Letter of Credit Agreement to any Eligible Assignee; provided,
however, that (i) the Agent and Parent must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld; it being
agreed that, in the case of any assignment of an L/C Subcommitment or other
obligations under the Letter of Credit Agreement, such consent will be properly
withheld if such assignee has not been approved by the Agent in its sole
discretion), (ii) the aggregate amount of the Commitments and outstanding Term
Loans of the assigning Lender that are subject to such assignment (determined as
of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Agents) shall not be less than $5,000,000, (iii) the assigning
Lender retains after the consummation of such assignment a minimum aggregate
amount of Commitments and Term Loans of $10,000,000, (iv) the parties to each
such assignment shall execute and deliver to the Agent an Assignment and
Acceptance, together with a Note or Notes subject to such assignment and a
processing and recordation fee of $3000, and (v) if the assigning Lender is
assigning all or any portion of its interests, rights or obligations under this
Agreement in respect of such Lender's Revolving Loans, the assigning Lender
shall also assign to
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such Eligible Assignee a corresponding portion of its interest, rights and
obligations under the LC Exposure and Swing Line Loans and Revolving Loan
Commitments; provided, further, that in the case of any assignment made (x) at
any time there exists an Event of Default hereunder, (y) where such assigning
Lender is assigning the entire amount of its Commitments and Term Loans
hereunder, or (z) where such assigning Lender is assigning to one of its
Affiliates or to a Person that is already a Lender under this Agreement prior to
giving effect to such assignment, then and in any such assignment described in
the preceding clauses (x), (y), or (z), the minimum amounts specified in clauses
(ii) and (iii) in this sentence shall not be required. From and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, the
assignee thereunder shall be a party hereto and to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement. Within five (5) Business Days after receipt of the
notice and the Assignment and Acceptance, Parent and each of the other
Borrowers, at its own expense, 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 assignee in a principal amount equal to the applicable Commitments or Term
Loans assumed by it pursuant to such Assignment and Acceptance and new Note or
Notes to the assigning Lender in the amount of its retained Commitment or
Commitments or amount of its retained Term Loans. 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 date of the surrendered Note
or Notes which they replace, and shall otherwise be in substantially the form
attached hereto.
(d) Each Lender may, without the consent of Parent, any other
Borrower or the Agents, sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments in the Loans owing to it and the
Notes held by it), provided, however, that (i) no Lender may sell a
participation in its aggregate Commitments and Term Loans (after giving effect
to any permitted assignment hereof) in an amount in excess of fifty percent
(50%) of such aggregate Commitments and Term Loans, except that no such maximum
amount shall be applicable to any such participation sold at any time there
exists an Event of Default hereunder, (ii) such Lender's obligations under this
Agreement shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
and (iv) the participating bank or other entity shall not be entitled to the
benefit (except through its selling Lender) of the cost protection provisions
contained in Article IV of this Agreement, and (v) Parent, the other Borrowers
and the Agents and other Lenders shall continue to deal solely and directly with
each Lender in connection with such Lender's rights and obligations under this
Agreement, and the other Credit Documents, and such Lender shall retain the sole
right to enforce the obligations of Parent and the other Borrowers relating to
the Loans and the Letters of Credit, and to approve any amendment, modification
or waiver of any provisions of this Agreement, and the other Credit Documents.
(e) Any Lender or participant may, in connection with the
assignment or participation or proposed assignment or participation, pursuant to
this Section, disclose to the assignee or participant or proposed assignee or
participant any information relating to Borrowers or the other Consolidated
Companies furnished to such Lender by or on behalf of Borrowers or any other
Consolidated Company. With respect to any disclosure of confidential,
non-public, proprietary
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information, such proposed assignee or participant shall agree to use the
information only for the purpose of making any necessary credit judgments with
respect to this credit facility and not to use the information in any manner
prohibited by any law, including without limitation, the securities laws of the
United States. The proposed participant or assignee shall agree not to disclose
any of such information except (i) to directors, employees, auditors or counsel
to whom it is necessary to show such information, each of whom shall be informed
of the confidential nature of the information, (ii) in any statement or
testimony pursuant to a subpoena or order by any court, governmental body or
other agency asserting jurisdiction over such entity, or as otherwise required
by law (provided prior notice is given to Borrowers and the Agent unless
otherwise prohibited by the subpoena, order or law), and (iii) upon the request
or demand of any regulatory agency or authority with proper jurisdiction. The
proposed participant or assignee shall further agree to return all documents or
other written material and copies thereof received from any Lender, the Agent or
Borrowers relating to such confidential information unless otherwise properly
disposed of by such entity.
(f) Any Lender may at any time assign all or any portion of
its rights in this Agreement and the Notes issued to it to a Federal Reserve
Bank; provided that no such assignment shall release the Lender from any of its
obligations hereunder.
(g) If (i) any Taxes referred to in Section 4.07(b) have been
levied or imposed so as to require withholdings or deductions by any Borrower
and payment by any Borrower of additional amounts to any Lender as a result
thereof, (ii) any Lender shall make demand for payment of increased costs or
reduced rate of return pursuant to Section 4.10 or any Lender determines that
LIBOR is unascertainable or illegal pursuant to Section 4.08 or Section 4.09, or
any Lender makes a claim for increased costs pursuant to Section 4.16, or (iii)
any Lender shall decline to consent to a modification or waiver of the terms of
this Agreement or the other Credit Documents requested by Borrowers, then and in
such event, upon request from Borrowers delivered to such Lender and the Agent,
such Lender shall assign, in accordance with the provisions of Section 11.06(c),
all of its rights and obligations under this Agreement and the other Credit
Documents to another Lender or an Eligible Assignee selected by Borrowers and
consented to by the Agent (such consent not be unreasonably withheld) in
consideration for the payment by such assignee to the Lender of the principal
of, and interest on, the outstanding Loans accrued to the date of such
assignment, and the assumption of such Lender's Commitment hereunder, together
with any and all other amounts owing to such Lender under any provisions of this
Agreement or the other Credit Documents accrued to the date of such assignment;
provided, however, Lenders subject to this Section 11.06 shall be treated in a
substantially identical manner.
SECTION 11.07. GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
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(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, THE NOTES, THE LETTER OF CREDIT AGREEMENT, OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA, OR THE
SUPERIOR COURT OF FULTON COUNTY, GEORGIA, OR IN ANY COURT OF THE UNITED STATES
OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION AND DELIVERY
OF THIS AGREEMENT, EACH BORROWER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND EACH
BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) EACH BORROWER HEREBY IRREVOCABLY DESIGNATES NATIONAL
REGISTERED AGENTS, INC. OF NASHVILLE, TENNESSEE, AS ITS DESIGNEE, APPOINTEE AND
LOCAL AGENT TO RECEIVE, FOR AND ON BEHALF OF SUCH BORROWER, SERVICE OF PROCESS
IN SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR THE NOTES OR ANY DOCUMENT RELATED THERETO. IT IS UNDERSTOOD
THAT A COPY OF SUCH PROCESS SERVED ON EITHER SUCH LOCAL AGENT WILL BE PROMPTLY
FORWARDED BY MAIL TO THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS
SIGNATURE BELOW, BUT THE FAILURE OF THE BORROWER TO RECEIVE SUCH COPY SHALL NOT
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. IF FOR ANY REASON SERVICE OF
PROCESS CANNOT PROMPTLY BE MADE ON EITHER SUCH LOCAL AGENT, EACH BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS
SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Agents, any
Lender, any holder of a Note or any Credit Party to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Borrowers in any other jurisdiction.
SECTION 11.08. CONFIDENTIALITY. Each Lender agrees that it
will maintain in confidence and will not disclose, publish or disseminate, to
any Person, any confidential information which it has or shall acquire during
the term of this Agreement relating to the business, operations and condition,
financial or otherwise of the Borrowers, except that such information may be
disclosed by such Lender if and to the extent that:
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(a) such information is in the public domain at the time of
disclosure;
(b) such information is required to be disclosed by subpoena
or similar process of applicable law or regulations;
(c) such information is required to be disclosed to any
regulatory or administrative body or commission to whose jurisdiction such
Lender may be subject;
(d) such information is disclosed to counsel, auditors or
other professional advisors to such Lender or to affiliates of such Lender
provided that such affiliates agree to keep such information confidential as set
forth herein;
(e) such information is disclosed with the prior written
consent of the Borrowers which consent shall not be unreasonably withheld or
delayed;
(f) such information is disclosed in connection with any
litigation or dispute between such Lender and the Borrowers concerning this
Agreement or the Notes or any of the other Credit Documents;
(g) such information is disclosed in connection with a
prospective assignment, grant of a participation interest in or other transfer
by such Lender of any of its interest in the Credit Documents in accordance with
Section 11.06(e);
(h) such information was in the possession of such Person or
such Person's affiliates without obligation of confidentiality prior to such
Lender furnishing it to such Person; or
(i) such information is received by such Lender, without
restriction as to its disclosure or use, from a Person, who, to such Lender's
knowledge or reasonable belief, was not prohibited from disclosing it by any
duty of confidentiality.
Each Lender agrees to use its best efforts to give the Borrowers prompt
notice of any subpoena or similar process referred to in clause (b) above,
provided that such Lender shall have no liability in event such notice is not
given.
SECTION 11.09. INDEPENDENT NATURE OF LENDERS' RIGHTS. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights pursuant to this Agreement and its Notes, and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
SECTION 11.10. INTENT NOT TO VIOLATE USURY LAWS. It is the
intent of the parties hereto not to violate any federal or state law, rule or
regulation pertaining either to usury or to the contracting for or charging or
collecting of interest, and the Borrowers and the Agents and Lenders agree that,
should any provision of this Agreement or of the Notes, or any act performed
hereunder
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or thereunder, violate any such law, rule or regulation, then the excess of
interest or loan charges contracted for or charged or collected over the maximum
lawful rate of interest shall be applied to the outstanding principal
indebtedness due to the Lenders by the Borrowers under this Agreement.
SECTION 11.11. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
SECTION 11.12. SURVIVAL.
(a) The obligations of the Borrowers under Sections 4.07(b),
4.10, 4.12, 4.13, 4.17 and 11.04 hereof shall survive the payment in full of the
Notes after the Revolver Termination Date and the Term Loan Maturity Date. All
representations and warranties made herein, in the certificates, reports,
notices, and other documents delivered pursuant to this Agreement and the Letter
of Credit Agreement shall survive the execution and delivery of this Agreement,
the Letter of Credit Agreement, the other Credit Documents, and such other
agreements and documents, the making of the Loans hereunder, the execution and
delivery of the Notes, and the issuance of the Letters of Credit.
(b) The obligations of the Agents, the Lenders, their
assignees and participants under Sections 4.07(b), 7.05, 11.08 and 11.06(e)
hereof shall survive the payment in full of the Notes after the Revolver
Termination Date and the Term Loan Maturity Date.
SECTION 11.13. SEVERABILITY. In case any provision in or
obligation under this Agreement, the Letter of Credit Agreement, or the other
Credit Documents shall be invalid, illegal or unenforceable, in whole or in
part, in any jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 11.14. INDEPENDENCE OF COVENANTS. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation of, another
covenant, shall not avoid the occurrence of a Default or an Event of Default if
such action is taken or condition exists.
SECTION 11.15. CHANGE IN ACCOUNTING PRINCIPLES, FISCAL YEAR OR
TAX LAWS. If (i) any preparation of the financial statements referred to in
Section 7.07 hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) result in a material change in the
method of calculation of financial covenants, standards or terms found in this
Agreement, or (ii) there is a material change in federal tax laws which
materially affects any of the Consolidated Companies' ability to comply with the
financial covenants, standards or terms found in this Agreement, the
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<PAGE> 107
parties agree to enter into negotiations in order to amend such provisions so as
to equitably reflect such changes with the desired result that the criteria for
evaluating any of the Consolidated Companies' financial condition shall be the
same after such changes as if such changes had not been made. Unless and until
such provisions have been so amended, the provisions of this Agreement shall
govern.
SECTION 11.16. HEADINGS DESCRIPTIVE; ENTIRE AGREEMENT. The
headings of the several sections and subsections of this Agreement are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Agreement. This Agreement, the Letter of Credit
Agreement, the other Credit Documents, and the agreements and documents required
to be delivered pursuant to the terms of this Agreement and the Letter of Credit
Agreement constitute the entire agreement among the parties hereto and thereto
regarding the subject matters hereof and thereof and supersede all prior
agreements, representations and understandings related to such subject matters.
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<PAGE> 108
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the day and year first above written.
Address for Notices: DYERSBURG CORPORATION
Dyersburg Fabrics Inc.
1315 Phillips Street By: /s/ W. S. Shropshire, Jr.
Dyersburg, TN 38024 ----------------------------------
William S. Shropshire, Jr.
Executive Vice President and Chief
Attn: William S. Shropshire, Jr. Financial Officer
Telecopy No.: 901-286-3411
(SIGNATURE PAGE TO CREDIT AGREEMENT)
<PAGE> 109
Address for Notices: DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, A TENNESSEE LIMITED
Dyersburg Fabrics Inc. PARTNERSHIP
1315 Phillips Street
Dyersburg, TN 38024 By: Dyersburg Fabrics Inc., its sole
general partner
Attn: William S. Shropshire, Jr.
Telecopy No.: 901-286-3411 By: /s/ W. S. Shropshire, Jr.
----------------------------
William S. Shropshire, Jr.
Executive Vice President and
Chief Financial Officer
(SIGNATURE PAGE TO CREDIT AGREEMENT)
<PAGE> 110
Address for Notices: UNITED KNITTING LIMITED
PARTNERSHIP, I, A TENNESSEE LIMITED
Dyersburg Fabrics Inc. PARTNERSHIP
1315 Phillips Street
Dyersburg, TN 38024 By: United Knitting, Inc., its sole
general partner
Attn: William S. Shropshire, Jr.
By: /s/ W. S. Shropshire, Jr.
Telecopy No.: 901-286-3411 ---------------------------
William S. Shropshire, Jr.
Secretary and Treasurer
(SIGNATURE PAGE TO CREDIT AGREEMENT)
<PAGE> 111
Address for Notices: IQUE LIMITED PARTNERSHIP, I, A
TENNESSEE LIMITED PARTNERSHIP
Dyersburg Fabrics Inc.
1315 Phillips Street By: IQUE, Inc., its sole general partner
Dyersburg, TN 38024
Attn: William S. Shropshire, Jr. By: W. S. Shropshire, Jr.
----------------------------
William S. Shropshire, Jr.
Telecopy No.: 901-286-3411 Executive Vice President and
Chief Financial Officer
(SIGNATURE PAGE TO CREDIT AGREEMENT)
<PAGE> 112
Address for Notices: ALAMAC KNIT FABRICS, INC.
Dyersburg Fabrics Inc.
1315 Phillips Street By: /s/ W. S. Shropshire, Jr.
Dyersburg, TN 38024 ----------------------------
William S. Shropshire, Jr.
Vice President and Secretary
Attn: William S. Shropshire, Jr.
Telecopy No.: 901-286-3411
(SIGNATURE PAGE TO CREDIT AGREEMENT)
<PAGE> 113
Address for Notices: SUNTRUST BANK, ATLANTA,
AS AGENT AND COLLATERAL AGENT
25 Park Place
23rd Floor
Atlanta, GA 30303 By: /s/ R. B. K.
Attention: Raymond King --------------------------
Raymond B. King
Vice President
Telex No.: 542210
Answerback: TRUSCO INT ATL
By: /s/ Thomas R. Banks
--------------------------
Telecopy No.: 404/588-8833 Thomas R. Banks
Assistant Vice President
Payment Office:
25 Park Place, N.E.
Atlanta, GA 30303
(SIGNATURE PAGE TO CREDIT AGREEMENT)
<PAGE> 114
Address for Notices: SUNTRUST BANK, ATLANTA
25 Park Place
23rd Floor By: /s/ R. B. K.
Atlanta, GA 30303 ---------------------------
Attention: Raymond King Raymond B. King
Vice President
Telex No.: 542210
Answerback: TRUSCO INT ATL By: /s/ Thomas R. Banks
--------------------------
Thomas R. Banks
Telecopy No.: 404/588-8833 Assistant Vice President
Domestic Lending Office:
One Park Place, N.E.
Atlanta, GA 30303
Telex No.: 542210
Answerback: TRUSCO INT ATL
PRO RATA
AMOUNT SHARE
------ -----
TERM LOAN COMMITMENT: $50,000,000 100.000%
REVOLVING
LOAN COMMITMENT: $110,000,000 100.000%
SWING LINE
COMMITMENT: $5,000,000 100.000%
L/C SUBCOMMITMENT: $12,000,000 100.000%
(SIGNATURE PAGE TO CREDIT AGREEMENT)
<PAGE> 115
EXHIBIT A
FORM OF
TERM NOTE
August __, 1997 U.S. $______________
FOR VALUE RECEIVED, the undersigned DYERSBURG CORPORATION, a Tennessee
corporation and DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited
partnership (herein collectively referred to as the "Term Borrowers"), hereby
promise, jointly and severally, to pay to the order of _______________, a
banking corporation organized under the laws of ______________ (herein, together
with any subsequent holder hereof, called the "Term Lender"), the principal sum
of _____ MILLION __________________________________ AND NO/100 UNITED STATES
DOLLARS ($____________), in twenty (20) consecutive quarterly installments, in
strict accordance with Schedule 2.02 to the Credit Agreement referred to below,
together with interest accrued thereon as provided herein. The Term Borrowers
likewise agree, jointly and severally, to pay interest on the outstanding
principal amount hereof, at such interest rates, payable at such times, and
computed in such manner, as are specified in the Credit Agreement in strict
accordance with the terms thereof. All remaining principal and accrued interest
then outstanding under this Term Note shall be due and payable in full on the
Term Loan Maturity Date.
The Term Lender shall record all payments of principal hereof, and,
prior to any transfer hereof, shall endorse such payments on the schedule
annexed hereto and made a part hereof, or on any continuation thereof which
shall be attached hereto and made a part hereof, which endorsement shall
constitute prima facie evidence of the accuracy of the information so endorsed;
provided, however, that delay or failure of the Term Lender to make any such
endorsement or recordation shall not affect the obligations of the Term
Borrowers hereunder or under the Credit Agreement with respect to the Term Loan
evidenced hereby.
Any principal or, to the extent not prohibited by law, interest due
under this Term Note that is not paid on the due date therefor, whether a
regularly scheduled payment date, on the maturity date, or resulting from the
acceleration of maturity upon the occurrence of an Event of Default, shall bear
interest from the date due to payment in full at the rate as provided in Section
4.03(c) of the Credit Agreement.
All payments of principal and interest shall be made in lawful money of
the United States of America in immediately available funds at the Payment
Office of the Agent specified in the Credit Agreement.
This Term Note is issued pursuant to, and is one of the Term Notes
referred to in, that certain Credit Agreement dated as of August 27, 1997, among
the Term Borrowers, United Knitting Limited Partnership, I, IQUE Limited
Partnership, I, Alamac Knit Fabrics, Inc., SunTrust Bank, Atlanta, as Agent,
SunTrust Bank, Atlanta, as Collateral Agent, and the lenders from time to time a
party thereto
<PAGE> 116
(as the same may be further amended, modified or supplemented from time to time,
the "Credit Agreement"), and the Term Lender is and shall be entitled to all
benefits thereof and all Security Documents executed and delivered to the
Lenders or the Agent in connection therewith. Terms defined in the Credit
Agreement are used herein with the same meanings. The Credit Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events, restrictions on prepayments on account
of principal hereof prior to the maturity hereof, and mandatory prepayments upon
the occurrence of certain events.
This Term Note may be voluntarily prepaid as set forth in Section 4.06
of the Credit Agreement.
In case an Event of Default shall occur and be continuing, the
principal of and all accrued interest on this Term Note may automatically
become, or be declared, due and payable in the manner and with the effect
provided in the Credit Agreement. The Term Borrowers agree, jointly and
severally, to pay, and save the Term Lender harmless against any liability for
the payment of, all reasonable out-of-pocket costs and expenses, including
reasonable attorneys' fees, arising in connection with the enforcement by the
Term Lender of any of its rights under this Term Note or the Credit Agreement.
This Term Note and the rights and obligations of the Term Lender and
the Term Borrowers hereunder shall be governed by and construed in accordance
with the laws (without giving effect to the conflict of law principles thereof)
of the State of Georgia.
Each of the Term Borrowers expressly waives any presentment, demand,
protest or notice in connection with this Term Note, now or hereafter required
by applicable law. TIME IS OF THE ESSENCE OF THIS TERM NOTE.
2
<PAGE> 117
IN WITNESS WHEREOF, each Term Borrower has caused this Term Note to be
executed and delivered under seal by its duly authorized officers as of the date
first above written.
DYERSBURG CORPORATION
By:
-----------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, A TENNESSEE LIMITED
PARTNERSHIP
By: Dyersburg Fabrics Inc., its sole general partner
By:
-------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
3
<PAGE> 118
Term Note (cont'd)
PAYMENTS OF PRINCIPAL
<TABLE>
<S> <C> <C> <C> <C>
Type of
Term Amount of Last Day of
Loan and Principal Applicable
Interest Repaid or Interest Notation
Date Rate Prepaid Period Made By
- ----------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 119
EXHIBIT B
FORM OF
REVOLVING NOTE
August __, 1997 U.S. $____________
FOR VALUE RECEIVED, the undersigned, DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, UNITED KNITTING LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, IQUE LIMITED PARTNERSHIP, I, a
Tennessee limited partnership and ALAMAC KNIT FABRICS, INC., a Delaware
corporation (herein collectively referred to as the "Revolving Borrowers"),
hereby promise, jointly and severally, to pay to the order of
_________________________________, a banking corporation organized under the
laws of _____________ (herein, together with any subsequent holder hereof,
called the "Revolving Lender"), on the Revolver Termination Date the lesser of
(i) the principal sum of ___________________ AND NO/100 UNITED STATES DOLLARS
($__________.00) and (ii) the outstanding principal amount of the Revolving
Advances made by the Revolving Lender to the Revolving Borrowers as pursuant to
the terms of the Credit Agreement referred to below. The Revolving Borrowers
likewise promise, jointly and severally, to pay interest on the outstanding
principal amount of each such Revolving Advance, at such interest rates, payable
at such times, and computed in such manner, as are specified for such Revolving
Advance in the Credit Agreement in strict accordance with the terms thereof.
The Revolving Lender shall record all Revolving Advances made pursuant
to its Revolving Loan Commitment under the Credit Agreement and all payments of
principal of such Revolving Advances and, prior to any transfer hereof, shall
endorse such Revolving Advances and payments on the schedule annexed hereto and
made a part hereof, or on any continuation thereof which shall be attached
hereto and made a part hereof, which endorsement shall constitute prima facie
evidence of the accuracy of the information so endorsed; provided, however, that
delay or failure of the Revolving Lender to make any such endorsement or
recordation shall not affect the obligations of Revolving Borrowers hereunder or
under the Credit Agreement with respect to the Revolving Advances evidenced
hereby.
Any principal or, to the extent not prohibited by applicable law,
interest due under this Revolving Note that is not paid on the due date
therefor, whether on the scheduled Revolver Termination Date, or resulting from
the acceleration of maturity upon the occurrence of an Event of Default, shall
bear interest from the date due to payment in full at the rate as provided in
Section 4.03(c) of the Credit Agreement.
<PAGE> 120
All payments of principal and interest shall be made in lawful money of
the United States of America in immediately available funds at the Payment
Office of the Agent specified in the Credit Agreement.
This Revolving Note is issued pursuant to, and is one of the Revolving
Notes referred to in, that certain Credit Agreement dated as of August 27, 1997
among Dyersburg Corporation, a Tennessee corporation, the Revolving Borrowers,
SunTrust Bank, Atlanta, as Agent, SunTrust Bank, Atlanta, as Collateral Agent
and the lenders from time to time a party thereto, (as the same may be hereafter
amended, modified or supplemented from time to time, the "Credit Agreement") and
each assignee thereof becoming a "Lender" as provided therein, and the Revolving
Lender is and shall be entitled to all benefits thereof and all Security
Documents executed and delivered to the Lenders or the Agents in connection
therewith. Terms defined in the Credit Agreement are used herein with the same
meanings. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and for mandatory prepayments upon the occurrence of certain events.
This Revolving Note may be prepaid in whole or in part, without premium
or penalty but with accrued interest on the principal amount prepaid to the date
of prepayment, and otherwise in accordance with the terms and conditions of
Section 4.06 of the Credit Agreement.
In case an Event of Default shall occur and be continuing, the
principal of and all accrued interest on this Revolving Note may automatically
become, or be declared, due and payable in the manner and with the effect
provided in the Credit Agreement. The Revolving Borrowers agree, jointly and
severally, to pay, and save the Revolving Lender harmless against any liability
for the payment of, all reasonable out-of-pocket costs and expenses, including
reasonable attorneys' fees, arising in connection with the enforcement by the
Revolving Lender of any of its rights under this Revolving Note or the Credit
Agreement.
This Revolving Note and the rights and obligations of the Revolving
Lender and Revolving Borrowers hereunder shall be governed by and construed in
accordance with the laws (without giving effect to the conflict of law
principles thereof) of the State of Georgia.
Each Revolving Borrower expressly waives any presentment, demand,
protest or notice in connection with this Revolving Note, now or hereafter
required by applicable law. TIME IS OF THE ESSENCE OF THIS REVOLVING NOTE.
2
<PAGE> 121
IN WITNESS WHEREOF, each Revolving Borrower has caused this Revolving
Note to be executed and delivered under seal by its duly authorized officers as
of the date first above written.
DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, A TENNESSEE LIMITED
PARTNERSHIP
By: Dyersburg Fabrics Inc., its sole general partner
By:
-------------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
UNITED KNITTING LIMITED
PARTNERSHIP, A TENNESSEE LIMITED
PARTNERSHIP
By: United Knitting Inc., its sole general partner
By:
-------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
IQUE LIMITED PARTNERSHIP, I, A TENNESSEE
LIMITED PARTNERSHIP
By: IQUE, Inc., its sole general partner
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
ALAMAC KNIT FABRICS, INC.
By:
-----------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
3
<PAGE> 122
Revolving Note (cont'd)
ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
<S> <C> <C> <C> <C> <C>
Last Day of
Amount Amount of Applicable
of Interest Principal Interest Notation
Date Advance Rate Prepaid Period Made By
- -------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 123
EXHIBIT C
FORM OF
SWING LINE NOTE
August __, 1997 U.S. $5,000,000.00
FOR VALUE RECEIVED, the undersigned, DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, UNITED KNITTING LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, IQUE LIMITED PARTNERSHIP, I, a
Tennessee limited partnership and, ALAMAC KNIT FABRICS, INC., a Delaware
corporation (collectively, the "Revolving Borrowers") hereby promise, jointly
and severally, to pay to the order of SUNTRUST BANK, ATLANTA, a Georgia banking
corporation (herein, together with any subsequent holder hereof, the "Swing Line
Lender") upon the Revolver Termination Date, an amount equal to the lesser of
(x) FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) or (y) so much thereof as
may have been advanced by the Swing Line Lender to the Revolving Borrowers under
the Swing Line Commitment established pursuant to the terms of that certain
Credit Agreement, dated as of even date herewith, by and among Dyersburg
Corporation, a Tennessee corporation, the Revolving Borrowers, the lenders from
time to time party thereto (the "Lenders"), SunTrust Bank, Atlanta, as agent for
the Lenders (the "Agent") and SunTrust Bank, Atlanta as collateral agent for the
Lenders (the "Collateral Agent") (as hereafter amended, modified or
supplemented, the "Credit Agreement"), as such Swing Line Commitment may be
extended, renewed, increased or decreased from time to time hereafter, together
with interest from the date of each Swing Line Advance hereunder on the unpaid
amount of such Swing Line Advance until such Swing Line Advance is paid in full,
payable on the dates and at the rates established pursuant to the terms of the
Credit Agreement.
Payments of both principal and interest shall be made in immediately
available funds at the Payment Office of the Agent or where the Agent or Swing
Line Lender shall so designate in lawful money of the United States of America.
Any principal or, to the extent not prohibited by applicable law,
interest due under this Swing Line Note that is not paid on the due date
therefor, whether on the scheduled Revolver Termination Date, or resulting from
the acceleration of maturity upon the occurrence of an Event of Default, shall
bear interest from the date due to payment in full at the rate as provided in
Section 4.03(c) of the Credit Agreement.
This Swing Line Note is issued pursuant to, and is the Swing Line Note
referred to in, the Credit Agreement and Swing Line Lender is and shall be
entitled to all benefits thereof and all Security Documents executed and
delivered to the Lenders or the Agents in connection therewith. Terms defined in
the Credit Agreement are used herein with the same meanings. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events.
<PAGE> 124
Upon the terms of this Swing Line Note and in compliance with the terms
and conditions hereof and of the Credit Agreement, the Revolving Borrowers, from
time to time, may request Swing Line Advances hereunder, repay and reborrow up
to the maximum aggregate principal amount outstanding at any one time as
indicated above. All Swing Line Advances made hereunder by the Swing Line
Lender, agreed to maturity date(s) for each Swing Line Advance made hereunder
and agreed to interest rates for each Swing Line Advance made hereunder, shall
be endorsed by the Swing Line Lender on a schedule attached hereto or otherwise
maintained by the Swing Line Lender, which is a part of this Swing Line Note,
and which endorsements, together with the Swing Line Lender's internal records,
shall be prima facie evidence of such, Swing Line Advances, maturity dates and
interest rates, as the case may be, and absent manifest error, shall be binding
on the Revolving Borrowers, it being understood, however, that the failure to
make any such endorsement shall not affect the obligations of the Revolving
Borrowers hereunder.
In case an Event of Default shall occur and be continuing, the
principal of and all accrued interest on this Swing Line Note may automatically
become, or be declared, due and payable in the manner and with the effect
provided in the Credit Agreement. The Revolving Borrowers, jointly and
severally, agree to pay, and save the Swing Line Lender harmless against any
liability for the payment of, all reasonable out-of-pocket costs and expenses,
including reasonable attorneys' fees actually incurred, arising in connection
with the enforcement by the Swing Line Lender of any of its rights under this
Swing Line Note or the Credit Agreement.
This Swing Line Note and the rights and obligations of the Swing Line
Lender and the Revolving Borrowers hereunder shall be governed by and construed
in accordance with the laws (without giving effect to the conflict of law
principles thereof) of the State of Georgia.
Each of the Revolving Borrowers expressly waives any presentment,
demand, protest or notice in connection with this Swing Line Note, now or
hereafter required by applicable law. TIME IS OF THE ESSENCE OF THIS SWING LINE
NOTE.
2
<PAGE> 125
IN WITNESS WHEREOF, each of the Revolving Borrowers has caused this
Swing Line Note to be executed under seal and delivered by its duly authorized
officers as of the date first above written.
DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, A TENNESSEE LIMITED
PARTNERSHIP
By: Dyersburg Fabrics Inc., its sole general
partner
By:
------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
UNITED KNITTING LIMITED
PARTNERSHIP, I, A TENNESSEE LIMITED
PARTNERSHIP
By: United Knitting Inc., its sole general partner
By:
------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
IQUE LIMITED PARTNERSHIP, I, A
TENNESSEE LIMITED PARTNERSHIP
By: IQUE, Inc., its sole general partner
By:
------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
ALAMAC KNIT FABRICS, INC.
By:
----------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
3
<PAGE> 126
SCHEDULE TO SWING LINE NOTE
Advances made under the Swing Line Facility referred to in the foregoing
Swing Line Note.
<TABLE>
<S> <C> <C> <C> <C> <C>
Principal Maturity Interest Payments
Amount of Date of Rate of Made on Notation
Date Loan Loan Loan Loan Made By
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 127
EXHIBIT D-1
FORM OF
PARENT GUARANTY AGREEMENT
THIS PARENT GUARANTY AGREEMENT (this "Guaranty"), dated as of August 27,
1997, made by DYERSBURG CORPORATION, a Tennessee corporation (the "Guarantor"),
in favor of (i) the banks and other lending institutions that are parties to the
Credit Agreement (as hereinafter defined) and each assignee thereof becoming a
"Lender" as provided therein (collectively, the "Lenders"), (ii) SunTrust Bank,
Atlanta, in its capacity as Collateral Agent (the "Collateral Agent") under the
terms of the Credit Agreement, and (iii) SunTrust Bank, Atlanta as agent under
the terms of the Credit Agreement (the "Agent"; the Lenders, the Collateral
Agent, and the Agent being collectively referred to herein as the "Guaranteed
Parties");
W I T N E S S E T H:
WHEREAS, Guarantor has entered into that certain Credit Agreement dated as
of August 27, 1997, by and among Guarantor, Dyersburg Fabrics Limited
Partnership, I, United Knitting Limited Partnership, I, IQUE Limited
Partnership, I and Alamac Knit Fabrics, Inc. (collectively, the "Borrowers"),
the Lenders, the Agent, and the Collateral Agent (as hereafter amended,
restated, or supplemented from time to time, the "Credit Agreement"; all
capitalized terms used herein without definition having the respective meanings
set forth for such terms in the Credit Agreement);
WHEREAS, Guarantor owns, directly or indirectly, all outstanding capital
stock of or partnership interest in each of the other Borrowers (collectively,
the "Subsidiary Borrowers");
WHEREAS, the Subsidiary Borrowers and Guarantor share an identity of
interest as members of a consolidated group of companies engaged in
substantially similar businesses with Guarantor providing certain centralized
financial, accounting and management services to each of the Subsidiary
Borrowers;
WHEREAS, consummation of the transactions pursuant to the Credit Agreement
will facilitate expansion and enhance the overall financial strength and
stability of Guarantor's entire corporate group; and
<PAGE> 128
WHEREAS, it is a condition precedent to the Lenders' obligations to enter
into the Credit Agreement and to make extensions of credit thereunder that
Guarantor execute and deliver this Guaranty, and Guarantor desires to execute
and deliver this Guaranty to satisfy such condition precedent;
NOW, THEREFORE, in consideration of the premises and in order to induce the
Lenders to enter into and perform their obligations under the Credit Agreement,
Guarantor hereby agrees as follows:
SECTION 1. GUARANTY. Guarantor hereby irrevocably and unconditionally
guarantees the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all Loans, Letters of Credit reimbursement
obligations, and all other Obligations owing by the Subsidiary Borrowers to the
Lenders, the Agent, the Collateral Agent, or any of them, under the Credit
Agreement, the Notes, and the other Credit Documents, including all renewals,
extensions, modifications and refinancings thereof, now or hereafter owing,
whether for principal, interest, fees, expenses or otherwise, and any and all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
expenses) incurred by the Lenders or the Collateral Agent in enforcing any
rights under this Guaranty (collectively, the "Guaranteed Obligations"),
including without limitation, all interest which, but for the filing of a
petition in bankruptcy with respect to the Subsidiary Borrowers, would accrue on
any principal portion of the Guaranteed Obligations. Any and all payments by
Guarantor hereunder shall be made free and clear of and without deduction for
any set-off, counterclaim, or withholding so that, in each case, each Guaranteed
Party will receive, after giving effect to any Taxes (as such term is defined in
the Credit Agreement, but excluding Taxes imposed on overall net income of the
Guaranteed Party to the same extent as excluded pursuant to the Credit
Agreement), the full amount that it would otherwise be entitled to receive with
respect to the Guaranteed Obligations (but without duplication of amounts for
Taxes already included in the Guaranteed Obligations). Guarantor acknowledges
and agrees that this is a guarantee of payment when due, and not of collection,
and that this Guaranty may be enforced up to the full amount of the Guaranteed
Obligations without proceeding against any of the Subsidiary Borrowers, against
any security for the Guaranteed Obligations, against any other Guarantor or
under any other guaranty covering any portion of the Guaranteed Obligations.
SECTION 2. GUARANTY ABSOLUTE. Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Credit
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of any Guaranteed
Party with respect thereto. The liability of Guarantor under this Guaranty shall
be absolute and unconditional in accordance with its terms and shall remain in
full force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation, the following (whether or not
Guarantor consents thereto or has notice thereof):
(a) any change in the time, place or manner of payment of, or in any
other term of, all or any of the Guaranteed Obligations, any waiver,
indulgence, renewal, extension, amendment
- 2 -
<PAGE> 129
or modification of or addition, consent or supplement to or deletion from
or any other action or inaction under or in respect of the Credit
Agreement, the Notes, or the other Credit Documents, or any other
documents, instruments or agreements relating to the Guaranteed Obligations
or any other instrument or agreement referred to therein or any assignment
or transfer of any thereof;
(b) any lack of validity or enforceability of the Credit Agreement,
the Notes, or the other Credit Documents, or any other document, instrument
or agreement referred to therein or any assignment or transfer of any
thereof;
(c) any furnishing to the Guaranteed Parties of any additional
security for the Guaranteed Obligations, or any sale, exchange, release or
surrender of, or realization on, any security for the Guaranteed
Obligations;
(d) any settlement or compromise of any of the Guaranteed Obligations,
any security therefor, or any liability of any other party with respect to
the Guaranteed Obligations, or any subordination of the payment of the
Guaranteed Obligations to the payment of any other liability of the
Subsidiary Borrowers;
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
Guarantor, any Subsidiary Credit Party or any other Credit Party, or any
action taken with respect to this Guaranty by any trustee or receiver, or
by any court, in any such proceeding;
(f) any nonperfection of any security interest or lien on any
collateral, or any amendment or waiver of or consent to departure from any
guaranty or security, for all or any of the Guaranteed Obligations;
(g) any application of sums paid by the Subsidiary Borrowers or any
other Person with respect to the liabilities of any of the Subsidiary
Borrowers to the Guaranteed Parties, regardless of what liabilities of the
Subsidiary Borrowers remain unpaid;
(h) any act or failure to act by any Guaranteed Party which may
adversely affect Guarantor's subrogation rights, if any, against the
Subsidiary Borrowers or any of them to recover payments made under this
Guaranty; and
(i) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Guarantor, any Subsidiary Credit Party or
any other Credit Party.
If claim is ever made upon any of the Guaranteed Parties for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations, and any
- 3 -
<PAGE> 130
Guaranteed Party repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body having
jurisdiction over the Guaranteed Party or any of its property, or (b) any
settlement or compromise of any such claim effected by the Guaranteed Party with
any such claimant (including any of the Subsidiary Borrowers or a trustee in
bankruptcy for any of the Subsidiary Borrowers), then and in such event
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding on it, notwithstanding any revocation hereof or the
cancellation of the Credit Agreement, the Notes, the other Credit Documents, or
any other instrument evidencing any liability of any of the Subsidiary
Borrowers, and Guarantor shall be and remain liable to the Guaranteed Party for
the amounts so repaid or recovered to the same extent as if such amount had
never originally been paid to the Guaranteed Party.
SECTION 3. WAIVER. Guarantor hereby waives notice of acceptance of this
Guaranty, notice of any liability to which it may apply, and further waives
presentment, demand of payment, protest, notice of dishonor or nonpayment of any
such liabilities, suit or taking of other action by the Guaranteed Parties
against, and any other notice to, any of the Subsidiary Borrowers or any other
party liable with respect to the Guaranteed Obligations (including Guarantor or
any other Person executing a guaranty of the obligations of any of the
Subsidiary Borrowers).
SECTION 4. SUBROGATION. Guarantor will not exercise any rights against any
of the Subsidiary Borrowers which it may acquire by way of subrogation or
contribution, by any payment made hereunder or otherwise, until all the
Guaranteed Obligations shall have been irrevocably paid in full and the Credit
Agreement and the Letter of Credit Agreement shall have been irrevocably
terminated. If any amount shall be paid to Guarantor on account of such
subrogation or contribution rights at any time when all the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in trust
for the benefit of the Guaranteed Parties and shall forthwith be paid to the
Collateral Agent to be credited and applied to the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms of the Credit
Agreement. If (i) Guarantor shall make payment to the Guaranteed Parties of all
or any part of the Guaranteed Obligations and (ii) all the Guaranteed
Obligations shall be irrevocably paid in full and the Credit Agreement and the
Letter of Credit Agreement irrevocably terminated, the Guaranteed Parties will,
at Guarantor's request, execute and deliver to Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by Guarantor.
SECTION 5. SEVERABILITY. Any provision of this Guaranty which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 6. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by Guarantor therefrom shall in any event
be effective unless the same shall be in writing executed by the Collateral
Agent.
- 4 -
<PAGE> 131
SECTION 7. NOTICES. All notices and other communications provided for
hereunder shall be given in the manner, and at the addresses for Guarantor and
the Collateral Agent, respectively, as specified in Section 11.01 of the Credit
Agreement.
SECTION 8. NO WAIVER; REMEDIES. No failure on the part of the Collateral
Agent or the other Guaranteed Parties to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. No notice to or demand on Guarantor
in any case shall entitle Guarantor to any other further notice or demand in any
similar or other circumstances or constitute a waiver of the rights of the
Collateral Agent or other Guaranteed Parties to any other or further action in
any circumstances without notice or demand. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9. RIGHT OF SET OFF. In addition to and not in limitation of all
rights of offset that the Collateral Agent or other Guaranteed Parties may have
under applicable law, the Collateral Agent or other Guaranteed Parties shall,
upon the occurrence of any Event of Default and whether or not the Collateral
Agent or other Guaranteed Parties have made any demand or the Guaranteed
Obligations are matured, have the right to appropriate and apply to the payment
of the Guaranteed Obligations, all deposits of Guarantor (general or special,
time or demand, provisional or final) then or thereafter held by and other
indebtedness or property then or thereafter owing by the Collateral Agent or the
other Guaranteed Parties to Guarantor, whether or not related to this Guaranty
or any transaction hereunder.
SECTION 10. CONTINUING GUARANTY; TRANSFER OF OBLIGATIONS. This Guaranty is
a continuing guaranty and shall (i) remain in full force and effect until
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty and termination of the Total Commitments, (ii) be binding
upon Guarantor, its successors and assigns, and (iii) inure to the benefit of
and be enforceable by the Collateral Agent, its successors, transferees and
assigns, for the benefit of the Guaranteed Parties.
SECTION 11. GOVERNING LAW; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS;
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE
OF GEORGIA (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
OTHERWISE RELATED HERETO MAY BE BROUGHT IN THE SUPERIOR COURTS OF FULTON COUNTY
OF THE STATE OF GEORGIA OR IN ANY COURT OF THE
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<PAGE> 132
UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION
AND DELIVERY OF THIS GUARANTY, GUARANTOR HEREBY CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THE AFORESAID COURTS SOLELY FOR
THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE RIGHTS OF THE COLLATERAL AGENT AND
OTHER GUARANTEED PARTIES WITH RESPECT TO THIS GUARANTY OR ANY DOCUMENT RELATED
HERETO. GUARANTOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED AGENTS,
INC., AS THE DESIGNEE, APPOINTEE AND AGENT OF GUARANTOR TO RECEIVE, FOR AND ON
BEHALF OF GUARANTOR, SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY DOCUMENT RELATED HERETO AND
SUCH SERVICE SHALL BE DEEMED COMPLETED THIRTY DAYS AFTER MAILING THEREOF TO SAID
AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE
PROMPTLY FORWARDED BY MAIL TO GUARANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT THE
FAILURE OF GUARANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. IF FOR ANY REASON
SERVICE OF PROCESS CANNOT PROMPTLY BE MADE ON EITHER SUCH LOCAL AGENT, GUARANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS
SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS
GUARANTY OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE COLLATERAL AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST GUARANTOR IN ANY
OTHER JURISDICTION.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR HEREBY IRREVOCABLY
WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT
OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR THEREUNDER.
SECTION 12. SUBORDINATION OF SUBSIDIARY BORROWERS' OBLIGATIONS TO
GUARANTOR. As an independent covenant, Guarantor hereby expressly covenants and
agrees for the benefit of the Collateral Agent and other Guaranteed Parties that
all obligations and liabilities of each of the Subsidiary Borrowers to Guarantor
of whatsoever description including, without limitation, all intercompany
receivables of Guarantor from each of the Subsidiary Borrowers ("Junior Claims")
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shall be subordinate and junior in right of payment to all obligations of the
Subsidiary Borrowers to the Collateral Agent and other Guaranteed Parties under
the terms of the Credit Agreement and the other Credit Documents ("Senior
Claims") to the extent provided in this Section 12.
If an Event of Default shall occur, then, unless and until such Event of
Default shall have been cured, or waived, or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities by setoff or
otherwise) shall be made by any of the Subsidiary Borrowers to Guarantor on
account of or in any manner in respect of any Junior Claim except such payments
and distributions the proceeds of which shall be applied to the payment of
Senior Claims.
In the event of a Proceeding (as hereinafter defined), all Senior Claims
shall first be paid in full before any direct or indirect payment or
distribution (in cash, property, securities by setoff or otherwise) shall be
made to Guarantor on account of or in any manner in respect of any Junior Claim
except such payments and distributions the proceeds of which shall be applied to
the payment of Senior Claims. For the purposes of the previous sentence,
"Proceeding" means any of the Subsidiary Borrowers or Guarantor shall commence a
voluntary case concerning itself under the Bankruptcy Code; or any involuntary
case is commenced against any of the Subsidiary Borrowers or Guarantor; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or any substantial part of the property of any of the Subsidiary
Borrowers or Guarantor, or any of the Subsidiary Borrowers or Guarantor
commences any other proceedings under any reorganization arrangement, adjustment
of debt, relief of debtor, dissolution, insolvency or liquidation or similar law
of any jurisdiction whether now or hereafter in effect relating to any of the
Subsidiary Borrowers or Guarantor, or any such proceeding is commenced against
any of the Subsidiary Credit Parties or Guarantor, or any of the Subsidiary
Borrowers or Guarantor is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or any
of the Subsidiary Borrowers or Guarantor suffers any appointment of any
custodian or the like for it or any substantial part of its property; or any of
the Subsidiary Borrowers or Guarantor makes a general assignment for the benefit
of creditors; or any of the Subsidiary Borrowers or Guarantor shall fail to pay,
or shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or any of the Subsidiary Borrowers or Guarantor
shall call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts; or any of the Subsidiary Borrowers or Guarantor shall
by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action shall be taken by
any of the Subsidiary Borrowers or Guarantor for the purpose of effecting any of
the foregoing.
In the event any direct or indirect payment or distribution is made to
Guarantor in contravention of this Section 12, such payment or distribution
shall be deemed received in trust for the benefit of the Collateral Agent and
other Guaranteed Parties and shall be immediately paid over to the Collateral
Agent for application against the Guaranteed Obligations in accordance with the
terms of the Credit Agreement.
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<PAGE> 134
Guarantor agrees to execute such additional documents as the Collateral
Agent may reasonably request to evidence the subordination provided for in this
Section 12.
SECTION 13. AUTOMATIC ACCELERATION IN CERTAIN EVENTS. Upon the occurrence
of an Event of Default specified in Section 9.07 of the Credit Agreement, all
Guaranteed Obligations shall automatically become immediately due and payable by
Guarantor, without notice or other action on the part of the Collateral Agent or
other Guaranteed Parties, and regardless of whether payment of the Guaranteed
Obligations by the Subsidiary Borrowers has then been accelerated. In addition,
if any event of the types described in Section 9.07 of the Credit Agreement
should occur with respect to Guarantor, then the Guaranteed Obligations shall
automatically become immediately due and payable by Guarantor, without notice or
other action on the part of the Collateral Agent or other Guaranteed Parties,
and regardless of whether payment of the Guaranteed Obligations by any of the
Subsidiary Borrowers has then been accelerated.
SECTION 14. INFORMATION. Guarantor assumes all responsibility for being and
keeping itself informed of the Subsidiary Borrowers' financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
Guarantor assumes and incurs hereunder, and agrees that none of the Guaranteed
Parties will have any duty to advise Guarantor of information known to it or any
of them regarding such circumstances or risks.
SECTION 15. SURVIVAL OF AGREEMENT. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Guaranty, the Credit Agreement, the making of the Borrowings, the issuance of
the Letters of Credit, and the execution and delivery of the Notes and the other
Credit Documents.
SECTION 16. COUNTERPARTS. This Guaranty and any amendments, waivers,
consents or supplements may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed
and delivered under seal by its duly authorized officers as of the date first
above written.
Address: DYERSBURG CORPORATION
1315 East Phillips (the "Guarantor")
Dyersburg, Tennessee 38025
Attn: Mr. William S.
Shropshire, Jr.
By:
-----------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
(SIGNATURE PAGE TO PARENT GUARANTY AGREEMENT)
<PAGE> 136
SECTION 12 OF THE
FOREGOING GUARANTY
ACKNOWLEDGED AND
AGREED TO:
DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, A TENNESSEE LIMITED PARTNERSHIP
By: Dyersburg Fabrics Inc., its sole general partner
By:
--------------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
UNITED KNITTING LIMITED PARTNERSHIP, I,
A TENNESSEE LIMITED PARTNERSHIP
By: United Knitting Inc., its sole general partner
By:
--------------------------------------------
William S. Shropshire, Jr.
Secretary and Treasurer
IQUE LIMITED PARTNERSHIP, I,
A TENNESSEE LIMITED PARTNERSHIP
By: IQUE, Inc., its sole general partner
By:
--------------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
ALAMAC KNIT FABRICS, INC.
By:
-----------------------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
(SIGNATURE PAGE TO PARENT GUARANTY AGREEMENT)
<
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EXHIBIT D-2
FORM OF
AFFILIATE GUARANTY AGREEMENT
THIS AFFILIATE GUARANTY AGREEMENT (this "Guaranty"), dated as
of August 27, 1997, made by each of the corporations and partnerships listed on
SCHEDULE I attached hereto and by this reference made a part hereof (such
corporations and partnerships herein referred to individually as a "Guarantor"
and collectively as the "Guarantors"), in favor of (i) the banks and other
lending institutions that are parties to the Credit Agreement (as hereinafter
defined) and each assignee thereof becoming a "Lender" as provided therein (the
"Lenders"), (ii) SunTrust Bank, Atlanta, in its capacity as collateral agent
(the "Collateral Agent") under the terms of the Credit Agreement, and (iii)
SunTrust Bank, Atlanta, as agent under the terms of the Credit Agreement (the
"Agent"; the Lenders, the Collateral Agent, and the Agent being collectively
referred to herein as the "Guaranteed Parties");
W I T N E S S E T H:
WHEREAS, Dyersburg Corporation, a corporation organized and
existing under the laws of the State of Tennessee (the "Parent"), Dyersburg
Fabrics Limited Partnership, I, United Knitting Limited Partnership, I, IQUE
Limited Partnership, I, Alamac Knit Fabrics, Inc. (collectively, the
"Borrowers"), the Lenders, the Agent, and the Collateral Agent have entered into
that certain Credit Agreement dated as of August 27, 1997 (as the same may
hereafter be amended, restated, supplemented or otherwise modified from time to
time, and including all schedules, riders, and supplements thereto, the "Credit
Agreement"; terms defined therein and not otherwise defined herein being used
herein as therein defined);
WHEREAS, Parent owns, directly or indirectly, all outstanding
capital stock or partnership interests of each of the Guarantors;
WHEREAS, the Parent, the other Borrowers and Guarantors share
an identity of interest as members of a consolidated group of companies engaged
in substantially similar businesses with the Parent providing certain
centralized financial, accounting and management services to each of the
Guarantors;
WHEREAS, consummation of the transactions pursuant to the
Credit Agreement will facilitate expansion and enhance the overall financial
strength and stability of the Parent's entire corporate group, including the
Guarantors; and
WHEREAS, it is a condition precedent to the Lenders'
obligations to enter into the Credit Agreement and to make extensions of credit
thereunder that Guarantors execute and deliver this Guaranty, and Guarantors
desire to execute and deliver this Guaranty to satisfy such condition precedent;
<PAGE> 138
NOW, THEREFORE, in consideration of the premises and in order
to induce the Lenders to enter into and perform their obligations under the
Credit Agreement, the Guarantors hereby, jointly and severally, agree as
follows:
SECTION 1. GUARANTY. The Guarantors hereby jointly and
severally, irrevocably and unconditionally, guarantee the punctual payment when
due, whether at stated maturity, by acceleration or otherwise, of all Loans, and
all other Obligations owing by the Borrowers (limited in the case of UKLP, IQLP
and Alamac to the Obligations owing by the Term Borrowers) to the Lenders, the
Agent, or the Collateral Agent, or any of them, under the Credit Agreement, the
Notes, and the other Credit Documents, including all renewals, extensions,
modifications and refinancings thereof, now or hereafter owing, whether for
principal, interest, fees, expenses or otherwise, and any and all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and expenses)
incurred by the Lenders or the Agents in enforcing any rights under this
Guaranty (collectively, the "Guaranteed Obligations"), including without
limitation, all interest which, but for the filing of a petition in bankruptcy,
would accrue on any principal portion of the Guaranteed Obligations. Any and all
payments by the Guarantors hereunder shall be made free and clear of and without
deduction for any set-off, counterclaim, or withholding so that, in each case,
each Guaranteed Party will receive, after giving effect to any Taxes (as such
term is defined in the Credit Agreement, but excluding Taxes imposed on overall
net income of the Guaranteed Party to the same extent as excluded pursuant to
the Credit Agreement), the full amount that it would otherwise be entitled to
receive with respect to the Guaranteed Obligations (but without duplication of
amounts for Taxes already included in the Guaranteed Obligations). The
Guarantors acknowledge and agree that this is a guarantee of payment when due,
and not of collection, and that this Guaranty may be enforced up to the full
amount of the Guaranteed Obligations without proceeding against the Borrowers,
against any security for the Guaranteed Obligations, against any other Guarantor
or under any other guaranty covering any portion of the Guaranteed Obligations.
SECTION 2. GUARANTY ABSOLUTE. The Guarantors guarantee that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Credit Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Guaranteed Party with respect thereto. The liability of each
Guarantor under this Guaranty shall be absolute and unconditional in accordance
with its terms and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including, without limitation,
the following (whether or not such Guarantor consents thereto or has notice
thereof):
(a) any change in the time, place or manner of payment of, or
in any other term of, all or any of the Guaranteed Obligations, any
waiver, indulgence, renewal, extension, amendment or modification of or
addition, consent or supplement to or deletion from or any other action
or inaction under or in respect of the Credit Agreement or the other
Credit Documents, or any other documents, instruments or agreements
relating to the Guaranteed Obligations or any other instrument or
agreement referred to therein or any assignment or transfer of any
thereof;
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(b) any lack of validity or enforceability of the Credit
Agreement or the other Credit Documents, or any other document,
instrument or agreement referred to therein or any assignment or
transfer of any thereof;
(c) any furnishing to the Guaranteed Parties of any additional
security for the Guaranteed Obligations, or any sale, exchange, release
or surrender of, or realization on, any security for the Guaranteed
Obligations;
(d) any settlement or compromise of any of the Guaranteed
Obligations, any security therefor, or any liability of any other party
with respect to the Guaranteed Obligations, or any subordination of the
payment of the Guaranteed Obligations to the payment of any other
liability of the Borrowers;
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to any Guarantor or any Borrower, or any action taken with respect to
this Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(f) any nonperfection of any security interest or lien on any
collateral, or any amendment or waiver of or consent to departure from
any guaranty or security, for all or any of the Guaranteed Obligations;
(g) any application of sums paid by any Borrower or any other
Person with respect to the liabilities of any Borrower to the
Guaranteed Parties, regardless of what liabilities of the Borrowers
remain unpaid;
(h) any act or failure to act by any Guaranteed Party which
may adversely affect a Guarantor's subrogation rights, if any, against
the Borrowers to recover payments made under this Guaranty; and
(i) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, any Guarantor.
If claim is ever made upon any Guaranteed Party for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations, and any Guaranteed Party repays all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over the Guaranteed Party or any of its property, or (b) any
settlement or compromise of any such claim effected by the Guaranteed Party with
any such claimant (including the Borrowers or a trustee in bankruptcy for the
Borrowers or any of them), then and in such event the Guarantors agree that any
such judgment, decree, order, settlement or compromise shall be binding on it,
notwithstanding any revocation hereof or the cancellation of the Credit
Agreement, the other Credit Documents, or any other instrument evidencing any
liability of the Borrowers, and the Guarantors shall be and remain liable to the
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Guaranteed Party for the amounts so repaid or recovered to the same extent as if
such amount had never originally been paid to the Guaranteed Party.
SECTION 3. WAIVER. The Guarantors hereby waive notice of
acceptance of this Guaranty, notice of any liability to which it may apply, and
further waive presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the
Guaranteed Parties against, and any other notice to, the Borrowers or any other
party liable with respect to the Guaranteed Obligations (including the
Guarantors or any other Person executing a guaranty of the obligations of the
Borrowers).
SECTION 4. SUBROGATION. No Guarantor will exercise any rights
against any Borrower which it may acquire by way of subrogation or contribution,
by any payment made hereunder or otherwise, until all the Guaranteed Obligations
shall have been irrevocably paid in full and the Credit Agreement shall have
been irrevocably terminated. If any amount shall be paid to a Guarantor on
account of such subrogation or contribution rights at any time when all the
Guaranteed Obligations shall not have been paid in full, such amount shall be
held in trust for the benefit of the Guaranteed Parties and shall forthwith be
paid to the Collateral Agent to be credited and applied to the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Agreement. If (i) a Guarantor shall make payment to the Guaranteed
Parties of all or any part of the Guaranteed Obligations and (ii) all the
Guaranteed Obligations shall be irrevocably paid in full and the Credit
Agreement irrevocably terminated, the Guaranteed Parties will, at such
Guarantor's request, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to such Guarantor of an interest in the
Guaranteed Obligations resulting from such payment by such Guarantor.
SECTION 5. SEVERABILITY. Any provision of this Guaranty which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 6. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by a Guarantor therefrom
shall in any event be effective unless the same shall be in writing executed by
the Collateral Agent.
SECTION 7. NOTICES. All notices and other communications
provided for hereunder shall be given in the manner specified in the Credit
Agreement (i) in the case of the Collateral Agent, at the address specified for
the Collateral Agent in the Credit Agreement, and (ii) in the case of the
Guarantors, at the respective addresses specified for such Guarantors in this
Guaranty.
SECTION 8. NO WAIVER; REMEDIES. No failure on the part of the
Collateral Agent or other Guaranteed Parties to exercise, and no delay in
exercising, any right hereunder shall operate
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as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. No notice to or demand on any Guarantor in any case shall entitle
such Guarantor to any other further notice or demand in any similar or other
circumstances or constitute a waiver of the rights of the Collateral Agent or
other Guaranteed Parties to any other or further action in any circumstances
without notice or demand. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 9. RIGHT OF SET OFF. In addition to and not in
limitation of all rights of offset that the Collateral Agent or other Guaranteed
Parties may have under applicable law, the Collateral Agent or other Guaranteed
Parties shall, upon the occurrence of any Event of Default and whether or not
the Collateral Agent or other Guaranteed Parties have made any demand or the
Guaranteed Obligations are matured, have the right to appropriate and apply to
the payment of the Guaranteed Obligations, all deposits of any Guarantor
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property then or thereafter owing by the
Collateral Agent or other Guaranteed Parties to any Guarantor, whether or not
related to this Guaranty or any transaction hereunder.
SECTION 10. CONTINUING GUARANTY; TRANSFER OF OBLIGATIONS. This
Guaranty is a continuing guaranty and shall (i) remain in full force and effect
until payment in full of the Guaranteed Obligations and all other amounts
payable under this Guaranty and the termination of the Credit Agreement, (ii) be
binding upon each Guarantor, its successors and assigns, and (iii) inure to the
benefit of and be enforceable by the Collateral Agent, its successors,
transferees and assigns, for the benefit of the Guaranteed Parties.
SECTION 11. GOVERNING LAW; APPOINTMENT OF AGENT FOR SERVICE OF
PROCESS; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY OR OTHERWISE RELATED HERETO MAY BE BROUGHT IN THE SUPERIOR COURTS OF
FULTON COUNTY OF THE STATE OF GEORGIA OR IN ANY COURT OF THE UNITED STATES OF
AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION AND DELIVERY OF
THIS GUARANTY, EACH GUARANTOR HEREBY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE JURISDICTION OF THE AFORESAID COURTS SOLELY FOR THE PURPOSE OF
ADJUDICATING ITS RIGHTS OR THE RIGHTS OF THE COLLATERAL AGENT AND OTHER
GUARANTEED PARTIES WITH RESPECT TO THIS GUARANTY OR ANY DOCUMENT RELATED HERETO.
EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED AGENTS, INC.,
AS THE DESIGNEE, APPOINTEE AND AGENT OF SUCH GUARANTOR TO
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<PAGE> 142
RECEIVE, FOR AND ON BEHALF OF SUCH GUARANTOR, SERVICE OF PROCESS IN SUCH
JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL BE DEEMED COMPLETED THIRTY
DAYS AFTER MAILING THEREOF TO SAID AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO THE
RESPECTIVE GUARANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT THE FAILURE OF SUCH
GUARANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. IF FOR ANY REASON SERVICE OF
PROCESS CANNOT PROMPTLY BE MADE ON EITHER SUCH LOCAL AGENT, EACH GUARANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS
SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH
GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS
GUARANTY OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE COLLATERAL AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR IN ANY
OTHER JURISDICTION.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR
HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR THEREUNDER.
SECTION 12. SUBORDINATION OF THE BORROWERS' OBLIGATIONS TO THE
GUARANTORS. As an independent covenant, each Guarantor hereby expressly
covenants and agrees for the benefit of the Collateral Agent and other
Guaranteed Parties that all obligations and liabilities of any Borrower to such
Guarantor of whatsoever description including, without limitation, all
intercompany receivables of such Guarantor from any Borrower ("Junior Claims")
shall be subordinate and junior in right of payment to all obligations of each
Borrower to the Collateral Agent and other Guaranteed Parties under the terms of
the Credit Agreement and the other Credit Documents ("Senior Claims") to the
extent provided in this Section 12.
If an Event of Default shall occur, then, unless and until
such Event of Default shall have been cured, waived, or shall have ceased to
exist, no direct or indirect payment (in cash, property, securities by setoff or
otherwise) shall be made by any Borrower to any Guarantor on
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<PAGE> 143
account of or in any manner in respect of any Junior Claim except such payments
and distributions the proceeds of which shall be applied to the payment of
Senior Claims.
In the event of a Proceeding (as hereinafter defined), all
Senior Claims shall first be paid in full before any direct or indirect payment
or distribution (in cash, property, securities by setoff or otherwise) shall be
made to any Guarantor on account of or in any manner in respect of any Junior
Claim except such payments and distributions the proceeds of which shall be
applied to the payment of Senior Claims. For the purposes of the previous
sentence, "Proceeding" means any Borrower or any Guarantor shall commence a
voluntary case concerning itself under the Bankruptcy Code or any other
applicable bankruptcy laws; or any involuntary case is commenced against any
Borrower or any Guarantor; or a custodian (as defined in the Bankruptcy Code or
any other applicable bankruptcy laws) is appointed for, or takes charge of, all
or any substantial part of the property of any Borrower or any Guarantor, or any
Borrower or any Guarantor commences any other proceedings under any
reorganization arrangement, adjustment of debt, relief of debtor, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to any Borrower or any Guarantor, or any such
proceeding is commenced against any Borrower or any Guarantor, or any Borrower
or any Guarantor is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or any Borrower or
any Guarantor suffers any appointment of any custodian or the like for it or any
substantial part of its property; or any Borrower or any Guarantor makes a
general assignment for the benefit of creditors; or any Borrower or any
Guarantor shall fail to pay, or shall state that it is unable to pay, or shall
be unable to pay, its debts generally as they become due; or any Borrower or any
Guarantor shall call a meeting of its creditors with a view to arranging a
composition or adjustment of its debts; or any Borrower or any Guarantor shall
by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action shall be taken by
any Borrower or any Guarantor for the purpose of effecting any of the foregoing.
In the event any direct or indirect payment or distribution is
made to a Guarantor in contravention of this Section 12, such payment or
distribution shall be deemed received in trust for the benefit of the Collateral
Agent and other Guaranteed Parties and shall be immediately paid over to the
Collateral Agent for application against the Guaranteed Obligations in
accordance with the terms of the Credit Agreement.
Each Guarantor agrees to execute such additional documents as
the Collateral Agent may reasonably request to evidence the subordination
provided for in this Section 12.
SECTION 13. AUTOMATIC ACCELERATION IN CERTAIN EVENTS. Upon the
occurrence of an Event of Default specified in Section 9.07 of the Credit
Agreement, all Guaranteed Obligations shall automatically become immediately due
and payable by the Guarantors, without notice or other action on the part of the
Collateral Agent or other Guaranteed Parties, and regardless of whether payment
of the Guaranteed Obligations by any Borrower has then been accelerated. In
addition, if any event of the types described in Section 9.07 of the Credit
Agreement should occur with respect to any Guarantor, then the Guaranteed
Obligations shall automatically become immediately due and
7
<PAGE> 144
payable by such Guarantor, without notice or other action on the part of the
Collateral Agent or other Guaranteed Parties, and regardless of whether payment
of the Guaranteed Obligations by any Borrower has then been accelerated.
SECTION 14. SAVINGS CLAUSE. (a) It is the intent of each
Guarantor and the Guaranteed Parties that each Guarantor's maximum obligations
hereunder shall be in, but not in excess of:
(i) in a case or proceeding commenced by or against
such Guarantor under the Bankruptcy Code on or within one year from the
date on which any of the Guaranteed Obligations are incurred, the
maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such
Guarantor under (A) Section 548 of the Bankruptcy Code or (B) any state
fraudulent transfer or fraudulent conveyance act or statute applied in
such case or proceeding by virtue of Section 544 of the Bankruptcy
Code; or
(ii) in a case or proceeding commenced by or against
such Guarantor under the Bankruptcy Code subsequent to one year from
the date on which any of the Guaranteed Obligations are incurred, the
maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of the Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such
Guarantor under any state fraudulent transfer or fraudulent conveyance
act or statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against
such Guarantor under any law, statute or regulation other than the
Bankruptcy Code (including, without limitation, any other bankruptcy,
reorganization, arrangement, moratorium, readjustment of debt,
dissolution, liquidation or similar debtor relief laws), the maximum
amount which would not otherwise cause the Guaranteed Obligations (or
any other obligations of such Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under such law,
statute or regulation including, without limitation, any state
fraudulent transfer or fraudulent conveyance act or statute applied in
any such case or proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) shall be determined in any such case or proceeding and shall
hereinafter be referred to as the "Avoidance Provisions").
(b) To the end set forth in Section 14(a), but only to the
extent that the Guaranteed Obligations would otherwise be subject to
avoidance under the Avoidance Provisions if such Guarantor is not
deemed to have received valuable consideration, fair value or
reasonably equivalent value for the Guaranteed Obligations, or if the
Guaranteed
8
<PAGE> 145
Obligations would render the Guarantor insolvent, or leave the
Guarantor with an unreasonably small capital to conduct its business,
or cause the Guarantor to have incurred debts (or to have intended to
have incurred debts) beyond its ability to pay such debts as they
mature, in each case as of the time any of the Guaranteed Obligations
are deemed to have been incurred under the Avoidance Provisions and
after giving effect to contribution as among Guarantors, the maximum
Guaranteed Obligations for which such Guarantor shall be liable
hereunder shall be reduced to that amount which, after giving effect
thereto, would not cause the Guaranteed Obligations (or any other
obligations of such Guarantor to the Guaranteed Parties), as so
reduced, to be subject to avoidance under the Avoidance Provisions.
This Section 14(b) is intended solely to preserve the rights of the
Guaranteed Parties hereunder to the maximum extent that would not cause
the Guaranteed Obligations of any Guarantor to be subject to avoidance
under the Avoidance Provisions, and neither such Guarantor nor any
other Person shall have any right or claim under this Section 14 as
against the Guaranteed Parties that would not otherwise be available to
such Person under the Avoidance Provisions.
(c) None of the provisions of this Section 14 are intended in
any manner to alter the obligations of any holder of Subordinated Debt
or the rights of the holders of "senior indebtedness" as provided by
the terms of the Subordinated Debt. Accordingly, it is the intent of
each of the Guarantors that, in the event that any payment or
distribution is made with respect to the Subordinated Debt prior to the
payment in full of the Guaranteed Obligations by virtue of the
provisions of this Section 14, in any case or proceeding of the kinds
described in clauses (i)-(iii) of Section 14(a), the holders of the
Subordinated Debt shall be obligated to pay or deliver such payment or
distribution to or for the benefit of the Guaranteed Parties.
Furthermore, in respect of the Avoidance Provisions, it is the intent
of each Guarantor that the subrogation rights of the holders of
Subordinated Debt with respect to the obligations of the Guarantor
under this Guaranty, be subject in all respects to the provisions of
Section 14(b).
SECTION 15. INFORMATION. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of each Borrower's
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks that such Guarantor assumes and incurs hereunder, and agrees
that none of the Guaranteed Parties will have any duty to advise any of the
Guarantors of information known to it or any of them regarding such
circumstances or risks.
SECTION 16. REPRESENTATIONS AND WARRANTIES. Each Guarantor
represents and warrants as to itself that all representations and warranties
relating to it contained in Sections 6.01 through 6.06 of the Credit Agreement
are true and correct.
SECTION 17. SURVIVAL OF AGREEMENT. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Guaranty, the Credit
9
<PAGE> 146
Agreement, the making of the Borrowings, and the execution and delivery of the
Notes and the other Credit Documents.
SECTION 18. COUNTERPARTS. This Guaranty and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
SECTION 19. ADDITIONAL GUARANTORS. Upon execution and delivery
by any Subsidiary of the Parent of an instrument in the form of Annex 1, such
Subsidiary shall become a Guarantor hereunder with the same force and effect as
if originally named a Guarantor herein (each an "Additional Guarantor"). The
execution and delivery of any such instrument shall not require the consent of
any Guarantor hereunder. The rights and obligations of each Guarantor hereunder
shall remain in full force and effect notwithstanding the addition of any
Additional Guarantor as a party to this Guaranty.
10
<PAGE> 147
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be duly executed and delivered by their respective duly authorized officers as
of the date first above written.
Address for Notices:
1105 North Market Street AIH INC.
Suite 1136
Wilmington, DE 19899 By:
------------------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
1315 East Phillips DYERSBURG FABRICS INC.
Dyersburg, Tennessee 38025
Attn: Mr. William S. By:
Shropshire, Jr. -----------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
1105 North Market Street ALAMAC ENTERPRISES INC.
Suite 1136
Wilmington, DE 19899 By:
------------------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
1315 East Phillips ALAMAC KNIT FABRICS, INC.
Dyersburg, Tennessee 38025
Attn: Mr. William S. By:
Shropshire, Jr. -------------------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
1315 East Phillips UNITED KNITTING, INC.
Dyersburg, Tennessee 38025
Attn: Mr. William S. By:
Shropshire, Jr. ------------------------------------------
William S. Shropshire, Jr.
Secretary and Treasurer
(SIGNATURE PAGE TO AFFILIATE GUARANTY AGREEMENT)
<PAGE> 148
900 Market Street DFIC, INC.
Wilmington, DE 19801
By:
-----------------------------------------
William S. Shropshire, Jr.
Vice President
1315 East Phillips IQUE, INC.
Dyersburg, Tennessee 38025
Attn: Mr. William S. By:
Shropshire, Jr. -----------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
900 Market Street UKIC, INC.
Wilmington, DE 19801
By:
------------------------------------------
William S. Shropshire, Jr.
Vice President
900 Market Street IQUEIC, INC.
Wilmington, DE 19801
By:
-----------------------------------------
William S. Shropshire, Jr.
Vice President
1315 East Phillips UNITED KNITTING LIMITED PARTNERSHIP,
Dyersburg, Tennessee 38025 I, A TENNESSEE LIMITED PARTNERSHIP
Attn: Mr. William S.
Shropshire, Jr. By: United Knitting Inc., its sole general
partner
By:
-----------------------------------------
William S. Shropshire, Jr.
Secretary and Treasurer
(SIGNATURE PAGE TO AFFILIATE GUARANTY AGREEMENT)
<PAGE> 149
1315 East Phillips IQUE LIMITED PARTNERSHIP, I, A TENNESSEE
Dyersburg, Tennessee 38025 LIMITED PARTNERSHIP
Attn: Mr. William S.
Shropshire, Jr. By: IQUE, Inc., its sole general partner
By:
-----------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
(SIGNATURE PAGE TO AFFILIATE GUARANTY AGREEMENT)
<PAGE> 150
SECTION 12 OF THE
FOREGOING GUARANTY
ACKNOWLEDGED AND
AGREED TO:
DYERSBURG CORPORATION
By:
-----------------------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, A TENNESSEE LIMITED PARTNERSHIP
By: Dyersburg Fabrics Inc., its sole general partner
By:
-------------------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
UNITED KNITTING LIMITED PARTNERSHIP, I,
A TENNESSEE LIMITED PARTNERSHIP
By: United Knitting Inc., its sole general partner
By:
-----------------------------------------------
William S. Shropshire, Jr.
Secretary and Treasurer
(SIGNATURE PAGE TO AFFILIATE GUARANTY AGREEMENT)
<PAGE> 151
IQUE LIMITED PARTNERSHIP, I,
A TENNESSEE LIMITED PARTNERSHIP
By: IQUE, Inc., its sole general partner
By:
--------------------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
ALAMAC KNIT FABRICS, INC.
By:
------------------------------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
(SIGNATURE PAGE TO AFFILIATE GUARANTY AGREEMENT)
<PAGE> 152
SCHEDULE I
AFFILIATE GUARANTORS
AIH, Inc., a Delaware corporation
Dyersburg Fabrics Inc., a Tennessee corporation
Alamac Enterprises Inc., a Delaware corporation
Alamac Knit Fabrics, Inc., a Delaware corporation
United Knitting Inc., a Tennessee corporation
DFIC, Inc., a Delaware corporation
IQUE, Inc., a Tennessee corporation
UKIC, Inc., a Delaware corporation
IQUEIC, Inc., a Delaware corporation
United Knitting Limited Partnership, I, a Tennessee Limited Partnership
IQUE Limited Partnership, I, a Tennessee Limited Partnership
<PAGE> 153
ANNEX 1
SUPPLEMENT
TO
AFFILIATE GUARANTY AGREEMENT
THIS SUPPLEMENT TO AFFILIATE GUARANTY AGREEMENT (this
"Supplement to Guaranty Agreement"), dated as of _______________, made by
___________________ ____, a ________ corporation (the "Additional Guarantor"),
in favor of (i) the banks and other lending institutions that are parties to the
Credit Agreement (as hereinafter defined) and each assignee thereof becoming a
"Lender" as provided therein (collectively, the "Lenders"), (ii) SunTrust Bank,
Atlanta, in its capacity as Collateral Agent (the "Collateral Agent") under the
terms of the Credit Agreement, and (iii) SunTrust Bank, Atlanta, as agent under
the terms of the Credit Agreement (the "Agent"; the Lenders, the Collateral
Agent, and the Agent being collectively referred to herein as the "Guaranteed
Parties").
W I T N E S S E T H:
WHEREAS, Dyersburg Corporation, a Tennessee corporation (the
"Parent"), Dyersburg Fabrics Limited Partnership, I, United Knitting Limited
Partnership, I, IQUE Limited Partnership, I, Alamac Knit Fabrics, Inc.
(collectively, the "Borrowers"), the Lenders, the Agent, and the Collateral
Agent are parties to a Credit Agreement, dated as of August 27, 1997 (as the
same has been or may hereafter be amended, restated, or supplemented from time
to time, the "Credit Agreement"), pursuant to which the Lenders made commitments
to make loans and other financial accommodations to the Borrowers;
WHEREAS, certain Subsidiaries (the "Guarantors") of the Parent
have executed and delivered an Affiliate Guaranty Agreement dated as of August
27, 1997 (as the same has been amended, restated and supplemented from time to
time and is now in effect, the "Affiliate Guaranty") pursuant to which the
Guarantors have agreed to guarantee all of the obligations of the Borrowers
under the Credit Agreement and the other Credit Documents (as defined in the
Credit Agreement);
WHEREAS, the Borrowers, the Affiliate Guarantors and the
Additional Guarantor share an identity of interests as members of a consolidated
group of companies engaged in substantially similar businesses; the Parent
provides certain centralized financial, accounting and management services to
the Additional Guarantor; and the making of the Loans has facilitated expansion
and enhanced the overall financial strength and stability of the Parent's
corporate group, including the Additional Guarantor;
WHEREAS, it is a condition subsequent to the Lenders'
obligation to make extensions of credit under the Credit Agreement that the
Additional Guarantor execute and
<PAGE> 154
deliver to the Collateral Agent this Supplement to Guaranty Agreement, and the
Additional Guarantor desires to execute and deliver this Supplement to Guaranty
Agreement to satisfy such condition subsequent;
NOW, THEREFORE, in consideration of the premises and in order
to induce the Lenders to make extensions of credit under the Credit Agreement,
the Additional Guarantor hereby agrees as follows:
1. DEFINED TERMS. Capitalized terms not otherwise defined herein which are
used in the Affiliate Guaranty are used herein with the meanings specified for
such terms in the Affiliate Guaranty.
2. ADDITIONAL GUARANTOR. The Additional Guarantor agrees that it shall be and
become a Guarantor for all purposes of the Affiliate Guaranty and shall be fully
liable thereunder to the Collateral Agent and other Guaranteed Parties to the
same extent and with the same effect as though the Additional Guarantor had been
one of the Guarantors originally executing and delivering the Affiliate
Guaranty. Without limiting the foregoing, the Additional Guarantor hereby
jointly and severally (with respect to the guaranties made by the Affiliate
Guarantors under the Affiliate Guaranty), irrevocably and unconditionally,
guarantees the punctual payment when due, whether at stated maturity by
acceleration of otherwise, of the Borrowings and all other Obligations (as
defined in the Credit Agreement, and including all renewals, extensions,
modifications and refinancings thereof, now or hereafter existing, whether for
principal, interest, fees, expenses or otherwise, and any and all expenses
(including reasonable attorneys' fees and reasonable out-of-pocket expenses)
incurred by the Collateral Agent and other Guaranteed Parties in enforcing any
rights under the Affiliate Guaranty (as supplemented hereby), subject, however,
to the limitations expressly provided in the Affiliate Guaranty in Section 14
thereof. All references in the Affiliate Guaranty to "Guarantors" or any
"Guarantor" shall be deemed to include and to refer to the Additional Guarantor.
3. GOVERNING LAW; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS; SUBMISSION TO
JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS SUPPLEMENT TO GUARANTY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
SUPPLEMENT TO GUARANTY AGREEMENT OR OTHERWISE RELATED HERETO MAY BE BROUGHT IN
THE SUPERIOR COURTS OF FULTON COUNTY OF THE STATE OF GEORGIA OR IN ANY COURT OF
THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY
EXECUTION AND DELIVERY OF THIS
2
<PAGE> 155
SUPPLEMENT TO GUARANTY AGREEMENT, THE ADDITIONAL GUARANTOR HEREBY CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THE AFORESAID
COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE RIGHTS OF THE
COLLATERAL AGENT OR OTHER GUARANTEED PARTIES WITH RESPECT TO THIS SUPPLEMENT TO
GUARANTY AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE ADDITIONAL GUARANTOR
HEREBY IRREVOCABLY DESIGNATES __________________________________________, AS THE
DESIGNEE, APPOINTEE AND AGENT OF THE ADDITIONAL GUARANTOR TO RECEIVE, FOR AND ON
BEHALF OF THE ADDITIONAL GUARANTOR, SERVICE OF PROCESS IN SUCH JURISDICTION IN
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SUPPLEMENT TO GUARANTY
AGREEMENT OR ANY DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL BE DEEMED
COMPLETED THIRTY (30) DAYS AFTER MAILING THEREOF TO SAID AGENT. IT IS UNDERSTOOD
THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY
MAIL TO THE ADDITIONAL GUARANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT THE
FAILURE OF THE ADDITIONAL GUARANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS. IF FOR ANY REASON SERVICE OF PROCESS CANNOT PROMPTLY BE MADE ON EITHER
SUCH LOCAL AGENT, THE ADDITIONAL GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE BORROWER AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE ADDITIONAL GUARANTOR HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS IN RESPECT OF THIS SUPPLEMENT TO GUARANTY AGREEMENT OR
ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
COLLATERAL AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ADDITIONAL GUARANTOR
IN ANY OTHER JURISDICTION.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE ADDITIONAL
GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS SUPPLEMENT
TO GUARANTY AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR ANY MATTER ARISING IN
CONNECTION HEREUNDER OR THEREUNDER.
3
<PAGE> 156
IN WITNESS WHEREOF, the Additional Guarantor has caused this
Supplement to Guaranty Agreement to be duly executed and delivered by its duly
authorized officer as of the date first above written.
Address for Notices: ADDITIONAL GUARANTOR:
By:
--------------------------------
Name:
Title:
4
<PAGE> 157
EXHIBIT E-1
FORM OF
BORROWER SECURITY AGREEMENT
THIS BORROWER SECURITY AGREEMENT made and entered into as of
August 27, 1997, by and among DYERSBURG CORPORATION, a Tennessee corporation
("Parent"), DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited
partnership ("DFLP"), UNITED KNITTING LIMITED PARTNERSHIP, I, a Tennessee
limited partnership ("UKLP"), IQUE LIMITED PARTNERSHIP, I, a Tennessee limited
partnership ("IQLP"), ALAMAC KNIT FABRICS, INC., a Delaware corporation
("Alamac"; Parent, DFLP, UKLP, IQLP and Alamac referred to collectively herein
as the "Borrowers"), in favor of SUNTRUST BANK, ATLANTA, a Georgia banking
corporation, as collateral agent for the lenders from time to time party to the
Credit Agreement defined below (in such capacity, the "Secured Party").
W I T N E S S E T H:
WHEREAS, the Borrowers, SunTrust Bank, Atlanta, as agent and
collateral agent and the lenders named therein have entered into a Credit
Agreement dated as of August 27, 1997 (as the same may be amended, modified or
supplemented from time to time, the "Credit Agreement"; all terms used herein
without definition shall have the meanings ascribed to such terms in the Credit
Agreement), pursuant to which the Lenders, subject to the terms and conditions
set forth in the Credit Agreement, have agreed to provide certain financial
accommodations to the Borrowers;
WHEREAS, each of the Borrowers desires to secure its
obligation to pay, duly and punctually, the indebtedness evidenced by the Credit
Agreement and all other Obligations owing to the Secured Party, the Agent and
the Lenders;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrowers and the Secured Party, intending to be legally bound, hereby agree as
follows:
1. Grant of Security Interest. Each of the Borrowers hereby conveys
and grants to the Secured Party, for the benefit of the Agents and the Lenders,
a lien on and a security interest in all of the following, whether now existing
or hereafter acquired or created:
a. Equipment. All of such Borrower's machinery and
equipment, including but not limited to, pintrucks, air entanglers,
forklifts, tufting machines, pellet trucks, yarn testers, weaving
machines, electrical transformers, coning towers, storage tanks,
spinnerettes, air compressors, air dryers, receiver tanks, blower
systems, and all other machinery, apparatus,equipment, fittings,
fixtures, and other tangible personal property (other than Inventory)
of every kind and description used or usable in such Borrower's
business operations or owned by such Borrower, or in which such
Borrower has an interest, and all parts, accessories and
<PAGE> 158
special tools relating thereto, wherever located, whether now or
hereafter existing or acquired, and all proceeds thereof and
substitutions and replacements therefor, including, without limitation,
all insurance proceeds payable with respect to any of the foregoing
(collectively, the "Equipment").
b. Accounts. All of such Borrower's accounts, contract rights,
chattel paper and instruments, whether now existing or hereafter
acquired or arising or in which such Borrower now has or hereafter
acquires any rights, including, without limitation, all present and
future rights to payments for goods, merchandise or Inventory sold or
leased or for services rendered, whether or not represented by
instruments or chattel paper, and whether or not earned by
performance; proceeds of any letter of credit on which such Borrower
is beneficiary; and all forms of obligations whatsoever owing to such
Borrower, together with all instruments and documents of title
representing any of the foregoing, all rights in any goods,
merchandise or Inventory which any of the foregoing may represent, all
rights in any returned or repossessed goods, merchandise or Inventory,
and all rights, security and guaranties with respect to each of the
foregoing, including, without limitation, any rights of stoppage in
transit and reclamation (the "Accounts").
c. Inventory. All inventory, including, without limitation, all
fabric, piece goods, yarn, thread, finished goods, merchandise, goods
in transit and other personal property, wheresoever located, which is
or may at any time be held for sale or lease, furnished under any
contract of service, or held as raw materials, work in process,
supplies or materials used or consumed in such Borrower's business,
and any property of such Borrower the sale or other disposition of
which has given rise to an Account and which has been returned to or
repossessed or stopped in transit by such Borrower (the "Inventory").
d. Intellectual Property. All (i) (1) all patents and patent
applications, (2) all inventions and improvements described and claimed
therein, (3) all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, (4) all income,
royalties, damages and payments now and hereafter due and/or payable to
such Borrower with respect thereto, including, without limitation,
damages and payments for past or future infringements or
misappropriations thereof, (5) all rights to sue for past, present and
future infringements or misappropriations thereof and (6) all other
rights corresponding thereto throughout the world (collectively, the
"Patents"), (ii) any written agreement granting any right to produce
any invention on which a Patent is in existence, now owned or hereafter
acquired any Borrower (collectively, the "Patent Licenses"), (iii) (1)
all trademarks (including service marks and tradenames, whether
registered or at common law), registrations and applications therefor,
and the entire product lines and goodwill of such Borrower's business
connected therewith and symbolized thereby, (2) all renewals thereof,
(3) all income, royalties, damages and payments now and hereafter due
or payable or both with respect thereto, including, without limitation,
damages and payments thereof, (4) all rights to sue for past, present
and future infringements or misappropriations thereof and (5) all other
rights corresponding thereto throughout the world (collectively, the
"Trademarks"), and (iv) any written agreement granting any right to use
any Trademark or Trademark registration, now
2
<PAGE> 159
owned or hereafter acquired by any Borrower (collectively, the
"Trademark Licenses"; the Patents, Patent Licenses, Trademarks and
Trademark Licenses referred to collectively herein as the "Intellectual
Property Collateral"), including without limitation, the Intellectual
Property Collateral described on Exhibit A attached hereto;
e. General Intangibles. All (i) Patents, Patent Licenses,
Trademarks, Trademark Licenses, trade names, copyrights, licensing
agreements and rights, customer lists, technology agreements, computer
programs and other software, books and records, (ii) all rights and
interests of such Borrower under all leases and rental agreements with
respect to properties, (iii) all rights and interest of such Borrower
with respect to all partnerships, limited liability companies and other
entity in which such Borrower holds an ownership interest, as more
fully set forth in the next paragraph, (iv) all rights to
indemnification, and (v) all other general intangibles; whether now or
hereafter existing or acquired, and all proceeds thereof and all
substitutions and replacements therefor (collectively, the "General
Intangibles").
f. Partnership and other Equity Interests. All general
partnership interests, limited partnership interests, ownership
interests in limited liability companies not represented by an
Instrument, including without limitation, the partnerships listed on
Exhibit A hereto, all profits; all allocations, including without
limitation, allocations of profit, loss, investment tax credit and
gain; all distributions, including without limitation, distributions of
net profits, and other assets of such partnership or other entities,
all proceeds from disposition of assets; all revenues from operations;
proceeds of dissolution; all capital; all documents; all securities;
all instruments and other property at any time or from time to time
distributable to such Borrower in respect of, in exchange for or in
substitution of any right, title, interest or benefit, legal or
equitable, as partner or member, which such Borrower may have, possess
or enjoy now or hereafter in, to and under any partnership agreement,
operating agreement or other governing documents; all voting rights
under such governing documents, together with full power and authority
to enforce, collect, receive and receipt for the foregoing or any
portion thereof, whether now existing or hereafter acquired and all
proceeds thereof (the "Equity Interests");
g. Instruments. All promissory notes, letters of credit,
guarantees, securities, and other items constituting "instruments" (as
defined in the Uniform Commercial Code as in effect in the State of
Georgia) owned or held by such Borrower, whether or not in negotiable
form, and all collateral and other security therefor, whether now or
hereafter existing or acquired, and all proceeds thereof and all
substitutions and replacements therefor (collectively, the
"Instruments").
h. Documents, Books and Records. All documents, books and records
(including, without limitation, customer lists, credit files, computer
programs, printouts and other computer materials and records) of any
of the Borrowers pertaining to any of the foregoing.
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i. Other Personal Property. All other goods and personal property
of such Borrower, whether tangible or intangible, wherever located.
j. Products and Proceeds. All products and proceeds of the
foregoing, and all replacements, additions, accessions, or
substitutions thereof, all after acquired property, and the accounts or
other proceeds arising from the sale or other disposition of any
property including any returns thereof, including, where applicable,
the proceeds of insurance covering any of the foregoing.
k. Collateral Defined. The Equipment, the Accounts, the
Inventory, the Intellectual Property Collateral, the General
Intangibles, the Equity Interests, the Instruments and all of the
other property described above are herein sometimes collectively
called the "Collateral."
2. Obligations Secured. The security interest granted hereby secures
the Obligations (as defined in the Credit Agreement) of the Borrowers to the
Secured Party, the Agents and the Lenders however created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due, and all renewals, extensions, modifications and
refinancings of the foregoing indebtedness and obligations, together with all
reasonable costs of collection, including reasonable attorneys' fees actually
incurred if collected by or through an attorney-at-law or in bankruptcy or other
judicial proceedings (collectively, the "Secured Obligations").
3. The Borrowers' Right to Use Collateral. Until the occurrence and
during the continuation of an Event of Default and notice from the Secured Party
to the Borrowers to the contrary, the Borrowers:
a. Use of Inventory. May sell any of the Inventory normally
held by the Borrowers for such purpose, and use and consume any raw
materials or materials normally held by the Borrowers for such
purpose, all in the ordinary course of the Borrowers' business.
b. Disposal of Obsolete Collateral. May sell or otherwise
dispose of property which is worn out or obsolete or no longer used or
useful in the Borrowers' business, in accordance with past business
practices and as otherwise permitted by the terms of the Credit
Agreement.
c. Use of Accounts. Will endeavor to collect, as and when due,
all amounts due with respect to any of the Accounts, including the
taking of such action with respect to such collection as the Secured
Party may reasonably request or, in the absence of such request, as the
Borrowers may deem advisable; and, in the ordinary course of business
may grant to any party obligated on any of the Accounts any rebate,
refund or adjustment to which such party may be lawfully entitled; and,
in connection therewith, may accept the return of goods the sale of
which shall have given rise to such Accounts.
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d. Distributions on Equity Interests. May accept and retain
distributions in respect of the Equity Interests in accordance with
past business practices and the terms of the Credit Agreement.
4. Direct Collection by the Secured Party. The Secured Party may, at
any time during the continuation an Event of Default hereunder, and at the
Borrowers' expense, notify or direct the Borrowers to notify (which notification
the Borrowers agrees to promptly undertake) any parties obligated on any of the
Accounts to make payment directly to the Secured Party of any amounts due, or to
become due, thereunder and the Secured Party may enforce collection of any of
the Accounts by suit or otherwise and surrender, release, or exchange all or any
part thereof, or compromise, extend, or renew same for any period. All monies so
received by the Secured Party may, at the Secured Party's sole discretion, be
either (a) applied by the Secured Party directly toward payment of all or any
part of the Secured Obligations, whether or not then due, in such order of
application as the Secured Party may determine; or (b) deposited to the credit
of the Borrowers with the Secured Party as security for payment of the Secured
Obligations, and the Secured Party may, from time to time, in its sole
discretion (i) apply all or any part of the collected funds in said deposit
account toward payment of all or any part of the Secured Obligations, whether or
not then due, in such order of application as the Secured Party may determine,
or (ii) permit the Borrowers to use all or any part of the funds on deposit in
said account in the normal course of the Borrowers' business.
5. Warranties. Each of the Borrowers hereby represents and warrants to
the Secured Party that:
a. Financing Statements. No financing statement covering any
of the Collateral is on file in any public office, except any which
may have been filed (i) on behalf of the Secured Party, or (ii) with
respect to any security interests expressly permitted by the terms of
the Credit Agreement.
b. Good Title. The Borrowers are and will be the lawful owner
of all Collateral, free of all liens and claims whatsoever, except (i)
the security interest granted hereby, and (ii) liens and security
interests expressly permitted by the terms of the Credit Agreement, and
the Borrowers have the right to subject the same to the security
interest granted hereby.
c. Accuracy of Information. All information now or hereafter
furnished by the Borrowers to the Secured Party relating to the
Collateral or otherwise to this transaction is and will be true and
correct as of the date furnished in all material respects.
d. Location of Business and Collateral. All books and records
relating to the Collateral are kept at the Borrowers' chief executive
office listed on Exhibit B hereto and all of the Equipment and
Inventory is kept at one of the locations listed on Exhibit B attached
hereto (the "Collateral Locations").
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e. Status of Intellectual Property Collateral. As of the date
hereof, none of the Borrowers has any Patents or Patent Licenses, or
registered Trademarks or Trademark Licenses except as set forth on
Exhibit A hereto.
f. Valid and Subsisting. (i) The Patents, Trademarks and any
trademarks or patents in which any Borrower has been granted rights
pursuant to Trademark Licenses or Patent Licenses are subsisting and
have not been adjudged invalid or unenforceable, each of the
Trademarks, Patents and any trademark or patent in which any Borrower
has been granted rights pursuant to Trademark Licenses or Patent
Licenses is valid and enforceable, and no claim has been made that the
use of any of the Trademarks, Patents or any trademark or patent in
which any Borrower has been granted rights pursuant to the Trademark
Licenses or Patent Licenses, in either case, which is material to the
conduct of such Borrower's business, does or may violate the rights of
any third person, (ii) each of the Borrowers has used, to the best of
its knowledge, and will continue to use for the duration of this
Security Agreement, proper statutory notice in connection with its use
of the Trademarks, and (iii) each of the Borrowers has used, to the
best of its knowledge, and will continue to use for the duration of
this Security Agreement, consistent standards of quality in its
manufacture of products sold under the Trademarks and any Trademarks in
which such Borrower has been granted rights pursuant to the Trademark
Licenses.
g. Status of Equity Interests. None of the Equity Interests
constitute an "uncertificated security" under applicable law. None of
the Borrowers has any other Equity Interests other than those listed
on Exhibit A hereto.
6. Agreements of the Borrowers. Each of the Borrowers hereby agrees
that:
a. Perfection of Security Interest. Upon request of the
Secured Party, it will execute such financing statements and other
documents, pay the cost of filing or recording the same in all public
offices deemed necessary by the Secured Party, and do such other acts
and things, all as the Secured Party may from time to time reasonably
request, to establish and maintain a valid and perfected security
interest in all of the Collateral, free of all other liens and claims
except those expressly permitted by the Credit Agreement.
b. Location of Equipment and Inventory. Unless the Secured
Party shall otherwise consent in writing, it shall not during the term
of this Security Agreement, remove any Equipment or Inventory from the
Collateral Locations, except in connection with sales of Inventory in
the ordinary course of business or in connection with the transfer
thereof between Collateral Locations or sales of Equipment permitted
hereunder, unless such Borrower shall have given the Secured Party
thirty (30) days prior written notice hereof and taken such action
reasonably requested by Secured Party to maintain the perfection of its
security interest hereunder.
c. Books and Records. It will keep at the address set forth on
Exhibit B all of its books and records concerning all of the
Collateral, which books and records will be of
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such character as will enable the Secured Party or its designees to
determine at any time the status thereof, and, unless the Secured Party
shall otherwise consent in writing, the Borrowers will not duplicate
any such books or records at any other address, unless the Borrowers
shall have given the Secured Party thirty (30) days prior written
notice hereof and taken such action reasonably requested by Secured
Party to maintain the perfection of its security interest hereunder.
d. Furnishing of Information. It will furnish the Secured
Party such information concerning the Borrowers, the Collateral, and
any obligors on any of the Accounts as the Secured Party may from time
to time reasonably request.
e. Inspection. It will permit the Secured Party and its
designees, at such reasonable times during normal business hours and
as often as the Secured Party may reasonably request, to inspect the
Collateral, and to inspect, audit and make copies of and extracts from
books, records and all other papers in possession of the Borrowers
pertaining to the Collateral and any obligors on any of the Accounts,
and, upon reasonable request of the Secured Party, will furnish duly
verified copies or summaries thereof in form and content reasonably
satisfactory to the Secured Party.
f. Notation on Records. It will stamp on its records relating
to the Collateral comprised of chattel papers, instruments or
documents a notation in form and content reasonably satisfactory to
the Secured Party of the security interest of the Secured Party
hereunder.
g. Notation of Books of Partnerships and Limited Liability
Companies. It will cause each of the partnerships and limited liability
companies in which it holds Equity Interests to note on the appropriate
books and ownership records of such partnership or limited liability
company a notation of the security interest of the Secured Party
hereunder and shall, upon request, deliver copies of such books and
records to the Secured Party.
h. Transfers and Encumbrances. Except as permitted under
Section 3 hereof and as expressly permitted by the Credit Agreement, it
will not sell, lease, assign or create or permit to exist any lien on,
or security interest in, any Collateral to or in favor of anyone other
than the Secured Party.
i. Insurance. It will at all times keep all Inventory and
Equipment insured against loss, damage, theft and such other risks and
in such amounts and with such companies and under such policies and in
such form as shall be required under the terms of the Credit Agreement
or otherwise reasonably satisfactory to the Secured Party. The
insurance policy shall name the Secured Party as loss payee and
additional insured, as applicable, and shall provide thirty (30) days'
prior written notice to the Secured Party in the event of cancellation,
change, or material alteration or modification. If the Secured Party so
requests, the originals or true copies of such policies or certificates
thereof shall be deposited with the Secured Party.
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j. Collection Expenses. It will reimburse the Secured Party
for all reasonable expenses, including reasonable attorneys' fees and
legal expense actually incurred by the Secured Party in seeking to
collect or enforce any rights under the Collateral or actually incurred
by the Secured Party in seeking to collect any of the Secured
Obligations and to enforce any rights hereunder.
k. Change of Location or Name. The Borrowers will give at
least 30 days' prior written notice to the Secured Party of (i) any
change in the principal place of business or chief executive office of
any of the Borrowers; (ii) any change in the name of any of the
Borrowers; or (iii) any merger, consolidation or other corporate
reorganization involving any of the Borrowers.
l. Maintenance of Collateral. The Borrowers will at all times
maintain the Collateral in good condition and will not waste, misuse or
otherwise permit the Collateral to deteriorate in value, except for
ordinary wear and tear given its intended use.
m. Use of Equipment. The Equipment will be used solely for
business use and will remain in the possession or control of one of the
Borrowers at all times at such Borrower's risk of loss; provided,
however, that the Borrowers may, in the ordinary course of its business
and consistent with past practices, remove and transport Equipment on a
temporary basis for repairs.
7. Delivery of Instruments. The Borrowers will deliver to the Secured
Party, promptly upon the receipt by any Borrower thereof, all documents
evidencing instruments owned or held by the Borrowers and having a stated amount
or fair value in excess of $10,000, together with such assignments,
endorsements, stock powers executed in blank, or other writings reasonably
deemed necessary by the Secured Party to perfect and/or protect the security
interest in such instruments granted herein.
8. Performance of the Borrowers' Obligations by the Secured Party.
Following the occurrence and during the continuation of an Event of Default, at
its option, the Secured Party may from time to time perform any agreement of the
Borrowers hereunder which the Borrowers shall fail to perform and take any other
action which the Secured Party reasonably deems necessary for the maintenance or
preservation of any of the Collateral or its interest therein, and the Borrowers
agree, jointly and severally, to reimburse the Secured Party, immediately upon
demand by Secured Party, for all reasonable expenses incurred in connection with
the foregoing, together with interest thereon from the date incurred until the
date of reimbursement at the default rate set forth in the Credit Agreement. All
such expenses incurred by the Secured Party, together with the interest accrued
thereon, shall be indebtedness secured hereby.
9. Events of Default. "Event of Default" as used herein shall mean the
occurrence of any of the following events:
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a. Breach of Terms. Failure of the Borrowers to observe or
perform any obligation, covenant, condition or term of this Security
Agreement, which failure shall remain unremedied for thirty (30) days
following written notice thereof from the Secured Party to the
Borrowers or any of them.
b. False Representations. Any representation or warranty of
the Borrowers set forth herein or otherwise made or furnished to the
Secured Party by or on behalf of the Borrowers in connection with this
Security Agreement proves to have been false or misleading in any
material respect when made or furnished.
c. Other Defaults. The occurrence of any "Event of Default" as
defined under the Credit Agreement.
10. Procedures of Default.
a. Remedies. Upon the occurrence and during the continuation
of any Event of Default, the following action may be taken: (a) declare
any or all of the Obligations immediately due and payable without any
other notice of any kind; (b) proceed immediately to exercise any and
all of the Secured Party's rights, powers and privileges with respect
to the Collateral; (c) apply and set off any indebtedness due or to
become due to the Borrowers from the Secured Party including, without
limitation, the Collateral and any other deposits or other cash
collateral of any of the Borrowers held by the Secured Party in
satisfaction of any of the Obligations of the Borrowers; or (d)
exercise from time to time any other right or remedy available to the
Secured Party under the applicable Uniform Commercial Code or otherwise
available under the Credit Documents, at law or in equity. Upon the
occurrence and during the continuation of an Event of Default, and at
the option of the Secured Party, each of the Borrowers shall (a) upon
receipt of written instruction from Secured Party to do so, cease the
sale, lease or furnishing under contract of service of any of the
Inventory and cease the use or consumption thereof in business; (b) at
its expense assemble all the Collateral at a convenient place
satisfactory to the Secured Party; and (c) pay all reasonable costs and
expenses of the Secured Party of collection of any and all the Secured
Obligations and enforcement of rights hereunder, including reasonable
attorneys' fees actually incurred. All rights and remedies specified
herein are cumulative and are in addition to such other rights and
remedies as are otherwise available to the Secured Party. Each of the
Borrowers hereby authorizes, following the occurrence and during the
continuance of an Event of Default, the Secured Party pursuant to the
power of attorney granted in subsection (b) hereof to sign and execute
in the name of such Borrower any intended transfer, conveyance or
instrument in writing that may be necessary or desirable to effect any
disposition of the Collateral. No disposition of any Collateral shall
extinguish any Secured Obligations of the Borrowers except to the
extent that the net cash proceeds are applied thereto.
b. Securities Act, Etc. In view of the nature of the Equity
Interests now or hereafter included in the Collateral, or because of
other present or future circumstances, a question may arise under the
Securities Act of 1933, as amended, as now or hereafter in
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effect, or any similar statute hereafter enacted analogous in purpose
or effect (such Act and any such similar statute as from time to time
in effect being hereinafter called the "Federal Securities Laws") with
respect to any disposition of the Equity Interests permitted hereunder.
Each Borrower understands that compliance with the Federal Securities
Laws may very strictly limit the course of the Secured Party's conduct
if the Secured Party were to attempt to dispose of all or any part of
the Equity Interests and may also limit the extent to which or the
manner in which any subsequent transferee of any Equity Interests may
dispose of the same. Similarly, there may be other legal restrictions
or limitations affecting the Secured Party in any attempt to dispose of
all or any part of the Equity Interests under applicable Blue Sky or
other state securities laws or similar laws analogous in purpose or
effect. Each Borrower clearly understands that the Secured Party shall
be entitled to place all or any part of the Equity Interest for private
placement by an investment banking firm, that any such investment
banking firm may purchase all or any part of the Equity Interests for
its own account, and that the Secured Party shall be entitled to place
all or any part of the Collateral privately with a purchaser or
purchasers, notwithstanding the existence of a public or private market
upon which the quotations or sales prices may exceed substantially the
price at which the Secured Party sells.
c. Power of Attorney. Each of the Borrowers does hereby
irrevocably make, constitute and appoint the Secured Party and any of
its officers or designees its true and lawful attorney-in-fact, with
full power and authority to do any and all acts necessary or proper to
carry out the intent of this Security Agreement, including without
limitation, the right, power and authority (i) to enforce all rights of
the Borrowers under and pursuant to any agreements constituting, giving
rise to or with respect to the Collateral, all for the sole benefit of
the Secured Party; (ii) to enter into and perform such arrangements as
may be necessary in order to carry out the terms, covenants and
conditions of this Security Agreement that are required to be observed
or performed by the Borrowers; and (iii) to execute such other and
further mortgages, pledges and assignments of the Collateral as the
Secured Party may reasonably require for the purpose of perfecting,
protecting or maintaining the security interest granted to the Secured
Party by this Security Agreement, and the Borrowers hereby ratify and
confirm all that the Secured Party as such attorney-in-fact or its
substitutes do by virtue of this power of attorney, which power is
coupled with an interest and is irrevocable until the Borrowers have
paid in full the Secured Obligations (and the commitment of the Lenders
to advance funds under the Credit Agreement is terminated) and this
Security Agreement is terminated. If the Secured Party exercises the
foregoing power of attorney, the Secured Party shall notify the
Borrowers thereof promptly after such exercise; provided, however, no
delay or failure in giving such notice shall render such exercise
invalid or ineffective or result in any liability on the part of the
Secured Party to the Borrowers.
d. The Borrowers to Hold in Trust. Subsequent to the
occurrence of any Event of Default described in Section 9 hereof, and
during the continuance thereof, and regardless of whether the Secured
Party makes any demand to or request of the Borrowers, the Borrowers
agree to hold in trust for the Secured Party any and all cash, checks,
drafts, items, chattel paper and other instruments or writings for the
payment of money that may be
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received by the Borrowers in full or partial payment or otherwise as
proceeds of any of the Collateral, in precisely the form received. The
Borrowers will not commingle any such proceeds with any other of its
funds or property, but will hold them separate and apart from its own
funds or property until delivery is made to the Secured Party. The
Borrowers will immediately upon request by the Secured Party endorse,
transfer and deliver any and all such payments to the Secured Party for
application against the Secured Obligations.
e. Notices. If any notification of intended disposition of any
of the Collateral is required by law, such notification if mailed
shall be deemed reasonably and properly given if given at least ten
(10) days before such disposition in accordance with Section 11(j)
hereof.
f. Disposition of Proceeds. Any proceeds of any disposition of
any of the Collateral may be applied by the Secured Party to the
payment of the Secured Party's reasonable expenses in connection with
the Collateral, including reasonable attorneys' fees actually incurred,
and any balance of such proceeds may be applied by the Secured Party
toward the payment of such of the Obligations, in such order of
application, as the Secured Party may from time to time elect, and any
remaining balance paid to the Borrowers or other person or entity
entitled thereto.
g. Grant of License to Use Intellectual Property Collateral.
For the purpose of enabling Secured Party to exercise rights and
remedies hereunder following the occurrence and during the continuation
of an Event of Default, each Borrower hereby grants to Secured Party an
irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to such Borrower), effective upon the
occurrence and during the continuation of an Event of Default, to use,
license or sublicense any Intellectual Property Collateral or related
General Intangible, now owned or hereafter acquired by such Borrower,
and wherever the same may be located, and including, without
limitation, in such license reasonable access to all media in which any
of the licensed items may be recorded or stored and to all computer and
automatic machinery software and programs used for the compilation or
printout thereof.
11. Miscellaneous.
a. Custody of Collateral. The Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of any
of the Collateral in its possession if it takes such action for that
purpose as any Borrower requests in writing, but failure of the Secured
Party to comply with any such request shall not of itself be deemed a
failure to exercise reasonable care, and no failure of the Secured
Party to preserve or protect any rights with respect to such Collateral
against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by the Borrowers,
shall be deemed a failure to exercise reasonable care in the custody or
preservation of such Collateral.
b. No Waiver; Remedies Cumulative. No failure or delay on the
part of the Secured Party in exercising any right or remedy hereunder
and no course of dealing between the Borrowers and the Secured Party
shall operate as a waiver thereof, nor shall any single
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or partial exercise of any right or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right
or remedy hereunder. The rights and remedies herein expressly provided
are cumulative and not exclusive of any rights or remedies which the
Secured Party would otherwise have. No notice to or demand on the
Borrowers required hereunder shall entitle the Borrowers to any other
or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Secured Party to any other or
further action in any circumstances without notice or demand.
c. Counterparts. This Security Agreement may be executed in
any number of counterparts, and by different parties hereto on
separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one
and the same instrument.
d. Governing Law; Submission to Jurisdiction.
(I) THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF GEORGIA.
(II) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
SECURITY AGREEMENT OR ANY DOCUMENT RELATED THERETO MAY BE BROUGHT IN
THE COURTS OF THE STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA
FOR THE NORTHERN DISTRICT OF GEORGIA AND, BY EXECUTION AND DELIVERY OF
THIS SECURITY AGREEMENT, EACH OF THE BORROWERS HEREBY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE BORROWERS HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(III) TO THE EXTENT PERMITTED BY LAW, EACH OF THE BORROWERS
AND SECURED PARTY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND
IRREVOCABLY WAIVE THE RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY
IN RESPECT TO ANY LITIGATION, WHETHER IN CONTRACT OR TORT, AT LAW OR
EQUITY, BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT AND ANY OTHER DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE
EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY
HERETO.
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(iv) Nothing herein shall affect the right of the Secured
Party to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrowers
in any other jurisdiction.
e. Captions. The headings of the several sections and
subsections of this Security Agreement are inserted for convenience
only and shall in no way affect the meaning or construction of any
provision of this Security Agreement.
f. Severability. If any part of any provision of this Security
Agreement shall be invalid or unenforceable under applicable law, said
part shall be ineffective to the extent of such invalidity only,
without in any way affecting the remaining parts of said provision or
the remaining provisions.
g. Modification. No amendment or waiver of any provision of
this Security Agreement nor consent to any departure by the Borrowers
therefrom shall in any event be effective unless the same shall be in
writing and signed by the Secured Party, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
h. Survival of Representations. All representations and
warranties contained herein or made in writing by the Borrowers in
connection herewith shall survive the execution and delivery of this
Security Agreement and any and all other documents and writings
relating to or arising out of any of the foregoing or any of the
Obligations.
i. Successors and Assigns. This Security Agreement shall be
binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
j. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex,
telecopy or similar teletransmission or writing) and shall be given to
such party at its address or telex number set forth on the signature
pages of the Credit Agreement. Each such notice, request or other
communication to the Borrowers shall be effective as provided in the
Credit Agreement.
k. Time of Essence. Time is of the essence in interpreting and
performing this Security Agreement.
l. Indemnity. The Borrowers hereby agree, jointly and
severally, to indemnify the Secured Party and its agents, officers and
employees against and agrees to protect, save and hold harmless each
thereof from any and all liabilities, obligations, losses, damages,
penalties, actions, suits, costs, expenses and disbursements of
whatever kind and description imposed on, incurred by or asserted
against any such person in any way arising out of or related to the
enforcement or collection of the Collateral, the Secured Obligations
or this Security Agreement, or the use, possession, maintenance,
operation, condition, sale,
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registration, ownership, lease or other disposition of the Collateral,
except to the extent any such matters have resulted as a direct
consequence of the Secured Party's gross negligence or willful
misconduct. This indemnity shall survive the termination of this
Agreement.
m. Term of Agreement. Each of the Borrowers acknowledges and
agrees that the number and amount of the Secured Obligations may
fluctuate from time to time hereafter. The Borrowers expressly agrees
that this Security Agreement and the security interest in the
Collateral conveyed to the Secured Party hereunder shall remain valid
and in full force and effect, notwithstanding any such fluctuations and
future payments and whether or not any Secured Obligations exist at any
given time. The Borrowers may terminate this Security Agreement and the
Secured Party shall release its security interest in the Collateral
upon (i) the payment in full by or on behalf of the Borrowers of all of
the Secured Obligations and (ii) the termination of the Credit
Agreement and all obligation of the Agents and the Lenders to extend
any further credit to the Borrowers thereunder.
n. Financing Statements. Each of the Borrowers hereby
authorizes the Secured Party to file continuations to financing
statements without the signature of the Borrowers so long as any of the
Secured Obligations remain unpaid. Upon payment in full of the Secured
Obligations and the termination of this Security Agreement, the Secured
Party shall execute and deliver to the Borrowers such termination
statements as the Borrowers shall reasonably request.
o. Not A Party. Secured Party does not, by entering into or
accepting this Security Agreement, become a partner or a member under
any partnership agreement or operating agreement, nor a party to any
such partnership agreement or operating agreement, nor liable for any
obligations of a partner or member thereunder.
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IN WITNESS WHEREOF, each of the Borrowers has caused this
Security Agreement to be duly executed and delivered by its duly authorized
officer as of the date first above written.
DYERSBURG CORPORATION
By:
---------------------------------------------------
William S. Shropshire, Jr
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, A TENNESSEE LIMITED
PARTNERSHIP
By: Dyersburg Fabrics Inc., its sole general partner
By:
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William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
UNITED KNITTING LIMITED PARTNERSHIP,
I, A TENNESSEE LIMITED PARTNERSHIP
By: United Knitting, Inc., its sole general partner
By:
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William S. Shropshire, Jr.
Secretary and Treasurer
(SIGNATURE PAGE TO SECURITY AGREEMENT)
<PAGE> 172
IQUE LIMITED PARTNERSHIP, I, A TENNESSEE LIMITED
PARTNERSHIP
By: IQUE, Inc., its sole general partner
By:
-----------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
ALAMAC KNIT FABRICS, INC.
By:
--------------------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
(SIGNATURE PAGE TO SECURITY AGREEMENT)
<PAGE> 173
SUNTRUST BANK, ATLANTA,
AS COLLATERAL AGENT
By:
-------------------------------------
Raymond B. King
Vice President
By:
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Thomas R. Banks
Assistant Vice President
(SIGNATURE PAGE TO SECURITY AGREEMENT)
<PAGE> 174
EXHIBIT A
INTELLECTUAL PROPERTY COLLATERAL
EQUITY INTERESTS
<PAGE> 175
EXHIBIT B
PRINCIPAL PLACE OF BUSINESS OF EACH BORROWER
COLLATERAL LOCATIONS
<PAGE> 176
EXHIBIT E-2
FORM OF
AFFILIATE SECURITY AGREEMENT
THIS AFFILIATE SECURITY AGREEMENT made and entered into as of
August 27, 1997, by and among each of the entities listed on SCHEDULE I attached
hereto (referred to collectively herein as the "Affiliates"), in favor of
SUNTRUST BANK, ATLANTA, a Georgia banking corporation, as collateral agent for
the lenders from time to time party to the Credit Agreement defined below (in
such capacity, the "Secured Party").
W I T N E S S E T H:
WHEREAS, Dyersburg Corporation, Dyersburg Fabrics Limited
Partnership, I, United Knitting Limited Partnership, I, IQUE Limited
Partnership, I and Alamac Knit Fabrics, Inc. (collectively, the "Borrowers"),
SunTrust Bank, Atlanta, as agent and collateral agent and the lenders named
therein have entered into a Credit Agreement dated as of August 27, 1997 (as the
same may be amended, modified or supplemented from time to time, the "Credit
Agreement"; all terms used herein without definition shall have the meanings
ascribed to such terms in the Credit Agreement), pursuant to which the Lenders,
subject to the terms and conditions set forth in the Credit Agreement, have
agreed to provide certain financial accommodations to the Borrowers;
WHEREAS, each of the Affiliates has entered into that certain
Affiliate Guaranty, dated as of August 27, 1997 (as the same may be amended,
modified or supplemented from time to time, the "Affiliate Guaranty") in favor
of the Secured Party, the Agent and the Lenders pursuant to which the
Affiliates, for good and valuable consideration, have guaranteed the payment in
full of all Obligations of the Borrowers;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Affiliates and the Secured Party, intending to be legally bound, hereby agree as
follows:
1. Grant of Security Interest. Each of the Affiliates hereby conveys
and grants to the Secured Party, for the benefit of the Agents and the Lenders,
a lien on and a security interest in all of the following, whether now existing
or hereafter acquired or created:
a. Equipment. All of such Affiliate's machinery and
equipment, including but not limited to, pintrucks, air entanglers,
forklifts, tufting machines, pellet trucks, yarn testers, weaving
machines, electrical transformers, coning towers, storage tanks,
spinnerettes, air compressors, air dryers, receiver tanks, blower
systems, and all other machinery, apparatus, equipment, fittings,
fixtures, and other tangible personal property (other than Inventory)
of every kind and description used or usable in such Affiliate's
business operations or owned by such Affiliate, or in which such
Affiliate has an interest, and all parts, accessories and
special
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tools relating thereto, wherever located, whether now or hereafter
existing or acquired, and all proceeds thereof and substitutions and
replacements therefor, including, without limitation, all insurance
proceeds payable with respect to any of the foregoing (collectively,
the "Equipment").
b. Accounts. All of such Affiliate's accounts, contract
rights, chattel paper and instruments, whether now existing or
hereafter acquired or arising or in which such Affiliate now has or
hereafter acquires any rights, including, without limitation, all
present and future rights to payments for goods, merchandise or
Inventory sold or leased or for services rendered, whether or not
represented by instruments or chattel paper, and whether or not earned
by performance; proceeds of any letter of credit on which such
Affiliate is beneficiary; and all forms of obligations whatsoever
owing to such Affiliate, together with all instruments and documents
of title representing any of the foregoing, all rights in any goods,
merchandise or Inventory which any of the foregoing may represent, all
rights in any returned or repossessed goods, merchandise or Inventory,
and all rights, security and guaranties with respect to each of the
foregoing, including, without limitation, any rights of stoppage in
transit and reclamation (the "Accounts").
c. Inventory. All inventory, including, without limitation,
all fabric, piece goods, yarn, thread, finished goods, merchandise,
goods in transit and other personal property, wheresoever located,
which is or may at any time be held for sale or lease, furnished under
any contract of service, or held as raw materials, work in process,
supplies or materials used or consumed in such Affiliate's business,
and any property of such Affiliate the sale or other disposition of
which has given rise to an Account and which has been returned to or
repossessed or stopped in transit by such Affiliate (the "Inventory").
d. Intellectual Property. All (i) (1) all patents and patent
applications, (2) all inventions and improvements described and
claimed therein, (3) all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, (4) all income,
royalties, damages and payments now and hereafter due and/or payable
to such Affiliate with respect thereto, including, without limitation,
damages and payments for past or future infringements or
misappropriations thereof, (5) all rights to sue for past, present and
future infringements or misappropriations thereof and (6) all other
rights corresponding thereto throughout the world (collectively, the
"Patents"), (ii) any written agreement granting any right to produce
any invention on which a Patent is in existence, now owned or
hereafter acquired any Affiliate (collectively, the "Patent
Licenses"), (iii) (1) all trademarks (including service marks and
tradenames, whether registered or at common law), registrations and
applications therefor, and the entire product lines and goodwill of
such Affiliate's business connected therewith and symbolized thereby,
(2) all renewals thereof, (3) all income, royalties, damages and
payments now and hereafter due or payable or both with respect
thereto, including, without limitation, damages and payments thereof,
(4) all rights to sue for past, present and future infringements or
misappropriations thereof and (5) all other rights corresponding
thereto throughout the world (collectively, the "Trademarks"), and
(iv) any written agreement granting any right to use any Trademark or
Trademark registration, now
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<PAGE> 178
owned or hereafter acquired by any Affiliate (collectively, the
"Trademark Licenses"; the Patents, Patent Licenses, Trademarks and
Trademark Licenses referred to collectively herein as the
"Intellectual Property Collateral"), including without limitation, the
Intellectual Property Collateral described on Exhibit A attached
hereto;
e. General Intangibles. All (i) Patents, Patent Licenses,
Trademarks, Trademark Licenses, trade names, copyrights, licensing
agreements and rights, customer lists, technology agreements, computer
programs and other software, books and records, (ii) all rights and
interests of such Affiliate under all leases and rental agreements
with respect to properties, (iii) all rights and interest of such
Affiliate with respect to all partnerships, limited liability
companies and other entity in which such Affiliate holds an ownership
interest, as more fully set forth in the next paragraph, (iv) all
rights to indemnification, and (v) all other general intangibles;
whether now or hereafter existing or acquired, and all proceeds
thereof and all substitutions and replacements therefor (collectively,
the "General Intangibles").
f. Partnership and other Equity Interests. All general
partnership interests, limited partnership interests, ownership
interests in limited liability companies not represented by an
Instrument, including without limitation, the partnerships listed on
Exhibit A hereto, all profits; all allocations, including without
limitation, allocations of profit, loss, investment tax credit and
gain; all distributions, including without limitation, distributions
of net profits, and other assets of such partnership or other
entities, all proceeds from disposition of assets; all revenues from
operations; proceeds of dissolution; all capital; all documents; all
securities; all instruments and other property at any time or from
time to time distributable to such Affiliate in respect of, in
exchange for or in substitution of any right, title, interest or
benefit, legal or equitable, as partner or member, which such
Affiliate may have, possess or enjoy now or hereafter in, to and under
any partnership agreement, operating agreement or other governing
documents; all voting rights under such governing documents, together
with full power and authority to enforce, collect, receive and receipt
for the foregoing or any portion thereof, whether now existing or
hereafter acquired and all proceeds thereof (the "Equity Interests");
g. Instruments. All promissory notes, letters of credit,
guarantees, securities, and other items constituting "instruments" (as
defined in the Uniform Commercial Code as in effect in the State of
Georgia) owned or held by such Affiliate, whether or not in negotiable
form, and all collateral and other security therefor, whether now or
hereafter existing or acquired, and all proceeds thereof and all
substitutions and replacements therefor (collectively, the
"Instruments").
h. Documents, Books and Records. All documents, books and
records (including, without limitation, customer lists, credit files,
computer programs, printouts and other computer materials and records)
of any of the Affiliates pertaining to any of the foregoing.
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i. Other Personal Property. All other goods and personal
property of such Affiliate, whether tangible or intangible, wherever
located.
j. Products and Proceeds. All products and proceeds of the
foregoing, and all replacements, additions, accessions, or
substitutions thereof, all after acquired property, and the accounts
or other proceeds arising from the sale or other disposition of any
property including any returns thereof, including, where applicable,
the proceeds of insurance covering any of the foregoing.
k. Collateral Defined. The Equipment, the Accounts, the
Inventory, Intellectual Property Collateral, the General Intangibles,
the Equity Interests, the Instruments and all of the other property
described above are herein sometimes collectively called the
"Collateral."
2. Obligations Secured. The security interest granted hereby secures
the Obligations (as defined in the Credit Agreement) of the Affiliates to the
Secured Party, the Agents and the Lenders however created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due, and all renewals, extensions, modifications and
refinancings of the foregoing indebtedness and obligations, together with all
reasonable costs of collection, including reasonable attorneys' fees actually
incurred if collected by or through an attorney-at-law or in bankruptcy or other
judicial proceedings (collectively, the "Secured Obligations").
3. The Affiliates' Right to Use Collateral. Until the occurrence and
during the continuation of an Event of Default and notice from the Secured Party
to the Affiliates to the contrary, the Affiliates:
a. Use of Inventory. May sell any of the Inventory normally
held by the Affiliates for such purpose, and use and consume any raw
materials or materials normally held by the Affiliates for such
purpose, all in the ordinary course of the Affiliates' business.
b. Disposal of Obsolete Collateral. May sell or otherwise
dispose of property which is worn out or obsolete or no longer used or
useful in the Affiliates' business, in accordance with past business
practices and as otherwise permitted by the terms of the Credit
Agreement.
c. Use of Accounts. Will endeavor to collect, as and when due,
all amounts due with respect to any of the Accounts, including the
taking of such action with respect to such collection as the Secured
Party may reasonably request or, in the absence of such request, as
the Affiliates may deem advisable; and, in the ordinary course of
business may grant to any party obligated on any of the Accounts any
rebate, refund or adjustment to which such party may be lawfully
entitled; and, in connection therewith, may accept the return of goods
the sale of which shall have given rise to such Accounts.
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<PAGE> 180
d. Distributions on Equity Interests. May accept and retain
distributions in respect of the Equity Interests in accordance with
past business practices and the terms of the Credit Agreement.
4. Direct Collection by the Secured Party. The Secured Party may, at
any time during the continuation an Event of Default hereunder, and at the
Affiliates' expense, notify or direct the Affiliates to notify (which
notification the Affiliates agrees to promptly undertake) any parties obligated
on any of the Accounts to make payment directly to the Secured Party of any
amounts due, or to become due, thereunder and the Secured Party may enforce
collection of any of the Accounts by suit or otherwise and surrender, release,
or exchange all or any part thereof, or compromise, extend, or renew same for
any period. All monies so received by the Secured Party may, at the Secured
Party's sole discretion, be either (a) applied by the Secured Party directly
toward payment of all or any part of the Secured Obligations, whether or not
then due, in such order of application as the Secured Party may determine; or
(b) deposited to the credit of the Affiliates with the Secured Party as security
for payment of the Secured Obligations, and the Secured Party may, from time to
time, in its sole discretion (i) apply all or any part of the collected funds in
said deposit account toward payment of all or any part of the Secured
Obligations, whether or not then due, in such order of application as the
Secured Party may determine, or (ii) permit the Affiliates to use all or any
part of the funds on deposit in said account in the normal course of the
Affiliates' business.
5. Warranties. Each of the Affiliates hereby represents and warrants
to the Secured Party that:
a. Financing Statements. No financing statement covering any
of the Collateral is on file in any public office, except any which
may have been filed (i) on behalf of the Secured Party, or (ii) with
respect to any security interests expressly permitted by the terms of
the Credit Agreement.
b. Good Title. The Affiliates are and will be the lawful owner
of all Collateral, free of all liens and claims whatsoever, except (i)
the security interest granted hereby, and (ii) liens and security
interests expressly permitted by the terms of the Credit Agreement,
and the Affiliates have the right to subject the same to the security
interest granted hereby.
c. Accuracy of Information. All information now or hereafter
furnished by the Affiliates to the Secured Party relating to the
Collateral or otherwise to this transaction is and will be true and
correct as of the date furnished in all material respects.
d. Location of Business and Collateral. All books and records
relating to the Collateral are kept at the Affiliates' chief executive
office listed on Exhibit B hereto and all of the Equipment and
Inventory is kept at one of the locations listed on Exhibit B attached
hereto (the "Collateral Locations").
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e. Status of Intellectual Property Collateral. As of the
date hereof, none of the Affiliates has any Patents or Patent
Licenses, or registered Trademarks or Trademark Licenses except as
set forth on Exhibit A hereto.
f. Valid and Subsisting. (i) The Patents, Trademarks and any
trademarks or patents in which any Affiliate has been granted rights
pursuant to Trademark Licenses or Patent Licenses are subsisting and
have not been adjudged invalid or unenforceable, each of the
Trademarks, Patents and any trademark or patent in which any Affiliate
has been granted rights pursuant to Trademark Licenses or Patent
Licenses is valid and enforceable, and no claim has been made that the
use of any of the Trademarks, Patents or any trademark or patent in
which any Affiliate has been granted rights pursuant to the Trademark
Licenses or Patent Licenses, in either case, which is material to the
conduct of such Affiliate's business, does or may violate the rights
of any third person, (ii) each of the Affiliates has used, to the best
of its knowledge, and will continue to use for the duration of this
Security Agreement, proper statutory notice in connection with its use
of the Trademarks, and (iii) each of the Affiliates has used, to the
best of its knowledge, and will continue to use for the duration of
this Security Agreement, consistent standards of quality in its
manufacture of products sold under the Trademarks and any Trademarks
in which such Affiliate has been granted rights pursuant to the
Trademark Licenses.
g. Status of Equity Interests. None of the Equity Interests
constitute an "uncertificated security" under applicable law. None of
the Affiliates has any other Equity Interests other than those listed
on Exhibit A hereto.
6. Agreements of the Affiliates. Each of the Affiliates hereby
agrees that:
a. Perfection of Security Interest. Upon request of the
Secured Party, it will execute such financing statements and other
documents, pay the cost of filing or recording the same in all public
offices deemed necessary by the Secured Party, and do such other acts
and things, all as the Secured Party may from time to time reasonably
request, to establish and maintain a valid and perfected security
interest in all of the Collateral, free of all other liens and claims
except those expressly permitted by the Credit Agreement.
b. Location of Equipment and Inventory. Unless the Secured
Party shall otherwise consent in writing, it shall not during the term
of this Security Agreement, remove any Equipment or Inventory from the
Collateral Locations, except in connection with sales of Inventory in
the ordinary course of business or in connection with the transfer
thereof between Collateral Locations or sales of Equipment permitted
hereunder, unless such Affiliate shall have given the Secured Party
thirty (30) days prior written notice hereof and taken such action
reasonably requested by Secured Party to maintain the perfection of
its security interest hereunder.
c. Books and Records. It will keep at the address set forth
on Exhibit B all of its books and records concerning all of the
Collateral, which books and records will be of
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such character as will enable the Secured Party or its designees to
determine at any time the status thereof, and, unless the Secured
Party shall otherwise consent in writing, the Affiliates will not
duplicate any such books or records at any other address, unless the
Affiliates shall have given the Secured Party thirty (30) days prior
written notice hereof and taken such action reasonably requested by
Secured Party to maintain the perfection of its security interest
hereunder.
d. Furnishing of Information. It will furnish the Secured
Party such information concerning the Affiliates, the Collateral, and
any obligors on any of the Accounts as the Secured Party may from time
to time reasonably request.
e. Inspection. It will permit the Secured Party and its
designees, at such reasonable times during normal business hours and
as often as the Secured Party may reasonably request, to inspect the
Collateral, and to inspect, audit and make copies of and extracts from
books, records and all other papers in possession of the Affiliates
pertaining to the Collateral and any obligors on any of the Accounts,
and, upon reasonable request of the Secured Party, will furnish duly
verified copies or summaries thereof in form and content reasonably
satisfactory to the Secured Party.
f. Notation on Records. It will stamp on its records
relating to the Collateral comprised of chattel papers, instruments or
documents a notation in form and content reasonably satisfactory to
the Secured Party of the security interest of the Secured Party
hereunder.
g. Notation of Books of Partnerships and Limited Liability
Companies. It will cause each of the partnerships and limited
liability companies in which it holds Equity Interests to note on the
appropriate books and ownership records of such partnership or limited
liability company a notation of the security interest of the Secured
Party hereunder and shall, upon request, deliver copies of such books
and records to the Secured Party.
h. Transfers and Encumbrances. Except as permitted under
Section 3 hereof and as expressly permitted by the Credit Agreement,
it will not sell, lease, assign or create or permit to exist any lien
on, or security interest in, any Collateral to or in favor of anyone
other than the Secured Party.
i. Insurance. It will at all times keep all Inventory and
Equipment insured against loss, damage, theft and such other risks and
in such amounts and with such companies and under such policies and in
such form as shall be required under the terms of the Credit Agreement
or otherwise reasonably satisfactory to the Secured Party. The
insurance policy shall name the Secured Party as loss payee and
additional insured, as applicable, and shall provide thirty (30) days'
prior written notice to the Secured Party in the event of
cancellation, change, or material alteration or modification. If the
Secured Party so requests, the originals or true copies of such
policies or certificates thereof shall be deposited with the Secured
Party.
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j. Collection Expenses. It will reimburse the Secured Party
for all reasonable expenses, including reasonable attorneys' fees and
legal expense actually incurred by the Secured Party in seeking to
collect or enforce any rights under the Collateral or actually
incurred by the Secured Party in seeking to collect any of the Secured
Obligations and to enforce any rights hereunder.
k. Change of Location or Name. The Affiliates will give at
least 30 days' prior written notice to the Secured Party of (i) any
change in the principal place of business or chief executive office of
any of the Affiliates; (ii) any change in the name of any of the
Affiliates; or (iii) any merger, consolidation or other corporate
reorganization involving any of the Affiliates.
l. Maintenance of Collateral. The Affiliates will at all
times maintain the Collateral in good condition and will not waste,
misuse or otherwise permit the Collateral to deteriorate in value,
except for ordinary wear and tear given its intended use.
m. Use of Equipment. The Equipment will be used solely for
business use and will remain in the possession or control of one of
the Affiliates at all times at such Affiliate's risk of loss;
provided, however, that the Affiliates may, in the ordinary course of
its business and consistent with past practices, remove and transport
Equipment on a temporary basis for repairs.
7. Delivery of Instruments. The Affiliates will deliver to the Secured
Party, promptly upon the receipt by any Affiliate thereof, all documents
evidencing instruments owned or held by the Affiliates and having a stated
amount or fair value in excess of $10,000, together with such assignments,
endorsements, stock powers executed in blank, or other writings reasonably
deemed necessary by the Secured Party to perfect and/or protect the security
interest in such instruments granted herein.
8. Performance of the Affiliates' Obligations by the Secured Party.
Following the occurrence and during the continuation of an Event of Default, at
its option, the Secured Party may from time to time perform any agreement of the
Affiliates hereunder which the Affiliates shall fail to perform and take any
other action which the Secured Party reasonably deems necessary for the
maintenance or preservation of any of the Collateral or its interest therein,
and the Affiliates agree, jointly and severally, to reimburse the Secured Party,
immediately upon demand by Secured Party, for all reasonable expenses incurred
in connection with the foregoing, together with interest thereon from the date
incurred until the date of reimbursement at the default rate set forth in the
Credit Agreement. All such expenses incurred by the Secured Party, together with
the interest accrued thereon, shall be indebtedness secured hereby.
9. Events of Default. "Event of Default" as used herein shall mean the
occurrence of any of the following events:
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a. Breach of Terms. Failure of the Affiliates to observe or
perform any obligation, covenant, condition or term of this Security
Agreement, which failure shall remain unremedied for thirty (30) days
following written notice thereof from the Secured Party to the
Affiliates or any of them.
b. False Representations. Any representation or warranty of
the Affiliates set forth herein or otherwise made or furnished to the
Secured Party by or on behalf of the Affiliates in connection with
this Security Agreement proves to have been false or misleading in any
material respect when made or furnished.
c. Other Defaults. The occurrence of any "Event of Default"
as defined under the Credit Agreement.
10. Procedures of Default.
a. Remedies. Upon the occurrence and during the continuation
of any Event of Default, the following action may be taken: (a)
declare any or all of the Obligations immediately due and payable
without any other notice of any kind; (b) proceed immediately to
exercise any and all of the Secured Party's rights, powers and
privileges with respect to the Collateral; (c) apply and set off any
indebtedness due or to become due to the Affiliates from the Secured
Party including, without limitation, the Collateral and any other
deposits or other cash collateral of any of the Affiliates held by the
Secured Party in satisfaction of any of the Obligations of the
Affiliates; or (d) exercise from time to time any other right or
remedy available to the Secured Party under the applicable Uniform
Commercial Code or otherwise available under the Credit Documents, at
law or in equity. Upon the occurrence and during the continuation of
an Event of Default, and at the option of the Secured Party, each of
the Affiliates shall (a) upon receipt of written instruction from
Secured Party to do so, cease the sale, lease or furnishing under
contract of service of any of the Inventory and cease the use or
consumption thereof in business; (b) at its expense assemble all the
Collateral at a convenient place satisfactory to the Secured Party;
and (c) pay all reasonable costs and expenses of the Secured Party of
collection of any and all the Secured Obligations and enforcement of
rights hereunder, including reasonable attorneys' fees actually
incurred. All rights and remedies specified herein are cumulative and
are in addition to such other rights and remedies as are otherwise
available to the Secured Party. Each of the Affiliates hereby
authorizes, following the occurrence and during the continuance of an
Event of Default, the Secured Party pursuant to the power of attorney
granted in subsection (b) hereof to sign and execute in the name of
such Affiliate any intended transfer, conveyance or instrument in
writing that may be necessary or desirable to effect any disposition
of the Collateral. No disposition of any Collateral shall extinguish
any Secured Obligations of the Affiliates except to the extent that
the net cash proceeds are applied thereto.
b. Securities Act, Etc. In view of the nature of the Equity
Interests now or hereafter included in the Collateral, or because of
other present or future circumstances, a question may arise under the
Securities Act of 1933, as amended, as now or hereafter in
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effect, or any similar statute hereafter enacted analogous in purpose
or effect (such Act and any such similar statute as from time to time
in effect being hereinafter called the "Federal Securities Laws") with
respect to any disposition of the Equity Interests permitted
hereunder. Each Affiliate understands that compliance with the Federal
Securities Laws may very strictly limit the course of the Secured
Party's conduct if the Secured Party were to attempt to dispose of all
or any part of the Equity Interests and may also limit the extent to
which or the manner in which any subsequent transferee of any Equity
Interests may dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Secured Party in any attempt
to dispose of all or any part of the Equity Interests under applicable
Blue Sky or other state securities laws or similar laws analogous in
purpose or effect. Each Affiliate clearly understands that the Secured
Party shall be entitled to place all or any part of the Equity
Interest for private placement by an investment banking firm, that any
such investment banking firm may purchase all or any part of the
Equity Interests for its own account, and that the Secured Party shall
be entitled to place all or any part of the Collateral privately with
a purchaser or purchasers, notwithstanding the existence of a public
or private market upon which the quotations or sales prices may exceed
substantially the price at which the Secured Party sells.
c. Power of Attorney. Each of the Affiliates does hereby
irrevocably make, constitute and appoint the Secured Party and any of
its officers or designees its true and lawful attorney-in-fact, with
full power and authority to do any and all acts necessary or proper to
carry out the intent of this Security Agreement, including without
limitation, the right, power and authority (i) to enforce all rights
of the Affiliates under and pursuant to any agreements constituting,
giving rise to or with respect to the Collateral, all for the sole
benefit of the Secured Party; (ii) to enter into and perform such
arrangements as may be necessary in order to carry out the terms,
covenants and conditions of this Security Agreement that are required
to be observed or performed by the Affiliates; and (iii) to execute
such other and further mortgages, pledges and assignments of the
Collateral as the Secured Party may reasonably require for the purpose
of perfecting, protecting or maintaining the security interest granted
to the Secured Party by this Security Agreement, and the Affiliates
hereby ratify and confirm all that the Secured Party as such
attorney-in-fact or its substitutes do by virtue of this power of
attorney, which power is coupled with an interest and is irrevocable
until the Affiliates have paid in full the Secured Obligations (and
the commitment of the Lenders to advance funds under the Credit
Agreement is terminated) and this Security Agreement is terminated. If
the Secured Party exercises the foregoing power of attorney, the
Secured Party shall notify the Affiliates thereof promptly after such
exercise; provided, however, no delay or failure in giving such notice
shall render such exercise invalid or ineffective or result in any
liability on the part of the Secured Party to the Affiliates.
d. The Affiliates to Hold in Trust. Subsequent to the
occurrence of any Event of Default described in Section 9 hereof, and
during the continuance thereof, and regardless of whether the Secured
Party makes any demand to or request of the Affiliates, the Affiliates
agree to hold in trust for the Secured Party any and all cash, checks,
drafts, items, chattel paper and other instruments or writings for the
payment of money that may be received by
10
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the Affiliates in full or partial payment or otherwise as proceeds of
any of the Collateral, in precisely the form received. The Affiliates
will not commingle any such proceeds with any other of its funds or
property, but will hold them separate and apart from its own funds or
property until delivery is made to the Secured Party. The Affiliates
will immediately upon request by the Secured Party endorse, transfer
and deliver any and all such payments to the Secured Party for
application against the Secured Obligations.
e. Notices. If any notification of intended disposition of
any of the Collateral is required by law, such notification if mailed
shall be deemed reasonably and properly given if given at least ten
(10) days before such disposition in accordance with Section 11(j)
hereof.
f. Disposition of Proceeds. Any proceeds of any disposition of
any of the Collateral may be applied by the Secured Party to the
payment of the Secured Party's reasonable expenses in connection with
the Collateral, including reasonable attorneys' fees actually
incurred, and any balance of such proceeds may be applied by the
Secured Party toward the payment of such of the Obligations, in such
order of application, as the Secured Party may from time to time
elect, and any remaining balance paid to the Affiliates or other
person or entity entitled thereto.
g. Grant of License to Use Intellectual Property Collateral.
For the purpose of enabling Secured Party to exercise rights and
remedies hereunder following the occurrence and during the
continuation of an Event of Default, each Affiliate hereby grants to
Secured Party an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to such Affiliate),
effective upon the occurrence and during the continuation of an Event
of Default, to use, license or sublicense any Intellectual Property
Collateral or related General Intangible, now owned or hereafter
acquired by such Affiliate, and wherever the same may be located, and
including, without limitation, in such license reasonable access to
all media in which any of the licensed items may be recorded or stored
and to all computer and automatic machinery software and programs used
for the compilation or printout thereof.
11. Miscellaneous.
a. Custody of Collateral. The Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of any
of the Collateral in its possession if it takes such action for that
purpose as any Affiliate requests in writing, but failure of the
Secured Party to comply with any such request shall not of itself be
deemed a failure to exercise reasonable care, and no failure of the
Secured Party to preserve or protect any rights with respect to such
Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by the Affiliates,
shall be deemed a failure to exercise reasonable care in the custody
or preservation of such Collateral.
b. No Waiver; Remedies Cumulative. No failure or delay on the
part of the Secured Party in exercising any right or remedy hereunder
and no course of dealing between the Affiliates and the Secured Party
shall operate as a waiver thereof, nor shall any single or
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<PAGE> 187
partial exercise of any right or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right or
remedy hereunder. The rights and remedies herein expressly provided
are cumulative and not exclusive of any rights or remedies which the
Secured Party would otherwise have. No notice to or demand on the
Affiliates required hereunder shall entitle the Affiliates to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Secured Party to any other or
further action in any circumstances without notice or demand.
c. Counterparts. This Security Agreement may be executed in
any number of counterparts, and by different parties hereto on
separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one
and the same instrument.
d. Governing Law; Submission to Jurisdiction.
(I) THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF GEORGIA.
(II) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
SECURITY AGREEMENT OR ANY DOCUMENT RELATED THERETO MAY BE BROUGHT IN
THE COURTS OF THE STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA
FOR THE NORTHERN DISTRICT OF GEORGIA AND, BY EXECUTION AND DELIVERY OF
THIS SECURITY AGREEMENT, EACH OF THE AFFILIATES HEREBY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE AFFILIATES
HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.
(III) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AFFILIATES
AND SECURED PARTY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND
IRREVOCABLY WAIVE THE RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY
IN RESPECT TO ANY LITIGATION, WHETHER IN CONTRACT OR TORT, AT LAW OR
EQUITY, BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT AND ANY OTHER DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE
EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY HERETO.
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<PAGE> 188
(iv) Nothing herein shall affect the right of the Secured
Party to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Affiliates
in any other jurisdiction.
e. Captions. The headings of the several sections and
subsections of this Security Agreement are inserted for convenience
only and shall in no way affect the meaning or construction of any
provision of this Security Agreement.
f. Severability. If any part of any provision of this
Security Agreement shall be invalid or unenforceable under applicable
law, said part shall be ineffective to the extent of such invalidity
only, without in any way affecting the remaining parts of said
provision or the remaining provisions.
g. Modification. No amendment or waiver of any provision of
this Security Agreement nor consent to any departure by the Affiliates
therefrom shall in any event be effective unless the same shall be in
writing and signed by the Secured Party, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
h. Survival of Representations. All representations and
warranties contained herein or made in writing by the Affiliates in
connection herewith shall survive the execution and delivery of this
Security Agreement and any and all other documents and writings
relating to or arising out of any of the foregoing or any of the
Obligations.
i. Successors and Assigns. This Security Agreement shall be
binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
j. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex,
telecopy or similar teletransmission or writing) and shall be given to
such party at its address or telex number set forth on the signature
pages of the Credit Agreement or the Affiliate Guaranty Agreement, as
applicable. Each such notice, request or other communication to the
Affiliates shall be effective as provided in the Credit Agreement or
the Affiliate Guaranty Agreement, as applicable.
k. Time of Essence. Time is of the essence in interpreting
and performing this Security Agreement.
l. Indemnity. The Affiliates hereby agree, jointly and
severally, to indemnify the Secured Party and its agents, officers and
employees against and agrees to protect, save and hold harmless each
thereof from any and all liabilities, obligations, losses, damages,
penalties, actions, suits, costs, expenses and disbursements of
whatever kind and description imposed on, incurred by or asserted
against any such person in any way arising out of or related to the
enforcement or collection of the Collateral, the Secured Obligations
or this Security
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<PAGE> 189
Agreement, or the use, possession, maintenance, operation, condition,
sale, registration, ownership, lease or other disposition of the
Collateral, except to the extent any such matters have resulted as a
direct consequence of the Secured Party's gross negligence or willful
misconduct. This indemnity shall survive the termination of this
Agreement.
m. Term of Agreement. Each of the Affiliates acknowledges and
agrees that the number and amount of the Secured Obligations may
fluctuate from time to time hereafter. The Affiliates expressly agrees
that this Security Agreement and the security interest in the
Collateral conveyed to the Secured Party hereunder shall remain valid
and in full force and effect, notwithstanding any such fluctuations
and future payments and whether or not any Secured Obligations exist
at any given time. The Affiliates may terminate this Security
Agreement and the Secured Party shall release its security interest in
the Collateral upon (i) the payment in full by or on behalf of the
Affiliates of all of the Secured Obligations and (ii) the termination
of the Credit Agreement and all obligation of the Agents and the
Lenders to extend any further credit to the Affiliates thereunder.
n. Financing Statements. Each of the Affiliates hereby
authorizes the Secured Party to file continuations to financing
statements without the signature of the Affiliates so long as any of
the Secured Obligations remain unpaid. Upon payment in full of the
Secured Obligations and the termination of this Security Agreement,
the Secured Party shall execute and deliver to the Affiliates such
termination statements as the Affiliates shall reasonably request.
o. Not A Party. Secured Party does not, by entering into or
accepting this Security Agreement, become a partner or a member under
any partnership agreement or operating agreement, nor a party to any
such partnership agreement or operating agreement, nor liable for any
obligations of a partner or member thereunder.
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<PAGE> 190
IN WITNESS WHEREOF, each of the Affiliates has caused this
Security Agreement to be duly executed and delivered by its duly authorized
officer as of the date first above written.
AIH INC.
By:
---------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
DYERSBURG FABRICS INC.
By:
---------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
ALAMAC ENTERPRISES INC.
By:
---------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
UNITED KNITTING, INC.
By:
---------------------------------
William S. Shropshire, Jr.
Secretary and Treasurer
DFIC, INC.
By:
---------------------------------
William S. Shropshire, Jr.
Vice President
(SIGNATURE PAGE TO SECURITY AGREEMENT)
<PAGE> 191
IQUE, INC.
By:
---------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
UKIC, INC.
By:
---------------------------------
William S. Shropshire, Jr.
Vice President
IQUEIC, INC.
By:
---------------------------------
William S. Shropshire, Jr.
Vice President
(SIGNATURE PAGE TO SECURITY AGREEMENT)
<PAGE> 192
SUNTRUST BANK, ATLANTA,
AS COLLATERAL AGENT
By:
---------------------------------
Raymond B. King
Vice President
By:
---------------------------------
Thomas R. Banks
Assistant Vice President
(SIGNATURE PAGE TO SECURITY AGREEMENT)
<PAGE> 193
SCHEDULE I
AFFILIATE GUARANTORS
AIH Inc., a Delaware corporation
Dyersburg Fabrics Inc., a Tennessee corporation
Alamac Enterprises Inc., a Delaware corporation
United Knitting Inc., a Tennessee corporation
DFIC, Inc., a Delaware corporation
IQUE, Inc., a Tennessee corporation
UKIC, Inc., a Delaware corporation
IQUEIC, Inc., a Delaware corporation
<PAGE> 194
EXHIBIT A
INTELLECTUAL PROPERTY COLLATERAL
EQUITY INTERESTS
<PAGE> 195
EXHIBIT B
PRINCIPAL PLACE OF BUSINESS OF EACH AFFILIATE
COLLATERAL LOCATIONS
<PAGE> 196
EXHIBIT F-1
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT, dated as of August 27, 1997, made
by _____________________________, a ________________ corporation (the
"Pledgor"), in favor of SUNTRUST BANK, ATLANTA, a Georgia banking corporation,
in its capacity as Collateral Agent for the "Lenders" from time to time a party
to the Credit Agreement described below (the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, the Pledgor is the record and beneficial owner of all
of the issued and outstanding shares of stock of each of the corporations listed
on Schedule I attached hereto (each, a Pledged Entity and collectively, the
"Pledged Entities", as such stock is described on Schedule I attached hereto
(the "Pledged Shares"); and
WHEREAS, Dyersburg Corporation, a Tennessee corporation,
Dyersburg Fabrics Limited Partnership, I, a Tennessee limited partnership,
United Knitting Limited Partnership, I, a Tennessee limited partnership, IQUE
Limited Partnership, I, a Tennessee limited partnership and Alamac Knit Fabrics,
Inc., as borrowers (the "Borrowers"), SunTrust Bank, Atlanta, as agent and
collateral agent and the lenders named therein have entered into a Credit
Agreement dated as of August 27, 1997 (as the same may be amended, modified or
supplemented from time to time, the "Credit Agreement"), pursuant to which the
Lenders, subject to the terms and conditions set forth in the Credit Agreement,
have agreed to provide certain financial accommodations to the Borrowers;
WHEREAS, each of the Subsidiaries and Affiliates of the
Borrowers have executed and delivered a Guaranty Agreement to the Agents and the
Lenders guaranteeing payment in full of all of the Obligations of the Borrowers;
WHEREAS, the Pledgor desires to secure its obligation to pay,
duly and punctually, all Obligations owing to the Secured Party, the Agent and
the Lenders;
WHEREAS, it is a condition precedent to the Lenders'
obligation to advance Loans in favor of the Borrowers that the Pledgor execute
and deliver this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and
to induce the Agents and the Lenders to provide financial accommodations to the
Borrowers under the Credit Agreement, Pledgor hereby agrees in favor of the
Collateral Agent for the benefit of the Agents and the Lenders as follows:
1. Definitions. In addition to the terms defined hereinabove,
unless otherwise defined herein, terms defined in the Credit Agreement are used
herein as therein defined, and the following shall have (unless otherwise
provided elsewhere in this Stock Pledge Agreement) the
<PAGE> 197
following respective meanings (such meanings being equally applicable to both
the singular and plural form of the terms defined):
"Act" shall mean the Securities Act of 1933, as amended (or
any similar statute thereafter in effect).
"Agreement" shall mean this Stock Pledge Agreement, and shall
include all further amendments, modifications and supplements hereto and shall
refer to this Agreement as the same may be in effect at the time such reference
becomes operative.
"Bankruptcy Code" shall mean title 11, United States Code, as
amended from time to time, and any successor statute thereto.
"Event of Default" shall have the meaning assigned to such
term in Section 8(a) hereof.
"Pledged Collateral" shall have the meaning assigned to such
term in Section 2 hereof.
"Secured Obligations" shall have the meaning assigned to such
term in Section 3 hereof.
"UCC" shall mean the Uniform Commercial Code of the State of
Georgia.
2. Pledge. Pledgor hereby pledges to Collateral Agent for the
benefit of the Agents and the Lenders, and grants to the Collateral Agent for
the benefit of the Agents and the Lenders a first priority security interest in,
all of the following (all of the following, herein, collectively, the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares; and
(b) all additional shares of stock of the Pledged Entities
from time to time acquired by Pledgor in any manner (which shares shall be
deemed to be part of the Pledged Shares) and the certificates representing such
shares, and all dividends, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares.
3. Security for Obligations. This Agreement secures, and the
Pledged Collateral is security for, the prompt payment by Pledgor in full when
due, whether at stated maturity, by acceleration or otherwise, and the
performance by Pledgor of (a) all Obligations of Pledgor to the Agents and the
Lenders, and (b) all obligations of Pledgor to the Collateral Agent and Lenders
hereunder (herein, collectively, the "Secured Obligations"). The term "Secured
Obligations" includes,
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without limitation, all interest, charges, expenses, fees, attorneys' fees and
other sums chargeable to Pledgor under this Agreement, the Credit Agreement or
any of the other Credit Documents.
4. Delivery of Pledged Collateral. All certificates
representing or evidencing the Pledged Shares shall be delivered to and held by
or on behalf of the Collateral Agent pursuant hereto and shall be accompanied by
duly executed instruments of transfer or assignment in blank with signatures
guaranteed by a member of a registered national securities exchange or the
National Association of Securities Dealers, Inc. or by a commercial bank or
trust company having an office or correspondent in the United States, all in
form and substance satisfactory to Collateral Agent. Collateral Agent shall have
the right, at any time in its discretion and without notice to Pledgor, to
transfer to or to register in the name of Collateral Agent or any of its
nominees, any or all of the Pledged Shares. In addition, Collateral Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Pledged Shares for certificates or instruments of smaller or
larger denominations.
5. Representations and Warranties. Pledgor represents and
warrants to the Collateral Agent and the Lenders that:
(a) Pledgor is, and at the time of delivery of the Pledged
Shares to Collateral Agent pursuant to Section 4 hereof will be, the sole holder
of record and the sole beneficial owner of the Pledged Collateral free and clear
of any lien thereon or affecting the title thereto except for the lien and
security interest created by this Agreement.
(b) All of the Pledged Shares have been duly authorized,
validly issued and are fully paid and non-assessable.
(c) Pledgor has the right and requisite authority to pledge,
assign, transfer, deliver, deposit and set over the Pledged Collateral to
Collateral Agent for the benefit of the Lenders as provided herein. This
Agreement is the legal, valid and binding obligation of Pledgor, enforceable
against Pledgor in accordance with its terms, except as such enforcement is
subject to the effect of (i) any applicable bankruptcy, insolvency, fraudulent
transfer, reorganization or other law relating to or affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) None of the Pledged Shares has been issued or transferred
in violation of the securities registration, securities disclosure or similar
laws of any jurisdiction to which such issuance or transfer may be subject.
(e) On the date hereof, the authorized capital stock of
Pledged Entities consists of the number of shares of common stock, with the
number of shares issued and outstanding, that are described in Schedule I
hereto. As of the date hereof, (i) no subscription, warrant, option or other
right to purchase or acquire any shares of any class of capital stock of any
Pledged Entity is
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<PAGE> 199
authorized and outstanding, and (ii) there is no commitment by any Pledged
Entity to issue any such shares, warrants, options or other such rights or
securities. The Pledged Shares constitute one hundred percent (100%) of the
issued and outstanding shares of stock of Pledged Entities.
(f) The pledge of the Pledged Collateral is not in
contravention of any law or of any agreement to which Pledgor is party or by
which Pledgor is otherwise bound, and no consent, approval, authorization or
other order of, or other action by, any Person or notice to or filing with, any
Person is required for the pledge by Pledgor of the Pledged Collateral pursuant
to this Agreement.
(g) The pledge, assignment and delivery of the Pledged
Collateral pursuant to this Agreement will create a valid first priority lien on
and a first priority perfected security interest in the Pledged Collateral,
securing the payment of the Secured Obligations.
The representations and warranties set forth in this Section 5
shall survive the execution and delivery of this Agreement.
6. Covenants. Pledgor covenants and agrees that until the
Credit Agreement has been terminated and the Secured Obligations have been paid
in full:
(a) Without the prior written consent of Collateral Agent,
Pledgor will not sell, assign, transfer, pledge or otherwise encumber any of its
rights in or to the Pledged Collateral or any unpaid dividends or other
distributions or payments with respect thereto or grant a lien in any thereof.
(b) Pledgor will not, subsequent to the date of this
Agreement, without the prior written consent of Collateral Agent, cause or
permit any Pledged Entity to issue or grant any warrants, stock options of any
nature or other instruments convertible into shares of any class of capital
stock or issue any additional shares of capital stock or sell or transfer any
treasury stock.
(c) Pledgor will, at its expense, promptly execute,
acknowledge and deliver all such instruments and take all such action as
Collateral Agent from time to time may request in order to ensure to Collateral
Agent the benefits of the lien and security interest in and to the Pledged
Collateral intended to be created by this Agreement.
(d) Pledgor has and will defend the title to the Pledged
Collateral and the lien and security interest of Collateral Agent and the
Lenders thereon against the claim of any Person and will maintain and preserve
such lien and security interest until the date of termination of the Credit
Agreement and payment in full of the Secured Obligations.
(e) Pledgor will pay all taxes, assessments and charges
levied, assessed or imposed upon the Pledged Collateral before the same become
delinquent or become liens upon any of the Pledged Collateral except where the
same may be contested in good faith by appropriate proceedings and as to which
adequate reserves have been provided.
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<PAGE> 200
(f) Except as permitted by Section 7(a)(ii) hereof with
respect to cash dividends, Pledgor will cause any additional Pledged Collateral
issued to or received by it to be forthwith deposited and pledged with
Collateral Agent in each case accompanied by instruments of assignment in
conformity with Section 4 hereof.
7. Pledgor's Rights; Termination of Rights.
(a) As long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall have the right, from time to time,
to vote and give consents with respect to the Pledged Collateral or any part
thereof for all purposes not inconsistent with the provisions of this Agreement,
the Credit Agreement or any other Credit Document; provided, however, that no
vote shall be cast, and no consent shall be given or action taken by Pledgor
which would have the effect of impairing the position of Collateral Agent or
Lenders hereunder or which would authorize or effect (A) the dissolution or
liquidation, in whole or in part, of Any Pledged Entity, (B) the consolidation
or merger of any Pledged Entity with any other Person (excepting that permitted
under Section 8.03 of the Credit Agreement), (C) the sale, disposition or
encumbrance of any material portion of the assets of any Pledged Entity or a
business or division of any Pledged Entity, (D) any change in the authorized
number of shares, the stated capital or the authorized shares of any Pledged
Entity or the issuance of any additional shares of capital stock of any Pledged
Entity, or (E) the alteration of the voting rights with respect to the capital
stock of any Pledged Entity.
(ii) Pledgor shall be entitled, from time to time,
to collect and receive, for Pledgor's own use, all dividends paid in respect of
the Pledged Shares to the extent not in violation of the Credit Agreement or
Guaranty Agreement other than any and all (A) dividends paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Pledged Collateral, (B) dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution, and (C) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Pledged Collateral; provided, however,
that until actually paid all rights to such dividends shall remain subject to
the lien created by this Agreement.
(b) All dividends (other than such cash dividends as are
permitted to be paid to Pledgor in accordance with clause (a)(ii) above) and all
other distributions in respect of any of the Pledged Shares, whenever paid or
made, shall be delivered to Collateral Agent to hold as Pledged Collateral and
shall, if received by Pledgor, be received in trust for the benefit of
Collateral Agent, be segregated from all other property or funds of Pledgor, and
be forthwith delivered to Collateral Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement or assignment).
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<PAGE> 201
(c) Upon the occurrence of an Event of Default and during the
continuance thereof, all of Pledgor's rights to exercise voting and other
consensual rights pursuant to Section 7(a)(i) hereof and all of Pledgor's rights
to receive any cash dividends pursuant to Section 7(a)(ii) hereof shall cease
and all such rights shall thereupon become vested in Collateral Agent who shall
have the sole and exclusive right to exercise the voting and other consensual
rights which Pledgor would otherwise be authorized to exercise pursuant to
Section 7(a)(i) hereof and to receive and retain the dividends which Pledgor
would otherwise be authorized to receive and retain pursuant to Section 7(a)(ii)
hereof; provided, however, that notwithstanding anything contained in this
Agreement to the contrary, no voting or other consensual rights shall be vested
in Collateral Agent unless and until Collateral Agent gives written notice to
Pledgor that Collateral Agent intends to have such voting or other consensual
rights vest in itself. Upon the occurrence of an Event of Default and during the
continuation thereof, Pledgor shall pay over to Collateral Agent any cash
dividends received by Pledgor with respect to the Pledged Collateral and any and
all money and other property paid over to or received by Collateral Agent shall
be retained by Collateral Agent as Pledged Collateral hereunder and shall be
applied in accordance with the provisions hereof.
8. Defaults and Remedies. (a) Each of the following shall
constitute an "Event of Default" hereunder:
(i) if there shall occur any Event of Default under
the Credit Agreement;
(ii) if any of the Pledged Collateral shall be
attached or levied upon or seized in any legal proceeding, or
held by virtue of any lien or distress and is not released
within 90 days;
(iii) if Pledgor shall materially breach any
covenant, representation or warranty set forth herein; or
(iv) if Pledgor makes any misrepresentation of any
material fact to Collateral Agent or any Lender in connection
with this Agreement or any transaction relating thereto.
(b) Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, Collateral Agent may exercise all rights
of a secured party under the UCC. In addition, Collateral Agent is hereby
authorized and empowered to (i) transfer and register in its name or in the name
of its nominee the whole or any part of the Pledged Collateral, (ii) exercise
the voting rights with respect thereto, (iii) collect and receive all cash
dividends and other distributions made thereon, (iv) sell in one or more sales
after ten (10) Business Days' notice of the time and place of any public sale or
of the time after which a private sale is to take place (which notice Pledgor
agrees is commercially reasonable), but without any previous notice or
advertisement, the whole or any part of the Pledged Collateral and (v) otherwise
act with respect to the Pledged Collateral as though Collateral Agent were the
outright owner thereof. Pledgor hereby irrevocably constitutes and appoints
Collateral Agent as the proxy and attorney-in-fact of Pledgor, with full power
of substitution
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<PAGE> 202
to exercise any of the rights provided in the preceding sentence; provided,
however, that Collateral Agent shall not have any duty to exercise any such
right or to preserve the same and shall not be liable for any failure to do so
or for any delay in doing so. Any sale shall be made at a public or private sale
at Collateral Agent's place of business, or at any public building in the City
of Atlanta, Georgia or elsewhere to be named in the notice of sale, either for
cash or upon credit or for future delivery at such price as Collateral Agent may
deem to be the fair market value of such Pledged Collateral, and Collateral
Agent or any Lender may be the purchaser of the whole or any part of the Pledged
Collateral so sold and hold the same thereafter in its own right free from any
claim of Pledgor or any right of redemption, which Pledgor hereby waives to the
maximum extent permitted by applicable law. Each sale shall be made to the
highest bidder, but Collateral Agent reserves the right to reject any and all
bids at such sale which, in its discretion, it shall deem inadequate. Demands of
performance, except as otherwise herein specifically provided for, notices of
sale, advertisements and the presence of property at sale are hereby waived and
any sale hereunder may be conducted by an auctioneer or any officer or agent of
Collateral Agent.
(c) If, at the original time or times appointed for the sale
of the whole or any part of the Pledged Collateral, the highest bid, if there be
but one sale, shall be inadequate to discharge in full all the Secured
Obligations, or if the Pledged Collateral be offered for sale in lots, if at any
of such sales, the highest bid for the lot offered for sale would indicate to
Collateral Agent, in its discretion, the unlikelihood of the proceeds of the
sales of the whole of the Pledged Collateral being sufficient to discharge all
the Secured Obligations, Collateral Agent, on one or more occasions and in its
discretion, may postpone any of said sales by public announcement at the time of
sale or the time of previous postponement of sale, and no other notice of such
postponement or postponements of sale need be given, any other notice being
hereby waived; provided, however, that any sale or sales made after such
postponement shall be after ten (10) Business Days' notice to Pledgor.
(d) If, at any time Collateral Agent shall determine to
exercise its rights to sell the whole or any part of the Pledged Collateral
hereunder, such Pledged Collateral or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Act, Collateral Agent
may, in its discretion (subject only to applicable requirements of law), sell
such Pledged Collateral or part thereof by private sale in such manner and under
such circumstances as Collateral Agent may deem necessary or advisable, and
shall not be required to effect such registration or to cause the same to be
effected. Without limiting the generality of the foregoing, in any such event
Lender in its discretion (i) may, in accordance with applicable securities laws,
proceed to make such private sale notwithstanding that a registration statement
for the purpose of registering such Pledged Collateral or part thereof could be
or shall have been filed under said Act, (ii) may approach and negotiate with a
single possible purchaser to effect such sale, (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing of its
own account, for investment and not with a view to the distribution or sale of
such Pledged Collateral or part thereof, and (iv) may place all or any part of
the Pledged Collateral with an investment banking firm for private placement
which firm shall be entitled to purchase all or any part of the Pledged
Collateral for its own account. In addition to a private sale as provided above
in this Section 8, if any of the Pledged Collateral shall not be freely
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distributable to the public without registration under the Act at the time of
any proposed sale pursuant to this Section 8, then Collateral Agent shall not be
required to effect such registration or cause the same to be effected but, in
its discretion (subject only to applicable requirements of law), may require
that any sale hereunder (including a sale at auction) be conducted subject to
restrictions (i) as to the financial sophistication and ability of any Person
permitted to bid or purchase at any such sale, (ii) as to the content of legends
to be placed upon any certificates representing the Pledged Collateral sold in
such sale, including restrictions on future transfer thereof, (iii) as to the
representations required to be made by each Person bidding or purchasing at such
sale relating to that Person's access to financial information about Pledgor's
and such Person's intentions as to the holding of the Pledged Collateral so sold
for investment, for its own account, and not with a view of the distribution
thereof, and (iv) as to such other matters as Collateral Agent may, in its
discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the UCC and other laws affecting the enforcement of creditors' rights and the
Act and all applicable state securities laws.
(e) Pledgor acknowledges that notwithstanding the legal
availability of a private sale or a sale subject to the restrictions described
above in paragraph (d), Collateral Agent may, in its discretion, elect to cause
registration of any or all the Pledged Collateral under the Act (or any
applicable state securities law). Pledgor, however, recognizes that Collateral
Agent may be unable to effect a public sale of any or all the Pledged Collateral
and may be compelled to resort to one or more private sales thereof. Pledgor
also acknowledges that any such private sale may result in prices and other
terms less favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. Collateral Agent
shall be under no obligation to delay a sale of any of the Pledged Collateral
for the period of time necessary to permit Pledgor to cause such securities to
be registered for public sale under the Act, or under applicable state
securities laws, even if Pledgor would agree to do so.
(f) Pledgor agrees that following the occurrence and during
the continuance of an Event of Default it will not at any time plead, claim or
take the benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Agreement, or the absolute sale of the whole or any part of
the Pledged Collateral or the possession thereof by any purchaser at any sale
hereunder, and Pledgor waives the benefit of all such laws to the extent it
lawfully may do so. Pledgor agrees that it will not interfere with any right,
power and remedy of Collateral Agent provided for in this Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by Collateral Agent of any one or more of
such rights, powers, or remedies. No failure or delay on the part of Collateral
Agent to exercise any such right, power or remedy and no notice or demand which
may be given to or made upon Pledgor by Collateral Agent with respect to any
such remedies shall operate as a waiver thereof, or limit or impair Collateral
Agent's right to take any action or to exercise any power or remedy hereunder,
without notice or demand, or prejudice its rights as against Pledgor in any
respect. Pledgor waives all claims, damages and demands against
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Collateral Agent arising out of the repossession, retention or sale of the
Pledged Collateral except such as result from Collateral Agent's gross
negligence or willful misconduct.
(g) Pledgor further agrees that a breach of any of the
covenants contained in this Section 8 will cause irreparable injury to
Collateral Agent and Lenders, that Collateral Agent and Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, agrees that each
and every covenant contained in this Section 8 shall be specifically enforceable
against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that the Secured Obligations are not then due and payable in accordance
with the agreements and instruments governing and evidencing such obligations.
Pledgor further acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by Collateral Agent and Lenders by reason of a
breach of any of such covenants and, consequently, agrees that, if Collateral
Agent or any Lender shall sue for damages for breach, it shall pay, as
liquidated damages and not as a penalty, an amount equal to the lesser of (i)
the value of the Pledged Collateral pledged by Pledgor on the date that
Collateral Agent or any Lender shall demand compliance with this Section 8, and
(ii) the amount required to pay in full the Secured Obligations.
9. Application of Proceeds. Any cash held by Collateral Agent
as Pledged Collateral and all cash proceeds received by Collateral Agent in
respect of any sale of, liquidation of, or other realization upon all or any
part of the Pledged Collateral shall be applied or distributed by Collateral
Agent first, to the payment of the costs and expenses of such sale, including,
without limitation, fees and expenses of counsel and all expenses, liabilities
and advances made or incurred by Collateral Agent in connection therewith and
then to the payment of all other Secured Obligations (in whatever order
Collateral Agent elects). After the application of all such proceeds as
aforesaid, Collateral Agent will return any excess to Pledgor and Pledgor shall
remain liable for any deficiency.
10. Power of Attorney. Pledgor appoints Collateral Agent as
Pledgor's attorney, with power to endorse Pledgor's name on any checks, notes,
acceptances, money orders, drafts or other form of payment or security
representing a portion of the Pledged Collateral that may come into Collateral
Agent's possession and to do all things necessary to carry out this Agreement.
Pledgor ratifies and approves all such acts of such attorney. Collateral Agent,
as attorney hereunder, will not be liable for any acts or omissions, nor for any
errors of judgment or mistakes of fact or law. This power, coupled with an
interest, is irrevocable until the payment in full of the Secured Obligations
and termination of the Credit Agreement.
11. Waiver. No delay on Collateral Agent's part in exercising
any power of sale, lien, option or other right hereunder, and no notice or
demand which may be given to or made upon Pledgor by Collateral Agent with
respect to any power of sale, lien, option or other right hereunder, shall
constitute a waiver thereof, or limit or impair Collateral Agent's right to take
any action or to exercise any power of sale, lien, option, or any other right
hereunder, without notice or demand, or prejudice Collateral Agent's rights as
against Pledgor in any respect.
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12. Assignment. Collateral Agent may assign, endorse or
transfer any instrument evidencing all or any part of the Secured Obligations to
any Person, and the holder of such instrument shall be entitled to the benefits
of this Agreement.
13. Termination. Promptly following the payment in full of the
Secured Obligations and the termination of the Credit Agreement, Collateral
Agent shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at the
time subject to this Agreement and all instruments of assignment executed in
connection therewith, free and clear of the liens hereof and, except as
otherwise provided herein, all of Pledgor's obligations hereunder shall at such
time terminate.
14. Lien Absolute. All right of Collateral Agent and Lenders
hereunder, and all obligations of Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement, any other Credit Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Credit Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from the terms of, any guaranty, for all of any of the Secured Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor.
15. Release. Pledgor consents and agrees that Collateral Agent
or any Lender may at any time, or from time to time, in its discretion (a)
renew, extend or change the time of payment, and/or the manner, place or terms
of payment of all or any part of the Secured Obligations and (b) exchange,
release and/or surrender all or any of the Pledged Collateral, or any part
thereof, by whomsoever deposited, which is now or may hereafter be held by
Collateral Agent or any Lender in connection with all or any of the Secured
Obligations; all in such manner and upon such terms as Collateral Agent or any
Lender may deem proper, and without notice to or further assent from Pledgor, it
being hereby agreed that Pledgor shall be and remain bound upon this Agreement,
irrespective of the existence, value or condition of any of the Pledged
Collateral, and notwithstanding any such change, exchange, settlement,
compromise, surrender, release, renewal or extension, and notwithstanding also
that the Secured Obligations may, at any time exceed the aggregate principal
amount thereof set forth in the Credit Agreement, or any other agreement
governing any Secured Obligations. Pledgor hereby waives notice of acceptance of
this Agreement, and also presentment, demand, protest and notice of dishonor of
any and all of the Secured Obligations, and promptness in commencing suit
against any party hereto or liable hereon, and in giving any notice to or of
making
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any claim or demand hereunder upon Pledgor. No act or omission of any kind on
Collateral Agent's part shall in any event affect or impair this Agreement.
16. Collateral Agent's Right to Take Action. In the event that
Pledgor fails or refuses to perform any of its obligations set forth herein,
including, without limitation its obligation pursuant to Section 6(e) hereof to
pay taxes, assessments and other charges levied, assessed or imposed on the
Pledged Collateral, or otherwise fails or refuses to pay any amount necessary
for the preservation and protection of the Pledged Collateral, Collateral Agent
shall have the right, without obligation, to do all things it deems necessary or
advisable to discharge the same (including, without limitation, to pay any such
taxes, assessments, charges or other sums, together with interest and penalties
thereon) and any sums paid by Collateral Agent, or the cost thereof, including,
without limitation, attorneys' fees, shall be reimbursed by Pledgor to
Collateral Agent on demand and, until so reimbursed, shall bear interest at the
default rate of interest chargeable pursuant to the Credit Agreement.
17. Indemnification. Pledgor agrees to indemnify and hold
Collateral Agent and each Lender harmless from and against (a) any taxes,
liabilities, obligations, losses, penalties, suits, costs, actions, judgments,
claims and damages, including attorney's fees and disbursements, and other
expenses incurred or arising by reason of the taking or the failure to take
action by Collateral Agent or any Lender, in good faith, in respect of any
transaction effected under this Agreement or in connection with the lien
provided for herein, including, without limitation, any taxes payable in
connection with the delivery or registration of any of the Pledged Collateral as
provided herein, and (b) any liabilities, obligations, losses, penalties, suits,
costs, actions, judgments, claims and damages, including attorney's fees and
disbursements and other expenses which may be imposed on, incurred by, or
asserted against Collateral Agent or any Lender in any litigation, proceeding or
investigation, including, without limitation, any of the foregoing brought under
any federal or state securities laws which is threatened, instituted or
conducted by any governmental agency or instrumentality or any other Person with
respect to any aspect of or any transaction contemplated by or referred to in,
or any other matter related to this Agreement, whether or not Collateral Agent
or any Lender is a party thereto. The obligations of Pledgor under this Section
17 shall survive the termination of this Agreement.
18. Payments. Collateral Agent shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments to any
portion of the Secured Obligations. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against Pledgor for liquidation or reorganization, should Pledgor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of Pledgor's
assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Secured Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by Collateral Agent or any Lender, whether as
a "voidable preference", "fraudulent conveyance" or otherwise all as though such
payment or performance had not been made. In the
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event that any payment or any part thereof, is rescinded, reduced, restored, or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
19. Miscellaneous.
(a) No Liability. Neither Collateral Agent, any Lender nor any
of their respective officers, directors, employees, agents or counsel shall be
liable for any action lawfully taken or omitted to be taken by it or them
hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct.
(b) No Oral Changes. No term, covenant or condition of this
Agreement can be changed or terminated orally.
(c) Successors and Assigns. All of the rights, privileges,
remedies and options given to Collateral Agent and Lenders hereunder shall inure
to the benefit of its successors and assigns; and all the terms, conditions,
promises, covenants, provisions and warranties of this Agreement shall inure to
the benefit of and shall bind the representatives, successors and assigns of
Collateral Agent, Lenders and Pledgor. Pledgor may not assign this Agreement to
any Person.
(d) Interpretation. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(e) Expense Reimbursement. Pledgor shall reimburse Collateral
Agent for all of Collateral Agent and each Lender's expenses incurred in
connection with the execution, delivery, administration and enforcement of this
Agreement, including, without limitation, the fees and disbursements of
Collateral Agent's legal counsel, accountants and any other third Persons, and
all costs and expenses incurred by the Collateral Agent or the Lenders
(including attorney's fees and disbursements) to: (i) commence, defend or
intervene in any court proceeding; (ii) cause the Pledged Shares to be
registered under the Act; (iii) file a petition, complaint, answer, motion or
other pleadings, or to take any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise) relating to this Agreement; and (iv)
enforce any of Collateral Agent's rights to collect any of the Secured
Obligations. Pledgor also agrees to pay, and to save harmless Collateral Agent
and each Lender from any delay in paying, any intangibles, documentary stamp and
other taxes, if any, which may be payable in connection with the execution and
delivery of this Agreement.
(f) Injunctive Relief. Pledgor recognizes that, in the event
that Pledgor 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 Collateral Agent and Lenders; therefore, Pledgor agrees
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that Collateral Agent, if Collateral Agent so requests, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.
(g) Notices. Except as otherwise provided herein, any notice
required hereunder shall be given in the manner and to the party to be notified
and its counsel, at the addresses and in the manner provided in the Credit
Agreement.
(h) Section Headings. Any section headings used herein are
solely for the convenience of the parties and shall be without legal effect.
(i) Time of Essence. Time is of the essence in all matters
pertaining to the payment or performance by Pledgor of its obligations
hereunder.
20. Survival of Rights, Duties, Etc. No termination or
cancellation (regardless of cause or procedure) of the Credit Agreement shall in
any way affect or impair the powers, obligations, duties, rights and liabilities
of the parties hereto in any way with respect to (i) any transaction or event
occurring prior to such termination or cancellation, (ii) the Pledged
Collateral, or (iii) any of Pledgor's undertakings, agreements, covenants,
warranties and representations contained in this Agreement and all such
undertakings, agreements, covenants, warranties and representations shall
survive such termination or cancellation until all of the Secured Obligations of
every nature whatsoever shall have been fully paid and satisfied.
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IN WITNESS WHEREOF, Pledgor has caused this Agreement to be
executed by an officer thereunto duly authorized as of the date first above
written.
[NAME OF PLEDGOR]
By:
----------------------
Name:
----------------
Title:
----------------
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SCHEDULE I
<TABLE>
<CAPTION>
Pledged Class(es) of Stock Certificate
Entity Stock Number(s) Number of Shares
- ------ ------------ ----------------- ----------------
<S> <C> <C> <C>
- ------------------ --------------- ---------------- ----------------
- ------------------ --------------- ---------------- -----------------
- ------------------ --------------- ---------------- -----------------
</TABLE>
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EXHIBIT F-2
PARENT
STOCK PLEDGE AGREEMENT
THIS PARENT STOCK PLEDGE AGREEMENT, dated as of August 27,
1997, made by DYERSBURG CORPORATION, a Tennessee corporation (the "Pledgor"),
in favor of SUNTRUST BANK, ATLANTA, a Georgia banking corporation, in its
capacity as Collateral Agent for the "Lenders" from time to time a party to the
Credit Agreement described below (the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, the Pledgor is the record and beneficial owner of all
of the issued and outstanding shares of stock of each of the corporations listed
on Schedule I attached hereto (each, a Pledged Entity and collectively, the
"Pledged Entities", as such stock is described on Schedule I attached hereto
(the "Pledged Shares"); and
WHEREAS, Pledgor, Dyersburg Fabrics Limited Partnership, I, a
Tennessee limited partnership, United Knitting Limited Partnership, I, a
Tennessee limited partnership, IQUE Limited Partnership, I, a Tennessee limited
partnership and Alamac Knit Fabrics, Inc., as borrowers (the "Borrowers"),
SunTrust Bank, Atlanta, as agent and collateral agent and the lenders named
therein have entered into a Credit Agreement dated as of August 27, 1997 (as the
same may be amended, modified or supplemented from time to time, the "Credit
Agreement"), pursuant to which the Lenders, subject to the terms and conditions
set forth in the Credit Agreement, have agreed to provide certain financial
accommodations to the Borrowers;
WHEREAS, Pledgor has also executed and delivered to the Agents
and the Lenders that certain Parent Guaranty Agreement, dated as of August 27,
1997, wherein the Pledgor has unconditionally guaranteed payment in full of all
Obligations of the Credit Parties (as such terms are defined in the Credit
Agreement);
WHEREAS, the Pledgor desires to secure its obligation to pay,
duly and punctually, all Obligations owing to the Secured Party, the Agent and
the Lenders;
WHEREAS, it is a condition precedent to the Lenders'
obligation to advance Loans in favor of the Borrowers that the Pledgor execute
and deliver this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and
to induce the Agents and the Lenders to provide financial accommodations to the
Borrowers under the Credit Agreement, Pledgor hereby agrees in favor of the
Collateral Agent for the benefit of the Agents and the Lenders as follows:
<PAGE> 212
1. Definitions. In addition to the terms defined hereinabove,
unless otherwise defined herein, terms defined in the Credit Agreement are used
herein as therein defined, and the following shall have (unless otherwise
provided elsewhere in this Stock Pledge Agreement) the following respective
meanings (such meanings being equally applicable to both the singular and plural
form of the terms defined):
"Act" shall mean the Securities Act of 1933, as amended (or
any similar statute thereafter in effect).
"Agreement" shall mean this Stock Pledge Agreement, and shall
include all further amendments, modifications and supplements hereto and shall
refer to this Agreement as the same may be in effect at the time such reference
becomes operative.
"Bankruptcy Code" shall mean title 11, United States Code, as
amended from time to time, and any successor statute thereto.
"Event of Default" shall have the meaning assigned to such
term in Section 8(a) hereof.
"Pledged Collateral" shall have the meaning assigned to such
term in Section 2 hereof.
"Secured Obligations" shall have the meaning assigned to such
term in Section 3 hereof.
"UCC" shall mean the Uniform Commercial Code of the State of
Georgia.
2. Pledge. Pledgor hereby pledges to Collateral Agent for the
benefit of the Agents and the Lenders, and grants to the Collateral Agent for
the benefit of the Agents and the Lenders a first priority security interest in,
all of the following (all of the following, herein, collectively, the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares; and
(b) all additional shares of stock of the Pledged Entities
from time to time acquired by Pledgor in any manner (which shares shall be
deemed to be part of the Pledged Shares) and the certificates representing such
shares, and all dividends, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares.
3. Security for Obligations. This Agreement secures, and the
Pledged Collateral is security for, the prompt payment by Pledgor in full when
due, whether at stated maturity, by
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acceleration or otherwise, and the performance by Pledgor of (a) all Obligations
of Pledgor to the Agents and the Lenders, and (b) all obligations of Pledgor to
the Collateral Agent and Lenders hereunder (herein, collectively, the "Secured
Obligations"). The term "Secured Obligations" includes, without limitation, all
interest, charges, expenses, fees, attorneys' fees and other sums chargeable to
Pledgor under this Agreement, the Credit Agreement or any of the other Credit
Documents.
4. Delivery of Pledged Collateral. All certificates
representing or evidencing the Pledged Shares shall be delivered to and held by
or on behalf of the Collateral Agent pursuant hereto and shall be accompanied by
duly executed instruments of transfer or assignment in blank with signatures
guaranteed by a member of a registered national securities exchange or the
National Association of Securities Dealers, Inc. or by a commercial bank or
trust company having an office or correspondent in the United States, all in
form and substance satisfactory to Collateral Agent. Collateral Agent shall have
the right, at any time in its discretion and without notice to Pledgor, to
transfer to or to register in the name of Collateral Agent or any of its
nominees, any or all of the Pledged Shares. In addition, Collateral Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Pledged Shares for certificates or instruments of smaller or
larger denominations.
5. Representations and Warranties. Pledgor represents and
warrants to the Collateral Agent and the Lenders that:
(a) Pledgor is, and at the time of delivery of the Pledged
Shares to Collateral Agent pursuant to Section 4 hereof will be, the sole holder
of record and the sole beneficial owner of the Pledged Collateral free and clear
of any lien thereon or affecting the title thereto except for the lien and
security interest created by this Agreement.
(b) All of the Pledged Shares have been duly authorized,
validly issued and are fully paid and non-assessable.
(c) Pledgor has the right and requisite authority to pledge,
assign, transfer, deliver, deposit and set over the Pledged Collateral to
Collateral Agent for the benefit of the Lenders as provided herein. This
Agreement is the legal, valid and binding obligation of Pledgor, enforceable
against Pledgor in accordance with its terms, except as such enforcement is
subject to the effect of (i) any applicable bankruptcy, insolvency, fraudulent
transfer, reorganization or other law relating to or affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) None of the Pledged Shares has been issued or transferred
in violation of the securities registration, securities disclosure or similar
laws of any jurisdiction to which such issuance or transfer may be subject.
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(e) On the date hereof, the authorized capital stock of
Pledged Entities consists of the number of shares of common stock, with the
number of shares issued and outstanding, that are described in Schedule I
hereto. As of the date hereof, (i) no subscription, warrant, option or other
right to purchase or acquire any shares of any class of capital stock of any
Pledged Entity is authorized and outstanding, and (ii) there is no commitment by
any Pledged Entity to issue any such shares, warrants, options or other such
rights or securities. The Pledged Shares constitute one hundred percent (100%)
of the issued and outstanding shares of stock of Pledged Entities.
(f) The pledge of the Pledged Collateral is not in
contravention of any law or of any agreement to which Pledgor is party or by
which Pledgor is otherwise bound, and no consent, approval, authorization or
other order of, or other action by, any Person or notice to or filing with, any
Person is required for the pledge by Pledgor of the Pledged Collateral pursuant
to this Agreement.
(g) The pledge, assignment and delivery of the Pledged
Collateral pursuant to this Agreement will create a valid first priority lien on
and a first priority perfected security interest in the Pledged Collateral,
securing the payment of the Secured Obligations.
The representations and warranties set forth in this Section 5
shall survive the execution and delivery of this Agreement.
6. Covenants. Pledgor covenants and agrees that until the
Credit Agreement has been terminated and the Secured Obligations have been paid
in full:
(a) Without the prior written consent of Collateral Agent,
Pledgor will not sell, assign, transfer, pledge or otherwise encumber any of its
rights in or to the Pledged Collateral or any unpaid dividends or other
distributions or payments with respect thereto or grant a lien in any thereof.
(b) Pledgor will not, subsequent to the date of this
Agreement, without the prior written consent of Collateral Agent, cause or
permit any Pledged Entity to issue or grant any warrants, stock options of any
nature or other instruments convertible into shares of any class of capital
stock or issue any additional shares of capital stock or sell or transfer any
treasury stock.
(c) Pledgor will, at its expense, promptly execute,
acknowledge and deliver all such instruments and take all such action as
Collateral Agent from time to time may request in order to ensure to Collateral
Agent the benefits of the lien and security interest in and to the Pledged
Collateral intended to be created by this Agreement.
(d) Pledgor has and will defend the title to the Pledged
Collateral and the lien and security interest of Collateral Agent and the
Lenders thereon against the claim of any Person and will maintain and preserve
such lien and security interest until the date of termination of the Credit
Agreement and payment in full of the Secured Obligations.
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(e) Pledgor will pay all taxes, assessments and charges
levied, assessed or imposed upon the Pledged Collateral before the same become
delinquent or become liens upon any of the Pledged Collateral except where the
same may be contested in good faith by appropriate proceedings and as to which
adequate reserves have been provided.
(f) Except as permitted by Section 7(a)(ii) hereof with
respect to cash dividends, Pledgor will cause any additional Pledged Collateral
issued to or received by it to be forthwith deposited and pledged with
Collateral Agent in each case accompanied by instruments of assignment in
conformity with Section 4 hereof.
7. Pledgor's Rights; Termination of Rights.
(a) As long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall have the right, from time to time,
to vote and give consents with respect to the Pledged Collateral or any part
thereof for all purposes not inconsistent with the provisions of this Agreement,
the Credit Agreement or any other Credit Document; provided, however, that no
vote shall be cast, and no consent shall be given or action taken by Pledgor
which would have the effect of impairing the position of Collateral Agent or
Lenders hereunder or which would authorize or effect (A) the dissolution or
liquidation, in whole or in part, of Any Pledged Entity, (B) the consolidation
or merger of any Pledged Entity with any other Person (excepting that permitted
under Section 8.03 of the Credit Agreement), (C) the sale, disposition or
encumbrance of any material portion of the assets of any Pledged Entity or a
business or division of any Pledged Entity, (D) any change in the authorized
number of shares, the stated capital or the authorized shares of any Pledged
Entity or the issuance of any additional shares of capital stock of any Pledged
Entity, or (E) the alteration of the voting rights with respect to the capital
stock of any Pledged Entity.
(ii) Pledgor shall be entitled, from time to time, to
collect and receive, for Pledgor's own use, all dividends paid in respect of the
Pledged Shares to the extent not in violation of the Credit Agreement or
Guaranty Agreement other than any and all (A) dividends paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Pledged Collateral, (B) dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution, and (C) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Pledged Collateral; provided, however,
that until actually paid all rights to such dividends shall remain subject to
the lien created by this Agreement.
(b) All dividends (other than such cash dividends as are
permitted to be paid to Pledgor in accordance with clause (a)(ii) above) and all
other distributions in respect of any of the Pledged Shares, whenever paid or
made, shall be delivered to Collateral Agent to hold as Pledged Collateral and
shall, if received by Pledgor, be received in trust for the benefit of
Collateral Agent,
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be segregated from all other property or funds of Pledgor, and be forthwith
delivered to Collateral Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement or assignment).
(c) Upon the occurrence of an Event of Default and during the
continuance thereof, all of Pledgor's rights to exercise voting and other
consensual rights pursuant to Section 7(a)(i) hereof and all of Pledgor's rights
to receive any cash dividends pursuant to Section 7(a)(ii) hereof shall cease
and all such rights shall thereupon become vested in Collateral Agent who shall
have the sole and exclusive right to exercise the voting and other consensual
rights which Pledgor would otherwise be authorized to exercise pursuant to
Section 7(a)(i) hereof and to receive and retain the dividends which Pledgor
would otherwise be authorized to receive and retain pursuant to Section 7(a)(ii)
hereof; provided, however, that notwithstanding anything contained in this
Agreement to the contrary, no voting or other consensual rights shall be vested
in Collateral Agent unless and until Collateral Agent gives written notice to
Pledgor that Collateral Agent intends to have such voting or other consensual
rights vest in itself. Upon the occurrence of an Event of Default and during the
continuation thereof, Pledgor shall pay over to Collateral Agent any cash
dividends received by Pledgor with respect to the Pledged Collateral and any and
all money and other property paid over to or received by Collateral Agent shall
be retained by Collateral Agent as Pledged Collateral hereunder and shall be
applied in accordance with the provisions hereof.
8. Defaults and Remedies. (a) Each of the following shall
constitute an "Event of Default" hereunder:
(i) if there shall occur any Event of Default under
the Credit Agreement;
(ii) if any of the Pledged Collateral shall be
attached or levied upon or seized in any legal proceeding, or
held by virtue of any lien or distress and is not released
within 90 days;
(iii) if Pledgor shall materially breach any
covenant, representation or warranty set forth herein; or
(iv) if Pledgor makes any misrepresentation of any
material fact to Collateral Agent or any Lender in connection
with this Agreement or any transaction relating thereto.
(b) Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, Collateral Agent may exercise all rights
of a secured party under the UCC. In addition, Collateral Agent is hereby
authorized and empowered to (i) transfer and register in its name or in the name
of its nominee the whole or any part of the Pledged Collateral, (ii) exercise
the voting rights with respect thereto, (iii) collect and receive all cash
dividends and other distributions made thereon, (iv) sell in one or more sales
after ten (10) Business Days' notice of the time and place of any public sale or
of the time after which a private sale is to take place (which notice Pledgor
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agrees is commercially reasonable), but without any previous notice or
advertisement, the whole or any part of the Pledged Collateral and (v) otherwise
act with respect to the Pledged Collateral as though Collateral Agent were the
outright owner thereof. Pledgor hereby irrevocably constitutes and appoints
Collateral Agent as the proxy and attorney-in-fact of Pledgor, with full power
of substitution to exercise any of the rights provided in the preceding
sentence; provided, however, that Collateral Agent shall not have any duty to
exercise any such right or to preserve the same and shall not be liable for any
failure to do so or for any delay in doing so. Any sale shall be made at a
public or private sale at Collateral Agent's place of business, or at any public
building in the City of Atlanta, Georgia or elsewhere to be named in the notice
of sale, either for cash or upon credit or for future delivery at such price as
Collateral Agent may deem to be the fair market value of such Pledged
Collateral, and Collateral Agent or any Lender may be the purchaser of the whole
or any part of the Pledged Collateral so sold and hold the same thereafter in
its own right free from any claim of Pledgor or any right of redemption, which
Pledgor hereby waives to the maximum extent permitted by applicable law. Each
sale shall be made to the highest bidder, but Collateral Agent reserves the
right to reject any and all bids at such sale which, in its discretion, it shall
deem inadequate. Demands of performance, except as otherwise herein specifically
provided for, notices of sale, advertisements and the presence of property at
sale are hereby waived and any sale hereunder may be conducted by an auctioneer
or any officer or agent of Collateral Agent.
(c) If, at the original time or times appointed for the sale
of the whole or any part of the Pledged Collateral, the highest bid, if there be
but one sale, shall be inadequate to discharge in full all the Secured
Obligations, or if the Pledged Collateral be offered for sale in lots, if at any
of such sales, the highest bid for the lot offered for sale would indicate to
Collateral Agent, in its discretion, the unlikelihood of the proceeds of the
sales of the whole of the Pledged Collateral being sufficient to discharge all
the Secured Obligations, Collateral Agent, on one or more occasions and in its
discretion, may postpone any of said sales by public announcement at the time of
sale or the time of previous postponement of sale, and no other notice of such
postponement or postponements of sale need be given, any other notice being
hereby waived; provided, however, that any sale or sales made after such
postponement shall be after ten (10) Business Days' notice to Pledgor.
(d) If, at any time Collateral Agent shall determine to
exercise its rights to sell the whole or any part of the Pledged Collateral
hereunder, such Pledged Collateral or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Act, Collateral Agent
may, in its discretion (subject only to applicable requirements of law), sell
such Pledged Collateral or part thereof by private sale in such manner and under
such circumstances as Collateral Agent may deem necessary or advisable, and
shall not be required to effect such registration or to cause the same to be
effected. Without limiting the generality of the foregoing, in any such event
Lender in its discretion (i) may, in accordance with applicable securities laws,
proceed to make such private sale notwithstanding that a registration statement
for the purpose of registering such Pledged Collateral or part thereof could be
or shall have been filed under said Act, (ii) may approach and negotiate with a
single possible purchaser to effect such sale, (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing of its
own account, for investment and not with
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a view to the distribution or sale of such Pledged Collateral or part thereof,
and (iv) may place all or any part of the Pledged Collateral with an investment
banking firm for private placement which firm shall be entitled to purchase all
or any part of the Pledged Collateral for its own account. In addition to a
private sale as provided above in this Section 8, if any of the Pledged
Collateral shall not be freely distributable to the public without registration
under the Act at the time of any proposed sale pursuant to this Section 8, then
Collateral Agent shall not be required to effect such registration or cause the
same to be effected but, in its discretion (subject only to applicable
requirements of law), may require that any sale hereunder (including a sale at
auction) be conducted subject to restrictions (i) as to the financial
sophistication and ability of any Person permitted to bid or purchase at any
such sale, (ii) as to the content of legends to be placed upon any certificates
representing the Pledged Collateral sold in such sale, including restrictions on
future transfer thereof, (iii) as to the representations required to be made by
each Person bidding or purchasing at such sale relating to that Person's access
to financial information about Pledgor's and such Person's intentions as to the
holding of the Pledged Collateral so sold for investment, for its own account,
and not with a view of the distribution thereof, and (iv) as to such other
matters as Collateral Agent may, in its discretion, deem necessary or
appropriate in order that such sale (notwithstanding any failure so to register)
may be effected in compliance with the UCC and other laws affecting the
enforcement of creditors' rights and the Act and all applicable state securities
laws.
(e) Pledgor acknowledges that notwithstanding the legal
availability of a private sale or a sale subject to the restrictions described
above in paragraph (d), Collateral Agent may, in its discretion, elect to cause
registration of any or all the Pledged Collateral under the Act (or any
applicable state securities law). Pledgor, however, recognizes that Collateral
Agent may be unable to effect a public sale of any or all the Pledged Collateral
and may be compelled to resort to one or more private sales thereof. Pledgor
also acknowledges that any such private sale may result in prices and other
terms less favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. Collateral Agent
shall be under no obligation to delay a sale of any of the Pledged Collateral
for the period of time necessary to permit Pledgor to cause such securities to
be registered for public sale under the Act, or under applicable state
securities laws, even if Pledgor would agree to do so.
(f) Pledgor agrees that following the occurrence and during
the continuance of an Event of Default it will not at any time plead, claim or
take the benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Agreement, or the absolute sale of the whole or any part of
the Pledged Collateral or the possession thereof by any purchaser at any sale
hereunder, and Pledgor waives the benefit of all such laws to the extent it
lawfully may do so. Pledgor agrees that it will not interfere with any right,
power and remedy of Collateral Agent provided for in this Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by Collateral Agent of any one or more of
such rights, powers, or remedies. No failure or delay on the part of Collateral
Agent to exercise any such right, power or remedy and no notice or demand which
may be given to or made upon Pledgor by Collateral Agent with respect to any
such
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remedies shall operate as a waiver thereof, or limit or impair Collateral
Agent's right to take any action or to exercise any power or remedy hereunder,
without notice or demand, or prejudice its rights as against Pledgor in any
respect. Pledgor waives all claims, damages and demands against Collateral Agent
arising out of the repossession, retention or sale of the Pledged Collateral
except such as result from Collateral Agent's gross negligence or willful
misconduct.
(g) Pledgor further agrees that a breach of any of the
covenants contained in this Section 8 will cause irreparable injury to
Collateral Agent and Lenders, that Collateral Agent and Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, agrees that each
and every covenant contained in this Section 8 shall be specifically enforceable
against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that the Secured Obligations are not then due and payable in accordance
with the agreements and instruments governing and evidencing such obligations.
Pledgor further acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by Collateral Agent and Lenders by reason of a
breach of any of such covenants and, consequently, agrees that, if Collateral
Agent or any Lender shall sue for damages for breach, it shall pay, as
liquidated damages and not as a penalty, an amount equal to the lesser of (i)
the value of the Pledged Collateral pledged by Pledgor on the date that
Collateral Agent or any Lender shall demand compliance with this Section 8, and
(ii) the amount required to pay in full the Secured Obligations.
9. Application of Proceeds. Any cash held by Collateral Agent
as Pledged Collateral and all cash proceeds received by Collateral Agent in
respect of any sale of, liquidation of, or other realization upon all or any
part of the Pledged Collateral shall be applied or distributed by Collateral
Agent first, to the payment of the costs and expenses of such sale, including,
without limitation, fees and expenses of counsel and all expenses, liabilities
and advances made or incurred by Collateral Agent in connection therewith and
then to the payment of all other Secured Obligations (in whatever order
Collateral Agent elects). After the application of all such proceeds as
aforesaid, Collateral Agent will return any excess to Pledgor and Pledgor shall
remain liable for any deficiency.
10. Power of Attorney. Pledgor appoints Collateral Agent as
Pledgor's attorney, with power to endorse Pledgor's name on any checks, notes,
acceptances, money orders, drafts or other form of payment or security
representing a portion of the Pledged Collateral that may come into Collateral
Agent's possession and to do all things necessary to carry out this Agreement.
Pledgor ratifies and approves all such acts of such attorney. Collateral Agent,
as attorney hereunder, will not be liable for any acts or omissions, nor for any
errors of judgment or mistakes of fact or law. This power, coupled with an
interest, is irrevocable until the payment in full of the Secured Obligations
and termination of the Credit Agreement.
11. Waiver. No delay on Collateral Agent's part in exercising
any power of sale, lien, option or other right hereunder, and no notice or
demand which may be given to or made upon Pledgor by Collateral Agent with
respect to any power of sale, lien, option or other right hereunder,
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shall constitute a waiver thereof, or limit or impair Collateral Agent's right
to take any action or to exercise any power of sale, lien, option, or any other
right hereunder, without notice or demand, or prejudice Collateral Agent's
rights as against Pledgor in any respect.
12. Assignment. Collateral Agent may assign, endorse or
transfer any instrument evidencing all or any part of the Secured Obligations to
any Person, and the holder of such instrument shall be entitled to the benefits
of this Agreement.
13. Termination. Promptly following the payment in full of the
Secured Obligations and the termination of the Credit Agreement, Collateral
Agent shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at the
time subject to this Agreement and all instruments of assignment executed in
connection therewith, free and clear of the liens hereof and, except as
otherwise provided herein, all of Pledgor's obligations hereunder shall at such
time terminate.
14. Lien Absolute. All right of Collateral Agent and Lenders
hereunder, and all obligations of Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement, any other Credit Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Credit Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from the terms of, any guaranty, for all of any of the Secured Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor.
15. Release. Pledgor consents and agrees that Collateral Agent
or any Lender may at any time, or from time to time, in its discretion (a)
renew, extend or change the time of payment, and/or the manner, place or terms
of payment of all or any part of the Secured Obligations and (b) exchange,
release and/or surrender all or any of the Pledged Collateral, or any part
thereof, by whomsoever deposited, which is now or may hereafter be held by
Collateral Agent or any Lender in connection with all or any of the Secured
Obligations; all in such manner and upon such terms as Collateral Agent or any
Lender may deem proper, and without notice to or further assent from Pledgor, it
being hereby agreed that Pledgor shall be and remain bound upon this Agreement,
irrespective of the existence, value or condition of any of the Pledged
Collateral, and notwithstanding any such change, exchange, settlement,
compromise, surrender, release, renewal or extension, and notwithstanding also
that the Secured Obligations may, at any time exceed the aggregate principal
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amount thereof set forth in the Credit Agreement, or any other agreement
governing any Secured Obligations. Pledgor hereby waives notice of acceptance of
this Agreement, and also presentment, demand, protest and notice of dishonor of
any and all of the Secured Obligations, and promptness in commencing suit
against any party hereto or liable hereon, and in giving any notice to or of
making any claim or demand hereunder upon Pledgor. No act or omission of any
kind on Collateral Agent's part shall in any event affect or impair this
Agreement.
16. Collateral Agent's Right to Take Action. In the event that
Pledgor fails or refuses to perform any of its obligations set forth herein,
including, without limitation its obligation pursuant to Section 6(e) hereof to
pay taxes, assessments and other charges levied, assessed or imposed on the
Pledged Collateral, or otherwise fails or refuses to pay any amount necessary
for the preservation and protection of the Pledged Collateral, Collateral Agent
shall have the right, without obligation, to do all things it deems necessary or
advisable to discharge the same (including, without limitation, to pay any such
taxes, assessments, charges or other sums, together with interest and penalties
thereon) and any sums paid by Collateral Agent, or the cost thereof, including,
without limitation, attorneys' fees, shall be reimbursed by Pledgor to
Collateral Agent on demand and, until so reimbursed, shall bear interest at the
default rate of interest chargeable pursuant to the Credit Agreement.
17. Indemnification. Pledgor agrees to indemnify and hold
Collateral Agent and each Lender harmless from and against (a) any taxes,
liabilities, obligations, losses, penalties, suits, costs, actions, judgments,
claims and damages, including attorney's fees and disbursements, and other
expenses incurred or arising by reason of the taking or the failure to take
action by Collateral Agent or any Lender, in good faith, in respect of any
transaction effected under this Agreement or in connection with the lien
provided for herein, including, without limitation, any taxes payable in
connection with the delivery or registration of any of the Pledged Collateral as
provided herein, and (b) any liabilities, obligations, losses, penalties, suits,
costs, actions, judgments, claims and damages, including attorney's fees and
disbursements and other expenses which may be imposed on, incurred by, or
asserted against Collateral Agent or any Lender in any litigation, proceeding or
investigation, including, without limitation, any of the foregoing brought under
any federal or state securities laws which is threatened, instituted or
conducted by any governmental agency or instrumentality or any other Person with
respect to any aspect of or any transaction contemplated by or referred to in,
or any other matter related to this Agreement, whether or not Collateral Agent
or any Lender is a party thereto. The obligations of Pledgor under this Section
17 shall survive the termination of this Agreement.
18. Payments. Collateral Agent shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments to any
portion of the Secured Obligations. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against Pledgor for liquidation or reorganization, should Pledgor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of Pledgor's
assets, and shall continue to be effective or be reinstated, as the
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case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by Collateral Agent or any
Lender, whether as a "voidable preference", "fraudulent conveyance" or otherwise
all as though such payment or performance had not been made. In the event that
any payment or any part thereof, is rescinded, reduced, restored, or returned,
the Secured Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
19. Miscellaneous.
(a) No Liability. Neither Collateral Agent, any Lender nor any
of their respective officers, directors, employees, agents or counsel shall be
liable for any action lawfully taken or omitted to be taken by it or them
hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct.
(b) No Oral Changes. No term, covenant or condition of this
Agreement can be changed or terminated orally.
(c) Successors and Assigns. All of the rights, privileges,
remedies and options given to Collateral Agent and Lenders hereunder shall inure
to the benefit of its successors and assigns; and all the terms, conditions,
promises, covenants, provisions and warranties of this Agreement shall inure to
the benefit of and shall bind the representatives, successors and assigns of
Collateral Agent, Lenders and Pledgor. Pledgor may not assign this Agreement to
any Person.
(d) Interpretation. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(e) Expense Reimbursement. Pledgor shall reimburse Collateral
Agent for all of Collateral Agent and each Lender's expenses incurred in
connection with the execution, delivery, administration and enforcement of this
Agreement, including, without limitation, the fees and disbursements of
Collateral Agent's legal counsel, accountants and any other third Persons, and
all costs and expenses incurred by the Collateral Agent or the Lenders
(including attorney's fees and disbursements) to: (i) commence, defend or
intervene in any court proceeding; (ii) cause the Pledged Shares to be
registered under the Act; (iii) file a petition, complaint, answer, motion or
other pleadings, or to take any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise) relating to this Agreement; and (iv)
enforce any of Collateral Agent's rights to collect any of the Secured
Obligations. Pledgor also agrees to pay, and to save harmless Collateral Agent
and each Lender from any delay in paying, any intangibles, documentary stamp and
other taxes, if any, which may be payable in connection with the execution and
delivery of this Agreement.
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(f) Injunctive Relief. Pledgor recognizes that, in the event
that Pledgor 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 Collateral Agent and Lenders; therefore, Pledgor agrees that
Collateral Agent, if Collateral Agent so requests, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.
(g) Notices. Except as otherwise provided herein, any notice
required hereunder shall be given in the manner and to the party to be notified
and its counsel, at the addresses and in the manner provided in the Credit
Agreement.
(h) Section Headings. Any section headings used herein are
solely for the convenience of the parties and shall be without legal effect.
(i) Time of Essence. Time is of the essence in all matters
pertaining to the payment or performance by Pledgor of its obligations
hereunder.
20. Survival of Rights, Duties, Etc. No termination or
cancellation (regardless of cause or procedure) of the Credit Agreement shall in
any way affect or impair the powers, obligations, duties, rights and liabilities
of the parties hereto in any way with respect to (i) any transaction or event
occurring prior to such termination or cancellation, (ii) the Pledged
Collateral, or (iii) any of Pledgor's undertakings, agreements, covenants,
warranties and representations contained in this Agreement and all such
undertakings, agreements, covenants, warranties and representations shall
survive such termination or cancellation until all of the Secured Obligations of
every nature whatsoever shall have been fully paid and satisfied.
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IN WITNESS WHEREOF, Pledgor has caused this Agreement to be
executed by an officer thereunto duly authorized as of the date first above
written.
DYERSBURG CORPORATION
By:
-----------------------------
William S. Shropshire, Jr.
Executive Vice President,
Chief Financial Officer,
Secretary, and Treasurer
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SCHEDULE I
<TABLE>
<CAPTION>
Pledged Class(es) of Stock Certificate
Entity Stock Number(s) Number of Shares
- ------- ----- ----------------- ----------------
<S> <C> <C> <C>
AIH Inc. Common 2 100
Dyersburg Fabrics Inc. Common 2 1000
</TABLE>
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EXHIBIT F-3
FORM OF
BOND PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, dated as of August 27, 1997, made by
DYERSBURG CORPORATION, a Tennessee corporation (the "Pledgor"), in favor of
SUNTRUST BANK, ATLANTA, a Georgia banking corporation, in its capacity as
Collateral Agent for the "Lenders" from time to time a party to the Credit
Agreement described below (the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, the Pledgor is the record and beneficial owner of all
of the Industrial Development Revenue Notes (Dyersburg Fabrics Inc. Project)
Series 1993-2 issued by the Industrial Development Board of Dyer County (the
"Issuer") in the original principal amount of $7,300,000 (the "Bonds"); and
WHEREAS, the Pledgor, the other Borrowers named therein,
SunTrust Bank, Atlanta, as agent and collateral agent and the lenders named
therein have entered into a Credit Agreement dated as of August 25, 1997 (as the
same may be amended, modified or supplemented from time to time, the "Credit
Agreement"; all terms used herein without definition shall have the meanings
ascribed to such terms in the Credit Agreement), pursuant to which the Lenders,
subject to the terms and conditions set forth in the Credit Agreement, have
agreed to provide certain financial accommodations to the Borrowers;
WHEREAS, Pledgor desires to secure its obligation to pay, duly
and punctually, the indebtedness evidenced by the Credit Agreement and all other
Obligations owing to the Secured Party, the Agent and the Lenders;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration receipt of which is hereby acknowledged, the Pledgor
hereby agrees with the Collateral Agent as follows:
1. Pledge. The Pledgor hereby pledges to the Collateral Agent,
for the benefit of the Agents and the Lenders, and grants to the Collateral
Agent, for the benefit of the Agents and the Lenders a security interest in, all
of its right, title and interest in and to the Bonds, as the same may be from
time to time issued and delivered to the Pledgor and all interest, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Bonds
(the "Pledged Collateral").
2. Security for Obligations. This Agreement and the pledge
and security interest granted by the Pledgor to the Collateral Agent, for the
benefit of the Agents and the Lenders,
<PAGE> 227
hereunder secures the prompt payment by Pledgor in full when due, whether at
stated maturity, by acceleration or otherwise, and the performance by Pledgor of
(a) all Obligations of Pledgor to the Agents and the Lenders under the Credit
Agreement and the other Credit Documents and (b) all obligations of Pledgor to
the Collateral Agent and Lenders hereunder (herein, collectively, the
"Obligations"). The term "Obligations" includes, without limitation, all
interest, charges, expenses, fees, attorneys' fees and other sums chargeable to
Pledgor under this Agreement, the Credit Agreement or any of the other Credit
Documents.
3. Delivery of Pledged Collateral. The Bonds shall be
delivered by the Pledgor to the Collateral Agent simultaneously with the
execution and delivery thereof. The Bonds may, at the request of the Collateral
Agent, be registered in the name of the Collateral Agent or its designee as
pledgee, and all certificates or instruments representing or evidencing the
Pledged Collateral shall be delivered to and held by the Collateral Agent and
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. In addition, the Collateral
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations as permitted by the Master Purchase Agreement
dated as of April 28, 1993, among the Issuer, Dyersburg Fabrics Inc. and the
Pledgor (the "Master Purchase Agreement").
4. Release of Pledged Collateral. Subject to the provisions
of Section 9 hereof, the Pledged Collateral shall not be released until all
Obligations shall have been paid in full.
5. Representations and Warranties. The Pledgor represents and
warrants that:
(a) At or prior to delivery, the Pledgor will be the legal
and beneficial owner of the Pledged Collateral free and clear of
any lien, security interest, option or other charge or
encumbrance except for the security interest created by this
Agreement.
(b) Upon the delivery of the Pledged Collateral to the
Collateral Agent pursuant to this Agreement, the pledge of the
Pledged Collateral pursuant to this Agreement will create a valid
and perfected first priority security interest in the Pledged
Collateral, subject to no prior pledge, lien, mortgage,
hypothecation, security interest, charge, option or encumbrance
created by the Pledgor or to any agreement purporting to grant to
any third party a security interest in the property or assets of
the Pledgor which would include the Pledged Collateral.
6. Affirmative Covenants. So long as any Obligations shall
remain outstanding, the Pledgor covenants and agrees that, unless the Collateral
Agent shall otherwise consent in writing:
(a) Upon delivery of any Bond to the Collateral Agent, the
Pledgor will own the same free and clear of all liens, claims,
encumbrances and security interests
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of any nature whatsoever created by the Pledgor, except for the
lien and security interest provided for hereby.
(b) The Pledgor will defend the Collateral Agent's position
as pledgee of the Bonds against the claims and demands of all
persons whomsoever.
(c) The Pledgor will provide copies to the Pledgee of any
demands, notices, certifications or other communications given or
received by the Pledgor by any party to any other party under the
Master Purchase Agreement or any other document or instrument
related to the Bonds.
7. Negative Covenant. So long as any Obligation shall remain
outstanding, the Pledgor will not, without the written consent of the Collateral
Agent, sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Pledged Collateral, nor will it create, incur or
permit to exist any affirmative pledge, lien, mortgage, hypothecation, security
interest, charge, option or any other affirmative encumbrance with respect to
any of the Pledged Collateral, or any part thereof, or any interest therein, or
any proceeds thereof, except for the lien and security interest provided for by
this Agreement.
8. Further Assurances. The Pledgor agrees that at any time and
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action that may be necessary or desirable, or that the Collateral Agent may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral.
9. Voting Rights; Interest; Etc. So long as no Event of Default
or event which, with the giving of notice or time elapse, or both, is reasonably
likely to become an Event of Default shall have occurred and be continuing:
(a) The Pledgor shall be entitled to exercise, or refrain
from exercising, any and all voting and other consensual rights
pertaining to the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this Agreement or any
Credit Document; provided, however, that the Pledgor shall not
exercise or refrain from exercising any such right if, in the
Collateral Agent's judgment, such action would have a material
adverse effect on the value of the Pledged Collateral or any part
thereof; and, provided, further, that the Pledgor shall give the
Collateral Agent at least two days' written notice of the manner
in which it intends to exercise, or the reasons for refraining
from exercising, any such right.
(b) The Pledgor shall be entitled to receive and retain any
and all interest paid in respect of the Pledged Collateral,
provided, however, that any and all
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(i) interest paid or payable other than in cash in
respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral, and
(ii) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange
for, any Pledged Collateral,
shall be, and shall be forthwith delivered to the Collateral Agent to hold as,
Pledged Collateral and shall, if received by the Pledgor, be received in trust
for the benefit of the Collateral Agent, be segregated from the other property
or funds of the Pledgor, and be forthwith delivered to the Collateral Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement).
(c) The Collateral Agent shall execute and deliver (or cause
to be executed and delivered) to the Pledgor all such proxies and
instruments as the Pledgor may reasonably request for the purpose
of enabling the Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to paragraph (i) above
and to receive the interest payments which it is authorized to
receive and retain pursuant to paragraph (ii) above.
(d) Upon the occurrence of an Event of Default or an event
which, with the giving of notice or time elapse, or both, would
become an Event of Default:
(i) All rights of the Pledgor to exercise the voting
and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 9(a) and to receive
the interest and principal payments which it would otherwise
be authorized to receive and retain pursuant to Section 9(b)
shall cease, and all such rights shall thereupon become
vested in the Collateral Agent who shall thereupon have the
sole right to exercise such voting and other consensual
rights and to receive and hold as Pledged Collateral such
interest payments.
(ii) All interest and principal payments which are
received by the Pledgor contrary to the provisions of
paragraph (i) of this Section 9(d) shall be received in
trust for the benefit of the Collateral Agent, shall be
segregated from other funds of the Pledgor and shall be
forthwith paid over to the Collateral Agent as Pledged
Collateral in the same form as so received (with any
necessary endorsement).
10. Collateral Agent Appointed Attorney-in-Fact. The Pledgor
hereby appoints the Collateral Agent the Pledgor's attorney-in-fact, said
appointment being coupled with an interest, with full authority in the place and
stead of the Pledgor, and in the name of the Pledgor or otherwise, from time to
time in the Collateral Agent's discretion to take any action and to execute any
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<PAGE> 230
instrument which the Collateral Agent may deem necessary or advisable to assure
that Pledged Bonds are pledged to the Collateral Agent and the Pledgor's
agreements and Obligations hereunder are performed and satisfied, including,
without limitation, to receive, endorse and collect all instruments made payable
to the Pledgor representing any interest payment or other distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same.
11. Collateral Agent May Perform. If the Pledgor fails to
perform any agreement contained herein, the Collateral Agent, upon notice to
Pledgor, may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Collateral Agent incurred in connection therewith
shall be payable by the Pledgor pursuant to Section 15 hereof.
12. Reasonable Care. The Collateral Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in their possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property,
it being understood that the Collateral Agent shall not have any responsibility
for (i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral.
13. Sale of Collateral. The Pledgor agrees to do or cause to
be done all such other acts and things as may be necessary to make any sale or
sales of any portion or all of the Pledged Collateral contemplated by Section 14
hereof valid and binding and in compliance with any and all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and all
courts, arbitrators or governmental instrumentalities, domestic or foreign,
having jurisdiction over any such sale or sales, all at the Pledgor's expense.
The Pledgor further agrees that a breach of any of the covenants contained in
this Section 13 will cause irreparable injury to the Collateral Agent, that the
Collateral Agent has no adequate remedy at law in respect of such breach and, as
a consequence, agrees that each and every covenant contained in this Section
shall be specifically enforceable against the Pledgor and the Pledgor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred. The Pledgor further acknowledges the impossibility of ascertaining the
amount of damages which would be suffered by the Collateral Agent by reason of a
breach of any of such covenants and, consequently, agrees that, if the
Collateral Agent shall sue for damages for breach, it shall pay, as liquidated
damages and not as a penalty, against release of the Pledged Collateral, an
amount equal to the principal amount of the Bonds, plus accrued interest
thereon, on the date the Collateral Agent shall demand compliance with this
Section.
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14. Remedies upon Default. If any Event of Default shall have
occurred and is continuing:
(a) The Collateral Agent may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform
Commercial Code (the "UCC") in effect in the State of Georgia at
that time, and the Collateral Agent may also, without notice
except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at
any exchange, broker's board or at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Pledgor agrees that, to the extent
notice of sale shall be required by law, ten days' notice to the
Pledgor 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. The Collateral Agent shall not be
obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Collateral Agent may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to
which it was so adjourned.
(b) Any cash held by the Collateral Agent or on its behalf
as Pledged Collateral and all cash proceeds received by the
Collateral Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral
may, in the discretion of the Collateral Agent, be held by the
Collateral Agent or on its behalf as collateral for, and then or
at any time thereafter applied (after payment of any amounts
payable to the Collateral Agent pursuant to Section 15) in whole
or in part by the Collateral Agent against, all or any part of
the Obligations in such order as the Collateral Agent shall
elect. Any surplus of such cash or cash proceeds held by the
Collateral Agent or on its behalf and remaining after payment and
performance in full of all the Obligations shall be paid over to
the Pledgor or to whomsoever may be lawfully entitled to receive
such surplus promptly, but in any event within two Business Days
of the receipt thereof.
15. Expenses. The Pledgor will upon demand pay to the Collateral
Agent the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any agents, which the Collateral Agent
may incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent hereunder, or (iv) the
failure by the Pledgor to perform or observe any of the provisions hereof.
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<PAGE> 232
16. Amendments, Etc. No amendment or waiver of any provision
of this Agreement nor consent to any departure by the Pledgor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Collateral Agent and Pledgor, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
Neither the Collateral Agent nor the Pledgor shall by any act, delay, omission
or otherwise be deemed to have waived any of its respective rights or remedies
hereunder and no waiver shall be valid unless in writing, signed by the
Collateral Agent or the Pledgor, as applicable, and then only to the extent
therein set forth. A waiver by the Collateral Agent or the Pledgor of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent or the Pledgor, as applicable, would
otherwise have on any future occasion. No failure to exercise or any delay in
exercising on the part of the Collateral Agent or the Pledgor, any right, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and not exclusive of any rights or remedies
provided by law.
17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing and shall be delivered
in accordance with the provisions of the Credit Agreement.
18. Continuing Security Interest. This Agreement shall create
a continuing security interest in the Pledged Collateral and shall (i) remain in
full force and effect until payment and performance in full of the Obligations,
(ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure to
the benefit of the Collateral Agent, the Lenders and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), the Collateral Agent may, subject to the terms and
conditions of the Credit Agreement, assign or otherwise transfer the Credit
Agreement and this Agreement to any other person or entity, and such other
person or entity shall thereupon become vested with all the benefits in respect
thereof granted to the Collateral Agent herein or otherwise. Upon the payment
and performance in full of the Obligations, the Pledgor shall be entitled to the
return, upon its request and at its expense, of such of the Pledged Collateral
as shall not have been sold or otherwise applied pursuant to the terms hereof.
20. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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<PAGE> 233
21. Governing Law; Terms. This Agreement shall be governed by
and construed in accordance with the laws of the State of Georgia. Unless
otherwise defined herein, terms defined in Article 9 of the UCC are used herein
as therein defined.
22. Execution in Counterparts. This Agreement may be executed
in separate counterparts, all of which taken together shall be deemed to
constitute one and the same instrument.
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<PAGE> 234
IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be
duly executed and delivered by its officers thereunto duly authorized as of the
date and year first above written.
DYERSBURG CORPORATION,
A TENNESSEE CORPORATION
By:
-----------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
(SIGNATURE PAGE TO BOND PLEDGE AGREEMENT)
<PAGE> 235
Accepted By:
SUNTRUST BANK, ATLANTA, as Collateral Agent
By:
-----------------------------------
Raymond B. King
Vice President
By:
-----------------------------------
Thomas R. Banks
Assistant Vice President
(SIGNATURE PAGE TO BOND PLEDGE AGREEMENT)
<PAGE> 236
EXHIBIT G
FORM OF
CLOSING CERTIFICATE
The undersigned, in his or her capacity as a duly authorized officer of
DYERSBURG CORPORATION, a Tennessee corporation ("Parent"), DYERSBURG FABRICS
INC., a Tennessee corporation and the sole general partner of DYERSBURG FABRICS
LIMITED PARTNERSHIP, I, a Tennessee limited partnership ("DFLP"), UNITED
KNITTING INC., a Tennessee corporation and the sole general partner of UNITED
KNITTING LIMITED PARTNERSHIP, I, a Tennessee limited partnership ("UKLP"), IQUE,
INC., a Tennessee corporation and the sole general partner of IQUE LIMITED
PARTNERSHIP, I, a Tennessee limited partnership ("IQLP") or ALAMAC KNIT FABRICS
INC., a Delaware corporation (collectively, the "Borrowers"), respectively,
hereby give this certificate to induce SUNTRUST BANK, ATLANTA, a Georgia banking
corporation, and the other Lenders party to the Credit Agreement described below
(referred to collectively as the "Lenders"), SunTrust Bank, Atlanta as agent for
itself and the other Lenders (in such capacity, the "Agent") and SunTrust Bank,
Atlanta as collateral agent for itself and the other Lenders (in such capacity,
the "Collateral Agent") to consummate certain financial accommodations with the
Borrowers pursuant to the terms of the Credit Agreement dated as of even date
herewith (the "Credit Agreement"). Capitalized terms used herein and not defined
herein have the same meanings assigned to them in the Credit Agreement:
The undersigned hereby certifies, in his or her representative capacity
on behalf of each of the Borrowers, as shown below, to the Agents and the
Lenders that:
1. In his or her aforesaid capacity, he or she has knowledge of the business and
financial affairs of the relevant Borrower sufficient to issue this certificate
and is authorized and empowered to issue this certificate for and on behalf of
such Borrower.
2. All representations and warranties contained in the Credit Agreement are true
and correct in all material respects on and as of the date hereof.
3. After giving effect to the initial Loans to be made to the Borrowers pursuant
to the Credit Agreement, no Default or Event of Default has occurred and is
continuing.
4. Since the date of the audited financial statements of the Consolidated
Companies described in Section 6.14 of the Credit Agreement, there has been no
change which has had or could reasonably be expected to have a Materially
Adverse Effect.
5. The Advances to be made on the date hereof are being used solely for the
purposes provided in the Credit Agreement, and such Advances and use of proceeds
thereof will not contravene, violate or conflict with, or involve the Agents, or
any Lender in a violation of, any law, rule, injunction, or regulation, or
determination of any court of law or other governmental authority, applicable to
the Borrowers.
<PAGE> 237
6. There is no action or proceeding instituted or pending before any court or
other governmental authority or, to the knowledge of any Borrower, threatened
(i) which reasonably could be expected to have a Materially Adverse Effect, or
(ii) seeking to prohibit or restrict one or more Credit Party's ownership or
operation of any portion of its business or assets, or to compel one or more
Credit Party to dispose of or hold separate all or any portion of its businesses
or assets, where such portion or portions of such business(es) or assets, as the
case may be, constitute a material portion of the total businesses or assets of
the Consolidated Companies.
7. The conditions precedent set forth in Sections 5.01 and 5.02 of the Credit
Agreement have been or will be satisfied (or have been waived pursuant to the
terms of the Credit Agreement) prior to or concurrently with the making of the
initial Loans under the Credit Agreement.
8. The execution, delivery and performance by the Credit Parties of the Credit
Documents will not violate any Requirement of Law or cause a breach or default
under any of their respective Contractual Obligations.
9. Each of the Credit Parties has the corporate or partnership power and
authority to make, deliver and perform the Credit Documents to which it is a
party and has taken all necessary corporate or partnership action to authorize
the execution, delivery and performance of such Credit Documents. No consents or
authorization of, or filing with, any Person (including, without limitation, any
governmental authority), is required in connection with the execution, delivery
or performance by any Credit Party, or the validity or enforceability against
any Credit Party, of the Credit Documents, other than such consents,
authorizations or filings which have been made or obtained.
10. Upon the making of the initial Advances pursuant to the Credit Agreement,
(i) all amounts outstanding pursuant to the Existing Senior Notes and the
Existing Credit Agreement shall have been paid in full and such agreement shall
have been terminated, and (ii) the Transaction shall have been consummated as
contemplated by the terms of the Credit Agreement.
2
<PAGE> 238
IN WITNESS WHEREOF, the undersigned has executed this certificate in
his or her aforesaid capacity as of this 27th day of August, 1997.
-------------------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial Officer,
Secretary and Treasurer of Dyersburg Corporation
-------------------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial Officer,
Secretary and Treasurer of Dyersburg Fabrics Inc.,
the sole general partner of Dyersburg Fabrics Limited
Partnership, I
-------------------------------------------------
William S. Shropshire, Jr.
Secretary and Treasurer of United Knitting
Inc., the sole general partner of
United Knitting Limited Partnership, I
-------------------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial Officer,
Secretary and Treasurer of IQUE, Inc., the sole general
partner of IQUE Limited Partnership, I
-------------------------------------------------
William S. Shropshire, Jr.
Vice President and Secretary of Alamac
Knit Fabrics, Inc.
3
<PAGE> 239
EXHIBIT I
FORM OF
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT dated as of August 27, 1997 (this
"Contribution Agreement") by and among DYERSBURG CORPORATION, a Tennessee
corporation ("Parent"), DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee
limited partnership ("DFLP"), UNITED KNITTING LIMITED PARTNERSHIP, I, a
Tennessee limited partnership ("UKLP"), IQUE LIMITED PARTNERSHIP, I, a Tennessee
limited partnership ("IQLP"), ALAMAC KNIT FABRICS, INC., a Delaware corporation
("Alamac"; Parent, DFLP, UKLP, IQLP and Alamac referred to collectively herein
as the "Borrowers"), each of the other Subsidiaries of Parent listed on SCHEDULE
I attached hereto and by this reference made a part hereof (such other
Subsidiaries, together with the Revolving Lenders in the case of the Term Loans,
the Parent and together with any successors, referred to herein individually as
a "Guarantor" and collectively as "Guarantors"), SUNTRUST BANK, ATLANTA, a
Georgia banking corporation (the "Collateral Agent"), in its capacity as
collateral agent for (i) the banks and other lending institutions identified on
the signature pages to the Credit Agreement (as defined below) and each assignee
thereof becoming a "Lender" as provided therein (the "Lenders"), (ii) SunTrust
Bank, Atlanta as "Agent" under the Credit Agreement (the "Agent"), for the
purpose of establishing rights and obligations of contribution among the
Borrowers and Guarantors in connection with the Guaranty Agreements (as such
term is defined below).
R E C I T A L S
WHEREAS, the Borrowers, the Lenders, the Agent and the
Collateral Agent have entered into that certain Credit Agreement dated as of
August 27, 1997 (as so amended and restated and as it may hereafter be amended,
modified, or supplemented, the "Credit Agreement"; capitalized terms used herein
but not otherwise defined herein shall have the meanings assigned to such terms
in the Credit Agreement);
WHEREAS, the Subsidiaries of the Parent listed on Schedule I
hereto, together with the Revolving Borrowers (other than DFLP) for the purposes
of guaranteeing the obligations of the Term Borrowers, have executed and
delivered the Affiliate Guaranty Agreement dated as of even date herewith (the
"Affiliate Guaranty") pursuant to which such Guarantors have agreed to guarantee
all the obligations of the Borrowers pursuant to the Credit Agreement and all
other Guaranteed Obligations (as defined in the Affiliate Guaranty);
WHEREAS, Parent and the Collateral Agent have executed and
delivered the Parent Guaranty Agreement of even date herewith (the "Parent
Guaranty"; the Affiliate Guaranty and the Parent Guaranty referred to
collectively as the "Guaranty Agreements") pursuant to which Parent has
<PAGE> 240
Parent Guaranty referred to collectively as the "Guaranty Agreements") pursuant
to which Parent has agreed to guarantee, among other things, all obligations of
the other Borrowers pursuant to the Credit Agreement, and all other Guaranteed
Obligations (as defined in the Parent Guaranty); and
WHEREAS, as a result of transactions contemplated by the
Credit Agreement, Guarantors will benefit from the Guaranteed Obligations and in
consideration thereof desire to enter into this Contribution Agreement to
provide a fair and equitable arrangement to make contributions in the event
payments are made under the Guaranty Agreements.
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Parent, DFLP, each other Guarantor and Collateral Agent
hereby agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), Parent and and each other Borrower agree that (a) in the
event a payment shall be made by any Guarantor under the Guaranty Agreements in
respect of the obligations of Parent or any other Borrower under the terms of
the Credit Agreement, Parent or such other Borrower, as the case may be, shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the person to whom such payment shall have
been made to the extent of such payment and (b) in the event any assets of any
Guarantor shall be sold pursuant to any stock pledge agreement or similar
instrument or agreement to satisfy a claim of any Guaranteed Party, Parent or
such other Borrower, as the case may be, shall indemnify such Guarantor in an
amount equal to the greater of the book value or the fair market value of the
assets so sold; provided that, this Section 1 shall not apply to the extent that
any Guarantor is jointly and severally liable for any such amount as a Borrower
pursuant to the Credit Agreement.
SECTION 2. Contribution and Subrogation. Each Guarantor agrees (subject
to Section 3) that in the event a payment shall be made by any Guarantor under
the Guaranty Agreements or assets of any Guarantor shall be sold pursuant to any
stock pledge agreement or similar instrument or agreement to satisfy a claim of
any Guaranteed Party, and such Guarantor (the "Claiming Guarantor") shall not
have been indemnified by Parent and/or the other Borrowers as provided in
Section 1, each other Guarantor (a "Contributing Guarantor") shall indemnify the
Claiming Guarantor in an amount equal to the amount of such payment or the
greater of the book value or the fair market value of such assets, as the case
may be, multiplied by a fraction, the numerator of which shall be the
Consolidated Net Worth of the Contributing Guarantor on the date hereof, and the
denominator of which shall be the sum of the Consolidated Net Worth of all the
Guarantors on the date hereof. Any Contributing Guarantor making any payment to
a Claiming Guarantor pursuant to this Section 2 shall be subrogated to the
rights of such Claiming Guarantor under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this
Agreement to the contrary, (i) all rights of the Guarantors under Sections 1 and
2 and all other rights of indemnity, contribution or subrogation under
applicable law or otherwise shall be fully subordinated to the
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<PAGE> 241
indefeasible payment in full of the Guaranteed Obligations (as defined in the
Affiliate Guaranty), and (ii) no such rights shall be exercised until all of the
Guaranteed Obligations shall have been irrevocably paid in full and the Credit
Agreement and Letter of Credit Agreement shall have been irrevocably terminated.
If any amount shall be paid to any Guarantor on account of such indemnity,
contribution, or subrogation rights at any time when all of the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in trust
for the benefit of the Guaranteed Parties (as defined in the Guaranty
Agreements) and shall forthwith be paid to the Collateral Agent to be credited
and applied upon the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement and the Letter of Credit
Agreement. No failure on the part of Parent, the Borrowers, or any Guarantor to
make the payments required by Sections 1 and 2 (or any other payments required
under applicable law or otherwise) shall in any respect limit the obligations
and liabilities of any Guarantor with respect to the Guaranty Agreements, and
each Guarantor shall remain liable for the full amount of the obligations of
such Guarantor under such Guaranty Agreements.
SECTION 4. Allocation. If at any time there exists more than one
Claiming Guarantor with respect to the Guaranty Agreements, then payment from
other Guarantors pursuant to this Contribution Agreement shall be allocated
among such Claiming Guarantors in proportion to the total amount of money paid
for or on account of the Guaranteed Obligations by each such Claiming Guarantor
pursuant to the Guaranty Agreements.
SECTION 5. Preservation of Rights. This Contribution Agreement shall
not limit or affect any right which any Guarantor may have against any other
Person that is not a party hereto.
SECTION 6. Subsidiary Payment. The amount of contribution payable under
this Contribution Agreement by any Guarantor (other than Parent) with respect to
the Guaranty Agreements shall be reduced by the amount of any contribution paid
hereunder by a Subsidiary of such Guarantor with respect to the Guaranty
Agreements.
SECTION 7. Asset Sale. If all of the stock of any Guarantor shall be
sold or otherwise disposed of (including by merger or consolidation) in an Asset
Sale not prohibited by the Credit Agreement or otherwise consented to by the
Required Lenders under the Credit Agreement, the agreements of such Guarantor
hereunder shall automatically be discharged and released without any further
action by such Guarantor and shall be assumed in full by the corporation which
prior to such Asset Sale or consent owned the stock of such Guarantor, effective
as of the time of such Asset Sale or consent. Parent shall cause any such
corporation which is not a Guarantor to become a party to this Contribution
Agreement and the Affiliate Guaranty unless otherwise agreed in writing by the
Required Lenders.
SECTION 8. Equitable Allocation. If as a result of any reorganization,
recapitalization or other corporate change in Parent or any of its Subsidiaries,
or as a result of any amendment, waiver or modification of the terms and
conditions governing the Guaranty Agreements or any of the
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<PAGE> 242
Guaranteed Obligations, or for any other reason, the contributions under this
Contribution Agreement become inequitable, the parties hereto shall promptly
modify and amend this Contribution Agreement to provide for an equitable
allocation of contributions. All such modifications and amendments shall be in
writing and signed by all parties hereto.
SECTION 9. Asset of Party to Which Contribution and Indemnification Are
Owing. The parties hereto acknowledge that the right to contribution and
indemnification hereunder shall each constitute an asset in favor of the party
to which such contribution or indemnification is owing.
SECTION 10. Successors and Assigns; Amendments. This Contribution
Agreement shall be binding upon each party hereto and its respective successors
and assigns and shall inure to the benefit of the parties hereto and their
respective successors and assigns. None of any Guarantor's rights or any
interest therein under this Contribution Agreement may be assigned or
transferred without the written consent of the Collateral Agent. In the event of
any such transfer or assignment of rights by any Guarantor, the rights and
privileges herein conferred upon that Guarantor shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. This Contribution Agreement shall not be amended without the
prior written consent of the Collateral Agent.
SECTION 11. Termination. This Contribution Agreement, as it may be
modified or amended from time to time, shall remain in effect, and shall not be
terminated as to the Guaranty Agreements, until the Guaranty Agreements have
been discharged or otherwise satisfied in accordance with their respective
terms.
SECTION 12. CHOICE OF LAW. THIS CONTRIBUTION AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF GEORGIA WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 13. Counterparts. This Contribution Agreement and any
amendments, waivers, consents or supplements may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts shall constitute but one and the same instrument.
SECTION 14. Additional Guarantors. Upon execution and delivery, after
the date hereof, by the Collateral Agent and a Subsidiary of Parent of an
instrument in the form of Annex 1, such Subsidiary of Parent shall become a
Guarantor hereunder with the same force and effect as if originally named as a
Guarantor hereunder. The rights and obligations of each Guarantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Guarantor as a party to this Agreement.
SECTION 15. Severability. In case any provision in or obligation under
this Contribution Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality or
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<PAGE> 243
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 16. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic or telecopy
communication) and mailed, telegraphed, telecopied or delivered, if to any
Guarantor (other than Parent), addressed to it at the address set forth for such
party in the Affiliate Guaranty, and if to any other party, at the address set
forth for such party in the Credit Agreement. All such notices and other
communications shall be given and deemed to have been received as provided by
the terms of the Credit Agreement.
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<PAGE> 244
IN WITNESS WHEREOF, Parent, the Borrowers, the other Guarantors, and
the Collateral Agent have duly executed this Contribution Agreement as of the
day and year first above written.
DYERSBURG CORPORATION
By:
-----------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, A TENNESSEE LIMITED PARTNERSHIP
By: Dyersburg Fabrics Inc., its sole general partner
By:
-----------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
UNITED KNITTING LIMITED PARTNERSHIP,
I, A TENNESSEE LIMITED PARTNERSHIP
By: United Knitting, Inc., its sole general partner
By:
-----------------------------------------
William S. Shropshire, Jr.
Secretary and Treasurer
(SIGNATURE PAGE TO CONTRIBUTION AGREEMENT)
<PAGE> 245
IQUE LIMITED PARTNERSHIP, I,
A TENNESSEE LIMITED PARTNERSHIP
By: IQUE, Inc., its sole general partner
By:
-----------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
ALAMAC KNIT FABRICS, INC.
By:
---------------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
AIH INC.
By:
---------------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
DYERSBURG FABRICS INC.
By:
---------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
ALAMAC ENTERPRISES INC.
By:
---------------------------------------
William S. Shropshire, Jr.
Vice President and Secretary
(SIGNATURE PAGE TO CONTRIBUTION AGREEMENT)
<PAGE> 246
UNITED KNITTING, INC.
By:
-----------------------------------------
William S. Shropshire, Jr.
Secretary and Treasurer
DFIC, INC.
By:
-----------------------------------------
William S. Shropshire, Jr.
Vice President
IQUE, INC.
By:
-----------------------------------------
William S. Shropshire, Jr.
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
UKIC, INC.
By:
-----------------------------------------
William S. Shropshire, Jr.
Vice President
IQUEIC, INC.
By:
-----------------------------------------
William S. Shropshire, Jr.
Vice President
(SIGNATURE PAGE TO CONTRIBUTION AGREEMENT)
<PAGE> 247
SUNTRUST BANK, ATLANTA, AS COLLATERAL
AGENT
By:
-----------------------------------
Raymond B. King
Vice President
By:
-----------------------------------
Thomas R. Banks
Assistant Vice President
(SIGNATURE PAGE TO CONTRIBUTION AGREEMENT)
<PAGE> 248
SCHEDULE I
AFFILIATE GUARANTORS
AIH Inc., a Delaware corporation
Dyersburg Fabrics Inc., a Tennessee corporation
Alamac Enterprises Inc. a Delaware corporation
United Knitting, Inc., a Tennessee corporation
DFIC, Inc., a Delaware corporation
IQUE, Inc., a Tennessee corporation
UKIC, Inc., a Delaware corporation
IQUEIC, Inc., a Delaware corporation
<PAGE> 249
ANNEX 1
SUPPLEMENT TO
CONTRIBUTION AGREEMENT
SUPPLEMENT NO. ________ dated as of ___________, to
the ONTRIBUTION AGREEMENT dated as of August 27, 1997 (the "Contribution
Agreement") by and among Dyersburg Corporation ("Parent"), (together with any
successors, referred to herein individually as a "Guarantor" and collectively as
"Guarantors"), and SunTrust Bank, Atlanta, a Georgia banking corporation, in its
capacity as collateral agent ("Collateral Agent") for the banks and other
lending institutions (the "Lenders") parties to the Credit Agreement dated as of
August 25, 1997 among Parent, the other Borrowers, the Lenders, SunTrust Bank,
Atlanta as agents (the "Agent"), and Collateral Agent (as amended, modified or
supplemented from time to time, the "Credit Agreement"; capitalized terms used
herein but not otherwise defined herein have the meanings assigned to such terms
in the Credit Agreement or the Contribution Agreement, as the case may be).
Guarantors have entered into the Contribution Agreement in
order to induce the Lenders to make the Loans and the Agent to issue the Letters
of Credit. Pursuant to Section 7.10 of the Credit Agreement, each Material
Subsidiary incorporated in the United States that was not in existence or not a
Material Subsidiary or incorporated in the United States on the date thereof is
required to enter into the Contribution Agreement as a Guarantor upon becoming a
Material Subsidiary of Parent incorporated in the United States. Section 14 of
the Contribution Agreement provides that additional Subsidiaries of Parent may
become Guarantors under the Contribution Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned ("New Guarantor")
is a Subsidiary of Parent incorporated in the United States and is executing
this Supplement in accordance with the requirements of the Credit Agreement to
become a Guarantor under the Contribution Agreement in order to induce the
Lenders to make additional Loans, and the Agent to issue additional Letters of
Credit, and as consideration for the Loans previously made and Letters of Credit
previously issued.
Accordingly, Collateral Agent and New Guarantor agree as
follows:
SECTION 1. In accordance with Section 14 of the Contribution
Agreement, New Guarantor by its signature below becomes a Guarantor under the
Contribution Agreement with the same force and effect as if originally named
therein as a Guarantor, and New Guarantor hereby agrees to all the terms and
provisions of the Contribution Agreement applicable to it as a Guarantor
thereunder. Each reference to a "Guarantor" in the Contribution Agreement shall
be deemed to include New Guarantor. The Contribution Agreement is hereby
incorporated herein by reference.
SECTION 2. This Supplement has been duly authorized, executed
and delivered by New Guarantor and constitutes a legal, valid and binding
obligation of New Guarantor, enforceable
<PAGE> 250
against it in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity).
SECTION 3. This Supplement and any amendments, waivers,
consents or supplements may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
shall constitute but one and the same instrument.
SECTION 4. This Supplement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto, and written or
telephonic notification of such execution and authorization of delivery thereof
has been received by New Guarantor and Collateral Agent.
SECTION 5. Except as expressly supplemented hereby, the
Contribution Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 7. In case any provision in or obligation under this
Supplement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 8. All communications and notices hereunder shall be
in writing and given as provided in Section 16 of the Contribution Agreement.
All communications and notices hereunder to New Guarantor shall be given to it
at the address set forth under its signature.
SECTION 9. New Guarantor agrees to reimburse Collateral Agent
for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, disbursements and other charges of counsel for
Collateral Agent.
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<PAGE> 251
IN WITNESS WHEREOF, New Guarantor and Collateral Agent have
duly executed this Supplement to the Contribution Agreement as of the day and
year first above written.
[NAME OF NEW GUARANTOR]
By:___________________________
Name:
Title:
Address: ____________________
______________________________
______________________________
[COLLATERAL AGENT]
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
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<PAGE> 252
EXHIBIT J
DYERSBURG CORPORATION
BORROWING BASE CERTIFICATE
AS OF ____________________
This Borrowing Base Certificate is furnished to SUNTRUST BANK, ATLANTA, as
Agent, pursuant to that certain Credit Agreement dated as of August 27, 1997, by
and among DYERSBURG CORPORATION, a Tennessee corporation ("Parent"), DYERSBURG
FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited partnership ("DFLP"), UNITED
KNITTING LIMITED PARTNERSHIP, I, a Tennessee limited partnership ("UKLP"), IQUE
LIMITED PARTNERSHIP, I, a Tennessee limited partnership ("IQLP") or ALAMAC KNIT
FABRICS, INC. (collectively, the "Borrowers"), SUNTRUST BANK, ATLANTA, as Agent,
SUNTRUST BANK, ATLANTA, as Collateral Agent and the Lender parties thereto (as
amended, modified or supplemented from time to time, the "Credit Agreement").
Unless otherwise defined herein, the terms used in this Borrowing Base
Certificate have the meanings ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected (officer title) of each of the Revolving
----------------------
Borrowers or the sole general partner thereof.
2. I have reviewed the terms of the Credit Agreement and I have made, or
have caused to be made under my supervision, the attached computation
of the Borrowing Base as defined in Section 1.01 of the Agreement.
3. No change of name, corporate identity or address of the Chief
Executive Office of any of the Revolving Borrowers has occurred.
4. I have reviewed the terms of the Credit Agreement and, pursuant to such
review, I have no knowledge of the existence of any condition or event
which would constitute a Default or Event of Default, except as set
forth below (detailing the nature of the condition of event, the period
during which it has existed and the action which any Borrower has
taken, is taking, or proposes to take with respect to each such
condition of event):
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------.
5. All of the Eligible Inventory is located at one of the Collateral
Locations.
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<PAGE> 253
6. The information above and any attached exhibits do not contain any
untrue statement of material fact or omit a material fact, either
individually or in aggregate, that would make the information or any
attached exhibits misleading.
By: _________________________________________
Name:
______________________, of Dyersburg
Fabrics Inc., the sole general partner of
Dyersburg Fabrics Limited Partnership, I
By: _________________________________________
Name:
______________________, of United Knitting
Inc., the sole general partner of
United Knitting Limited Partnership, I
By: _________________________________________
Name:
______________________, of IQUE, Inc., the sole
general partner of IQUE Limited Partnership, I
By: _________________________________________
Name:
______________________, of Alamac
Knit Fabrics, Inc.
J-2
<PAGE> 254
SCHEDULE 1
DYERSBURG CORPORATION
BORROWING BASE
DATED AS OF ______________
COLLATERAL VALUE
A. Greige
1. DFLP $____________
2. UKLP $____________
3. IQLP $____________
4. Alamac $____________
TOTAL $_______________
B. Finished Goods
1. DFLP $____________
2. UKLP $____________
3. IQLP $____________
4. Alamac $____________
TOTAL $____________
C. Yarn
1. DFLP $____________
2. UKLP $____________
3. IQLP $____________
4. Alamac $____________
TOTAL $________________
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<PAGE> 255
D. Thread
1. DFLP $____________
2. UKLP $____________
3. IQLP $____________
4. Alamac $____________
TOTAL $________________
E. Other (Specify)___________ $____________
1. DFLP $____________
2. UKLP $____________
3. IQLP $____________
4. Alamac $____________
TOTAL $________________
F. Less: Ineligible Inventory $(_______________)
1. DFLP $____________
2. UKLP $____________
3. IQLP $____________
4. Alamac $____________
TOTAL $________________
TOTAL ELIGIBLE INVENTORY $____________
ADVANCE RATE X 50%
INVENTORY BORROWING BASE $____________
J-4
<PAGE> 256
ACCOUNTS RECEIVABLES
A. Total Receivables
1. DFLP $________________
2. UKLP $________________
3. IQLP $________________
4. Alamac $________________
TOTAL $_______________
B. Less: Returns
1. DFLP $________________
2. UKLP $________________
3. IQLP $________________
4. Alamac $________________
TOTAL $_______________ %
C. Less: Ineligible Receivables
1. DFLP $________________
2. UKLP $________________
3. IQLP $________________
4. Alamac $________________
TOTAL $_______________
D. Total Eligible Receivables
1. DFLP $________________
2. UKLP $________________
3. IQLP $________________
4. Alamac $________________
TOTAL $_______________
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<PAGE> 257
TOTAL ELIGIBLE ACCOUNTS $_______________
ADVANCE RATE X 85%
RECEIVABLES BORROWING BASE $____________
LESS: TOTAL BORROWING BASE $____________
LESS: REVOLVER OUTSTANDINGS
1. DFLP $_______________
2. UKLP $_______________
3. IQLP $_______________
4. Alamac $_______________
TOTAL $(______)_______
TOTAL AVAILABLE CREDIT $____________
J-6
<PAGE> 258
EXHIBIT K
FORM OF
ASSIGNMENT AND ACCEPTANCE AGREEMENT
ASSIGNMENT AND ACCEPTANCE AGREEMENT (the "Assignment
Agreement") dated as of ___________________, between
___________________________________________________________ ("Assignor") and
__________________________________ ("Assignee"). All capitalized terms used
herein and not
otherwise defined shall have the respective meanings provided such terms in the
Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, Assignor is a party to a Credit Agreement, dated as
of August 27, 1997 (as amended to the date hereof, the "Credit Agreement"),
among DYERSBURG CORPORATION, a Tennessee corporation ("Parent"), DYERSBURG
FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited partnership ("DFLP"), UNITED
KNITTING LIMITED PARTNERSHIP, I, a Tennessee limited partnership ("UKLP"), IQUE
LIMITED PARTNERSHIP, I, a Tennessee limited partnership ("IQLP"), ALAMAC KNIT
FABRICS, INC., a Delaware corporation ("Alamac"; Parent, DFLP, UKLP, IQLP and
Alamac referred to collectively herein as the "Borrowers"), various financial
institutions (including Assignor, the "Lenders"), SunTrust Bank, Atlanta, as
Agent for the Lenders (the "Agent") and SunTrust Bank, Atlanta as Collateral
Agent for the Lenders (the "Collateral Agent"); and
WHEREAS, Assignor has (i) a Revolving Loan Commitment of
$___________ under the Credit Agreement pursuant to which it has made
outstanding Revolving Advances of $______________ and Swing Line Exposure of
$______________ and L/C Exposure of $____________________; and (ii) a Term Loan
of $_______________ outstanding under the Credit Agreement;
WHEREAS, Assignor and Assignee wish Assignor to assign to
Assignee its rights under the Credit Agreement with respect to a portion of its
Revolving Loan Commitment and of its outstanding Revolving Advances, Swing Line
Exposure and L/C Exposure thereunder, as well as a portion of its Term Loan; and
WHEREAS, Assignor and Assignee wish Assignee to assume the
obligations of Assignor under the Credit Agreement to the extent of the rights
so assigned;
NOW THEREFORE, in consideration of the mutual agreements
herein contained, the parties hereto agree as follows:
1. Assignment. Assignor hereby assigns to Assignee, without
recourse, or representation or warranty (other than expressly provided herein)
and subject to Section 5 hereof, ___% as the
<PAGE> 259
"Assignee's Share" ("Assignee's Share") of all of Assignor's rights, title and
interest arising under the Credit Agreement relating to Assignor's Revolving
Loan Commitment, including with respect to Assignee's Share of the Revolving
Advances, heretofore made by the Assignor under the Revolving Loan Commitment
and Assignee's Share of the Assignor's Swing Line Exposure and L/C Exposure
pursuant to the Credit Agreement, as well as Assignee's Share of Assignor's Term
Loans outstanding pursuant to the Credit Agreement. The dollar amount of
Assignee's Share of Assignor's Revolving Loan Commitment is $__________, the
dollar amount of Assignee's Share of Assignor's outstanding Revolving Advances
under the Revolving Loan Commitment is $__________, the dollar amount of
Assignee's Share of the Assignor's Swing Line Exposure is $_________________,
the dollar amount of Assignee's Share of the Assignor's L/C Exposure is
$___________________ and the dollar amount of the Assignee's Share of the
Assignor's Term Loan is $_________________.
2. Assumption. Assignee hereby assumes from Assignor all of Assignor's
obligations arising under the Credit Agreement relating to Assignee's Share of
Assignor's Revolving Loan Commitment and of the Revolving Advances, Swing Line
Exposure and L/C Exposure outstanding thereunder, as well as Assignee's Share of
the Term Loans. It is the intent of the parties hereto that Assignor shall be
released from all of its obligations under the Credit Agreement relating to
Assignee's Share.
3. Assignments; Participations. Assignee may not assign all or any
part of the rights granted to it hereunder. Assignee may sell or grant
participations in all or any part of the rights granted to it hereunder in
accordance with the provisions of Section 11.06 of the Credit Agreement.
4. Payment of Interest and Fees to Assignee.
(a) Notwithstanding anything to the contrary contained in this
Assignment Agreement, if and when Assignor receives or collects any payment of
interest on any Advance attributable to Assignee's Share or any payment of the
Commitment Fee or Letter of Credit Fees or Bond Letter of Credit Fees
attributable to Assignee's Share, Assignor shall distribute to Assignee such
payment but only to the extent such interest or fee accrued after the Assignment
Effective Date (as hereinafter defined).
(b) Notwithstanding anything to the contrary contained in this
Assignment Agreement, if and when Assignee receives or collects any payment of
interest on any Advance or any payment of the Commitment Fee, Letter of Credit
Fee or Bond Letter of Credit Fee which, in any such case, is required to be paid
to Assignor pursuant to clause (a) above, Assignee shall distribute to Assignor
such payment.
5. Payments on Assignment Effective Date. In consideration of the
assignment by Assignor to Assignee of Assignee's Share of Assignor's outstanding
Revolving Loan Commitment and Advances as set forth above, Assignee agrees to
pay to Assignor on or prior to the Assignment Effective Date an amount specified
by Assignor in writing on or prior to the Assignment Effective Date which
represents Assignee's Share of the principal amount of the respective Advances
made
2
<PAGE> 260
by Assignor pursuant to the Revolving Loan Commitment and Term Loans, in each
case, as outstanding on the Assignment Effective Date.
6. Effectiveness. (a) This Assignment Agreement shall become effective
on the date (the "Assignment Effective Date") (which is at least five days after
the date hereof) on which (i) Assignor and Assignee shall have signed a copy
hereof (whether the same or different copies) and, in the case of Assignee,
shall have delivered same to Assignor, (ii) the Borrowers shall have consented
hereto, (iii) a copy of the fully executed Assignment, a fee of $3,000 and the
Notes evidencing the Revolving Loan Commitment and Term Loans assigned hereby
shall have been delivered to the Agent, and (iv) Assignee shall have paid to
Assignor the amount set forth in Section 5.
(b) It is agreed that all interest on any Advance attributable
to Assignee's Share and all fees attributable to Assignee's Share, which, in
each case, accrues on and after the Assignment Effective Date shall be paid
directly to the Assignee in accordance with Section 1.12 of the Credit
Agreement.
7. Amendment of Credit Agreement. On the Assignment Effective Date the
Credit Agreement shall be amended by deeming the signature of Assignee herein as
a signature to the Credit Agreement. The Assignee shall be deemed a "Lender" for
all purposes under the Credit Agreement and shall be subject to and shall
benefit from all of the rights and obligations of a Lender under the Credit
Agreement. The address of the Assignee for notice purposes shall be as set forth
below, and the Credit Agreement shall be amended by deeming such signature page
and address to be included thereon. Without limiting the generality of the
foregoing, Assignee agrees that it will perform its obligations as a Lender
under the Credit Agreement as required by the terms thereof and Assignee
appoints and authorizes the Agents to take such actions as Agents on its behalf
and exercise such powers under the Credit Agreement and the other Credit
Documents as are delegated to the Agents by the terms of the Credit Agreement
and the other Credit Documents, together with such powers as are reasonably
incidental thereto.
8. Representations and Warranties. Each of the Assignor and the
Assignee represents and warrants to the other party as follows:
(a) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment Agreement and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
Assignment Agreement;
(b) the making and performance by it of this Assignment Agreement
and all documents required to be executed and delivered by it hereunder do not
and will not violate any law or regulation of the jurisdiction of its
incorporation or any other law or regulation applicable to it;
(c) this Assignment Agreement has been duly executed and delivered
by it and constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and
3
<PAGE> 261
(d) all consents, licenses, approvals, authorizations, exemptions,
registrations, filings, opinions and declarations from or with any agency,
department, administrative authority, statutory corporation or judicial entity
necessary for the validity or enforceability of its obligations under this
Assignment Agreement have been obtained, and no governmental authorizations
other than any already obtained are required in connection with its execution,
delivery and performance of this Assignment Agreement.
9. Expenses. The Assignor and the Assignee agree that each party shall
bear its own expenses in connection with the preparation and execution of this
Assignment Agreement.
10. Miscellaneous. (a) Assignor shall not be responsible to Assignee
for the execution (by any party other than the Assignor), effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of the
Credit Agreement, the Notes, the Guaranty Agreements or any Security Documents
or for any representations, warranties, recitals or statements made therein or
in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents made or furnished or
made available by Assignor to Assignee or by or on behalf of the Borrowers or
any Guarantor to Assignor or Assignee in connection with the Credit Agreement,
the Notes, the Guaranty Agreements, the Security Documents and the transactions
contemplated thereby. Assignor shall not be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in the Credit Agreement, the Notes, the
Guaranty Agreements or any Security Document or as to the use of the proceeds of
the Advances or as to the existence or possible existence of any event which
constitutes an Event of Default or which with the giving of notice or the
passage of time or both would constitute an Event of Default.
(b) Assignee represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the
Borrowers and each Guarantor in connection with the making of the Advances and
the assignment of Assignee's Share of Assignor's Revolving Loan Commitments and
of Assignor's Revolving Advances and Term Loans to Assignee hereunder and has
made and shall continue to make its own appraisal of the creditworthiness of the
Borrowers and each Guarantor. Assignor shall have no duty or responsibility
either initially or on a continuing basis to make any such investigation or any
such appraisal on behalf of Assignee or to provide Assignee with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Advances or at any time or times thereafter and shall
further have no responsibility with respect to the accuracy of, or the
completeness of, any information provided to Assignee, whether by Assignor or by
or on behalf of the Borrowers or any Guarantor.
(c) THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS
ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF GEORGIA.
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<PAGE> 262
(d) No term or provision of this Assignment Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by both parties.
(e) This Assignment Agreement may be executed in one or more
counterparts, each of which shall be an original but all of which, taken
together, shall constitute one and the same instrument.
(f) The Assignor may at any time or from time to time grant to
others assignments or participations in its Revolving Loan Commitments or the
Advances or the Term Loans but not in the portions thereof assigned to Assignee
pursuant to this Assignment Agreement. The Assignor represents and warrants that
it has not at any time prior to the Assignment Effective Date encumbered or
assigned the portion of its Revolving Loan Commitments or Advances or Term Loans
being assigned hereunder.
(g) All payments hereunder or in connection herewith shall be
made in Dollars and in immediately available funds, if payable to the Assignor,
to the account of the Assignor at its address as designated in the Credit
Agreement, and, if payable to the Assignee, to the account of the Assignee's
address, as designated on the signature page hereof.
(h) This Assignment Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. Neither of the parties hereto may assign or transfer any of its rights
or obligations under this Assignment Agreement without the prior consent of the
other party.
(i) All representations and warranties made herein and indemnities
provided for herein shall survive the consummation of the transaction
contemplated hereby.
(j) The Assignee acknowledges receipt of copies of the documents
received in connection with the transactions contemplated by the Credit
Agreement and this Assignment Agreement.
5
<PAGE> 263
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement as of the date first above written.
[NAME OF ASSIGNOR]
By:
------------------------------
Title:
Assignee's Share of [NAME OF ASSIGNEE]
Revolving Loan Commitment:
$ By:
------------------ ------------------------------
Title:
Assignee's Share of
Term Loans:
$
------------------
Address:
- -------------------------
- -------------------------
- -------------------------
Tel. No:
---------------
Fax No:
---------------
CONSENTED TO AS OF THE
DATE SET FORTH ABOVE:
DYERSBURG CORPORATION
By:
------------------------------
Name:
-----------------------
Title:
-----------------------
6
<PAGE> 264
DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, a Tennessee Limited Partnership
By: Dyersburg Fabrics Inc., its sole general partner
By:
------------------------------
Name:
-------------------------
Title:
-------------------------
UNITED KNITTING LIMITED PARTNERSHIP, I,
a Tennessee limited partnership
By: United Knitting, Inc., its sole general partner
By:
------------------------------
Name:
-------------------------
Title:
-------------------------
IQUE LIMITED PARTNERSHIP, I,
a Tennessee limited partnership
By: IQUE, Inc., its sole general partner
By:
------------------------------
Name:
-------------------------
Title:
-------------------------
ALAMAC KNIT FABRICS, INC.
By:
------------------------------
Name:
-------------------------
Title:
-------------------------
7
<PAGE> 265
SUNTRUST BANK, ATLANTA,
as Agent and Collateral Agent
By:
------------------------------
Name:
-------------------------
Title:
-------------------------
By:
------------------------------
Name:
-------------------------
Title:
-------------------------
8
