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EXHIBIT 4.9
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
among
AVONDALE MILLS, INC.
The Banks Listed Herein
and
WACHOVIA BANK, N.A.,
as Agent
Dated as of September 28, 2000
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TABLE OF CONTENTS
CREDIT AGREEMENT
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ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01 Definitions.....................................................................................1
Section 1.02 Accounting Terms and Determinations............................................................24
Section 1.03 References.....................................................................................25
Section 1.04 Use of Defined Terms...........................................................................25
Section 1.05 Terminology....................................................................................25
ARTICLE II THE CREDITS...........................................................................................25
Section 2.01 Commitments to Lend............................................................................25
Section 2.02 Method of Borrowing............................................................................27
Section 2.03 Notes..........................................................................................28
Section 2.04 Maturity of Loans..............................................................................29
Section 2.05 Interest Rates.................................................................................29
Section 2.06 Fees...........................................................................................31
Section 2.07 Optional Termination or Reduction of Commitments...............................................32
Section 2.08 Mandatory Reduction and Termination of Commitments.............................................32
Section 2.09 Optional Prepayments...........................................................................33
Section 2.10 Mandatory Prepayments..........................................................................33
Section 2.11 General Provisions as to Payments..............................................................33
Section 2.12 Computation of Interest and Fees...............................................................35
Section 2.13 Letter of Credit Provisions....................................................................36
ARTICLE III CONDITIONS TO BORROWINGS.............................................................................41
Section 3.01 Conditions to First Borrowing and Effectiveness of this Agreement..............................41
Section 3.02 Conditions to All Borrowings...................................................................45
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................46
Section 4.01 Corporate Existence and Power..................................................................46
Section 4.02 Corporate and Governmental Authorization; No Contravention.....................................46
Section 4.03 Binding Effect.................................................................................46
Section 4.04 Financial Information..........................................................................46
Section 4.05 No Litigation..................................................................................47
Section 4.06 Compliance with ERISA..........................................................................47
Section 4.07 Compliance with Laws; Payment of Taxes.........................................................48
Section 4.08 Subsidiaries...................................................................................48
Section 4.09 Investment Company Act.........................................................................48
Section 4.10 Public Utility Holding Company Act.............................................................48
Section 4.11 Ownership of Property; Liens...................................................................48
Section 4.12 No Default.....................................................................................48
Section 4.13 Full Disclosure................................................................................49
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Section 4.14 Environmental Matters..........................................................................49
Section 4.15 Capital Stock..................................................................................49
Section 4.16 Margin Stock...................................................................................50
Section 4.17 Insolvency.....................................................................................50
ARTICLE V COVENANTS..............................................................................................50
Section 5.01 Information....................................................................................50
Section 5.02 Inspection of Property, Books and Records......................................................53
Section 5.03 Fixed Charge Coverage Ratio....................................................................53
Section 5.04 Intentionally Omitted..........................................................................53
Section 5.05 Senior Debt to Capitalization Ratio............................................................53
Section 5.06 Total Debt to Cash Flow Ratio..................................................................53
Section 5.07 Restricted Payments............................................................................53
Section 5.08 Intentionally Omitted..........................................................................53
Section 5.09 Loans or Advances..............................................................................54
Section 5.10 Investments....................................................................................54
Section 5.11 Negative Pledge................................................................................55
Section 5.12 Maintenance of Existence.......................................................................56
Section 5.13 Dissolution....................................................................................56
Section 5.14 Consolidations, Mergers and Sales of Assets....................................................56
Section 5.15 Use of Proceeds................................................................................56
Section 5.16 Compliance with Laws; Payment of Taxes.........................................................56
Section 5.17 Insurance......................................................................................57
Section 5.18 Change in Fiscal Year..........................................................................57
Section 5.19 Maintenance of Property........................................................................57
Section 5.20 Environmental Notices..........................................................................57
Section 5.21 Environmental Matters..........................................................................57
Section 5.22 Environmental Release..........................................................................57
Section 5.23 Additional Consolidated Senior Debt; Debt of Receivables Subsidiary............................58
Section 5.24 Transactions with Affiliates...................................................................58
Section 5.25 Collateral.....................................................................................58
Section 5.26 Subordinated Debt..............................................................................60
ARTICLE VI DEFAULTS..............................................................................................60
Section 6.01 Events of Default..............................................................................60
Section 6.02 Notice of Default..............................................................................63
ARTICLE VII THE AGENT............................................................................................63
Section 7.01 Appointment; Powers and Immunities.............................................................63
Section 7.02 Reliance by Agent..............................................................................64
Section 7.03 Defaults.......................................................................................64
Section 7.04 Rights of Agent as a Bank......................................................................64
Section 7.05 Indemnification................................................................................64
Section 7.06 CONSEQUENTIAL DAMAGES..........................................................................65
Section 7.07 Payee of Note Treated as Owner.................................................................65
Section 7.08 Nonreliance on Agent and Other Banks...........................................................65
Section 7.09 Failure to Act.................................................................................66
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Section 7.10 Resignation or Removal of Agent................................................................66
ARTICLE VIII CHANGE IN CIRCUMSTANCES; COMPENSATION...............................................................66
Section 8.01 Basis for Determining Interest Rate Inadequate or Unfair.......................................66
Section 8.02 Illegality.....................................................................................67
Section 8.03 Increased Cost and Reduced Return..............................................................67
Section 8.04 Base Rate Loans or Other Fixed Rate Loans Substituted for Affected Fixed Rate Loans............69
Section 8.05 Compensation...................................................................................69
ARTICLE IX MISCELLANEOUS.........................................................................................69
Section 9.01 Notices........................................................................................69
Section 9.02 No Waivers.....................................................................................70
Section 9.03 Expenses; Documentary Taxes....................................................................70
Section 9.04 Indemnification................................................................................70
Section 9.05 Setoff; Sharing of Setoffs.....................................................................70
Section 9.06 Amendments and Waivers.........................................................................71
Section 9.07 No Margin Stock Collateral.....................................................................72
Section 9.08 Successors and Assigns.........................................................................72
Section 9.09 Confidentiality................................................................................75
Section 9.10 Representation by Banks........................................................................75
Section 9.11 Obligations Several............................................................................75
Section 9.12 Georgia Law....................................................................................75
Section 9.13 Severability...................................................................................75
Section 9.14 Interest.......................................................................................76
Section 9.15 Interpretation.................................................................................76
Section 9.16 Waiver of Jury Trial; Consent to Jurisdiction..................................................76
Section 9.17 Counterparts...................................................................................76
Section 9.18 Release of Receivables Program Assets..........................................................76
EXHIBIT A-1 Form of Revolver Loan Note
EXHIBIT A-2 Form of Swing Loan Note
EXHIBIT B-1 Form of Opinion of Georgia Counsel for the Borrower and the Parent
EXHIBIT B-2 Form of Local Counsel Opinion as to Mortgage
EXHIBIT C Form of Opinion of Special Counsel for the Agent
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Notice of Borrowing
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Closing Certificate
EXHIBIT H Form of Mortgage
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EXHIBIT I Form of Amended and Restated Parent Guaranty
EXHIBIT J Form of Amended and Restated Security Agreement
EXHIBIT K Form of Amended and Restated SunTrust Intercreditor Agreement
EXHIBIT L Form of Amended and Restated Stock Pledge Agreement
EXHIBIT M Form of Receivables Intercreditor Agreement
EXHIBIT N Form of Borrower Pledge Agreement
EXHIBIT O Limited Guaranty Agreement
EXHIBIT P Security Agreement (Avondale Mills Graniteville Fabrics, Inc.)
EXHIBIT Q Mortgage and Assignment of Leases, Rents and Profits
EXHIBIT R Form of Notice of Letter of Credit
Schedule 4.04 Intangible Assets in Existence Prior to the Original Closing Date
Schedule 4.05 Litigation
Schedule 4.08 Subsidiaries
Schedule 4.14 Environmental Matters
Schedule 5.11 Existing Liens
Schedule 5.17 Description of Insurance
Schedule 5.25 Plants
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of
September 28, 2000 among AVONDALE MILLS, INC., the BANKS listed on the signature
pages hereof, and WACHOVIA BANK, N.A. (formerly Wachovia Bank of Georgia, N.A.),
as Agent.
The Borrower has requested amendments to the Original Credit
Agreement in order, among other things, to extend the Termination Date to
January 30, 2004 and provide for an expanded letter of credit facility, and the
Banks are willing to provide such financing pursuant to the terms and conditions
set forth in this Agreement, which is an amendment and restatement of, and which
replaces, the Original Credit Agreement.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The terms as defined in this
Section 1.01 shall, for all purposes of this Agreement and any amendment hereto
(except as herein otherwise expressly provided or unless the context otherwise
requires), have the meanings set forth herein:
"Accounts Receivable Collateral" has the meaning set forth in
the Security Agreement.
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.05(c).
"Affiliate" of any Person means (i) any Person that directly,
or indirectly through one or more intermediaries, controls such Person (a
"Controlling Person"), (ii) any other Person which is controlled by or is under
common control with such Person, or (iii) any other Person of which such Person
owns, directly or indirectly, 20% or more of the common stock or equivalent
equity interests. As used herein, the term "control" means possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agent" means Wachovia Bank, N.A. (formerly Wachovia Bank of
Georgia, N.A.), a national banking association organized under the laws of the
United States of America, in its capacity as administrative and syndication
agent for the Banks hereunder, and its successors and permitted assigns in such
capacity.
"Agent's Letter Agreement" means the letter agreement dated as
of August 31, 2000 between the Borrower and the Agent, and any amendments and
modifications thereto.
"Aggregate Commitment" means the sum of all the Commitments.
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"Aggregate Unused Commitment" means the sum of all the Unused
Commitments.
"Agreement" means this Second Amended and Restated Credit
Agreement (which amends, restates and replaces the Original Credit Agreement),
together with all amendments and supplements hereto.
"AMGF" means Avondale Mills Graniteville Fabrics, Inc., a
Delaware corporation which is a Wholly Owned Subsidiary and which formerly was
known as Camp Helen Co.
"AMGF Distribution Facility Lease" means the Lease Agreement
dated May 16, 1997, between Graniteville, L.L.C., as "Lessor", and AMGF, as
"Lessee", pursuant to which the "Lessor" will construct a 254,774 square foot
distribution facility on premises located on Bettis Academy Road, Sage Mill
Industrial Park, Aiken County, South Carolina, and AMGF will lease such
distribution facility for a term of 10 years, commencing November 15, 1997, for
a monthly base rent of $58,385 on a "triple net" basis.
"AMGF Documents" means the AMGF Guaranty, the AMGF Mortgage
and the AMGF Security Agreement, or any one, or more, or all of them, as the
context shall require.
"AMGF/Graniteville Transaction" means the transaction which
includes the following related events: (i) the transfer by the Borrower, as an
additional equity capital contribution, of the Graniteville Indigo Dyeing
Facility (having a book value of approximately $6,300,000) to AMGF; (ii) the
loan by the Borrower to AMGF of up to $40,000,000 (or such amount in excess
thereof as to which the consent of the Required Banks has been obtained) to
construct and equip a weave room addition to the Graniteville Indigo Dyeing
Facility and to equip the facility leased under the AMGF Distribution Facility
Lease; (iii) the release by the Agent of the Graniteville Indigo and Dyeing
Facility from the Mortgage and the Security Agreement; and (iv) the execution
and delivery by AMGF of the AMGF Documents pursuant to the Second Amendment, as
described in Section 5.25(e).
"AMGF Guaranty" means the Limited Guaranty Agreement dated as
of the date of the Second Amendment, substantially in the form of Exhibit O,
executed by AMGF in favor of the Agent, for the benefit of the Banks,
unconditionally Guaranteeing the payment of all of the Obligations, but pursuant
to which the liability of AMGF is limited as provided in Section 15 thereof.
"AMGF Mortgage" means the Mortgage and Assignment of Leases,
Rents and Profits executed by AMGF dated as of the date of the Second Amendment,
substantially in the form of Exhibit P, conveying a first priority security
title to and Lien on the real property and improvements at the AMGF Plant to the
Agent, for the benefit of the Banks, subject only to the Permitted Encumbrances
applicable thereto, as security for the obligations of AMGF pursuant to the AMGF
Guaranty, together with all amendments and supplements thereto.
"AMGF Plant" means the Graniteville Indigo Dyeing Facility and
all equipment now or hereafter located thereon or used in connection therewith,
including, without limitation,
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all property added in connection with the construction of a weave room addition
pursuant to the AMGF/Graniteville Transaction, and all replacements thereof and
substitutions therefor.
"AMGF Security Agreement" means the Security Agreement
executed by AMGF dated as of the date of the Second Amendment, substantially in
the form of Exhibit Q, granting to the Agent, for the benefit of the Banks, a
first priority security interest in all accounts, inventory, general
intangibles, documents and equipment of AMGF, including without limitation, the
personal property at the AMGF Plant and at the facility leased under the AMGF
Distribution Facility Lease, together with all proceeds of all of the foregoing,
subject only to the Permitted Encumbrances, together with all amendments and
supplements thereto.
"Anniversary Date" means the last day of each 12 month period,
commencing on the Closing Date.
"Applicable Margin" has the meaning set forth in Section
2.05(a).
"Assignee" has the meaning set forth in Section 9.08(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.08(c) in the form attached hereto as
Exhibit D.
"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages hereof as
having a Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate
per annum equal to the higher as of such day of (i) the Prime Rate, and (ii)
one-half of one percent above the Federal Funds Rate. For purposes of
determining the Base Rate for any day, changes in the Prime Rate shall be
effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to bear
interest at a rate based upon the Base Rate.
"Bill and Hold" means an arrangement in which the Borrower or
its Subsidiary, at the request of one of its customers contained in a written
purchase order and/or similar writing, invoices the customer for goods but
retains possession of such goods for a period of time; provided, that all of the
following requirements are satisfied:
(a) title to, and the risk of loss of, the goods is
transferred to the customer, and the Borrower's or Subsidiary's
inventory records are marked to indicate that title has passed;
(b) the Borrower's or Subsidiary's records are adequate
to enable the Borrower or Subsidiary or a third-party to identify the
goods subject to such arrangement as separate from the Borrower's or
Subsidiary's own inventory at any time; and
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(c) the related invoice is payable on the normal due date
for similar Receivables of the Borrower or Subsidiary that do not arise
from a Bill and Hold arrangement.
"Borrower" means Avondale Mills, Inc., an Alabama corporation,
and its successors and its permitted assigns.
"Borrower Pledge Agreement" means a Stock Pledge Agreement, in
substantially the form of Exhibit N, executed pursuant to the Original Credit
Agreement by the Borrower in favor of the Agent , for the benefit of the Banks,
pledging all of the Receivables Subsidiary Pledged Stock to secure the payment
of all of the Obligations, pursuant to the provisions of Section 9.18.
"Borrowing" means a borrowing hereunder consisting of Revolver
Loans or Swing Loans. A Borrowing is a "Domestic Borrowing" if such Loans are
Domestic Loans or a "Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans.
A Domestic Borrowing is a "Set Rate Borrowing" if such Domestic Loans are Set
Rate Loans or a "Base Rate Borrowing" if such Domestic Loans are Base Rate
Loans.
"Capital Expenditures" means for any period the sum of all
capital expenditures incurred during such period by the Parent and its
Consolidated Subsidiaries, as determined in accordance with GAAP, but in any
event including expenditures for assets acquired under Capitalized Leases.
"Capital Stock" means any nonredeemable capital stock of the
Parent or any Consolidated Subsidiary (to the extent issued to a Person other
than the Parent), whether common or preferred.
"Capitalized Lease" means any lease which is required to be
capitalized on a consolidated balance sheet of the lessee and its subsidiaries
in accordance with GAAP.
"Capitalized Rentals" of any Person means as of the date of
any determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such Person
in accordance with GAAP.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C.ss. 9601 et. seq. and its implementing
regulations and amendments.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section
8.02.
"Closing Certificate" has the meaning set forth in Section
3.01(b)(ii).
"Closing Date" means September 28, 2000.
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"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code.
"Collateral" means (i) the personal property in which the
Agent is granted a security interest pursuant to the Security Agreement and the
AMGF Security Agreement, respectively, (ii) the Plants and the AMGF Plant
conveyed to the Agent pursuant to the Operative Mortgages, and (iii) the Pledged
Stock pledged to the Agent pursuant to the Pledge Agreement; provided, however,
that all references to Collateral shall exclude the Receivables Program Assets,
but shall include the Receivables Subsidiary Pledged Stock and the Purchase
Money Note.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Sections 2.07 and 2.08.
"Compliance Certificate" has the meaning set forth in Section
5.01(c).
"Consolidated Adjusted Tangible Net Worth" means, at any time,
Stockholders' Equity, less the sum of the value, as set forth or reflected on
the most recent consolidated balance sheet of the Parent and its Consolidated
Subsidiaries, prepared in accordance with GAAP, of any of the following, but
only to the extent created, incurred or arising on or after the Original Closing
Date (except as specified in clause (A) below):
(A) Any surplus resulting from any write-up of assets
subsequent to August 25, 1995, other than in connection with the acquisition of
the Graniteville Assets;
(B) All assets which would be treated as intangible assets for
balance sheet presentation purposes under GAAP, including without limitation
goodwill (whether representing the excess of cost over book value of assets
acquired, or otherwise), trademarks, tradenames, copyrights, patents and
technologies, and unamortized debt discount and expense, other than capitalized
transaction costs incurred in connection with the acquisition of the
Graniteville Assets; and
(C) To the extent not included in (B) of this definition, any
amount at which shares of Capital Stock of the Parent appear as an asset on the
balance sheet of the Parent and its Consolidated Subsidiaries.
"Consolidated Cash Flow" means for any period, for the Parent
and its Consolidated Subsidiaries, determined on a consolidated basis in
accordance with GAAP, and calculated for the Fiscal Quarter just ended and the
immediately preceding 3 Fiscal Quarters, Consolidated Net Income, plus (i) Net
Interest Expense (including interest on the Subordinated Debt), plus (ii) income
taxes, plus (iii) depreciation, plus (iv) amortization, plus or minus, as the
case may be, (v) LIFO Adjustments and plus (vi) the amount of any non-cash
write-offs of obsolete or surplus equipment, spare parts or real property, up to
but not in excess of $10,000,000 during any period of 4 consecutive Fiscal
Quarters.
"Consolidated Net Income" means, for any period, the Net
Income of the Parent and its Consolidated Subsidiaries determined on a
consolidated basis, but excluding (i)
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extraordinary items and (ii) any equity interests of the Parent or any
Subsidiary in the unremitted earnings of any Person that is not a Subsidiary.
For purposes of clause (i), extraordinary items shall include termination and
severance payments to employees, and costs and expenses incurred or accrued in
connection with the closing of facilities, relating to or as a result of the
acquisition of the Graniteville Assets, but, as to cash items, only to the
extent of such cash items which are paid or incurred prior to the end of the
first Fiscal Quarter of the 1997 Fiscal Year and in an aggregate amount not
exceeding $5,000,000.
"Consolidated Senior Debt" means Consolidated Total Funded
Debt, excluding, however, the Subordinated Debt.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Parent in its consolidated financial statements
as of such date.
"Consolidated Total Capitalization" shall mean as of the date
of any determination thereof, the sum of (a) Consolidated Adjusted Tangible Net
Worth and (b) Consolidated Total Funded Debt.
"Consolidated Total Funded Debt" means at any date the Funded
Debt of the Parent and its Consolidated Subsidiaries, determined on a
consolidated basis as of such date.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Parent, are treated as a single employer
under Section 414 of the Code.
"Coosa Bonds" means the $7,500,000 Industrial Development
Board of Coosa County Tax-Exempt Adjustable Mode Industrial Development Revenue
Bonds (Avondale Mills, Inc. Project) Series 2000 issued pursuant to the Coosa
Bonds Indenture, in connection with the acquisition by the Coosa Bonds Issuer
and the leasing by the Coosa Bonds Issuer to the Borrower, as lessee, of the
project in Coosa County, Alabama, more particularly described in the Coosa Bonds
Indenture.
"Coosa Bonds Indenture" means the Indenture of Trust by and
between the Industrial Development Board of Coosa County and The Bank of New
York, as Trustee, dated as of April 1, 2000, as amended or supplemented from
time to time pursuant thereto.
"Coosa Bonds Issuer" has the meaning set forth for the term
"Issuer" in the Coosa Bonds Indenture.
"Coosa Bonds Letter of Credit" means the standby Letter of
Credit issued by the Agent to The Bank of New York, as Trustee under the Coosa
Bonds Indenture, described in and issued to enhance the Coosa Bonds pursuant to
the Coosa Bonds Reimbursement Agreement, in the amount of the sum of (i) the
Coosa Bonds Letter of Credit - Principal Component (in the initial amount of
$7,500,000), plus (ii) the Coosa Bonds Letter of Credit - Interest Component (in
the initial amount of $282,500), which Coosa Bonds Letter of Credit is subject
to:
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(1) automatic extensions of the Coosa Bonds Letter of
Credit Expiration Date for additional one month
periods, unless a Coosa Bonds Notice of Non-Extension
is received by the parties entitled thereto as
provided in Section 2.2(b) of the Coosa Bonds
Reimbursement Agreement, in which case the Coosa
Bonds Letter of Credit Expiration Date is the fifth
date of the thirteenth calendar month following the
calendar month during which such Coosa Bonds Notice
of Non-Extension is so received;
(2) cancellation or replacement by another letter of
credit pursuant to Section 2.2(c) of the Coosa Bonds
Reimbursement Agreement;
(3) reduction by the amount of any principal of the Coosa
Bonds drawn thereunder, including by the amount of
any Coosa Bonds Tender Drawing, subject to
reinstatement to the Coosa Bonds Letter of Credit -
Principal Component as to the amount of any Coosa
Bonds Tender Drawing upon receipt by the Coosa Bonds
Trustee of notice from the Agent that the Coosa Bonds
Tender Advance applicable thereto has been repaid;
(4) reduction by the amount of any interest of the Coosa
Bonds drawn thereunder, subject to automatic
reinstatement to the Coosa Bonds Letter of Credit -
Interest Component 10 calendar days after such
interest drawing, unless the Agent has notified the
Coosa Bonds Trustee that the Agent has not been
reimbursed therefor or that an Event of Default has
occurred and is continuing pursuant to Section 2.3 of
the Coosa Bonds Reimbursement Agreement; and
(5) reduction by the amount of any Coosa Bonds redeemed,
defeased or cancelled, as specified in a notice from
the Coosa Bonds Trustee to the Agent pursuant to
Section 3.8(b) of the Coosa Bonds Indenture.
"Coosa Bonds Letter of Credit Expiration Date" means October
5, 2001, or such later date to which the Coosa Bonds Letter of Credit Expiration
Date has been extended as contemplated in clause (1) of the definition of Coosa
Bonds Letter of Credit.
"Coosa Bonds Letter of Credit Fee" means the letter of credit
fee calculated and payable quarterly in advance pursuant to Section 2.4(a) of
the Coosa Bonds Reimbursement Agreement, at a rate equal to the Applicable
Margin for Euro-Dollar Loans in effect from time to time hereunder.
"Coosa Bonds Letter of Credit - Interest Component" means an
interest component equal to 113 days' interest on the Coosa Bonds, computed as
though the Coosa Bonds bore interest at the rate of 12% per annum,
notwithstanding the actual rate borne by the Coosa Bonds from time to time,
based on a 360-day year for the actual number of days elapsed.
"Coosa Bonds Letter of Credit Obligations" means, at any
particular time, without duplication, the sum of (a) the Coosa Bonds
Reimbursement Obligations at such time, (b) the aggregate maximum amount
available for drawing under the Coosa Bonds Letter of Credit at such time and
(c) the amount of any Coosa Bonds Reinstatement Reserve at such time.
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"Coosa Bonds Letter of Credit - Principal Component" means the
aggregate principal amount of the Coosa Bonds.
"Coosa Bonds Letter of Credit Related Documents" means the
"Related Documents", as defined in the Coosa Bonds Reimbursement Agreement.
"Coosa Bonds Notice of Non-Extension" has the meaning set
forth for the term "Notice of Non-Extension" in the Coosa Bonds Reimbursement
Agreement.
"Coosa Bonds Reimbursement Agreement" means the Reimbursement
and Security Agreement dated as OF April 1, 2000 between the Agent, as the
issuer, and the Borrower, as the account party, in substantially the form of
Annex 1 attached hereto and made a part hereof, as amended or supplemented from
time to time as permitted hereby and thereby.
"Coosa Bonds Reimbursement Note" has the meaning set forth for
the term "Reimbursement Note" in the Coosa Bonds Reimbursement Agreement.
"Coosa Bonds Reimbursement Obligations" means the
reimbursement or repayment obligations of the Borrower to the Agent pursuant to
Section 2.5 of the Coosa Bonds Reimbursement Agreement.
"Coosa Bonds Reinstatement Reserve" means, with respect to the
Coosa Bonds Letter of Credit, at any time the amount which has been drawn under
the Coosa Bonds Letter of Credit (i) for payment of interest on the Coosa Bonds
which is subject to being but has not yet been reinstated to the Coosa Bonds
Letter of Credit - Interest Component pursuant to Paragraph 5 of the Coosa Bonds
Letter of Credit and Section 2.3 of the Coosa Bonds Reimbursement Agreement and
(ii) for payment of principal on the Coosa Bonds which is subject to being but
has not yet been reinstated to the Coosa Bonds Letter of Credit - Principal
Component pursuant to Paragraph 6 of the Coosa Bonds Letter of Credit and
Section 2.3 of the Coosa Bonds Reimbursement Agreement.
"Coosa Bonds Tender Advance" has the meaning set forth for the
term "Tender Advance" in the Coosa Bonds Reimbursement Agreement.
"Coosa Bonds Tender Drawing" has the meaning set forth for the
term "Tender Drawing" in the Coosa Bonds Reimbursement Agreement.
"Coosa Bonds Trustee" means The Bank of New York, or any
successor thereof, in its capacity as trustee under the Coosa Bonds Indenture.
"Current Maturities of Long Term Debt" means all payments in
respect of Long Term Debt (other than the Working Capital Obligations) that are
required to be made within one year from the date of determination, whether or
not the obligation to make such payments would constitute a current liability of
the obligor under GAAP.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the
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<PAGE> 14
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such Person
as lessee under Capitalized Leases, (v) all obligations of such Person to
reimburse any bank or other Person in respect of amounts payable under a
banker's acceptance, (vi) all Redeemable Preferred Stock of such Person (in the
event such Person is a corporation), (vii) all obligations of such Person to
reimburse any bank or other Person in respect of amounts paid or to be paid
under a letter of credit or similar instrument, (viii) all Debt of others
secured by a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person, (ix) all Debt of others Guaranteed by such Person and
(x) all principal amounts outstanding and owed to parties other than the
Borrower or any Subsidiary under the items described in clause (a) of the
definition of Receivables Program Obligations; provided, however, that the AMGF
Distribution Facility Lease shall not constitute Debt for any purpose under this
Agreement.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day,
the sum of (i) 2% plus (ii) the interest rate (including the Applicable Margin)
then in effect for such Loan; provided, however, that for any Fixed Rate Loan
the rate under this clause (ii) shall not be less than the rate for Base Rate
Loans after the end of the Interest Period applicable thereto.
"Dividends" means any dividend or other distribution paid in
respect of any Capital Stock and Redeemable Preferred Stock (other than
dividends paid or payable in the form of additional Capital Stock or Redeemable
Preferred Stock).
"Dollars" or "$" means dollars in lawful currency of the
United States of America.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Georgia are authorized by law
to close.
"Domestic Loans" means Set Rate Loans or Base Rate Loans or
both, as the context shall require.
"Employee Restricted Stock" means the 179,026 shares of Class
A common stock of the Parent held by certain officers of the Parent and/or the
Borrower and subject to the terms of certain stock transfer and repurchase
agreements with such officers.
"Environmental Authority" means any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits,
orders, approvals, notices, registrations or other legal prerequisites for
conducting the business of the Borrower or any Subsidiary required by any
Environmental Requirement.
"Environmental Judgments and Orders" means all judgments,
decrees or orders arising from or reasonably related to any Environmental
Requirements, whether or not entered
9
<PAGE> 15
upon consent, or written agreements with an Environmental Authority or other
entity arising from or reasonably related to any Environmental Requirement,
whether or not incorporated in a judgment, decree or order.
"Environmental Liabilities" means any liabilities, whether
accrued, contingent or otherwise, arising from or reasonably related to any
Environmental Requirements.
"Environmental Notices" means written notice from any
Environmental Authority or by any other person or entity, of possible or alleged
noncompliance with or liability under any Environmental Requirement, including
without limitation any complaints, citations, written demands or requests from
any Environmental Authority or from any other person or entity for correction of
any violation of any Environmental Requirement or any investigations concerning
any violation of any Environmental Requirement.
"Environmental Proceedings" means any judicial or
administrative proceedings arising from or reasonably related to any
Environmental Requirement.
"Environmental Releases" means releases as defined in CERCLA
or under any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement
relating to health, safety or the environment and applicable to the Parent, any
Subsidiary or the Properties, including but not limited to any such requirement
under CERCLA or similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs and decrees.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Euro-Dollar Loan" means a Loan to be made as a Euro-Dollar
Loan pursuant to the applicable Notice of Borrowing.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.05(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Excluded Receivables Assets" has the meaning set forth in the
Receivables Intercreditor Agreement.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the day for which
such rate is to be determined is not a Domestic Business Day, the Federal Funds
Rate for such day
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<PAGE> 16
shall be such rate on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business Day, and (ii) if
such rate is not so published for any day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent on such day on such transactions,
as determined by the Agent.
"Fiscal Quarter" means any fiscal quarter of the Parent.
"Fiscal Year" means any fiscal year of the Parent. Any
reference to Fiscal Year together with a specific year (e.g. "1996 Fiscal Year")
refers to the Fiscal Year ending on the last Friday of August in such specific
year.
"Fixed Charge Coverage Ratio" means, on a consolidated basis
for the Parent and its Consolidated Subsidiaries, the ratio of (i) Consolidated
Cash Flow, less Dividends paid, for the Fiscal Quarter just ended and the
immediately preceding 3 Fiscal Quarters, to (ii) the sum of Net Interest Expense
for the Fiscal Quarter just ended and the immediately preceding 3 Fiscal
Quarters and Current Maturities of Long Term Debt, calculated at the end of the
Fiscal Quarter just ended.
"Fixed Rate Borrowing" means a Set Rate Borrowing or a
Euro-Dollar Borrowing, or both, as the context shall require.
"Fixed Rate Loans" means Set Rate Loans or Euro-Dollar Loans,
or both, as the context shall require.
"Funded Debt" of any Person shall mean all Debt of such Person
of the types described in clauses (i) through (vi), inclusive, and clause (x) of
the definition of Debt, regardless of the maturity thereof.
"GAAP" means generally accepted accounting principles applied
on a basis consistent with those which, in accordance with Section 1.02, are to
be used in making the calculations for purposes of determining compliance with
the terms of this Agreement.
"Graniteville Assets" means the assets acquired by the
Borrower from Graniteville Company pursuant to the Graniteville Asset Purchase
Agreement, which included all of the "Assets", but exclude all of the "Excluded
Assets", as those terms were defined therein.
"Graniteville Asset Purchase Agreement" means the Asset
Purchase Agreement dated March 31, 1996, as amended or supplemented from time to
time prior to the Original Closing Date, by and among the Borrower, as
Purchaser, the Parent, Graniteville Company, a South Carolina corporation, as
Seller, and Triarc Companies, Inc., a Delaware corporation.
"Graniteville Indigo Dyeing Facility" means the approximately
130,000 square foot indigo dyeing facility of the Borrower located in
Graniteville, South Carolina, the real property on which it is located and all
personal property located thereon or used in connection therewith.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person
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<PAGE> 17
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to secure, purchase or pay
(or advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to provide
collateral security, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hazardous Materials" includes, without limitation, (a) solid
or hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. ss. 6901 et seq. and its implementing regulations and
amendments, or in any comparable state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or in
any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including, crude oil or any fraction thereof,
or (d) pesticides, as defined in the Federal Insecticide, Fungicide, and
Rodenticide Act of 1975, or in any comparable state or local law or regulation,
as each such Act, statute or regulation may be amended from time to time.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
(a) any Interest Period (subject to paragraph (c) below)
which would otherwise end on a day which is not a Euro-Dollar Business
Day shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month,
in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the appropriate subsequent
calendar month) shall, subject to paragraph (c) below, end on the last
Euro-Dollar Business Day of the appropriate subsequent calendar month;
and
(c) no Interest Period may be selected which begins
before the Termination Date and would otherwise end after the
Termination Date.
(2) with respect to each Set Rate Borrowing, any period not exceeding 30 days
mutually agreeable to the Borrower and the Agent which ends on or prior to the
Termination Date.
"Interest Rate Protection Agreement" means an interest rate
hedging or protection agreement entered into by and between the Borrower and a
Bank or other financial institution, together with all exhibits, schedules,
extensions, renewals, amendments, substitutions and replacements thereto and
thereof.
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<PAGE> 18
"Investment" means any investment in any Person, whether by
means of purchase or acquisition of obligations, securities or a substantial
part of the assets of such Person, capital contribution to such Person, loan or
advance to such Person, making of a time deposit with such Person, Guarantee or
assumption of any obligation of such Person or otherwise.
"Knowledge" means, with reference to any Person, the knowledge
of such Person after due inquiry.
"Lending Office" means, as to each Bank, its office located at
its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Lending Office or such other office as such Bank
may hereafter designate as its Lending Office) by notice to the Borrower and the
Agent.
"Letter of Credit" means, individually or collectively, as the
context shall require, the Coosa Bonds Letter of Credit and any Other Letter of
Credit.
"Letter of Credit Obligations" means, individually or
collectively, as the context shall require, the Coosa Bonds Letter of Credit
Obligations and any Other Letter of Credit Obligations.
"Letter of Credit Reimbursement Obligations" means,
individually or collectively, as the context shall require, the Coosa Bonds
Letter of Credit Reimbursement Obligations and any Other Letter of Credit
Reimbursement Obligations.
"Lien" means, with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset; provided,
however, that the property leased by AMGF pursuant to the AMGF Distribution
Facility Lease shall not, solely by virtue of the AMGF Distribution Facility
Lease, constitute property of AMGF subject to a Lien for any purpose under this
Agreement.
"LIFO Adjustments" means adjustments to cost of goods sold
attributable to adjusting the carrying value of inventory under the last-in,
first-out method of accounting.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Swing
Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Swing Loans, or
any or all of them, as the context shall require.
"Loan Documents" means this Agreement, the Notes, the Security
Agreement, the Mortgages, the Coosa Bonds Reimbursement Agreement, the Coosa
Bonds Reimbursement Note, each Other Letter of Credit Application Agreement, any
other document evidencing, relating to or securing the Loans (including, without
limitation, the Borrower Pledge Agreement,
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<PAGE> 19
when executed and delivered pursuant to Section 9.18), the Letters of Credit,
the Coosa Bonds Reimbursement Agreement, the Coosa Bonds Reimbursement Note,
each Other Letter of Credit Application Agreement, and any other document or
instrument delivered from time to time in connection with this Agreement, the
Notes, the Loans, the Letters of Credit, the Coosa Bonds Reimbursement
Agreement, the Coosa Bonds Reimbursement Note, each Other Letter of Credit
Application Agreement, as such documents and instruments may be amended or
supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.05(c).
"Long Term Debt" means at any date any Consolidated Total
Funded Debt which matures (or the maturity of which may at the option of the
Parent or any Consolidated Subsidiary be extended such that it matures) more
than one year after such date.
"Margin Stock" means "margin stock" as defined in Regulations
T, U or X.
"Material Adverse Effect" means, with respect to any event,
act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon, any of
(a) the financial condition, operations or properties of the Parent and its
Consolidated Subsidiaries taken as a whole, (b) the rights and remedies of the
Agent or the Banks under the Principal Documents or the Parent Documents, or the
ability of the Borrower to perform its obligations under the Principal Documents
to which it is a party or the Parent to perform its obligations under the Parent
Documents, as applicable, or (c) the legality, validity or enforceability of the
Parent Documents or any Principal Document.
"Material Subsidiary" means any Subsidiary which has, on the
date of determination, assets with a book value of $500,000 or more or which has
gross revenues in any year of $1,000,000 or more.
"Mortgage" means any one, or more, or all, as the context
shall require, of the Master Mortgage, Deed of Trust, Leasehold Deed of Trust,
Deed to Secure Debt, Leasehold Deed to Secure Debt, Uniform Commercial Code
Security Agreement and Assignment of Leases, Rents and Profits of the Borrower
substantially in the form of Exhibit H, conveying a first priority (except for
the SunTrust Collateral Plants, which shall be second priority) security title
to and Lien on the Plant or Plants described therein (or, with respect to the
Bon Air and Walton Plants, in the Borrower's leasehold interests therein and
option to acquire fee title thereto) to the Agent, for the benefit of the Banks,
subject only to the Permitted Encumbrances applicable thereto, as security for
payment of the Obligations, together with all amendments and supplements
thereto.
"MPPAA" means the Multiemployer Pension Plan Amendments Act of
1980, amending Title IV of ERISA.
"Multiemployer Plan" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.
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<PAGE> 20
"Net Cash Proceeds" shall mean, in each case as set forth in a
statement in reasonable detail delivered to the Agent, with respect to the
disposition of assets (including pursuant to the Receivables Securitization
Program) by the Parent or any of its Subsidiaries (other than the Receivables
Subsidiary), the excess, if any, of (i) the cash received in connection with
such disposition over (ii) the sum of (A) the principal amount of any Debt
(other than the Obligations) which is secured by such asset and which is
required to be repaid in connection with the disposition thereof, plus (B) the
reasonable out-of-pocket expenses incurred by the Parent or such Subsidiary, as
the case may be, in connection with such disposition, plus (C) provision for
taxes, including income taxes, attributable to the disposition of such asset.
"Net Income" means, as applied to any Person for any period,
the aggregate amount of net income of such Person, after taxes, for such period,
as determined in accordance with GAAP.
"Net Interest Expense" means, for any period, interest expense
(including capitalized interest, to the extent capitalized interest exceeds
$50,000 in any Fiscal Year, including interest, yield, discount or similar
amounts paid under the Receivables Securitization Program) in respect of Debt,
less interest income.
"Notes" means the Revolver Loan Notes, the Swing Loan Note,
the Coosa Bonds Reimbursement Note, or any one, or more, or all of them, as the
context shall require, together with all amendments, consolidations,
modifications, renewals, and supplements thereto.
"Notice of Borrowing" has the meaning set forth in Section
2.02.
"Obligations" means all indebtedness, liabilities and
obligations of the Borrower (i) to the Agent and the Banks incurred or arising
from time to time under this Agreement and each of the Principal Documents,
including principal, interest, fees, costs and indemnification amounts, and any
extensions or renewals thereof in whole or in part, (ii) to the Agent incurred
or arising from time to time under the Coosa Bonds Reimbursement Agreement, the
Coosa Bonds Reimbursement Note, or any Other Letter of Credit Application
Agreement, including all of the Reimbursement Obligations, and any extensions or
renewals thereof in whole or in part, (iii) to any Bank or Affiliate thereof
under any Interest Rate Protection Agreement with any such Bank, limited,
however, as to this clause (iii), to a maximum aggregate principal amount of
$10,000,000 (prorated among all Interest Rate Protection Agreements, if there
are more than one, based on the actual (as distinguished from notional)
liability thereunder) and (iv) as to Wachovia, arising out of (including
reimbursement obligations) any commercial or standby letter of credit (other
than the Letters of Credit) issued by it for the account of the Borrower,
limited, however, as to this clause (iv), to a maximum aggregate amount
outstanding at any time of $5,000,000.
"Operative Mortgages" means each Mortgage and/or AMGF Mortgage
which the Agent has filed for record in the appropriate filing office pursuant
to the provisions of Section 5.25.
"Original Credit Agreement" means the Amended and Restated
Credit Agreement dated as of April 29, 1996 (which amended and restated the
Credit Agreement dated March 29, 1994, as amended prior to April 29, 1996), as
amended by First Amendment to Credit
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<PAGE> 21
Agreement dated as of March 20, 1997, Second Amendment to Credit Agreement dated
as of August 29, 1997, Third Amendment to Credit Agreement dated as of August
27, 1999 and Fourth Amendment to Credit Agreement dated as of April 1, 2000, by
and among the Borrower, Wachovia Bank, N.A. (formerly Wachovia Bank of Georgia,
N.A.), as Agent and as a Bank, Bank One, N.A. (formerly The First National Bank
of Chicago), as Documentation Agent and as a Bank, Bank of America, N.A.
(formerly NationsBank, N.A.), Regions Bank (formerly First Alabama Bank) and
First Union National Bank (formerly First Union National Bank of Georgia).
"Original Closing Date" means April 29, 1996.
"Other Letter of Credit" means any Letter of Credit issued
pursuant to Section 2.13, other than the Coosa Bonds Letter of Credit.
"Other Letter of Credit Application Agreement" means, with
respect to any Other Letter of Credit, such form of application therefor
(whether in a single or several documents) as the Agent may employ in the
ordinary course of business for its own account, whether or not providing for
collateral security, with such modifications thereto as may by agreed upon by
the Agent and the Borrower and are not materially adverse to the interests of
the Banks; provided, however, that in the event of any conflict between the
terms of any Other Letter of Credit Application Agreement and this Agreement,
the terms of this Agreement shall control.
"Other Letter of Credit Obligations" means , at any particular
time, the sum, without duplication, of (a) the Other Letter of Credit
Reimbursement Obligations at such time, and (b) the aggregate maximum amount
available for drawing under the Other Letters of Credit at such time (including
under Other Letters of Credit the issuance of which has been authorized by the
Agent but which have not yet been issued).
"Other Letter of Credit Reimbursement Obligations" means the
reimbursement or repayment obligations of the Borrower to the Agent pursuant to
Section 2.13 with respect to any Other Letter of Credit.
"Parent" means Avondale Incorporated, a Georgia corporation,
and its successors and permitted assigns.
"Parent Documents" means the Parent Guaranty and the Pledge
Agreement, or either of them, as the context shall require.
"Parent Guaranty" means the Amended and Restated Guaranty
Agreement dated as of even date herewith, substantially in the form of Exhibit
I, executed by the Parent in favor of the Agent, for the benefit of the Banks,
unconditionally Guaranteeing the payment of all of the Obligations.
"Participant" has the meaning set forth in Section 9.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
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<PAGE> 22
"Performance Pricing Determination Date" has the meaning set
forth in Section 2.05(a).
"Permitted Encumbrances" means, (i) as to the Collateral
described in the Security Agreement, the AMGF Security Agreement and the Coosa
Bonds Reimbursement Agreement, the encumbrances expressly permitted by the
Security Agreement, the AMGF Security Agreement, or the Coosa Bonds
Reimbursement Agreement, as the case may be, and (ii) as to each Plant and the
AMGF Plant, the encumbrances expressly permitted by the Mortgage and the AMGF
Mortgage with respect to such Plant or the AMGF Plant, as the case may be.
"Person" means an individual, a corporation, a limited
liability company, a partnership, an unincorporated association, a trust or any
other entity or organization, including, but not limited to, a government or
political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (i) maintained by a member
of the Controlled Group for employees of any member of the Controlled Group or
(ii) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Plants" means any one, or more, or all, as the context shall
require, of the Plants described in Schedule 5.25, as it may be supplemented
from time to time pursuant to Section 5.25, including as to each such Plant the
Property on which it is located and the buildings, fixtures and other
improvements located thereon.
"Pledge Agreement" means the Amended and Restated Stock Pledge
Agreement executed pursuant to the Original Credit Agreement, substantially in
the form of Exhibit L, executed by the Parent in favor of the Agent, for the
benefit of the Banks, pledging the Pledged Stock to secure the payment of all of
the Obligations.
"Pledged Stock" means the capital stock in the Borrower owned
by the Parent and described in and pledged pursuant to the Pledge Agreement.
"Prime Rate" refers to that interest rate so denominated and
set by Wachovia from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia. Wachovia
lends at interest rates above and below the Prime Rate.
"Principal Documents" means this Agreement, the Notes, the
Coosa Bonds Reimbursement Agreement, the Coosa Bonds Reimbursement Note, each
Other Letter of Credit Application Agreement, the Security Agreement, the
Operative Mortgages and the Borrower Pledge Agreement.
"Properties" means all real property owned, leased or
otherwise used or occupied by the Borrower or any Subsidiary, wherever located.
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<PAGE> 23
"Purchase Money Note" means a promissory note evidencing the
obligation of the Receivables Subsidiary to pay to the Borrower or any of its
Subsidiaries the purchase price for Receivables in connection with the
Receivables Securitization Program, which note shall be repaid from cash
available to the Receivables Subsidiary, other than cash required to be held as
reserves pursuant to Receivables Documents, amounts paid in respect of interest,
principal and other amounts owing under Receivables Documents and amounts paid
in connection with the purchase of additional Receivables.
"Real Property Documentation" shall mean the instruments,
documents and agreements executed and/or delivered by Borrower or AMGF to the
Agent (if applicable) pursuant to Section 5.25 in connection with each Operative
Mortgage in order to convey to the Agent (or a trustee for the benefit of the
Agent with respect to property in North Carolina) for the benefit of the Banks a
first priority (except for the SunTrust Collateral Plants, which shall be second
priority) security interest in, lien on and security title (subject to Permitted
Encumbrances) to the right, title and interest of Borrower in the Plant or
Plants described therein or in the AMGF Plant, as the case may be, and other
rights ancillary thereto, all in form and substance reasonably satisfactory to
the Agent, after consultation with the Borrower or AMGF, as the case may be. The
Real Property Documentation may include, without limitation, the following as to
each Plant or AMGF Plant and the Property on which it is located:
(i) an owner's/lessee's affidavit for each parcel or
tract of such Property;
(ii) mortgagee title insurance binders and policies for
each tract or parcel of such Property;
(iii) such consents, acknowledgments, intercreditor or
attornment and subordination agreements as the Agent
may require from any Third Parties with respect to
any portion of such Property;
(iv) a current survey of each parcel or tract of such
Property;
(v) a certificate as to the insurance required by the
related Mortgage or AMGF Mortgage, to the extent not
furnished pursuant to Section 5.17;
(vi) a report of a licensed engineer detailing an
environmental inspection of such Property;
(vii) an indemnification agreement regarding hazardous
materials for such Property;
(viii) an appraisal of such Property, prepared by an
appraiser satisfactory to the Agent and engaged by
and on behalf of the Agent and the Banks;
(ix) any revenue ruling or similar assurance from the
department or revenue or taxation requested by the
Agent with respect to any stamp, intangible or other
taxes payable in connection with the filing for
record of any of the Mortgages or the AMGF Mortgage,
as the case may be; and
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<PAGE> 24
(x) with respect to the AMGF Plant, a sewer easement
satisfactory to the Agent pertaining to the adjacent
land owned by the Borrower.
"Receivables" means all rights of the Borrower or its
Subsidiary to payment, whether constituting an account, chattel paper,
instrument, general intangible or otherwise, arising from the sale of goods or
services (including rights under Bill and Hold arrangements) by the Borrower or
its Subsidiary (and including the right to payment of any interest or finance
charges and other obligations with respect thereto).
"Receivables Documents" means (x) a receivables purchase
agreement, pooling and servicing agreement, credit agreement, agreements to
acquire undivided interests or other agreement to transfer, or create a security
interest in, Receivables Program Assets, in each case as amended, modified,
supplemented or restated and in effect from time to time entered into by the
Borrower and/or its Subsidiaries (including the Receivables Subsidiary), and (y)
each other instrument, agreement and other document entered into by the Borrower
or its Subsidiaries (including the Receivables Subsidiary) relating to the
transactions contemplated by the items referred to in clause (x) above, in each
case as amended, modified, supplemented or restated and in effect from time to
time.
"Receivables Intercreditor Agreement" means the Intercreditor
Agreement executed pursuant to the Original Credit Agreement, substantially in
the form of Exhibit M, between the Agent and the trustee under the Receivables
Securitization Program or, in respect of any Replacement Program (as defined in
Section 2.08(b)), any other intercreditor agreement between the trustee and the
Agent, in each case as amended from time to time.
"Receivables Program Assets" means (a) all Receivables which
are described as being transferred by the Borrower or its Subsidiaries
(including the Receivables Subsidiary) pursuant to the Receivables Documents;
provided, however, that the term "Receivables" shall not include any Excluded
Receivables Assets, (b) all Receivables Related Assets, and (c) all collections
(including recoveries) and other proceeds of the assets described in the
foregoing clauses (a) and (b).
"Receivables Program Obligations" means (a) notes, trust
certificates, undivided interests, partnership interests or other interests
representing the right to be paid a specified principal amount from the
Receivables Program Assets, and (b) related obligations of the Borrower and/or
its Subsidiaries (including, without limitation, rights in respect of interest
or yield, breach of warranty claims and expense reimbursement and indemnity
provisions) and other Standard Securitization Undertakings.
"Receivables Related Assets" means (i) any rights arising
under the documentation governing or relating to Receivables (including rights
in respect of liens securing such Receivables and other credit support in
respect of such Receivables), (ii) any proceeds of such Receivables and any
lockboxes or accounts in which such proceeds are deposited, (iii) spread
accounts and other similar accounts (and any amount on deposit therein)
established in connection with the Receivables Securitization Program, (iv) any
warranty, indemnity, dilution and other intercompany claim arising out of
Receivables Documents and (v) all other property included in the definition of
"Specified Assets" contained in the Receivables Intercreditor
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Agreement; provided, however, that the term "Receivables Related Assets" shall
not include any Excluded Receivables Assets.
"Receivables Securitization Program" means any transaction or
series of transactions that may be entered into by the Borrower and its
Subsidiaries pursuant to which the Borrower and/or its Subsidiaries may sell,
convey or otherwise transfer to the Receivables Subsidiary and (in the case of a
transfer by the Receivables Subsidiary) any other Person, or may grant a
security interest in, any Receivables Program Assets (whether now existing or
arising in the future); provided that:
(a) no portion of the indebtedness or any other
obligations (contingent or otherwise) of a Receivables Subsidiary or Special
Purpose Vehicle (i) is guaranteed by the Borrower or its Subsidiaries (other
than the Receivables Subsidiary and excluding guarantees of obligations pursuant
to Standard Securitization Undertakings), (ii) is recourse to or obligates the
Borrower or its Subsidiaries (other than the Receivables Subsidiary) for payment
other than pursuant to Standard Securitization Undertakings or (iii) subjects
any property or asset of the Borrower or its Subsidiaries (other than the
Receivables Subsidiary), directly or indirectly, contingently or otherwise, to
the satisfaction of obligations incurred in such transactions, other than
pursuant to Standard Securitization Undertakings,
(b) the Borrower and its Subsidiaries (other than the
Receivables Subsidiary) do not have any obligation to maintain or preserve the
financial condition of a Receivables Subsidiary or a Special Purpose Vehicle or
cause such entity to achieve certain levels of operating results, and
(c) the scheduled maturity of any Receivables Program
Obligations of the type described in clause (a) of the definition of
"Receivables Program Obligations" is no earlier than November 15, 2002.
"Receivables Subsidiary" means a special purpose corporation
that is a Wholly Owned Subsidiary of the Borrower, created for the sole purpose
of, and whose only business shall be, acquisition of the Receivables Program
Assets pursuant to the Receivables Securitization Program and those activities
incidental to the Receivables Securitization Program.
"Receivables Subsidiary Pledged Stock" means the capital stock
in the Receivables Subsidiary owned by the Borrower and described in and pledged
pursuant to the Borrower Pledge Agreement.
"Redeemable Preferred Stock" of any Person means any preferred
stock issued by such Person which is either (i) mandatorily redeemable (by
sinking fund or similar payments or otherwise) or (ii) redeemable at the option
of the holder thereof.
"Refunding Loan" means a new Loan made on the day on which an
outstanding Loan is maturing or a Base Rate Borrowing is being converted to a
Fixed Rate Borrowing, if and to the extent that the proceeds thereof are used
entirely for the purpose of paying such maturing Loan or Loan being converted,
excluding any difference between the amount of such maturing Loan or Loan being
converted and any greater amount being borrowed on such day and actually
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either being made available to the Borrower pursuant to Section 2.02(c) or
remitted to the Agent as provided in Section 2.11, in each case as contemplated
in Section 2.02(d).
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Reimbursement Obligations" means, individually or
collectively, as the context shall require, the Coosa Bonds Reimbursement
Obligations and any Other Letter of Credit Reimbursement Obligations.
"Register" has the meaning set forth in Section 9.08(c).
"Related Fund" means, with respect to any Bank that is a fund
that invests in lender loans, any other fund that invests in lender loans and is
advised or managed by the same investment advisor as such Bank.
"Reported Net Income" means, for any period, the Net Income of
the Parent and its Consolidated Subsidiaries determined on a consolidated basis.
"Required Banks" means at any time Banks having at least 66
2/3% of the aggregate amount of the Commitments or, if the Commitments are no
longer in effect, Banks holding at least 66 2/3% of the aggregate outstanding
principal amount of the Revolver Loan Notes.
"Restricted Payment" means (i) any Dividends paid by the
Parent and (ii) any payment on account of the purchase, redemption, retirement
or acquisition of (a) any Capital Stock (except shares acquired upon the
conversion thereof into other shares of Capital Stock) or (b) any option,
warrant or other right to acquire shares of Capital Stock, other than (i) up to
$5,000,000 in payments with respect to the Employee Restricted Stock and (ii)
any payments made in respect of shares of Capital Stock of the Parent owned by
G. Stephen Felker pursuant to an existing repurchase arrangement, to the extent
such payments are made from the proceeds of insurance on his life.
"Restricted Payment Calculation Period" means, with respect to
any Restricted Payment proposed to be made pursuant to Section 5.07, the period
beginning August 26, 2000
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through the end of the most recent Fiscal Quarter ending at least 45 days prior
to the date of such proposed Restricted Payment.
"Revolver Collateral Plants" means all Plants other than the
SunTrust Collateral Plants.
"Revolver Loan" means a Loan made at the same time by the
Banks pursuant to Article II, which may be a Base Rate Loan or a Euro-Dollar
Loan, subject to the provisions of Article II.
"Revolver Loan Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A-1, evidencing the obligation of the
Borrower to repay the Revolver Loans, together with all amendments,
consolidations, modifications, renewals, and supplements thereto.
"Rolling Stock" means all tractors, trailers and other motor
vehicles of the Debtor, title to which is registered under the Alabama
Certificate of Title and Antitheft Act (Ala. Code 32-8-1, et seq.), which term
does not include any motor vehicles listed on Exhibit B to the Security
Agreement.
"Second Amendment" means the Second Amendment to Credit
Agreement dated as of August 29, 1997 executed by the Borrower, the Agent and
the Banks, amending the Original Credit Agreement.
"Security Agreement" means the Amended and Restated Security
Agreement executed pursuant to the Original Credit Agreement, substantially in
the form of Exhibit J, granting to the Agent, for the benefit of the Banks, a
first priority (except as to the equipment located at the SunTrust Collateral
Plants, which shall be second priority) security interest in the personal
property described therein, subject only to the Permitted Encumbrances, together
with all amendments and supplements thereto.
"Senior Debt to Capitalization Ratio" means the ratio of
Consolidated Senior Debt to Consolidated Total Capitalization, calculated at the
end of each Fiscal Quarter.
"Set Rate" means a fixed rate per annum, for a specified
principal amount of the Swing Loans and for a specified Interest Period, set and
established from time to time by the Borrower and Wachovia pursuant to Section
2.01(b)(ii).
"Set Rate Loan" means a Loan to be made as a Set Rate Loan
pursuant to Section 2.01(b)(ii).
"Set Rate Request" has the meaning set forth in Section
2.01(b)(ii).
"Special Purpose Vehicle" means a trust, partnership or other
special purpose Person established by the Borrower to implement the Receivables
Securitization Program.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Borrower or its
Subsidiaries (other than the
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Receivables Subsidiary) that are reasonably customary in accounts receivable
securitization transactions, as determined in good faith by the Agent.
"Stockholders' Equity" means, at any time, the shareholders'
equity of the Parent and its Consolidated Subsidiaries, as set forth or
reflected on the most recent consolidated balance sheet of the Parent and its
Consolidated Subsidiaries prepared in accordance with GAAP, but excluding any
Redeemable Preferred Stock of the Parent or any of its Consolidated
Subsidiaries. Shareholders' equity generally would include, but not be limited
to (i) the par or stated value of all outstanding Capital Stock, (ii) capital
surplus, (iii) retained earnings, and (iv) various deductions such as (A)
purchases of treasury stock, (B) valuation allowances, (C) receivables due from
an employee stock ownership plan, (D) employee stock ownership plan debt
guarantees, and (E) translation adjustments for foreign currency transactions.
"Subordinated Debt" means (i) the 10.25% Subordinated Notes
and (ii) any other Debt, the payment of which has been expressly subordinated to
payment of the Obligations pursuant and subject to documents containing terms
and conditions reasonably satisfactory to the Agent and which has a maturity no
earlier than February 28, 2004.
"Subsidiary" means any corporation or other entity (other than
a Special Purpose Vehicle) of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by the Parent.
"SunTrust Collateral Plants" means the Plants so designated on
Schedule 5.25.
"SunTrust Intercreditor Agreement" means the Amended and
Restated Intercreditor Agreement executed pursuant to the Original Credit
Agreement, substantially in the form of Exhibit K, between SunTrust Bank,
Atlanta (formerly Trust Company Bank), the Agent and the Borrower, together with
any amendments and supplements thereto.
"Swing Loan" means a Loan made by Wachovia pursuant to Section
2.01(b), which may be a Base Rate Loan or a Set Rate Loan, subject to the
provisions of Section 2.01(b)(ii).
"Swing Loan Note" means the promissory note of the Borrower,
substantially in the form of Exhibit A-2, evidencing the obligation of the
Borrower to repay the Swing Loans, together with all amendments, consolidations,
modifications, renewals, and supplements thereto.
"10.25% Subordinated Notes" means the Senior Subordinated
Notes due 2006, issued by the Borrower on the Original Closing Date, as amended,
modified, renewed or supplemented from time to time, subject to the provisions
of Section 5.26.
"Termination Date" means January 30, 2004.
"Third Parties" means all mortgagees, lessees, sublessees,
tenants, licensees and other users of the Properties, excluding those users of
the Properties in the ordinary course of the Borrower's business and on a
temporary basis.
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"Total Debt to Cash Flow Ratio" means the ratio of
Consolidated Total Funded Debt to Consolidated Cash Flow, calculated at the end
of each Fiscal Quarter.
"Transferor Certificate" means, (i) with respect to the
Receivables Securitization Program closed on the Original Closing Date, the
"Transferor Certificate" described in Section 4.1 of the Avondale Receivables
Master Trust Pooling and Servicing Agreement dated on or about the Original
Closing Date among the Receivables Subsidiary, the Borrower and Manufacturers
and Traders Trust Company, as trustee, and (ii) as to any other Receivables
Securitization Program, any similar instrument evidencing the interest of the
Receivables Subsidiary in respect of the Receivables transferred in the
Receivables Securitization Program.
"Transferee" has the meaning set forth in Section 9.08(d).
"Unused Commitment" means at any date, with respect to any
Bank, an amount equal to its Commitment less the aggregate outstanding principal
amount of its Loans, other than, with respect to Wachovia, the Swing Loan, and
less the amount of its share of risk in the Letter of Credit Obligations.
"Wachovia" means Wachovia Bank, N.A (formerly Wachovia Bank of
Georgia, N.A.), a national banking association, and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the
shares of capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Parent.
"Working Capital Obligations" means the aggregate principal
amount of Revolver Loans and Swing Loans plus the amount of the Letter of Credit
Obligations outstanding at any time.
Section 1.02 Accounting Terms and Determinations. Unless
otherwise specified herein, all terms of an accounting character used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared,
in accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Parent's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Parent and its Consolidated Subsidiaries delivered
to the Banks unless with respect to any such change concurred in by the Parent's
independent public accountants or required by GAAP, in determining compliance
with any of the provisions of this Agreement or any of the other Loan Documents:
(i) the Borrower shall have objected to determining such compliance on such
basis at the time of delivery of such financial statements, or (ii) the Required
Banks shall so object in writing within 30 days after the delivery of such
financial statements, in either of which events such calculations shall be made
on a basis consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made (which, if
objection is made in respect of the first financial statements delivered under
Section 5.01 hereof, shall mean the financial statements referred to in Section
4.04).
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Section 1.03 References. Unless otherwise indicated,
references in this Agreement to "Articles", "Exhibits", "Schedules", "Sections"
and other subdivisions are references to articles, exhibits, schedules, sections
and other subdivisions hereof.
Section 1.04 Use of Defined Terms. All terms defined in
this Agreement shall have the same defined meanings when used in any of the
other Loan Documents, unless otherwise defined therein or unless the context
shall require otherwise.
Section 1.05 Terminology. All personal pronouns used in
this Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural, and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
ARTICLE II
THE CREDITS
Section 2.01 Commitments to Lend.
(a) Revolver Loans. Each Bank severally agrees, on the
terms and conditions set forth herein, to make Revolver Loans to the Borrower
from time to time before the Termination Date; provided that, immediately after
each such Revolver Loan is made, (i) the aggregate outstanding principal amount
of Revolver Loans made by such Bank shall not exceed the amount of its
Commitment, and (ii) the Working Capital Obligations shall not exceed the
Aggregate Commitment. Revolver Loans may be Base Rate Loans or Euro-Dollar
Loans. Each Revolver Loan Borrowing under this Section 2.01(a) shall be in an
aggregate principal amount of $5,000,000 or any larger multiple of $500,000
(except that any such Borrowing may be in the amount of the Aggregate Unused
Commitments) and shall be made from the several Banks ratably in proportion to
their respective Commitments. Within the foregoing limits, the Borrower may
borrow under this Section 2.01(a), repay or, to the extent permitted by Section
2.09, prepay Revolver Loans and reborrow under this Section 2.01(a) at any time
before the Termination Date.
(b) Swing Loans.
(i) In addition to the foregoing, Wachovia shall
from time to time, upon the request of the Borrower, if the applicable
conditions precedent in Article III have been satisfied, make Swing
Loans to the Borrower in an aggregate principal amount at any time
outstanding not exceeding $12,500,000; provided that, immediately after
such Swing Loan is made, the Working Capital Obligations shall not
exceed the Aggregate Commitment. Each Swing Loan Borrowing which is a
Base Rate Borrowing under this Section 2.01(b)(i) shall be in an
aggregate principal amount of $100,000 or any larger multiple of
$25,000. Within the foregoing limits, the Borrower may borrow under
this Section 2.01(b), prepay and reborrow under this Section 2.01(b) at
any time before the Termination Date. Swing Loans shall be included in
the calculation of "Working Capital Obligations" hereunder, but shall
not be considered a utilization of the Commitment of
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Wachovia or any other Bank hereunder. All Swing Loans shall be made as
Base Rate Loans, except that Swing Loans may be made as Set Rate Loans
subject and pursuant to the provisions of clause (ii) below. At any
time, upon the request of Wachovia, each Bank other than Wachovia
shall, on the third Domestic Business Day after such request is made,
purchase a participating interest in Swing Loans (including those that
are Base Rate Loans and those that are Set Rate Loans) in an amount
equal to its ratable share (based upon its respective Commitment) of
such Swing Loans. On such third Domestic Business Day, each Bank will
immediately transfer to Wachovia, in immediately available funds, the
amount of its participation. Whenever, at any time after Wachovia has
received from any such Bank its participating interest in a Swing Loan,
the Agent receives any payment on account thereof, the Agent will
distribute to such Bank its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Bank's participating interest was
outstanding and funded); provided, however, that in the event that such
payment received by the Agent is required to be returned, such Bank
will return to the Agent any portion thereof previously distributed by
the Agent to it. Each Bank'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 set-off,
counterclaim, recoupment, defense or other right which such Bank or any
other Person may have against Wachovia requesting such purchase or any
other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default or the termination of
the Commitments; (iii) any adverse change in the condition (financial
or otherwise) of the Borrower, the Parent or any other Person; (iv) any
breach of this Agreement by the Borrower or any other Bank; or (v) any
other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
(ii) Swing Loans may be Set Rate Loans, if the Agent shall
have determined that such Set Rate Loan, including the principal amount
thereof, the Interest Period and the Set Rate applicable thereto, has
been expressly agreed to by the Borrower and Wachovia (such agreement
may be obtained by telephone, confirmed promptly to the Agent in
writing) pursuant to the following procedures. Each Swing Loan
Borrowing which is a Set Rate Borrowing under this Section 2.01(b)(ii)
shall be in an aggregate principal amount of $1,000,000 or any larger
multiple of $100,000. No more than 2 Set Rate Loans may be outstanding
at any one time. If the Borrower desires a Set Rate Loan, (aa) the
Borrower shall provide the Agent and Wachovia with notice of a request
(a "Set Rate Request") for a quote for a Set Rate Borrowing prior to
11:00 a.m. (Atlanta, Georgia time) 1 Domestic Business Day before the
day of the proposed Set Rate Borrowing (which must be a Domestic
Business Day), which Set Rate Request shall include the principal
amount and proposed Interest Period of the relevant Set Rate Borrowing,
(bb) prior to 2:30 p.m. (Atlanta, Georgia time) on the date on which
Wachovia receives the Set Rate Request, Wachovia shall apprise the
Agent and the Borrower of its rate quote (a "Set Rate Quote") via
facsimile transmission, (cc) prior to 11:00 a.m. on the date of the
proposed Set Rate Borrowing, the Borrower shall inform the Agent and
Wachovia of its decision as to whether to accept a Set Rate Borrowing
at such Set Rate (which may be done by telephone and promptly confirmed
in writing), (dd) if the Borrower does desire a Set Rate Borrowing at
such Set Rate, then by 1:00 p.m. (Atlanta, Georgia time) on the
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date of such decision, Wachovia shall make such Set Rate Borrowing,
with interest accruing thereon at the Set Rate, available to the
Borrower.
Section 2.02 Method of Borrowing. This Section 2.02 shall
apply to all Borrowings other than Set Rate Borrowings, as to which only Section
2.01(b)(ii) shall apply.
(a) The Borrower shall give the Agent notice (a "Notice
of Borrowing"), which shall be substantially in the form of Exhibit E, prior to
11:00 a.m. (Atlanta, Georgia time) on the Domestic Business Day of a Base Rate
Borrowing and at least 3 Euro-Dollar Business Days before each Euro-Dollar
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether such Borrowing is to be a Swing Loan
Borrowing or a Revolver Loan Borrowing, and if the latter, whether it is to be a
Base Rate Borrowing or a Euro-Dollar Borrowing, and
(iv) in the case of a Euro-Dollar Borrowing, the
duration of the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period; provided, that if an Anniversary Date is
scheduled to occur during the Interest Period so selected, and as a result
thereof (but for this proviso) the Borrower shall become obligated to prepay or
repay all or any portion of the Loans on such Anniversary Date pursuant to
Section 2.08(b), then a portion of such Euro-Dollar Borrowing which is equal to
the amount of the Loans that would otherwise be so prepaid or repaid on any such
Anniversary Date either (A) shall have applicable thereto an Interest Period or
Interest Periods, as selected by the Borrower, ending on or before the
Anniversary Date on which Loans corresponding in amount to such portion would
otherwise be prepaid or repaid, or (B) shall instead be made as a Base Rate
Borrowing.
(b) Upon receipt of a Notice of Borrowing, the Agent
shall promptly notify each Bank of the contents thereof and of such Bank's
ratable share of such Borrowing (unless it is a Swing Loan Borrowing) and such
Notice of Borrowing shall not thereafter be revocable by the Borrower.
(c) Not later than 11:00 a.m. (2:00 p.m. in the case of a
Base Rate Borrowing) (Atlanta, Georgia time) on the date of each Revolver Loan
Borrowing, each Bank shall (except as provided in paragraph (d) of this Section)
make available its ratable share of such Revolver Loan Borrowing, in Federal or
other funds immediately available in Atlanta, Georgia, to the Agent at its
address referred to in Section 9.01. Unless the Agent determines that any
applicable condition specified in Article III has not been satisfied, the Agent
will make the funds so received from the Banks available to the Borrower at the
Agent's aforesaid address. Unless the Agent receives notice from a Bank, at the
Agent's address referred to in or specified pursuant to Section 9.01, no later
than 4:00 p.m. (local time at such address) on the Domestic Business Day before
the date of a Revolver Loan Borrowing stating that such Bank will not make a
Loan in connection with such Revolver Loan Borrowing, the Agent shall be
entitled to assume that such
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Bank will make a Loan in connection with such Revolver Loan Borrowing and, in
reliance on such assumption, the Agent may (but shall not be obligated to) make
available such Bank's ratable share of such Revolver Loan Borrowing to the
Borrower for the account of such Bank. If the Agent makes such Bank's ratable
share available to the Borrower and such Bank does not in fact make its ratable
share of such Revolver Loan Borrowing available on such date, the Agent shall be
entitled to recover such Bank's ratable share from such Bank or the Borrower
(and for such purpose shall be entitled to charge such amount to any account of
the Borrower maintained with the Agent), together with interest thereon for each
day during the period from the date of such Revolver Loan Borrowing until such
sum shall be paid in full at a rate per annum equal to the rate at which the
Agent determines that it obtained (or could have obtained) overnight Federal
funds to cover such amount for each such day during such period, provided that
any such payment by the Borrower of such Bank's ratable share and interest
thereon shall be without prejudice to any rights that the Borrower may have
against such Bank. If the Agent does not exercise its option to advance funds
for the account of such Bank, it shall forthwith notify the Borrower of such
decision. Unless the Agent determines that any applicable condition specified in
Article III has not been satisfied, Wachovia will make available to the Borrower
at Wachovia's Lending Office the amount of any such Borrowing which is a Swing
Loan Borrowing.
(d) If any Bank makes a new Loan hereunder on a day on
which the Borrower is to repay all or any part of an outstanding Loan from such
Bank, such Bank shall apply the proceeds of its new Loan to make such repayment
as a Refunding Loan and only an amount equal to the difference (if any) between
the amount being borrowed and the amount of such Refunding Loan shall be made
available by such Bank to the Agent as provided in paragraph (c) of this
Section, or remitted by the Borrower to the Agent as provided in Section 2.11,
as the case may be.
(e) Notwithstanding anything to the contrary contained in
this Agreement, no Fixed Rate Borrowing may be made if there shall have occurred
a Default or an Event of Default, which Default or Event of Default shall not
have been cured or waived.
(f) In the event that a Notice of Borrowing fails to
specify whether the Loans comprising such Borrowing are to be Base Rate Loans or
Euro-Dollar Loans, such Loans shall be made as Base Rate Loans. If the Borrower
is otherwise entitled under this Agreement to repay any Loans maturing at the
end of an Interest Period applicable thereto with the proceeds of a new
Borrowing, and the Borrower fails to repay such Loans using its own moneys and
fails to give a Notice of Borrowing in connection with such new Borrowing, a new
Borrowing shall be deemed to be made on the date such Loans mature in an amount
equal to the principal amount of the Loans so maturing, and the Loans comprising
such new Borrowing shall be Base Rate Loans.
(g) Notwithstanding anything to the contrary contained
herein, there shall not be more than 10 Fixed Rate Loans outstanding at any
given time.
Section 2.03 Notes.
(a) The Revolver Loans of each Bank shall be evidenced by
a single Revolver Loan Note payable to the order of such Bank for the account of
its Lending Office in an amount equal to the original principal amount of such
Bank's Commitment. The Swing Loans shall be
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evidenced by a single Swing Loan Note payable to the order of Wachovia in the
original principal amount of $12,500,000.
(b) Upon receipt of each Bank's Revolver Loan Note
pursuant to Section 3.01, the Agent shall deliver such Note to such Bank. Each
Bank (or Wachovia, with respect to the Swing Loan Note) shall record, and prior
to any transfer of its Note shall endorse on the schedule forming a part thereof
appropriate notations to evidence the date, amount and maturity of each Loan
made by it, the date and amount of each payment of principal made by the
Borrower with respect thereto and, with respect to a Revolver Loan, whether such
Loan is a Base Rate Loan or Euro-Dollar Loan (and as to Swing Loans, whether
such Loans are Base Rate Loans or Set Rate Loans), and such schedule shall
constitute rebuttable presumptive evidence of the principal amount owing and
unpaid on such Bank's (or Wachovia's) Note; provided that the failure of any
Bank (or Wachovia) to make any such recordation or endorsement shall not affect
the obligation of the Borrower hereunder or under the Notes or the ability of
any Bank (or Wachovia) to assign its Notes. Each Bank (and Wachovia) is hereby
irrevocably authorized by the Borrower so to endorse its Notes and to attach to
and make a part of any Note a continuation of any such schedule as and when
required.
Section 2.04 Maturity of Loans.
(a) Each Loan included in any Fixed Rate Borrowing shall
mature, and the principal amount thereof shall be due and payable, on the last
day of the Interest Period applicable to such Borrowing.
(b) Notwithstanding the foregoing, the outstanding
principal amount of the Loans, if any, together with all accrued but unpaid
interest thereon, if any, shall be due and payable on the Termination Date.
Section 2.05 Interest Rates.
(a) "Applicable Margin" means: (i) for any Base Rate
Loan, 0.00%; and (ii) for any Euro-Dollar Loan, (A) until the first Performance
Pricing Determination Date, 1.00%, and (B) thereafter, with respect to each
Performance Pricing Determination Date, the percentage determined as of the end
of the Fiscal Quarter or Fiscal Year just ended by reference to the percentage
shown in the following schedule, depending on the Total Debt to Cash Flow Ratio
as of the end of such Fiscal Quarter or Fiscal Year, as determined pursuant
hereto.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Total Debt to Cash Flow
Ratio
----------------------------------------------------------------------------------
<S> <C> <C>
> 3.50 to 1.0 > 2.75 to 1.0, but < 2.75 to 1.0
- - < 3.50 to 1.0
----------------------------------------------------------------------------------
1.75% 1.375% 1.00%
----------------------------------------------------------------------------------
</TABLE>
29
<PAGE> 35
In determining interest for purposes of this Section 2.05 and fees pursuant to
Section 2.06(a), the Borrower and the Banks shall refer to the Borrower's most
recent consolidated quarterly and annual (as the case may be) financial
statements delivered pursuant to Section 5.01(a) or (b), as the case may be. If
such financial statements require a change in interest pursuant to this Section
2.05 or fees pursuant to Section 2.06(a), the Borrower shall deliver to the
Agent, along with such financial statements, a notice to that effect, which
notice shall set forth in reasonable detail the calculations establishing the
required change. The date which is 10 Domestic Business Days after receipt by
the Agent of such financial statements and notice, commencing with the financial
statements for the fourth Fiscal Quarter of the 2000 Fiscal Year, is the
"Performance Pricing Determination Date." Any such required change in interest
and fees shall become effective on such Performance Pricing Determination Date,
and shall be in effect until the next Performance Pricing Determination Date,
provided, however, that: (i) for Euro-Dollar Loans, changes in interest shall
only be effective for Interest Periods commencing on or after the Performance
Pricing Determination Date; and (ii) no interest or fees shall be decreased
pursuant to this Section 2.05 or Section 2.06(a) if, on the Performance Pricing
Determination Date, (A) an Event of Default is in existence, or (B) a Default is
in existence which on such date is not an Event of Default but which becomes an
Event of Default; provided, however, that if an Event of Default exists on the
Performance Pricing Determination Date, or a Default exists and subsequently
becomes an Event of Default, any such decrease shall take effect upon the cure
of any such Event of Default.
(b) Each Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date such Loan is
made until it becomes due, at a rate per annum equal to the Base Rate for such
day plus the Applicable Margin. Such interest shall be payable on the first day
of each calendar month, commencing November 1, 2000. Any overdue principal of
and, to the extent permitted by applicable law, overdue interest on any Base
Rate Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the Default Rate.
(c) Each Euro-Dollar Loan and Set Rate Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to (i) as to Euro-Dollar Loans,
the sum of the Applicable Margin plus the applicable Adjusted London Interbank
Offered Rate for such Interest Period, and (ii) as to Set Rate Loans, the Set
Rate applicable thereto. Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period for Euro-Dollar Loans is
longer than 3 months, at intervals of 3 months after the first day thereof. Any
overdue principal of and, to the extent permitted by law, overdue interest on
any Euro-Dollar Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any
Euro-Dollar Loan means for the Interest Period of such Euro-Dollar Loan, the
rate per annum determined on the basis of the offered rate for deposits in
Dollars of amounts equal or comparable to the principal amount
30
<PAGE> 36
of such Euro-Dollar Loan offered for a term comparable to such Interest Period,
which rates appear on the Telerate Screen Page 3750 as of 11:00 a.m., London
time, 2 Euro-Dollar Business Days prior to the first day of such Interest
Period, provided that if no such offered rates appear on such page, the "London
Interbank Offered Rate" for such Interest Period will be the arithmetic average
(rounded upward, if necessary, to the next higher 1/100th of 1%) of rates quoted
by not less than 2 major banks in New York City, selected by the Agent, at
approximately 10:00 a.m., New York City time, 2 Euro-Dollar Business Days prior
to the first day of such Interest Period, for deposits in Dollars offered to
leading European banks for a period comparable to such Interest Period in an
amount comparable to the principal amount of such Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in respect of "Eurocurrency liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to United States residents). The Adjusted
London Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.
(d) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt notice to the
Borrower and the Banks by telecopier of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of manifest error.
(e) After the occurrence and during the continuance of an
Event of Default, the principal amount of the Loans (and, to the extent
permitted by applicable law, all accrued and past due interest thereon) may, at
the election of the Required Banks, bear interest at the Default Rate, effective
from and after the date such Event of Default occurred.
Section 2.06 Fees.
(a) The Borrower shall pay to the Agent for the ratable
account of each Bank, a commitment fee, which shall accrue from and including
the Closing Date to but excluding the Termination Date and shall be payable on
each April 1, July 1, October 1 and January 1 and on the Termination Date,
commencing January 1, 2001, for the quarterly period ending immediately prior to
such date (except that the payment on January 1, 2001 shall be for the period
from the Closing Date through December 31, 2000). The commitment fee shall be
calculated on the average daily principal amount of such Bank's Unused
Commitment during such period at the rate per annum (expressed below as a
decimal) of (A) until the first Performance Pricing Determination Date, 0.225%,
and (B) thereafter, with respect to each Performance Pricing Determination Date,
the percentage determined as of the end of the Fiscal Quarter or Fiscal Year
just ended by reference to the percentage shown in the following schedule,
depending on the Total Debt to Cash Flow Ratio as of the end of such Fiscal
Quarter or Fiscal Year, as determined pursuant hereto.
31
<PAGE> 37
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Total Debt to Cash Flow
Ratio
----------------------------------------------------------------------------------
<S> <C> <C>
> 3.50 to 1.0 > 2.75 to 1.0, but < 2.75 to 1.0
- - < 3.50 to 1.0
----------------------------------------------------------------------------------
0.325% 0.275% 0.225%
----------------------------------------------------------------------------------
</TABLE>
(b) The Borrower shall pay to the Agent, for the account and
sole benefit of the Agent, such fees and other amounts at such times as set
forth in the Agent's Letter Agreement.
Section 2.07 Optional Termination or Reduction of
Commitments. The Borrower may, upon at least 3 Domestic Business Days' notice to
the Agent, terminate at any time, or proportionately reduce the Unused
Commitments from time to time by an aggregate amount of at least $5,000,000 or
any larger multiple of $1,000,000. If the Commitments are terminated in their
entirety, all accrued fees (as provided under Section 2.06) shall be due and
payable on the effective date of such termination.
Section 2.08 Mandatory Reduction and Termination of
Commitments.
(a) The Commitments shall terminate on the Termination
Date and any Loans then outstanding (together with accrued interest thereon)
shall be due and payable on such date.
(b) The Aggregate Commitment shall be reduced by an
amount equal to:
(i) 100% of the Net Cash Proceeds (rounded to
the nearest $500,000) in excess of $5,000,000 of any individual sale of assets,
and in excess of $10,000,000 in the aggregate for all sales of assets during any
Fiscal Year, by the Parent or any of the Subsidiaries, but excluding (A) sales
of inventory in the ordinary course of business, (B) sales of equipment in the
ordinary course of business, if and to the extent of Net Cash Proceeds used
within a reasonable time to purchase equipment in replacement thereof, (C) sales
of Receivables pursuant to a Receivables Securitization Program (which shall be
subject to clause (ii) below); and
(ii) 100% of the Net Cash Proceeds (rounded to
the nearest $500,000) of the initial sale of Receivables to the Receivables
Subsidiary pursuant to any Receivables Securitization Program implemented after
(but not on or before) the Original Closing Date, as in existence on the date of
implementation thereof, provided, that (1) with respect to any increase
(including, but not limited to a new series) in an existing Receivables
Securitization Program or any Receivables Securitization Program which is
additional to an existing Receivables Securitization Program (each an
"Incremental Program"), the foregoing shall apply only to the extent of the
amount of the Net Cash Proceeds from the initial sale under the Incremental
Program, and (2) with respect to any Receivables Securitization Program which is
a replacement (a "Replacement Program") for another Receivables Securitization
Program (a "Replaced Program"), the foregoing shall apply only to the extent of
the amount, if any, by which the Net
32
<PAGE> 38
Cash Proceeds from the initial sale under the Replacement Program exceeds the
Net Cash Proceeds from the initial sale under the Replaced Program.
(c) Each reduction pursuant to Section 2.08(b) shall be
applied to reduce the Commitments of the several Banks ratably. No optional
reduction of the Aggregate Commitment pursuant to Section 2.07 shall reduce the
amount of any subsequent mandatory reduction pursuant to Section 2.08(b).
Section 2.09 Optional Prepayments.
(a) The Borrower may, upon at least 1 Domestic Business
Days' notice to the Agent, prepay any Base Rate Borrowing in whole at any time,
or from time to time in part in amounts aggregating at least $5,000,000 and any
larger multiple of $500,000 (or $100,000 and any larger multiple of $25,000 as
to Swing Loans which are Base Rate Loans, and $1,000,000 and any larger multiple
of $100,000 as to Swing Loans which are Set Rate Loans), by paying the principal
amount to be prepaid. Each such optional prepayment shall be applied to prepay
ratably the Base Rate Loans of the several Banks (or of Wachovia, in the case of
Swing Loans) included in such Base Rate Borrowing.
(b) Except as provided in Sections 2.09(a) and 8.02, the
Borrower may not prepay all or any portion of the principal amount of any Fixed
Rate Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to
this Section 2.09, the Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such prepayment and such notice
shall not thereafter be revocable by the Borrower.
Section 2.10 Mandatory Prepayments. On each date on which
the Commitments are reduced pursuant to Section 2.07 or Section 2.08, the
Borrower shall repay or prepay such principal amount of the outstanding Loans,
if any (together with interest accrued thereon), as may be necessary so that
after such payment the Working Capital Obligations do not exceed the Aggregate
Commitment as then reduced. All such prepayments shall be applied first to the
Revolver Loan Notes and then to the Swing Loan Note.
Section 2.11 General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of,
and interest on, the Loans and of fees hereunder, not later than 11:00 a.m.
(Atlanta, Georgia time) on the date when due, in Federal or other funds
immediately available, without setoff, counterclaim or other deduction, in
Atlanta, Georgia, to the Agent at its address referred to in Section 9.01. The
Agent will promptly distribute to Wachovia each such payment received by the
Agent on account of the Swing Loans, and to each Bank its ratable share of each
such payment received by the Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest on,
the Domestic Loans or of fees hereunder shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of or
interest on, the Euro-Dollar Loans shall be due on a day which is
33
<PAGE> 39
not a Euro-Dollar Business Day, the date for payment thereof shall be extended
to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day.
(c) All payments of principal, interest, fees and other
amounts to be made by the Borrower pursuant to this Agreement with respect to
any Loan or fee relating thereto shall be paid without deduction for, and free
from, any taxes, imposts, levies, deductions, or withholdings now or hereafter
imposed by any governmental authority or by any taxing authority thereof or
therein, excluding in the case of each Bank (1) any taxes imposed by the United
States or any political subdivision thereof on the effectively connected net
income of any Bank or any Bank's Lending Office or any franchise taxes imposed
by such jurisdiction, (2) taxes imposed on the net income of, or franchise taxes
imposed upon, any Bank by the jurisdiction under the laws of which such Bank is
organized or by any political subdivision thereof, (3) taxes imposed on the net
income of such Bank's Lending Office, and franchise taxes imposed on it, by the
jurisdiction of such Bank's Lending Office, or any political subdivision
thereof, (4) any taxes imposed on any Bank by Section 884(a) of the Internal
Revenue Code of 1986, as amended (and any successor statute to Section 884(a)),
and (5) any United States withholding tax payable with respect to any payments
to such Bank under the laws (including, without limitation, any treaty, ruling,
judicial or administrative determination or regulation) in effect on the
"Initial Date" (as hereinafter defined) or as a result of the Bank having
voluntarily changed the jurisdiction of its Lending Office from a jurisdiction
in which payments made to such Bank are exempt from United States withholding
tax to a jurisdiction in which such payments are not so exempt, but not
excluding any United States withholding tax payable or increased as a result of
any change in any law, treaty, ruling, judicial or administrative determination
or regulation, or interpretation thereof occurring after the Initial Date (all
such non-excluded taxes, levies, imposts, deductions, and withholdings
hereinafter referred to as "Taxes"). For purposes hereof, the term "Initial
Date" shall mean, in the case of each Bank party hereto on the date hereof, the
Closing Date, and in the case of each other Bank, the effective date of the
Assignment and Acceptance pursuant to which it became a Bank hereunder.
In the event that the Borrower is required by applicable law
to make any such withholding or deduction of Taxes with respect to any Loan or
fee or other amount, the Borrower shall pay such deduction or withholding to the
applicable taxing authority, shall promptly furnish to any Bank in respect of
which such deduction or withholding to the applicable taxing authority, shall
promptly furnish to any Bank in respect of which such deduction or withholding
is made all receipts and other documents evidencing such payment, and shall pay
to such Bank additional amounts as may be necessary in order that the amount
received by such Bank after the required withholding or other payment shall
equal the amount such Bank would have received had no such withholding or other
payment been made. If no withholding or deduction of Taxes are payable in
respect to any Loan or fee relating thereto, the Borrower shall furnish any
Bank, at such Bank's written request, a certificate from each applicable taxing
authority or an opinion of counsel reasonably acceptable to such Bank, in either
case stating that such payments are exempt from or not subject to withholding or
deduction of Taxes. If the Borrower fails to provide such original or certified
copy of a receipt evidencing payment of Taxes or certificate(s) or opinion of
counsel described in the preceding sentence, the Borrower hereby agrees to
compensate such Bank for, and indemnify it with respect to, the tax consequences
of the Borrower's failure to
34
<PAGE> 40
provide evidence of tax payments or tax exemption; provided, however, that the
Borrower shall not be obligated to indemnify any party for penalties, additions
to tax, interest or expenses associated with the payment of Taxes if the Bank's
liability for such Taxes has arisen as a result of the fault of such Bank; and
provided, further, that the Borrower shall not be obligated to indemnify any
Bank for Taxes, penalties, additions to tax, interest or expenses incurred as a
result of such Bank having voluntarily changed its Lending Office from a
jurisdiction in which payments made to such Bank are exempt from United States
withholding tax to a jurisdiction in which such payments are not so exempt. Such
compensation or indemnification payment shall be made within 30 days from the
date such Bank makes written request therefor. Any such request shall be made
within 90 days after the date on which such payment of Taxes was made. Each such
request shall be accompanied by a copy of the statement from the taxing
authority demanding payment by such Bank of such Taxes or by a certificate from
such Bank which certificate shall set forth in reasonable detail the basis for
any additional amount payable to such party under this Section 2.11 (together
with reasonable evidence of payment of such Taxes).
Any Bank entitled to claim any additional amounts payable
pursuant to this Section 2.11 shall use its best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if the making of such change would avoid the
need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and the making of such a change would not, in the reasonable
judgment of such Bank, be otherwise materially disadvantageous to such Bank.
Each Bank agrees, as soon as practicable after receipt by it
of a request by the Borrower to do so, to file all appropriate forms and take
other appropriate action to obtain a certificate or other appropriate document
from the appropriate governmental authority in the jurisdiction imposing the
relevant taxes, establishing that it is entitled to receive payments of
principal and interest under this Agreement and the Notes without deduction and
free from withholding of any Taxes imposed by such jurisdiction; provided, that,
if it is unable, for any reason, to establish such exemption, or to file such
forms and, in any event, during such period of time as such request for
exemption is pending, the Borrower shall nonetheless remain obligated under the
terms of the immediately preceding paragraph.
In the event any Bank receives a refund of any Taxes paid by
the Borrower pursuant to this Section 2.11, it will pay to the Borrower the
amount of such refund promptly upon receipt thereof; provided, however, if at
any time thereafter it is required to return such refund, the Borrower shall
promptly repay to it the amount of such refund.
Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower and the
Banks contained in this Section 2.11 shall be applicable with respect to any
Assignee, and any calculations required by such provisions (i) shall be made
based upon the circumstances of such Assignee, and (ii) constitute a continuing
agreement and shall survive the termination of this Agreement and the payment in
full or cancellation of the Notes.
Section 2.12 Computation of Interest and Fees. Interest
on Domestic Loans based on the Base Rate shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day). Interest on
35
<PAGE> 41
Domestic Loans based on the Set Rate and interest on Euro-Dollar Loans shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed, calculated as to each Interest Period from and including the first
day thereof to but excluding the last day thereof. Commitment fees and any other
fees payable hereunder shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day).
Section 2.13 Letter of Credit Provisions
(a) Commitment to and Issuance of Letters of Credit.
(i) Commitment to Issue Letters of Credit. The
Coosa Bonds Letter of Credit was issued pursuant to the Original Credit
Agreement. Subject to the terms and conditions of this Agreement and of
the applicable Other Letter of Credit Application Agreements, and in
reliance upon the representations and warranties of the Borrower herein
and therein set forth, the Agent shall issue for the account of the
Borrower, one or more Other Letters of Credit denominated in Dollars,
in accordance with this Section 2.13, from time to time during the
period commencing on the Closing Date and ending on the Domestic
Business Day 30 days prior to the Termination Date.
(ii) Types and Amounts. All Other Letters of
Credit shall be standby (not trade or other commercial) letters of
credit. The Agent shall have no obligation to issue any Other Letter of
Credit at any time:
(A) if the aggregate maximum amount
then available for drawing under all Letters of Credit, after
giving effect to the issuance of the requested Other Letter of
Credit, shall exceed any limit imposed by law or regulation
upon the Agent;
(B) if, after giving effect to the
issuance of the requested Other Letter of Credit, (i) the
aggregate Letter of Credit Obligations would exceed
$20,000,000, or (ii) the Working Capital Obligations would
exceed the Aggregate Commitment;
(C) which has an expiration date (i)
later than 13 months after the issuance date (but which may be
subject to an automatic renewal feature satisfactory to the
Agent); or (ii) after the Termination Date.
(iii) Other Conditions. In addition to being
subject to the satisfaction of the conditions contained in clause (ii)
above and in Article III, the obligation of the Agent to issue any
Other Letter of Credit is subject to the satisfaction in full of the
following conditions:
(A) the Borrower shall have delivered
to the Agent at such times and in such manner as the Agent may
prescribe, an Other Letter of Credit Application Agreement and
such other documents and materials as may reasonably be
required pursuant to the terms thereof all reasonably
satisfactory in
36
<PAGE> 42
form and substance to the Agent and the terms of the proposed
Other Letter of Credit shall be reasonably satisfactory in
form and substance to the Agent;
(B) as of the date of issuance no
order, judgment or decree of any court, arbitrator or
Authority shall purport by its terms to enjoin or restrain the
Agent from issuing the Other Letter of Credit and no law, rule
or regulation applicable to the Agent and no request or
directive (whether or not having the force of law) from any
Authority with jurisdiction over the Agent shall prohibit or
request that the Agent refrain from the issuance of letters of
credit generally or the issuance of that Other Letter of
Credit; and
(C) the Unused Commitment shall not be
less than the amount of the requested Other Letter of Credit.
(iv) Issuance of Other Letters of Credit.
(A) Request for Issuance. At least 2
Domestic Business Days before the effective date for any Other
Letter of Credit, the Borrower shall give the Agent a written
notice containing the original signature of an authorized
officer or employee of the Borrower. Such notice shall be
irrevocable and shall specify the original face amount of the
Other Letter of Credit requested (which original face amount
shall not be less than $1,000,000), the effective date (which
day shall be a Domestic Business Day) of issuance of such
requested Other Letter of Credit, the date on which such
requested Other Letter of Credit is to expire, the amount of
then outstanding Letter of Credit Obligations, the purpose for
which such Other Letter of Credit is to be issued, whether
such Other Letter of Credit may be drawn in single or partial
draws and the person for whose benefit the requested Other
Letter of Credit is to be issued.
(B) Issuance; Notice of Issuance. If
the original face amount of the requested Other Letter of
Credit is less than or equal to the Unused Commitment at such
time and the other applicable conditions set forth in this
Agreement are satisfied, the Agent shall issue the requested
Other Letter of Credit. The Agent shall give each Bank written
or telex notice in substantially the form of Exhibit R, or
telephonic notice confirmed promptly thereafter in writing, of
the issuance of an Other Letter of Credit and shall deliver to
each Bank in connection with such notice a copy of the Other
Letter of Credit issued by the Agent.
(C) No Extension or Amendment. The
Agent shall not extend or amend any Other Letter of Credit if
the issuance of a new Other Letter of Credit having the same
terms as such Other Letter of Credit as so amended or extended
would be prohibited by clause (iii) of paragraph (a) of this
Section 2.13.
(b) Payment of Reimbursement Obligations by Revolver Loans. Upon a
draw under any Letter of Credit (other than a Coosa Bonds Tender Drawing), the
Reimbursement Obligations arising therefrom shall be immediately payable in full
by the Borrower, together
37
<PAGE> 43
with interest until paid as provided in Section 2.6(b) of the Coosa Bonds
Reimbursement Agreement or, with respect to any Other Letter of Credit, at the
same rate as Base Rate Loans determined pursuant to Section 2.05 hereof,
provided that unless the Agent is immediately reimbursed by the Borrower or has
previously submitted a Set Rate Loan Request or Notice of Borrowing as
contemplated in the immediately succeeding sentence, the Borrower irrevocably
authorizes the Agent to treat such draw as a Notice of Borrowing and to cause
Revolver Loans (or a Swing Loan, if the amount of such draw, when added to the
amount of Swing Loans then outstanding, would not exceed the maximum amount of
Swing Loans) to be made to pay such Reimbursement Obligations, without regard to
(i) requirements for funding of specified multiple amounts in Section 2.01 or
2.02 or (ii) satisfaction or non-satisfaction of the conditions set forth in
Section 3.02. Such Revolver Loans shall be made as Base Rate Loans, unless the
Borrower has actually submitted a Notice of Borrowing therefor within the time
permitted by and pursuant to Section 2.01(a) or 2.02, as applicable or unless a
Set Rate Request has been submitted for a Swing Loan at the Set Rate pursuant to
Section 2.01(b)(ii) and a Set Rate has been established pursuant thereto. The
Agent shall notify the Banks of any such Revolver Loans and each Bank's share
thereof and each of the Banks shall make available its ratable share thereof
pursuant to Section 2.02(c). The amount of any Swing Loans or Revolver Loans
made pursuant hereto shall be applied by the Agent to repay such Reimbursement
Obligations. Coosa Bonds Tender Advances shall be evidenced by the Coosa Bonds
Reimbursement Note and shall be paid and prepaid as provided in Section 2.6 of
the Coosa Bonds Reimbursement Agreement.
(c) Duties of the Agent. Any action taken or omitted to
be taken by the Agent in connection with any Letter of Credit, if taken or
omitted in the absence of willful misconduct or gross negligence, shall not put
the Agent under any resulting liability to any Bank. In determining whether to
pay under any drawing under any Letter of Credit, the Agent shall have no
obligation relative to the Banks other than to confirm that any documents
required to have been delivered under such Letter of Credit appear to comply on
their face with the requirements of such Letter of Credit.
(d) Purchase of Participations. Immediately upon issuance
by the Agent of any Letter of Credit in accordance with this Agreement and the
Coosa Bonds Reimbursement Agreement, if applicable, each Bank shall be deemed to
have irrevocably and unconditionally purchased and received from the Agent,
without recourse or warranty, an undivided interest and participation, to the
extent of such Bank's ratable share of the Aggregate Commitment, in such Letter
of Credit.
(e) Sharing of Letter of Credit Payments. If for any
reason the Agent has not been reimbursed the amount of any Reimbursement
Obligation as required by paragraph (b) above and no Swing Loans or Revolver
Loans can be made with respect thereto pursuant to such paragraph, the Agent
shall promptly notify each Bank of such fact and each Bank shall make available
to the Agent its ratable share thereof in same day funds on the date of such
notice, if the Agent gives such notice prior to 2:00 P.M. (Atlanta, Georgia
time) on a Domestic Business Day, or on the next Domestic Business Day if such
notice is given after such time.
(f) Sharing of Coosa Bonds Reimbursement Note Payments.
Whenever the Agent receives any payment under the Coosa Bonds Reimbursement
Note, including any interest thereon, the Agent shall promptly notify each Bank
thereof and shall distribute to each
38
<PAGE> 44
Bank its ratable share of the amount of such payment in Dollars and in same day
funds, provided that such payment was received by the Agent by 2:00 P.M
(Atlanta, Georgia, time) on any Domestic Business Day, or on the next Domestic
Business Day, if such payment was received after such time.
(g) Obligations Irrevocable. The obligations of the Banks
to make Revolver Loans for payment of Reimbursement Obligations arising with
respect to a Letter of Credit, and of the Borrower to repay such Revolver Loans,
shall be irrevocable, not subject to any qualification or exception whatsoever
and shall be made in accordance with, but not subject to, the terms and
conditions of this Agreement under all circumstances (assuming that the Agent
has issued such Letter of Credit in accordance with the provisions hereof and of
the Coosa Bonds Reimbursement Agreement, if applicable), including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of
this Agreement or any of the other Principal Documents or the Coosa Bonds
Indenture or the Lease (as defined in the Coosa Bonds Indenture);
(ii) the existence of any claim, set-off, defense
or other right which the Borrower may have at any time against the Coosa Bonds
Trustee as beneficiary named in the Coosa Bonds Letter of Credit or any
beneficiary of any Other Letter of Credit or any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting) or against the
Coosa Bonds Issuer or any other Person under any of the Coosa Bonds Letter of
Credit Related Documents, or against the Agent, any Bank or any other Person,
whether in connection with any of the Principal Documents or Coosa Bonds Letter
of Credit Related Documents or the transactions contemplated herein or therein
or any unrelated transactions;
(iii) any draft, certificate or any other document
presented under any Letter of Credit proves to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security
for the performance or observance of any of the terms of any of the Principal
Documents or the Coosa Bonds Letter of Credit Related Documents;
(v) payment by the Agent under any Letter of
Credit against presentation of any draft or certificate that is insufficient or
otherwise does not comply with the terms of such Letter of Credit, except
payment resulting from the gross negligence or willful misconduct of the Agent;
or
(vi) any other circumstances or happenings
whatsoever, whether or not similar to any of the foregoing, except circumstances
or happenings resulting from the gross negligence or willful misconduct of the
Agent.
(h) Recovery or Avoidance of Payments. In the event any
payment by or on behalf of the Borrower received by the Agent with respect to
any Letter of Credit (including on account of any Revolver Loans made to pay the
resulting Reimbursement Obligations and on account of the Coosa Bonds
Reimbursement Note, if applicable) and distributed by the Agent to
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the Banks on account of their participations in such Letter of Credit is
thereafter set aside, avoided or recovered from the Agent in connection with any
receivership, liquidation or bankruptcy proceeding, each Bank that received such
distribution shall, upon demand by such Agent, contribute such Bank's ratable
share of the amount set aside, avoided or recovered together with interest at
the rate required to be paid by the Agent upon the amount required to be repaid
by it.
(i) Issuance Fee and Letter of Credit Fee. The Borrower
shall pay to the Agent with respect to each Letter of Credit (i) annually, on
the date of issuance of such Letter of Credit and on each anniversary thereof,
for its own account, a fronting fee in an amount equal to the product of (x) the
maximum aggregate amount available to be drawn under the terms of such Letter of
Credit on or after such date, multiplied by (y) one-eighth of one percent
(1/8%), multiplied by (z) a percentage equal to the ratable share of the
Aggregate Commitments held by Banks other than the Agent (in its capacity as a
Bank), (ii) as and when payable under the Coosa Bonds Reimbursement Agreement,
for the ratable account of the Banks, the Coosa Bonds Letter of Credit Fee and
(iii) the date of issuance of each Other Letter of Credit, and quarterly
thereafter (or at some other interval agreed upon by the Borrower and the
Agent), a letter of credit fee for each Other Letter of Credit, for the ratable
account of the Banks, in each case in an amount equal to the Applicable Margin
for Euro-Dollar Loans (expressed as a percentage) times the maximum aggregate
amount available to be drawn under the terms of such Other Letter of Credit.
Promptly upon receipt of any Letter of Credit Fee, the Agent shall distribute to
each Bank its ratable share thereof.
(j) Agent Charges. The Borrower shall pay to the Agent,
solely for its own account, the charges assessed by the Agent in connection with
(i) the issuance and payment of the Coosa Bonds Letter of Credit, which charges
shall be those set forth in the Coosa Bonds Reimbursement Agreement, (ii) the
issuance and payment of the Other Letter of Credit, which charges shall be those
set forth in the relevant Other Letter of Credit Application Agreement and (iii)
the amendment or cancellation of any Letter of Credit, which charges shall be
those typically charged by the Agent to its customers generally having credit
and other characteristics similar to the Borrower, as determined in good faith
by the Agent.
(k) Indemnification. In addition to amounts payable as
elsewhere provided in this Section 2.13, the indemnification provisions
contained in Section 10.2 of the Coosa Bonds Reimbursement Agreement for the
benefit of the Agent and the Banks are incorporated by reference herein.
(l) Assumption of Risk by Borrower. As between the
Borrower, the Agent and the Bank, the Borrower assumes all risks of the acts and
omissions of, or misuse of any Letter of Credit by, the Coosa Bonds Trustee as
beneficiary of the Coosa Bonds Letter of Credit or by the beneficiary of any
Other Letter of Credit. In furtherance and not in limitation of the foregoing,
the Agent and the Banks shall not be responsible for (i) the validity, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, inaccurate, fraudulent or
forged, (ii) the validity of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or
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ineffective for any reason, (iii) failure of the Coosa Bonds Trustee as
beneficiary of the Coosa Bonds Letter of Credit or of the beneficiary of any
Other Letter of Credit to comply duly with conditions required in order to draw
upon such Letter of Credit, (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher, for errors in interpretation of
technical terms, (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof, (vii) the misapplication by the Coosa Bonds Trustee as
beneficiary of the Coosa Bonds Letter of Credit or by any beneficiary of any
Other Letter of Credit of the proceeds of any drawing under such Letter of
Credit; and (viii) any consequences arising from causes beyond the control of
the Agent and the Banks.
(m) Exoneration. In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any action taken or
omitted by the Agent under or in connection with the Letters of Credit or any
related certificates if taken or omitted in good faith and with reasonable care,
shall not put the Agent or any Bank under any resulting liability to the
Borrower or relieve the Borrower of any of its obligations hereunder to any such
Person.
(n) No Amendment of Coosa Bonds Reimbursement Agreement.
The Agent agrees with the Banks that it will not amend any material provision of
or waive any Event of Default under the Coosa Bonds Reimbursement Agreement
without the prior written consent of the Required Banks (or all Banks, if
required by Section 9.06(a) of the Credit Agreement).
(o) Coosa Bonds Notice of Non-Extension. The Agent agrees
with the Banks that, if pursuant to the automatic renewal provisions of the
Coosa Bonds Letter of Credit, the Coosa Bonds Letter of Credit Expiration Date
would otherwise extend beyond the Termination Date, it will timely issue a Coosa
Bonds Non-Extension Notice so that the Coosa Bonds Letter of Credit Expiration
Date will occur on or before the Termination Date.
ARTICLE III
CONDITIONS TO BORROWINGS
Section 3.01 Conditions to First Borrowing and
Effectiveness of this Agreement.
(a) Conditions to First Borrowing. The obligation of each
Bank to make a Loan on the occasion of the first Borrowing under the Original
Credit Agreement (or any amendment thereof, as applicable) was satisfied by the
satisfaction of each of the conditions set forth in Section 3.02 on the date of
such first Borrowing (or amendment) and receipt by the Agent of the documents
described below in this paragraph (a):
(i) from each of the parties to the Original
Agreement of either (1) a duly executed counterpart of the Original Credit
Agreement signed by such party or (2) a facsimile transmission of a duly
executed signature page of this Agreement (with the original thereof to be sent
by overnight courier to the counsel for the Agent), and a duly executed
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Consent and Reaffirmation of Guarantors as attached hereto following the
signatures of the parties hereto, duly executed by the Guarantors;
(ii) a duly executed Revolver Loan Note under the
Original Credit Agreement for the account of each Bank (which was in the amount
of each Bank's Commitment at the time of the Original Credit Agreement), and a
duly executed Swing Loan Note under the Original Credit Agreement (which was in
the amount of $5,000,000) for the account of Wachovia, in each case complying
with the provisions of Section 2.03;
(iii) a duly executed Parent Guaranty, a duly
executed Pledge Agreement, a duly executed Security Agreement, duly executed
Mortgages (in such number of counterparts as the Agent may request), and duly
executed UCC-1 financing statements pertaining to the Security Agreement and the
Mortgages and UCC-2 Notices pertaining to the real property located in Georgia;
(iv) a duly executed SunTrust Intercreditor
Agreement, and instruments, in appropriate recordable form, duly executed by
SunTrust Bank, Atlanta;
(v) such releases and termination statements as
the Agent may request from The CIT Group/Commercial Services, Inc., Wachovia
Bank of South Carolina, N.A. and First Union National Bank of Georgia as to the
Graniteville Assets and payment in full of all amounts payable to such lenders
and termination of the loan and security documents with them;
(vi) lien and title searches satisfactory to the
Agent (1) pertaining to the Collateral described in the Security Agreement
(including, without limitation, the personal property portions of the
Graniteville Assets), indicating that, upon execution and delivery of this
Agreement and the Security Agreement, the filing of releases and termination
statements referred to in paragraph (e) above and of the UCC-1 financing
statements pertaining to such Collateral in the appropriate filing offices, and
the satisfaction of all other conditions in this Section 3.01, the Agent will
have a first priority (except as to the equipment located at the SunTrust
Collateral Plants, which shall be second priority) security interest in such
Collateral, except for the Permitted Encumbrances and (2) pertaining to the real
property portions of the Graniteville Assets, showing that there are no
encumbrances on such property other than Permitted Encumbrances;
(vii) receipt by the Borrower of not less than
$39,000,000 in cash proceeds from the issuance of additional Capital Stock of
the Parent;
(viii) an opinion letter (1) of King & Spalding,
counsel for the Borrower and the Parent, dated as of the Original Closing Date,
substantially in the form of Exhibit B-1, (2) of Bradley Arant Rose & White LLP,
Alabama counsel to the Borrower, addressing certain matters referred to in the
opinion of King & Spalding, and (3) of local counsel to the Agent in the States
of Alabama, North Carolina and South Carolina dated as of the Original Closing
Date, substantially in the form of Exhibit B-2 regarding the Mortgage as to any
Plant located in the state in which such counsel is located;
(ix) an opinion of Jones, Day, Reavis & Pogue,
special counsel for the Agent, dated as of the Original Closing Date,
substantially in the form of Exhibit C;
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(x) a certificate substantially in the form of
Exhibit G), dated as of the Original Closing Date, signed by a principal
financial officer of the Borrower, to the effect that (1) no Default had
occurred and was continuing on the date of the first Borrowing and (2) the
representations and warranties of the Borrower contained in Article IV were true
on and as of the date of the first Borrowing under the Original Credit
Agreement;
(xi) all documents which the Agent reasonably
requested relating to the existence of the Borrower and the Parent,
respectively, the corporate authority for and the validity of the Original
Credit Agreement and the other Loan Documents and the Parent Documents, and any
other matters relevant thereto, all in form and substance satisfactory to the
Agent, including, without limitation, a certificate of incumbency of the
Borrower and the Parent, respectively, signed by the Secretary or an Assistant
Secretary of the Borrower and the Parent, respectively, certifying as to the
names, true signatures and incumbency of the officer or officers of the Borrower
or the Parent, as applicable, authorized to execute and deliver the Loan
Documents or the Parent Documents, and certified copies of the following items
as to each of the Borrower and the Parent: (1) its Certificate of Incorporation,
(2) its Bylaws, (3) a certificate of the Secretary of State of the State of
Alabama (as to the Borrower) and Georgia (as to the Parent) as to its good
standing as an Alabama or Georgia corporation, respectively, together with a
certificate of good standing or valid existence from the Secretaries of State of
the States of North Carolina, South Carolina and Georgia as to the good standing
of the Borrower as a foreign corporation qualified to do business in such States
and (4) the action taken by its Board of Directors authorizing the execution,
delivery and performance of the Original Credit Agreement and the other Loan
Documents, or the Parent Documents, as applicable;
(xii) a Notice of Borrowing;
(xiii) receipt of the fees of the Agent pursuant to
Section 2.06(b) of the Original Credit Agreement;
(xiv) receipt of a certified copy of the executed
Graniteville Asset Purchase Agreement, including any amendments or supplements
prior to the Original Closing Date with such different or additional material
terms or conditions were reasonably satisfactory to the Agent;
(xv) closing of the purchase of the Graniteville
Assets pursuant to the Graniteville Asset Purchase Agreement and the Agent's
reasonable satisfaction with all material aspects of such purchase and the
Graniteville Assets acquired and liabilities assumed in connection therewith;
(xvi) receipt of opinion letters (or reliance
letters with respect thereto) from counsel for Graniteville Company pertaining
to the closing of the purchase of the Graniteville Assets pursuant to the
Graniteville Asset Purchase Agreement and matters related thereto;
(xvii) receipt of the audited balance sheet of the
Graniteville Assets as of January 2, 1994, January 1, 1995 and December 31, 1995
and any unaudited interim statements that were available for subsequent periods,
and audited statements of income, stockholders
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equity and cash flows with respect to the Graniteville Assets for the 10 month
period ended January 2, 1994 and the Fiscal years ended January 1, 1995 and
December 31, 1995 and any unaudited interim statements which were available for
subsequent periods;
(xviii) receipt of financial information reasonably
satisfactory to the Agent as to the Receivables to be transferred to the
Receivables Subsidiary pursuant to the Receivables Securitization Program to be
closed on the Original Closing Date.
(b) Conditions to Effectiveness of this Agreement. The
effectiveness of this Agreement is subject to the satisfaction of the conditions
set forth below in this paragraph (b) (as to the items described in clauses (i),
(v) and (vi), in sufficient number of counterparts for delivery of a counterpart
to each Bank and retention of one counterpart by the Agent).
(i) from each of the parties hereto of either
(i) a duly executed counterpart of this Agreement signed by such party or (ii) a
facsimile transmission of a duly executed signature page of this Agreement (with
the original thereof to be sent by overnight courier to the counsel for the
Agent).
(ii) a certificate (the "Closing Certificate")
substantially in the form of Exhibit G), dated as of the Closing Date, signed by
a principal financial officer of the Borrower, to the effect that (1) no Default
has occurred and is continuing on the Closing Date and (2) the representations
and warranties of the Borrower contained in Article IV are true on and as of the
Closing Date;
(iii) all documents which the Agent may reasonably
request relating to the existence of the Borrower, the Parent and Avondale Mills
Graniteville Fabrics, Inc., respectively, the corporate authority for and the
validity of this Agreement and the other Loan Documents or the Consent and
Reaffirmation of Guarantors, as applicable, and any other matters relevant
hereto, all in form and substance satisfactory to the Agent, including, without
limitation, a certificate of incumbency of the Borrower, the Parent and Avondale
Mills Graniteville Fabrics, Inc., respectively, signed by the Secretary or an
Assistant Secretary of the Borrower, the Parent and Avondale Mills Graniteville
Fabrics, Inc., respectively, certifying as to the names, true signatures and
incumbency of the officer or officers of the Borrower, the Parent or Avondale
Mills Graniteville Fabrics, Inc., as applicable, authorized to execute and
deliver the Loan Documents, or the Consent and Reaffirmation of Guarantors, as
applicable, and certified copies of the following items as to each of the
Borrower, the Parent and Avondale Mills Graniteville Fabrics, Inc.: (1) any
amendments to its Certificate of Incorporation or its Bylaws since the Original
Closing Date (or as to Avondale Mills Graniteville Fabrics, Inc., since it
became a Guarantor), (2) a certificate of the Secretary of State of the State of
Alabama (as to the Borrower), Georgia (as to the Parent) and Delaware (as to
Avondale Mills Graniteville Fabrics, Inc.) as to its good standing as an
Alabama, Georgia or Delaware corporation, respectively, together with a
certificate of good standing or valid existence from the Secretaries of State of
the States of North Carolina, South Carolina and Georgia as to the good standing
of the Borrower as a foreign corporation qualified to do business in such
States, and of South Carolina as to the good standing of Avondale Mills
Graniteville Fabrics, Inc. as a foreign corporation qualified to do business in
such State and (3) the action taken by its Board of Directors authorizing the
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execution, delivery and performance of this Agreement and the other Loan
Documents, or the Consent and Reaffirmation of Guarantors, as applicable;
(iv) execution and delivery of any amendments to
the Principal Documents as may reasonably be requested by the Agent;
(v) an opinion letter (1) of King & Spalding,
counsel for the Borrower and the Guarantors, dated as of the Closing Date,
substantially in the form of Exhibit B-1, but updated and addressing only this
Agreement and the replacement Notes and covering such additional matters
relating to the transactions contemplated hereby as the Agent may reasonably
request and (2) of Bradley Arant Rose & White LLP, Alabama counsel to the
Borrower, addressing certain matters referred to in the opinion of King &
Spalding;
(vi) an opinion of Jones, Day, Reavis & Pogue,
special counsel for the Agent, dated as of the Closing Date, substantially in
the form of Exhibit C, but updated and addressing only this Agreement and the
replacement Notes, and covering such additional matters relating to the
transactions contemplated hereby as the Agent may reasonably request;
(vii) a duly executed replacement Revolver Loan
Note for the account of each Bank and a duly executed replacement Swing Loan
Note;
(viii) receipt by the Agent, for the ratable
account of the Banks, of an upfront fee in an amount equal to 0.10% of the
Aggregate Commitment as of the Closing Date;
(ix) payment of the fees payable on the Closing
Date to the Agent or Wachovia Securities, Inc. pursuant to the Agent's Letter
Agreement; and
(x) payment of all outstanding principal and
accrued and unpaid interest under the Original Credit Agreement.
Section 3.02 Conditions to All Borrowings. The obligation
of the Agent to issue a Letter of Credit and of each Bank to make a Loan on the
occasion of each Borrowing, other than a Borrowing which consists solely of a
Refunding Loan and other than as provided in Section 2.13 with respect to
Borrowings to repay Reimbursement Obligations, is subject to the satisfaction of
the following conditions:
(a) receipt by the Agent of a Notice of Borrowing or a
Set Rate Request;
(b) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of
the Borrower contained in Article IV of this Agreement shall be true on and as
of the date of such Borrowing, except for events which have been disclosed in
writing to the Banks and which are described in any of Sections 4.04, 4.06(a),
4.07 (except the first sentence), 4.14(b) and (c) or 4.15; and
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(d) the fact that, immediately after such Borrowing, the
Working Capital Obligations will not exceed the amount of the Aggregate
Commitment and, with respect to any Letter of Credit, the other conditions set
forth in Section 2.13 have been satisfied.
Each Borrowing hereunder, other than a Borrowing which consists solely of a
Refunding Loan, shall be deemed to be a representation and warranty by the
Borrower on the date of such Borrowing as to the truth and accuracy of the facts
specified in paragraphs (b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower and (by execution and delivery of the Parent
Guaranty) the Parent represent and warrant that:
Section 4.01 Corporate Existence and Power. Each of the
Parent and the Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, is duly
qualified to transact business in every jurisdiction where, by the nature of its
business, such qualification is necessary, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except for failures which have not had and
would not reasonably be expected to have or cause a Material Adverse Effect.
Section 4.02 Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement, the Notes, the Security Agreement, the Mortgages and the other Loan
Documents and by the Parent of the Parent Documents (i) are within the corporate
powers of the Parent and the Borrower, respectively, (ii) have been duly
authorized by all necessary corporate action, (iii) require no action by or in
respect of or filing with, any governmental body, agency or official, (iv) do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or the Parent of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Parent, the Borrower or any of the
Subsidiaries, and (v) do not result in the creation or imposition of any Lien on
any asset of the Parent, the Borrower or any of the Subsidiaries, except in
favor of the Agent.
Section 4.03 Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower enforceable in accordance with its
terms, and the Notes, the Security Agreement, the Mortgages and the other Loan
Documents, and the Parent Documents, when executed and delivered in accordance
with this Agreement, will constitute valid and binding obligations of the
Borrower and the Parent, as applicable, enforceable in accordance with their
respective terms, provided that the enforceability hereof and thereof is subject
in each case to general principles of equity and to bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights generally.
Section 4.04 Financial Information.
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(a) The consolidated balance sheet of the Parent and its
Consolidated Subsidiaries as of August 27, 1999 and the related consolidated
statements of income, shareholders' equity and cash flows for the Fiscal Year
then ended, reported on by Arthur Andersen LLP, copies of which have been
delivered to each of the Banks, and the unaudited consolidated financial
statements (with consolidating schedule) of the Parent for the interim period
ended May 26, 2000, copies of which have been delivered to each of the Banks,
fairly present in all material respects, in conformity with GAAP (except for
customary exceptions for unaudited statements in accordance with the Parent's
practices existing on the Closing Date), the consolidated financial position of
the Parent and its Consolidated Subsidiaries as of such dates and their
consolidated results of operations and cash flows for such periods stated.
(b) Since August 27, 1999 there has been no event, act,
condition or occurrence having or which reasonably could be expected to have or
cause a Material Adverse Effect, except for matters disclosed in the financial
statements for the interim period ended May 26, 2000.
(c) Schedule 4.04 contains a list of all intangibles of
the Parent and its Consolidated Subsidiaries which were recorded on the
financial statements for the interim period ended February 23, 1996 of the types
described in clauses (A) through (C), inclusive, of the definition of
Consolidated Adjusted Tangible Net Worth which were in existence on the day
before the Original Closing Date.
Section 4.05 No Litigation. Except as described on
Schedule 4.05 or Schedule 4.14, there is no action, suit or proceeding pending,
or to the Knowledge of the officers of the Parent or the Borrower, overtly
threatened, against or affecting the Parent or the Borrower or any of the
Subsidiaries or with respect to which any of them may become subject as a result
of the acquisition of the Graniteville Assets, before any court or arbitrator or
any governmental body, agency or official which has not previously been
disclosed pursuant to Section 5.01(i) and which has or would reasonably be
expected to have or cause a Material Adverse Effect or which in any manner draws
into question the validity of or which has impaired or would reasonably be
expected to impair the ability of the Borrower to perform its obligations under,
this Agreement, the Notes, the Security Agreement, the Mortgages or any of the
other Loan Documents or of the Parent to perform its obligations under the
Parent Documents.
Section 4.06 Compliance with ERISA.
(a) The Borrower (i) terminated its only Plan on or about
October 31, 1986 pursuant to the termination procedures under Section 4041 of
ERISA and received all necessary approvals for such termination; (ii) has
distributed all vested benefits under such Plan, and the assets of such Plan so
distributed exceeded the amount of such vested benefits; and (iii) is not
required pursuant to the terms of any applicable collective bargaining agreement
to pay or accrue any contributions with respect to any plan which is a
Multiemployer Plan and there has been no complete or partial withdrawal by the
Borrower from any such Multiemployer Plan as provided by MPPAA.
(b) No non-exempt "prohibited transaction" within the
meaning of Section 4975 of the Internal Revenue Code or Section 406 of ERISA has
occurred with respect to any
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"employee benefit plan," as defined in Section 3 of ERISA, maintained by the
Borrower and which has had or would reasonably be expected to have or cause a
Material Adverse Effect.
Section 4.07 Compliance with Laws; Payment of Taxes. The
Parent, the Borrower and the Material Subsidiaries are in compliance with all
applicable laws, regulations and similar requirements of governmental
authorities, except where such compliance is being contested in good faith
through appropriate proceedings or where failure to comply would not have or
reasonably be expected to have or cause a Material Adverse Effect. There have
been filed on behalf of the Parent, the Borrower and the Material Subsidiaries
all Federal, state and local income, excise, property and other tax returns
which to the Knowledge of its officers are required to be filed by them and all
taxes due pursuant to such returns or pursuant to any assessment received by or
on behalf of the Parent, the Borrower or any Material Subsidiary have been paid,
except for taxes which are being contested in good faith through appropriate
proceedings and for which reasonable reserves have been established in
accordance with GAAP. The charges, accruals and reserves on the books of the
Parent, the Borrower and the Material Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Parent and Borrower, adequate.
United States income tax returns of the Parent, the Borrower and the Material
Subsidiaries have been closed through the 1994 Fiscal Year.
Section 4.08 Subsidiaries. Each of the Material
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, is duly qualified
to transact business in every jurisdiction where, by the nature of its business,
such qualification is necessary, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except where failure of any of the foregoing
would not have or reasonably be expected to have or cause a Material Adverse
Effect. The Parent has no Subsidiaries except for the Borrower and those
Subsidiaries listed on Schedule 4.08, as such schedule is supplemented from time
to time, which accurately sets forth each such Subsidiary's complete name and
jurisdiction of incorporation.
Section 4.09 Investment Company Act. Neither the Parent,
the Borrower nor any of the Material Subsidiaries is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
Section 4.10 Public Utility Holding Company Act. Neither
the Parent, the Borrower nor any of the Material Subsidiaries is a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
Section 4.11 Ownership of Property; Liens. Each of the
Parent, the Borrower and the Material Subsidiaries has title to its properties
sufficient for the conduct of its business, and none of such property is subject
to any Lien except as permitted in Section 5.11.
Section 4.12 No Default. Neither the Parent, the Borrower
nor any of the Material Subsidiaries is, to the Knowledge of their respective
officers, in default under or with respect to any agreement, instrument or
undertaking to which it is a party or by which it or any of
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its property is bound which has had or reasonably would be expected to have or
cause a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing, except as previously disclosed pursuant to Section 5.01(e).
Section 4.13 Full Disclosure. All information heretofore
furnished by the Parent and the Borrower to the Agent or any Bank for purposes
of or in connection with this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Parent and the Borrower
to the Agent or any Bank will be, to the Knowledge of their respective officers,
true, accurate and complete in every material respect or based on reasonable
estimates on the date as of which such information is stated or certified. The
Parent and the Borrower have disclosed to the Banks in writing any and all facts
which have had or would reasonably be expected to have or cause a Material
Adverse Effect.
Section 4.14 Environmental Matters.
(a) Except as set forth on Schedule 4.14, or disclosed
pursuant to Section 5.01(j), to the Knowledge of their respective officers and
Plant managers, (i) neither the Parent, the Borrower nor any Material Subsidiary
is subject, or may become subject as a result of the acquisition of the
Graniteville Assets, to any Environmental Liability which has had or would
reasonably be expected to have or cause a Material Adverse Effect and neither
the Parent, the Borrower nor any Material Subsidiary has been designated as a
potentially responsible party under CERCLA or under any state statute similar to
CERCLA, and (ii) none of the Properties has been identified on any current or
proposed (A) National Priorities List under 40 C.F.R. ss. 300, (B) CERCLIS list
or (C) any list arising from a state statute similar to CERCLA.
(b) To the Knowledge of their respective officers and
Plant managers of the Borrower, no Hazardous Materials have been or are being
used, produced, manufactured, processed, treated, recycled, generated, stored,
disposed of, managed or otherwise handled at, or shipped or transported to or
from the Properties or are otherwise present at, on, in or under the Properties
or the Graniteville Assets, or, at or from any adjacent site or facility (except
for Hazardous Materials, such as cleaning solvents, pesticides and other
materials used or otherwise handled in the ordinary course of business in
material compliance with all applicable Environmental Requirements) that would
reasonably be expected to lead to any material Environmental Liabilities.
(c) To the Knowledge of their respective officers and
Plant managers, the Parent, Borrower, and each of the Material Subsidiaries and
their respective Affiliates, has procured all Environmental Authorizations
necessary for the conduct of its business (after giving effect to the
acquisition of the Graniteville Assets), and is in material compliance with all
Environmental Requirements in connection with the operation of the Properties
and their respective businesses (after giving effect to the acquisition of the
Graniteville Assets), except where failure to so procure or comply would not
reasonably be expected to lead to any material Environmental Liabilities.
Section 4.15 Capital Stock. All Capital Stock,
debentures, bonds, notes and all other securities of the Parent, the Borrower
and the Material Subsidiaries presently issued and outstanding are validly and
properly issued in all material respects in accordance with all
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applicable laws, including, but not limited to, the "Blue Sky" laws of all
applicable states and the federal securities laws. The issued shares of capital
stock of the Wholly Owned Subsidiaries are owned by the Parent free and clear of
any Lien or adverse claim. At least a majority of the issued shares of capital
stock of each of the Parent's other Subsidiaries (other than Wholly Owned
Subsidiaries) is owned by the Parent free and clear of any Lien or adverse
claim, except any which are permitted under Section 5.11.
Section 4.16 Margin Stock. Neither the Parent, the
Borrower nor any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of purchasing or carrying any Margin
Stock, and no part of the proceeds of any Loan will be used to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock, or be used for any purpose which violates, or which
is inconsistent with, the provisions of Regulation X.
Section 4.17 Insolvency. After giving effect to the
execution and delivery of the Loan Documents and the Parent Documents and the
making of the Loans under this Agreement, neither the Parent nor the Borrower
will be "insolvent," within the meaning of such term as used in O.C.G.A. ss.
18-2-22 or as defined in ss. 101 of Title 11 of the United States Code or
Section 2 of the Uniform Fraudulent Transfer Act, or any other applicable state
law pertaining to fraudulent transfers, as each may be amended from time to
time, or be unable to pay its debts generally as such debts become due, or have
an unreasonably small capital to engage in any business or transaction, whether
current or contemplated.
ARTICLE V
COVENANTS
Each of the Borrower and (by execution and delivery of the
Parent Guaranty) the Parent agrees that, so long as any Bank has any Commitment
hereunder or any amount payable hereunder or under any Note remains unpaid:
Section 5.01 Information. The Parent and the Borrower
will deliver to each of the Banks:
(a) (i) as soon as available and in any event within
90 days after the end of each Fiscal Year, a consolidated balance sheet of the
Parent and the Consolidated Subsidiaries as of the end of such Fiscal Year and
the related consolidated statements of income, shareholders' equity and cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, all certified by Arthur Andersen LLP or
other independent public accountants of nationally recognized standing, with
such certification to be free of exceptions and qualifications not acceptable to
the Required Banks, together with unaudited consolidating statements for: (A)
each Material Subsidiary (other than the Borrower), except for any Material
Subsidiary as to which there has been no change in excess of $100,000 in its
assets, liabilities or shareholders' equity since the immediately preceding
Fiscal Quarter; and (B) the Parent during any period in which: (1) the Borrower
is not the sole direct Subsidiary of the Parent; (2) the Parent has assets
(other than the stock of the Borrower) having a book value in excess of
$1,000,000; or (3) the Parent has direct Debt (other
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than in connection with (x) the "SunTrust L/C's," as defined in the SunTrust
Intercreditor Agreement, (y) Guarantees of Debt of the Borrower or a Subsidiary
of the Borrower and (z) Debt to a Subsidiary) in excess of $1,000,000; and
(ii) at the written request of the Required
Banks, as soon as practicable, and in any event within 90 days after the end of
each Fiscal Year in which either (a) the assets of the Borrower and its
consolidated Subsidiaries comprise less than 90% of the consolidated assets of
the Parent and the Consolidated Subsidiaries as of the end of such Fiscal Year,
or (b) the consolidated revenues of the Borrower and its consolidated
Subsidiaries comprise less than 90% of the consolidated revenues of the Parent
and the Consolidated Subsidiaries, furnish to the Agent the annual consolidated
audit report of the Borrower and its consolidated Subsidiaries, including a
balance sheet, income statement and statement of cash flow, together with the
certification of the above-described accounting firm, with such certification to
be free of exceptions and qualifications not acceptable to the Required Banks,
prepared in accordance with the standards set forth above with respect to the
audit report of the Parent; and
(b) as soon as available and in any event within 45 days
after the end of each of the first 3 Fiscal Quarters of each Fiscal Year, a
consolidated balance sheet of the Parent and the Consolidated Subsidiaries as of
the end of such Fiscal Quarter and the related statement of income and statement
of cash flows for such Fiscal Quarter and for the portion of the Fiscal Year
ended at the end of such Fiscal Quarter, setting forth in each case in
comparative form the figures for the corresponding portion of the previous
Fiscal Year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP and consistency by the chief financial officer or
the chief accounting officer of the Borrower, together with unaudited
consolidating statements for: (i) each Material Subsidiary (other than the
Borrower), except for any Material Subsidiary as to which there has been no
change in excess of $100,000 in its assets, liabilities or shareholders' equity
since the immediately preceding Fiscal Quarter; and (ii) the Parent during any
period in which: (A) the Borrower is not the sole direct Subsidiary of the
Parent; (B) the Parent has assets (other than the stock of the Borrower) having
a book value in excess of $1,000,000; or (C) the Parent has direct Debt in
excess of $1,000,000 (other than Debt of the type excluded in Section
5.01(a)(i)(B)(3));
(c) simultaneously with the delivery of each set of
financial statements referred to in paragraphs (a) and (b) above, a certificate,
substantially in the form of Exhibit F (a "Compliance Certificate"), of the
chief financial officer or the chief accounting officer (i) of the Parent,
setting forth in reasonable detail the calculations required to establish
whether there was compliance with the requirements of Sections 5.03, 5.05
through 5.07, inclusive, and 5.09 through 5.11, inclusive, on the date of such
financial statements, (ii) of the Borrower, stating whether, to the Knowledge of
such officer, any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto, (iii) identifying
by name each Consolidated Subsidiary, and (iv) identifying by name any Material
Subsidiary (other than the Borrower) as to which there has been a change in
excess of $100,000 in its assets, liabilities or shareholders' equity since the
immediately preceding Fiscal Quarter;
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(d) simultaneously with the delivery of each set of
annual financial statements referred to in paragraphs (a) and (b) above, a
statement of the firm of independent public accountants which reported on such
statements to the effect that nothing has come to their attention to cause them
to believe that any Default existed on the date of such financial statements
under any of Sections 5.03, 5.05 through 5.07, inclusive, and 5.09;
(e) within 5 Domestic Business Days after any officer of
the Parent or the Borrower becomes aware of the occurrence of any Default, a
certificate of the chief financial officer or the chief accounting officer of
the Parent or the Borrower setting forth the details thereof and the action
which the Parent or the Borrower is taking or proposes to take with respect
thereto;
(f) promptly upon the mailing thereof to the shareholders
of the Parent generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and annual, quarterly or monthly
reports which the Parent or the Borrower shall have filed with the Securities
and Exchange Commission;
(h) from and after the adoption of any Plan, if and when
any member of the Controlled Group (i) gives or is required to give notice to
the PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute grounds for a termination of such
Plan under Title IV of ERISA, or knows that the plan administrator of any Plan
has given or is required to give notice of any such reportable event, a copy of
the notice of such reportable event given or required to be given to the PBGC;
(ii) receives notice of complete or partial withdrawal liability under Title IV
of ERISA, a copy of such notice; or (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate or appoint a trustee to administer
any Plan, a copy of such notice;
(i) within 5 Domestic Business Days after any officer of
the Parent or the Borrower becomes aware of any action, suit or proceeding
pending or overtly threatened, against or affecting the Parent or the Borrower
or any of the Subsidiaries or with respect to which any of them may become
subject as a result of the acquisition of the Graniteville Assets, before any
court or arbitrator or any governmental body, agency or official which has or
would reasonably be expected to have or cause a Material Adverse Effect or which
in any manner draws into question the validity of or which has impaired or would
reasonably be expected to impair the ability of the Borrower to perform its
obligations under, this Agreement, the Notes, the Security Agreement, the
Mortgages or any of the other Loan Documents or of the Parent to perform its
obligations under the Parent Documents, a certificate of the chief financial
officer or the chief accounting officer of the Parent or the Borrower setting
forth the details thereof and the action which the Parent or the Borrower is
taking or proposes to take with respect thereto;
(j) within 5 Domestic Business Days after any officer of
the Parent or the Borrower becomes aware (1) of any Environmental Liability to
which the Parent, the Borrower or any Material Subsidiary is subject, or may
become subject as a result of the acquisition of the Graniteville Assets, which
has had or would reasonably be expected to have or cause a Material
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Adverse Effect, or that the Parent, the Borrower or any Material Subsidiary has
been designated as a potentially responsible party under CERCLA or under any
state statute similar to CERCLA, a certificate of the chief financial officer or
the chief accounting officer of the Parent or the Borrower setting forth the
details thereof and the action which the Parent or the Borrower is taking or
proposes to take with respect thereto; and
(k) from time to time such additional information
regarding the financial position or business of the Parent, the Borrower and the
Subsidiaries as the Agent, at the request of any Bank, may reasonably request.
Section 5.02 Inspection of Property, Books and Records.
The Parent and the Borrower will (i) keep, and cause each Subsidiary to keep,
proper books of record and account in which full, true and correct entries to
permit preparation of financial statements in conformity with GAAP shall be made
of all dealings and transactions in relation to its business and activities; and
(ii) permit, and cause each Subsidiary to permit, representatives of any Bank
upon reasonable prior notice given by or through the Agent to visit and conduct
reasonable inspections of any of their respective properties, to examine and
make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
and, in coordination with such officers, employees and independent public
accountants. Each of the Parent and the Borrower agrees to cooperate and assist
in such visits and inspections, in each case at such reasonable times and as
often as may reasonably be desired.
Section 5.03 Fixed Charge Coverage Ratio. The Fixed
Charge Coverage Ratio, calculated at the end of each Fiscal Quarter, shall be
greater than: (i) 2.75 to 1.0 from the end of the 2000 Fiscal Year through the
end of the fourth Fiscal Quarter of the 2002 Fiscal Year and (ii) 3.00 to 1.0
thereafter.
Section 5.04 Intentionally Omitted
Section 5.05 Senior Debt to Capitalization Ratio. The
Senior Debt to Capitalization Ratio, calculated at the end of each Fiscal
Quarter, shall be less than 0.50 to 1.0.
Section 5.06 Total Debt to Cash Flow Ratio. The Total
Debt to Cash Flow Ratio, calculated at the end of each Fiscal Quarter, shall be
less than 3.75 to 1.0.
Section 5.07 Restricted Payments. The Parent and the
Borrower will not make any Restricted Payment, except, so long as no Default
shall have occurred and be continuing, a Restricted Payment may be made if at
the time of such Restricted Payment and after giving effect thereto, the
aggregate amount of such Restricted Payment and all other Restricted Payments
since the beginning of the Restricted Payment Calculation Period would not
exceed the sum of (x) $20,000,000, plus (y) 50% of Consolidated Net Income
during the Restricted Payment Calculation Period (treated as one accounting
period) (or, in case such Consolidated Net Income shall be a deficit, minus 100%
of such deficit).
Section 5.08 Intentionally Omitted
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Section 5.09 Loans or Advances. Neither the Parent, the Borrower nor
any of the Material Subsidiaries shall make loans or advances to any Person
except, so long as no Event of Default is in existence:
(A)(i) loans or advances to employees not exceeding
$2,000,000 in the aggregate principal amount outstanding at any time, in each
case made in the ordinary course of business and consistent with practices
existing on August 25, 1995; (ii) deposits required by government agencies or
public utilities; and (iii) loans or advances to Wholly Owned Subsidiaries
(other than from the Parent to the Borrower or as provided in Section 5.09(B) or
(C)) not exceeding $1,000,000 in the aggregate outstanding; provided that after
giving effect to the making of any loans, advances or deposits permitted by this
Section 5.09(A), the aggregate of all loans and advances permitted in this
Section 5.09(A) does not exceed $4,000,000;
(B) loans or advances from the Parent to the Borrower or
from the Borrower to the Parent, or from the Borrower to AMGF (i) pursuant to
the AMGF/Graniteville Transaction and within the limits contained in the
definition thereof and (ii) otherwise to fund the ongoing working capital needs
and capital expenditures of AMGF in the ordinary course of business;
(C) loans or advances to the Receivables Subsidiary
evidenced by a Purchase Money Note; and
(D) other loans or advances (not including any loans and
advances of the types described in clauses (A), (B) or (C) above) in an
aggregate amount, together with Investments permitted by clause (viii) of
Section 5.10, not exceeding the sum of $15,000,000, plus 10% of positive
Consolidated Adjusted Tangible Net Worth as of the date of measurement.
Section 5.10 Investments. Neither the Parent, the Borrower nor any of
the Consolidated Subsidiaries shall make Investments in any Person except as
permitted by Section 5.09 and except Investments in (i) direct obligations of
the United States Government maturing within one year, (ii) certificates of
deposit issued by a commercial bank whose credit is satisfactory to the Agent,
(iii) commercial paper rated A1 or the equivalent thereof by Standard & Poor's
Corporation or P1 or the equivalent thereof by Moody's Investors Service, Inc.
and in either case maturing within 6 months after the date of acquisition, (iv)
tender bonds the payment of the principal of and interest on which is fully
supported by a letter of credit issued by a United States bank whose long-term
certificates of deposit are rated at least AA or the equivalent thereof by
Standard & Poor's Corporation and Aa or the equivalent thereof by Moody's
Investors Service, Inc., (v) Investments by Borrower in the Receivables
Subsidiary and obligations consisting of Standard Securitization Undertakings,
(vi) Investments by the Receivables Subsidiary in a Special Purpose Vehicle and
obligations consisting of Standard Securitization Undertakings, (vii) loans and
advances permitted by Section 5.09, and Investments by the Borrower in AMGF (x)
pursuant to the AMGF/Graniteville Transaction and within the limits contained in
the definition thereof and (y) otherwise to fund the ongoing working capital
needs and capital expenditures of AMGF in the ordinary course of business and
(viii) other Investments in an aggregate amount on and after the Closing Date,
together with Investments permitted by clause (D) of Section 5.09, not exceeding
the sum of $15,000,000, plus 10% of positive Consolidated Adjusted Tangible Net
Worth as of the date of measurement.
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Section 5.11 Negative Pledge. Neither the Parent, the Borrower nor any
Consolidated Subsidiary will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except: (i) as to the Collateral,
Liens securing the Obligations and the Permitted Encumbrances, and (ii) as to
other assets:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the Original Closing Date and described on Schedule 5.11;
(b) any Lien existing on any asset of any Person at the time such
Person becomes a Consolidated Subsidiary and not created in contemplation of
such event;
(c) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring or
constructing such asset (including all Liens granted pursuant to the Coosa Bonds
Letter of Credit Related Documents), provided that such Lien attaches to such
asset concurrently with or within 18 months after the acquisition or completion
of construction thereof;
(d) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower or a Consolidated
Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
(f) Liens securing Debt owing by any Subsidiary to the Borrower;
(g) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
paragraphs of this Section, provided that (i) such Debt is not secured by any
additional assets, and (ii) the amount of such Debt secured by any such Lien is
not increased;
(h) Liens incidental to the conduct of its business or the
ownership of its assets which (i) do not secure Debt and (ii) do not in the
aggregate materially detract from the value of its assets or materially impair
the use thereof in the operation of its business;
(i) any Lien on Margin Stock;
(j) Liens on Receivables Program Assets pursuant to a Receivables
Securitization Program; and
(k) Liens (other than on the Transferor Certificate) not otherwise
permitted by the foregoing paragraphs of this Section securing Debt (other than
indebtedness represented by the Notes) in an aggregate principal amount at any
time outstanding not to exceed $3,000,000;
Provided Liens permitted by the foregoing paragraphs (b) through (e) inclusive,
and (i) shall at no time secure Debt in an aggregate amount greater than
$4,000,000.
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Section 5.12 Maintenance of Existence. The Parent and the Borrower
shall, and shall cause each Material Subsidiary to, maintain its existence and
carry on its business in substantially the same manner and in substantially the
same fields as such business is now carried on and maintained, except as
permitted by Section 5.14.
Section 5.13 Dissolution. Neither the Parent, the Borrower nor any of
the Material Subsidiaries shall suffer or permit dissolution or liquidation
either in whole or in part or redeem or retire any shares of its own stock or
that of any Subsidiary, except as permitted by Section 5.07 or through merger or
reorganization to the extent permitted by Section 5.14.
Section 5.14 Consolidations, Mergers and Sales of Assets. The Parent
and the Borrower will not, nor will it permit any Subsidiary to, consolidate or
merge with or into, or sell, lease or otherwise transfer all or any substantial
part of its assets to, any other Person (including in a sale and leaseback
transaction, but excluding sales of inventory in the ordinary course of
business), or discontinue or eliminate any business line or segment, provided
that (a) the Borrower may merge with another Person if (i) such Person was
organized under the laws of the United States of America or one of its states,
(ii) the Borrower is the corporation surviving such merger and (iii) immediately
after giving effect to such merger, no Default shall have occurred and be
continuing, (b) Subsidiaries other than the Borrower may merge with one another,
or with and into the Parent, with the Parent being the surviving corporation,
and (c) the foregoing limitation on the sale, lease or other transfer of assets
and on the discontinuation or elimination of a business line or segment shall
not prohibit, (1) any transfers of Receivables Program Assets pursuant to a
Receivables Securitization Program prior to termination of such program, the
transfer of the Graniteville Indigo Dyeing Facility to AMGF pursuant to the
AMGF/Graniteville Transaction, or the transfer of raw materials, supplies,
inventory and similar production-related items between the Borrower and AMGF in
the ordinary course of business, or (2) during any Fiscal Year, any other
transfer of assets (other than the Transferor Certificate, which may not be
transferred) for 100% cash consideration or the discontinuance or elimination of
a business line or segment (in a single transaction or in a series of related
transactions) unless the aggregate assets to be so transferred or utilized in a
business line or segment to be so discontinued, when combined with all other
assets transferred, and all other assets utilized in all other business lines or
segments discontinued, during such Fiscal Year exceeds $5,000,000, but in any
event subject to the provisions of Section 2.08(b)(i).
Section 5.15 Use of Proceeds. The proceeds of the Loans will be used
(i) to refinance existing revolving credit and other Debt outstanding, (ii) for
working capital and (iii) for general business purposes of the Parent, the
Borrower or any Subsidiaries. No portion of the proceeds of the Loans will be
used by the Borrower or any Subsidiary (A) in connection with, whether directly
or indirectly, any tender offer for, or other acquisition of, stock of any
corporation with a view towards obtaining control of such other corporation,
except in a negotiated transaction, (B) directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any Margin
Stock, or (C) for any purpose in violation of any applicable law or regulation.
Section 5.16 Compliance with Laws; Payment of Taxes. The Parent and
the Borrower will, and will cause each Subsidiary and each member of the
Controlled Group to, comply with applicable laws (including but not limited to,
from and after the adoption of a Plan,
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ERISA), regulations and similar requirements of governmental authorities
(including but not limited to PBGC), except where the necessity of such
compliance is being contested in good faith through appropriate proceedings, or
has not had and would not reasonably be expected to have or cause of Material
Adverse Effect. The Parent and the Borrower will, and will cause each Subsidiary
to, pay promptly when due all taxes, assessments, governmental charges, claims
for labor, supplies, rent and other obligations which, if unpaid, would become a
lien against the property of the Parent, the Borrower or any Subsidiary, except
liabilities being contested in good faith and against which, if required, the
Borrower will set up reserves in accordance with GAAP.
Section 5.17 Insurance. The Parent and the Borrower will maintain, and
will cause each Material Subsidiary to maintain (either in the name of the
Parent or the Borrower or in such Subsidiary's own name), with financially sound
and reputable insurance companies, insurance on all its property, or self
insurance, in each case consistent with practices existing on the Original
Closing Date, all as described on Schedule 5.17.
Section 5.18 Change in Fiscal Year. The Parent and the Borrower will
not, and will not permit any Material Subsidiary to, change its Fiscal Year
without the consent of the Required Banks.
Section 5.19 Maintenance of Property. The Parent and the Borrower
shall, and shall cause each Material Subsidiary to, maintain all of its
properties and assets in good condition, repair and working order, ordinary wear
and tear excepted and subject to prudent business practices.
Section 5.20 Environmental Notices. The Parent and the Borrower shall
furnish to the Agent prompt written notice of all material Environmental
Liabilities, pending, threatened or anticipated Environmental Proceedings,
Environmental Notices, Environmental Judgments and Orders, and, to the Knowledge
of their respective officers and Plant managers, Environmental Releases at, on,
in, under or in any way affecting the Properties or any adjacent property, and
all facts, events, or conditions, that would reasonably be anticipated to lead
to any material Environmental Liabilities.
Section 5.21 Environmental Matters. The Parent and the Borrower and
its Subsidiaries will not knowingly, and will not knowingly permit any Third
Party to, use, produce, manufacture, process, treat, recycle, generate, store,
dispose of, manage at, or otherwise handle, or ship or transport to or from the
Properties any Hazardous Materials (except for Hazardous Materials such as
cleaning solvents, pesticides and other similar materials used or otherwise
handled in the ordinary course of business in material compliance with all
applicable Environmental Requirements) that would reasonably be expected to lead
to any material Environmental Liabilities.
Section 5.22 Environmental Release. Each of the Parent and the
Borrower agrees that upon the occurrence of any material Environmental Release
known to any of their respective officers or Plant managers at or on any of the
Properties it will act immediately to investigate the extent of, and to take
appropriate remedial action with respect to such Environmental Release, whether
or not ordered or otherwise directed to do so by any Environmental Authority.
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Section 5.23 Additional Consolidated Senior Debt; Debt of Receivables
Subsidiary. Neither the Parent nor the Borrower shall incur or permit to exist,
or permit any Consolidated Subsidiary other than the Receivables Subsidiary to
incur or permit to exist, any Consolidated Senior Debt not in existence on the
Original Closing Date, and extensions, renewals, refinancings or refundings
thereof (provided that the amount of such Consolidated Senior Debt is not
increased), other than (i) the Obligations; (ii) Debt permitted to be secured by
Liens permitted by Section 5.11; (iii) Debt of the types described in clause
(vii) of the definition of Debt which is incurred in the ordinary course of
business in connection with the sale or purchase of goods or to assure
performance of an obligation to a utility or a governmental entity or a worker's
compensation obligation; (iv) Receivables Program Obligations; (v) Debt
permitted by Section 5.09; and (vi) other Debt in an aggregate amount
outstanding at any time not exceeding $4,000,000. Nothing in the foregoing shall
prohibit the Borrower from incurring obligations incurred in connection with
Interest Rate Protection Agreements. The Borrower shall not permit the
Receivables Subsidiary to incur any Debt or other liabilities other than in
connection with the Receivables Securitization Program.
Section 5.24 Transactions with Affiliates. Neither the Borrower nor
any of its Subsidiaries shall enter into, or be a party to, any transaction with
any Affiliate of the Borrower or such Subsidiary (which Affiliate is not the
Borrower, the Parent or a Subsidiary and in any event excluding the Receivables
Securitization Program), except as permitted by law and in the ordinary course
of business and pursuant to reasonable terms which are no less favorable to
Borrower, the Parent or such Subsidiary than would be obtained in a comparable
arm's length transaction with a Person which is not an Affiliate. Upon request
of the Agent, the Borrower shall fully disclose the terms of any such
transaction.
Section 5.25 Collateral.
(a) All manufacturing plants of the Borrower are listed on
Schedule 5.25, which shows, as to each Plant: (i) the City, Town or other local
jurisdiction, and County and State of its location; (ii) whether the Property on
which such Plant is located is owned or leased by the Borrower, and if leased,
the name and address of the owner; (iii) all Liens on the Property on which such
Plant is located; and (iv) the name, address and type of interest of any Third
Party whose consent is required in connection with the execution, delivery,
recording and performance of a Mortgage as to such Plant or related Property,
and whether such consent has been obtained. If the Borrower opens any additional
manufacturing plants, it shall promptly furnish to the Agent and the Banks a
supplement to Schedule 5.25 including such additional plant and a Mortgage and
appropriate UCC-1 financing statements requested by the Agent with respect
thereto.
(b) It is the intent of the parties hereto that the Obligations
shall be secured by the Collateral (including the Rolling Stock, if notice is
given by the Agent pursuant to the provisions of Section 4.7 of the Security
Agreement), subject to the provisions of Section 9.18 regarding the release of
the Receivables Program Assets. At the Original Closing Date, the Borrower and
the Parent, as applicable, executed and delivered to the Agent (i) the Security
Agreement and UCC-1 financing statements relating to the personal property
included in the Graniteville Assets, (ii) the Pledge Agreement, (iii) the
Mortgages (undated) and UCC-1 financing statements relating to the fixtures
located at the premises described therein and (iv) the Borrower Pledge
Agreement, the Receivables Subsidiary Pledged Stock and the Purchase Money
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Note, and the Agent has released the Receivables Program Assets pursuant to such
Section 9.18. However, the Mortgages and the UCC-1 financing statements related
thereto described in clause (iii) above shall be held by the Agent and not filed
for record except subject and pursuant to the provisions of this Section 5.25.
The Agent may date and file for record any of the Mortgages as to one, or more,
or all of the relevant Plants under the following circumstances applicable
thereto (such circumstances applicable to any Plant being the "Triggering
Circumstances" as to such Plant and the related Mortgage): (1) as to any of the
SunTrust Collateral Plants, at any time (and from time to time as to individual
Plants), at the direction of 100% of the Banks, and (2) as to the Revolver
Collateral Plants, at any time (and from time to time as to individual Plants)
after the occurrence of an Event of Default, at the direction of the Required
Banks, provided, however, with respect to this clause (2), that if any such
Event of Default giving rise to a Triggering Circumstance (the "Triggering Event
of Default") is waived by the Required Banks, then the foregoing right shall
terminate as to such Triggering Event of Default (but not as to any subsequent
Event of Default) if, for a period of 3 consecutive Fiscal Quarters after the
date of such waiver (the "Compliance Measurement Period"), the Borrower shall
have been continuously in compliance with both (A) the covenants contained in
Sections 5.03 through 5.06, inclusive, as in effect on the Original Closing Date
(without giving effect to any amendments to such covenants after the Original
Closing Date), and (B) all other provisions of this Agreement as in effect on
the date the Triggering Event of Default occurred, but such right shall
terminate only to the extent not already exercised during the Compliance
Measurement Period and shall not affect any Mortgages which have become
Operative Mortgages during the Compliance Measurement Period. At the request of
the Agent, made not more often than once in any Fiscal Year, the Borrower shall
reexecute any one, or more, or all of the Mortgages described in clause (iii)
above.
(c) At any time following the occurrence of the Triggering
Circumstances applicable to any Plant, the Borrower will, from time to time as
to individual Plants, at the request of the Agent and, (i) as to any of the
Revolver Collateral Plants, at the expense of the Borrower, deliver to the Agent
at the earliest practicable time all of the Real Property Documentation relating
to such Plant, (ii) as to all Plants, cooperate in all respects with the
obtaining of Real Property Documentation with respect thereto and the filing for
record of the related Mortgage and UCC-1 financing statement and (iii) as to the
Revolver Collateral Plants, pay all recording fees and costs and stamp,
intangible or other taxes payable in connection with the filing for record
thereof (collectively, the "Recording Expenses").
(d) The Borrower hereby irrevocably appoints the Agent as the
Borrower's attorney-in-fact, following the applicable Triggering Circumstances,
with full authority in the place and stead of the Borrower and in the name of
the Borrower or otherwise, from time to time in the Agent's discretion, to take
any action which the Agent may deem reasonably necessary or advisable to
accomplish the purposes of this Section 5.25, including, without limitation, to
(i) date any undated Mortgage, (ii) insert in the appropriate place the
outstanding principal balance in any Mortgage pertaining to any Plant located in
North Carolina, (iii) select and insert the name and address of the Trustee in
any Mortgage pertaining to any Plant located in North Carolina, and (iv)
execute, deliver and record in the appropriate filing office any instrument
(including, without limitation the relevant Mortgage and UCC-1 financing
statement), and to pay the related Recording Expenses.
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(e) As a condition to the effectiveness of the Second Amendment,
AMGF was required to execute and deliver to the Agent the AMGF Documents. For
all purposes under paragraphs (b) through (d), inclusive, of Section 5.25 (other
than the requirement for execution and delivery on the Original Closing Date),
and the rights of the Agent and the Banks thereunder: (i) the AMGF Security
Agreement shall be subject to the same terms and provisions thereof as apply to
the Security Agreement, as if it were the Security Agreement; (ii) the AMGF
Mortgage shall be subject to the same terms and provisions thereof as apply to
the Mortgages, as if it were a Mortgage; and (iii) the AMGF Plant shall be
subject to the same terms and provisions thereof as apply to the Plants, as if
it were a Plant (and for such purposes shall be treated as if it were a Revolver
Collateral Plant).
Section 5.26 Subordinated Debt. So long as any Obligations remain
outstanding and the Commitments have not been terminated, the Borrower will not:
(i) make any prepayments (whether optional or mandatory) of principal of or
other amounts under the 10.25% Subordinated Notes or any other obligations
constituting Subordinated Debt, or purchase or make any deposits for the
defeasance of the 10.25% Subordinated Notes or any other obligations
constituting Subordinated Debt; or (ii) amend or modify any of the documents
pertaining to the Subordinated Debt to (1) shorten the maturity thereof, (2)
raise the interest rate, fees or other amounts payable with respect thereto, (3)
change any of the subordination provisions thereof or (4) make any of the
covenants contained therein more restrictive. The Agent shall furnish to the
Banks, promptly after receipt by the Agent, copies of any drafts received by it
of (A) any proposed amendments to the documents pertaining to the 10.25%
Subordinated Notes and (B) documents pertaining to any Subordinated Debt
proposed to be issued after the Closing Date.
ARTICLE VI
DEFAULTS
Section 6.01 Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan or Reimbursement Obligation or shall fail to pay any interest on any Loan
or Reimbursement Obligation within 5 Domestic Business Days after such interest
shall become due, or shall fail to pay any fee or other amount payable hereunder
within 5 Domestic Business Days after the later of (i) the date such fee or
other amount becomes due or (ii) the date the Borrower receives a statement
therefor; or
(b) the Borrower or the Parent shall fail to observe or perform
any covenant contained in Sections 5.02(ii), 5.03, 5.05 to 5.07, inclusive,
Sections 5.11 or 5.18;
(c) (i) an Event of Default shall occur under the Coosa Bonds
Reimbursement Agreement or the Lease Agreement (as defined in the Coosa Bonds
Reimbursement Agreement), or (ii) the Borrower, the Parent or AMGF shall fail to
observe or perform any covenant or agreement contained in this Agreement (other
than those covered by paragraph (a) or (b) above) or any Principal Document or
the Parent Documents (other than as provided in clause (i) of this paragraph
(c)) and such failure shall not have been cured within 30 days after the earlier
to occur
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of (x) written notice thereof has been given to the Borrower by the Agent at the
request of any Bank or (y) an officer of the Borrower otherwise becomes aware of
any such failure; or
(d) any representation, warranty, certification or statement made
by the Borrower or the Parent in Article IV of this Agreement or by AMGF in the
AMGF Documents or in any certificate, financial statement or other document
delivered pursuant to this Agreement or the AMGF Documents shall prove to have
been incorrect or misleading in any material respect when made (or deemed made);
or
(e) the Borrower or any Material Subsidiary shall fail to make any
payment in respect of Debt outstanding (other than the Notes) in an amount in
excess of $2,000,000 when due or within any applicable grace period; or
(f) (i) any event or condition (other than one described in clause
(ii) below) shall occur which results in the acceleration of the maturity of
Debt outstanding of the Parent, the Borrower or any Material Subsidiary
(including, without limitation, any required mandatory prepayment or "put" of
such Debt to the Parent, the Borrower or any Material Subsidiary) or enables
(or, with the giving of notice or lapse of time or both, would enable) the
holders of such Debt or any Person acting on such holders' behalf to accelerate
the maturity thereof (including, without limitation, any required mandatory
prepayment or "put" of such Debt to the Parent, the Borrower or any Material
Subsidiary, if in any of the foregoing events the amount of Debt involved is in
excess of $2,000,000; or (ii) the occurrence of a "SunTrust L/C Default," as
defined in the SunTrust Intercreditor Agreement) or an event of default under
any lease, indenture or other document relating to the industrial development
revenue bonds secured thereby; or
(g) the Parent, the Borrower or any Material Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against the Parent, the Borrower or any Material Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against the Parent,
the Borrower or any Material Subsidiary under the federal bankruptcy laws as now
or hereafter in effect; or
(i) the Parent, the Borrower or any member of the Controlled Group
shall fail to pay when due any material amount which it shall have become liable
to pay to the PBGC or to
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a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans
shall be filed under Title IV of ERISA by the Borrower, any member of the
Controlled Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or Plans or a
proceeding shall be instituted by a fiduciary of any such Plan or Plans to
enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not have
been dismissed within 30 days thereafter; or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree adjudicating that any
such Plan or Plans must be terminated; provided, in each case, that the effect
of any of the foregoing would reasonably be expected to result in an unfunded
liability in excess of $2,000,000; or
(j) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $1,000,000 (exclusive of amounts covered by
insurance) shall be rendered against the Parent, the Borrower or any Material
Subsidiary and such judgment or order shall continue unsatisfied and unstayed
for a period of 30 days; or
(k) a federal tax lien for an amount in excess of $2,000,000 shall
be filed against the Borrower or any Subsidiary under Section 6323 of the Code
or a lien of the PBGC shall be filed against the Borrower or any Subsidiary
under Section 4068 of ERISA and in either case such lien shall remain
undischarged for a period of 25 days after the date of filing; or
(l) G. Stephen Felker or his estate shall cease to maintain voting
control over more than 50% of the Capital Stock of the Parent, or the Borrower
shall cease to be a Wholly Owned Subsidiary; or
(m) the occurrence of any event, act, occurrence, or condition
which the Required Banks reasonably determine either has or is likely to have or
cause a Material Adverse Effect;
(n) (i) the Security Agreement, the Pledge Agreement, any
Operative Mortgage, the Parent Guaranty, any of the AMGF Documents or the
Borrower Pledge Agreement, shall cease, for any reason, to be in full force and
effect or any party thereto (other than the Agent or the Banks) shall so assert
in writing; or (ii) the Security Agreement, the Pledge Agreement, any Operative
Mortgage, the AMGF Security Agreement or the Borrower Pledge Agreement shall
cease to be effective to grant a Lien on the Collateral described therein with
the priority purported to be created thereby;
Then, and in every such event, the Agent shall: (i) if requested by the Required
Banks, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate; (ii) if requested by the Required Banks, (x) send a notice
to the Coosa Bonds Trustee pursuant to Section 6.1(f) of the Coosa Bonds
Indenture that an Event of Default has occurred hereunder and a written request
that the Coosa Bonds be accelerated and/or (y) by notice to the Borrower declare
the Revolver Loan Notes (together with accrued interest thereon) to be, and the
Notes (including the Swing Loan Note) shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower together with interest at the
Default Rate accruing on the principal amount thereof from and after the date of
such Event of Default; provided that if any Event of Default specified in
paragraph
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(g) or (h) above occurs with respect to the Borrower, without any notice to the
Borrower or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower together with
interest thereon at the Default Rate accruing on the principal amount thereof
from and after the date of such Event of Default; (iii) file for record any
Mortgages and related UCC-1 financing statement on any of the Revolver
Collateral Plants pursuant to Section 5.25 (which shall not constitute a waiver
of or otherwise restrict any other right, power or remedy under any of the
Principal Documents or at law or in equity); or (iv) exercise any rights, powers
or remedies under the Coosa Bonds Reimbursement Agreement, any Other Letter of
Credit Application Agreement, the Security Agreement or any Operative Mortgage,
the Pledge Agreement and the Borrower Pledge Agreement. In addition to the
foregoing, if an Event of Default shall have occurred and be continuing, the
Borrower shall be obligated to deposit with the Agent cash collateral in an
amount equal to 100% of the Letter of Credit Obligations. Notwithstanding the
foregoing, the Agent shall have available to it all other remedies at law or
equity, and shall exercise any one or all of them at the request of the Required
Banks.
Section 6.02 Notice of Default. The Agent shall give notice to the
Borrower of any Default under Section 6.01(c) promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
Section 7.01 Appointment; Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents, and as collateral agent under the Mortgage and
with respect to any Interest Rate Protection Agreement to which such Bank is a
party, with such powers as are specifically delegated to the Agent by the terms
hereof and thereof, together with such other powers as are reasonably incidental
thereto. The Agent: (a) shall have no duties or responsibilities except as
expressly set forth in this Agreement and the other Loan Documents, and shall
not by reason of this Agreement or any other Loan Document be a trustee for any
Bank; (b) shall not be responsible to the Banks for any recitals, statements,
representations or warranties contained in this Agreement or any other Loan
Document, or in any certificate or other document referred to or provided for
in, or received by any Bank under, this Agreement or any other Loan Document, or
for the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or any other document referred to or
provided for herein or therein or for any failure by the Borrower to perform any
of its obligations hereunder or thereunder; (c) shall not be required to
initiate or conduct any litigation or collection proceedings hereunder or under
any other Loan Document except to the extent requested by the Required Banks,
and then only on terms and conditions satisfactory to the Agent, and (d) shall
not be responsible for any action taken or omitted to be taken by it hereunder
or under any other Loan Document or any other document or instrument referred to
or provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or wilful misconduct. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The
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provisions of this Article VII are solely for the benefit of the Agent and the
Banks, and the Borrower shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement and under the other Loan Documents, the Agent shall act solely as
agent of the Banks and does not assume and shall not be deemed to have assumed
any obligation towards or relationship of agency or trust with or for the
Borrower. The duties of the Agent shall be ministerial and administrative in
nature, and the Agent shall not have by reason of this Agreement or any other
Loan Document a fiduciary relationship in respect of any Bank.
Section 7.02 Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telefax, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants or
other experts selected by the Agent. As to any matters not expressly provided
for by this Agreement or any other Loan Document, the Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions signed by the Required Banks, and
such instructions of the Required Banks in any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.
Section 7.03 Defaults. The Agent shall not be deemed to have knowledge
of the occurrence of a Default or an Event of Default (other than the nonpayment
of principal of or interest on the Loans) unless the Agent has received notice
from a Bank or the Borrower specifying such Default or Event of Default and
stating that such notice is a "Notice of Default". In the event that the Agent
receives such a notice of the occurrence of a Default or an Event of Default,
the Agent shall give prompt notice thereof to the Banks. The Agent shall give
each Bank prompt notice of each nonpayment of principal of or interest on the
Loans whether or not it has received any notice of the occurrence of such
nonpayment. The Agent shall (subject to Section 9.06) take such action hereunder
with respect to such Default or Event of Default as shall be directed by the
Required Banks, provided that, unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
Section 7.04 Rights of Agent as a Bank. With respect to the Loans made
by it, Wachovia, in its capacity as a Bank hereunder shall have the same rights
and powers hereunder as any other Bank and may exercise the same as though it
were not acting as the Agent, and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include Wachovia, in its individual capacity. The
Agent may (without having to account therefor to any Bank) accept deposits from,
lend money to and generally engage in any kind of banking, trust or other
business with the Borrower (and any of its Affiliates) as if it were not acting
as the Agent, and the Agent may accept fees and other consideration from the
Borrower (in addition to any agency fees and arrangement fees heretofore agreed
to between the Borrower and the Agent) for services in connection with this
Agreement or any other Loan Document or otherwise without having to account for
the same to the Banks.
Section 7.05 Indemnification. Each Bank severally agrees to indemnify
the Agent, to the extent the Agent shall not have been reimbursed by the
Borrower, ratably in
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accordance with its Commitment, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and disbursements) or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any other Loan Document or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
(excluding, unless an Event of Default has occurred and is continuing, the
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided, however that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or wilful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
Section 7.06 CONSEQUENTIAL DAMAGES. THE AGENT SHALL NOT BE RESPONSIBLE
OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANY
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
Section 7.07 Payee of Note Treated as Owner. The Agent may deem and
treat each Person in whose name a Loan is registered as the owner thereof 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 Agent and the
provisions of Section 9.08(c) have been satisfied. Any requests, 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 that Note or of any Note or
Notes issued in exchange therefor or replacement thereof.
Section 7.08 Nonreliance on Agent and Other Banks. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower of this Agreement or any of the other
Loan Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any other
Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder or under
the other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of the Borrower or any other Person (or any of
their Affiliates) which may come into the possession of the Agent.
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Section 7.09 Failure to Act. Except for action expressly required of
the Agent hereunder or under the other Loan Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction by the Banks of
their indemnification obligations under Section 7.05 against any and all
liability and expense which may be incurred by the Agent by reason of taking,
continuing to take, or failing to take any such action.
Section 7.10 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Banks and the Borrower and
the Agent may be removed at any time with or without cause by the Required
Banks. Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Agent, provided that the Borrower shall have the
right to consent to any such successor Agent which is not a Bank, which consent
shall not be unreasonably withheld or delayed. If no successor Agent shall have
been so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the retiring Agent's notice of resignation or the Required
Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of
the Banks, appoint a successor Agent. Any successor Agent shall be a bank which
has a combined capital and surplus of at least $500,000,000. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor Agent
shall 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 hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
Section 8.01 Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period:
(a) the Agent determines that deposits in Dollars (in the
applicable amounts) are not being offered in the relevant market for such
Interest Period, or
(b) the Required Banks advise the Agent that the London Interbank
Offered Rate as determined by the Agent will not adequately and fairly reflect
the cost to such Banks of funding Euro-Dollar Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
Euro-Dollar Loans shall be suspended. Unless the Borrower notifies the Agent at
least 2 Domestic Business Days before the date of any Borrowing of Euro-Dollar
Loans for which a Notice of Borrowing has previously been given that it elects
not to borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing.
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Section 8.02 Illegality. If, after the date hereof, the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof (any such agency being referred to as an "Authority" and
any such event being referred to as a "Change of Law"), or compliance by any
Bank (or its Lending Office) with any request or directive issued after the date
hereof (whether or not having the force of law) of any Authority shall make it
unlawful or impossible for any Bank (or its Lending Office) to make, maintain or
fund its Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans shall be suspended. Before giving any notice
to the Agent pursuant to this Section, such Bank shall designate a different
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise materially
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each Euro-Dollar Loan of
such Bank, together with accrued interest thereon. Concurrently with prepaying
each such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an
equal principal amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Banks), and such Bank shall make such a Base Rate Loan.
Section 8.03 Increased Cost and Reduced Return
(a) If after the date hereof, a Change of Law or compliance by any
Bank (or its Lending Office) with any request or directive issued after the date
hereof (whether or not having the force of law) of any Authority:
(i) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System, but
excluding, with respect to any Euro-Dollar Loan, any such requirement included
in an applicable Euro-Dollar Reserve Percentage) against letters of credit (or
risk participations therein) or assets of, deposits with or for the account of,
or credit extended by, any Bank (or its Lending Office); or
(ii) shall impose on any Bank (or its Lending Office) or
on the London interbank market any other condition affecting its Euro-Dollar
Loans, its Notes, its obligation to make Euro-Dollar Loans or its obligation to
maintain the Letter of Credit or its risk participation therein;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Fixed Rate Loan or maintaining
the Letter of Credit or its risk participation therein, or to reduce the amount
of any sum received or receivable by such Bank (or its Lending Office) under
this Agreement or under its Notes with respect thereto, by an amount deemed by
such Bank to be material, then, within 15 days after demand by such Bank (with a
copy to the Agent), the Borrower shall pay to such Bank such additional amount
or amounts as
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will compensate such Bank for such increased cost or reduction; provided, that
the Borrower shall have no liability hereunder for amounts which were incurred
or accrued prior to a date which is more than 180 days before the Borrower's
receipt of the notice pertaining thereto given pursuant to paragraph (c) below.
(b) If any Bank shall have determined that after the date hereof
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office) with
any request or directive issued after the date hereof regarding capital adequacy
(whether or not having the force of law) of any Authority, has or would have the
effect of reducing the rate of return on such Bank's capital as a consequence of
its obligations hereunder to a level below that which such Bank could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15 days after demand by
such Bank, the Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such reduction; provided, that the Borrower
shall have no liability hereunder for amounts which were incurred or accrued
prior to a date which is more than 180 days before the Borrower's receipt of the
notice given pursuant to paragraph (c) below.
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise materially disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder, containing in reasonable detail the
calculations therefor, shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods generally employed in determining compensation of such type
with respect to its other borrowers.
(d) Notwithstanding the foregoing, in the event the Borrower is
required to pay any Bank amounts pursuant to Section 2.11(c) or to this Section
8.03 and the designation of a different Lending Office pursuant to Section
2.11(c) or Section 8.03(c) will not avoid the need for compensation to such Bank
(an "Affected Bank"), the Borrower may give notice to such Affected Bank (with
copies to the Agent) that it wishes to seek one or more assignees (which may be
one or more of the Banks) to assume the Commitment of such Affected Bank and to
purchase its outstanding Loans and Notes; provided, that if there is more than
one Affected Bank which has requested substantially and proportionally equal
compensation hereunder, the Borrower shall elect to seek an assignee to assume
the Commitments of all such Affected Banks. Each Affected Bank agrees to sell
its Commitment, Loans, Notes and interest in this Agreement in accordance with
Section 9.08(c) to any such assignee for an amount equal to the sum of the
outstanding unpaid principal of and accrued interest on such Loans and Notes,
plus all other fees and amounts (including, without limitation, any compensation
claimed by such Affected Banks under Section 2.11(c) or this Section 8.03 due
such Affected Bank hereunder calculated, in each case, to the date such Loans,
Notes and interest are purchased. Upon such sale or prepayment,
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each such Affected Bank shall have no further commitment or other obligation to
the Borrowers hereunder or under any Note.
(e) Subject to Section 9.08(e), the provisions of this Section
8.03 shall be applicable with respect to any Transferee, and any calculations
required by such provisions shall be made based upon the circumstances of such
Transferee.
Section 8.04 Base Rate Loans or Other Fixed Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any Bank to make or maintain
any type of Fixed Rate Loans has been suspended pursuant to Section 8.02 or (ii)
any Bank has demanded compensation under Section 8.03, and the Borrower shall,
by at least 5 Euro-Dollar Business Days' prior notice to such Bank through the
Agent, have elected that the provisions of this Section shall apply to such
Bank, then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such Bank as Set
Rate Loans or Euro-Dollar Loans, as the case may be, shall, subject to the terms
and conditions relating thereto, be made instead either (A) as Base Rate Loans,
or (B) if such demand for compensation relates to Set Rate Loans, but not
Euro-Dollar Loans, as Euro-Dollar Loans, as the Borrower may elect in the notice
to such Bank through the Agent referred to hereinabove (in all cases interest
and principal on such Loans shall be payable contemporaneously with the related
Fixed Rate Loans of the other Banks), and
(b) after each of its Set Rate Loans or Euro-Dollar Loans, as the
case may be, has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its Base Rate
Loans instead.
Section 8.05 Compensation. Upon the request of any Bank, delivered to
the Borrower and the Agent, the Borrower shall pay to such Bank such amount or
amounts as shall compensate such Bank for any loss, cost or expense incurred by
such Bank, as determined by it in good faith, using reasonable allocation and
attribution methods, as a result of:
(a) any payment or prepayment (pursuant to Section 2.09, 2.10,
6.01, 8.02 or otherwise) of a Fixed Rate Loan on a date other than the last day
of an Interest Period for such Fixed Rate Loan; or
(b) any failure by the Borrower to borrow a Fixed Rate Loan on the
date for the Fixed Rate Borrowing of which such Fixed Rate Loan is a part
specified in the applicable Notice of Borrowing delivered pursuant to Section
2.02 or failure to borrow a Set Rate Borrowing pursuant to Section 2.01.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telecopier or
similar writing) and shall be given to such party at its address or telecopier
number set forth on the signature pages hereof
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or such other address or telecopier number as such party may hereafter specify
for the purpose by notice to each other party. Each such notice, request or
other communication shall be effective (i) if given by telecopier, when such
telecopy is transmitted to the telecopier number specified in this Section and
the appropriate confirmation is received, (ii) if given by mail, 3 Domestic
Business Days after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section; provided that
notices to the Agent under Article II or Article VIII shall not be effective
until received.
Section 9.02 No Waivers. No failure or delay by the Agent or any Bank
in exercising any right, power or privilege hereunder or under any Note or other
Loan Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 9.03 Expenses; Documentary Taxes. The Borrower shall pay (i)
all out-of-pocket expenses of the Agent, including reasonable fees and
disbursements actually incurred of special counsel for the Agent, in connection
with the preparation of this Agreement and the other Loan Documents, any waiver
or consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder and (ii) if a Default occurs,
all reasonable out-of-pocket expenses actually incurred by the Agent and the
Banks, including reasonable fees and disbursements actually incurred of counsel,
in connection with such Default and collection and other enforcement proceedings
resulting therefrom, including reasonable out-of-pocket expenses actually
incurred in enforcing this Agreement and the other Loan Documents. The Borrower
shall indemnify the Agent and each Bank against any transfer taxes, documentary
taxes, assessments or charges made by any Authority by reason of the execution
and delivery of this Agreement or the other Loan Documents, except with respect
to the SunTrust Collateral Plants.
Section 9.04 Indemnification. The Borrower shall indemnify the Agent
and the Banks and each affiliate thereof and their respective directors,
officers, employees and agents from, and hold each of them harmless against, any
and all losses, liabilities, claims or damages to which any of them may become
subject, insofar as such losses, liabilities, claims or damages arise out of or
result from any actual or proposed use by the Borrower of the proceeds of any
extension of credit by any Bank hereunder or breach by the Borrower of this
Agreement or any other Loan Document or from any investigation, litigation or
other proceeding (including, without limitation, any threatened investigation or
proceeding) relating to the foregoing, and the Borrower shall reimburse the
Agent and each Bank, and each affiliate thereof and their respective directors,
officers, employees and agents, upon demand for any reasonable expenses
(including, without limitation, reasonable legal fees) actually incurred in
connection with any such investigation or proceeding; but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified.
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Section 9.05 Setoff; Sharing of Setoffs.
(a) The Borrower agrees that the Agent and each Bank, and Wachovia
as to the Swing Loan Note, shall have a lien for all indebtedness and
obligations owing to them from the Borrower upon, except to the extent any such
property is Receivables Program Assets, all deposits or deposit accounts, of any
kind, or any interest in any deposits or deposit accounts thereof, now or
hereafter pledged, mortgaged, transferred or assigned to the Agent or any such
Bank or otherwise in the possession or control of the Agent or any such Bank for
any purpose for the account or benefit of the Borrower and including any balance
of any deposit account or of any credit of the Borrower with the Agent or any
such Bank, whether now existing or hereafter established hereby authorizing the
Agent and each Bank at any time or times with or without prior notice to apply
such balances or any part thereof to such of the indebtedness and obligations
owing by the Borrower to the Lenders and/or the Agent then past due and in such
amounts as they may elect, and whether or not the collateral, if any, or the
responsibility of other Persons primarily, secondarily or otherwise liable may
be deemed adequate. For the purposes of this paragraph, all remittances and
property shall be deemed to be in the possession of the Agent or any such Bank
as soon as the same may be put in transit to it by mail or carrier or by other
bailee.
(b) Each Bank agrees that if it shall, by exercising any right of
setoff or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest owing with respect to the Revolver
Loan Note held by it which is greater than the proportion received by any other
Bank in respect of the aggregate amount of all principal and interest owing with
respect to the Revolver Loan Note held by such other Bank, the Bank receiving
such proportionately greater payment shall purchase such participations in the
Revolver Loan Notes held by the other Banks owing to such other Banks, and such
other adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Revolver Loan Notes held by the Banks
owing to such other Banks shall be shared by the Banks pro rata; provided that
(i) nothing in this Section shall impair the right of any Bank to exercise any
right of setoff or counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Revolver Loan Notes, and (ii) if all or any portion of
such payment received by the purchasing Bank is thereafter recovered from such
purchasing Bank, such purchase from each other Bank shall be rescinded and such
other Bank shall repay to the purchasing Bank the purchase price of such
participation to the extent of such recovery together with an amount equal to
such other Bank's ratable share (according to the proportion of (x) the amount
of such other Bank's required repayment to (y) the total amount so recovered
from the purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Note, whether or not acquired pursuant
to the foregoing arrangements, may exercise rights of setoff or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.
Section 9.06 Amendments and Waivers.
(a) Any provision of this Agreement, the Notes or any other Loan
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of the Agent are affected
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thereby, by the Agent); provided that, no such amendment or waiver shall, unless
signed by all Banks, (i) change the Commitment of any Bank or subject any Bank
to any additional obligation, (ii) change the principal of or rate of interest
on any Loan or any fees hereunder, (iii) change the Termination Date or the date
fixed for any payment of principal of or interest on any Loan or any fees
hereunder, (iv) change the amount of principal, interest or fees due on any date
fixed for the payment thereof, (v) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Notes, or the percentage of
Banks, which shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement, (vi) change the
manner of application of any payments made under this Agreement or the Notes,
(vii) release or substitute all or any substantial part of the Collateral,
except for the release of the Receivables Program Assets pursuant to Section
9.18, (viii) release any Guarantee given to support payment of the Loans (ix)
change the percentage of Banks required to give the direction to the Agent
pursuant to clause (i) of the last sentence of Section 5.25(b) or (x) amend this
Section 9.06(a).
(b) The Borrower will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement unless each Bank shall be informed thereof by the Borrower and
shall be afforded an opportunity of considering the same and shall be supplied
by the Borrower with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any waiver
or consent effected pursuant to the provisions of this Agreement shall be
delivered to each Bank forthwith following the date on which the same shall have
been executed and delivered by the requisite percentage of Banks. The Borrower
will not, directly or indirectly, pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest, fee or otherwise, to any
Bank (in its capacity as such) as consideration for or as an inducement to the
entering into by such Bank of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently paid, on
the same terms, ratably to all such Banks.
Section 9.07 No Margin Stock Collateral. Each of the Banks represents
to the Agent and each of the other Banks that it in good faith is not, directly
or indirectly (by negative pledge or otherwise), relying upon any Margin Stock
as collateral in the extension or maintenance of the credit provided for in this
Agreement.
Section 9.08 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any Note
held by such Bank, any Commitment or other obligation hereunder or any other
interest of such Bank hereunder. In the event of any such sale by a Bank of a
participating interest to a Participant, such Bank's obligations under this
Agreement shall remain unchanged, such Bank shall remain solely responsible for
the performance thereof, such Bank shall remain the holder of any such Note for
all purposes under this Agreement, and the Borrower and the Agent shall continue
to deal solely and directly with such Bank in connection with such Bank's rights
and obligations
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under this Agreement. In no event shall a Bank that sells a participation be
obligated to the Participant to take or refrain from taking any action hereunder
except that such Bank may agree that it will not (except as provided below),
without the consent of the Participant, agree to (i) the change of any date
fixed for the payment of principal of or interest on the related loan or loans,
(ii) the change of the amount of any principal, interest or fees due on any date
fixed for the payment thereof with respect to the related loan or loans, (iii)
the change of the principal of the related loan or loans, (iv) any change in the
rate at which either interest is payable thereon or (if the Participant is
entitled to any part thereof) fee is payable hereunder from the rate at which
the Participant is entitled to receive interest or fee (as the case may be) in
respect of such participation, (v) the release or substitution of all or any
substantial part of the Collateral, except the release of the Receivables
Program Assets pursuant to Section 9.18, or (vi) the release of the Parent
Documents. Each Bank selling a participating interest in any Loan, Note,
Commitment or other interest under this Agreement shall, within 10 Domestic
Business Days of such sale, provide the Borrower and the Agent with written
notification stating that such sale has occurred and identifying the Participant
and the interest purchased by such Participant. The Borrower agrees that each
Participant shall be entitled to the benefits of Article VIII with respect to
its participation in Loans outstanding from time to time, subject to the
provisions of Section 9.08(e).
(c) Any Bank may at any time assign to one or more banks or
financial institutions (each an "Assignee") all, or a proportionate part of all,
of its rights and obligations under this Agreement, the Notes and the other Loan
Documents (including, without limitation, the obligations and agreements
contained in Section 5 of the Receivables Intercreditor Agreement), and such
Assignee shall assume all such rights and obligations, pursuant to an Assignment
and Acceptance, executed by such Assignee, such transferor Bank and the Agent
(and in the case of an Assignee that is not then a Bank, unless an Event of
Default is in existence, by the Borrower); provided that (i) no interest may be
sold by a Bank to an Assignee which is not then a Bank or Affiliate thereof
pursuant to this paragraph (c) unless the Assignee has combined capital and
surplus of not less than $100,000,000 and shall agree to assume ratably
equivalent portions of the transferor Bank's Commitment, (ii) the amount of the
Commitment of the assigning Bank subject to such assignment (determined as of
the effective date of the assignment) shall be equal to or greater than
$10,000,000; and (iii) the Agent and, except during the existence of an Event of
Default, the Borrower, has consented thereto, which consents shall not be
unreasonably withheld or delayed. Upon (A) execution of the Assignment and
Acceptance by such transferor Bank, such Assignee, the Agent and (if applicable)
the Borrower, (B) delivery of an executed copy of the Assignment and Acceptance
to the Borrower and the Agent, (C) payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, (D) payment to the Agent of a processing and recordation
fee of $1,000, if the Assignee is a Bank or Affiliate thereof or Related Fund
thereof, and $3,500, in any other case, and (E) recordation of such assignment
on the Register, as defined and provided below, such Assignee shall for all
purposes be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank under this Agreement to the same extent as if it were an
original party hereto with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by the
Borrower, the Banks or the Agent shall be required. The Borrower hereby
designates the Agent to serve as the Borrower's agent, solely for purposes of
this Section 9.08(c), to maintain a register (the "Register") on which it will
record the Commitments from time to time of each of the
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Banks, the Loans made by each of the Banks and each repayment in respect of the
principal amount of the Loans of each Bank. Failure to make any such
recordation, or any error in such recordation shall not affect the Borrower's
obligations in respect of such Loans. With respect to any Banks, the transfer of
any Commitment of such Banks and the rights to the principal of, and interest
on, any Loan shall not be effective until such transfer is recorded on the
Register maintained by the Agent with respect to ownership of such Commitment
and Loans and prior to such recordation all amounts owing to the transferor with
respect to such Commitment and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitment and
Loans shall be recorded by the Agent on the Register only upon the acceptance by
the Agent of a properly executed and delivered Assignment and Acceptance
pursuant to this Section 9.08(c). Coincident with the delivery of such an
Assignment and Acceptance to the Agent for acceptance and registration of
assignment or transfer of all or part of a Commitment and/or Loan, or as soon
thereafter as practicable, the assigning or transferor Bank shall surrender the
Note evidencing such Commitment and/or Loan, and thereupon one or more new Notes
in the aggregate principal amount so assigned shall be issued to the new Bank
and, if applicable, a new Note shall be issued to the assigning or transferor
Bank in the remaining aggregate principal amount of its Commitment and/or Loan
not so assigned. The Borrower agrees to indemnify the Agent from and against any
and all losses, claims, damages and liabilities of whatsoever nature which may
be imposed on, asserted against or incurred by the Agent in performing its
duties under this Section 9.08(c); but excluding any such losses, claims,
damages and liabilities incurred by reason of the gross negligence or willful
misconduct of the Agent. Each Bank agrees to indemnify the Borrower and the
Agent from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Borrower or the Agent solely by reason of the inaccuracy of any information
which is furnished by such Bank concerning such Bank or its Lending Office or
the amount assigned pursuant to an Assignment and Acceptance Agreement.
(d) Subject to the provisions of Section 9.09, the Borrower
authorizes each Bank to disclose to any Participant or Assignee (each a
"Transferee") and any prospective Transferee any and all financial information
in such Bank's possession concerning the Borrower which has been delivered to
such Bank by the Borrower pursuant to this Agreement or which has been delivered
to such Bank by the Borrower in connection with such Bank's credit evaluation
prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment
under Section 8.03 than the transferor Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 8.02
or 8.03 requiring such Bank to designate a different Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Anything in this Section 9.08 to the contrary notwithstanding,
any Bank may assign and pledge all or any portion of the Loans and/or
obligations owing to it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank, provided that any payment in respect of such assigned
Loans and/or obligations made by the Borrower to the assigning and/or pledging
Bank in accordance
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with the terms of this Agreement shall satisfy the Borrower's obligations
hereunder in respect of such assigned Loans and/or obligations to the extent of
such payment. No such assignment shall release the assigning and/or pledging
Bank from its obligations hereunder.
Section 9.09 Confidentiality. Each Bank agrees to exercise reasonable
efforts to keep any information delivered or made available by the Borrower to
it confidential from anyone other than persons employed or retained by such Bank
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans; provided, however that nothing herein shall prevent
any Bank from disclosing such information (i) to any other Bank, (ii) upon the
order of any court or administrative agency, (iii) upon the request or demand of
any regulatory agency or authority having jurisdiction over such Bank, (iv)
which has been publicly disclosed by or on behalf of the Borrower, (v) to the
extent reasonably required in connection with any litigation to which the Agent,
any Bank or their respective Affiliates may be a party, (vi) to the extent
reasonably required in connection with the exercise of any remedy hereunder,
(vii) to such Bank's legal counsel and independent auditors and (viii) to any
actual or proposed Participant, Assignee or other Transferee of all or part of
its rights hereunder which has agreed in writing to be bound by the provisions
of this Section 9.09; provided, that, should disclosure of any such confidential
information be required by virtue of either clause (ii) or (iii) of the
immediately preceding sentence, any relevant Bank shall promptly notify the
Borrower of same so as to allow the Borrower to seek a protective order or to
take any other appropriate action; provided, further, that, no Bank shall be
required to delay compliance with any directive to disclose any such information
so as to allow the Borrower to effect any such action.
Section 9.10 Representation by Banks. Each Bank hereby represents that
it is a commercial lender or financial institution which makes Loans in the
ordinary course of its business or a Related Fund and that it will make its
Loans hereunder for its own account in the ordinary course of such business;
provided, however that, subject to Section 9.08, the disposition of the Note or
Notes held by that Bank shall at all times be within its exclusive control.
Section 9.11 Obligations Several. The obligations of each Bank
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document and
it shall not be necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
Section 9.12 Georgia Law. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of Georgia.
Section 9.13 Severability. In case any one or more of the provisions
contained in this Agreement, the Notes or any of the other Loan Documents should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby and shall be enforced to the
greatest extent permitted by law.
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Section 9.14 Interest. In no event shall the amount of
interest due or payable hereunder or under the Notes exceed the maximum rate of
interest allowed by applicable law, and in the event any such payment is
inadvertently made to any Bank by the Borrower or inadvertently received by any
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify such Bank in writing that it elects to have such
excess sum returned forthwith. It is the express intent hereof that the Borrower
not pay and the Banks not receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may legally be paid by the Borrower
under applicable law.
Section 9.15 Interpretation. No provision of this
Agreement or any of the other Loan Documents shall be construed against or
interpreted to the disadvantage of any party hereto by any court or other
governmental or judicial authority by reason of such party having or being
deemed to have structured or dictated such provision.
Section 9.16 Waiver of Jury Trial; Consent to
Jurisdiction. THE BORROWER (A) AND EACH OF THE BANKS AND THE AGENT IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, (B) SUBMITS TO THE NONEXCLUSIVE PERSONAL
JURISDICTION IN THE STATE OF GEORGIA, THE COURTS THEREOF AND THE UNITED STATES
DISTRICT COURTS SITTING THEREIN, FOR THE ENFORCEMENT OF THIS AGREEMENT, THE
NOTES AND THE OTHER LOAN DOCUMENTS, (C) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER
THE LAW OF ANY JURISDICTION TO OBJECT ON ANY BASIS (INCLUDING, WITHOUT
LIMITATION, INCONVENIENCE OF FORUM) TO JURISDICTION OR VENUE WITHIN THE STATE OF
GEORGIA FOR THE PURPOSE OF LITIGATION TO ENFORCE THIS AGREEMENT, THE NOTES OR
THE OTHER LOAN DOCUMENTS, AND (D) AGREES THAT SERVICE OF PROCESS MAY BE MADE
UPON IT IN THE MANNER PRESCRIBED IN SECTION 9.01 FOR THE GIVING OF NOTICE TO THE
BORROWER. NOTHING HEREIN CONTAINED, HOWEVER, SHALL PREVENT THE AGENT FROM
BRINGING ANY ACTION OR EXERCISING ANY RIGHTS AGAINST ANY SECURITY AND AGAINST
THE BORROWER PERSONALLY, AND AGAINST ANY ASSETS OF THE BORROWER, WITHIN ANY
OTHER STATE OR JURISDICTION.
Section 9.17 Counterparts. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
Section 9.18 Release of Receivables Program Assets.
Contemporaneously with the closing of the Receivables Securitization Program,
upon the written request of the Borrower, the Agent executed and delivered the
Receivables Intercreditor Agreement (which released the security interest in
Receivables Program Assets) and such other instruments as the Borrower or the
Trustee under the Receivables Program Documents reasonably requested, releasing
and terminating the security interest in the Receivables Program Assets of the
Agent pursuant to the Security Agreement and the UCC-1 financing statements
related thereto, and the Borrower executed and delivered the Borrower Pledge
Agreement; and delivered in pledge to the Agent, for the ratable benefit of the
Banks, all of the Receivables Subsidiary Pledged Stock and the
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Purchase Money Note, to secure payment of the Obligations. Each of the Banks
hereby (a) authorizes the Agent to execute, deliver and perform the Receivables
Intercreditor Agreement and (b) agrees to be bound by the terms and provisions
thereof, including, without limitation, the provisions of Section 5 thereof. The
Borrower agrees that, so long as any Obligations or Commitments remain
outstanding, it will not exercise its right to continue to make sales of
Receivables under (i) the Purchase Agreement (as defined in the Receivables
Intercreditor Agreement) at a time when sales otherwise would automatically
terminate under Section 8.2 thereof, or (ii) under any comparable agreement
under any other Receivables Securitization Program under comparable
circumstances.
[SIGNATURES COMMENCE ON NEXT PAGE]
77
<PAGE> 83
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, under seal, by their respective authorized
officers as of the day and year first above written.
AVONDALE MILLS, INC. (SEAL)
By:
---------------------------------------
Title:
Avondale Mills, Inc.
506 South Broad Street
Monroe, Georgia 30655
Attention: Vice Chairman and Chief
Financial Officer
Telecopier number: 770-267-2543
Confirmation number: 770-267-2226
78
<PAGE> 84
<TABLE>
<CAPTION>
COMMITMENTS WACHOVIA BANK, N.A.,
As Agent and as a Bank (SEAL)
<S> <C> <C>
$45,000,000
</TABLE>
By:
--------------------------------------
Title:
Lending Office
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Leveraged Finance
Telecopier number: 404-332-6920
Confirmation number: 404-332-6094
79
<PAGE> 85
<TABLE>
<S> <C> <C>
$30,000,000 BANK OF AMERICA, N.A. (SEAL)
</TABLE>
By:
--------------------------------------
Title:
Lending Office
Bank of America, N.A.
NC1-007-17-12
100 N. Tryon Street, 17th Floor
Charlotte, North Carolina 28255
Attention: Deirdre B. Doyle
Telecopier number: 704-386-1270
Confirmation number: 704-386-0783
80
<PAGE> 86
<TABLE>
<S> <C> <C>
$30,000,000 FIRST UNION NATIONAL BANK (SEAL)
</TABLE>
By:
--------------------------------------
Title:
Lending Office
First Union National Bank
201 South College Street
NC0760, 6TH Floor
Charlotte, North Carolina 28288-0760
Attention: Roger Pelz
Telecopier number: 704-374-4793
Confirmation number: 704-374-6060
81
<PAGE> 87
<TABLE>
<S> <C> <C>
$20,000,000 REGIONS BANK (SEAL)
</TABLE>
By:
--------------------------------------
Title:
Lending Office
Regions Bank
417 N. 20th Street
Birmingham, Alabama 35203
Attention: Mark Howze
Telecopier number: 205-326-7739
Confirmation number: 205-326-7193
TOTAL COMMITMENTS:
$125,000,000
82
<PAGE> 88
CONSENT AND REAFFIRMATION OF GUARANTORS
The undersigned (i) acknowledges receipt of the foregoing
Second Amended and Restated Credit Agreement (the "Amended Credit Agreement"),
(ii) consents to the execution and delivery of the Amended Credit Agreement by
the parties thereto and (iii) reaffirms all of its obligations and covenants
under (as applicable) the Amended and Restated Parent Guaranty dated as of April
29, 1996 executed by Avondale Incorporated, and the Limited Guaranty Agreement
dated as of August 29, 1997 executed by Avondale Mills Graniteville Fabrics,
Inc., and agrees that none of such obligations and covenants shall be affected
by the execution and delivery of the Amended Credit Agreement.
AVONDALE INCORPORATED AVONDALE MILLS GRANITEVILLE
FABRICS, INC.
By: By:
------------------------------- -----------------------------------
Title: Title:
83
<PAGE> 89
EXHIBIT A-1
REVOLVER LOAN NOTE
Atlanta, Georgia
September 28, 2000
For value received, AVONDALE MILLS, INC., an Alabama
corporation (the "Borrower"), promises to pay to the order of
_________________________________________, a ____________________ (the "Bank"),
for the account of its Lending Office, the principal sum of
___________________________________ and No/100 Dollars ($______), or such lesser
amount as shall equal the unpaid principal amount of each Revolver Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to below, on
the dates and in the amounts provided in the Credit Agreement. The Borrower
promises to pay interest on the unpaid principal amount of this Note on the
dates and at the rate or rates provided for in the Credit Agreement. Interest on
any overdue principal of and, to the extent permitted by law, overdue interest
on the principal amount hereof shall bear interest at the Default Rate, as
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Wachovia Bank, N.A., 191 Peachtree
Street, N.E., Atlanta, Georgia 30303-1757, or such other address as may be
specified from time to time pursuant to the Credit Agreement.
All Loans made by the Bank, the respective maturities thereof,
the interest rates from time to time applicable thereto, and all repayments of
the principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
the failure of the Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Credit Agreement.
This Revolver Loan Note is one of the Revolver Loan Notes
referred to in the Second Amended and Restated Credit Agreement dated as of even
date herewith among the Borrower, the Banks listed on the signature pages
thereof, and Wachovia Bank, N.A., as Agent (as the same may be amended and
modified from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the optional and mandatory prepayment and
the repayment hereof and the acceleration of the maturity hereof.
IN WITNESS WHEREOF, the Borrower has caused this Revolver Loan
Note to be duly executed, under seal, by its duly authorized officer as of the
day and year first above written.
AVONDALE MILLS, INC. (SEAL)
By:
---------------------------------------
Title:
84
<PAGE> 90
Revolver Loan Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Base Rate or Amount Amount of
Euro-Dollar of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
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</TABLE>
85
<PAGE> 91
EXHIBIT A-2
SWING LOAN NOTE
Atlanta, Georgia
September 28, 2000
For value received, AVONDALE MILLS, INC., an Alabama
corporation (the "Borrower"), promises to pay to the order of WACHOVIA BANK,
N.A., a national banking association (the "Bank"), for the account of its
Lending Office, the principal sum of Twelve Million, Five Hundred Thousand and
No/100 Dollars ($12,500,000), or such lesser amount as shall equal the unpaid
principal amount of each Swing Loan made by the Bank to the Borrower pursuant to
the Credit Agreement referred to below, on the dates and in the amounts provided
in the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of this Swing Loan Note at the rate provided for Base Rate
Loans on the dates provided for in the Credit Agreement. Interest on any overdue
principal of and, to the extent permitted by law, overdue interest on the
principal amount hereof shall bear interest at the Default Rate, as provided for
in the Credit Agreement. All such payments of principal and interest shall be
made in lawful money of the United States in Federal or other immediately
available funds at the office of Wachovia Bank, N.A., 191 Peachtree Street,
N.E., Atlanta, Georgia 30303-1757, or such other address as may be specified
from time to time pursuant to the Credit Agreement.
All Swing Loans made by the Bank, the respective maturities
thereof, and all repayments of the principal thereof shall be recorded by the
Bank and, prior to any transfer hereof, endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This Swing Loan Note is the Swing Loan Note referred to in the
Second Amended and Restated Credit Agreement dated as of even date herewith
among the Borrower, the Banks listed on the signature pages thereof, and
Wachovia Bank, N.A., as Agent (as the same may be amended and modified from time
to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit Agreement for
provisions for the optional and mandatory prepayment and the repayment hereof
and the acceleration of the maturity hereof.
86
<PAGE> 92
IN WITNESS WHEREOF, the Borrower has caused this Swing Loan
Note to be duly executed, under seal, by its duly authorized officer as of the
day and year first above written.
AVONDALE MILLS, INC. (SEAL)
By:
-------------------------------------
Title:
87
<PAGE> 93
Swing Loan Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Amount of Base Rate or Principal Notation
Date Loan Set Rate Loan Repaid Maturity Made By
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
88
<PAGE> 94
EXHIBIT B-1
OPINION OF
COUNSEL FOR THE BORROWER
[TO BE UPDATED, ADDRESSED TO WACHOVIA BANK, N.A. AND
REVISED TO DELETE REFERENCES TO DOCUMENTATION AGENT
AND ADDRESS ONLY THE SECOND AMENDED AND RESTATED
CREDIT AGREEMENT AND REPLACEMENT NOTES]
April 29, 1996
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Re: Amended and Restated Credit Agreement dated as of April 29,
1996, Among Avondale Mills, Inc., the Banks listed on the
signature pages thereof, Wachovia Bank of Georgia, H.A., as
Agent for such Banks and The First National Bank of Chicago,
as Documentation Agent (the "Credit Agreement")
We have acted as Georgia counsel for Avondale Mills, Inc., an Alabama
corporation (the "Borrower"), in connection with the above-referenced Credit
Agreement. Capitalized terms used in this opinion letter and not otherwise
defined herein shall have the respective meanings assigned to such terms in the
Credit Agreement. We have also acted as Georgia counsel for the Parent, Avondale
Incorporated, a Georgia corporation, in connection with the Parent Guaranty and
Pledge Agreement.
In connection with the opinions expressed in this letter, we have
examined each of the following documents dated as of April 29, 1996, as executed
by the Borrower and the Parent, as the case may be (collectively, the
"Transaction Documents"):
(1) the Credit Agreement;
(2) the Notes;
(3) the Security Agreement;
(4) the Mortgage;
(5) the Borrower Pledge Agreement;
(6) the Parent Guaranty; and
89
<PAGE> 95
(7) the Pledge Agreement.
The Transaction Documents described in items (1) through (5) above are herein
sometimes collectively referred to as the "Borrower Transaction Documents"; the
Transaction Documents described in items (6) and (7) above are herein sometimes
collectively referred to as the "Parent Transaction Documents."
We have also reviewed such other documents and given consideration to
such matters of law and fact as we have deemed appropriate, in our professional
judgment, to render the opinions expressed in this letter. The documents so
reviewed have included the originals or copies, certified or otherwise
identified to our satisfaction, of certain corporate records and documents of
the Borrower and the Parent, the certificates delivered on behalf of the
Borrower and the Parent to you on this date pursuant to the requirements of the
Transaction Documents, and the certificate delivered on behalf of the Borrower
and the Parent to us on this date (the "Officer's Certificate"), and we have
relied on the accuracy and completeness of all factual matters set forth in such
corporate records, documents, and certificates, as well as the representations
and warranties as to factual matters set forth in the Transaction Documents. In
rendering the opinions set forth in paragraphs 1 and 2 below with respect to the
current status of the Borrower and the Parent in the specified jurisdictions, we
have relied solely on the certificates issued with respect to the Borrower or
the Parent, as the case may be, by the Secretary of State of the respective
jurisdictions, copies of which have been delivered to you, and we have assumed
that all such certificates were properly given and remain accurate as of the
date of this letter.
For purposes of the opinions expressed herein, we have assumed (i) the
genuineness of all signatures (other than signatures on behalf of the Borrower
and the Parent) on all documents submitted to us as originals, (ii) the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as copies, (iii) the absence
of duress, fraud, or mutual mistake of material facts on the part of the parties
to the Transaction Documents, (iv) that the Borrower has rights in or title to
the Collateral described in the Security Agreement and the Mortgage [and the
Borrower Pledge Agreement and is the sole legal and beneficial owner of the
Receivables Subsidiary Pledged Stock], and (v) that the Parent is the sole legal
and beneficial owner of the Pledged Stock.
We have further assumed that (i) the Agent and the Banks have all
requisite power and authority to enter into and perform their respective
obligations under the Transaction Documents, (ii) the Credit Agreement, the
Security Agreement and the Pledge Agreement have been duly authorized, executed
and delivered by the Banks and the Agent, respectively, and constitute their
legal, valid and binding obligations, and (iii) to the extent applicable law
requires that the Banks or the Agent act in accordance with applicable duties of
good faith or fair dealing, in a commercially reasonable manner, or otherwise in
compliance with applicable legal requirements in exercising their respective
rights and remedies under the Transaction Documents, the Banks and the Agent
will fully comply with such legal requirements, notwithstanding any provisions
of the Transaction Documents that purport to grant the Banks or the Agent the
right to act or fail to act in a manner contrary to such legal requirements, or
based on its sole judgment or in its sole discretion or provisions of similar
import. We have also assumed that under no circumstances, whether by reason of
prepayment, acceleration or otherwise, will the rate of interest payable by the
Borrower or the Parent, including without limitation, expenses of the Banks or
the Agent
90
<PAGE> 96
chargeable to the Borrower or the Parent, and other fees and charges for the use
of money, whether or not denominated as interest, exceed five percent (5%) per
month.
We have further assumed, with your permission, the accuracy of each of
the matters set forth below, and we have made no independent inquiry or
investigation with respect thereto:
(1) That the Borrower is a corporation duly incorporated and
validly existing under the laws of the State of Alabama;
(2) That the Borrower has the corporate power and authority to
carry on its business as now conducted and to execute, deliver and perform its
obligations under the Borrower Transaction Documents;
(3) That the Borrower has taken all necessary corporate and
shareholder action to authorize the execution and delivery of, and performance
of its obligations under, the Borrower Transaction Documents; and
(4) That the execution, delivery and performance by the Borrower
of the Borrower Transaction Documents (i) require no approval, authorization,
consent, adjudication or order of any governmental authority of the State of
Alabama which has not been obtained, (ii) do not violate any provision of
applicable law or regulation of the State of Alabama, or of any judgment,
injunction, order, or decree issued by any judicial or administrative authority
of the State of Alabama which is binding on the Borrower, and (iii) do not
contravene or constitute a default under the articles of incorporation or
by-laws of the Borrower.
With respect to the matters described in paragraphs (1) through (4) above, we
understand that you have received the opinion of Bradley, Arant, Rose & White
dated April 29, 1996 (the "Bradley, Arant Opinion"). We know of no reason why
you and we would not be entitled to rely on the Bradley, Arant Opinion in
connection with the transactions contemplated by the Borrower Transaction
Documents.
Whenever any opinion or confirmation of fact set forth in this letter
is qualified by the words "to our knowledge", "known to us" or other words of
similar meaning, such words mean the current actual knowledge of lawyers in the
Primary Lawyer Group (defined below) of factual matters such lawyers recognize
as being relevant to the opinion or confirmation so qualified. "Primary Lawyer
Group" means the lawyer who signs this opinion letter on behalf of this firm
and, solely as to information relevant to an opinion or confirmation issue
addressed herein, each lawyer in this firm who is primarily responsible for
providing the response concerning the particular issue. Except as may be
expressly described herein, we have not undertaken any investigation to
determine the existence or absence of facts and no inference as to our knowledge
of the existence or absence of facts should be drawn from our serving as counsel
for the Borrower or the Parent on other matters.
The opinions expressed herein are limited to the laws of the State of
Georgia and applicable United States federal law, and we express no opinion as
to the laws of any other jurisdiction or the effect any such laws may have on
the matters set forth herein.
91
<PAGE> 97
Based on the foregoing, it is our opinion that:
1. The Borrower is a corporation in corporate good standing under the laws
of the State of Alabama, and is in corporate good standing as a foreign
corporation qualified to do business in the States of Georgia, South Carolina,
and North Carolina.
2. The Parent is a corporation duly incorporated, validly existing and in
corporate good standing under the laws of Georgia, and has all corporate power
required to carry on its business as now conducted.
3. The execution, delivery and performance by the Borrower of the Borrower
Transaction Documents (i) require no approval, authorization, consent,
adjudication or order of any governmental authority of the State of Georgia or
of the United States of America which has not been obtained, (ii) do not violate
any law or regulation of the State of Georgia or the United States of America
binding on the Borrower that would (A) either prohibit performance by the
Borrower under the Borrower Transaction Documents or subject the Borrower to a
fine, penalty, or other similar sanction, and (B) which a lawyer, using
customary professional diligence, would reasonably recognize as applicable to
the Borrower and the transactions contemplated by the Borrower Transaction
Documents, (iii) insofar as is known to us, do not violate any order, writ,
judgment, injunction, decree or award binding on the Borrower or its properties,
(iv) will not breach or cause a default under any of the "material agreements"
identified as such in the Officer's Certificate, and (v) insofar as is known to
us, except as provided in the Borrower Transaction Documents, will not result in
the creation or imposition of any Lien on any assets of the Borrower or any of
its Subsidiaries.
4. The execution, delivery and performance by the Parent of the Parent
Transaction Documents (i) are within the Parent's corporate powers, (ii) have
been duly authorized by all necessary corporate action, (iii) require no
approval, authorization, consent, adjudication or order of any governmental
authority of the State of Georgia or of the United States of America, which has
not been obtained, (iv) do not contravene any provision of the articles of
incorporation or by-laws of the Parent, (v) do not violate any law or regulation
of the State of Georgia or of the United States of America binding on the Parent
which (A) either prohibit performance by the Parent under the Parent Guaranty or
subject the Parent to a fine, penalty or other similar sanction, and (B) which a
lawyer, using customary professional diligence, would reasonably recognize as
applicable to the Parent in the transactions contemplated by the Parent
Guaranty, (vi) insofar as is known to us, do not violate any order, writ,
judgment, injunction, decree or award binding on the Parent or its properties,
(vii) will not breach or constitute a default under any of the "material
agreements" identified as such in the Officer's Certificate, and (viii) insofar
as is known to us, do not result in the creation or imposition of any Lien on
any assets of the Parent or any of its Subsidiaries.
5. Each of the Transaction Documents has been duly executed and delivered
(in the case of the Mortgage, subject to the provisions of Section 5.25 of the
Credit Agreement) on behalf of the Borrower or the Parent, as the case may be.
6. Each of the Transaction Documents other than the Mortgage constitutes,
and if on the date hereof the Mortgage had been duly and properly completed,
delivered, recorded (including
92
<PAGE> 98
payment of any applicable filing fees and intangibles recording taxes), and
indexed in the real estate records of the Offices of the Clerks of the Superior
Courts of Walton and Tift Counties, Georgia (the "Georgia Filing Offices"), the
Mortgage would constitute, the valid and binding obligation of the Borrower or
the Parent, as the case may be, enforceable against it in accordance with its
terms, except:
(a) As enforceability thereof may be limited by the
effect of (i) bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the rights and remedies of creditors
(including, without limitation, matters of contract rejection,
fraudulent conveyances and obligations, turn-over, preference,
equitable subordination, automatic stay, and substantive consolidation
under federal bankruptcy laws, as well as state laws regarding
fraudulent transfers, obligations, and conveyances, and state
receivership laws), and (ii) general principles of equity, whether
applied by a court of law or equity (including, without limitation,
principles governing the availability of specific performance,
injunctive relief or other traditional equitable remedies, principles
affording traditional equitable defenses such as waiver, laches and
estoppel, and legal standards requiring reasonableness or materiality
of breach for exercise of remedies or providing for defenses based on
impracticability or impossibility of performance or on obstruction or
failure to perform or otherwise act in accordance with an agreement by
a party thereto other than the Borrower or the Parent);
(b) That no opinion is expressed with respect to the
validity, binding effect, or enforceability of:
(i) those provisions of the Transaction
Documents requiring indemnification for, or providing
exculpation, release, or exemption from liability for, any
action or inaction by any other person or entity, to the
extent such action or inaction involves negligence or willful
misconduct on the part of any such person or entity or to the
extent otherwise contrary to public policy;
(ii) those provisions of the Transaction
Documents providing for payment of interest on unpaid
interest, or imposing increased interest rates or late payment
charges upon delinquency in payment or other default or
providing for liquidated damages or for premiums on
prepayment, acceleration, or termination, to the extent any
such provisions may be deemed to be penalties or forfeitures;
(iii) those provisions of the Transaction
Documents that have the effect of waiving the right of jury
trial, statutes of limitation, marshalling of assets or
similar requirements, or consenting or waiving objections to
the jurisdiction of certain courts or the venue or forum for
judicial actions;
(iv) those provisions of the Transaction
Documents providing that waivers or consents by a party may
not be given effect unless in writing or in compliance with
particular requirements, or that a party's course of dealing,
course of performance, or the like or failure or delay in
taking action may not constitute a waiver of related rights or
provisions, or that one or more waivers
93
<PAGE> 99
may not under certain circumstances constitute a waiver of
other matters of the same kind;
(v) those provisions of the Transaction
Documents providing that a party has the right to pursue
multiple remedies without regard to other remedies elected or
that all remedies are cumulative;
(vi) those provisions of the Transaction
Documents purporting to require payment by the Parent or the
Borrower of any Bank's or Agent's attorneys' fees without
compliance with the applicable requirements of O .C .G.A. ss.
13-1-11;
(vii) those provisions of the Transaction
Documents providing that modifications to such documents may
only be made in writing or that the provisions of such
documents are severable;
(viii) those provisions of the Transaction
Documents purporting to permit the exercise, under certain
circumstances, of rights or remedies without notice or without
providing opportunity to cure failures to perform;
(ix) those provisions of the Transaction
Documents purporting to grant rights of setoff otherwise than
in accordance with applicable law;
(x) those provisions of the Transaction
Documents purporting to require a waiver of defenses, setoffs,
or counterclaims against the Banks or the Agent;
(xi) those provisions of the Security Agreement,
the Pledge Agreement, or the Mortgage with respect to the
Agent's or any Bank's right to collect a deficiency except
upon compliance with applicable law;
(xii) Section 9.14 of the Credit Agreement;
Section 8.3 of the Security Agreement; the penultimate
sentence of Section 12(a) and Sections 22 and 23 of the Pledge
Agreement; and Sections 3.12 and 4.3 through 4.5 of the
Mortgage;
(xiii) those provisions of the Transaction
Documents purporting to require the Borrower or the Parent to
waive various rights, claims, and defenses, or to provide
certain remedies in favor of the Agent or the Banks, to the
extent any such waivers or remedial provisions may not be
valid, binding or enforceable under applicable law; provided,
however, in our opinion, the inclusion of such waivers and
remedial provisions does not render any Transaction Document
invalid as a whole, and each Transaction Document otherwise
contains remedies adequate for the practical. realization of
the benefits intended to be provided thereby assuming
compliance by the Agent and the Banks with applicable legal
requirements and procedures of the State of Georgia; or
(xiv) those provisions of the Security Agreement
and the Mortgage providing for the exercise of rights or
remedies with respect to any portion of the
94
<PAGE> 100
"Collateral" as described in the Security Agreement, or
"Premises" as described in the Mortgage, located outside the
State of Georgia; and
(c) That no opinion is expressed herein with respect to
any of the following matters:
(i) the adequacy or sufficiency of any of the
legal descriptions of the "Premises" as defined in the
Mortgage;
(ii) the status of the Borrower's or the Parent's
title to, or rights in, any of the "Collateral" as described
in the Security Agreement or the Pledge Agreement [or the
Borrower Pledge Agreement], or any of the "Premises" as
described in the Mortgage, or the perfection or priority of
any security interest or security title in and to any of such
"Collateral" pursuant to the Security Agreement or such
"Premises" pursuant to the Mortgage;
(iii) with respect to the Mortgage, the effect on
the opinions rendered herein of the delay of the Mortgage
becoming an Operative Mortgage as provided in the Credit
Agreement and the delay in the recordation, indexing and
cross-indexing thereof in the Georgia Filing Offices;
(iv) whether the Mortgage secures any
indebtedness, obligations, or liabilities of the Borrower
under an Interest Rate Protection Agreement that may
subsequently be in effect between the Borrower and any of the
Banks;
(v) the validity of any security interest in any
portion of the "Collateral" as described in the Security
Agreement, or the "Premises" as described in the Mortgage,
that is or purports to be nonassignable or nontransferable;
(vi) in the case of any property that becomes
collateral for the Obligations after the date hereof, the
effect that Section 552 of the Federal Bankruptcy Code would
have on the extent to which property acquired by a debtor
after the commencement of a case under the Federal Bankruptcy
Code may be subject to a security agreement entered into by
the debtor before the commencement of such case;
(vii) the enforceability against the government of
the United States of any assignment or security interest in
any portion of the Collateral described in the Security
Agreement constituting accounts or other claims against the
government of the United States subject to the Federal
Assignment of Claims Act; or
(viii) the validity of any conveyance of security
title or security interest in any of the Collateral described
in the Security Agreement or the Premises described in the
Mortgage to the extent that such matters are now or hereafter
governed by or subject to the law of any jurisdiction other
than the State of Georgia.
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<PAGE> 101
7. Neither the Parent nor the Borrower is an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
8. Neither the Parent nor the Borrower is a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
9. Insofar as is known to us, there is no action, suit or proceeding
pending or overtly threatened against or affecting the Parent, the Borrower, or
any other Subsidiaries of the Parent before any court or arbitrator or any
governmental body, agency or official in which (i) the monetary relief sought
against any of such parties is in excess of $500,000, or (ii) in any manner
questions the validity or enforceability of the Transaction Documents, except
for those actions, suits or proceedings listed on Schedule 4.05 to the Credit
Agreement.
This opinion letter is provided to you for your exclusive use solely in
connection with the transactions contemplated by the Credit Agreement and may
not be relied upon by any other person or for any other purpose without our
prior written consent. The opinions and confirmation of facts expressed in this
letter are strictly limited to the matters stated in this letter as of the date
hereof, and no other opinions or confirmations of fact are to be implied or
inferred. We undertake no obligation to advise you or any other person or entity
of changes of law or fact that occur after the date of this letter, whether or
not such change may affect any of the opinions expressed herein.
Yours very truly,
KING & SPALDING
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<PAGE> 102
EXHIBIT B-2
[Subject to revision to comport with
law and practice in each location]
OPINION OF LOCAL COUNSEL
AS TO THE MORTGAGE
[Dated as provided in
Section 3.01 of the Credit
Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn:
Dear Sirs:
We have acted as local counsel in the State of [Alabama]
[North Carolina] [South Carolina] (the "State") for Wachovia Bank of Georgia,
N.A., as Agent (the "Agent") in connection with the Amended and Restated Credit
Agreement (the "Credit Agreement") dated as of April 29, 1996, among Avondale
Mills, Inc., an Alabama corporation (the "Borrower"), the banks listed on the
signature pages thereof, the Agent and The First National Bank of Chicago, as
Documentation Agent. Terms defined in the Credit Agreement are used herein as
therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion. We have assumed for purposes of our opinions set
forth below that the execution and delivery of each Mortgage pertaining to a
Plant located in the State (each such Mortgage being a "State Mortgage") by the
Borrower has been duly authorized by the Borrower and that the execution and
delivery of the Credit Agreement by each Bank and by the Agent have been duly
authorized by each Bank and by the Agent.
Upon the basis of the foregoing, we are of the opinion that
each State Mortgage will create a valid and perfected [mortgage] [deed of trust]
Lien upon such of the "Premises" (as defined in the State Mortgage) as is
located in the State and constitutes real property under the law of the State
(the "State Real Property") in favor of the Agent for the ratable benefit of the
Banks and securing the "Secured Obligations" (as defined in the State Mortgage),
upon (i) the completion by the Agent of the acts described in clauses (i), (ii)
and (iii) of Section 5.25(d) of the
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<PAGE> 103
Credit Agreement, to the extent applicable, (ii) the proper filing, indexing and
recordation thereof in the real estate deed records (the "Real Estate Records")
maintained by and in the offices designated in Schedule A hereto and payment of
all fees, taxes and other charges payable in connection with recording the State
Mortgage, and (iii) the proper cross-indexing of the State Mortgage in the
Uniform Commercial Code filing offices designated in Schedule B hereto. The
filing of the State Mortgage in the offices designated in Schedule A and
Schedule B hereto are the only filings, recordings and registrations necessary
to perfect, publish notice of and preserve the Lien of and security interest in
the State Real Property created by the State Mortgage. The Liens created by the
State Mortgage on or in the State Real Property will validly secure the payment
of all future advances pursuant to the Credit Agreement, whether or not at the
time such advances are made an Event of Default or other event not within the
control of the Banks has relieved or may relieve the Banks from their
obligations to make such advances. The priority of the Liens created by the
State Mortgage will be the same with respect to (i) Loans made or deemed made
pursuant to the Credit Agreement and (ii) Obligations of the Borrower to any
Bank with respect to any Interest Rate Protection Agreement (up to the maximum
amount for all such Interest Rate Protection Agreements of $7,000,000) incurred
after the date hereof as with respect to any such Loans made or Obligations with
respect to such Interest Rate Protection Agreements incurred on the date hereof,
except to the extent that any priority may be affected by any Lien imposed by
law in favor of any government or governmental authority or agency.
We are qualified to practice in the State and do not purport
to be experts on any laws other than the laws of the United States and the State
and this opinion is rendered only with respect to such laws. We have made no
independent investigation of the laws of any other jurisdiction.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you, any Transferee
under the Credit Agreement, and Jones, Day, Reavis & Pogue without our prior
written consent.
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<PAGE> 104
EXHIBIT C
OPINION OF
JONES, DAY, REAVIS & POGUE, SPECIAL COUNSEL
FOR THE AGENT AND THE DOCUMENTATION AGENT
[TO BE UPDATED, ADDRESSED TO WACHOVIA BANK, N.A. AND
REVISED TO DELETE REFERENCES TO DOCUMENTATION AGENT
AND ADDRESS ONLY THE SECOND AMENDED AND RESTATED
CREDIT AGREEMENT AND REPLACEMENT NOTES]
[Dated as provided in
Section 3.01 of the Credit
Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn:
Dear Sirs:
We have participated in the preparation of the Amended and
Restated Credit Agreement (the "Credit Agreement") dated as of April 29, 1996,
among Avondale Mills, Inc., an Alabama corporation (the "Borrower"), the banks
listed on the signature pages thereof (the "Banks"), Wachovia Bank of Georgia,
N.A., as Agent (the "Agent") and The First National Bank of Chicago, as
Documentation Agent (the "Documentation Agent"), and have acted as special
counsel for the Agent for the purpose of rendering this opinion pursuant to
Section 3.01(d) of the Credit Agreement. Terms defined in the Credit Agreement
are used herein as therein defined.
This opinion letter is limited by, and is in accordance with,
the January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
which Interpretive Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
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<PAGE> 105
Upon the basis of the foregoing, and assuming the due
authorization, execution and delivery of the Credit Agreement, the Security
Agreement and each of the Notes by or on behalf of the Borrower, we are of the
opinion that each of the Credit Agreement and the Security Agreement constitutes
a valid and binding agreement of the Borrower and each Note constitutes valid
and binding obligations of the Borrower, in each case enforceable in accordance
with its terms.
We express no opinion as to the effect of the compliance or
noncompliance of the Agent or any of the Banks with any state or federal laws or
regulations applicable to the Agent or any of the Banks by reason of the legal
or regulatory status or the nature of the business of the Agent or any of the
Banks.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you and any
Transferee under the Credit Agreement without our prior written consent.
Very truly yours,
100
<PAGE> 106
EXHIBIT D
ASSIGNMENT AND ACCEPTANCE
Dated ____________________, 200__
Reference is made to the Second Amended and Restated Credit
Agreement dated as of September 28, 2000 (together with all amendments and
modifications thereto, the "Credit Agreement") among Avondale Mills, Inc., an
Alabama corporation (the "Borrower"), the Banks (as defined in the Credit
Agreement), and Wachovia Bank, N.A., as Agent (the "Agent"). Terms defined in
the Credit Agreement are used herein with the same meaning.
____________________________________________________ (the
"Assignor") and _____________________________________________________ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, without recourse to the Assignor, and the Assignee hereby purchases
and assumes from the Assignor, a __% interest in and to all of the Assignor's
rights and obligations under the Credit Agreement as of the Effective Date (as
defined below) (including, without limitation, a __% interest (which on the
Effective Date hereof is $__________) in the Assignor's Commitment and a _____
interest (which on the Effective Date hereof is $__________) in the Loans owing
to the Assignor and a __% interest in the Note[s] held by the Assignor (which
on the Effective Date hereof is $__________).
2. The Assignor (i) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the interest
being assigned by it hereunder, that such interest is free and clear of any
adverse claim and that as of the date hereof its Commitment (without giving
effect to assignments thereof which have not yet become effective) is
$__________ and the aggregate outstanding principal amount of Loans owing to it
(without giving effect to assignments thereof which have not yet become
effective) is $__________; (ii) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iii) attaches the Note[s] referred to in paragraph 1 above and requests
that the Agent exchange such Note[s] for [a new Note dated __________, ____ in
the principal amount of $__________ payable to the order of the Assignee] [new
Notes as follows: a Note dated __________, ____ in the principal amount of
$__________ payable to the order of the Assignor and a Note dated __________,
____ in the principal amount of $__________ payable to the order of the
Assignee].
3. The Assignee (i) confirms that it has received a copy
of the Credit Agreement, together with copies of the financial statements
referred to in Section 4.04(a) thereof (or any more recent financial statements
of the Borrower delivered pursuant to Section 5.01(a) or (b) thereof) and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (ii)
agrees that it
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<PAGE> 107
will, independently and without reliance upon the Agent, the Assignor or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) confirms that it is a bank
or financial institution; (iv) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank and agrees to be
bound by all of the terms and provisions of the Credit Agreement (including,
without limitation, the provisions of Section 9.18) and the Receivables
Intercreditor Agreement (including, without limitation, the obligations and
agreements contained in Section 5 thereof); (vi) specifies as its Lending Office
(and address for notices) the office set forth beneath its name on the signature
pages hereof, (vii) represents and warrants that the execution, delivery and
performance of this Assignment and Acceptance are within its corporate powers
and have been duly authorized by all necessary corporate action, (viii) attaches
the forms prescribed by the Internal Revenue Service of the United States
certifying as to the Assignee's status for purposes of confirming exemption from
United States withholding taxes with respect to all payments to be made to the
Assignee under the Credit Agreement and the Notes or such other documents as are
necessary to indicate that no such payments are subject to such taxes, and (ix)
represents and warrants that, as of the Effective Date, the Assignee is not
entitled to any compensation pursuant to Section 8.03 or entitled to any
suspension of its obligations to make Euro-Dollar Loans pursuant to Section
8.02.
4. The Effective Date for this Assignment and Acceptance
shall be ______, 200_ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for execution and
acceptance by the Agent and to the Borrower for execution by the Borrower.
5. Upon such execution and acceptance by the Agent [and
execution by the Borrower if the Assignee is not a Bank prior to the Effective
Date], from and after the Effective Date, (i) the Assignee shall be a party to
the Credit Agreement and, to the extent rights and obligations have been
transferred to it by this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) the Assignor shall, to the extent its
rights and obligations have been transferred to the Assignee by this Assignment
and Acceptance, relinquish its rights (other than under Sections 8.03, 9.03 and
9.04 of the Credit Agreement) and be released from its obligations under the
Credit Agreement.
6. Upon such execution and acceptance by the Agent [and
execution by the Borrower if the Assignee is not a Bank prior to the Effective
Date], from and after the Effective Date, the Agent shall make all payments in
respect of the interest assigned hereby to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments for periods prior to
such acceptance by the Agent directly between themselves.
7. This Assignment and Acceptance shall be governed by,
and construed in accordance with, the laws of the State of Georgia.
102
<PAGE> 108
[NAME OF ASSIGNOR]
By:
---------------------------------------
Title:
[NAME OF ASSIGNEE]
By:
---------------------------------------
Title:
Lending Office:
[Address]
WACHOVIA BANK, N.A.,
As Agent
By:
---------------------------------------
Title:
AVONDALE MILLS, INC.
If the Assignee is not a Bank or Affiliate
thereof prior to the Effective Date and no
Event of Default is in existence.
By:
---------------------------------------
Title:
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<PAGE> 109
EXHIBIT E
NOTICE OF BORROWING
______________________________, 2000___
Wachovia Bank, N.A., as Agent
191 Peachtree Street, N.W.
Atlanta, Georgia 30303-1757
Attention: Leveraged Finance
Re: Second Amended and Restated Credit Agreement (as amended and
modified from time to time, the "Credit Agreement") dated as
of September 28, 2000 by and among Avondale Mills, Inc., the
Banks from time to time parties thereto, and Wachovia Bank,
N.A., as Agent.
Gentlemen:
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings attributable thereto in the Credit Agreement.
This Notice of Borrowing is delivered to you pursuant to Section 2.02
of the Credit Agreement.
The Borrower hereby requests a [Euro-Dollar Borrowing] [Base Rate
Borrowing] [Swing Loan Borrowing] in the aggregate principal amount of
$_________ to be made on __________, 200_, and for interest to accrue thereon at
the rate established by the Credit Agreement for [Euro-Dollar Loans] [Base Rate
Loans].(1) [The duration of the Interest Period with respect thereto shall be]
[1 month] [2 months] [3 months] [6 months].
The Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized officer this ___ day of ________ , 200__ .
AVONDALE MILLS, INC.
By:
----------------------------
Title:
---------------
(1) Swing Loans must be Base Rate Loans.
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<PAGE> 110
EXHIBIT F
COMPLIANCE CERTIFICATE
Reference is made to the Second Amended and Restated Credit Agreement
dated as of September 28, 2000 (as amended and supplemented and in effect from
time to time, the "Credit Agreement") among Avondale Mills, Inc., the Banks
from time to time parties thereto, and Wachovia Bank, N.A., as Agent.
Capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement.
Pursuant to Section 5.01(c) of the Credit Agreement, (i)
____________________, the duly authorized ____________________ of Avondale
Incorporated, hereby certifies to the Agent and the Banks that the information
contained in the Compliance Check List attached hereto is true, accurate and
complete as of _______________, ______, and (ii) ____________________, the duly
authorized ____________________ of Avondale Mills, Inc. hereby (A) certifies to
the Agent and the Banks that to the Knowledge of such officer, no Default is in
existence on and as of the date hereof and (B) restates and reaffirms that to
the Knowledge of such officer, the representations and warranties contained in
Article IV of the Credit Agreement are true on and as of the date hereof as
though restated on and as of this date, except for events which have been
disclosed in writing to the Banks and which are described in any of Sections
4.04, 4.06(a), 4.07 (except the first sentence), 4.14(b) and (c) or 4.15.
Dated: ____________, 200__.
AVONDALE INCORPORATED
By:
--------------------------------------
Title:
AVONDALE MILLS, INC.
By:
--------------------------------------
Title:
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<PAGE> 111
COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
1. Fixed Charge Coverage Ratio (Section 5.03)
The Fixed Charge Coverage Ratio, calculated at the end of each Fiscal
Quarter, shall be greater than: (i) 2.75 to 1.0 from the end of the
2000 Fiscal Year through the end of the fourth Fiscal Quarter of the
2002 Fiscal Year and (ii) 3.00 to 1.0 thereafter.
<TABLE>
<S> <C>
(a) Consolidated Net Income - Schedule 1 $__________
(b) Net Interest Expense - Schedule 1 $__________
(c) income taxes - Schedule 1 $__________
(d) depreciation - Schedule 1 $__________
(e) amortization - Schedule 1 $__________
(f) Dividends - Schedule 1 $__________
(g) LIFO Adjustments -Schedule 1 $__________
(h) non-cash write-offs of obsolete or surplus equipment, $__________
spare parts or real property Schedule 1(2)
(i) sum of (a) plus (b) plus (c) plus (d) plus (e) less (f), $__________
less or plus (g), as applicable, plus (h)
(j) Current Maturities of Long Term Debt - Schedule 1 $__________
(k) Net Interest Expense $__________
(l) sum of (j) plus (k) $__________
Ratio of (i) to (l) __________
Requirement >[2.75 to 1.0]
>[3.00 to 1.0]
</TABLE>
---------------
(2) Not to exceed $10,000,000 during any period of 4 consecutive Fiscal
Quarters
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<PAGE> 112
COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
2. Senior Debt to Capitalization Ratio (Section 5.05)
The Senior Debt to Capitalization Ratio, calculated at the end of each
Fiscal Quarter, shall be less than 0.50 to 1.0.
<TABLE>
<S> <C>
(a) Consolidated Senior Debt - Schedule 2 $__________
(b) Consolidated Adjusted Tangible Net Worth - Schedule 3 $__________
(c) Subordinated Debt $__________
(d) Sum of (a) plus (b) plus (c) $__________
Ratio of (a) to (d) ___________
Requirement <0.50 to 1.0
</TABLE>
3. Total Debt to Cash Flow Ratio (Section 5.06)
The Total Debt to Cash Flow Ratio, calculated at the end of each
Fiscal Quarter, shall be less than 3.75 to 1.0.
<TABLE>
<S> <C>
(a) Consolidated Total Funded Debt - Schedule 2 $__________
(b) Consolidated Net Income - Schedule 1 $__________
(c) Net Interest Expense - Schedule 1 $__________
(d) income taxes - Schedule 1 $__________
(e) Depreciation - Schedule 1 $__________
(f) Amortization - Schedule 1 $__________
(g) LIFO Adjustments - Schedule 1 $__________
</TABLE>
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<PAGE> 113
COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
<TABLE>
<S> <C>
(h) non-cash write-offs of obsolete or surplus equipment, spare $__________
parts or real property Schedule 1(3)
(i) sum of (b) plus (c) plus (d) plus (e) plus (f) less or plus $__________
(g), as applicable, plus (h)
Ratio of (a) to (i) ___________
Requirement <3.75 to 1.0
</TABLE>
4. Restricted Payments (Section 5.07)
The Parent and the Borrower will not make any Restricted Payment,
except, so long as no Default shall have occurred and be continuing, a
Restricted Payment may be made if at the time of such Restricted
Payment and after giving effect thereto, the aggregate amount of such
Restricted Payment and all other Restricted Payments since the
beginning of the Restricted Payment Calculation Period would not
exceed the sum of (x) $20,000,000, plus (y) 50% of Consolidated Net
Income during the Restricted Payment Calculation Period (treated as
one accounting period) (or, in case such Consolidated Net Income shall
be a deficit, minus 100% of such deficit).
<TABLE>
<S> <C>
(a) Cumulative Consolidated Net Income during Restricted Payment $__________
Calculation Period
(b) 50% of (a) $__________
(c) Sum of (b) and $20,000,000 $__________
(d) Aggregate Restricted Payments made during Restricted Payment $__________
Calculation Period
Limitation (d) may not exceed (c)
</TABLE>
---------------
(3) Not to exceed $10,000,000 during any period of 4 consecutive Fiscal
Quarters
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<PAGE> 114
COMPLIANCE CHECK LIST
Avondale Incorporated
_________________
________________, _____
5. Loans and Advances (Section 5.09)
Neither the Parent, the Borrower nor any of the Material Subsidiaries
shall make loans or advances to any Person except, so long as no Event
of Default is in existence:
(A)(i) loans or advances to employees not exceeding
$2,000,000 in the aggregate principal amount outstanding at any time,
in each case made in the ordinary course of business and consistent
with practices existing on August 25, 1995; (ii) deposits required by
government agencies or public utilities; and (iii) loans or advances
to Wholly Owned Subsidiaries (other than from the Parent to the
Borrower or as provided in Section 5.09(C)) not exceeding $1,000,000
in the aggregate outstanding; provided that after giving effect to the
making of any loans, advances or deposits permitted by this Section
5.09(A), the aggregate of all loans and advances permitted in this
Section 5.09(A) does not exceed $4,000,000;
(B) loans or advances from the Parent to the Borrower or from
the Borrower to the Parent, or from the Borrower to AMGF (i) pursuant
to the AMGF/Graniteville Transaction and within the limits contained
in the definition thereof and (ii) otherwise to fund the ongoing
working capital needs and capital expenditures of AMGF in the ordinary
course of business;
(C) loans or advances to the Receivables Subsidiary evidenced
by a Purchase Money Note; and
(D) other loans or advances (not including any loans and
advances of the types described in clauses (A), (B) or (C) above) in
an aggregate amount, together with Investments permitted by clause
(viii) of Section 5.10, not exceeding the sum of $15,000,000, plus 10%
of positive Consolidated Adjusted Tangible Net Worth as of the date of
measurement.
Calculations with respect to Section 5.09(A):
<TABLE>
<S> <C>
(a) loans and advances to employees $_________
Limitation $2,000,000
(b) deposits required by government agencies or public utilities $_________
</TABLE>
109
<PAGE> 115
COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
<TABLE>
<S> <C>
(c) loans or advances to Wholly Owned Subsidiaries (other than $_________
stated exceptions))
Limitation $1,000,000
(d) sum of (a) plus (b) plus (c) $_________
Limitation $4,000,000
Calculations with respect to Section 5.09(D):
(e) loans and advances not permitted by clauses (A), (B) or (C) $__________
(f) sum of (a) and amount in paragraph 7(a) $__________
(g) Consolidated Adjusted Tangible Net Worth - Schedule 3 $__________
(g) 10% of (g) $__________
(h) Sum of (h) and $15,000,000 $__________
Limitation--(f) may not exceed (i)
</TABLE>
6. Investments (Section 5.10)
Neither the Parent, the Borrower nor any of the Consolidated
Subsidiaries shall make Investments in any Person except as permitted
by Section 5.09 and except Investments in (i) direct obligations of
the United States Government maturing within one year, (ii)
certificates of deposit issued by a commercial bank whose credit is
satisfactory to the Agent, (iii) commercial paper rated A1 or the
equivalent thereof by Standard & Poor's Corporation or P1 or the
equivalent thereof by Moody's Investors Service, Inc. and in either
case maturing within 6 months after the date of acquisition, (iv)
tender bonds the payment of the principal of and interest on which is
fully supported by a letter of credit issued by a United States bank
whose long-term certificates of deposit are rated at least AA or the
equivalent thereof by Standard & Poor's Corporation and Aa or the
equivalent thereof by Moody's Investors Service, Inc., (v) Investments
by Borrower in the Receivables Subsidiary and obligations consisting
of Standard Securitization Undertakings, (vi) Investments by the
Receivables Subsidiary in a Special Purpose
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<PAGE> 116
COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
Vehicle and obligations consisting of Standard Securitization
Undertakings, (vii) loans and advances permitted by Section 5.09, and
Investments by the Borrower in AMGF (x) pursuant to the
AMGF/Graniteville Transaction and within the limits contained in the
definition thereof and (y) otherwise to fund the ongoing working
capital needs and capital expenditures of AMGF in the ordinary course
of business, and (viii) other Investments in an aggregate amount on
and after the Closing Date, together with Investments permitted by
clause (D) of Section 5.09, not exceeding the sum of $15,000,000, plus
10% of positive Consolidated Adjusted Tangible Net Worth as of the
date of measurement.
<TABLE>
<S> <C>
(a) Other Investments (not permitted by clauses (i) through (vii) $__________
(b) Sum of (a) and Paragraph 6(e) $__________
(c) Consolidated Adjusted Tangible Net Worth - Schedule 3 $__________
(d) 10% of (c) $__________
(e) sum of (d) and $15,000,000 $__________
Limitation--(b) may not exceed (e)
</TABLE>
7. Negative Pledge (Section 5.11)
<TABLE>
<S> <C>
Amount of Debt secured by Liens not permitted by $__________
Sections 5.11(b) through 5.11(e), inclusive, and (i) Schedule - 4
Limitation $3,000,000
Amount of Debt secured by all Liens (Schedule 4 and Schedule
5.11 to Credit Agreement) $__________
Limitation $4,000,000
</TABLE>
111
<PAGE> 117
COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
8. List of Consolidated Subsidiaries (Section 5.01(c)(iii)
_______________________________
_______________________________
_______________________________
9. List of Material Subsidiaries (other than the Borrower), if any, as to
which there has been a change in excess of $100,000 in the assets,
liabilities or shareholders' equity thereof since the immediately
preceding Fiscal Quarter.
_______________________________
_______________________________
_______________________________
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<PAGE> 118
COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
Schedule - 1
Consolidated Net Income for:
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
Total $__________
Net Interest Expense for:
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
Total $__________
Income Taxes for:
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
Total $__________
Depreciation for:
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
Total $__________
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<PAGE> 119
COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
Amortization for:
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
Total $__________
LIFO adjustments for:
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
Total $__________
Dividends for:
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
Non-cash write-offs of obsolete or
surplus equipment, spare parts or
real property for:
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
_____ quarter 200___ $__________
Current Maturities of Long Term Debt for:
_____ quarter 200___ $__________
Total $__________
114
<PAGE> 120
COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
Schedule - 2
Consolidated Senior Debt and Consolidated Total Funded Debt
<TABLE>
<CAPTION>
INTEREST
RATE MATURITY TOTAL
-------- -------- -----
Secured
-------
<S> <C> <C> <C>
_________________________________ $__________
_________________________________ $__________
_________________________________ $__________
_________________________________ $__________
Total Secured $__________
Unsecured (including Capitalized Leases)
_________________________________ $__________
_________________________________ $__________
_________________________________ $__________
_________________________________ $__________
Total Unsecured $__________
Redeemable Preferred Stock $__________
Total $__________
Receivable Securitization Program $__________
Other Consolidated Senior Debt
_________________________________ $__________
_________________________________ $__________
_________________________________ $__________
Total Consolidated Senior Debt $__________
Plus Subordinated Debt $__________
Total Consolidated Total Funded Debt $__________
</TABLE>
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COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
Schedule - 3
Consolidated Adjusted Tangible Net Worth
<TABLE>
<S> <C>
(a) Stockholders' Equity $__________
(b) surplus from write-up of assets subsequent to August 25, 1995(4) $__________
(c) intangible assets(5) $__________
(d) Capital Stock shown as assets(6) $__________
Consolidated Adjusted Tangible Net Worth (sum of (a) less (b) less
(c) less (d)) $__________
</TABLE>
---------------
(4) Exclude any write-up in connection with the acquisition of the Graniteville
Assets
(5) Include only to the extent created, incurred or arising on or after the
Original Closing Date, and exclude capitalized transaction costs incurred
in connection with the acquisition of the Graniteville Assets
(6) Include only to the extent created, incurred or arising on or after the
Original Closing Date
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<PAGE> 122
COMPLIANCE CHECK LIST
Avondale Incorporated
_______________
_______________, _____
Schedule - 4
Liens Securing Debt In The Principal
Amount of $50,000 or More which are
Not shown on Schedule 5.11 to Credit Agreement
<TABLE>
<CAPTION>
Relevant Provision
of Section 5.11
Description of Lien Amount of Debt Secured Permitting Same
<S> <C> <C>
1. _____________ $_______ __________
2. _____________ $_______ __________
3. _____________ $_______ __________
4. _____________ $_______ __________
5. _____________ $_______ __________
6. _____________ $_______ __________
7. _____________ $_______ __________
8. _____________ $_______ __________
9. _____________ $_______ __________
</TABLE>
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<PAGE> 123
EXHIBIT G
AVONDALE MILLS, INC.
CLOSING CERTIFICATE
Reference is made to the Second Amended and Restated Credit Agreement
(the "Credit Agreement") dated as of September 28, 2000, among Avondale Mills,
Inc., the Banks listed therein, and Wachovia Bank, N.A., as Agent. Capitalized
terms used herein have the meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 3.01(b)(ii) of the Credit Agreement,__________ ,
the duly authorized of Avondale Mills, Inc. hereby certifies to the Agent and
the Banks that (i) to the Knowledge of the undersigned, no Default has occurred
and is continuing as of the date hereof, and (ii) the representations and
warranties contained in Article IV of the Credit Agreement are true on and as
of the date hereof.
Certified as of this 28th day of September, 2000.
By:
---------------------------------------
Printed Name:
--------------------------
Title:
---------------------------------
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Exhibit H
This Instrument Prepared By
and When Recorded Return to:
Jones, Day, Reavis & Pogue
3500 One Peachtree Center
303 Peachtree Street, N.E.
Atlanta, Georgia 30308-3242
By: Christopher L. Carson
MASTER MORTGAGE,LEASEHOLD MORTGAGE,
DEED OF TRUST, DEED TO SECURE DEBT,
LEASEHOLD DEED TO SECURE DEBT,
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT,
and
ASSIGNMENT OF LEASES, RENTS AND PROFITS
among
AVONDALE MILLS, INC.,
as Borrower and grantor
WACHOVIA BANK OF GEORGIA, N.A.,
as
Agent for certain banks
and
________________, as
Trustee and grantee for the benefit of the Agent,
as beneficiary for itself and the other Banks ratably,
with respect to the North Carolina Premises
--------------------------------------------------------------------------------
------------
COLLATERAL IS OR INCLUDES FIXTURES.
THIS INSTRUMENT IS ALSO TO BE INDEXED IN THE INDEX OF FINANCING STATEMENTS AS A
FIXTURE FILING IN ACCORDANCE WITH THE UNIFORM COMMERCIAL CODE, INCLUDING
SECTIONS 9-313 AND 9-402, AS ADOPTED IN ALABAMA, NORTH CAROLINA, SOUTH CAROLINA
AND GEORGIA.
THE NAMES OF THE DEBTOR AND THE SECURED PARTY, THE MAILING ADDRESS OF THE
SECURED PARTY FROM WHICH INFORMATION CONCERNING THE SECURITY INTEREST MAY BE
OBTAINED, THE MAILING ADDRESS OF THE DEBTOR AND A STATEMENT INDICATING THE
TYPES, OR DESCRIBING THE ITEMS, OF COLLATERAL, ARE AS DESCRIBED IN SUBSECTION
3.7.3 HEREOF.
THIS INSTRUMENT SECURES ANY CONTRACTUAL FUTURE ADVANCES HEREUNDER THAT MAY BE
MADE BY THE BANKS, AS DEFINED HEREIN, TO
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<PAGE> 125
BORROWER OR ANY CONTRACTUAL FUTURE OBLIGATIONS OF BORROWER TO THE "BANKS" AT
ANY TIME AND FROM TIME TO TIME DURING THE TERM HEREOF, NOT TO EXCEED, FOR
PURPOSES OF THE NORTH CAROLINA PREMISES AND THE SOUTH CAROLINA PREMISES ONLY,
FIFTEEN (15) YEARS (AS TO THE NORTH CAROLINA PREMISES) AND TEN (10) YEARS (AS
TO THE SOUTH CAROLINA PREMISES) IMMEDIATELY FOLLOWING THE DATE HEREOF, IN EACH
CASE IN AN AMOUNT NOT TO EXCEED AT ANY ONE TIME OUTSTANDING $225,000,000, PLUS
INTEREST, COSTS OF COLLECTION (INCLUDING, BUT NOT LIMITED TO REASONABLE ACTUAL
ATTORNEYS FEES, WHETHER OR NOT LITIGATION IS COMMENCED) AND SUMS ADVANCED TO
PROTECT THE SECURITY OF THIS INSTRUMENT.
NOTE: INTEREST OR DISCOUNT MAY BE DEFERRED, ACCRUED OR CAPITALIZED
BUT ONLY AT THE OPTION OF THE BANKS.
--------------------------------------------------------------------------------
-------------
The amount of present obligations secured hereby is $____________, and the
maximum amount of present and future obligations is $225,000,000.
*FOR NORTH CAROLINA PURPOSES, THIS INSTRUMENT SHALL CONSTITUTE A DEED OF TRUST,
SECURITY AGREEMENT AND ASSIGNMENT OF LEASES, RENTS AND PROFITS AND SHALL BE
INDEXED IN THE NAME OF AVONDALE MILLS, INC., AS GRANTOR, ________________, AS
TRUSTEE, AND WACHOVIA BANK OF GEORGIA, N.A. AS BENEFICIARY.
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<PAGE> 126
THIS MASTER MORTGAGE, LEASEHOLD MORTGAGE, DEED OF TRUST, DEED TO SECURE
DEBT, LEASEHOLD DEED TO SECURE DEBT, UNIFORM COMMERCIAL CODE SECURITY AGREEMENT
AND ASSIGNMENT OF LEASES, RENTS AND PROFITS, including the cover sheet and table
of contents, made as of the __ day of _________ , 199_ by and between AVONDALE
MILLS, INC., as party of the first part; and WACHOVIA BANK OF GEORGIA, N.A., as
Agent for certain Banks (as hereafter defined), as party of the second part and
__________________ as party of the third part.
W I T N E S S E T H T H A T:
WHEREAS, on April 29, 1996 party of the first part, party of the
second part and Banks entered into a certain Amended and Restated Credit
Agreement regarding certain obligations of the party of the first part owed to
Agent and Banks; and
WHEREAS, to secure the repayment of such money and the performance of
certain obligations, party of the first part desires to convey, grant and
assign liens, security titles, security interests and collateral assignments in
certain property;
NOW THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00), the mutual agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to secure the indebtedness hereinafter described, the parties
agree as follows:
ARTICLE I.
DEFINITIONS
For the purpose of this Instrument, the following defined terms have
the meanings set forth in this Article I:
"Agent" means Wachovia Bank of Georgia, N.A., in its capacity
as agent for certain Banks as described in the Credit Agreement (hereinafter
defined), and its permitted successors and assigns.
"Alabama Lease" means that certain Lease Agreement, dated as
of April 1, 1992, by and between the Alabama Lessor and Borrower, as amended or
modified from time to time.
"Alabama Lessor" means The Industrial Development Board of the
Town of Bon Air.
"Alabama Tracts" means, individually and collectively, as the
context shall require, Borrower's leasehold estate created by the Alabama Lease
in that certain tract or parcel of land located in Bon Air, Talladega County,
Alabama and those certain other tracts or parcels of land located in Coosa
County, St. Clair County and Tallapoosa County, Alabama owned by Borrower in
fee simple, all of which tracts are more particularly described on Exhibit "A"
attached hereto and by this reference made a part hereof as the "Alabama
Tracts".
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<PAGE> 127
"Bank" or "Banks" means Wachovia Bank of Georgia, N.A., a
national banking association, acting as Agent hereunder and each Bank and its
permitted successors and assigns as defined in the Credit Agreement.
"Borrower" means Avondale Mills, Inc., an Alabama corporation,
and its permitted successors and assigns.
"Credit Agreement" means the Amended and Restated Credit
Agreement dated April 29, 1996, by and between Borrower, Agent, The First
National Bank of Chicago, as Documentation Agent, and Banks, together with any
and all renewals, substitutions, modifications, amendments, consolidations and
extensions of the Credit Agreement.
"Default Condition" means any condition or event which
constitutes an Event of Default or which with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event of Default.
"Easements and Appurtenances" means and include all
easements, rights-of-way, strips and gores of land, vaults, streets, ways,
alleys, passages, sewer rights, waters, water courses, water rights and powers,
minerals, flowers, shrubs, crops, trees, timber and other emblements now or
hereafter located on the Land or under or above the same or any part or parcel
thereof, and all estates, rights, titles, interests, privileges, liberties,
tenements, hereditaments and appurtenances, reversion and reversions, remainder
and remainders, whatsoever, in any way belonging, relating or appertaining to
the Premises or any part thereof, or which hereafter shall in any way belong,
relate or be appurtenant thereto, whether now owned or hereafter acquired by
Borrower.
"Event of Default" has the meaning set forth in Section 4.1
hereof.
"Fixtures" means any and all items included in Plant,
Equipment and Personal Property which constitute fixtures under the law of the
state in which the Premises of which they constitute a part are located and any
and all other items of personal property which are physically attached to Land
or buildings thereon and any and all replacements and substitutions of any of
the foregoing.
"Georgia Lease" means that certain Lease Agreement dated June
1, 1992 between the Georgia Lessor and Borrower recorded in Deed Book 411, page
42, Walton County, Georgia Records, as amended or modified from time to time.
"Georgia Lessor" means the Development Authority of Walton
County.
"Georgia Tracts" means, individually and collectively, as the
context shall require, Borrower's leasehold estate created by the Georgia Lease
in that certain tract or parcel of land located in Walton County, Georgia, and
those certain other tracts or parcels of land located in Tift County and
Richmond County, Georgia owned by Borrower in fee simple, all of which tracts
are more particularly described on Exhibit "A" attached hereto and by this
reference made a part hereof as the "Georgia Tracts."
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<PAGE> 128
"Instrument" means this Master Mortgage, Deed of Trust, Deed
to Secure Debt, Uniform Commercial Code Security Agreement and Assignment of
Leases, Rents and Profits, together with any and all renewals, substitutions,
modifications, amendments, consolidations and extensions of this Instrument.
"Intercreditor Agreement" means the Amended and Restated
Intercreditor Agreement dated April 29, 1996 between Borrower, Agent and
SunTrust Bank, Atlanta, as amended or supplemented from time to time,
pertaining to the SunTrust Collateral Plants.
"Land" means, individually and collectively, as the context
shall require, the Georgia Tracts, the Alabama Tracts, the North Carolina
Tracts and the South Carolina Tracts.
"Leases and Rents" means and include all leases, subleases,
tenant contracts and rental agreements pertaining to the Premises whether now
or hereafter existing and including, without limitation, all income, rents,
issues, profits and revenues of the Premises at any time and from time to time
now or hereafter accruing (including, without limitation, all payments under
leases or tenancies, proceeds of insurance (including, without limitation,
business interruption insurance), condemnation payments with respect to such
income, rents, issues, profits and revenues, tenant security deposits, whether
held by Borrower or in a trust account, payments to Borrower in connection with
any sale of any Premises to a tenant or customer pursuant to the provisions of
any lease and escrow funds), and all the estate, right, title, interest,
property, possession, claim and demand whatsoever at law, as well as in equity,
of Borrower of, in and to the same whether now or hereafter existing.
"Notes" means, individually and collectively, as the context
shall require, the Revolver Loan Notes or the Swing Loan Note (as defined in
the Credit Agreement) dated April 29, 1996, made by Borrower and payable to the
order of a Bank, with the final payment being due April 28, 2001 (unless
extended by the Banks in their sole and absolute discretion), together with any
and all renewals, modifications, amendments, replacements and extensions
thereof.
"North Carolina Tracts" means, individually and collectively,
as the contract shall require, those certain tracts or parcels of land located
in Lee County and Yancey County, North Carolina being more particularly
described on Exhibit "A" attached hereto and by this reference made a part
hereof as the "North Carolina Tracts."
"Permitted Encumbrances" means, as to each of the Premises,
those matters identified as to such Premises on Exhibit "B", attached hereto
and by this reference made a part hereof and, subject to the provisions of
Section 5.11 of the Credit Agreement, outstanding security interests in Plant,
Equipment and Personal Property.
"Plant, Equipment and Personal Property" means and include
all buildings, structures and improvements of every nature whatsoever now or
hereafter situated on the Land now or hereafter owned by Borrower or in which
Borrower now or hereafter has rights (to the extent of such rights), and all
gas and electric fixtures, radiators, heaters, engines and machinery, boilers,
ranges, elevators and motors, plumbing and heating fixtures, carpeting and
other floor coverings, fire extinguishers and any other safety equipment
required by governmental
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regulation or law, washers, dryers, water heaters, mirrors, mantels, air
conditioning apparatus, refrigerating plants, refrigerators, cooking apparatus
and appurtenances, window screens, awning and storm sashes now or hereafter
owned by Borrower, which are or shall be attached to said buildings, structures
or improvements and all other furnishings, furniture, fixtures, machinery,
equipment, appliances, racks, forklifts, building supplies and materials, books
and records, chattels, contract rights, and personal property (excluding any
Receivables Program Assets) of every kind and nature whatsoever now or
hereafter owned by Borrower or in which Borrower now or hereafter has rights
(to the extent of such rights) and now or hereafter located in, on or about, or
used or intended to be used with or in connection with the use, operation or
enjoyment of the Premises, including all extensions, additions, improvements,
betterments, after-acquired property, renewals, replacements and substitutions,
or proceeds from a sale of any of the foregoing; and all the right, title and
interest of Borrower now or hereafter in any such furnishings, furniture,
fixtures, machinery, equipment, appliances and personal property subject to or
covered by any prior or superior security agreement, conditional sales
contract, chattel mortgage or similar lien or claim, together with the benefit
of any deposits or payments now or hereafter made by Borrower or on behalf of
Borrower; and all personal property constituting proceeds hereafter acquired
with cash proceeds of any of the Plant, Equipment and Personal Property
described hereinabove; all of which are hereby declared and shall be deemed to
be fixtures (except for the purpose of the definition of "Fixtures" above), and
accessions to the Land and a part of the Premises as between the parties hereto
and all persons claiming by, through or under them, and which shall be deemed
to be a portion of the security for the Secured Obligations; provided, that the
foregoing shall not include any equipment described in Exhibit "B" to the
"Security Agreement," as defined in the Credit Agreement. The location of the
Plant, Equipment and Personal Property is also the location of the Land.
"Premises" means and includes, collectively, the related
Land, the Plant, Equipment and Personal Property, the Easements and
Appurtenances and the Leases and Rents. Whenever the word "Premises" is
preceded by the name of a state or city, for example, "Georgia Premises", such
reference shall be deemed to mean and include that portion of the Premises
located in the identified state or city.
"Required Banks" has the meaning set forth in the Credit
Agreement.
"Secured Obligations" means and includes the following
collectively:
(a) Any and all indebtedness, obligations and
liabilities of Borrower to Agent and/or Banks now
existing pursuant to, or hereafter arising out of,
or otherwise relating to the any of the Transaction
Documents, including, without limitation, all
"Obligations", as that term is defined in the Credit
Agreement and including, to the extent provided in
such definition, indebtedness, obligation and
liabilities under "Interest Rate Protection
Agreements," as defined in the Credit Agreement,
with any of the Banks.
(b) Any and all indebtedness, obligations and
liabilities of Borrower to Agent and/or Banks now
existing or hereafter arising, in either instance,
under, by virtue of or pursuant to this Instrument.
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(c) Any and all advances hereafter made by Agent and/or
Banks at any time to protect or preserve the
Premises or the lien hereof on the Premises, or for
taxes, assessments, insurance premiums or other
advances authorized under the terms of this
Instrument (whether or not the original Borrower
remains the owner of the Premises at the time of any
of such advances).
(d) Any and all other present and future indebtedness
(i) now owing or (ii) which may at any time and from
time to time hereafter be owing by Borrower to Agent
and/or Banks arising, in either instance, out of or
otherwise relating to the Credit Agreement or the
other Transaction Documents, now existing or
hereafter coming into existence, however and
whenever incurred or evidenced, whether express or
implied, direct or indirect, absolute or contingent,
or due or to become due, joint, several, joint and
several, if arising from, by virtue of, evidenced by
or pursuant to any of the Transaction Documents and
all renewals, substitutions, modifications,
amendments, consolidations and extensions and
restatements thereof.
"South Carolina Tracts" means, individually and collectively,
as the context shall require, those certain tracts or parcels of land located
in Oconee County, Aiken County and Edgefield County, South Carolina being more
particularly described on Exhibit "A" attached hereto and by this reference
made a part hereof as the "South Carolina Tracts."
"Tract" or "Tracts" means, individually and collectively, as
the context shall require, any one or all of the Georgia Tracts, the Alabama
Tracts, the North Carolina Tracts and the South Carolina Tracts.
"Transaction Documents" means the Credit Agreement, the
Notes, this Instrument, the other "Loan Documents" (as defined in the Credit
Agreement) and any other instrument, document or other writing executed on or
after the date hereof on behalf of Borrower evidencing, securing or otherwise
relating to any of the Secured Obligations.
"SunTrust Collateral Plants" means the Premises identified as
the "SunTrust Collateral Plants" on Exhibit "A" attached hereto and by this
reference made a part hereof. The SunTrust Collateral Plants are located in
Walton County, Georgia, Lee County, North Carolina and the Town of Walhalla,
South Carolina.
"Trustee" means ____________, a resident of ____________
County, North Carolina with respect to the North Carolina Premises, together
with any successor Trustee appointed pursuant to the provisions of this
Instrument.
ARTICLE II.
GRANTING CLAUSES
2.1 Granting Clause. In order to secure the full and
prompt payment when due, whether by acceleration or otherwise, and full and
prompt performance, of the Secured Obligations in such order of priority as
Agent may elect, Borrower hereby mortgages, grants,
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<PAGE> 131
conveys and warrants the Premises (i) as to the North Carolina Premises, to the
Trustee, for the benefit of the Agent, as beneficiary, for itself and the other
Banks ratably, and (ii) as to all other Premises, to the Agent, for the ratable
benefit of the Banks, and grants (i) as to the North Carolina Premises, to the
Trustee, for the benefit of the Agent, as beneficiary, for itself and the other
Banks ratably, and (ii) as to all other Premises, to the Agent, for the ratable
benefit of the Banks, a security interest in the Premises as more particularly
set forth in this Article:
2.1.1 Alabama Premises. Borrower hereby does
grant, bargain, sell, assign and convey unto Agent for the ratable benefit of
the Banks, the successors, successors-in-title and assigns of Agent, for the
benefit of the Banks, the Alabama Tracts and all rights with respect thereto
(including, without limitation, any purchase or extension options Borrower may
have under the Alabama Lease including under Section 5.6 thereof), together
with the Plant, Equipment and Personal Property, the Easements and
Appurtenances, and the Leases and Rents pertaining to the Alabama Tract, to
have and to hold forever.
2.1.2 Georgia Premises. Borrower hereby does
grant, bargain, sell, assign and convey unto Agent, the successors,
successors-in-title and assigns of Agent, for the benefit of the Banks, the
Georgia Tracts and all rights with respect thereto, (including, without
limitation, any purchase or extension options Borrower may have under the
Georgia Lease including under Section 5.6 thereof), together with the Plant,
Equipment and Personal Property, the Easements and Appurtenances and the Leases
and Rents pertaining to each such tract, to have and to hold in fee simple
forever. With respect to the Georgia Tracts, this Instrument is intended to
operate and is to be construed as a deed passing title to those tracts to Agent
and not as a mortgage and is made under those provisions of the existing laws
of the State of Georgia relating to deeds to secure debt.
2.1.3 North Carolina Premises. Borrower as
grantor hereby does irrevocably grant, bargain, sell, assign and convey unto
Trustee in trust with power of sale under and subject to the terms hereof, for
the benefit of the Agent, as beneficiary for itself and the other Banks
ratably, the North Carolina Tracts, together with the Plant, Equipment and
Personal Property, the Easements and Appurtenances, and the Leases and Rents
pertaining to the North Carolina Tracts, to have and hold forever.
2.1.4 South Carolina Premises. Borrower hereby
does grant, bargain, sell, alien, remise, release, assign, convey, transfer,
mortgage, hypothecate, pledge, deliver, set over, warrant and confirm into
Agent, for the benefit of the Banks and their successors or assigns, all right,
title and interest of Borrower in and to the South Carolina Tracts, together
with the Plant, Equipment and Personal Property, the Easements and
Appurtenances, and the Leases and Rents pertaining to the South Carolina
Tracts, to have and hold forever.
2.2 Warranty of Title. Borrower does warrant and will
forever defend the title to the Premises against the claims of all persons
whomsoever, except as to the Permitted Encumbrances. Borrower represents and
warrants that it is lawfully seized of the Land in fee simple absolute (except
for the Tracts which are leased pursuant to the Alabama Lease and the Georgia
Lease), that Borrower has good right and is lawfully authorized to sell, convey
or
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<PAGE> 132
encumber the Premises and that the Premises are free and clear of all
encumbrances except liens for real property taxes not yet due and payable and
Permitted Encumbrances.
2.3 Defeasance. Should the Secured Obligations secured by
this Instrument be paid and satisfied according to the tenor and effect thereof
when the same shall become due and payable and the obligations of the Banks
under the Credit Agreement be terminated in writing, then this Instrument and
the conveyance effected and the liens and security interests granted hereby
shall be released and terminated and shall be cancelled and surrendered. Upon
payment and satisfaction of the Secured Obligations in full and the termination
of the obligations of the Banks and the Agent under the Credit Agreement, Agent
shall execute, in recordable form, and deliver to Borrower such instruments as
are required to release and terminate of record this Instrument.
2.4 Future Disbursements. This Instrument secures, among
other obligations, all present and future loan disbursements made by Agent
and/or Banks to Borrower which are included in the Secured Obligations. The
Notes evidence a revolving credit facility under the Credit Agreement and there
may be advances, repayment and disbursements or readvances of principal from
time to time. It is expressly agreed that the outstanding principal balance
under the Notes may, from time to time, be reduced to a zero balance without
such repayment operating to extinguish and release the lien, security title and
security interest created by this Instrument. This Instrument shall remain in
full force and effect as to any subsequent future advances made after such zero
balance without loss of priority until the Secured Obligations are paid in full
and satisfied and all agreements between Borrower and Banks for further
advances have been terminated. Borrower waives the operation of any applicable
statute, law or regulation having a contrary effect. For purposes of North
Carolina law, the amount of present obligations secured hereby is
$____________. For purposes of the North Carolina Premises and the South
Carolina Premises only, the aggregate outstanding principal amount of such loan
disbursements secured by this Instrument shall not exceed ___,000,000 and
No/100 Dollars ($___,000,000); provided, however, that said maximum amount may
be increased as aforesaid and by such additional sums and amounts as may be
advanced by Agent and/or Banks pursuant to the provisions of this Instrument
for the protection and preservation of the Premises, interest, attorneys' fees
and court costs.
ARTICLE III.
COVENANTS OF BORROWER
3.1 Payment of Indebtedness. Borrower will pay the
Secured Obligations according to the tenor thereof and all other sums now or
hereafter secured hereby promptly as the same shall become due.
3.2 Taxes, Liens and Other Charges.
3.2.1 In the event of the passage of any state,
federal, municipal or other governmental law, order, rule or regulation,
subsequent to the date hereof, in any manner changing or modifying the laws now
in force governing the taxation of debts secured by mortgages, deeds of trust
or deeds to secure debt (not including tax on interest or fee income
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<PAGE> 133
associated with such debt) or the manner of collecting taxes so as to adversely
affect Agent or the Banks, Borrower will, subject to Subsection 3.2.5, promptly
pay any such additional tax, except to the extent this Instrument relates to
any of the SunTrust Collateral Plants.
3.2.2 Borrower will, subject to Subsection 3.2.5,
pay, before the same become delinquent, all taxes, liens, assessments and
charges of every character including all utility charges, whether public or
private, already levied or assessed or that may hereafter be levied or assessed
upon or against the Premises; and upon demand will furnish Agent receipted
bills evidencing such payment.
3.2.3 Borrower will not, subject to Subsection
3.2.5, suffer any mechanic's, materialman's, laborer's, statutory or other lien
to be created and to remain outstanding upon all or any part of the Premises,
except for inchoate liens securing obligations not for borrowed money which are
not yet due and payable and except for the Permitted Encumbrances.
3.2.4 Borrower, to the full extent permitted by
applicable law, shall, subject to Subsection 3.2.5, indemnify and hold Agent
and Banks harmless from, or shall reimburse Agent and Banks for, any and all
intangible tax, documentary stamp tax, mortgage tax, note tax or other like or
similar tax (excluding income, franchise or capital taxes imposed on the income
of Agent or Banks) imposed with respect to this Instrument or under any power
of sale herein granted, any of the other Transaction Documents, or the Secured
Obligations, and from any interest, charges or penalties assessed with respect
thereto, except to the extent any of the foregoing relate to any of the
SunTrust Collateral Plants.
3.2.5 The Borrower shall have the right to contest
by appropriate proceedings any taxes, liens, assessments or other charges
described in Subsections 3.2.1 through 3.2.4, inclusive, provided that it has
established adequate reserves therefor.
3.3 Insurance.
3.3.1 So long as any portion of the Secured
Obligations remains unpaid, Borrower, at its expense, shall procure and
maintain for the benefit of Agent and Banks, insurance policies issued by such
insurance companies, and in such amounts as are required by Section 5.17 of the
Credit Agreement. All insurance required by this Subsection 3.3.1 which protect
against physical damage to the Plant, Equipment and Personal Property shall
contain a standard mortgagee clause (without contribution) in favor of Agent
and Banks, shall not be terminable without thirty (30) days' prior written
notice to Agent, and shall be evidenced by original policies or certified
copies of policies deposited with Agent, to be held by Agent until the Secured
Obligations shall have been fully paid and discharged. All other insurance
policies, such as general liability policies, required by the terms of this
Instrument shall be evidenced by certificates delivered to Agent and in case of
cancellation, shall provide for thirty (30) days' prior written notice to
Agent.
3.3.2 Following the occurrence and during the
continuance of an Event of Default, Agent is hereby authorized and empowered,
at its option, to adjust or compromise
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any loss under any insurance policies maintained pursuant to this Section 3.3,
and to collect and receive the proceeds from any such policy or policies, and
each insurance company is hereby authorized and directed to make payment for
all such losses directly to Agent, for the ratable benefit of the Banks,
instead of to Borrower and Agent jointly. In the event any insurance company
fails to disburse directly and solely to Agent but disburses instead either
solely to Borrower or to Borrower and Agent jointly, Borrower agrees
immediately to endorse and transfer such proceeds to Agent. Upon the failure of
Borrower to endorse and transfer such proceeds as aforesaid, Agent may execute
such endorsements or transfers for and in the name of Borrower and Borrower
hereby irrevocably appoints Agent as Borrower's agent and attorney-in-fact so
to do. After deducting from said insurance proceeds all of its expenses
incurred in the collection and administration of such sums, including
attorneys' fees, Agent may apply the net proceeds or any part thereof, at its
option, (i) to the payment of the Secured Obligations, whether or not due and
in whatever order the Required Banks elect, (ii) to the repair and/or
restoration of the Premises or (iii) for any other purposes or objects for
which Agent is entitled to advance funds under this Instrument; all without
affecting the lien of this Instrument. Agent shall not be held responsible for
any failure to collect any insurance proceeds due under the terms of any policy
regardless of the cause of such failure absent gross negligence or willful
misconduct. Reference is made to Subsection 3.5.3.
3.3.3 Not less than thirty (30) days prior to the
expiration date of each policy maintained pursuant to this Section 3.3,
evidence of a renewal or replacement thereof satisfactory to Agent shall be
delivered to Agent. At the request of Agent, Borrower shall deliver to Agent
receipts evidencing the payment for all such insurance policies and renewals or
replacements. In the event of the foreclosure of this Instrument or any other
transfer of title to any of the Premises in extinguishment, in whole or in
part, of the Secured Obligations, all right, title and interest of Borrower in
and to all insurance policies then in force with respect to such Premises shall
pass to the purchaser or grantee.
3.3.4 Any provision of this Instrument to the
contrary notwithstanding, this Section 3.3 and Section 3.4 and the rights and
obligations of Borrower and Agent hereunder with respect to insurance and
condemnation are in all respects subject to and subordinate to the Alabama
Lease, the Georgia Lease and any security agreements, mortgages, deeds of trust
or deeds to secure debt prior or superior to this Instrument and the rights of
the lessors thereunder or parties secured thereby relating to the collection
and disposition of insurance and condemnation proceeds.
3.4 Condemnation. Following the occurrence and during the
continuance of an Event of Default, if all or any material portion of the
Premises shall be damaged or taken through condemnation (the term
"condemnation" when used in this Instrument shall include any damage or taking
by any governmental or quasi-governmental authority and any transfer by private
sale in lieu thereof), either temporarily or permanently, then the Secured
Obligations shall, at the option of the Required Banks, become immediately due
and payable, and Agent, for the ratable benefit of the Banks, shall be entitled
to receive all compensation, awards and other payments or relief thereof. In
such event, Agent is hereby authorized, at its option, to commence, appear in
and prosecute, in its own or in Borrower's name, any action or proceeding
relating to any condemnation, and to settle or compromise any claim in
connection therewith,
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and all such compensation, awards, damages, claims, rights of action and
proceeds and the right thereto are hereby assigned by Borrower to Agent, for
the ratable benefit of the Banks. After deducting from said condemnation
proceeds all of its expenses incurred in the collection and administration of
such sums, including attorney's fees, Agent may apply the net proceeds or any
part thereof, at the option of the Required Banks, (a) to the payment of the
Secured Obligations, whether or not due and in whatever order the Required
Banks elect, (b) to the repair and/or restoration of the Premises, or (c) for
any other purposes or objects for which Agent is entitled to advance funds
under this Instrument, all without affecting the lien of this Instrument; and
any balance of such moneys then remaining shall be paid to Borrower. Borrower
agrees to execute such further assignment of any compensation, awards, damages,
claims, rights of action and proceeds as Agent may require. If, prior to the
receipt by Agent of such award or proceeds, the Premises shall have been sold
on foreclosure of this Instrument, Agent, for the ratable benefit of the Bank,
shall have the right to receive such award or proceeds to the extent of any
unpaid Secured Obligations following such sale, with interest thereon at the
"Default Rate" (as defined in the Credit Agreement), whether or not a
deficiency judgment on this Instrument shall have been sought or recovered, and
to the extent of reasonable actual counsel fees, costs and disbursements
incurred by Agent in connection with the collection of such award or proceeds.
Reference is made to Subsections 3.3.4 and 3.5.3.
3.5 Care of Premises.
3.5.1 Borrower will keep the buildings, parking
areas, roads and walkways, recreational facilities, landscaping and all other
improvements of any kind now or hereafter erected on the Land or any part
thereof in good condition and repair, and in substantial compliance with all
applicable laws, except to the extent failure would not have a material adverse
effect on the usefulness or value of the Premises, and will not commit or
suffer any waste and will not do or suffer to be done anything (other than that
which is inherent in the ordinary course of Borrower's business operations)
which will unreasonably increase the risk of fire or other hazard to the
Premises or any part thereof.
3.5.2 Borrower will not remove or demolish nor
materially alter the structural character of any improvement located on the
Land without the written consent of the Agent (at the direction of the Required
Banks) except to the extent failure would not have a material adverse effect on
the usefulness or value of the Premises.
3.5.3 If the Premises or any part thereof is
materially damaged by fire or any other cause, or any material portion thereof
is taken by condemnation, Borrower will give immediate written notice thereof
to Agent. Borrower shall either (i) repair or restore such property to the
extent reasonably practical, and may use the proceeds of any insurance or
condemnation award for such purpose, with any amounts thereof not so used to be
paid to the Agent for application to the Secured Obligations, or (ii) treat
such event as a sale of assets for purposes of Sections 2.08(b) and 5.14 of the
Credit Agreement. The provisions of this Subsection 3.5.3 are subject to the
provisions of Subsection 3.3.2 (as to insurance) and Section 3.4 (as to
condemnation) upon the occurrence and during the continuance of an Event of
Default.
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3.6 Leases, Contracts, Etc.
3.6.1 As additional collateral and further
security for the Secured Obligations, Borrower does hereby assign as a present
and absolute assignment (to the extent assignable pursuant to the terms
thereof) to Agent, for the benefit of Banks, all of Borrower's right, title and
interest now existing or hereafter arising in and to any and all Leases and
Rents, franchise agreements, management contracts, construction contracts, and
other contracts (not included in the definition of Leases and Rents), licenses
and permits now or hereafter affecting the Premises, or any part thereof,
(reserving only to Borrower the right to collect currently due and payable
income, rents, issues, profits, charges and revenues from the Premises until
such time, if any, as an Event of Default shall exist and be continuing). The
foregoing is intended to be a present and absolute assignment and not merely
the passing of a security interest. Borrower agrees to execute and deliver to
Agent, such additional instruments, in form and substance reasonably
satisfactory to Agent, as may hereafter be reasonably requested by Agent
further to evidence and confirm said assignment; provided, however, that
acceptance of any such assignment shall not be construed as a consent by Agent
to any lease, tenant contract, rental agreement, franchise agreement,
management contract, construction contract, or other contract, license or
permit, or to impose upon Agent, any obligation with respect thereto.
3.6.2 Borrower shall furnish to Agent, within
twenty (20) days after a receipt of a request by Agent to do so, such
information as Agent or any Bank from time to time may reasonably request
concerning the leases, tenant contracts and rental agreements.
3.7 Security Agreement.
3.7.1 PARTS OF THE PREMISES ARE, OR ARE TO BECOME,
FIXTURES ON THE LAND. Insofar as the Plant, Equipment and Personal Property
and the Leases and Rents are concerned, this Instrument is hereby made and
declared to be a security agreement, and a security interest is hereby granted
by Borrower to Agent, for the ratable benefit of Banks, encumbering each and
every item of Plant, Equipment and Personal Property and of Leases and Rents in
compliance with the provisions of the applicable Uniform Commercial Code. A
financing statement or statements reciting this Instrument to be a security
agreement, affecting all of said personal property aforementioned, shall be
executed by Borrower and Agent and appropriately filed. The remedies for any
violation of the covenants, terms and conditions of the security agreement
herein contained shall be (i) as prescribed herein, or (ii) as prescribed by
general law, or (iii) as prescribed by the specific statutory consequences now
or hereafter enacted and specified in the applicable Uniform Commercial Code,
all at Agent's sole election. Borrower and Agent agree that the filing of such
financing statement(s) in the records normally having to do with personal
property shall never be construed as in anywise derogating from or impairing
this declaration and hereby stated intention of Borrower and Agent that
everything used in connection with the production of income from the Premises
and/or adapted for use therein and which is described or reflected in this
Instrument as part of the Plant, Equipment or Personal Property, is, and at all
times and for all purposes and in all proceedings both legal or equitable shall
be, regarded as part of the real estate irrespective of whether (a) any such
item is physically attached to the improvements, (b) serial numbers are used
for the better identification of certain items capable of being thus identified
in a recital contained herein, or (c) any such item
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is referred to or reflected in any such financing statement(s) so filed at any
time. Similarly, the mention in any such financing statement(s) of the rights
in and to (aa) the proceeds of any fire and/or hazard insurance policy, or (bb)
any award in eminent domain proceedings for a taking or for loss of value, or
(cc) Borrower's interest as lessor in any present or future lease or rights to
income growing out of the use and/or occupancy of the Premises, whether
pursuant to lease or otherwise, shall never be construed as in anywise altering
any of the rights of Agent, Banks or Borrower as determined by this instrument
or impugning the priority of Agent's lien granted hereby or by any other
recorded document, but such mention in such financing statement(s) is declared
to be for the protection of Agent and Banks in the event any court shall at any
time hold with respect to the foregoing (aa), (bb) or (cc), that notice of
Agent's priority of interest to be effective against a particular class of
persons, must be filed in the Uniform Commercial Code records.
3.7.2 Borrower warrants that (i) Borrower's (that
is, "Debtor's") name, identity or corporate structure and residence or
principal place of business are as set forth in Subsection 3.7.3 hereof; (ii)
Borrower (that is, "Debtor") has been using or operating under said name,
identity or corporate structure without change for the time period set forth in
Subsection 3.7.3 hereof; (iii) that Borrower is duly qualified to do business
in each state in which the Land is located; and (iv) the location of the Plant,
Equipment and Personal Property is upon the Land, except as permitted in the
Security Agreement. Borrower covenants and agrees that: (i) Borrower will
furnish Agent with notice of any change in the matters addressed by clauses (i)
or (iii) of this Subsection 3.7.2 within thirty (30) days of the effective date
of any such change; (ii) Borrower will promptly execute any financing
statements or other instruments deemed necessary by Agent to prevent any filed
financing statement from becoming misleading or losing its perfected status;
and (iii) and that Borrower will remain qualified to do business in each state
in which the Land is located.
3.7.3 Upon execution by Agent (where local
practice requires the same), this Instrument shall constitute a financing
statement filed as a fixture filing under the Uniform Commercial Code in the
real estate records of the county or city in which the Premises is located with
respect to all fixtures which are a part of the Premises and with respect to
any goods or other personal property that may now be or hereafter become a
fixture. The information contained in this Subsection 3.7.3 is provided in
order that this Instrument shall comply with the requirements of the applicable
Uniform Commercial Code for instruments to be filed as financing statements, to
perfect the security interests with respect to fixtures. The names of the
"Debtor" and the "Secured Party", the identity or corporate structure and
residence or principal place of business of "Debtor", and the time period for
which "Debtor" has been using or operating under said name and identity or
corporate structure without change, are as set forth in Exhibit "C", attached
hereto and by this reference made a part hereof; the mailing address of the
"Secured Party" from which information concerning the security interest may be
obtained, and the mailing address of Borrower (that is, "Debtor"), are as set
forth in Section 5.5 of this Instrument; and a statement indicating the types,
or describing the items, of collateral is set forth hereinabove.
3.7.4 Conflict with Security Agreement. To the
extent any of the provisions of this Instrument pertaining to Plant, Equipment
and Personal Property are in conflict
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with any provisions of the Security Agreement, the conflicting provisions of
the Security Agreement shall govern and control over the conflicting provisions
of this Instrument.
3.8 Further Assurances; After Acquired Property. At any
time, and from time to time, upon reasonable request by Agent, Borrower will
make, execute and deliver or cause to be made, executed and delivered, to Agent
and, where appropriate, cause to be recorded and/or filed and from time to time
thereafter to be re-recorded and/or refiled at such time and in such offices
and places as shall be deemed desirable by Agent, any and all such other and
further mortgages, deeds of trust, security agreements, financing statements,
continuation statements, instruments of further assurance, certificates and
other documents as may, in the opinion of Agent reasonably exercised, be
necessary or desirable in order to effectuate, complete, or perfect, or to
continue and preserve (a) the obligation of Borrower under the Secured
Obligations and under this Instrument and (b) the lien and security interests
granted by this Instrument as a first and prior lien (except for the Permitted
Encumbrances) upon and in and to all of the Premises, whether now owned or
hereafter acquired by Borrower, as well as any certificates, petitions or other
instruments reasonably requested by the Agent for allocation of stamp,
intangible, recording or similar tax liability relating to the filing of this
Instrument for record as to multiple Premises. Upon any failure by Borrower so
to do, Agent may make, execute, record, file, re-record and/or refile any and
all such mortgages, security agreements, deeds of trust, financing statements,
continuation statements, instruments, certificates and documents for and in the
name of Borrower and Borrower hereby irrevocably appoints Agent the agent and
attorney-in-fact of Borrower so to do. The lien of this Instrument and the
security interest created hereby will automatically attach, without further
act, to after-acquired personal property attached to, or located on, the Land
and/or used in connection with the operation of the Premises or any part
thereof.
3.9 Expenses. Borrower will pay or reimburse Agent and
Banks, upon demand therefor, for all reasonable actual attorneys' fees, costs
and expenses incurred by Agent or any Bank in any suit, action, legal
proceeding or dispute of any kind in which Agent and/or Banks are made a party
or appear as party plaintiff or defendant, affecting the Secured Obligations
secured hereby, this Instrument or the interest created herein, or the
Premises, including, but not limited to, the exercise of the power of sale
contained in this Instrument or the foreclosure of this Instrument, any
condemnation action involving the Premises or any action to protect the
security hereof; and any such amounts paid by Agent or any Bank shall be
included in the Secured Obligations secured by the lien of this Instrument.
Notwithstanding the foregoing, neither Agent nor any Bank shall be entitled to
recover any such expenses in any such suit by Agent or such Bank against
Borrower if such suit results in a judicial determination in favor of Borrower
with respect to the subject matter thereof or results in a determination of
liability against Agent or such Bank based on an act of gross negligence or
willful misconduct.
3.10 Subrogation. Agent shall be subrogated to all right,
title, equity liens and claims of all persons, firms or corporations to whom
Borrower has paid or pays, or to whom monies are paid, from the proceeds of the
Secured Obligations in the settlement of claims, liens or charges or for the
benefit of Borrower.
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3.11 Limit of Validity. If from any circumstances
whatsoever fulfillment of any provision of this Instrument, the Notes or any of
the other Transaction Documents (as defined in the Credit Agreement) at the
time performance of such provision shall be due, shall involve transcending the
limit of validity presently prescribed by any applicable usury statute or any
other applicable law, with regard to obligations of like character and amount,
then ipso facto the obligation to be fulfilled shall be reduced to the limit of
such validity, so that in no event shall any exaction be possible under this
Instrument that is in excess of the current limit of such validity, but such
obligation shall be fulfilled to the limit of such validity.
3.12 Junior Encumbrances. Borrower shall not further
mortgage, encumber or pledge all or any part of the Premises or of Borrower's
interest in the Premises or any part thereof, except for Permitted
Encumbrances.
3.13 Ground Lease.
3.13.1 Borrower shall duly and punctually perform
all terms, covenants, conditions and agreements imposed on the tenant (or
lessee) or the Premises or any part thereof by the Alabama Lease and the
Georgia Lease, and will do all other things necessary to preserve and keep
unimpaired the rights of Borrower under the Alabama Lease and the Georgia
Lease.
3.13.2 Borrower represents that the Alabama Lease
and the Georgia Lease are in full force and effect and there is no existing
default or event of default under the Alabama Lease or the Georgia Lease or in
the performance of any of the terms, covenants, conditions, or warranties
thereof on the part of tenant (or lessee) to be kept, performed and observed.
3.13.3 Borrower represents that it has heretofore
furnished Agent true and complete copies of the Alabama Lease and the Georgia
Lease and all amendments relating thereto, and all consents of third parties
required by the Alabama Lease and the Georgia Lease, or any other document or
instrument relating thereto, for the execution and delivery of this Instrument,
including the consents of the Alabama Lessor and the Georgia Lessor, if
required by the Alabama Lease and the Georgia Lease.
3.13.4 Borrower shall within three (3) days
following receipt by Borrower of any written notice from the landlord (or
lessor) under the Alabama Lease or the Georgia Lease, furnish a copy of such
notice to Agent. With respect to any default on the part of the Alabama Lessor
or the Georgia Lessor under the Alabama Lease or the Georgia Lease, as
applicable, and of the occurrence of any event which, with or without any
notice or lapse of time or both, would constitute a default on the part of the
Alabama Lessor or the Georgia Lessor under the Alabama Lease or the Georgia
Lease, as applicable, Borrower will (i) forward to Agent any written notice
thereof by Borrower to the Alabama Lessor or the Georgia Lessor, as applicable,
simultaneously with the delivery thereof to the Alabama Lessor or the Georgia
Lessor, as applicable, and (ii) promptly notify Agent of any other such
occurrence or condition of which Borrower has actual knowledge.
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3.13.5 Borrower shall not, without the express written
consent of and joinder by the Agent (at the direction of the Required Banks),
amend or modify in any material respect, supplement, surrender, terminate,
cancel or assign the Alabama Lease or the Georgia Lease or any option to renew
or extend the term thereof. Borrower hereby assigns to the Agent for the
benefit of the Banks all rights which Borrower may have now or in the future to
amend or modify in any material respect, supplement, surrender, terminate,
cancel or assign the Alabama Lease or the Georgia Lease. Any such amendment or
modification in any material respect, supplement, surrender, termination,
cancellation or assignment of the Alabama Lease or the Georgia Lease made,
suffered to be made or consented to by Borrower without the Agent's prior
written consent shall be void and of no force and effect.
3.13.6 So long as any Event of Default exists hereunder,
Borrower hereby authorizes Agent, and hereby appoints Agent its
attorney-in-fact (which appointment is coupled with an interest), to name any
arbitrators or appraisers which Borrower, as tenant (or lessee) under the
Alabama Lease or the Georgia Lease, has the right to appoint by virtue of the
Alabama Lease or the Georgia Lease.
3.13.7 Without limiting the generality of any other provision
of this Instrument, Borrower covenants and agrees (i) that the lien of this
Instrument shall automatically and without further action by Borrower, Agent or
the Lenders, extend and attach to any further or greater estate in and to the
Alabama Tract subject to the Alabama Lease or the Georgia Tract subject to the
Georgia Lease hereafter acquired by Borrower, in addition to remaining a lien
on the leasehold estate, (ii) that the acquisition by Borrower of any further
and greater estate in and to the Alabama Tract subject to the Alabama Lease or
the Georgia Tract subject to the Georgia Lease, shall not, without the express
written consent of and joinder by the Agent (acting at the direction of the
Required Banks), result in a merger of the leasehold estate under the Alabama
Lease or the Georgia Lease, as applicable, into such further and greater
estate, and (iii) that, in the event of acquisition of any such further or
greater estate, Borrower will execute and deliver to Agent for the benefit of
the Banks such supplemental mortgages, spreader agreements and other documents
as the Agent shall reasonably require in order to effectuate the foregoing.
Where the lien of this Instrument has been extended to cover any interest of
Borrower in the fee estate, in the event of any foreclosure sale under this
Mortgage, Agent will have the right to sell the leasehold estate and the fee
interest of Borrower separately or together at the election of the Required
Banks.
3.13.8 If, and to the extent, that compliance with any term,
provision, covenant or agreement contained in this Instrument would constitute
a breach of any term, provision, covenant or agreement contained in the Alabama
Lease or the Georgia Lease giving the landlord (or lessor) thereunder the right
to declare a default or event of default thereunder, then, but only to such
extent, compliance with such term, provision, covenant or agreement contained
in this Instrument shall not be required.
3.13.9 In the event of any failure by Borrower to perform any
covenant on the part of the tenant (or lessee) to be performed under the
Alabama Lease or the Georgia Lease after the giving of any applicable notice to
do so from the Agent or from the
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landlord (or lessor) under the Alabama Lease or the Georgia Lease, as
applicable, or upon receipt by Agent from the landlord (or lessor) under the
Alabama Lease or the Georgia Lease of any written notice of the occurrence of
any default or event of default by the tenant (or lessee) thereof, Agent may
take any action reasonably deemed by Agent to be necessary or advisable to
prevent or to cure such default or event of default, regardless of whether the
existence of such default or event of default or the nature thereof be
questioned or denied by Borrower or by any party on behalf of Borrower.
Borrower hereby expressly grants to Agent, and agrees that Agent shall have the
absolute and immediate right to enter into and upon the Premises or any part
thereof to such extent and as often as Agent reasonably deems necessary or
desirable in order to cure any such default or event of default by the tenant
(or lessee) under the Alabama Lease or the Georgia Lease. Any and all costs and
expenses (including but not limited to legal fees and disbursements) incurred
by Agent in connection with any such actions will be immediately due and
payable by Borrower on demand and will bear interest at the "Default Rate" (as
defined in the Credit Agreement) from the time of advancement by Agent until
repaid.
3.13.10 Borrower will not subordinate or consent to the
subordination to the Alabama Lease or the Georgia Lease to any mortgage,
security deed, deed of trust, lease or other interest on or in the landlord's
(or lessor's) interest in all or any part of the Alabama Tract subject to the
Alabama Lease or the Georgia Tract subject to the Georgia Lease, unless in each
case, the written joinder and consent of the Agent (acting at the direction of
the Required Banks shall have been first had and obtained).
3.13.11 Upon the Agent's written request, Borrower will
submit satisfactory evidence of payment of all of Borrower's monetary
obligations under the Alabama Lease and the Georgia Lease (including but not
limited to ground rent, taxes, assessments, insurance premiums and operating
expenses).
3.13.12 Agent will have the right to appear in and
participate in all proceedings, including any arbitration proceedings, which
could effect Agent's security or the provisions of the Alabama Lease or the
Georgia Lease or that which relates to the Tracts subject thereto. Borrower
agrees to pay promptly upon demand all reasonable costs and expenses of the
Agent (including, but not limited to, reasonable legal fees and disbursements)
actually incurred in any such proceedings.
ARTICLEL IV.
DEFAULT AND REMEDIES
4.1 Events of Default. The terms "Default", "Event of Default" or
"Events of Default", wherever used in this Instrument, mean any Event of
Default as defined in the Credit Agreement.
4.2 Acceleration of Maturity. If an Event of Default shall have
occurred and be continuing and shall not have been expressly waived in writing
by Agent, then the Secured Obligations secured hereby shall, by written notice
as provided in the Credit Agreement, immediately become due and payable without
further notice or demand, time being of the essence of this Instrument and the
rate of interest with respect thereto shall be as provided in
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Section 2.05 of the Credit Agreement; and no omission on the part of Agent to
exercise such option when entitled to do so shall be construed as a waiver of
such right.
4.3 Agent's Right to Enter and Take Possession, Operate and Apply
Revenues.
4.3.1 If an Event of Default shall have occurred and be
continuing and shall not have been expressly waived in writing by Agent, then,
subject to the provisions of Section 5.16, Borrower, upon demand of Agent,
shall forthwith surrender to Agent the actual possession of the Premises and
if, and to the extent, permitted by law, Agent itself, or by such officers or
agents as it may appoint, may enter and take possession of all the Premises
without the appointment of a receiver, or an application therefor, and may
exclude Borrower and its agents and employees wholly therefrom, and may have
access to the books, papers and accounts of Borrower. Borrower waives the
posting of any bond in the event Agent elects to take possession.
4.3.2 If Borrower shall for any reason fail to surrender or
deliver the Premises or any part thereof after such demand by Agent, Agent may
obtain a judgment or decree conferring upon Agent the right to immediate
possession or requiring Borrower to deliver immediate possession of the
Premises to Agent, to the entry of which judgment or decree Borrower hereby
specifically consents. Borrower will pay to Agent, upon demand, all reasonable
actual expenses of obtaining such judgment or decree, including reasonable
actual compensation to Agent, its attorneys and agents; and all such expenses
and compensation shall, until paid, be secured by the lien of this Instrument.
4.3.3 Upon every such entering upon or taking of possession,
Agent may hold, store, use, operate, manage and control the Premises and
conduct the business thereof, and, from time to time (i) make all necessary and
proper maintenance, repairs, renewals, replacements, additions, betterments and
improvements thereto and thereon and purchase or otherwise acquire additional
fixtures, personalty and other property; (ii) insure or keep the Premises
insured; (iii) manage and operate the Premises and exercise all the rights and
powers of Borrower to the same extent as Borrower could in its own name or
otherwise with respect to the same; and (iv) enter into any and all agreements
with respect to the exercise by others of any of the powers herein granted
Agent, all as Agent from time to time may determine to be in its best interest.
Agent may collect and receive all the rents, issues, profits and revenues from
the Premises, including those past due as well as those accruing thereafter,
and, after deducting (aa) all reasonable actual expenses of taking, holding,
managing and operating the Premises (including reasonable actual compensation
for the services of all persons employed for such purposes); (bb) the cost of
all such maintenance, repairs, renewals, replacements, additions, betterments,
improvements, purchases and acquisitions; (cc) the cost of such insurance; (dd)
such taxes, assessments and other similar charges as Agent may at its option
pay; (ee) other proper charges upon the Premises or any part thereof; and (ff)
the reasonable actual compensation, expenses and disbursements of the attorneys
and agents of Agent, Agent shall apply the remainder of the moneys and proceeds
so received by Agent, first to the payment of accrued interest; second, to the
payment and satisfaction of the Secured Obligations currently due (whether by
acceleration or otherwise); and third, to the Borrower.
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4.3.4 Whenever all that is due (whether by acceleration or
otherwise) upon such Secured Obligations and under any of the terms, covenants,
conditions and agreements of this Instrument, shall have been paid and all
Events of Default made good, Agent shall surrender possession of the Premises
to Borrower, its successors or assigns. The same right of taking possession,
however, shall exist if any subsequent Event of Default shall occur.
4.4 Performance by Agent of Defaults by Borrower. If Borrower
shall default in the payment, performance or observance of any term, covenant
or condition of this Instrument, Agent may, at its option and after using best
efforts to notify Borrower, pay, perform or observe the same, and all payments
made or costs or expenses incurred by Agent in connection therewith, shall be
secured hereby and shall be, without demand, immediately repaid by Borrower to
Agent with interest thereon at a rate per annum equal to the "Default Rate" (as
defined in the Credit Agreement) calculated on the basis set forth in the
Credit Agreement. Agent shall be the sole judge of the necessity for any such
actions and of the amounts to be paid, but shall exercise such judgment
reasonably and in good faith. Agent is hereby empowered to enter and to
authorize others to enter upon the Premises or any part thereof for the purpose
of performing or observing any such defaulted term, covenant or condition
without thereby becoming liable to Borrower or any person in possession holding
under Borrower except for gross negligence or willful misconduct.
4.5 Receiver. If an Event of Default shall have occurred and be
continuing and shall not have been expressly waived by Agent, then, subject to
the provisions of Section 5.16, Agent, upon application to a court of competent
jurisdiction, shall be entitled (except as to the South Carolina Premises) as a
matter of strict right without notice and without regard to the occupancy or
value of any security for the Secured Obligations secured hereby or the
adequacy or inadequacy of such security and without the requirement of any bond
or the solvency of any party bound for its payment and satisfaction, to the
appointment of a receiver to take possession of and to operate the Premises and
to collect and apply the rents, issues, profits and revenues thereof. As to the
South Carolina Premises, Agent may apply to a court of competent jurisdiction
pursuant to S.C. Code Ann. 15-65-10, et seq., as amended from time to time for
the appointment of a receiver to take possession of and to operate the South
Carolina Premises and to collect and apply the rents, issues, profits and
revenues thereof. As to the South Carolina Premises, Agent agrees to notify
Borrower of its application for the appointment of a receiver at least four (4)
days prior to such appointment, unless the court to which such application is
made prescribes a shorter time. The receiver shall have all of the rights and
powers permitted under the laws of the state wherein the Land is situated.
Borrower will pay to Agent upon demand all expenses, including receiver's fees,
reasonable actual attorneys' fees, costs and agent's compensation, incurred
pursuant to the provisions of this Section 4.5; and all such reasonable actual
expenses shall be secured by this Instrument.
4.6 Enforcement. If an Event of Default shall have occurred and
be continuing and shall not have been expressly waived by Agent, concerning
enforcement by judicial foreclosure or exercise of private power of sale, Agent
shall have the following options, subject to the provisions of Section 5.16:
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4.6.1 With respect to the Alabama Premises, this subsection
shall apply. Agent, its agents or its attorneys, at its option, may sell the
Alabama Premises or any part of the Alabama Premises (including, without
limitation, all of the rights of Borrower under the Alabama Lease) before the
entrance of the courthouse in the county or counties where the Alabama Premises
is located, at public outcry for cash or credit, after first giving notice of
the time, place and terms of said sale by publication once a week for three (3)
successive weeks prior to said sale in the newspaper customarily used for such
notices published in said county and state in which the Alabama Premises is
located; and upon receipt of the purchase money, Agent, its agents or its
attorneys, or any person conducting said sale for it, is authorized to execute
to the purchaser at said sale a deed to the property so purchased in the name
of Borrower, and such purchaser shall not be held to inquire as to the
application of the proceeds of such sale. At said foreclosure sale, the Alabama
Premises may be offered for sale and sold as a whole or in part as Agent may
elect. The presence of any portion of the property constituting the Alabama
Premises at the place of sale is expressly waived. Prior to any such sale, the
Agent may, in its sole discretion, elect to exercise all rights of the Borrower
under the Alabama Lease, and notify the Alabama Lessor of its intent to do so,
whereupon the Alabama Lessor hereby is authorized and directed by the Borrower
to accept performance from the Agent.
4.6.2 With respect to the Georgia Premises, this subsection
shall apply. Agent, at its option, may sell the Georgia Premises or any part of
the Georgia Premises at public sale or sales before the door of the courthouse
of the county or counties in which the Georgia Premises or any part of the
Georgia Premises is situated, to the highest bidder for cash, in order to pay
the Secured Obligations secured hereby and accrued interest thereon and
insurance premiums, liens, assessments, taxes and charges, including utility
charges, if any, with accrued interest thereon, and all expenses of the sale
and of all proceedings in connection therewith, including reasonable actual
attorney's fees, if incurred, after advertising the time, place and terms of
sale once a week for four (4) weeks immediately preceding such sale (but
without regard to the number of days) in a newspaper in which Sheriff's sales
are advertised in said county or counties. At any such public sale, Agent may
execute and deliver to the purchaser a conveyance of the Georgia Premises or
any part of the Georgia Premises, with full warranties of title and to this
end, Borrower hereby constitutes and appoints Agent the agent and
attorney-in-fact of Borrower to make such sale and conveyance, and thereby to
divest Borrower of all right, title or equity that Borrower may have in and to
the Georgia Premises and to vest the same in the purchaser or purchasers at
such sale or sales, and all the acts and doings of said agent and
attorney-in-fact are hereby ratified and confirmed and any recitals in said
conveyance or conveyances as to facts essential to a valid sale shall be
binding upon Borrower. Prior to any such sale, the Agent may, in its sole
discretion, elect to exercise all rights of the Borrower under the Georgia
Lease, and notify the Georgia Lessor of its intent to do so, whereupon the
Georgia Lessor hereby is authorized and directed by the Borrower to accept
performance from the Agent.
4.6.3 With respect to the North Carolina Premises, this
subsection shall apply. Should Agent elect to foreclose by exercise of the
power of sale herein contained, Agent shall notify Trustee and shall deposit
with Trustee copies of this Instrument, the Notes and such receipts and
evidence of expenditures made and secured hereby as Trustee may require.
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Upon application of Agent, it shall be lawful for and the
duty of Trustee, and Trustee hereby is authorized and empowered to expose to
sale and to sell the North Carolina Premises (either as a whole or in separate
parcels and in such order as the Trustee shall determine) at public auction for
cash, after having first complied with all applicable requirements of North
Carolina law with respect to the exercise of powers of sale contained in deeds
of trust and upon such sale, Trustee shall convey title to the purchaser in fee
simple. After retaining from the proceeds all expenses incurred by Trustee,
including, without limitation, a Trustee's commission not exceeding five
percent of the bid and reasonable actual attorneys' fees for legal services
actually performed, Trustee shall apply the residue of the proceeds first to
the payment of all sums expended by Agent under the terms of this Instrument;
second, to the payment of the Secured Obligations and interest thereof secured
hereby; and the balance, if any, shall be paid to Borrower. Borrower agrees
that in the event of sale hereunder, Lender shall have the right to bid.
Trustee may require the successful bidder at any sale to deposit immediately
with Trustee cash or certified check in an amount not to exceed ten percent
(10%) of the bid, provided notice of such requirement is contained in the
advertisement of the sale. The bid may be rejected if the deposit is not
immediately made and thereupon the next highest bidder may be declared to be
the purchaser. Such deposit shall be refunded in case a resale is had;
otherwise, it shall be applied to the purchase price. If the Plant, Equipment
and Personal Property is sold hereunder, it need not be at the place of sale;
the published notice, however, shall state the time and place where such Plant,
Equipment and Personal Property may be inspected prior to sale. If a
foreclosure proceeding is commenced by the Trustee but not completed, the
Trustee's fee will be 2% of the fair market value of the North Carolina
Premises involved in such foreclosure if the termination occurs prior to the
first public auction sale and not more than 3% of the fair market value of the
North Carolina Premises involved in such foreclosure if the termination occurs
after the first public auction sale.
4.6.4 With respect to the South Carolina Premises, this
subsection shall apply. Agent, at its option, may (a) commence proceedings to
collect sums due hereunder, foreclose this Instrument and sell the real
property portion of the South Carolina Premises: At the foreclosure, Agent or
any Bank shall be entitled to bid and to purchase the real property portion of
the South Carolina Premises and shall be entitled to apply the Secured
Obligations, or any portion thereof, in payment for the real property portion
of the South Carolina Premises; (b) collect and receive all the rents, issues,
profits and revenues from the South Carolina Premises, including those past due
as well as those accruing thereafter; (c) with respect to the personalty that
is located on the South Carolina Premises, exercise all rights, remedies and
powers available to secured parties under the Uniform Commercial Code in force
in the State of South Carolina; and (d) exercise any other rights or remedies
provided in this Instrument or by law, all of which rights and remedies may be
exercised by Agent independently, simultaneously or consecutively in any order
without being deemed to have waived any right or remedy previously or not yet
exercised.
Borrower agrees that, to the extent permitted by law, legal
process in connection with the foreclosure of the debt secured hereby may be
made by written notice to Agent pursuant to Section 5.5. To the extent
permitted by law, such process shall be deemed to be personally served on
Borrower as of the date of actual receipt thereof by the U.S. Mail. Such method
of service of process shall be in addition to all other methods permitted by
law.
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4.6.5 Agent may, in addition to and not in abrogation of the
rights covered under this Section 4.6, either with or without entry or taking
possession as herein provided or otherwise, proceed by a suit or suits in law
or in equity or by any other appropriate proceeding or remedy granted or
conferred by applicable statutes (i) to enforce payment of the Secured
Obligations or the performance of any term, covenant, condition or agreement of
this Instrument or any other right, and (ii) to pursue any other remedy
available to it, all as Agent shall determine most effectual for such purposes.
4.7 Purchase by Agent or any Bank. Upon any foreclosure sale,
either judicially or by private power of sale, Agent, for the benefit of the
Banks ratably, or, to the extent permitted by applicable law, any Bank may bid
for and purchase the Premises and shall be entitled to apply all or any part of
the Secured Obligations as a credit to the purchase price.
4.8 Application of Proceeds of Sale. Except as in hereinabove
expressly set forth, in the event of a foreclosure sale of the Premises, either
judicially or by private power of sale, the proceeds of said sale shall be
applied, unless applicable statutes shall specify otherwise, first, to the
expenses of such sale and of all proceedings in connection therewith and the
reasonable actual expenses of foreclosing this Instrument, including reasonable
actual attorneys' and trustee's fees, then to payment of the Secured
Obligations in such order as the Required Banks shall elect, and finally the
remainder, if any, shall be paid as required by law, or in the absence of any
provision therefor in the law, shall be paid to the parties entitled thereto;
provided, however that as to such remainder, Agent shall not be bound by any
inheritance, devise, conveyance, assignment or lien of or upon Borrower's
equity, without actual notice thereof prior to distribution.
4.9 Borrower as Tenant Holding Over. In the event of any such
foreclosure sale by Agent or Trustee, as the case may be, Borrower shall be
deemed a tenant holding over and shall forthwith deliver possession to the
purchaser or purchasers at such sale or be summarily dispossessed according to
provisions of law applicable to tenants holding over.
4.10 Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws. Borrower agrees to the full extent permitted by law, that in
case of a Default on the part of Borrower hereunder, neither Borrower nor
anyone claiming through or under it shall or will set up, claim or seek to take
advantage of any appraisement, valuation, stay, extension, homestead,
exemption, redemption or moratorium laws, statutory or otherwise now or
hereafter in force, in order to prevent or hinder the enforcement or
foreclosure of this Instrument, or the absolute sale of the Premises, or the
final and absolute putting into possession thereof, immediately after such
sale, of the purchasers thereat, and Borrower, for itself and all who may at
any time claim through or under it, hereby waives to the full extent that it
may lawfully so do, the benefit of all such laws, and any and all right to have
the assets comprised in the security intended to be created hereby marshalled
upon any foreclosure of the lien hereof, provided, however, that nothing herein
shall constitute a waiver of Official Code of Georgia Annotated Section
44-14-161 or 45 O.S. 1981 ss. 18 or any other provision requiring a valuation
of property sold at a foreclosure sale as a condition to the granting of a
deficiency judgment.
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4.11 Leases. Agent, at its option, is authorized to foreclose or
direct the Trustee to foreclose this Instrument subject to the rights of any
tenants of the Premises, and the failure to make any such tenants parties to
any such foreclosure proceedings and to foreclose their rights will not be, nor
be asserted to be by Borrower, a defense to any proceedings instituted by Agent
to collect the Secured Obligations secured hereby.
4.12 Discontinuance of Proceedings and Restoration of the Parties.
In case Agent shall have proceeded, or shall have instructed the Trustee to
proceed, to enforce any right, power or remedy under this Instrument by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, then and in every such case Borrower
and Agent shall be restored to their former positions and rights hereunder, and
all rights, powers and remedies of Agent and the Trustee shall continue as if
no such proceeding had been taken.
4.13 Remedies Cumulative. No right, power or remedy conferred upon
or reserved to Agent by this Instrument is intended to be exclusive of any
other right, power or remedy or exclusive of any other right, power or remedy
conferred by statute, but each and every such right, power and remedy shall be
cumulative and concurrent and shall be in addition to any other right, power
and remedy given hereunder or now or hereafter existing at law or in equity or
by statute.
4.14 Waiver.
4.14.1 No delay or omission of Agent to exercise any right,
power or remedy accruing upon any default or Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to be a waiver of
any such default, or acquiescence therein; and every right, power and remedy
given by this Instrument to Agent or the Trustee may be exercised from time to
time and as often as may be deemed expedient by Agent. No consent or waiver,
expressed or implied, by Agent or Banks to or of any breach or default by
Borrower in the performance of the obligations hereunder or any Event of
Default shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance of the same or any other obligations
of Borrower hereunder or any Event of Default. Failure on the part of Agent or
Banks to complain of any act or failure to act or to declare an Event of
Default, irrespective of how long such failure continues, shall not constitute
a waiver by Agent or Banks of their rights hereunder or impair any rights,
powers or remedies consequent on any breach or default by Borrower. Agent or
Banks may, at any time, or from time to time, renew or extend this Instrument,
or alter or modify the same in any way, or waive any of the terms, covenants or
conditions hereof in whole or in part, and may release any portion of the
Premises or any other security, and grant such extensions and indulgences in
relation to the Secured Obligations as Agent may determine without the consent
of any junior lienor or encumbrancer and without any obligation to give notice
of any kind thereto and without in any manner affecting the priority of the
lien hereof on any part of the Premises.
4.14.2 If Agent or Banks, as applicable, (i) grant
forbearance or an extension of time for the payment or satisfaction of the
Secured Obligations; (ii) take other or additional security for the payment of
the Secured Obligations; (iii) waive or do not exercise any right granted
herein or in any of the Secured Obligations; (iv) release any part of the
Premises
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from the lien of this Instrument or otherwise changes any of the terms,
covenants, conditions or agreements of any of the Secured Obligations; (v)
consent to the filing of any map, plat or replat affecting the Premises; (vi)
consent to the granting of any easement or other right affecting the Premises;
or (vii) make or consent to any agreement subordinating the lien hereof, any
such act or omission shall not release, discharge, modify, change or affect the
original liability under any of the Secured Obligations or any other obligation
of Borrower or any subsequent purchaser of the Premises or any part thereof, or
any maker, co-signer, endorser, surety or guarantor; nor shall any such act or
omission preclude Agent from exercising any right, power or privilege herein
granted or intended to be granted in the event of any default then made or of
any subsequent default; nor, except as otherwise expressly provided in an
instrument or instruments executed by Agent (and the Banks, if required) shall
the lien of this Instrument be altered thereby. In the event of the sale or
transfer by operation of law or otherwise of all or any part of the Premises,
Agent, without notice, is hereby authorized and empowered to deal with any such
vendee or transferee with reference to the Premises or the Secured Obligations,
or with reference to any of the terms, covenants, conditions or agreements
hereof, as fully and to the same extent as it might deal with the original
parties hereto and without in any way releasing or discharging any liabilities,
obligations or undertakings.
4.15 Suits to Protect the Premises. Agent shall have power to
institute and maintain such suits and proceedings as it may reasonably deem
expedient (a) to prevent any impairment of the Premises by any acts which may
be unlawful or any violation of this Instrument, (b) to preserve or protect its
interest and those of the Trustee, as applicable, in the Premises and in the
rents, issues, profits and revenues arising therefrom, and (c) to restrain the
enforcement of or compliance with any legislation or other governmental
enactment, rule or order that Agent, in its reasonable judgment, believes to be
unconstitutional or otherwise invalid, if, and only to the extent, the
enforcement of or compliance with such enactment, rule or order would impair
the security hereunder or be prejudicial to the interest of Agent, hereunder or
under the other Transaction Documents.
4.16 Agent May File Proofs of Claim. In the case of any
receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition or other proceedings affecting Borrower, its creditors or its
property, Agent, to the extent permitted by law, shall be entitled to file such
proofs of claim and other documents as may be necessary or advisable in order
to have the claims of Agent allowed in such proceedings for the entire amount
due and payable by Borrower under this Instrument at the date of the
institution of such proceedings and for any additional amount which may become
due and payable by Borrower hereunder after such date.
4.17 Multiple Sales. To the extent permitted by law, in any
judicial proceedings to foreclose this Instrument or nonjudicial exercise of
power of sale or any other private or public sale, the Premises, at the option
of Agent or the Trustee, as applicable, may be sold in whole or in part and in
the event of such multiple sales, the Secured Obligations shall not be merged
into any foreclosure sale or foreclosure judgment so long as there shall remain
outstanding any amount secured by this Instrument. Such a foreclosure judgment
in any state in which the Land is located shall not operate, in and of itself,
as a release of the other property hereby secured or a waiver of Agent's right
to elect any other remedy available to it hereunder.
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ARTICLE V.
MISCELLANEOUS PROVISIONS
5.1 Successors and Assigns. This Instrument shall inure to the
benefit of and be binding upon Borrower, Agent and Trustee or their respective
legal representatives, permitted successors and assigns. Whenever a reference
is made in this Instrument to Borrower, Agent or Trustee such reference shall
be deemed to include a reference to the legal representatives, permitted
successors and assigns of Borrower, Agent or Trustee.
5.2 Terminology. All personal pronouns used in this Instrument
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural, and vice versa. Titles
and Articles are for convenience only and neither limit nor amplify the
provisions of this Instrument itself, and all references herein to Articles,
Sections or Subsections shall refer to the corresponding Articles, Sections or
Subsections of this Instrument unless specific reference is made to such
Articles, Sections or Subsections of another document or instrument.
5.3 Severability. If any provision of this Instrument or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Instrument and the
application of such provisions to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
5.4 Applicable Law. This Instrument and the obligations created
and secured hereby shall be interpreted, construed and enforced according to
the laws of the State of Georgia; except that, only for purposes of determining
(i) matters pertaining to real property, including the sufficiency of the
conveyance, warranties of title, perfection and the effect of non-perfection
and the foreclosure proceedings and remedies available to Agent and Trustee,
and (ii) perfection and the effect of non-perfection of personal property, the
provisions of the Instrument shall be construed in accordance with the law of
the state in which the Tract in question is located.
5.5 Notices. All notices, requests and demands to or upon the
respective parties hereto, and all responses thereto, shall be in writing and
shall be deemed to have been properly given or served when personally delivered
or deposited in the mail, certified mail, return receipt requested, postage
prepaid, or delivered to a nationally recognized overnight courier service,
with all delivery charges paid or provided for, addressed to the addresses set
forth below. All notices, requests and demands, and all responses thereto,
shall be effective upon receipt thereof. Rejection or other refusal to accept
or the inability to deliver because of changed address of which no notice was
given shall be deemed to be receipt of the notice, demand or request sent. By
giving at least 30 days written notice hereof, Borrower, Agent or Trustee shall
have the right from time to time and at any time during the term of this
Agreement to change their respective addresses and each shall have the right to
specify as its address any other address within the continental United States
of America. For the purpose of this Agreement, the following addresses apply:
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Borrower:
Avondale Mills, Inc.
506 South Broad Street
Monroe, Georgia 30655
Attn: Chairman and Chief Executive Officer
Agent:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street
Atlanta, Georgia 30303-1757
Attention: Commercial Group - GA212
Trustee:
-------------------------
-------------------------
-------------------------
5.6 Replacement of Documents. Upon receipt of evidence reasonably
satisfactory to Borrower or Agent of the loss, theft, destruction or mutilation
of any of the Transaction Documents and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably satisfactory to
Borrower or Agent or, in the case of any such mutilation, upon surrender and
cancellation of the appropriate document, the other party or parties will
execute and deliver, in lieu thereof, a replacement document or instrument
supplied by Borrower or Agent, identical in form and substance and dated as of
the date of the document being replaced and upon such execution and delivery of
such replacement document all references in this Instrument to the document
being replaced shall be deemed to refer to such replacement document.
5.7 Time of the Essence. Time is of the essence with respect to
each and every covenant, agreement and obligation of Borrower under each of the
Transaction Documents and any and all other instruments now or hereafter
evidencing, securing or otherwise relating to the Secured Obligations.
5.8 Counterparts. This Instrument may be executed in any number
of counterparts, each of which is deemed to be an original document, all of
which taken together shall constitute one and the same Instrument.
5.9 No Obligation to Marshal Assets. Notice is hereby given that
no holder of any mortgage, deed of trust, deed to secure debt, lien, security
interest or other encumbrance affecting all or any portion of the Premises,
which is inferior to the lien, security interest and security title of the
Instrument shall have the right or privilege to require Agent to marshal
assets.
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5.10 Consent of Agent. Agent, by its acceptance of this
Instrument, agrees to be bound by the terms and conditions of this Instrument.
5.11 Appointment of Successor Trustee. Agent shall at any time
have the irrevocable right to remove Trustee with respect to the North Carolina
Premises herein named without notice or cause and to appoint a successor
thereto by an instrument in writing, duly acknowledged, in such form as to
entitle such written instrument to be recorded in North Carolina, and in the
event of the death or resignation of Trustee with respect to the North Carolina
Premises named herein, Agent shall have the right to appoint a successor
thereto by such written instrument, and any Trustee with respect to the North
Carolina Premises so appointed shall be vested with the title to the North
Carolina premises and shall possess all the powers, duties and obligations
herein conferred on Trustee with respect to the North Carolina Premises in the
same manner and to the same extent as though such were named herein as Trustee
with respect to the North Carolina Premises.
5.12 Trustee's Powers. At any time, or from time to time, without
liability therefor and without notice, upon written request of Agent and
presentation of copies of this instrument and the Notes secured hereby for
endorsement, and without affecting the personal liability of any person for
payment of the Secured Obligations or the effect of this Instrument upon the
remainder of said Premises, Trustee shall (i) reconvey any part of said
Premises, (ii) consent in writing to the making of any map or plat thereof,
(iii) join in granting any easement therein, or (iv) joint in any extension
agreement or any agreement subordinating the lien or charge hereof. The Trustee
shall not be liable for any error of judgment or act done by the Trustee, or be
otherwise responsible or accountable under any circumstances whatsoever. The
Trustee shall not be personally liable in case of entry by him/it or anyone
acting by virtue of the powers herein granted him/it upon the Premises for
debts contracted or liability or damages incurred in the management or
operation of the Premises. The Trustee shall have the right to rely on any
instrument, document or signature authorizing or supporting any action taken or
proposed to be genuine. The Trustee shall be entitled to reimbursement for
expenses incurred by him/it in the performance of his/its duties hereunder. The
Borrower will on demand reimburse the Trustee for and save and hold him/it
harmless from and against any and all loss, cost, liability, damage and expense
whatsoever incurred by him/it in the performance of his/its duties. Prior to
undertaking any action hereunder which shall obligate the Trustee to incur any
obligation or expense, the Trustee shall first be entitled to be indemnified to
his/its reasonable satisfaction against all such costs and expense.
5.13 Agent's Powers. Without affecting the liability of any other
person liable for the payment of any obligation herein mentioned, and without
affecting the lien or charge of this Instrument upon any portion of the
Premises not then or theretofore released as security for the full amount of
all unpaid obligations, Agent (and the Banks) may, from time to time and
without notice (i) release any person so liable, (ii) extend the maturity or
alter any of the terms of any such obligation, (iii) grant other indulgences,
(iv) cause to be released or reconveyed at any time at Agent's option, any
parcel, portion or all of the Premises, (v) take or release any other or
additional security for any obligation herein mentioned, or (vi) make
compositions or other arrangements with debtors in relation thereto.
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5.14 Acceptance by Trustee. Trustee accepts this Trust when this
Instrument, duly executed and acknowledged, is made of public record as
provided by law.
5.15 No Liability or Obligation on Agent. Nothing in this
Instrument shall be construed to impose any obligation upon Agent to expend any
money or to take any other discretionary act herein permitted, and Agent shall
not have any liability or obligation for any delay or failure to take any
discretionary act in the absence of gross negligence or willful misconduct by
Agent.
5.16 Intercreditor Agreement. Notwithstanding any term or
provision hereof to the contrary, as to the SunTrust Collateral Plants, all
rights, powers and remedies hereunder are and shall be subject in all respects
to and shall be governed by the terms and provisions of the Intercreditor
Agreement.
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IN WITNESS WHEREOF, Borrower has executed this instrument under seal,
as of the day and year first above written.
Signed, sealed and delivered "BORROWER"
in the presence of: AVONDALE MILLS, INC.
----------------------------------- By:
Witness --------------------------------
Name:
Title:
----------------------------------- Attest:
Witness ----------------------------
Name:
Title:
[CORPORATE SEAL]
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STATE OF GEORGIA )
)
COUNTY OF FULTON )
ACKNOWLEDGMENTS
Before me this _____ day of ____________________ , 1996 a Notary
Public in and for Georgia and a resident of ___________________ County, Georgia
personally appeared ________________ residing in ________ County, Georgia and
_________________ residing in _____________ and known to me to be the persons
described in and who executed the foregoing Instrument as (and acknowledged to
me that they were) ______________ and ____________, respectively, of AVONDALE
MILLS, INC., an Alabama corporation, and acknowledged before me that they,
after being informed of the contents and for the purpose and consideration
therein expressed, executed the same as such officers and affixed the corporate
seal in the name of and on behalf of said corporation by authority of its board
of directors and said _____________ and ______________ acknowledged said
Instrument to be the free act and deed of said corporation.
WITNESS my hand and official seal in the County and State aforesaid
this _______ day of ___________, ___________, County and State aforesaid.
--------------------------------------
Notary Public
Notarization Date: ___________, 19____
My Commission expires:________________
[NOTARIAL SEAL]
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THIS INSTRUMENT PREPARED BY CHRISTOPHER L. CARSON, ATTORNEY AT LAW, OF
JONES, DAY, REAVIS & POGUE, 3500 ONE PEACHTREE CENTER, 303 PEACHTREE STREET,
N.E., ATLANTA, GEORGIA 30308-3242
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ACKNOWLEDGMENT FOR NORTH CAROLINA
STATE OF GEORGIA )
COUNTY OF FULTON )
I ____________________, a Notary Public of __________ County, State of
Georgia, certify that _______________________ personally came before me this
day and acknowledged that he/she is ___________ Secretary of AVONDALE MILLS,
INC., an Alabama corporation, and that, by authority duly given and as the act
of the corporation, the foregoing instrument was signed in its name by its
__________ President, sealed with its corporate seal, and attested by
himself/herself as its _______ Secretary.
Witness my hand and official seal, this _____ day of __________, 19__.
My commission expires:
-----------------------------------
Notary Public
_____________, 19__.
[Official Seal]
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ALABAMA FORM OF ACKNOWLEDGMENT
(STATE OF ALABAMA )
(__________ COUNTY )
I, the undersigned, a Notary Public in and for said State, hereby
certify that ______________________________, whose name as
______________________________ of Avondale Mills, Inc., an Alabama corporation,
is signed to the foregoing instrument, and who is known to me, acknowledged
before me on this day that, being informed of the contents of the instrument,
he as such officer, and with full authority, executed the same voluntarily for
and as the act of said corporation.
Given under my hand and seal, this _____ day of __________, 1996.
-----------------------------------
Notary Public
My commission expires:
-------------
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STATE OF GEORGIA )
) PROBATE
COUNTY OF FULTON )
Before me, the undersigned notary public, personally appeared the
undersigned witness, who being duly sworn, deposed and said that s/he saw
Avondale Mills, Inc. by ______________________________, its
______________________________ sign, seal and deliver the foregoing Mortgage
and Security Agreement and Assignment of Rents and that s/he together with the
other witness whose signature appears above witnessed the execution thereof.
--------------------------------------
Witness
SWORN TO and subscribed before
me this _____ day of April, 1996
(SEAL)
--------------------------------------------
Notary Public for Georgia
My Commission expires:
---------------------
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STATE OF GEORGIA )
) SOUTH CAROLINA
COUNTY OF FULTON ) PROBATE
BEFORE ME, the undersigned notary public, personally appeared
______________________________, who being duly sworn, deposed and said that he
saw _________________________ the _______________________ of Avondale Mills,
Inc., an Alabama corporation, sign, seal and deliver the foregoing Master
Mortgage, Deed to Secure Debt, Deed of Trust, Leasehold Mortgage, Leasehold
Deed to Secure Debt, and Leasehold Deed of Trust, Uniform Commercial Code
Security Agreement and Assignment of Leases, Rents and Profits on behalf of
Avondale Mills, Inc., an Alabama corporation, and he together with
_______________________, witnessed the execution thereof.
-------------------------------------
SWORN TO and subscribed
before me this _____ day of
_____________________, 1996.
---------------------------------------
Notary Public
My Commission Expires:
-------------
[NOTARIAL SEAL]
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EXHIBIT "B"
PERMITTED ENCUMBRANCES
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EXHIBIT "C"
Description of "Debtor" and "Secured Party"
A. Debtor:
1. Name and Identity or Corporate Structure:
AVONDALE MILLS, INC., an Alabama corporation
2. a. The principal place of business and chief executive
office of Debtor in Alabama is located at 900
Avondale Avenue, Sylacauga, Alabama 35140.
b. The principal place of business and chief executive
office of Debtor in Georgia is located at 506 S.
Broad, Monroe, GA 30655.
3. Debtor has been using or operating under said name and
identity or corporate structure without change for the
following time period:
Not less than six years.
B. Secured Party: Wachovia Bank of Georgia, N.A., a national
banking association, in its capacity as
Agent for certain banks
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EXHIBIT I
AMENDED AND RESTATED PARENT GUARANTY
THIS AMENDED AND RESTATED PARENT GUARANTY (this "Guaranty")
is made as of the 29th day of April, 1996, by Avondale Incorporated, a Georgia
corporation (the "Parent") in favor of the Agent, for the ratable benefit of
the Banks, under the Credit Agreement referred to below;
WITNESSETH
WHEREAS, Avondale Mills, Inc., an Alabama corporation (the
"Borrower") and WACHOVIA BANK OF GEORGIA, N.A., as Agent (the "Agent"), and The
First National Bank of Chicago, as Documentation Agent, and certain other Banks
from time to time party thereto have entered into a certain Amended and
Restated Credit Agreement dated as of April 29, 1996 (as it may be amended or
modified from time to time, the "Credit Agreement"), providing, subject to the
terms and conditions thereof, for extensions of credit to be made by the Banks
to the Borrower for the benefit of the Borrower and of the Parent;
WHEREAS, the Parent executed a Parent Guaranty dated as of
March 29, 1994, in connection with the Original Credit Agreement (the "Original
Parent Guaranty");
WHEREAS, it is a condition precedent to the Agent and the
Banks executing the Credit Agreement that the Parent execute and deliver this
Guaranty whereby the Parent shall guarantee the payment when due of all
principal, interest and other amounts that shall be at any time payable by the
Borrower under the Credit Agreement, the Notes and the other Principal
Documents; and
WHEREAS, in consideration of the financial and other support
that the Borrower has provided, and such financial and other support as the
Borrower may in the future provide, to Parent, and in order to induce the Banks
and the Agent to enter into the Credit Agreement, the Parent is willing to
guarantee the obligations of the Borrower under the Credit Agreement, the
Notes, and the other Principal Documents;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions. Terms defined in the Credit
Agreement and not otherwise defined herein have, as used herein, the respective
meanings provided for therein.
SECTION 2. Representations, Warranties and Covenants. The
Parent incorporates herein by reference as fully as if set forth herein all of
the representations and warranties of the Parent contained in Article IV of the
Credit Agreement (which representations and warranties shall be deemed to have
been renewed by the Parent upon each Borrowing under the Credit Agreement to
the same extent and with the same effect as provided therein with
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respect to the renewal thereof by the Borrower) and all covenants of the Parent
contained in Article V of the Credit Agreement. In the event the Parent issues
any Capital Stock after the Closing Date, the Parent will make available to the
Borrower, by loan, equity contribution or other means, an amount equal to 100%
of the Net Cash Proceeds thereof, in order that the Borrower can comply, on a
timely basis, with the provisions of Section 2.08(b)(ii) of the Credit
Agreement.
SECTION 3. The Guaranty. The Parent hereby unconditionally
guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest on each Note issued
by the Borrower pursuant to the Credit Agreement, and the full and punctual
payment of all other amounts payable by the Borrower under the Credit Agreement
and the other Principal Documents, including principal, interest, fees, costs
and indemnification amounts, and any extensions and renewals thereof in whole
or in part, and any other amounts constituting Obligations as defined in the
Credit Agreement (all of the foregoing obligations being referred to
collectively as the "Guaranteed Obligations"). Upon failure by the Borrower to
pay punctually any such amount, the Parent agrees that it shall forthwith on
demand pay the amount not so paid at the place and in the manner specified in
the Credit Agreement, the relevant Note or the relevant Principal Document, as
the case may be. This Guaranty is an amendment to and restatement of, and
supersedes, the Original Parent Guaranty.
SECTION 4. Guaranty Unconditional. The obligations of the
Parent hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement,
compromise, waiver or release in respect of any obligation of the
Borrower under the Credit Agreement, any Note, or any other Principal
Document, by operation of law or otherwise or any obligation of any
other guarantor of any of the Obligations;
(ii) any modification or amendment of or
supplement to the Credit Agreement, any Note, or any other Principal
Document;
(iii) any release, nonperfection or invalidity of
any direct or indirect security for any obligation of the Borrower
under the Credit Agreement, any Note, any Principal Document, or any
obligations of any other guarantor of any of the Obligations;
(iv) any change in the corporate existence,
structure or ownership of the Borrower or any other guarantor of any
of the Guaranteed Obligations, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower, or
any other guarantor of the Guaranteed Obligations, or its assets or
any resulting release or discharge of any obligation of the Borrower,
or any other guarantor of any of the Guaranteed Obligations;
(v) the existence of any claim, setoff or other
rights which the Parent may have at any time against the Borrower, any
other guarantor of any of the Guaranteed Obligations, the Agent, any
Bank or any other Person, whether in connection herewith or
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any unrelated transactions, provided that nothing herein shall prevent
the assertion of any such claim by separate suit or compulsory
counterclaim;
(vi) any invalidity or unenforceability relating
to or against the Borrower, or any other guarantor of any of the
Guaranteed Obligations, for any reason related to the Credit
Agreement, any other Principal Document, or any other guaranty, or any
provision of applicable law or regulation purporting to prohibit the
payment by the Borrower, or any other guarantor of the Guaranteed
Obligations, of the principal of or interest on any Note or any other
amount payable by the Borrower under the Credit Agreement, the Notes,
or any other Principal Document; or
(vii) any other act or omission to act or delay
of any kind by the Borrower, any other guarantor of the Guaranteed
Obligations, the Agent, any Bank or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the
Guarantor's obligations hereunder.
SECTION 5. Discharge Only Upon Payment In Full; Reinstatement
In Certain Circumstances. The Parent's obligations hereunder shall remain in
full force and effect until all Guaranteed Obligations shall have been paid in
full and the Commitments under the Credit Agreement shall have terminated or
expired. If at any time any payment of the principal of or interest on any Note
or any other amount payable by the Borrower under the Credit Agreement or any
other Principal Document is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
the Parent's obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
SECTION 6. Waiver of Notice by the Parent. The Parent
irrevocably waives acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by law, any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against the
Borrower, any other guarantor of the Guaranteed Obligations, or any other
Person.
SECTION 7. Other Waivers by the Parent. The Parent hereby
expressly waives, renounces, and agrees not to assert, any right, claim or
cause of action, including, without limitation, a claim for reimbursement,
subrogation, indemnification or otherwise, against the Borrower arising out of
or by reason of this Guaranty or the obligations of the Parent hereunder,
including, without limitation, the payment or securing or purchasing of any of
the Guaranteed Obligations by the Parent. The waiver, renunciation and
agreement contained in the immediately preceding sentence is for the benefit of
the Agent and the Banks and also for the benefit of the Borrower who may assert
the benefits thereof as a third-party beneficiary, and the Parent may be
released from such waiver, renunciation and agreement only by the execution and
delivery, by the Agent, the Required Banks and the Borrower, of an instrument
expressly releasing the Parent therefrom.
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SECTION 8. Stay of Acceleration. If acceleration of the time
for payment of any amount payable by the Borrower under the Credit Agreement,
any Note or any other Principal Document is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of the Credit Agreement, any Note or any other
Principal Document shall nonetheless be payable by the Parent hereunder
forthwith on demand by the Agent made at the request of the Required Banks.
SECTION 9. Notices. All notices, requests and other
communications to any party hereunder shall be given or made by telecopier or
other writing and telecopied or mailed or delivered to the intended recipient at
its address or telecopier number set forth on the signature pages hereof or such
other address or telecopy number as such party may hereafter specify for such
purpose by notice to the Agent in accordance with the provisions of Section 9.01
of the Credit Agreement. Except as otherwise provided in this Guaranty, all such
communications shall be deemed to have been duly given when transmitted by
telecopier, or personally delivered or, in the case of a mailed notice, 3
Domestic Business Days after such communication is deposited in the mails with
first class postage prepaid, in each case given or addressed as aforesaid.
SECTION 10. No Waivers. No failure or delay by the Agent or
any Banks in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided in this Guaranty, the Credit
Agreement, the Notes, and the other Principal Documents shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 11. Successors and Assigns. This Guaranty is for the
benefit of the Agent and the Banks and their respective successors and assigns
and in the event of an assignment of any amounts payable under the Credit
Agreement, the Notes, or the other Principal Documents, the rights hereunder, to
the extent applicable to the indebtedness so assigned, may be transferred with
such indebtedness. This Guaranty may not be assigned by the Parent without the
prior written consent of the Agent and the Required Banks, and shall be binding
upon the Parent and its successors and permitted assigns.
SECTION 12. Changes in Writing. Neither this Guaranty nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by the Parent and the Agent with the consent of the
Required Banks.
SECTION 13. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER
OF JURY TRIAL. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF GEORGIA. EACH OF THE PARENT AND THE AGENT HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF GEORGIA AND OF ANY GEORGIA STATE COURT SITTING IN
ATLANTA, GEORGIA AND FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE PARENT
IRREVOCABLY WAIVES, TO THE
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FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH ANY OF THEM MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARENT AND THE AGENT HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 14. Taxes, etc. All payments required to be made by
the Parent hereunder shall be made without setoff or counterclaim and free and
clear of and without deduction or withholding for or on account of, any present
or future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by any government or any political or taxing authority to the same
extent and with the same effect as provided in Section 2.11(c) of the Credit
Agreement with respect to payments made by the Borrower.
IN WITNESS WHEREOF, the Parent has caused this Guaranty to be
duly executed by its authorized officer as of the date first above written.
AVONDALE INCORPORATED
By:
--------------------------------------------
Title:
Avondale Incorporated
506 South Broad Street
Monroe, Georgia 30655
Attention: Chairman and
Chief Executive Officer
Telecopier number: 770-267-2543
Telephone number: 770-267-2226
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Exhibit J
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement") is made
and entered into as of April 29, 1996 by and between AVONDALE MILLS, INC. (the
"Borrower") and WACHOVIA BANK OF GEORGIA, N.A. as agent for the Banks parties to
the "Credit Agreement" (as hereinafter defined) (the "Agent")
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to that certain Amended and Restated Credit
Agreement, dated as of even date herewith, among Borrower, the Agent, The First
National Bank of Chicago, as Documentation Agent, and the Banks parties thereto
(as amended or modified from time to time, the "Credit Agreement"), the Borrower
is or may hereafter become indebted to the Banks and the Agent; and
WHEREAS, the Borrower executed and delivered a Security Agreement dated
as of March 29, 1994 (the "Original Security Agreement" pursuant to a Credit
Agreement by and among the Borrower, the Agent and the Banks party thereto (the
"Original Credit Agreement"); and
WHEREAS, in order to secure said indebtedness and to induce the Banks
and the Agent to execute and enter into the Credit Agreement, the Borrower has
agreed to execute and deliver this Agreement, granting a security interest in,
and lien upon, the Collateral to the Agent for the benefit of the Banks, and
continuing in effect the security interest in, and lien upon, the Collateral
granted to the Agent pursuant to the Original Security Agreement; and
WHEREAS, it is the intent of the parties that this Agreement amend,
restate and supersede the Original Security Agreement, and continue in effect
the security interests and liens granted thereto without lapse or loss of
perfection, and that all UCC-1's filed in connection with the Original Security
Agreement continue to perfect the security interests and liens in the Collateral
granted and continued in effect pursuant hereto;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged and Borrower and the Agent hereby covenant and agree as
follows:
1. DEFINITIONS. Unless otherwise defined herein, capitalized
terms used herein have the meanings set forth in the Credit Agreement. In
addition, the following terms have the meanings set forth below, unless the
context requires otherwise:
"Accounts Receivable Collateral" means all rights of
the Borrower to payment for goods sold or leased, or to be sold or to be leased,
or for services rendered or to be rendered, howsoever evidenced or incurred,
including, without limitation, all accounts, instruments, chattel paper and
general intangibles, all returned or repossessed goods and all
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books, records, computer tapes, programs and ledger books arising therefrom or
relating thereto, whether now owned or hereafter acquired or arising.
"Account Debtor" means the Person who is obligated on
any of the Accounts Receivable Collateral or otherwise is obligated as a
purchaser or lessee of any of the Inventory Collateral.
"Act" means the Uniform Commercial Code - Secured
Transactions of Georgia (O.C.G.A. Art. 11-9), and any act that may be
substituted therefor, as from time to time amended.
"Agreement" means this Agreement, together with all
exhibits, riders, supplements, addenda and additions now or hereafter attached
hereto or made a part hereof, and all amendments hereof.
"Collateral" means and includes all of the property
described in Paragraph 4 hereof, including all property of such type consisting
of the Graniteville Assets, but subject to the provisions of Section 11.8 as to
Receivables Program Assets.
"Collateral Locations" means those locations set
forth on Exhibit "A" attached hereto and by this reference made a part hereof.
"Credit Agreement" has the meaning set forth in the
recitals hereto.
"Documentary Collateral" means all chattel paper,
instruments, documents or notes (excluding any of the foregoing arising out of
the sale or lease of goods or the furnishing of services) and all payments
thereunder and instruments and other property from time to time delivered in
respect thereof or in exchange therefor, and all bills of sale, bills of lading,
warehouse receipts, and other documents of title, whether now owned or hereafter
acquired or arising.
"Equipment Collateral" means all equipment of the
Borrower, or in which it has rights, whether now owned or hereafter acquired,
wherever located, including, without limitation, all machinery, furniture,
furnishings, leasehold improvements, motor vehicles, forklifts, rolling stock,
dies and tools used or useful in the Borrower's business but excluding, in any
event, (i) all fixtures, and (ii) all machinery and equipment listed on Exhibit
"B" attached hereto and by this reference made a part hereof.
"Intangibles Collateral" means all general
intangibles of the Borrower (excluding any general intangibles evidencing rights
of the Borrower to payment for goods sold or leased, or to be sold or leased, or
for services rendered or to be rendered), whether now existing or hereafter
acquired or arising, including, without limitation, all copyrights, royalties,
trademarks, trade names, tax refunds, rights to tax refunds, service marks,
patent and proprietary rights, blueprints, drawings, designs, trade secrets,
plans, diagrams, schematics and assembly and display materials relating thereto
and all customer lists.
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"Intercreditor Agreement" means the Amended and
Restated Intercreditor Agreement dated of even date herewith between the
Borrower, the Agent and SunTrust Bank, Atlanta, as amended or supplemented from
time to time.
"Inventory Collateral" means all inventory of the
Borrower, or in which it has rights, whether now owned or hereafter acquired,
wherever located, including, without limitation, all goods of the Borrower held
for sale or lease or furnished or to be furnished under contracts of service,
all goods held for display or demonstration, goods on lease or consignment,
returned and repossessed goods, all raw materials, work-in-process, finished
goods and supplies used or consumed in the Borrower's business, together with
all documents, documents of title, dock warrants, dock receipts, warehouse
receipts, bills of lading or orders for the delivery of all, or any portion, of
the foregoing.
"Permitted Liens" means the liens and encumbrances
pertaining to portions of the Collateral described on Exhibit "C" attached
hereto and by this reference made a part hereof.
In addition to and cumulative with such other
definitions and descriptions as herein may be provided therefor, the terms
"equipment", "inventory", "accounts", "general intangibles", "chattel paper",
"documents of title", "goods", "consumer goods" and "instruments", if and to the
extent used herein, shall have such meanings as may be respectively ascribed to
them in the Act as in existence on date hereof.
6. GRANT OF SECURITY INTEREST. As a general and continuing
collateral security for payment of the Obligations and the performance by
Borrower of all of the provisions of the Loan Documents, the Borrower hereby
grants to the Agent for the ratable benefit of the Banks a security interest in
and security title to all Collateral and the Borrower makes such further
agreements with the Agent in regard thereto as hereinafter set forth.
7. DESCRIPTION OF COLLATERAL.
The following described property, wherever located,
whether now existing or hereafter acquired or arising constitutes the Collateral
(subject to the provisions of Section 11.8):
(a) the Accounts Receivable Collateral;
(b) the Equipment Collateral;
(c) the Intangibles Collateral;
(d) the Inventory Collateral;
(e) the Documentary Collateral;
(f) the Purchase Money Note; and
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(g) all products and proceeds of any and all of
the foregoing, including, without limitation, insurance or condemnation
proceeds, all property received wholly or partially in trade or exchange for any
of the foregoing, and all rents, revenues, issues, profits and proceeds arising
from the sale, lease, license, encumbrance, collection or any other temporary or
permanent disposition of any of the foregoing or any interest therein.
8. REPRESENTATIONS AND WARRANTIES.
8.1 The Borrower is, or, with respect to Collateral
acquired after the date hereof, will be, the owner of the Collateral free and
clear from any Lien, except for the Permitted Liens. No financing statement
covering any of the Collateral is on file in any public office other than any
evidencing Permitted Liens.
8.2 Location. As of the date hereof, the tangible portion
of the Collateral is situated only at one or more Collateral Locations, other
than as permitted by Section 5.6.
8.3 Name. The name of the Borrower is as set forth on the
signature page hereof and the Borrower has not conducted any business under any
other name during the past 6 years.
8.4 Right to Assign. Borrower has the full right, power
and authority to make this assignment of the Collateral.
8.5 Delivery. Borrower has delivered the Purchase Money
Note and all other agreements, letters of credit, promissory notes, chattel
paper or anything else the physical possession of which is necessary in order
for Agent to perfect or preserve the priority of its Lien in the Collateral.
8.6 Purchaser of Collateral. Except for the acquisition
of assets from Walton Monroe Mills, Inc., Macfield Spinning, Inc. and
Graniteville Company, during the past 6 years, Borrower has not purchased any of
the Collateral in a bulk transfer or in a transaction which was outside the
ordinary course of the business of Borrower's seller.
9. GENERAL COVENANTS.
9.1 Liens. The Borrower shall keep the Collateral free
and clear of all Liens, except for the Permitted Liens
9.2 Casualty. The Borrower shall promptly notify the
Agent of any material loss of or damage to the Inventory Collateral or the
Equipment Collateral or any part thereof.
9.3 Use of Collateral. Until there occurs an Event of
Default the Borrower may, subject to the provisions of Paragraph 6 hereof, use
the Collateral in any lawful manner not inconsistent with this Agreement or with
the terms or conditions of any policy of insurance thereon.
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9.4 Disposition of Collateral. The Borrower may not sell,
lease, exchange or otherwise dispose of any of the Collateral except as
hereinafter specifically provided. Borrower may sell, lease, exchange or
otherwise dispose of any portion of the Inventory Collateral in the ordinary
course of business for cash or upon open account or on terms of payment
ordinarily extended to its customers. Upon the sale, exchange or other
disposition of the Inventory Collateral, the security interest created and
provided for herein shall continue in and attach to any proceeds thereof,
without break in continuity and without further formality or act, including,
without limitation, accounts, contract rights, shipping documents, documents of
title, bills of lading, warehouse receipts, dock warrants, dock receipts and
cash or non-cash proceeds, and in the event of any unauthorized sale, shall
continue in Inventory Collateral itself. Borrower may sell Equipment Collateral
pursuant and subject to the provisions of Sections 2.08(b)(i)(B) and 5.14 of the
Credit Agreement. In addition, Borrower may sell, exchange or otherwise dispose
of portions of the Equipment Collateral which are obsolete, worn-out or
unsuitable for continued use by Borrower if such Equipment Collateral is
replaced promptly upon its disposition with equipment constituting Equipment
Collateral having a market value equal or greater than the Equipment Collateral
so disposed of and in which Agent shall obtain and have a Lien pursuant hereto
of the same priority as in the Equipment Collateral so disposed of.
9.5 Insurance. The Borrower agrees that it will obtain
and maintain insurance on the Inventory Collateral and the Equipment Collateral
as required by Section 5.17 of the Credit Agreement, with loss payable to the
Agent as its interests may appear. Such insurance shall not be cancelable by the
Borrower, unless with the prior written consent of the Required Banks, or by the
Borrower's insurer, unless with at least 30 days advance written notice to the
Agent.
9.6 Location. The Borrower agrees not to locate the
Inventory Collateral or the Equipment Collateral (other than (i) Rolling Stock
and other goods which are covered by a certificate of title, as contemplated in
section 11-9-103(3)(a) of the Act and (ii) other goods which are mobile and
which are of a type normally used in more than one jurisdiction and are not
covered by a certificate of title, as contemplated in Section 11-9-103(3)(a) of
the Act) at any location other than a Collateral Location without providing
written notice to the Agent no later than 30 days after such relocation;
provided, however, that nothing contained herein shall be deemed to prohibit the
Borrower, without notice to or the consent of the Agent, from transferring
temporarily (for periods not to exceed 3 months in any event) Inventory
Collateral or Equipment Collateral from a Collateral Location to another
location at any time or from time to time hereafter for the limited purpose of
having work performed on such Inventory Collateral or Equipment Collateral, or
for temporary storage thereof or for shipment thereof to a Collateral Location,
if done in the ordinary course of the Borrower's business. In addition, to the
extent the Borrower should warehouse any of the Inventory Collateral at any time
hereafter at any location other than a Collateral Location, the Borrower
acknowledges and agrees that such warehousing may be conducted only by
warehousemen who have been pre-approved by the Agent and who, in any event,
shall issue non-negotiable warehouse receipts in the Agent's name to evidence
any such warehousing of goods constituting Inventory Collateral. If the Borrower
consigns any part of the Inventory Collateral, it will comply with Section 2-326
of the Uniform Commercial Code of any state where such Inventory Collateral is
located with respect thereto, by filing in the
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appropriate public office or offices UCC-1 financing statements showing the
Borrower as consignor and the Agent as assignee of consignor, and will furnish
copies thereof to the Agent.
9.7 The Borrower shall deliver to the Agent within 60
days after receiving written notice from the Agent directing it to do so, the
original title certificates to all of the Rolling Stock, together with duly
executed applications in the appropriate form for new certificates of title
thereto showing thereon the Lien of the Agent pursuant to the Security
Agreement.
10. SPECIAL PROVISIONS REGARDING RECEIVABLES AND INVENTORY. Each
item of the Accounts Receivable Collateral arises or will arise under a contract
between the Borrower and an Account Debtor, or from the bona fide sale or
delivery of goods to or performance of services for, an Account Debtor. The
Borrower will promptly notify the Agent of all returns, repossessions and
recoveries which are reasonably expected to result in losses to the Borrower in
excess of $500,000 in any month. From and after the occurrence of any Event of
Default and during the continuation thereof, (i) the Agent may collect, realize,
sell or otherwise deal with the Accounts Receivable Collateral or any and all
sums owing or which may become due upon any items of the Inventory Collateral or
any part thereof in such manner, upon such terms and conditions and at such time
or times as may seem to it advisable and without notice to the Borrower, and
(ii) the Borrower hereby irrevocably designates and appoints the Agent its true
and lawful attorney either in the name of the Agent or the name of the Borrower
to take such actions and any other actions as the Agent may deem necessary or
desirable in order to realize upon the Inventory Collateral and the Accounts
Receivable Collateral, including, without limitation, power to endorse in the
name of Borrower, any checks, drafts, notes, or other instruments received in
payment of or on account of the Inventory Collateral or the Accounts Receivable
Collateral. The Agent shall not be liable or accountable for any failure to
collect, realize, sell or obtain payment of the Accounts Receivable Collateral
or any and all sums owing or which may become due upon any items of the
Inventory Collateral or any part thereof and shall not be bound to institute
proceedings for the purpose of collecting, realizing, or obtaining payment of
the same or for the purpose of preserving any rights of the Agent, the Borrower
or any other Person in respect of the same. From and after the occurrence of any
Event of Default and during the continuation thereof, (i) all moneys collected
or received by the Borrower in respect of the Accounts Receivable Collateral or
any and all sums owing or which may become due upon any items of the Inventory
Collateral shall be received as trustee in trust for the Agent for the ratable
benefit of the Banks and shall be forthwith paid over to the Agent for the
ratable benefit of the Banks at the Agent's request, and (ii) all moneys
collected or received by the Agent in respect of the Accounts Receivable
Collateral or any and all sums owing or which may become due upon any items of
the Inventory Collateral or other Collateral may be applied to the Obligations
in the order which the Required Banks deem best or, in the sole discretion of
the Required Banks, may be released to the Borrower, all without prejudice to
the liability of the Borrower or the Agent's right to hold and realize upon this
security.
11. PRESERVATION. The Borrower will take all reasonably necessary
and appropriate measures to obtain, maintain, protect and preserve any material
Intangibles Collateral including, without limitation, registration thereof with
the appropriate state or federal governmental agency or department.
167
<PAGE> 173
12. REMEDIES. Upon the occurrence and during the existence of any
Event of Default, the Agent for the ratable benefit of the Banks shall have all
of the rights and remedies described in Sections 8.1 through 8.5 inclusive, and
it may exercise any one, more, or all of such remedies, in its sole discretion,
without thereby waiving any of the others, subject, however, to the provisions
of Section 11.7.
12.1 General Remedies of a Secured Party. The Agent shall
have all the rights and remedies of a "secured party" under the Act (regardless
of whether the Act has been enacted in the jurisdiction where the rights or
remedies are asserted, including, without limitation, the right to take
possession of any of the Collateral or the proceeds thereof by such means
(without breach of the peace) and through agents or otherwise as it may elect,
the right to sell, lease, or otherwise dispose of the Collateral or any portion
thereof, the right to apply the proceeds derived therefrom to any and all of the
Obligations secured thereby in such order as the Agent may elect, and, for this
purpose, the right to sign in the name of the Borrower any transfer, conveyance,
or instrument necessary in the premises. Any such disposition of the Collateral
may be in its then condition or following any commercially reasonable
preparation or processing thereof, by public or private proceedings, by one or
more contracts, as a unit or in parcels, at any time or place and on any terms,
so long as the same are commercially reasonable.
12.2 Notice of Disposition. The Agent shall give the
Borrower written notice of the time and place of any public sale of the
Collateral or the time after which any other intended disposition thereof is to
be made. The requirement of sending reasonable notice shall be met if such
notice is mailed postage prepaid or otherwise given to the undersigned at its
last address as shown on the Agent's records at least 10 days before such
disposition.
12.3 Receiver. In addition to the foregoing, the Agent, at
the direction of the Required Banks, may appoint any person to be a receiver
(which term shall include a receiver and manager) of the Collateral, including,
without limitation, any rents and profits thereof and may remove any receiver
and appoint another in its (his) stead, and such receiver so appointed shall
have power to take possession of the Collateral and to carry on or concur in
carrying on the business of the Borrower, and to dispose of or concur in the
disposition of the Collateral or any part thereof in the manner described
hereinabove. Any such receiver shall for all purposes be deemed to be the agent
of the Borrower. The Agent may from time to time fix the remuneration of such
receiver. The Agent and the Banks in appointing or refraining from appointment
of such receiver shall not incur any liability to the receiver, the Borrower or
otherwise.
12.4 Assemblage. In facilitation of the foregoing, the
Agent may require that the Borrower assemble and make available all of or any
portion of the Collateral at a location reasonably designated by the Agent, all
at the expense of the Borrower.
12.5 Application of Proceeds. All moneys from time to time
received by the Agent from the disposition of Collateral shall be applied by the
Agent for the benefit of the Banks in the following manner: first, in discharge
of all reasonable expenses of re-taking, holding, preserving, preparing for sale
or lease, selling, leasing, and the like of the Collateral including, without
limitation, fees and expenses of any receivers and attorneys, insurance
premiums, tax payments and the like; secondly, to all outstanding fees and other
expenses owing
168
<PAGE> 174
under the Credit Agreement or the other Loan Documents in such order as the
Required Banks shall elect; thirdly, ratably to accrued interest on the
Obligations; fourthly, ratably to the remaining balances of the Obligations then
outstanding; lastly, to the Borrower, any residue.
13. FURTHER ASSURANCES. The Borrower shall from time to time
forthwith on the Agent's reasonable request do, make and execute, and use
reasonable good faith efforts to cause to be done, made and executed, such
financing statements, certificates of title, landlord's and mortgagee's waivers,
estoppel certificates, further assignments, documents, acts, matters and things
as may be required by the Agent of or with respect to the Collateral or any part
thereof or as may be required to give effect to these presents, and the Borrower
hereby constitutes and appoints the Agent as the true and lawful attorney of the
undersigned irrevocably with full power of substitution to do, make, and execute
all such statements, assignments, documents, acts, matters, or things with the
right to use the name of the Borrower whenever and wherever it may be reasonably
deemed necessary or expedient.
14. DEALINGS. The Agent may grant extensions of time and other
indulgences, take and give up securities, accept compositions, grant releases
and discharges and otherwise deal with the Borrower, debtors of the Borrower,
sureties and others and with the Collateral and other securities as the Agent
may see fit without prejudice to the liability of the Borrower or the Agent's
right to hold and realize upon this security.
15. GENERAL.
15.1 Governing Laws. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Georgia.
15.2 Non-Exclusivity of Remedies. No remedy for the
enforcement of the rights of the Agent hereunder shall be exclusive of or
dependent on any other such remedy but any one or more of such remedies may from
time to time be exercised independently or in combination.
15.3 Waiver. Each and every right granted to the Agent
under this Agreement, under any other Loan Document or allowed to the Agent by
law or in equity, shall be cumulative and may be exercised from time to time by
the Agent in its sole discretion. No failure on the part of the Agent to
exercise, and no delay in exercising, any right shall operate as a waiver
thereof, nor shall any single or partial exercise by the Agent of any right
preclude any other or future exercise thereof or the exercise of any other
right.
15.4 Counterparts. This Agreement may be executed in two
or more counterparts, each of which when fully executed shall be an original,
and all of said counterparts taken together shall be deemed to constitute one
and the same agreement.
15.5 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the permitted successors and assigns of
the parties hereto.
15.6 Reimbursement. If any taxes, fees or other costs
shall be payable on account of the execution, issuance, delivery, or recording
of this Agreement or any financing
169
<PAGE> 175
statements, certificates, documents or instruments executed in connection
herewith, by reason of any existing or hereafter enacted federal, state, or
provincial statute, the Borrower will pay all such taxes, fees or other costs,
including any applicable interest and penalty, and will indemnify and hold the
Agent and the Banks harmless from and against liability in connection therewith.
15.7 SunTrust Intercreditor Agreement. Notwithstanding any
term or provision hereof to the contrary, as to the SunTrust Collateral Plants,
the rights, powers and remedies of the Agent hereunder are and shall be subject
to and shall be governed by the terms of the SunTrust Intercreditor Agreement.
15.8 Release of Receivable Program Assets. The security
interest of the Agent in the Accounts Receivable Collateral that is or becomes
Receivables Program Assets and any other Collateral that is or becomes
Receivables Program Assets, in each case other than Excluded Receivables Assets,
is subject to release under the circumstances, and subject to satisfaction of
the conditions, set forth in Section 9.18 of the Credit Agreement, and from and
after such release, the Collateral shall not include such Accounts Receivable
Collateral or such other Collateral and the provisions of this Agreement shall
be ignored and shall have no further force or effect with respect to such
Accounts Receivable Collateral or such other Collateral, except to the extent of
Excluded Receivables Assets.
IN WITNESS WHEREOF, the Borrower and the Agent have executed
this Agreement and affixed their respective seals thereto.
AGENT:
-----
WACHOVIA BANK OF GEORGIA, N.A.,
as Agent for the Banks (SEAL)
By:
-----------------------------------
Title:
BORROWER:
--------
AVONDALE MILLS, INC (SEAL)
By:
-----------------------------------
Title:
Attest:
-------------------------------
Title:
170
<PAGE> 176
SECURITY AGREEMENT
EXHIBIT "A"
SCHEDULE OF OUTSIDE INVENTORY LOCATIONS
Fabrics Division: See attached List
Yarn Division: NDS Warehouse
19801 South Santa Fe Avenue
Rancho Dominguez, CA 90221
Hickory Throwing Co.
520 20th Street, S.E.
Hickory, NC 28601
Yarns Etc.
1005 Gault Avenue North
Ft. Payne, AL 35967
Walton Fabrics Division: None
Cotton: Central Cotton Warehouse
North Norton Avenue
Sylacauga, AL 35150
Sycamore Cotton Warehouse
Avondale Mills
L & N Station
Sycamore, AL 35149
Other Raw Materials: None
171
<PAGE> 177
<TABLE>
<CAPTION>
OUTSIDE INVENTORY LOCATIONS: AVONDALE FABRICS DIVISION
NAME CITY STATE COUNTY
---- ---- ----- ------
<S> <C> <C> <C>
THOMASTON BLEACHERY THOMASTON GA UPSON
WESTPOINT STEVENS OPELIKA AL LEE
CRANSTON PRINT WORKS FLETCHER NC HENDERSON
U.S. FINISHING GREENVILLE SC GREENVILLE
KING FINISHING DOVER GA SCREVEN
BRITTANY DYEING & PRINTING NEW BEDFORD MA BRISTOL
PRIORITY FINISHING FALL RIVER MA BRISTOL
PENN TRANSFER LTD. HAZELTON PA LUZERNE
FACE MATE SOMERSWORTH NH STRAFFORD
NORTH CAROLINA FIN. SALISBURY NC ROWAN
RUSSELL CORPORATION ALEXANDER CITY AL TALLAPOOSA
DELTA MILLS #3 WALLACE SC MARLBORO
MF&H TEXTILES BUTLER GA TAYLOR
TEXPRINT MACON GA BIBB
DELIA MILLS #2 WALLACE SC MARLBORO
SYLACAUGA FINISHING SYLACAUGA AL TALLADEGA
GREENWOOD MILLS (SERVICE DEPT) GREENWOOD SC GREENWOOD
WALTON FABRICS MONROE GA WALTON
INMAN MILLS-RAMEY PLANT ENOREE SC SPARTANBURG
OPP & MICOLAS OPP AL CONVINGTON
GREENWOOD MILLS (HARRIS#6) GREENWOOD SC GREENWOOD
GREENWOOD MILLS (GREENWOOD#5) GREENWOOD SC GREENWOOD
INMAN MILLS-SAYBROOK PLANT INMAN SC SPARTANBURG
INMAN MILLS-MIN. SHOALS PLANT ENOREE SC SPARTANBURG
MAYFAIR MILLS STARR SC ANDERSON
GREENWOOD MILLS (MATHEWS #3) GREENWOOD SC GREENWOOD
T.N.S. MILLS SPARTANBURG SC SPARTANBURG
FLINT RIVER TEXTILES ALBANY GA DOUGHERTY
ARKWRIGHT MILLS SPARTANBURG SC SPARTANBURG
T.N.S. MILLS GAFFNEY SC CHEROKEE
GREENWOOD MILLS (LINER PLANT) ORANGEBURG SC ORANGEBURG
ROOSTERHEAD WAREHOUSE ROME GA FLOYD
EASTERN DISTRIBUTION GREENVILLE SC GREENVILLE
PIEDMONT DISTR. CTR. WHSE. #7 CHARLOTTE NC MECKLENBURG
A.T.S. WAREHOUSE CHARLESTON SC CHARLESTON
BUNCH WAREHOUSE NORTH CHARLESTON SC CHARLESTON
INTERPORT SDS INC. OPELIKA AL LEE
</TABLE>
172
<PAGE> 178
OUTSIDE INVENTORY LOCATIONS: GRANITEVILLE COMPANY
<TABLE>
<CAPTION>
NAME CITY STATE COUNTY
---- ---- --- -----------
<S> <C> <C> <C>
ELLIOTT WAREHOUSE DUNCAN SC SPARTANBURG
PIEDMONT DISTRIBUTION CENTER CHARLOTTE NC MECKLENBURG
AMERICAN FAST PRINT SPARTANBURG SC SPARTANBURG
U.S. FINISHING GREENVILLE SC GREENVILLE
INMAN MILLS INMAN SC SPARTANBURG
AVONDALE MILLS (WALTON MILLS) MONROE GA WALTON
JOSHUA L. BAILY STARR SC ANDERSON
JOSHUA L. BAILY (WAREHOUSE #93) EASLEY SC PICKENS
JACKSON MILLS IVA SC SPARTANBURG
CLINTON MILLS CLINTON SC LAURENS
TNS MILLS GAFFNEY SC CHEROKEE
GREENWOOD MILLS (GREENWOOD #5) GREENWOOD SC GREENWOOD
AVONDALE MILLS SYLACAUGA AL TALLADEGA
GREENWOOD MILLS (GREENWOOD #3) GREENWOOD SC GREENWOOD
GREENWOOD MILLS (DURST #8) GREENWOOD SC GREENWOOD
INMAN MILLS (MOUNTAIN SHOALS) ENOREE SC SPARTANBURG
INMAN MILLS (RAMEY) ENOREE SC SPARTANBURG
JACKSON MILLS WELLFORD SC ANDERSON
INMAN MILLS (SAYBROOK) INMAN SC SPARTANBURG
J.P. STEVENS TAYLORS SC GREENVILLE
SCHNEIDER MILLS TAYLORSVILLE NC ALEXANDER
TNS MILLS SPARTANBURG SC SPARTANBURG
COMMERCIAL BONDED WAREHOUSE, INC. N. CHARLESTON SC CHARLESTON
SOUTH CAROLINA STATE PORTS AUTHORITY CHARLESTON SC CHARLESTON
ATLANTIC TRANSPORTATION SERVICES, INC. CHARLESTON SC CHARLESTON
MT. VERNON MILLS, INC. TALLASSEE AL TALLAPOOSA
MILLIKEN & CO. GREER SC GREENVILLE/
SPARTANBURG
KANEMATSU USA, INC. LOS ANGELS CA LOS ANGELES
SOUTHERN PHENIX TEXTILES, INC. PHENIX CITY AL RUSSELL
RAMTEX, INC. RAMSEUR NC RANDOLPH
</TABLE>
173
<PAGE> 179
SECURITY AGREEMENT
EXHIBIT B
EXCLUDED EQUIPMENT
AVONDALE LIGHTWEIGHT TRUCKS
AS OF 03/29/96
<TABLE>
<CAPTION>
LOCATION DESCRIPTION BOOK VALUE
-------- ----------- ----------
<S> <C> <C>
CORP OFFICE 1985 CHEVROLET VAN 0.00
1991 FORD CLUB VAN 0.00
COTTON DEPT. 1989 CHEVROLET S-10 PU 0.00
1993 FORD AEROSTAR VAN 4,846.50
SYCAMORE WHSE. 1978 DODGE PU 0.00
SUPPLY DIST. CENTER 1995 FORD AEROSTAR VAN 9,993.75
1984 VOLVO TRUCK 0.00
TRUCK DEPT. 1989 CHEVROLET PU 0.00
1985 DODGE 4WD PU 0.00
BEVELLE 1976 CHEVROLET PU 0.00
1978 CHEVROLET 0.00
1989 CHEVROLET PU 0.00
SYLACAUGA YARD 1982 CHEVROLET PU 0.00
1974 CHEVROLET DUMP TRUCK 0.00
WASTE WATER 1977 FORD PU 0.00
TREATMENT 1973 FORD DUMP TRUCK 0.00
EVA JANE 1982 FORD PU 0.00
1984 CHEVROLET PU 0.00
1987 CHEVROLET PU 0.00
1990 FORD DUMP TRUCK 0.00
BON AIR 1989 CHEVROLET PU 0.00
BURNSVILLE 1984 CHEVROLET PU 0.00
CATHERINE 1981 CHEVROLET PU 0.00
</TABLE>
174
<PAGE> 180
<TABLE>
<S> <C> <C>
COOSA 1988 CHEVROLET PU 0.00
PELL CITY 1995 CHEVROLET PU 11,003.49
TIFTON 1995 CHEVROLET PU 8,629.78
WALHALLA 1995 FORD PU 7,575.32
1974 CHEVROLET DUMP TRUCK 0.00
SANFORD 1989 CHEVROLET PU 0.00
LEE 1989 CHEVROLET PU 0.00
WALTON FABRICS 1973 CHEVROLET FLATBED TRUCK 0.00
1984 VOLVO TRUCK 0.00
</TABLE>
175
<PAGE> 181
SECURITY AGREEMENT
EXHIBIT "C" - PART 1
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------------------------------------------ ------------------------------------------------ --------------------------------
<S> <C> <C>
AVONDALE MILLS, INC.
------------------------------------------------ ------------------------------------------------ --------------------------------
Xerox Corporation Date Filed: 04/10/96 Xerox Leased Equipment
File number: 96-15376
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Val Tech Computer Systems Date Filed: 03/06/96 Leased Equipment Notice Filing
(assignee Nat'l Bank of Commerce) File number: 96-09326
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Val Tech Computer Systems Date Filed: 08/09/95 Leased Equipment
(assignee First Alabama Bank) File number: 95-32698
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Val Tech Computer Systems Date Filed: 05/24/95 Leased Equipment
(assignee First Alabama Bank) File number: 95-21606
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 11/14/94 Equipment
File number: 94-43091
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 11/14/94 Equipment
File number: 94-43090
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 11/14/94 Equipment
File number: 94-43089
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Val Tech Computer Systems Date Filed: 06/09/94 Leased Equipment Notice Filing
File number: 94-20960
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
AT&T Credit Corporation Date Filed: 05/02/94 Leased Equipment
File number: 94-15516
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
</TABLE>
176
<PAGE> 182
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------------------------------------------ ------------------------------------------------ --------------------------------
<S> <C> <C>
Wachovia Bank of Georgia, as Agent Date Filed: 04/04/94 Blanket Lien
File number: 94-11561
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Val Tech Computer Systems Date Filed: 02/25/94 Leased Equipment Notice Filing
(assignee Nat'l Bank of Commerce re-assigned File number: 94-06560
10/11/95 to Val Tech) SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Pacific Atlantic Systems Date Filed: 12/28/93 Leased Equipment Notice Filing
File number: 93-44875
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Val Tech Computer Systems Date Filed: 12/20/93 Leased Equipment Notice Filing
(assignee Nat'l Bank of Commerce re-assigned File number: 93-43776
10/11/95 to Val Tech) SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Pacific Atlantic Systems Date Filed: 09/30/93 Leased Equipment Notice Filing
File number: 93-34411
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Xerox Corporation Date Filed: 04/27/93 Xerox Leased Equipment
File number: 93-14521
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Xerox Corporation Date Filed: 04/27/93 Xerox Leased Equipment
File number: 93-14511
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Bell Atlantic Systems Leasing Date Filed: 01/25/93 Leased Equipment Notice Filing
(assignee: COS Computer Systems) File number: 93-02601
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
SouthTrust Bank of Alabama Date Filed: 01/14/93 Leased Equipment, Insurance,
File number: 93-01620 Proceeds
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Trust Company Bank Date Filed: 04/30/92 IRB Project and Equipment
(co-debtor: Industrial Dev. Board Town on Bon File number: 92-15816
Air) SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
</TABLE>
177
<PAGE> 183
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------------------------------------------ ------------------------------------------------ --------------------------------
<S> <C> <C>
SouthTrust Bank of Alabama Date Filed: 02/10/92 Equipment, Insurance, Proceeds
File number: 92-04907
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Mayer Electric Supply Co., Inc. Date Filed: 04/18/91 Consignment of inventory to a
File number: 91-14211 Systems Contracting Agreement
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
CIT Group/Equipment Financing, Inc. Date Filed: 01/27/88 12 - Volvo Sleeper Tractors
Continued: 08/04/92
File number: A270067
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
CIT Group/Equipment Financing, Inc. Date Filed: 08/17/87 1 - Volvo Sleeper Tractor
Continued: 04/02/92
File number: A253773
SOS Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 02/16/95 Rieter Drawframe
File number: 2046
Coosa County, Alabama
------------------------------------------------ ------------------------------------------------ --------------------------------
Wachovia Bank of Georgia, as Agent Date Filed: 04/07/94 Blanket Lien
File number: 94-069505
SOS California
------------------------------------------------ ------------------------------------------------ --------------------------------
Wachovia Bank of Georgia, as Agent Date Filed: 04/05/94 Blanket Lien
File number: 1052193
SOS Connecticut
------------------------------------------------ ------------------------------------------------ --------------------------------
Wachovia Bank of Georgia, as Agent Date Filed: 04/04/95 Blanket Lien
File number: 33817
Floyd County
------------------------------------------------ ------------------------------------------------ --------------------------------
Wachovia Bank of Georgia, as Agent Date Filed: 04/04/95 Blanket Lien
File number: 30395
Walton County
------------------------------------------------ ------------------------------------------------ --------------------------------
Wachovia Bank of Georgia, as Agent Date Filed: 04/04/95 Blanket Lien
File number: 225684
SOS Massachusetts
------------------------------------------------ ------------------------------------------------ --------------------------------
</TABLE>
178
<PAGE> 184
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------------------------------------------ ------------------------------------------------ --------------------------------
<S> <C> <C>
Wachovia Bank of Georgia, as Trustee Date Filed: 10/03/95 Property/items secured by
File number: 1269123 UCC-1 #0588793, filed 07/19/89
SOS North Carolina which has expired
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 02/16/95 Rieter Drawframe
File number: 1162256
SOS North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 02/16/95 Rieter Drawframe
File number: 1162255
SOS North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 02/16/95 Rieter Drawframe
File number: 1162254
SOS North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Wachovia Bank of Georgia, as Agent Date Filed: 04/05/94 Blanket Lien
File number: 1093872
SOS North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Trust Company Bank of Georgia Date Filed: 12/04/92 IRB Project and Equipment
File number: 0947502
SOS North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Trust Company Bank of Georgia Date Filed: 12/03/92 IRB Project and Equipment
File number: 0947094
SOS North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Staunton Norris, as Deed of Trust Trustee and Date Filed: 07/08/88 IRB Project and Equipment
Trust Company Bank and First Nat'l Bank of Continued: 06/30/93
Atlanta, as Indentured Trustee File number: 0470504
Continued: 0011832
SOS North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Staunton Norris, as Deed of Trust Trustee and Date Filed: 07/19/89 IRB Project and Equipment
Trust Company Bank and First Nat'l Bank of File number: 0588793
Atlanta, as Indentured Trustee SOS North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 11/18/94 Rieter Drawframe
File number: 94-1512
Lee County, North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
</TABLE>
179
<PAGE> 185
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------------------------------------------ ------------------------------------------------ --------------------------------
<S> <C> <C>
Rieter Corporation Date Filed: 11/18/94 Rieter Drawframe
File number: 94-1511
Lee County, North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Trust Company Bank / Wachovia Bank of Georgia, Date Filed: 12/02/92 IRB Project and Equipment
NA File number: 92-1601
Lee County, North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 11/07/94 Rieter Drawframe RSB 951
File number: 94-203
Yancey County, North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Trust Company Bank Date Filed: 12/04/92 IRB Project and Equipment
File number: 92-1976
Yancey County, North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Staunton Norris, as Deed of Trust Trustee and Date Filed: 07/08/88 IRB Project and Equipment
Trust Company Bank and First Nat'l Bank of Continued: 06/25/93
Atlanta, as Indentured Trustee File number: 88-288
Continued as 93-103
Yancey County, North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Staunton Norris, as Deed of Trust Trustee and Date Filed: 07/13/89 IRB Project and Equipment
Trust Company Bank and First Nat'l Bank of File number: 89-256
Atlanta, as Indentured Trustee Yancey County, North Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Wachovia Bank of Georgia Date Filed: 04/12/94 Blanket Lien
File number: 1563871
SOS New Jersey
------------------------------------------------ ------------------------------------------------ --------------------------------
Wachovia Bank of Georgia Date Filed: 04/06/94 Blanket Lien
File number: 23000343
SOS Pennsylvania
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 11/10/94 Leased Equipment
File number: 941110-
103225A
SOS South Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
</TABLE>
180
<PAGE> 186
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------------------------------------------ ------------------------------------------------ --------------------------------
<S> <C> <C>
Wachovia Bank of Georgia Date Filed: 04/05/94 Blanket Lien
File number: 940405-
132723A
SOS South Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Trust Company Bank Date Filed: 12/04/92 IRB Project and Equipment
File number: 921204-
100723A
SOS South Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Bell Atlantic Systems Leasing Date Filed: 04/08/91 Leased Equipment
File number: 91-017594
SOS South Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Trust Company Bank Date Filed: 01/04/91 IRB Project and Equipment
File number: 91-00010
Oconee County, South Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Trust Company Bank Date Filed: 12/02/92 IRB Project and Equipment
File number: 92-00694
Oconee County, South Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Rieter Corporation Date Filed: 11/09/94 Rieter Drawframe
File number: 94-00681
Oconee County, South Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
Wachovia Bank of Georgia Date Filed: 04/05/94 Blanket Lien
File number: 94064691
SOS Texas
------------------------------------------------ ------------------------------------------------ --------------------------------
</TABLE>
181
<PAGE> 187
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------------------------------------------ ------------------------------------------------ --------------------------------
<S> <C> <C>
GRANITEVILLE COMPANY
------------------------------------------------ ------------------------------------------------ --------------------------------
Schlafhorst, Inc. Date Filed: 02/06/92 Equipment
File number: 92-005960
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Schlafhorst, Inc. Date Filed: 01/14/92 Equipment
File number: 92-002008/
92-002009
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Schlafhorst, Inc. Date Filed: 01/14/92 Equipment
File number: 92-002008
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Olin Corporation Date Filed: 02/10/94 Leased Equipment
File number: 131059A
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Olin Corporation Date Filed: 12/07/93 Leased Equipment
File number: 110634A
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
BellSouth Financial Services Corporation Secretary of State, SC
Amendment: 09/28/92, #134045A
------------------------------------------------ ------------------------------------------------ --------------------------------
Pitney Bowes Credit Corporation Date Filed: 01/29/92 Equipment Informational Filing
File number: 92004503/
92004504
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Schlafhorst, Inc. Date Filed: 08/19/91 3 - Rotor Autocoro
File number: 91-040929
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Pitney Bowes Credit Corporation Date Filed: 01/25/96 Leased Equipment
File number: 122033A
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
</TABLE>
182
<PAGE> 188
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------------------------------------------ ------------------------------------------------ --------------------------------
<S> <C> <C>
Primeco, Inc. d/b/a Prime Equipment Date Filed: 09/13/94 1 - Scissor Lift
File number: 100644A
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
E.I. DuPont De Nemours & Co. Separation Systems Date Filed: 12/27/91 Notice filing of a Service
File number: 91-061914 Agreement
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Date Filed: 01/12/93 Office Equipment
Canon Financial Services, Inc. File number: 145328A
Secretary of State, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Primeco, Inc. d/b/a Prime Equipment Date Filed: 09/13/94 1 - Scissor Lift
File number: 1329
Aiken County, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Schlafhorst, Inc. Date Filed: 02/06/92 Rotor Autocoro(s)
File number: 192
Aiken County, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Schlafhorst, Inc. Date Filed: 01/15/92 Rotor Autocoro(s)
File number: 81
Aiken County, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Schlafhorst, Inc. Date Filed: 01/15/92 Rotor Autocoro(s)
File number: 80
Aiken County, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
Schlafhorst, Inc. Date Filed: 08/20/91 Rotor Autocoro(s)
File number: 1335
Aiken County, SC
------------------------------------------------ ------------------------------------------------ --------------------------------
First United Leasing Corporation Date Filed: 01/22/93 1/Panafax Facsimile
File number: 014679
SOS New York
------------------------------------------------ ------------------------------------------------ --------------------------------
Pitney Bowes Date Filed: Equipment Lease
File number: 960412-
131615A
SOS South Carolina
------------------------------------------------ ------------------------------------------------ --------------------------------
WALTON MONROE MILLS, INC.
------------------------------------------------ ------------------------------------------------ --------------------------------
</TABLE>
183
<PAGE> 189
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------------------------------------------ ------------------------------------------------ --------------------------------
<S> <C> <C>
Trust Company Bank Date Filed: 06/15/92 IRB Project and Equipment
File number: 28353
Walton County, Georgia
------------------------------------------------ ------------------------------------------------ --------------------------------
Trust Company Bank Date Filed: 01/28/93 Partial Release - 5 Saurer
File number: 28353 Shutterless Weaving Machines,
Walton County, Georgia Type 400
------------------------------------------------ ------------------------------------------------ --------------------------------
NCC Leasing Date Filed: 07/25/91 NCR electronic data processing
File number: 27498 equipment
Walton County, Georgia
------------------------------------------------ ------------------------------------------------ --------------------------------
The CIT Group/Commercial Services, Inc. N/A $260,000 cash deposit to
secure certain reimbursement
and indemnity obligations
------------------------------------------------ ------------------------------------------------ --------------------------------
NCC Leasing Date Filed: 09/12/91 14 Terminal Green
File number: 27605 1010/keyboards
Walton County, Georgia
------------------------------------------------ ------------------------------------------------ --------------------------------
</TABLE>
184
<PAGE> 190
Exhibit K
SECURITY AGREEMENT
EXHIBIT C - PART 2
EXISTING ENCUMBRANCES IN CONNECTION WITH
INDUSTRIAL REVENUE BOND INDEBTEDNESS
<TABLE>
<CAPTION>
Original Principal Amount
IRB Transaction Outstanding on Bonds
--------------- -------------------------
<S> <C>
1. The Yancey County Industrial $10,000,000
Facilities and Pollution Control
Financing Authority Refunding
Revenue Bonds (Avondale Mills,
Inc. Project), Series 1988.
</TABLE>
Applicable Documents:
a. Deed of Trust and Security Agreement, dated as of July 1,
1988, from Avondale Mills, Inc. to Staunton Norris, as deed of
trust trustee, for the benefit of The First National Bank of
Atlanta, as trustee, and Trust Company Bank, as amended by
that First Amendment to Deed of Trust and Security Agreement,
to be dated on or about March 29, 1994.
b. Indenture of Trust, dated as of July 1, 1988, between The
Yancey County Industrial Facilities and Pollution Control
Financing Authority and The First National Bank of Atlanta, as
trustee.
c. Loan Agreement, dated as of July 1, 1988, between Avondale
Mills, Inc. and The Yancey County Industrial Facilities and
Pollution Control Financing Authority and related Promissory
Note.
d. Letter of Credit Agreement, dated as of July 1, 1988, between
Trust Company Bank and Avondale Mills, Inc., as amended
through the date hereof.
e. Security Agreement, dated as of December 2, 1992, from
Avondale Mills, Inc. to Trust Company Bank.
<TABLE>
<S> <C> <C>
2. The Lee County Industrial Facilities $5,000,000
and Pollution Control Financing
Authority Refunding Revenue Bonds
(Avondale Mills, Inc. Project), Series 1989.
</TABLE>
185
<PAGE> 191
Applicable Documents:
a. Indenture of Trust, dated as of June 1, 1989, between The Lee
County Industrial Facilities and Pollution Control Financing
Authority and The First National Bank of Atlanta, as trustee.
b. Loan Agreement, dated as of June 1, 1989, between The Lee
County Industrial Facilities and Pollution Control Financing
Authority and Avondale Mills, Inc. and related Promissory
Note.
c. Second Deed of Trust and Security Agreement, dated as of June
1, 1989, from Avondale Mills, Inc. to Staunton Norris, as deed
of trust trustee, for the benefit of The First National Bank
of Atlanta, as trustee, and Trust Company Bank.
d. Letter of Credit Agreement, dated as of June 1, 1989, between
Trust Company Bank and Avondale Mills, Inc., as amended
through the date hereof.
e. Deed of Trust and Security Agreement, dated as of December 2,
1992, from Avondale Mills, Inc. to Richard Love, as deed of
trust trustee, for the benefit of Wachovia Bank of Georgia,
N.A., as trustee, and Trust Company Bank, as amended by that
First Amendment to Deed of Trust and Security Agreement, to be
dated on or about March 29, 1994.
<TABLE>
<S> <C> <C>
3. Development Authority of Walton County $4,000,000
Industrial Development Revenue Bonds (Series 1992A)
(Walton Monroe Mills, Inc. Project), and
Series 1992A and Series 1992B $2,000,000
(Series 1992B)
</TABLE>
Applicable Documents:
a. Indenture of Trust, dated as of June 1, 1992, between
Development Authority of Walton County and Trust Company Bank,
as trustee.
b. Lease Agreement, dated as of June 1, 1992, between Development
Authority of Walton County and Walton Monroe Mills, Inc.
c. Security Deed and Security Agreement, dated as of June 1,
1992, among Development Authority of Walton County and Walton
Monroe Mills, Inc., as grantors, and Trust Company Bank, as
grantee, as amended by that First Amendment to Security Deed
and Security Agreement, to be dated on or about March 29,
1994.
d. Guaranty Agreement, dated as of June 1, 1992, from Walton
Monroe Mills, Inc. to Trust Company Bank, as trustee.
186
<PAGE> 192
e. Letter of Credit Agreement, dated as of June 1, 1992, between
Trust Company Bank and Walton Monroe Mills, Inc., as amended
through the date hereof.
187
<PAGE> 193
EXHIBIT M
Amended and Restated Intercreditor Agreement
THIS AMENDED AND RESTATED INTERCREDITOR AGREEMENT, made as of the 29th
day of April, 1996, by, between, and among WACHOVIA BANK OF GEORGIA, N.A. as
agent for itself and the Banks referred to below, whose address is 191 Peachtree
Street, N.E., Atlanta, Georgia 30303-1757 (in such capacity, together with any
successors and assigns in such capacity, the "Agent"), SUNTRUST BANK, ATLANTA,
whose address is 25 Park Place, Atlanta, Georgia 30303 ("SunTrust"), and
AVONDALE MILLS, INC., whose address is at 506 South Broad Street, Monroe,
Georgia 30655 (the "Borrower");
W I T N E S S E T H
WHEREAS, the Borrower executed and delivered a Security Agreement dated
as of March 29, 1994 (the "Original Security Agreement" pursuant to a Credit
Agreement by and among the Borrower, the Agent and the Banks party thereto (the
"Original Credit Agreement"); and
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement
dated of even date herewith, by and among the Borrower, certain lenders parties
thereto (collectively, the "Banks"), the Agent, as agent for the Banks, and The
First National Bank of Chicago, as Documentation Agent (as amended or modified
from time to time, the "Credit Agreement"), the Original Credit Agreement has
been amended and restated, and the Banks have made or will make loans to the
Borrower;
WHEREAS, in order to secure said indebtedness and to induce the Banks
and the Agent to execute and enter into the Credit Agreement, the Borrower has
executed and delivered an Amended and Restated Security Agreement, amending and
restating the Original Security Agreement, granting a security interest in, and
lien upon, certain personal property of the Borrower to the Agent for the
benefit of the Banks, including the Graniteville Assets, as defined in the
Credit Agreement, and continuing in effect the security interest in, and lien
upon, such personal property granted to the Agent pursuant to the Original
Security Agreement, including, without limitation, and subject to the security
interest and lien granted to SunTrust pursuant to the SunTrust Mortgages (as
hereinafter defined) the machinery and equipment of the Borrower located at
those certain plants of the Borrower located at Walton County, Georgia and
Burnsville, North Carolina and at the Lee Plant in Lee County, North Carolina
(collectively, the "SunTrust Plants") (such machinery and equipment being
hereinafter referred to as the "SunTrust Equipment");
WHEREAS, pursuant to the Credit Agreement, the Borrower has also
executed and delivered to the Agent multiple counterparts of an undated Master
Mortgage, Deed of Trust, Deed to Secure Debt, Uniform Commercial Code Security
Agreement and Assignment of Leases, Rents and Profits together with certain
UCC-1 financing statements (collectively, the "Escrowed Additional Collateral
Documents") pursuant to which, if and when recorded pursuant to the Credit
Agreement, the Borrower has granted to the Agent for the ratable benefit of the
188
<PAGE> 194
Banks perfected mortgage liens on, or security title to, all of Borrower's
plants, including, without limitation, subject to the mortgage liens or security
titles granted to SunTrust pursuant to the SunTrust Mortgages, the SunTrust
Plants;
WHEREAS, pursuant to the agreements described on Schedule I hereto
(collectively, as amended or modified from time to time, the "SunTrust
Agreements"), SunTrust has issued various letters of credit for the account of
Borrower to support industrial development bonds and workers' compensation
self-insurance arrangements in several states (collectively, together with any
renewals or replacements of, or new, letters of credit to support workers'
compensation self-insurance arrangements, the "SunTrust L/Cs");
WHEREAS, pursuant to the mortgages described on Schedule II hereto
(collectively, as amended or modified from time to time, the "SunTrust
Mortgages"), Borrower granted to SunTrust mortgage liens on, or security title
to, the SunTrust Plants and a security interest in, or lien upon, the SunTrust
Equipment to secure the SunTrust Secured Debt (as hereinafter defined); and
WHEREAS, the Banks are willing to make loans to Borrower pursuant to
the terms of the Credit Agreement only on the condition precedent that the
respective rights, security titles, liens and security interests of the Agent
and SunTrust in and to the SunTrust Plants and the SunTrust Equipment be clearly
set forth and the parties hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and the making of
loans and/or the extension of credit by Banks to Borrower, it is hereby agreed
by, between, and among the Agent, SunTrust and the Borrower as follows:
1. Consent of SunTrust; Acknowledgment of Agent. SunTrust hereby
consents to (a) the security interest in and lien upon the SunTrust Equipment
granted to the Agent for the ratable benefit of the Banks pursuant to the
Security Agreement, and (b) the execution, delivery and completion and
recordation of the Escrowed Additional Collateral Documents, provided, that, as
to any of the SunTrust Plants, each and every one of the Banks shall have
directed the Agent to so complete and record the Escrowed Additional Collateral
Documents pertaining thereto. The Agent hereby acknowledges and agrees that (a),
the security interest in and lien upon the SunTrust Equipment granted to the
Agent for the ratable benefit of the Banks pursuant to the Security Agreement
and the lien upon, and security title to, the SunTrust Plants granted to the
Agent for the ratable benefit of the Banks upon the completion and recordation
of the Escrowed Additional Collateral Documents shall be in each instance
subordinate and inferior to the security interest, lien or security title
therein or thereto in favor of SunTrust to the extent of the SunTrust Secured
Debt, as defined below, and (b) the Agent will not complete and record the
Escrowed Additional Collateral Documents as to any of the SunTrust Plants except
at the direction of each and every one of the Banks.
2. Limit of SunTrust Debt. SunTrust hereby agrees that the amount
of indebtedness owing from the Borrower secured by the SunTrust Equipment and
the SunTrust Plants shall not exceed a maximum amount which may be drawn upon
the SunTrust L/Cs of $22,000,000, together with interest thereon, fees, costs
and indemnification amounts with respect thereto, and
189
<PAGE> 195
all expenses of SunTrust incurred by SunTrust in protecting and preserving the
SunTrust Equipment or the SunTrust Plants or in endeavoring to collect any of
the foregoing, including reasonable attorneys fees and expenses actually
incurred (collectively, the "SunTrust Secured Debt"). Any other indebtedness
owing from Borrower to SunTrust shall not constitute SunTrust Secured Debt for
purposes hereof.
3. Notice and Cure Rights. SunTrust hereby agrees to give the
Agent prompt notice of any event of default (a "SunTrust L/C Default") under the
SunTrust Agreements, the SunTrust Mortgages or any other agreements evidencing,
securing or relating to the SunTrust Secured Debt (collectively, the "SunTrust
Documents"); provided that failure of SunTrust to deliver such notice shall not
affect the subordination terms or any other terms of this Agreement. SunTrust
further agrees to accept any cure of such SunTrust L/C Default by the Agent or
the Banks provided such cure is completed within 30 days of the receipt by the
Agent of notice thereof. The Agent agrees to use commercially reasonable efforts
to notify SunTrust of the filing for record of any Escrowed Additional
Collateral Documents pertaining to any of the SunTrust Plants, but failure to
give such notice shall not affect the validity or enforceability thereof.
4. Foreclosure. In the event, following notice of a SunTrust L/C
Default and the expiration of the cure period therefor as set forth in the
immediately preceding Section 3, SunTrust exercises its right to foreclosure,
sale under power, repossession or any other similar right, power or remedy (any
of the foregoing being referred to herein as a "Foreclosure Remedy") under any
of the SunTrust Documents and realizes a surplus over and above the amount of
the SunTrust Secured Debt, SunTrust will pay such surplus to the Agent for the
ratable benefit of the Banks; provided, that the Agent and the Banks acknowledge
and agree that SunTrust has no obligation to produce any such surplus. The
Borrower hereby irrevocably directs SunTrust to make such payment (if any) to
the Agent, regardless of whether any of the Escrowed Additional Collateral
Documents have been recorded. The Agent agrees that the Agent will not interfere
with the exercise by SunTrust of any Foreclosure Remedy and will not, without
the prior consent of SunTrust (unless the Agent or the Banks have exercised the
purchase option pursuant to Section 5 below) seek to exercise any Foreclosure
Remedy under the Security Agreement or the Escrowed Additional Collateral
Documents or any other documents in connection therewith as to the SunTrust
Equipment or the SunTrust Plants, so long as any SunTrust L/C's remain
outstanding and any SunTrust Secured Debt remains unpaid.
5. Purchase Option. SunTrust agrees that at any time following
the occurrence of either an event of default under the Credit Agreement or a
SunTrust L/C Default, the Agent (at the direction of each and every one of the
Banks) and the Banks shall have the right, but not the obligation, on 30 days
prior written notice to SunTrust to purchase SunTrust's secured position with
respect to the SunTrust L/C's by SunTrust's arranging for the Agent to issue
letters of credit in replacement of, or substitution for, the SunTrust L/C's,
causing the SunTrust Documents to be amended to refer to such replacement
letters of credit, if necessary, and assigning such SunTrust Documents to the
Agent for the ratable benefit of the Banks.
6. Bankruptcy. In the event a "petition" as defined in 11 U.S.C.
ss.101(31) is filed by or against the Borrower commencing a case under Title 11,
U.S.C., nothing contained in this Agreement shall be construed or applied to
limit or otherwise affect the rights of the Agent or the
190
<PAGE> 196
Banks to assert or prove any indebtedness owing to any of them, to vote or
assert rights in connection therewith (subject to the provisions of Section 4)
or to receive, collect and retain any dividends, distributions or payments
received in connection with any such case or any proceeding therein in
satisfaction of such indebtedness or claim.
7. Consent; Defense by Borrower. The Borrower hereby consents and
agrees to the terms of this Agreement. If either the Agent or SunTrust should
commence or participate in any action or proceeding against Borrower contrary to
this Agreement, the Borrower may interpose as a defense or dilatory plea the
making of this Agreement, and the Agent or SunTrust, as applicable, may
intervene and interpose such defense or plea in the Agent's or SunTrust's, as
applicable, name or in the name of the Borrower.
8. Certain Waivers and Notices. The Agent, the Banks and SunTrust
may grant extensions of time of payment or performance to, and make compromises
and settlements with, Borrower and all other persons, without notice to or the
consent of the Agent, the Banks and/or SunTrust, as applicable and without
affecting the agreements of the Agent, SunTrust and Borrower hereunder.
9. Priorities; No Third Party Beneficiary. The priorities of the
security titles, liens and security interests established, altered, or specified
herein are applicable, irrespective of the time or order of attachment or
perfection thereof, the method of perfection, the time or order of filing of
financing statements or taking of possession, or the giving of or failure to
give notice of the acquisition or expected acquisition of purchase money or
other security titles, liens and security interests. The agreements made herein
are solely for the purpose of establishing the relative priorities of the Agent
and SunTrust and shall not inure to the benefit of any other person or entity,
except the successors and assigns of the Agent and SunTrust, and except as set
forth in Section 7 hereof.
10. Notices. All notices hereunder shall be effective upon receipt
and shall be in writing and sent by either certified mail, return receipt
requested, mailgram, telegram, or telex, to the addresses as set forth above,
but to the attention of the following: (a) the Agent, Attention: Commercial
Group, or (b) SunTrust, Attention: Raymond King, or (c) Borrower, Attention:
Chairman and Chief Financial Officer; or to such other address or person as any
of the parties hereto may designate in writing to the other parties. Notice
shall be deemed received when presented for delivery to the United States
Postage Service or the transmitting utility.
11. Governing Law; Termination; Successors and Assigns. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Georgia applicable to contracts made and to be performed in such state,
and shall not be modified, amended, or terminated orally. This Agreement may not
be terminated by SunTrust so long as any "Obligations" (as defined in the Credit
Agreement) remain unpaid, or by the Agent, so long as any SunTrust L/C's remain
outstanding or any SunTrust Secured Debt is outstanding and unpaid. Nothing
herein contained shall obligate the Agent, the Banks or SunTrust to grant credit
to or continue their respective financing arrangements with the Borrower. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, designees, and assigns, including, without
limitation, any successor agent under the Credit
191
<PAGE> 197
Agreement. All terms used herein which are defined in the Georgia Uniform
Commercial Code - Secured Transactions shall have the meanings therein stated,
unless the context otherwise requires.
12. No Assignment of SunTrust Secured Debt. SunTrust may not
assign or transfer to others any of its interests in and to the SunTrust Secured
Debt, or any interest in the SunTrust Equipment or the SunTrust Plants, unless
such assignment or transfer is made expressly subject to this Agreement and with
prior written notice to the Agent and the Borrower.
13. Amendments of SunTrust Documents, Recordation. SunTrust and
the Borrower hereby agree to execute and file for record such additional
counterparts of this Agreement and such amendments to the SunTrust Documents as
the Agent shall reasonably determine to be necessary or desirable to give effect
to the provisions of this Agreement.
IN WITNESS WHEREOF, the Agent, SunTrust and Borrower have duly
executed, or caused to be duly executed, this Agreement under seal as of the day
and year first written above.
Signed, sealed and AGENT
delivered in the
presence of: WACHOVIA BANK OF
GEORGIA, N.A. as Agent for the Banks
By:
---------------------------- ---------------------------------
Witness Title:
---------------------------- Attest:
Witness -----------------------------
Name:
Title:
[BANK SEAL]
Signed, sealed and SUNTRUST
delivered in the
presence of: SUNTRUST BANK, ATLANTA
By:
---------------------------- ---------------------------------
Witness Title:
Attest:
---------------------------- -----------------------------
Witness Name:
Title:
192
<PAGE> 198
[BANK SEAL]
Signed, sealed and BORROWER
delivered in the
presence of: AVONDALE MILLS, INC.
By:
---------------------------- ---------------------------------
Witness Title:
Attest:
---------------------------- -----------------------------
Witness Name:
Title:
[CORPORATE SEAL]
193
<PAGE> 199
ACKNOWLEDGEMENT OF GUARANTOR
Avondale Incorporated hereby acknowledges that it has guaranteed to
the Agent and the Banks the obligations of Borrower under the Credit Agreement
and consents to all of the terms and provisions of the foregoing Agreement and
agrees that nothing contained in such Agreement shall be construed or applied
to limit or otherwise affect the interest of the Agent or the Banks under such
guaranty or its right to enforce the same.
Signed, sealed and GUARANTOR
delivered in the
presence of: AVONDALE INCORPORATED
By:
---------------------------------- ------------------------------
Witness Title:
Attest:
---------------------------------- --------------------------
Witness Name:
Title:
194
<PAGE> 200
STATE OF GEORGIA )
)
COUNTY OF FULTON )
ACKNOWLEDGMENTS
Before me this ____ day of ______________, 1996 a Notary Public in and
for Georgia and a resident of ______________________ County, Georgia personally
appeared ________________ residing in ________ County, Georgia and
_________________ residing in _____________ and known to me to be the persons
described in and who executed the foregoing Instrument as (and acknowledged to
me that they were) ______________ and ____________, respectively, of WACHOVIA
BANK OF GEORGIA, a national banking association, and acknowledged before me that
they, after being informed of the contents and for the purpose and consideration
therein expressed, executed the same as such officers and affixed the bank seal
in the name of and on behalf of said bank by authority of its board of directors
and said _____________ and ______________ acknowledged said Instrument to be the
free act and deed of said bank.
WITNESS my hand and official seal in the County and State aforesaid
this _____ day of ________________, ______, County and State aforesaid.
--------------------------------------
Notary Public
Notarization Date: , 19
-------------- --
My Commission expires:
----------------
[NOTARIAL SEAL]
STATE OF GEORGIA )
)
COUNTY OF FULTON )
195
<PAGE> 201
ACKNOWLEDGMENTS
Before me this ______ day of _________________ , 1996 a Notary Public
in and for Georgia and a resident of _________________ County, Georgia
personally appeared ________________ residing in ________ County, Georgia and
_________________ residing in _____________ and known to me to be the persons
described in and who executed the foregoing Instrument as (and acknowledged to
me that they were) ______________ and ____________, respectively, of SUNTRUST
BANK, ATLANTA, a Georgia bank, and acknowledged before me that they, after
being informed of the contents and for the purpose and consideration therein
expressed, executed the same as such officers and affixed the bank seal in the
name of and on behalf of said bank by authority of its board of directors and
said _____________ and ______________ acknowledged said Instrument to be the
free act and deed of said bank.
WITNESS my hand and official seal in the County and State aforesaid
this ______ day of _________________ , ______, County and State aforesaid.
--------------------------------------
Notary Public
Notarization Date: , 19
-------------- --
My Commission expires:
----------------
[NOTARIAL SEAL]
196
<PAGE> 202
ACKNOWLEDGMENTS
Before me this _____ day of _________________ , 1996 a Notary Public
in and for Georgia and a resident of ___________________ County, Georgia
personally appeared ________________ residing in ________ County, Georgia and
_________________ residing in _____________ and known to me to be the persons
described in and who executed the foregoing Instrument as (and acknowledged to
me that they were) ______________ and ____________, respectively, of AVONDALE
MILLS, INC., an Alabama corporation, and acknowledged before me that they,
after being informed of the contents and for the purpose and consideration
therein expressed, executed the same as such officers and affixed the corporate
seal in the name of and on behalf of said corporation by authority of its board
of directors and said _____________ and ______________ acknowledged said
Instrument to be the free act and deed of said corporation.
WITNESS my hand and official seal in the County and State aforesaid
this ____ day of ___________________, ______, County and State aforesaid.
--------------------------------------
Notary Public
Notarization Date: , 19
-------------- --
My Commission expires:
----------------
[NOTARIAL SEAL]
THIS INSTRUMENT PREPARED BY CHRISTOPHER L. CARSON, ATTORNEY AT LAW, OF
JONES, DAY, REAVIS & POGUE, 3500 ONE PEACHTREE CENTER, 303 PEACHTREE STREET,
N.E., ATLANTA, GEORGIA 30308-3242
197
<PAGE> 203
ACKNOWLEDGMENT FOR NORTH CAROLINA
STATE OF GEORGIA )
COUNTY OF FULTON )
I ____________________, a Notary Public of __________ County, State of
Georgia, certify that _______________________ personally came before me this
day and acknowledged that he/she is ___________ Secretary of WACHOVIA BANK OF
GEORGIA, N.A., a national banking association, and that, by authority duly
given and as the act of the bank, the foregoing instrument was signed in its
name by its __________ President, sealed with its corporate seal, and attested
by himself/herself as its _______ Secretary.
Witness my hand and official seal, this _____ day of __________, 19__.
My commission expires:
---------------------------------
Notary Public
, 19 .
------------- -- [Official Seal]
198
<PAGE> 204
ACKNOWLEDGMENT FOR NORTH CAROLINA
STATE OF GEORGIA )
COUNTY OF FULTON )
I ____________________, a Notary Public of __________ County, State of
Georgia, certify that _______________________ personally came before me this
day and acknowledged that he/she is ___________ Secretary of SUNTRUST BANK,
ATLANTA, a Georgia bank, and that, by authority duly given and as the act of
the bank, the foregoing instrument was signed in its name by its __________
President, sealed with its corporate seal, and attested by himself/herself as
its _______ Secretary.
Witness my hand and official seal, this _____ day of __________, 19__.
My commission expires:
---------------------------------
Notary Public
, 19 .
------------- -- [Official Seal]
199
<PAGE> 205
ACKNOWLEDGMENT FOR NORTH CAROLINA
STATE OF GEORGIA )
COUNTY OF FULTON )
I ____________________, a Notary Public of __________ County, State of
Georgia, certify that _______________________ personally came before me this
day and acknowledged that he/she is ___________ Secretary of AVONDALE MILLS,
INC., an Alabama corporation, and that, by authority duly given and as the act
of the corporation, the foregoing instrument was signed in its name by its
__________ President, sealed with its corporate seal, and attested by
himself/herself as its _______ Secretary.
Witness my hand and official seal, this _____ day of __________, 19__.
My commission expires:
---------------------------------
Notary Public
, 19 .
------------- -- [Official Seal]
200
<PAGE> 206
ALABAMA FORM OF ACKNOWLEDGMENT
(STATE OF ALABAMA )
(__________ COUNTY )
I, the undersigned, a Notary Public in and for said State, hereby
certify that _________________________, whose name as ________________________
of WACHOVIA BANK OF GEORGIA, a national banking association, is signed to the
foregoing instrument, and who is known to me, acknowledged before me on this
day that, being informed of the contents of the instrument, he as such officer,
and with full authority, executed the same voluntarily for and as the act of
said bank.
Given under my hand and seal, this _____ day of __________, 1996.
--------------------------------------
Notary Public
My Commission expires:
----------------
201
<PAGE> 207
ALABAMA FORM OF ACKNOWLEDGMENT
(STATE OF ALABAMA )
(__________ COUNTY )
I, the undersigned, a Notary Public in and for said State, hereby
certify that ______________________________, whose name as
______________________________ of SUNTRUST BANK, ATLANTA, a Georgia bank, is
signed to the foregoing instrument, and who is known to me, acknowledged before
me on this day that, being informed of the contents of the instrument, he as
such officer, and with full authority, executed the same voluntarily for and as
the act of said bank.
Given under my hand and seal, this _____ day of __________, 1996.
--------------------------------------
Notary Public
My Commission expires:
----------------
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ALABAMA FORM OF ACKNOWLEDGMENT
(STATE OF ALABAMA )
(__________ COUNTY )
I, the undersigned, a Notary Public in and for said State, hereby
certify that ______________________________, whose name as
______________________________ of Avondale Mills, Inc., an Alabama corporation,
is signed to the foregoing instrument, and who is known to me, acknowledged
before me on this day that, being informed of the contents of the instrument,
he as such officer, and with full authority, executed the same voluntarily for
and as the act of said corporation.
Given under my hand and seal, this _____ day of __________, 1996.
--------------------------------------
Notary Public
My Commission expires:
----------------
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STATE OF GEORGIA ) SOUTH CAROLINA
) PROBATE
COUNTY OF FULTON )
Before me, the undersigned notary public, personally appeared
the undersigned witness, who being duly sworn, deposed and said that s/he saw
WACHOVIA BANK OF GEORGIA, N.A., by ____________________________ its
_____________________________ sign, seal and deliver the foregoing Amended and
Restated Intercreditor Agreement and that s/he together with the other witness
whose signature appears above witnessed the execution thereof.
--------------------------------------
Witness
SWORN TO and subscribed before
me this _____ day of April, 1996
-------------------------------- (SEAL)
Notary Public for Georgia
My Commission expires:
-------------------
204
<PAGE> 210
STATE OF GEORGIA ) SOUTH CAROLINA
) PROBATE
COUNTY OF FULTON )
Before me, the undersigned notary public, personally appeared the
undersigned witness, who being duly sworn, deposed and said that s/he saw
SUNTRUST BANK, ATLANTA, by ______________________________ its
______________________________ sign, seal and deliver the foregoing Amended and
Restated Intercreditor Agreement and that s/he together with the other witness
whose signature appears above witnessed the execution thereof.
--------------------------------------
Witness
SWORN TO and subscribed before
me this _____ day of April, 1996
-------------------------------- (SEAL)
Notary Public for Georgia
My Commission expires:
-------------------
205
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STATE OF GEORGIA ) SOUTH CAROLINA
) PROBATE
COUNTY OF FULTON )
Before me, the undersigned notary public, personally appeared the
undersigned witness, who being duly sworn, deposed and said that s/he saw
Avondale Mills, Inc. by ______________________________ its
______________________________ sign, seal and deliver the foregoing Amended and
Restated Intercreditor Agreement and that s/he together with the other witness
whose signature appears above witnessed the execution thereof.
--------------------------------------
Witness
SWORN TO and subscribed before
me this _____ day of April, 1996
-------------------------------- (SEAL)
Notary Public for Georgia
My Commission expires:
206
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STATE OF GEORGIA ) SOUTH CAROLINA
) PROBATE
COUNTY OF FULTON )
BEFORE ME, the undersigned notary public, personally appeared
______________________________, who being duly sworn, deposed and said that he
saw _________________________ the _______________________ of Avondale Mills,
Inc., an Alabama corporation, sign, seal and deliver the foregoing Amended and
Restated Intercreditor Agreement on behalf of Avondale Mills, Inc., an Alabama
corporation, and he together with _______________________, witnessed the
execution thereof.
--------------------------------------
SWORN TO and subscribed before
me this _____ day of
_______________________, 1996
--------------------------------
Notary Public
My Commission expires:
[NOTARIAL SEAL]
207
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STATE OF GEORGIA ) SOUTH CAROLINA
) PROBATE
COUNTY OF FULTON )
BEFORE ME, the undersigned notary public, personally appeared
______________________________, who being duly sworn, deposed and said that he
saw _________________________ the _______________________ of Wachovia Bank of
Georgia, N.A., a national banking association, sign, seal and deliver the
foregoing Amended and Restated Intercreditor Agreement on behalf of Wachovia
Bank of Georgia, N.A., a national banking association, and he together with
_______________________, witnessed the execution thereof.
--------------------------------------
SWORN TO and subscribed before
me this _____ day of
___________________, 1996
--------------------------------
Notary Public
My Commission expires:
[NOTARIAL SEAL]
208
<PAGE> 214
STATE OF GEORGIA ) SOUTH CAROLINA
) PROBATE
COUNTY OF FULTON )
BEFORE ME, the undersigned notary public, personally appeared
______________________________, who being duly sworn, deposed and said that he
saw _________________________ the _______________________ of SunTrust Bank,
Atlanta, a Georgia bank, sign, seal and deliver the foregoing Amended and
Restated Intercreditor Agreement on behalf of SunTrust Bank, Atlanta, a Georgia
bank, and he together with _______________________, witnessed the execution
thereof.
--------------------------------------
SWORN TO and subscribed before
me this _____ day of
________________________, 1996
--------------------------------
Notary Public
My Commission expires:
[NOTARIAL SEAL]
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SCHEDULE I
SUNTRUST AGREEMENTS
LEE COUNTY, NORTH CAROLINA (LEE PLANT)
Letter of Credit Agreement Dated as of June 1, 1989, as amended, By
and Between Avondale Mills, Inc. and Trust Company Bank relating to
$5,000,000 The Lee County Industrial Facilities and Pollution Control
Financing Authority Refunding Revenue Bonds (Avondale Mills, Inc.
Project), Series 1989
WALTON COUNTY, GEORGIA
Letter of Credit Agreement Dated as of June 1, 1992, as amended, By
and Between Walton Monroe Mills, Inc. and Trust Company Bank relating
to $4,000,000 Development Authority of Walton County Industrial
Development Revenue Bonds (Walton Monroe Mills, Inc. Project), Series
1992A and $2,000,000 Development Authority of Walton County Industrial
Development Revenue Bonds (Walton Monroe Mills, Inc. Project), Series
1992B
YANCEY COUNTY, NORTH CAROLINA
Letter of Credit Agreement Dated as of July 1, 1988, as amended, By
and Between Avondale Mills, Inc. and Trust Company Bank relating to
$10,000,000 The Yancey County Industrial Facilities and Pollution
Control Financing Authority Refunding Revenue Bonds (Avondale Mills,
Inc. Project), Series 1988
WALHALLA, SOUTH CAROLINA
Letter of Credit Agreement Dated as of December 1, 1990, as amended,
By and Between Avondale Mills, Inc. and Trust Company Bank relating to
$5,000,000 City of Walhalla, South Carolina Refunding Revenue Bonds
(Avondale Mills, Inc. Project), Series 1990
BON AIR, ALABAMA
Letter of Credit Agreement Dated as of April 1, 1992, as amended, By
and Between Avondale Mills, Inc. and Trust Company Bank relating to
$3,000,000 The Industrial Development Board of the Town of Bon Air
Refunding Revenue Bonds (Avondale Mills, Inc. Project), Series 1992
WORKERS COMPENSATION LETTERS OF CREDIT
(a) Application and Agreement for Irrevocable Standby Letter of Credit
dated November 18, 1987 in the face amount of $200,000
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(b) Application and Agreement for Irrevocable Standby Letter of Credit
dated December 7, 1988 in the face amount of $500,000
(c) Application and Agreement for Irrevocable Standby Letter of Credit
dated October 20, 1992 in the face amount of $250,000
(d) Application and Agreement for Irrevocable Standby Letter of Credit
dated August 12, 1993 in the face amount of $250,000
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SCHEDULE II
SUNTRUST MORTGAGES
LEE COUNTY, NORTH CAROLINA (LEE PLANT)
Deed of Trust and Security Agreement from Avondale Mills, Inc., to
Richard Love, as deed of trust trustee for the benefit of Wachovia
Bank of Georgia, National Association, as Bond Trustee, and Trust
Company Bank Dated as of December 2, 1992
WALTON COUNTY, GEORGIA
Security Deed and Security Agreement dated as of June 1, 1992 from
Development Authority of Walton County (the "Issuer") and Walton
Monroe Mills, Inc. (the "Company"; the Issuer and the Company herein
together called the "Grantors") to Trust Company Bank
YANCEY COUNTY, NORTH CAROLINA
(a) Deed of Trust and Security Agreement from Avondale Mills, Inc., to
Staunton Norris, as deed of trust trustee for the benefit of First National
Bank of Atlanta, as Bond Trustee, and Trust Company Bank Dated as of July 1,
1988
(b) Security Agreement from Avondale Mills to Trust Company Bank Dated as
of December 2, 1992
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EXHIBIT L
AMENDED AND RESTATED STOCK PLEDGE AGREEMENT
THIS AMENDED AND RESTATED STOCK PLEDGE AGREEMENT (this
"Agreement"), is made and entered into as of April 29, 1996, by and between
Wachovia Bank of Georgia, N.A., a national banking association, as agent for
the Banks parties to the "Credit Agreement" (as hereinafter defined)(the
"Agent"), and Avondale Incorporated, a Georgia corporation ("Pledgor");
WITNESSETH:
WHEREAS, the Pledgor executed and delivered a Stock Pledge Agreement
dated as of March 29, 1994 (the "Original Pledge Agreement" pursuant to a
Credit Agreement of even date therewith by and among the Borrower, the Agent
and the Banks party thereto (the "Original Credit Agreement"); and
WHEREAS, pursuant to that certain Amended and Restated Credit
Agreement, dated as of even date herewith, among Borrower, the Agent, The First
National Bank of Chicago, as Documentation Agent, and the Banks parties thereto
(as amended or modified from time to time, the "Credit Agreement"), the
Original Credit Agreement has been amended and restated, and the Banks have
made or will make loans to the Borrower; and
WHEREAS, the obligations of the Banks to extend financial
accommodations under the Credit Agreement is conditioned on, among other
things, the execution and delivery by Pledgor of the Parent Guaranty (as
defined in the Credit Agreement) and this Agreement in order to secure said
indebtedness and to induce the Banks and the Agent to execute and enter into
the Credit Agreement, the Borrower has agreed to execute and deliver this
Agreement, granting a security interest in, and lien upon, the Pledged Stock to
the Agent for the benefit of the Banks, and continuing in effect the security
interest in, and lien upon, the Pledged Stock granted to the Agent pursuant to
the Original Pledge Agreement; and
WHEREAS, pursuant to the Parent Guaranty, Pledgor has guaranteed
payment of all of the Obligations; and
WHEREAS, to induce the Banks to extend or to continue to extend
financial accommodations to the Borrower, Pledgor has agreed to enter into this
Agreement; and
WHEREAS, Pledgor is the sole owner of 100% of the Capital Stock of the
Borrower and will be benefitted by such financial accommodations by the Banks
to the Borrower;
WHEREAS, it is the intent of the parties that this Agreement amend,
restate and supersede the Original Pledge Agreement, and continue in effect the
security interests and liens granted thereto without lapse or loss of
perfection;
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NOW, THEREFORE, for the sum of $10 in hand paid and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to induce the Banks to extend financial accommodations from
time to time to the Borrower, Pledgor and the Agent hereby agree as follows:
1. Defined Terms. Capitalized terms contained herein but not
defined herein shall have the meanings given them in the Credit Agreement.
2. Pledge of Collateral. Pledgor does hereby pledge,
hypothecate, assign, transfer, set over, deliver and grant a security interest
in and to the Agent in all that Capital Stock of Avondale Mills, Inc. set forth
and described on Exhibit "A" attached hereto and by reference made part hereof
(which stock is simultaneously herewith being delivered to the Agent,
accompanied by blank stock powers signed by Pledgor), together with any and all
other securities, cash or other property at any time and from time to time
receivable or otherwise distributed in respect of or in exchange for any or all
of such pledged stock, and together with the proceeds thereof (hereinafter said
property being collectively referred to as the "Collateral"), all as security
for the payment of all of the Obligations in existence from time to time.
3. Holding of Collateral and Rights. Pledgor acknowledges and
agrees that the Agent shall hold the Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto forever, subject, however, to the provisions of Sections 8 and 14
hereof and to the return of the Collateral (or such portion thereof as may be
existing from time to time hereafter after giving effect to the terms hereof)
by the Agent to Pledgor pursuant to Section 4 hereof or upon the final and
indefeasible payment in full of all the Obligations and termination in writing
of any and all credit commitments with respect thereto.
4. Intentionally Omitted.
5. Representations and Warranties; Certain Covenants. The Parent
incorporates herein by reference as fully as if set forth herein all of the
representations and warranties of the Parent contained in Article IV of the
Credit Agreement (which representations and warranties shall be deemed to have
been renewed by Pledgor upon each Borrowing under the Credit Agreement to the
same extent and with the same effect as provided therein with respect to the
renewal thereof by the Borrower) and all covenants of Pledgor contained in
Article V of the Credit Agreement. In addition, Pledgor hereby represents and
warrants (which representations and warranties likewise shall be deemed to have
been renewed by Pledgor upon each Borrowing under the Credit Agreement) that:
(i) Pledgor has the complete and unconditional authority to pledge the
Collateral; (ii) Pledgor holds the Collateral free and clear of any and all
liens, charges, encumbrances and security interests thereon (other than in
favor of the Agent) and has good right, title and legal authority to pledge the
Collateral in the manner contemplated herein; (iii) all stock now owned or
hereafter owned by Pledgor and constituting or which will constitute Collateral
hereunder is, or will be on date of pledge thereof, validly issued, fully paid
and non-assessable; and (iv) no authorization, approval, or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required either (1) for the pledge by Pledgor of the Collateral pursuant to
this Agreement or for the execution, delivery or performance of this Agreement
by Pledgor or (2) for the exercise by Agent of the voting or other
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<PAGE> 220
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement (except as may be required in connection
with the exercise of such rights or remedies by laws affecting the voting,
offering and sale of securities generally).
6. Delivery of Additional Securities; Further Assurances.
Pledgor further covenants with the Agent that Pledgor will cause any additional
securities or other property issued to or received by Pledgor with respect to
any of the Collateral (except as provided in Section 8 below), whether for
value paid by Pledgor or otherwise, and including stock dividends, to be
deposited forthwith with the Agent and be pledged hereunder, in each case
accompanied by blank stock powers or other proper instruments of assignment
duly executed by Pledgor in such form as may be reasonably required by the
Agent. Pledgor agrees that at any time and from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action that the Agent may reasonably request,
in other to perfect and protect the security interest granted or purported to
be granted hereby or to enable the Agent to exercise and enforce its rights,
powers and remedies hereunder with respect to any Collateral.
7. Name in Which Collateral Held. Pledgor further acknowledges
and agrees that the Agent may hold any of the Collateral in its own name,
endorsed or assigned in blank or in the name of any nominee or nominees, and
that the Agent may deliver any or all of the Collateral to the issuer or
issuers thereof for the purpose of making denominational exchanges or
registrations of transfer or for such other purposes in furtherance of this
Agreement as the Agent may deem advisable.
8. Voting Rights; Dividends, Etc. (a) So long as no Event of
Default shall have occurred and be continuing and the Agent has not, subject to
the provisions of Section 14 hereof, delivered a notice to Pledgor of the
Agent's intention to exercise voting and other consensual rights pursuant to
this Section 8:
(i) Pledgor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the Collateral or any
part thereof for any purpose not prohibited by the terms of this Agreement, the
Parent Guaranty, the Credit Agreement or any other Loan Documents; provided,
however, that the Pledgor shall give the Agent at least 5 Domestic Business
Days' prior written notice of the manner in which it intends to exercise any
right if such action would have a material adverse effect on the value of the
Collateral, and following request therefor by the Agent, Pledgor shall not
exercise or refrain from exercising any such right; and
(ii) the Agent shall execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies and other
instruments as Pledgor may reasonably request for the purpose of enabling
Pledgor to exercise the voting and other rights which it is entitled to
exercise pursuant to clause (i) above.
(iii) Pledgor shall be entitled to receive and
retain any nonliquidating cash dividends, interest or any other distribution of
property paid, payable or otherwise distributed in cash in respect of the
Collateral.
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(b) Subject to the provisions of Section 14 hereof, upon
the occurrence and during the continuance of an Event of Default, and with
respect to clause (i) below, the delivery of a notice to Pledgor of the Agent's
intention to exercise voting and other consensual rights pursuant thereto:
(i) All rights of Pledgor to exercise the
voting and other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 8(a) shall cease, and all such rights shall
thereupon become vested in the Agent who shall thereupon have the sole right to
exercise such voting and other consensual rights; provided, however, Pledgor
shall continue to have the rights to exercise such voting and other consensual
rights notwithstanding the occurrence and continuance of an Event of Default
until the Agent, subject to the provisions of Section 14 hereof, delivers a
notice to Pledgor of the Agent's intention to exercise such voting and other
consensual rights.
(ii) All rights of Pledgor to receive cash
dividends, interest, proceeds or other distributions in cash from the
Collateral, which it would otherwise be authorized to receive and retain
pursuant to Section 8(a) shall cease and all rights to dividends, interest,
proceeds and other distributions shall thereupon be vested in the Agent, who
shall thereupon have the sole right to receive and hold as Collateral such
interest or other distributions. All dividends, interest, proceeds and other
distributions which are received by Pledgor contrary to these provisions shall
be received in trust for the benefit of the Agent, shall be segregated from
other property or funds of Pledgor and shall be forthwith delivered to the
Agent as Collateral in the same form as so received (with any necessary
endorsement).
9. Agent Appointed Attorney-in-Fact. Pledgor hereby irrevocably
appoints the Agent as Pledgor's attorney-in-fact, with full authority in the
place and stead of Pledgor and in the name of Pledgor or otherwise, from time
to time in the Agent's discretion, after the occurrence and during the
continuance of an Event of Default, and subject to the provisions of Section 14
hereof, where applicable, to take any action and to execute any instrument
which the Agent may deem reasonably necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to receive, endorse
and collect all instruments made payable to Pledgor representing any dividend,
principal and/or interest payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same, when
and to the extent permitted by this Agreement.
10. The Agent May Perform. If Pledgor fails to perform any
agreement contained herein, the Agent may take reasonable action to perform, or
cause performance of, such agreement, and the reasonable expenses of the Agent
incurred in connection therewith shall be payable by Pledgor under Section 13;
provided, that, the Agent shall exercise commercially reasonable efforts to
notify Pledgor prior to taking any such action (although the failure to so
notify Agent shall not limit the Agent's rights hereunder).
11. Reasonable Care. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Agent accords the Agent's own property, it being understood that the
Agent shall not have responsibility for (i) ascertaining or taking action with
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respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters, unless reasonably requested to do so by Pledgor, or
(ii) taking any necessary steps to preserve rights against any parties with
respect to any Collateral.
12. Events of Default. The following shall constitute "Events of
Default" hereunder:
(a) Should Pledgor assign, attempt to encumber, subject
to further pledge or security interest, sell, transfer or otherwise dispose of
any of the Collateral without the prior written consent of the Agent;
(b) If an "Event of Default" occurs under any of the
Credit Agreement, the other Loan Documents or the Parent Guaranty; or
(c) If any representations or warranties made herein by
Pledgor shall be untrue in any material respect when made or furnished.
13. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) Subject to the provisions of Section 14 hereof, the
Agent may exercise (in compliance with all applicable securities laws) in
respect of the Collateral, in addition to other rights and remedies provided
for herein or otherwise available to them, all the rights and remedies of a
secured party on default under the Uniform Commercial Code in effect in the
State of Georgia at that time, and the Agent may also, without notice except as
specified below, sell (in compliance with all applicable securities laws) the
Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, over the counter or at any of the Agent's offices or
elsewhere, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as the Agent may deem commercially reasonable
or otherwise in such manner as necessary to comply with applicable federal and
state securities laws. The Agent shall be authorized at any such sale (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale the Agent shall have the
right to assign, transfer and deliver to the purchaser or purchasers at any
such sale and such purchasers shall hold the property sold absolutely, free
from any claim or right on the part of Pledgor, and Pledgor hereby waives (to
the extent permitted by law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Subject to the provisions of Section
14 hereof, the Agent shall give Pledgor at least 10 days' notice of the time
and place of any public sale or the time after which any private sale is to be
made , which Pledgor agrees shall constitute reasonable notification. At any
such sale, the Agent may bid (which bid may be, in whole or in part, in the
form of cancellation of Obligations) for and purchase the whole or any part of
the Collateral. The Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. If sale of all or any part of the
Collateral is made on credit or for future delivery,
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the Collateral so sold may be retained by the Agent until the sale price is
paid by the purchaser or purchasers thereof, but the Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such
Collateral may be sold again upon like notice. Pledgor agrees that any sale of
the Collateral conducted by the Agent in accordance with the foregoing
provisions of this Section 13 shall be deemed to be a commercially reasonable
sale under O.C.G.A. ss. 11-9-504 of the Georgia Uniform Commercial Code. As an
alternative to exercising the power of sale herein conferred upon them, the
Agent may proceed by a suit or suits at law or in equity to foreclose the
security interest granted under this Agreement and to sell the Collateral, or
any portion thereof, pursuant to a judgment or decree of a court or courts of
competent jurisdiction.
(b) Any cash held by the Agent as Collateral and all
cash proceeds received by the Agent in respect of any sale of, collection from,
or other realization upon or any part of the Collateral following the
occurrence of an Event of Default shall be applied by the Agent for the benefit
of the Banks in the following manner: first, in discharge of all expenses
incurred by the Agent which Pledgor is obligated to reimburse the Agent
pursuant to Section 15 hereof; secondly, to all outstanding fees and other
expenses owing under the Credit Agreement or the other Loan Documents in such
order as the Required Banks shall elect; thirdly, to accrued and unpaid
interest on the Obligations in such order as the Required Banks may elect; and
lastly, to the principal balances of any such Obligations then outstanding in
such order as the Required Banks may elect.
(c) Any surplus of such cash or cash proceeds held by
the Agent and remaining after payment in full of all the Obligations shall be
paid over to Pledgor or to whomsoever may be lawfully entitled to receive such
surplus.
14. Standstill as to Certain Remedies. Notwithstanding any other
provision in this Agreement to the contrary, the right of the Agent with
respect to voting and other consensual rights pursuant to Section 8(b) hereof
and with respect to sale of the Collateral pursuant to Section 13(a) hereof
shall not vest and may not be exercised for a period of 90 days after whichever
of the following is applicable (the "Standstill Period"):
(i) with respect to an Event of Default under Section 6.01(b) of the
Credit Agreement arising out of a breach of any of Sections 5.03 through 5.06,
inclusive, of the Credit Agreement, the earlier to occur of (x) written notice
thereof has been given to the Pledgor by the Agent, or (y) an officer of the
Pledgor otherwise becomes aware of any such breach, or (z) the date which is 30
days after the end of the Fiscal Quarter in which such breach occurs;
(ii) with respect to any Event of Default under Section 6.01(m) of the
Credit Agreement, written notice thereof has been given to the Pledgor by the
Agent; and
(iii) with respect to any other Event of Default, the date of
occurrence of such Event of Default,
in each case, unless a "Standstill Termination Event" occurs during the
Standstill Period, in which case such rights may be exercised by the Agent
immediately or at any time thereafter, so
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long as such Event of Default continues. The term "Standstill Termination
Event" means the occurrence of any of the following events:
(a) An Event of Default under Section 5.02(ii) of the Credit
Agreement;
(b) The Consolidated Cash Flow of the Pledgor and its
Consolidated Subsidiaries, determined on a consolidated basis in accordance
with GAAP, calculated for the fiscal month of the Pledgor just ended and the
immediately preceding 11 fiscal months of the Pledgor, is less than
$55,000,000;
(c) The Fixed Charge Coverage Ratio, calculated at the end of
each fiscal month of the Pledgor, is greater than 1.25 to 1.0;
(d) The Borrower or the Pledgor shall create any Lien securing
Debt in excess of $1,000,000 on any of the Collateral or any Plant which is not
permitted by Section 5.11 of the Credit Agreement;
(e) An Event of Default under Section 5.14 of the Credit
Agreement, but if such Event of Default relates to a sale of assets, only if
the amount thereof exceeds the amount permitted by Section 5.14 by $2,000,000;
(f) The Borrower or the Pledgor shall incur any Debt of the types
described in clauses (i) or (ii) of the definition of Debt in the Credit
Agreement, or Debt of others of such type Guaranteed by the Borrower or the
Pledgor, in excess of $4,000,000, which is not permitted by Section 5.23 of the
Credit Agreement, or the Receivables Subsidiary shall incur any Debt or other
liabilities other than in connection with the Receivables Securitization
Program;
(g) The Pledgor or any Subsidiary which is not a Wholly-Owned
Subsidiary shall make any Restricted Payments in any Fiscal Year in an amount
in excess of $2,000,000 over the maximum amount permitted by Section 5.07 of
the Credit Agreement;
(h) An Event of Default occurs under Section 5.26 of the Credit
Agreement;
(i) The Borrower shall fail to pay within 5 days of the date when
due (other than by reason of acceleration of maturity pursuant to Section 6.01
of the Credit Agreement) any principal of any Loan, or shall fail to pay any
interest on any Loan within 10 Domestic Business Days after such interest shall
become due, or, if the Event of Default which commences the Standstill Period
arose from a failure to pay principal (other than by reason of acceleration of
maturity pursuant to Section 6.01 of the Credit Agreement) of or interest on
the Loans, such failure continues after the date such Event of Default occurred
for 5 days, with respect to a principal payment failure, or 5 Domestic Business
Days, with respect to an interest payment failure;
(j) An Event of Default occurs under any of Sections 6.01(g), (h)
or (l) of the Credit Agreement; or
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(k) The Pledgor fails to comply with the provisions of the last
sentence of this Section 14.
So long as the Event of Default which commenced the Standstill Period continues,
the Pledgor will furnish to the Agent, as soon as available and in any event,
within 21 days after the end of each fiscal month of the Pledgor, commencing
with the fiscal month in which such Event of Default occurs, the financial
statements required to be furnished by Section 5.01(b) of the Credit Agreement,
but on a monthly basis, for each fiscal month of the Parent and the portion of
the Fiscal Year ended at the end of such fiscal month, together with a statement
of the chief financial officer or the chief accounting officer of the Pledgor,
setting forth in reasonable detail the calculations required to establish
whether a Standstill Termination Event has occurred under paragraph (b) or (c)
above.
15. Expenses. Pledgor will, upon demand, pay to the Agent the amount of
any and all reasonable expenses, including the reasonable fees and expenses of
its counsel, actually incurred, and of any experts and agents, and including any
taxes or fees incurred on account of the execution, issuance, delivery or
recording of this Agreement or other documents executed in connection herewith
which the Agent may incur in connection with (i) the sale of, collection from,
or other realization upon, any of the Collateral, or (ii) the exercise or
enforcement of any of the rights of the Agent hereunder, or (iii) the failure by
Pledgor to perform or observe any of the provisions hereof.
16. Security Interest Absolute. All rights of the Agent hereunder, the
security interest granted to the Agent hereunder, and all obligations of Pledgor
hereunder, shall be absolute and unconditional irrespective of any of the
following, and Pledgor expressly consents to the occurrence of any of such
events and waives, in its capacity as Pledgor, to the extent permitted by law,
any defense arising therefrom:
(i) any lack of validity or enforceability of any of the
Loan Documents or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from any of the Loan
Documents;
(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to or departure
from any of the Loan Documents, including, without limitation, the Security
Agreement and any Operative Mortgages or any other guaranty for all or any of
the Obligations; or
(iv) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, Pledgor in respect of the
Obligations or in respect of this Agreement.
17. Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by Pledgor herefrom shall in any event be
effective unless the same
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shall be in writing and signed by the Agent and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
18. No Waiver; Cumulative Remedies. No failure on the part of the Agent
to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy by the Agent preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. All
remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law.
19. Severability. If any provision of this Agreement or the application
thereof to any party hereto or circumstances shall be invalid or unenforceable
to any extent, the remainder of this Agreement and the application of such
provisions to any other party thereto or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
20. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telecopier or similar
writing) and shall be given to such party at its address or telecopier number
set forth on the signature pages or at such other address or telecopier number
as such party may hereafter specify for the purpose by notice to each other
party. Each such notice, request or other communication shall be effective (i)
if given by telecopier, when such telecopy is transmitted to the telecopier
number specified in this Section and the appropriate confirmation is received,
(ii) if given by mail, 3 Domestic Business Days after such communication is
deposited in the mail, with first class postage prepaid, addressed as aforesaid
or (iii) if given by any other means, when delivered at the address specified in
this Section 20.
21. Time is of the Essence. Time is of the essence in this Agreement.
22. Interpretation. No provision of this Agreement shall be construed
against or interpreted to the disadvantage of any party hereto by any court or
other governmental or judicial authority by reason of such party having or being
deemed to have structured or dictated such provision.
23. The Agent Not Joint Venturer. Neither this Agreement nor any
agreements, instruments, documents or transactions contemplated hereby shall in
any respect be interpreted, deemed or construed as making the Agent a partner or
joint venturer with Pledgor or as creating any similar relationship or entity,
and Pledgor agrees that it will not make any contrary assertion, contention,
claim or counterclaim in any action, suit or other legal proceeding involving
the Agent and Pledgor.
24. Jurisdiction. Pledgor agrees that any legal action or proceeding
with respect to this Agreement may be brought in the courts of the State of
Georgia or the United States of America for the Northern District of Georgia,
Atlanta Division, all as the Agent may elect. By execution of this Agreement,
Pledgor hereby submits to each such jurisdiction, hereby expressly waiving
whatever rights may correspond to it by reason of its present or future
domicile. Nothing herein shall affect the right of the Agent to commence legal
proceedings or otherwise
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proceed against Pledgor in any other jurisdiction or to serve process in any
manner permitted or required by law.
25. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia and shall inure to the benefit
of and be binding upon the successors and assigns of the parties hereto.
26. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when fully executed shall be an original, and all of
said counterparts taken together shall be deemed to constitute one and the same
agreement.
[Signatures on Following Page]
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IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly
executed under seal as of the date first above written.
"PLEDGOR"
AVONDALE INCORPORATED (SEAL)
By:
----------------------------------------
Title:
Avondale Incorporated
506 South Broad Street
Monroe, Georgia 30655
Attention: Chairman and Chief Executive Officer
Telecopier number: 770-267-2543
Telephone number: 770-267-2226
ACCEPTED AND AGREED:
WACHOVIA BANK OF GEORGIA, N.A.,
in its capacity as Agent
By:
------------------------------
Title:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Commercial Group
Telecopier number: 404-332-6220
Telephone number: 404-332-6094
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Exhibit A to Amended and Restated
Stock Pledge Agreement
DESCRIPTION OF THE CAPITAL STOCK OF AVONDALE MILLS, INC.
1,000 Shares, $1.00 Par Value Common Stock Evidenced by Certificate No. 1
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Exhibit M
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of April 29 1996 (this
"Agreement"), is executed and delivered by WACHOVIA BANK OF GEORGIA, N.A., as
agent under the Security Agreement referred to hereinbelow (in such capacity,
together with its successors in such capacity, the "Agent"), and MANUFACTURERS
AND TRADERS TRUST COMPANY as trustee under the Pooling and Servicing Agreement
referred to hereinbelow (in such capacity, the "Trustee").
BACKGROUND
A. Avondale Mills, Inc. (the "Company") and the Agent, are
parties to that certain Amended and Restated Security Agreement dated as of
April 29, 1996 (as amended, modified, supplemented or restated and in effect
from time to time, the "Security Agreement") for the benefit of certain
creditors of the Company party to the credit agreement referred to therein (as
amended, modified, supplemented or restated and in effect from time to time, the
"Credit Agreement").
B. The Company is entering into that certain Receivables Purchase
Agreement (as amended, modified, supplemented or restated and in effect from
time to time, the "Purchase Agreement"), dated as of April 29, 1996, by and
between the Company and Avondale Receivables Company (the "Receivables
Subsidiary"), pursuant to which the Company will sell or contribute to the
Receivables Subsidiary substantially all domestic Receivables that it now owns
and from time to time hereafter will own, and the Company may from time to time
enter into one or more Contribution Agreements (each, a "Contribution
Agreement") with the Receivables Subsidiary, pursuant to which the Company will
contribute to the Receivables Subsidiary some or all of its Receivables.
C. Contemporaneously with the sale or contribution of Receivables
to the Receivables Subsidiary pursuant to the Purchase Agreement and any
Contribution Agreement, the Receivables Subsidiary will transfer the Receivables
and the other Specified Assets (as defined below) to the Trustee pursuant to
that certain Pooling and Servicing Agreement (as amended, supplemented, modified
or restated and in effect from time to time, the "Pooling and Servicing
Agreement") dated as of April 29, 1996 among the Receivables Subsidiary, the
Company, as initial Servicer, and the Trustee.
D. Contemporaneously with the execution and delivery of the
Purchase Agreement and the Pooling and Servicing Agreement, and from time to
time thereafter, securities ("Certificates") and undivided interests ("Purchased
Interests") representing beneficial interests in, or obligations secured by,
such Specified Assets will be issued. Certain of the Certificates and Purchased
Interests may be sold by the Receivables Subsidiary to investors ("Investors")
and/or pledged to secure loans or other extensions of credit made to the
Receivables Subsidiary by lenders (the "Lenders"), all as further provided by
the Transaction Documents (as defined below).
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E. To induce the Receivables Subsidiary and the Trustee to enter
into the Transaction Documents, to induce any Lenders to extend credit
thereunder and to induce any Investors to purchase Certificates, the requisite
parties to the Credit Agreement have authorized the Agent to execute and deliver
this Agreement.
F. The execution and delivery of this Agreement is a condition
precedent to the effectiveness of the Purchase Agreement, the Pooling and
Servicing Agreement and the other Transaction Documents.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Definitions. (a) Capitalized terms not defined herein that are
defined in Appendix A to the Pooling and Servicing Agreement shall for the
purposes of this Agreement (including the recitals hereof) have the meanings
ascribed to such terms in such Appendix A.
(b) In addition, the following terms shall have the meanings
specified below:
"Bank Collateral" means all property and interests in property
(other than Specified Assets) now or hereafter acquired by the Company
in or upon which a security interest, lien or mortgage is granted by
the Company to the Agent under the Security Agreement or any other
collateral document executed in connection with the Credit Agreement,
including the "Excluded Receivables Assets", as defined below.
"Excluded Receivables Assets" means: (i) "Inventory
Collateral" (as that term is defined in the Security Agreement referred
to in the Credit Agreement), other than returned goods, if any,
relating to the sale that gave rise to any Receivables which are
included in the Specified Assets ("Specified Returned Goods)"; (ii)
Excluded Receivables; and (iii) any Receivables or other proceeds of
Inventory Collateral created or arising (x) after a Bankruptcy Event in
which the Company is the debtor (other than proceeds of Specified
Returned Goods), (y) after termination of purchases under the Purchase
Agreement or (z) from the sale or other disposition of any of the
Inventory Collateral (other than Specified Returned Goods) by the
Agent, as a secured party under the UCC.
"Specified Assets" means the Purchased Receivables, the
Contributed Receivables and the Related Assets, as more fully described
in Sections 1.1 and 1.9 of the Purchase Agreement; provided, however,
that, notwithstanding anything to the contrary in the Purchase
Agreement, Appendix A to the Pooling and Servicing Agreement or any
other Transaction Documents, the term "Specified Assets" shall not
include any of the Excluded Receivables Assets, which shall constitute
Bank Collateral.
2. Authorization. The Agent confirms that the terms of the Credit
Agreement (i) authorize the Agent to execute, deliver and perform this
Agreement, and (ii) provide for all of the parties to the Credit Agreement to be
bound by this Agreement.
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3. Release of Specified Assets. The Agent hereby releases all
liens and security interests of any kind whatsoever which the Agent (or any
trustee or agent acting on its behalf) holds in Specified Assets, to the extent
that such Specified Assets would otherwise constitute Bank Collateral. It is
understood and agreed that the Agent shall have no rights to or in any proceeds
of the Bank Collateral that constitute Specified Assets, except to the extent
such proceeds constitute Excluded Receivables Assets. The Agent agrees, upon the
reasonable request of the Trustee, to execute and deliver to the Trustee such
UCC partial release statements and other documents and instruments, and do such
other acts and things, as the Trustee may reasonably request in order to
evidence the release provided for in this Section 3; provided, however, that
failure to execute and deliver any such partial release statements, documents or
instruments, or to do such acts and things, shall not affect or impair the
release provided for in this Section 3.
4. Separation of Collateral. (a) The Trustee hereby agrees
promptly to return to the Company funds or other property other than Specified
Assets (or proceeds thereof, other than proceeds constituting Excluded
Receivables Assets) which constitute Bank Collateral (or proceeds thereof);
provided, that the Company or the Agent shall have identified such Bank
Collateral or proceeds in writing to the Trustee or an Authorized Officer of the
Trustee otherwise has actual knowledge of the identity of such Bank Collateral
or proceeds; and provided further that if the Agent shall so request in a
written notice to the Trustee, the Trustee shall return such funds and property
to the Agent instead of to the Company. For purposes of maintaining the
perfection of the Agent's lien thereon, the Agent hereby appoints the Trustee as
its agent in respect of such funds or other property.
(b) The Agent hereby agrees to promptly return to the Trustee any
funds or other property which constitute Specified Assets (or proceeds thereof),
provided, that the Trustee shall have identified such Specified Assets or
proceeds in writing to the Agent or an officer of the Agent otherwise has actual
knowledge of the identity of such Specified Assets or proceeds. For purposes of
maintaining the perfection of the Trustee's interests therein, the Trustee
hereby appoints the Agent as its agent with respect to such Specified Assets and
proceeds.
(c) All payments made by an Obligor that is obligated to make
payment with respect to both Specified Assets and other Receivables shall be
applied against the Receivables, if any, that are designated by such Obligor. In
the absence of such designation, such payment shall be applied against the
oldest outstanding Receivables owed by such Obligor.
(d) Unless the Trustee and Agent agree otherwise in writing,
neither the Trustee nor the Agent shall send any notice to an Obligor directing
it to remit payments in respect of any Receivable to any account other than the
Lockbox Accounts or the Concentration Accounts.
(e) In the event that any of the Specified Assets (or proceeds
thereof, other than proceeds constituting Excluded Receivables Assets) become
commingled with any Bank Collateral (or proceeds thereof), then the Agent and
the Trustee shall, in good faith, cooperate with each other to separate the
Specified Assets (and proceeds thereof) from such Bank Collateral (and proceeds
thereof); provided, however, that in the case of any assets, if such separation
is not possible, the parties hereto agree to share the proceeds of such property
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proportionately according to the interests of the Agent and the Trustee therein;
provided, further, that each party shall bear its own out-of-pocket costs and
expenses incurred to effect such separation and/or sharing (including without
limitation fees and expenses of auditors and attorneys) to the extent that such
costs and expenses are not reimbursed or otherwise borne by the Company (it
being understood that nothing in this Agreement shall limit the obligation of
the Company to make such reimbursement or bear such costs and expenses in
accordance with the terms of the Credit Agreement, the Security Agreement and
the Transaction Documents); and provided, further, that this Section 4(e) shall
not require any party to this Agreement to take any action which it believes, in
good faith, may prejudice its ability to realize the value of, or to otherwise
protect, its interests (and the interests of the parties for which it acts).
5. Additional Agreements with Bank Parties. The Agent agrees,
represents and warrants, on behalf of itself and the other parties to the Credit
Agreement (excluding the Company; the Agent and such other parties being herein
called the "Bank Parties") as follows:
(a) The Bank Parties shall not (i) challenge the transfers of
Specified Assets from the Company to the Receivables Subsidiary, whether on the
grounds that such transfers were disguised financings or fraudulent conveyances
or otherwise, so long as such transfers are carried out in all material respects
in accordance with the Transaction Documents, or (ii) assert that the Company
and the Receivables Subsidiary should be substantively consolidated.
(b) Notwithstanding any prior termination of this Agreement, the
Bank Parties shall not, with respect to the Receivables Subsidiary, institute or
join any other Person in instituting a proceeding of the type referred in the
definition of "Event of Bankruptcy", so long as any Certificate or Purchased
Interest or any obligation to an Investor or a Lender shall be outstanding or
there shall not have lapsed one year plus one day since the last day on any such
Certificate or Purchased Interest or obligation shall have been outstanding. The
foregoing will not limit the rights of Bank Parties to file any claim or
otherwise take any action with respect to any such insolvency proceedings that
may be instituted against the Receivables Subsidiary by a Person other than a
Bank Party.
(c) No Bank Party shall assign its rights or obligations under the
Credit Agreement to any other Person unless such Person shall have agreed in
writing to be bound by the terms of this Agreement as if it were a party hereto.
(d) Subject to any applicable restrictions in the Transaction
Documents, the Trustee may (but shall not be required to) enter into one or more
premises of the Company, whether leased or owned, at any time during reasonable
business hours, without force or process of law and without obligation to pay
rent or compensation to the Company, the Receivables Subsidiary or the Bank
Parties and may use any equipment (including data processing equipment) located
thereon relating to Records and may have access and use of such Records and any
other property (including software) to which such access and use are granted
under the Transaction Documents, in each case provided that such uses are for
the purposes of enforcing the Trustee's rights with respect to the Specified
Assets.
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6. Additional Agreements of Trustee. The Trustee agrees, represents and
warrants as follows:
(a) The Trustee shall not (i) challenge the transfers of the Bank
Collateral (other than Specified Assets) from the Company to the Agent, whether
on the grounds that such transfers were fraudulent conveyances or otherwise, so
long as such transfers are carried out in all material respects in accordance
with the Credit Agreement, the Security Agreement and related documents, or (ii)
assert that the Company and the Receivables Subsidiary should be substantively
consolidated.
(b) The Trustee shall not assign its rights or obligations under
the Transaction Documents to any other Person unless such Person shall have
agreed in writing to be bound by the terms of this Agreement as if it were a
party hereto.
(c) The Trustee does not have any security or other interest in
any portion of the Bank Collateral (including, without limitation, Receivables)
that do not constitute Specified Assets.
(d) The Trustee shall use commercially reasonable efforts to
notify the Agent of any termination pursuant to Section 8.1 or 8.2 of the
Purchase Agreement, but failure to give such notice shall not create any
liability on the part of the Trustee or affect its rights hereunder.
7. Reliance. Each of the Receivables Subsidiary, the Trustee, all
Lenders, all Investors and all Bank Parties may rely on this Agreement as if
such Person were a party hereto. This Agreement shall remain in effect until the
termination of the Trust in accordance with the terms of the Pooling Agreement.
8. Miscellaneous. (a) No delay upon the part of any party to this
Agreement and the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any such party of
any right, power or remedy preclude other or further exercise thereof, or the
exercise of any other right, power or remedy. No waiver, amendment or other
modification, or consent with respect to, any provision of this Agreement shall
be effective unless the same shall be in writing and shall be signed by the
Agent and the Trustee.
(b) This Agreement may be executed in any number of counterparts
and by different parties hereto on separate counterparts, each of one which so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(c) This Agreement shall be governed by and construed in
accordance with the internal laws (as opposed to conflicts of law provisions) of
the State of New York.
(d) This Agreement shall be binding upon and inure to the benefit
of each of the parties hereto and their respective successors and assigns.
(e) All notices and other communications for hereunder shall,
unless otherwise stated herein, be in writing (including telecommunications and
communications by facsimile copy) and mailed, transmitted or delivered, as to
each party hereto at its address set forth under its name on
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<PAGE> 235
the signature pages hereof or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective upon receipt or (i) in the case of notice by
mail, three business days after being deposited in the mails, postage prepaid,
and (ii) in the case of notice by facsimile copy, upon the earlier to occur of
(A) completion of transmission and telephone confirmation of receipt or (B) the
recipient's close of business on the date of transmission.
IN WITNESS WHEREOF, the Agent and the Trustee have caused this
Agreement to be executed and delivered as of the day first above written.
WACHOVIA BANK OF GEORGIA, N.A.,
as Agent
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address:
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address:
ACKNOWLEDGED AND AGREED:
AVONDALE RECEIVABLES COMPANY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
AVONDALE MILLS, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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EXHIBIT N
BORROWER PLEDGE AGREEMENT
THIS BORROWER PLEDGE AGREEMENT (this "Agreement"), is made and entered
into as of April 29, 1996, by and between Wachovia Bank of Georgia, N.A., a
national banking association, as agent for the Banks parties to the "Credit
Agreement" (as hereinafter defined)(the "Agent"), and Avondale Mills, Inc., an
Alabama corporation ("Borrower");
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Credit
Agreement, dated as of April 29, 1996 among Borrower, the Agent, The First
National Bank of Chicago, as Documentation Agent, and the Banks parties thereto
(as amended or modified from time to time, the "Credit Agreement"), the Banks
have made or will make loans to the Borrower; and
WHEREAS, the obligations of the Banks to extend financial
accommodations under the Credit Agreement is conditioned on, among other things,
the execution and delivery by Borrower of this Agreement in order to secure all
of the Obligations of the Borrower under the Credit Agreement and to induce the
Banks and the Agent to execute and enter into the Credit Agreement, the Borrower
has agreed to execute and deliver this Agreement, granting a security interest
in, and lien upon, the Receivable Subsidiary Pledged Stock to the Agent for the
benefit of the Banks; and
WHEREAS, to induce the Banks to extend or to continue to extend
financial accommodations to the Borrower, Borrower has agreed to enter into this
Agreement; and
WHEREAS, Borrower is the sole owner of 100% of the Capital Stock of the
Receivables Subsidiary;
NOW, THEREFORE, for the sum of $10 in hand paid and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to induce the Banks to extend financial accommodations from
time to time to the Borrower, Borrower and the Agent hereby agree as follows:
1. Defined Terms. Capitalized terms contained herein but not
defined herein shall have the meanings given them in the Credit Agreement.
2. Pledge of Collateral. Borrower does hereby pledge,
hypothecate, assign, transfer, set over, deliver and grant a security interest
in and to the Agent in all that Capital Stock of Avondale Receivables Company
set forth and described on Exhibit "A" attached hereto and by reference made
part hereof (which stock is simultaneously herewith being delivered to the
Agent, accompanied by blank stock powers signed by Borrower), together with any
and all other securities, cash or other property at any time and from time to
time receivable or otherwise distributed in respect of or in exchange for any or
all of such pledged stock, and together with the proceeds thereof (hereinafter
said property being collectively referred to as the "Collateral"), all as
security for the payment of all of the Obligations in existence from time to
time.
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3. Holding of Collateral and Rights. Borrower acknowledges and
agrees that the Agent shall hold the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto
forever, subject, however, to the provisions of Section 7 hereof and to the
return of the Collateral (or such portion thereof as may be existing from time
to time hereafter after giving effect to the terms hereof) by the Agent to
Borrower upon the final and indefeasible payment in full of all the Obligations
and termination in writing of any and all credit commitments with respect
thereto.
4. Representations and Warranties; Certain Covenants. Borrower
hereby represents and warrants (which representations and warranties likewise
shall be deemed to have been renewed by Borrower upon each Borrowing under the
Credit Agreement) that: (i) Borrower has the complete and unconditional
authority to pledge the Collateral; (ii) Borrower holds the Collateral free and
clear of any and all liens, charges, encumbrances and security interests thereon
(other than in favor of the Agent) and has good right, title and legal authority
to pledge the Collateral in the manner contemplated herein; (iii) all stock now
owned or hereafter owned by Borrower and constituting or which will constitute
Collateral hereunder is, or will be on date of pledge thereof, validly issued,
fully paid and non-assessable; and (iv) no authorization, approval, or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required either (1) for the pledge by Borrower of the
Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by Borrower or (2) for the exercise by Agent of
the voting or other rights provided for in this Agreement or the remedies in
respect of the Collateral pursuant to this Agreement (except as may be required
in connection with the exercise of such rights or remedies by laws affecting the
voting, offering and sale of securities generally).
5. Delivery of Additional Securities; Further Assurances.
Borrower further covenants with the Agent that Borrower will cause any
additional securities or other property issued to or received by Borrower with
respect to any of the Collateral (except as provided in Section 7 below),
whether for value paid by Borrower or otherwise, and including stock dividends,
to be deposited forthwith with the Agent and be pledged hereunder, in each case
accompanied by blank stock powers or other proper instruments of assignment duly
executed by Borrower in such form as may be reasonably required by the Agent.
Borrower agrees that at any time and from time to time, at the expense of
Borrower, Borrower will promptly execute and deliver all further instruments and
documents, and take all further action that the Agent may reasonably request, in
other to perfect and protect the security interest granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its rights, powers
and remedies hereunder with respect to any Collateral.
6. Name in Which Collateral Held. Borrower further acknowledges
and agrees that the Agent may hold any of the Collateral in its own name,
endorsed or assigned in blank or in the name of any nominee or nominees, and
that the Agent may deliver any or all of the Collateral to the issuer or issuers
thereof for the purpose of making denominational exchanges or registrations of
transfer or for such other purposes in furtherance of this Agreement as the
Agent may deem advisable.
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7. Voting Rights; Dividends, Etc. (a) So long as no Event of
Default shall have occurred and be continuing and the Agent has not delivered a
notice to Borrower of the Agent's intention to exercise voting and other
consensual rights pursuant to this Section 7:
(i) Borrower shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not prohibited by the terms of this Agreement, the
Parent Guaranty, the Credit Agreement or any other Loan Documents; provided,
however, that the Borrower shall give the Agent at least 5 Domestic Business
Days' prior written notice of the manner in which it intends to exercise any
right if such action would have a material adverse effect on the value of the
Collateral, and following request therefor by the Agent, Borrower shall not
exercise or refrain from exercising any such right; and
(ii) the Agent shall execute and deliver (or cause to be
executed and delivered) to Borrower all such proxies and other instruments as
Borrower may reasonably request for the purpose of enabling Borrower to exercise
the voting and other rights which it is entitled to exercise pursuant to clause
(i) above.
(iii) Borrower shall be entitled to receive and retain any
nonliquidating cash dividends, interest or any other distribution of property
paid, payable or otherwise distributed in cash in respect of the Collateral.
(b) Upon the occurrence and during the continuance of an Event of
Default, and with respect to clause (i) below, the delivery of a notice to
Borrower of the Agent's intention to exercise voting and other consensual rights
pursuant thereto:
(i) All rights of Borrower to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant to
Section 7(a) shall cease, and all such rights shall thereupon become vested in
the Agent who shall thereupon have the sole right to exercise such voting and
other consensual rights; provided, however, Borrower shall continue to have the
rights to exercise such voting and other consensual rights notwithstanding the
occurrence and continuance of an Event of Default until the Agent delivers a
notice to Borrower of the Agent's intention to exercise such voting and other
consensual rights.
(ii) All rights of Borrower to receive cash dividends,
interest, proceeds or other distributions in cash from the Collateral, which it
would otherwise be authorized to receive and retain pursuant to Section 7(a)
shall cease and all rights to dividends, interest, proceeds and other
distributions shall thereupon be vested in the Agent, who shall thereupon have
the sole right to receive and hold as Collateral such interest or other
distributions. All dividends, interest, proceeds and other distributions which
are received by Borrower contrary to these provisions shall be received in trust
for the benefit of the Agent, shall be segregated from other property or funds
of Borrower and shall be forthwith delivered to the Agent as Collateral in the
same form as so received (with any necessary endorsement).
8. Agent Appointed Attorney-in-Fact. Borrower hereby irrevocably
appoints the Agent as Borrower's attorney-in-fact, with full authority in the
place and stead of Borrower and in the name of Borrower or otherwise, from time
to time in the Agent's discretion, after the
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<PAGE> 239
occurrence and during the continuance of an Event of Default, to take any action
and to execute any instrument which the Agent may deem reasonably necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instruments made payable to
Borrower representing any dividend, principal and/or interest payment or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same, when and to the extent permitted by this Agreement.
9. The Agent May Perform. If Borrower fails to perform any
agreement contained herein, the Agent may take reasonable action to perform, or
cause performance of, such agreement, and the reasonable expenses of the Agent
incurred in connection therewith shall be payable by Borrower under Section 12;
provided, that, the Agent shall exercise commercially reasonable efforts to
notify Borrower prior to taking any such action (although the failure to so
notify Agent shall not limit the Agent's rights hereunder).
10. Reasonable Care. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Agent accords the Agent's own property, it being understood that the
Agent shall not have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters, unless reasonably requested to do so by Borrower, or
(ii) taking any necessary steps to preserve rights against any parties with
respect to any Collateral.
11. Events of Default. The following shall constitute "Events of
Default" hereunder:
(a) Should Borrower assign, attempt to encumber, subject
to further pledge or security interest, sell, transfer or otherwise dispose of
any of the Collateral without the prior written consent of the Agent;
(b) If an "Event of Default" occurs under any of the
Credit Agreement, the other Loan Documents or the Parent Guaranty; or
(c) If any representations or warranties made herein by
Borrower shall be untrue in any material respect when made or furnished.
12. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Agent may exercise (in compliance with all
applicable securities laws) in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to them, all the
rights and remedies of a secured party on default under the Uniform Commercial
Code in effect in the State of Georgia at that time, and the Agent may also,
without notice except as specified below, sell (in compliance with all
applicable securities laws) the Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, over the counter or at any
of the Agent's offices or elsewhere, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as the Agent may deem
commercially reasonable or otherwise in such manner as necessary to comply with
applicable federal and state securities laws. The Agent shall be authorized at
any such sale (if it deems it
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<PAGE> 240
advisable to do so) to restrict the prospective bidders or purchasers to persons
who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Agent shall have the right
to assign, transfer and deliver to the purchaser or purchasers at any such sale
and such purchasers shall hold the property sold absolutely, free from any claim
or right on the part of Borrower, and Borrower hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. The Agent shall give Borrower at least 10 days'
notice of the time and place of any public sale or the time after which any
private sale is to be made , which Borrower agrees shall constitute reasonable
notification. At any such sale, the Agent may bid (which bid may be, in whole or
in part, in the form of cancellation of Obligations) for and purchase the whole
or any part of the Collateral. The Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. If sale of all or any part of
the Collateral is made on credit or for future delivery, the Collateral so sold
may be retained by the Agent until the sale price is paid by the purchaser or
purchasers thereof, but the Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. Borrower agrees that any sale of the Collateral conducted by the Agent
in accordance with the foregoing provisions of this Section 12 shall be deemed
to be a commercially reasonable sale under O.C.G.A. ss. 11-9-504 of the Georgia
Uniform Commercial Code. As an alternative to exercising the power of sale
herein conferred upon them, the Agent may proceed by a suit or suits at law or
in equity to foreclose the security interest granted under this Agreement and to
sell the Collateral, or any portion thereof, pursuant to a judgment or decree of
a court or courts of competent jurisdiction.
(b) Any cash held by the Agent as Collateral and all cash
proceeds received by the Agent in respect of any sale of, collection from, or
other realization upon or any part of the Collateral following the occurrence of
an Event of Default shall be applied by the Agent for the benefit of the Banks
in the following manner: first, in discharge of all expenses incurred by the
Agent which Borrower is obligated to reimburse the Agent pursuant to Section 13
hereof; secondly, to all outstanding fees and other expenses owing under the
Credit Agreement or the other Loan Documents in such order as the Required Banks
shall elect; thirdly, to accrued and unpaid interest on the Obligations in such
order as the Required Banks may elect; and lastly, to the principal balances of
any such Obligations then outstanding in such order as the Required Banks may
elect.
(c) Any surplus of such cash or cash proceeds held by the
Agent and remaining after payment in full of all the Obligations shall be paid
over to Borrower or to whomsoever may be lawfully entitled to receive such
surplus.
13. Expenses. Borrower will, upon demand, pay to the Agent the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel, actually incurred, and of any experts and agents, and
including any taxes or fees incurred on account of
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<PAGE> 241
the execution, issuance, delivery or recording of this Agreement or other
documents executed in connection herewith which the Agent may incur in
connection with (i) the sale of, collection from, or other realization upon, any
of the Collateral, or (ii) the exercise or enforcement of any of the rights of
the Agent hereunder, or (iii) the failure by Borrower to perform or observe any
of the provisions hereof.
14. Security Interest Absolute. All rights of the Agent hereunder,
the security interest granted to the Agent hereunder, and all obligations of
Borrower hereunder, shall be absolute and unconditional irrespective of any of
the following, and Borrower expressly consents to the occurrence of any of such
events and waives, in its capacity as Borrower, to the extent permitted by law,
any defense arising therefrom:
(i) any lack of validity or enforceability of any of the
Loan Documents or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from any of the Loan
Documents;
(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to or departure
from any of the Loan Documents, including, without limitation, the Security
Agreement and any Operative Mortgages or any other guaranty for all or any of
the Obligations; or
(iv) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, Borrower in respect of the
Obligations or in respect of this Agreement.
15. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by Borrower herefrom shall in any
event be effective unless the same shall be in writing and signed by the Agent
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
16. No Waiver; Cumulative Remedies. No failure on the part of the
Agent to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy by the Agent preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law.
17. Severability. If any provision of this Agreement or the
application thereof to any party hereto or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to any other party thereto or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
18. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telecopier or similar
writing) and shall be given to such
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<PAGE> 242
party at its address or telecopier number set forth on the signature pages or at
such other address or telecopier number as such party may hereafter specify for
the purpose by notice to each other party. Each such notice, request or other
communication shall be effective (i) if given by telecopier, when such telecopy
is transmitted to the telecopier number specified in this Section and the
appropriate confirmation is received, (ii) if given by mail, 3 Domestic Business
Days after such communication is deposited in the mail, with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified in this Section 18.
19. Time is of the Essence. Time is of the essence in this
Agreement.
20. Interpretation. No provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have structured or dictated such provision.
21. The Agent Not Joint Venturer. Neither this Agreement nor any
agreements, instruments, documents or transactions contemplated hereby shall in
any respect be interpreted, deemed or construed as making the Agent a partner or
joint venturer with Borrower or as creating any similar relationship or entity,
and Borrower agrees that it will not make any contrary assertion, contention,
claim or counterclaim in any action, suit or other legal proceeding involving
the Agent and Borrower.
22. Jurisdiction. Borrower agrees that any legal action or
proceeding with respect to this Agreement may be brought in the courts of the
State of Georgia or the United States of America for the Northern District of
Georgia, Atlanta Division, all as the Agent may elect. By execution of this
Agreement, Borrower hereby submits to each such jurisdiction, hereby expressly
waiving whatever rights may correspond to it by reason of its present or future
domicile. Nothing herein shall affect the right of the Agent to commence legal
proceedings or otherwise proceed against Borrower in any other jurisdiction or
to serve process in any manner permitted or required by law.
23. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia and shall inure to
the benefit of and be binding upon the successors and assigns of the parties
hereto.
24. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when fully executed shall be an original, and all of
said counterparts taken together shall be deemed to constitute one and the same
agreement.
[Signatures on Following Page]
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<PAGE> 243
IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly
executed under seal as of the date first above written.
"Borrower"
AVONDALE MILLS, INC. (SEAL)
By:
------------------------------------------
Title:
Avondale Mills, Inc.
506 South Broad Street
Monroe, Georgia 30655
Attention: Chairman and Chief Executive Officer
Telecopier number: 770-267-2543
Confirmation number: 770-267-2226
ACCEPTED AND AGREED:
WACHOVIA BANK OF GEORGIA, N.A.,
in its capacity as Agent
By:
------------------------------
Title:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Commercial Group
Telecopier number: 404-332-6220
Telephone number: 404-332-6094
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<PAGE> 244
Exhibit A
To Borrower Pledge Agreement
Description of the Capital Stock of
Avondale Receivables Company
500 Shares, $0.01 Par Value Common Stock Evidenced by Certificate No. 1
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<PAGE> 245
Schedule 4.04
INTANGIBLE ASSETS IN EXISTENCE PRIOR TO AUGUST 29, 1996
<TABLE>
<CAPTION>
Balance
at 02/23/96
-------------
<S> <C>
Loan Commitment Fee on Revolver $1,081,579.93
Goodwill - Macfield Spinning Acquisition 63,978.62
Bond Issue Costs - Bon Air 28,524.81
Bond Issue Costs - Walton 95,776.47
-------------
TOTAL $1,269,859.83
=============
</TABLE>
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<PAGE> 246
Schedule 4.05
CERTAIN PENDING AND THREATENED LITIGATION
AVONDALE MILLS, INC.
1. Sullivan et al. v. Russell Corporation et al. Plaintiffs, property
owners in the Raintree Subdivision on Lake Martin, sued Avondale Mills,
Russell Corporation and Alabama Power Company for property damage and
mental anguish resulting from alleged discharges from the Alexander
City plants operated by Russell Corporation and Avondale Mills,
respectively. On November 17, 1998, a Jefferson County jury returned
verdicts for property damage and punitive damages totaling $52,553,200
against Avondale Mills, Russell Corporation and Alabama Power Company.
The jury returned two separate, inconsistent verdicts, in one of which
the amounts awarded against the respective defendants were specified
(30% against Avondale Mills) and in the other, the award was in the
aggregate only. This case is now on appeal to the Supreme Court of
Alabama. Oral argument was held in January 2000, and on August 4, 2000,
the Alabama Supreme Court issued a 6-3 opinion reversing and ordering a
judgment to be entered in favor of the defendants because of
plaintiffs' failure of proof. Plaintiffs filed an Application for
Rehearing on August 18, 2000, and Avondale Mills filed its response on
September 1, 2000.
Christian v. Russell Corporation et al. This case was filed on February
23, 1999, by former property owners in the Raintree Subdivision on Lake
Martin seeking damages for personal injury and diminished property
value. This case has been stayed by the trial court pending resolution
of the Sullivan appeal, and only limited discovery has been taken to
date.
Locke v. Russell Corporation et al. This case was filed on behalf of 24
additional Raintree Subdivision plaintiffs on January 13, 2000, and has
been transferred to the same judge now handling the Christian case and
consolidated for all purposes with that case. As indicated above, these
cases have now been stayed pending resolution of the Sullivan appeal
and no discovery has been conducted.
2. Lemelson Medical Education and Research Foundation ("Lemelson") has
made demands on Avondale Mills to pay royalties for a license under a
number of patents controlled by Lemelson. Lemelson has asserted that
Avondale Mills needs a license under a number of patents that are said
to relate to "machine vision" and "barcode reading." These patents have
been asserted against hundreds of companies worldwide. On April 14,
2000, Lemelson filed complaints in federal court in Arizona alleging
that Avondale Mills and over 400 other companies have infringed the
foregoing patents. Lemelson has not yet specified any product or
process of Avondale Mills that allegedly gives rise to any
infringement. As a consequence of motions filed in an earlier case by
other defendants, all proceedings as to the patents claimed by Lemelson
to relate to "machine vision" and
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<PAGE> 247
"barcode reading" are likely to be stayed, in favor of lawsuits brought
by barcode and machine vision manufacturers that are pending in Nevada.
In those lawsuits, these manufacturers are seeking a declaration that
the "machine vision" and "barcode" patents of Lemelson are either
invalid, unenforceable, or not infringed. As a result, it is likely
that there will be no activity in the Arizona lawsuit against Avondale
Mills in the near future.
3. Avondale Mills and Avondale Mills Graniteville Fabrics are involved in
various employment-related claims and proceedings.
4. Avondale Mills and the Guarantors are subject to certain workers'
compensation claims arising in the ordinary course of business.
5. Avondale Mills and the Guarantors are subject from time to time to
claims and litigation arising in the ordinary course of business and
covered (subject to customary deductibles and self-insurance) by their
respective insurance carriers.
6. Environmental claims and threatened litigation as described in Schedule
4.14.
Avondale Mills does not now expect any of the foregoing to have or cause a
Material Adverse Effect, or to draw into question the validity of or impair the
ability of Avondale Mills to perform its obligations under the Credit Agreement,
the Notes, or any of the Loan Documents, or of Avondale Incorporated or Avondale
Mills Graniteville Fabrics to perform their respective obligations under the
Loan Documents to which they are parties.
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Exhibit O
LIMITED GUARANTY AGREEMENT
THIS LIMITED GUARANTY AGREEMENT (this "Guaranty") is made as
of August 29, 1997, by Avondale Mills Graniteville Fabrics, Inc., a Delaware
corporation (the "Subsidiary") in favor of the Agent, for the ratable benefit of
the Banks, under the Credit Agreement referred to below;
W I T N E S S E T H
WHEREAS, Avondale Mills, Inc., an Alabama corporation (the
"Borrower") and WACHOVIA BANK, N.A., as Agent (the "Agent"), and The First
National Bank of Chicago, as Documentation Agent, and certain other Banks from
time to time party thereto have entered into a certain Amended and Restated
Credit Agreement dated as of April 29, 1996, as amended by First Amendment to
Credit Agreement dated as of March 20, 1997 and Second Amendment to Credit
Agreement dated as of August 29, 1997 (as so amended, and as it may be amended
or modified from time to time, the "Credit Agreement"), providing, subject to
the terms and conditions thereof, for extensions of credit to be made by the
Banks to the Borrower for the benefit of the Borrower and of the Subsidiary;
WHEREAS, it is a condition precedent to the effectiveness of
the Second Amendment to Credit Agreement referred to above, and to the
acquisition by the Subsidiary of the AMGF Plant described therein, among other
things, that the Subsidiary execute and deliver this Guaranty whereby the
Subsidiary shall guarantee the payment when due of all principal, interest and
other amounts that shall be at any time payable by the Borrower under the Credit
Agreement, the Notes and the other Principal Documents, subject to the
limitation on liability provisions contained herein; and
WHEREAS, in consideration of the financial and other support
that the Borrower has provided, and such financial and other support as the
Borrower may in the future provide, to Subsidiary, and in order to induce the
Banks and the Agent to enter into the Second Amendment to Credit Agreement
referred to above, the Subsidiary is willing to guarantee the obligations of the
Borrower under the Credit Agreement, the Notes, and the other Principal
Documents, subject to the limitation of liability provisions contained in
Section 15 hereof;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions. Terms defined in the Credit Agreement
and not otherwise defined herein have, as used herein, the respective meanings
provided for therein.
SECTION 2. Representations, Warranties and Covenants. The
Subsidiary hereby represents and warrants that:
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<PAGE> 249
(a) The Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to transact business in every jurisdiction
where, by the nature of its business, such qualification is necessary, and has
all corporate powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted, except for
failures which have not had and would not reasonably be expected to have or
cause a Material Adverse Effect.
(b) The execution, delivery and performance by the
Subsidiary of this Guaranty, the AMGF Security Agreement and the AMGF Mortgage
(i) are within the corporate powers of the Subsidiary, (ii) have been duly
authorized by all necessary corporate action, (iii) require no action by or in
respect of or filing with, any governmental body, agency or official, (iv) do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the
Subsidiary or any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Subsidiary, and (v) do not result in the
creation or imposition of any Lien on any asset of the Subsidiary, except in
favor of the Agent.
(c) This Guaranty constitutes a valid and binding
agreement of the Subsidiary enforceable in accordance with its terms, and the
AMGF Security Agreement and the AMGF Mortgage, when executed and delivered in
accordance with the Credit Agreement, will constitute valid and binding
obligations of the Subsidiary, enforceable in accordance with their respective
terms, provided that the enforceability hereof and thereof is subject in each
case to general principles of equity and to bankruptcy, insolvency and similar
laws affecting the enforcement of creditors' rights generally.
SECTION 3. The Guaranty. Subject to the provisions of Section
15, the Subsidiary hereby unconditionally guarantees the full and punctual
payment (whether at stated maturity, upon acceleration or otherwise) of the
principal of and interest on each Note issued by the Borrower pursuant to the
Credit Agreement, and the full and punctual payment of all other amounts payable
by the Borrower under the Credit Agreement and the other Principal Documents,
including principal, interest, fees, costs and indemnification amounts, and any
extensions and renewals thereof in whole or in part, and any other amounts
constituting Obligations as defined in the Credit Agreement (all of the
foregoing obligations being referred to collectively as the "Guaranteed
Obligations"). Upon failure by the Borrower to pay punctually any such amount,
the Subsidiary agrees that it shall forthwith on demand pay the amount not so
paid at the place and in the manner specified in the Credit Agreement, the
relevant Note or the relevant Principal Document, as the case may be.
SECTION 4. Guaranty Unconditional. Subject to Section 15, the
obligations of the Subsidiary hereunder shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of the Borrower under
the Credit Agreement, any Note, or any other Principal Document, by
operation of law or otherwise or any obligation of any other guarantor
of any of the Obligations;
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<PAGE> 250
(ii) any modification or amendment of or
supplement to the Credit Agreement, any Note, or any other Principal
Document;
(iii) any release, nonperfection or invalidity of
any direct or indirect security for any obligation of the Borrower
under the Credit Agreement, any Note, any Principal Document, or any
obligations of any other guarantor of any of the Obligations;
(iv) any change in the corporate existence,
structure or ownership of the Borrower or any other guarantor of any of
the Guaranteed Obligations, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower, or
any other guarantor of the Guaranteed Obligations, or its assets or any
resulting release or discharge of any obligation of the Borrower, or
any other guarantor of any of the Guaranteed Obligations;
(v) the existence of any claim, setoff or other
rights which the Subsidiary may have at any time against the Borrower,
any other guarantor of any of the Guaranteed Obligations, the Agent,
any Bank or any other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory
counterclaim;
(vi) any invalidity or unenforceability relating
to or against the Borrower, or any other guarantor of any of the
Guaranteed Obligations, for any reason related to the Credit Agreement,
any other Principal Document, or any other guaranty, or any provision
of applicable law or regulation purporting to prohibit the payment by
the Borrower, or any other guarantor of the Guaranteed Obligations, of
the principal of or interest on any Note or any other amount payable by
the Borrower under the Credit Agreement, the Notes, or any other
Principal Document; or
(vii) any other act or omission to act or delay of
any kind by the Borrower, any other guarantor of the Guaranteed
Obligations, the Agent, any Bank or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the Guarantor's
obligations hereunder.
SECTION 5. Discharge Only Upon Payment In Full; Reinstatement
In Certain Circumstances. The Subsidiary's obligations hereunder shall remain in
full force and effect until all Guaranteed Obligations shall have been paid in
full and the Commitments under the Credit Agreement shall have terminated or
expired. If at any time any payment of the principal of or interest on any Note
or any other amount payable by the Borrower under the Credit Agreement or any
other Principal Document is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
the Subsidiary's obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
SECTION 6. Waiver of Notice by the Subsidiary. The Subsidiary
irrevocably waives acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by
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<PAGE> 251
law, any notice not provided for herein, as well as any requirement that at any
time any action be taken by any Person against the Borrower, any other guarantor
of the Guaranteed Obligations, or any other Person.
SECTION 7. Other Waivers by the Subsidiary. The Subsidiary
hereby expressly waives, renounces, and agrees not to assert, any right, claim
or cause of action, including, without limitation, a claim for reimbursement,
subrogation, indemnification or otherwise, against the Borrower arising out of
or by reason of this Guaranty or the obligations of the Subsidiary hereunder,
including, without limitation, the payment or securing or purchasing of any of
the Guaranteed Obligations by the Subsidiary. The waiver, renunciation and
agreement contained in the immediately preceding sentence is for the benefit of
the Agent and the Banks and also for the benefit of the Borrower who may assert
the benefits thereof as a third-party beneficiary, and the Subsidiary may be
released from such waiver, renunciation and agreement only by the execution and
delivery, by the Agent, the Required Banks and the Borrower, of an instrument
expressly releasing the Subsidiary therefrom.
SECTION 8. Stay of Acceleration. If acceleration of the time
for payment of any amount payable by the Borrower under the Credit Agreement,
any Note or any other Principal Document is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of the Credit Agreement, any Note or any other
Principal Document shall nonetheless be payable by the Subsidiary hereunder
forthwith on demand by the Agent made at the request of the Required Banks.
SECTION 9. Notices. All notices, requests and other
communications to any party hereunder shall be given or made by telecopier or
other writing and telecopied or mailed or delivered to the intended recipient at
its address or telecopier number set forth on the signature pages hereof or such
other address or telecopy number as such party may hereafter specify for such
purpose by notice to the Agent in accordance with the provisions of Section 9.01
of the Credit Agreement. Except as otherwise provided in this Guaranty, all such
communications shall be deemed to have been duly given when transmitted by
telecopier, or personally delivered or, in the case of a mailed notice, 3
Domestic Business Days after such communication is deposited in the mails with
first class postage prepaid, in each case given or addressed as aforesaid.
SECTION 10. No Waivers. No failure or delay by the Agent or
any Banks in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided in this Guaranty, the Credit
Agreement, the Notes, and the other Principal Documents shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 11. Successors and Assigns. This Guaranty is for the
benefit of the Agent and the Banks and their respective successors and assigns
and in the event of an assignment of any amounts payable under the Credit
Agreement, the Notes, or the other Principal Documents, the rights hereunder, to
the extent applicable to the indebtedness so assigned, may be transferred with
such indebtedness. This Guaranty may not be assigned by the Subsidiary
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<PAGE> 252
without the prior written consent of the Agent and the Required Banks, and shall
be binding upon the Subsidiary and its successors and permitted assigns.
SECTION 12. Changes in Writing. Neither this Guaranty nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by the Subsidiary and the Agent with the consent of the
Required Banks.
SECTION 13. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER
OF JURY TRIAL. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF GEORGIA. EACH OF THE SUBSIDIARY AND THE AGENT
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF GEORGIA AND OF ANY GEORGIA STATE COURT
SITTING IN ATLANTA, GEORGIA AND FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE
SUBSIDIARY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH OF THE SUBSIDIARY AND THE AGENT HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 14. Taxes, etc. All payments required to be made by
the Subsidiary hereunder shall be made without setoff or counterclaim and free
and clear of and without deduction or withholding for or on account of, any
present or future taxes, levies, imposts, duties or other charges of whatsoever
nature imposed by any government or any political or taxing authority to the
same extent and with the same effect as provided in Section 2.11(c) of the
Credit Agreement with respect to payments made by the Borrower.
SECTION 15. Limitation of Liability. Any other provision of
this Guaranty, or the AMGF Documents to the contrary notwithstanding, the Agent
and the Banks, by acceptance hereof, expressly agree that the Subsidiary shall
not have any liability hereunder for an amount in excess of the sum of: (i) the
sum of (x) the aggregate principal amount of all loans, advances and other
financial accommodations made to the Subsidiary by the Borrower, directly or
indirectly, both prior to and after the date hereof (including, without
limitation, pursuant to the AMGF/Graniteville Transaction), less (y) all amounts
repaid by the Subsidiary thereon; plus (ii) interest on the amount determined
under clause (i) from the date due until the date paid at the Default Rate; plus
(iii) all costs of collection, including reasonable attorneys fees actually
incurred; plus (iv) all protective advances and (without duplication of
paragraph (iii) all costs and expenses incurred by the Agent pursuant to the
AMGF Mortgage or the AMGF Security Agreement; plus (v) the aggregate value of
all other assets transferred from time to time on and after the date hereof by
the Borrower to the Subsidiary (including, without limitation, pursuant to the
AMGF/Graniteville Transaction).
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IN WITNESS WHEREOF, the Subsidiary has caused this Guaranty to
be duly executed by its authorized officer as of the date first above written.
AVONDALE MILLS GRANITEVILLE FABRICS, INC.
By:
--------------------------------------------------
Title:
Avondale Mills Graniteville Fabrics, Inc.
--------------------------------------------------
--------------------------------------------------
Attention: Chairman and
Chief Executive Officer
Telecopier number: 770-267-2543
Telephone number: 770-267-2226
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<PAGE> 254
Exhibit P
SECURITY AGREEMENT
(Avondale Mills Graniteville Fabrics, Inc.)
THIS SECURITY AGREEMENT (this "Agreement") is made and entered
into as of August 29, 1997 by and between AVONDALE MILLS GRANITEVILLE FABRICS,
INC. (the "Guarantor") and WACHOVIA BANK, N.A., as agent for the Banks parties
to the "Credit Agreement" (as hereinafter defined) (the "Agent")
WITNESETH:
WHEREAS, pursuant to that certain Amended and Restated Credit
Agreement, dated as of April 29, 1996, as amended by First Amendment to Credit
Agreement dated as of even date herewith, among Avondale Mills, Inc., the Agent,
The First National Bank of Chicago, as Documentation Agent, and the Banks
parties thereto (as so amended, and as hereafter amended or supplemented from
time to time, the "Credit Agreement", the Guarantor has executed and delivered
the a Limited Guaranty Agreement dated as of even date herewith in favor of the
Agent, for the benefit of the Banks, unconditionally Guaranteeing the payment of
all of the Obligations, subject to the limitation of liability provisions
contained therein; and
WHEREAS, in order to secure the indebtedness of the Guarantor
pursuant to the AMGF Guaranty and to induce the Banks and the Agent to execute
and enter into the Second Amendment to the Credit Agreement, the Guarantor has
agreed to execute and deliver this Agreement (which is the AMGF Security
Agreement referred to in the Credit Agreement), granting a security interest in,
and lien upon, the Collateral to the Agent for the benefit of the Banks;
NOW, THEREFORE, for and in consideration of the above premises
and other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged and Guarantor and the Agent hereby covenant and agree as
follows:
1. DEFINITIONS. Unless otherwise defined herein,
capitalized terms used herein have the meanings set forth in the Credit
Agreement. In addition, the following terms have the meanings set forth below,
unless the context requires otherwise:
"Accounts Receivable Collateral" means all rights of the
Guarantor to payment for goods sold or leased, or to be sold or to be leased, or
for services rendered or to be rendered, howsoever evidenced or incurred,
including, without limitation, all accounts, instruments, chattel paper and
general intangibles, all returned or repossessed goods and all books, records,
computer tapes, programs and ledger books arising therefrom or relating thereto,
whether now owned or hereafter acquired or arising.
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<PAGE> 255
"Account Debtor" means the Person who is obligated on any of
the Accounts Receivable Collateral or otherwise is obligated as a purchaser or
lessee of any of the Inventory Collateral.
"Act" means the Uniform Commercial Code - Secured Transactions
of Georgia (O.C.G.A. Art. 11-9), and any act that may be substituted therefor,
as from time to time amended.
"Agreement" means this Agreement, together with all exhibits,
riders, supplements, addenda and additions now or hereafter attached hereto or
made a part hereof, and all amendments hereof.
"Collateral" means and includes all of the property described
in Paragraph 4 hereof.
"Collateral Locations" means those locations set forth on
Exhibit "A" attached hereto and by this reference made a part hereof.
"Credit Agreement" has the meaning set forth in the recitals
hereto.
"Documentary Collateral" means all chattel paper, instruments,
documents or notes of the Guarantor (excluding any of the foregoing arising out
of the sale or lease of goods or the furnishing of services) and all payments
thereunder and instruments and other property from time to time delivered in
respect thereof or in exchange therefor, and all bills of sale, bills of lading,
warehouse receipts, and other documents of title, whether now owned or hereafter
acquired or arising.
"Equipment Collateral" means all equipment of the Guarantor,
or in which it has rights, whether now owned or hereafter acquired, wherever
located, including, without limitation, all machinery, furniture, furnishings,
leasehold improvements, motor vehicles, forklifts, rolling stock, dies and tools
used or useful in the Guarantor's business but excluding, in any event, all
fixtures.
"Intangibles Collateral" means all general intangibles of the
Guarantor (excluding any general intangibles evidencing rights of the Guarantor
to payment for goods sold or leased, or to be sold or leased, or for services
rendered or to be rendered), whether now existing or hereafter acquired or
arising, including, without limitation, all copyrights, royalties, trademarks,
trade names, tax refunds, rights to tax refunds, service marks, patent and
proprietary rights, blueprints, drawings, designs, trade secrets, plans,
diagrams, schematics and assembly and display materials relating thereto and all
customer lists.
"Inventory Collateral" means all inventory of the Guarantor,
or in which it has rights, whether now owned or hereafter acquired, wherever
located, including, without limitation, all goods of the Guarantor held for sale
or lease or furnished or to be furnished under contracts of service, all goods
held for display or demonstration, goods on lease or consignment, returned and
repossessed goods, all raw materials, work-in-process, finished goods and
supplies used or consumed in the Guarantor's business, together with all
documents, documents of title,
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<PAGE> 256
dock warrants, dock receipts, warehouse receipts, bills of lading or orders for
the delivery of all, or any portion, of the foregoing.
"Secured Obligations" means and includes the following
collectively:
1. Any and all indebtedness, obligations and liabilities
of the Guarantor to the Agent and/or the Banks now existing pursuant to, or
hereafter arising out of, or otherwise relating to the AMGF Guaranty, subject to
the limitation of liability provisions contained herein.
2. Any and all indebtedness, obligations and liabilities
of the Guarantor to the Agent and/or the Banks now existing or hereafter
arising, in either instance, under, by virtue of or pursuant to this Agreement.
3. Any and all advances hereafter made by the Agent
and/or the Banks at any time to protect or preserve the Collateral or the
security interest on the Collateral granted pursuant hereto, or for taxes,
assessments, insurance premiums or other advances authorized under the terms of
this Agreement (whether or not the original Guarantor remains the owner of the
Collateral at the time of any of such advances).
"Permitted Liens" means the liens and encumbrances pertaining
to portions of the Collateral described on Exhibit "B" attached hereto and by
this reference made a part hereof.
In addition to and cumulative with such other definitions and
descriptions as herein may be provided therefor, the terms "equipment",
"inventory", "accounts", "general intangibles", "chattel paper", "documents of
title", "goods", "consumer goods" and "instruments", if and to the extent used
herein, shall have such meanings as may be respectively ascribed to them in the
Act as in existence on date hereof.
3. GRANT OF SECURITY INTEREST. As a general and
continuing collateral security for payment of the Guaranteed Obligations, the
Guarantor hereby grants to the Agent for the ratable benefit of the Banks a
security interest in and security title to all Collateral and the Guarantor
makes such further agreements with the Agent in regard thereto as hereinafter
set forth.
4. DESCRIPTION OF COLLATERAL.
The following described property, wherever located, whether
now existing or hereafter acquired or arising constitutes the Collateral:
(a) the Accounts Receivable Collateral;
(b) the Equipment Collateral;
(c) the Intangibles Collateral;
(d) the Inventory Collateral;
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<PAGE> 257
(e) the Documentary Collateral; and
(f) all products and proceeds of any and all of
the foregoing, including, without limitation, insurance or condemnation
proceeds, all property received wholly or partially in trade or
exchange for any of the foregoing, and all rents, revenues, issues,
profits and proceeds arising from the sale, lease, license,
encumbrance, collection or any other temporary or permanent disposition
of any of the foregoing or any interest therein.
5. REPRESENTATIONS AND WARRANTIES.
5.1 The Guarantor is, or, with respect to
Collateral acquired after the date hereof, will be, the owner of the Collateral
free and clear from any Lien, except for the Permitted Liens. No financing
statement covering any of the Collateral is on file in any public office other
than any evidencing Permitted Liens.
5.2 Location. As of the date hereof, the
tangible portion of the Collateral is situated only at one or more Collateral
Locations, other than as permitted by Section 5.6.
5.3 Name. The name of the Guarantor is as set
forth on the signature page hereof and the Guarantor has not conducted any
business under any other name, other than its former name, "Camp Helen Company",
during the past 6 years.
5.4 Right to Assign. Guarantor has the full
right, power and authority to make this assignment of the Collateral.
5.5 Delivery. Guarantor has delivered all
agreements, letters of credit, promissory notes, chattel paper or anything else
the physical possession of which is necessary in order for Agent to perfect or
preserve the priority of its Lien in the Collateral.
5.6 Purchaser of Collateral. Except for the
acquisition of assets from the Borrower, during the past 6 years, Guarantor has
not purchased any of the Collateral in a bulk transfer or in a transaction which
was outside the ordinary course of the business of Guarantor's seller.
6. GENERAL COVENANTS.
6.1 Liens. The Guarantor shall keep the
Collateral free and clear of all Liens, except for the Permitted Liens.
6.2 Casualty. The Guarantor shall promptly
notify the Agent of any material loss of or damage to the Inventory Collateral
or the Equipment Collateral or any part thereof.
6.3 Use of Collateral. Until there occurs an
Event of Default the Guarantor may, subject to the provisions of Paragraph 6
hereof, use the Collateral in any lawful
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<PAGE> 258
manner not inconsistent with this Agreement or with the terms or conditions of
any policy of insurance thereon.
6.4 Disposition of Collateral. The Guarantor may
not sell, lease, exchange or otherwise dispose of any of the Collateral except
as hereinafter specifically provided. Guarantor may sell, lease, exchange or
otherwise dispose of any portion of the Inventory Collateral in the ordinary
course of business for cash or upon open account or on terms of payment
ordinarily extended to its customers. Upon the sale, exchange or other
disposition of the Inventory Collateral, the security interest created and
provided for herein shall continue in and attach to any proceeds thereof,
without break in continuity and without further formality or act, including,
without limitation, accounts, contract rights, shipping documents, documents of
title, bills of lading, warehouse receipts, dock warrants, dock receipts and
cash or non-cash proceeds, and in the event of any unauthorized sale, shall
continue in Inventory Collateral itself. Guarantor may sell Equipment Collateral
pursuant and subject to the provisions of Sections 2.08(b)(i)(B) and 5.14 of the
Credit Agreement. In addition, Guarantor may sell, exchange or otherwise dispose
of portions of the Equipment Collateral which are obsolete, worn-out or
unsuitable for continued use by Guarantor if such Equipment Collateral is
replaced promptly upon its disposition with equipment constituting Equipment
Collateral having a market value equal or greater than the Equipment Collateral
so disposed of and in which Agent shall obtain and have a Lien pursuant hereto
of the same priority as in the Equipment Collateral so disposed of.
6.5 Insurance. The Guarantor agrees that it will
obtain and maintain insurance on the Inventory Collateral and the Equipment
Collateral as required by Section 5.17 of the Credit Agreement, with loss
payable to the Agent as its interests may appear. Such insurance shall not be
cancelable by the Guarantor, unless with the prior written consent of the
Required Banks, or by the Guarantor's insurer, unless with at least 30 days
advance written notice to the Agent.
6.6 Location. The Guarantor agrees not to locate
the Inventory Collateral or the Equipment Collateral (other than (i) Rolling
Stock and other goods which are covered by a certificate of title, as
contemplated in section 11-9-103(3)(a) of the Act and (ii) other goods which are
mobile and which are of a type normally used in more than one jurisdiction and
are not covered by a certificate of title, as contemplated in Section
11-9-103(3)(a) of the Act) at any location other than a Collateral Location
without providing written notice to the Agent no later than 30 days after such
relocation; provided, however, that nothing contained herein shall be deemed to
prohibit the Guarantor, without notice to or the consent of the Agent, from
transferring temporarily (for periods not to exceed 3 months in any event)
Inventory Collateral or Equipment Collateral from a Collateral Location to
another location at any time or from time to time hereafter for the limited
purpose of having work performed on such Inventory Collateral or Equipment
Collateral, or for temporary storage thereof or for shipment thereof to a
Collateral Location, if done in the ordinary course of the Guarantor's business.
In addition, to the extent the Guarantor should warehouse any of the Inventory
Collateral at any time hereafter at any location other than a Collateral
Location, the Guarantor acknowledges and agrees that such warehousing may be
conducted only by warehousemen who have been pre-approved by the Agent and who,
in any event, shall issue non-negotiable
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<PAGE> 259
warehouse receipts in the Agent's name to evidence any such warehousing of goods
constituting Inventory Collateral. If the Guarantor consigns any part of the
Inventory Collateral, it will comply with Section 2-326 of the Uniform
Commercial Code of any state where such Inventory Collateral is located with
respect thereto, by filing in the appropriate public office or offices UCC-1
financing statements showing the Guarantor as consignor and the Agent as
assignee of consignor, and will furnish copies thereof to the Agent.
6.7 The Guarantor shall deliver to the Agent
within 60 days after receiving written notice from the Agent directing it to do
so, the original title certificates to all of the Rolling Stock, together with
duly executed applications in the appropriate form for new certificates of title
thereto showing thereon the Lien of the Agent pursuant to the Security
Agreement.
7. SPECIAL PROVISIONS REGARDING RECEIVABLES AND
INVENTORY. Each item of the Accounts Receivable Collateral arises or will arise
under a contract between the Guarantor and an Account Debtor, or from the bona
fide sale or delivery of goods to or performance of services for, an Account
Debtor. The Guarantor will promptly notify the Agent of all returns,
repossessions and recoveries which are reasonably expected to result in losses
to the Guarantor in excess of $500,000 in any month. From and after the
occurrence of any Event of Default and during the continuation thereof, (i) the
Agent may collect, realize, sell or otherwise deal with the Accounts Receivable
Collateral or any and all sums owing or which may become due upon any items of
the Inventory Collateral or any part thereof in such manner, upon such terms and
conditions and at such time or times as may seem to it advisable and without
notice to the Guarantor, and (ii) the Guarantor hereby irrevocably designates
and appoints the Agent its true and lawful attorney either in the name of the
Agent or the name of the Guarantor to take such actions and any other actions as
the Agent may deem necessary or desirable in order to realize upon the Inventory
Collateral and the Accounts Receivable Collateral, including, without
limitation, power to endorse in the name of Guarantor, any checks, drafts,
notes, or other instruments received in payment of or on account of the
Inventory Collateral or the Accounts Receivable Collateral. The Agent shall not
be liable or accountable for any failure to collect, realize, sell or obtain
payment of the Accounts Receivable Collateral or any and all sums owing or which
may become due upon any items of the Inventory Collateral or any part thereof
and shall not be bound to institute proceedings for the purpose of collecting,
realizing, or obtaining payment of the same or for the purpose of preserving any
rights of the Agent, the Guarantor or any other Person in respect of the same.
From and after the occurrence of any Event of Default and during the
continuation thereof, (i) all moneys collected or received by the Guarantor in
respect of the Accounts Receivable Collateral or any and all sums owing or which
may become due upon any items of the Inventory Collateral shall be received as
trustee in trust for the Agent for the ratable benefit of the Banks and shall be
forthwith paid over to the Agent for the ratable benefit of the Banks at the
Agent's request, and (ii) all moneys collected or received by the Agent in
respect of the Accounts Receivable Collateral or any and all sums owing or which
may become due upon any items of the Inventory Collateral or other Collateral
may be applied to the Obligations in the order which the Required Banks deem
best or, in the sole discretion of the Required Banks, may be released to the
Guarantor, all without prejudice to the liability of the Guarantor or the
Agent's right to hold and realize upon this security.
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8. PRESERVATION. The Guarantor will take all reasonably
necessary and appropriate measures to obtain, maintain, protect and preserve any
material Intangibles Collateral including, without limitation, registration
thereof with the appropriate state or federal governmental agency or department.
9. REMEDIES. Upon the occurrence and during the
existence of any Event of Default, the Agent for the ratable benefit of the
Banks shall have all of the rights and remedies described in Sections 8.1
through 8.5 inclusive, and it may exercise any one, more, or all of such
remedies, in its sole discretion, without thereby waiving any of the others.
9.1 General Remedies of a Secured Party. The
Agent shall have all the rights and remedies of a "secured party" under the Act
(regardless of whether the Act has been enacted in the jurisdiction where the
rights or remedies are asserted, including, without limitation, the right to
take possession of any of the Collateral or the proceeds thereof by such means
(without breach of the peace) and through agents or otherwise as it may elect,
the right to sell, lease, or otherwise dispose of the Collateral or any portion
thereof, the right to apply the proceeds derived therefrom to any and all of the
Obligations secured thereby in such order as the Agent may elect, and, for this
purpose, the right to sign in the name of the Guarantor any transfer,
conveyance, or instrument necessary in the premises. Any such disposition of the
Collateral may be in its then condition or following any commercially reasonable
preparation or processing thereof, by public or private proceedings, by one or
more contracts, as a unit or in parcels, at any time or place and on any terms,
so long as the same are commercially reasonable.
9.2 Notice of Disposition. The Agent shall give
the Guarantor written notice of the time and place of any public sale of the
Collateral or the time after which any other intended disposition thereof is to
be made. The requirement of sending reasonable notice shall be met if such
notice is mailed postage prepaid or otherwise given to the undersigned at its
last address as shown on the Agent's records at least 10 days before such
disposition.
9.3 Receiver. In addition to the foregoing, the
Agent, at the direction of the Required Banks, may appoint any person to be a
receiver (which term shall include a receiver and manager) of the Collateral,
including, without limitation, any rents and profits thereof and may remove any
receiver and appoint another in its (his) stead, and such receiver so appointed
shall have power to take possession of the Collateral and to carry on or concur
in carrying on the business of the Guarantor, and to dispose of or concur in the
disposition of the Collateral or any part thereof in the manner described
hereinabove. Any such receiver shall for all purposes be deemed to be the agent
of the Guarantor. The Agent may from time to time fix the remuneration of such
receiver. The Agent and the Banks in appointing or refraining from appointment
of such receiver shall not incur any liability to the receiver, the Guarantor or
otherwise.
9.4 Assemblage. In facilitation of the
foregoing, the Agent may require that the Guarantor assemble and make available
all of or any portion of the Collateral at a location reasonably designated by
the Agent, all at the expense of the Guarantor.
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9.5 Application of Proceeds. All moneys from
time to time received by the Agent from the disposition of Collateral shall be
applied by the Agent for the benefit of the Banks in the following manner:
first, in discharge of all reasonable expenses of re-taking, holding,
preserving, preparing for sale or lease, selling, leasing, and the like of the
Collateral including, without limitation, fees and expenses of any receivers and
attorneys, insurance premiums, tax payments and the like; secondly, to all
outstanding fees and other expenses owing under the Credit Agreement or the
other Loan Documents in such order as the Required Banks shall elect; thirdly,
ratably to accrued interest on the Obligations; fourthly, ratably to the
remaining balances of the Obligations then outstanding; lastly, to the
Guarantor, any residue.
10. FURTHER ASSURANCES. The Guarantor shall from time to
time forthwith on the Agent's reasonable request do, make and execute, and use
reasonable good faith efforts to cause to be done, made and executed, such
financing statements, certificates of title, landlord's and mortgagee's waivers,
estoppel certificates, further assignments, documents, acts, matters and things
as may be required by the Agent of or with respect to the Collateral or any part
thereof or as may be required to give effect to these presents, and the
Guarantor hereby constitutes and appoints the Agent as the true and lawful
attorney of the undersigned irrevocably with full power of substitution to do,
make, and execute all such statements, assignments, documents, acts, matters, or
things with the right to use the name of the Guarantor whenever and wherever it
may be reasonably deemed necessary or expedient.
11. DEALINGS. The Agent may grant extensions of time and
other indulgences, take and give up securities, accept compositions, grant
releases and discharges and otherwise deal with the Guarantor, debtors of the
Guarantor, sureties and others and with the Collateral and other securities as
the Agent may see fit without prejudice to the liability of the Guarantor or the
Agent's right to hold and realize upon this security.
12. GENERAL.
12.1 Governing Laws. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of Georgia.
12.2 Non-Exclusivity of Remedies. No remedy for
the enforcement of the rights of the Agent hereunder shall be exclusive of or
dependent on any other such remedy but any one or more of such remedies may from
time to time be exercised independently or in combination.
12.3 Waiver. Each and every right granted to the
Agent under this Agreement, under any other Loan Document or allowed to the
Agent by law or in equity, shall be cumulative and may be exercised from time to
time by the Agent in its sole discretion. No failure on the part of the Agent to
exercise, and no delay in exercising, any right shall operate as a waiver
thereof, nor shall any single or partial exercise by the Agent of any right
preclude any other or future exercise thereof or the exercise of any other
right.
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12.4 Counterparts. This Agreement may be executed
in two or more counterparts, each of which when fully executed shall be an
original, and all of said counterparts taken together shall be deemed to
constitute one and the same agreement.
12.5 Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the permitted successors and assigns
of the parties hereto.
12.6 Reimbursement. If any taxes, fees or other
costs shall be payable on account of the execution, issuance, delivery, or
recording of this Agreement or any financing statements, certificates, documents
or instruments executed in connection herewith, by reason of any existing or
hereafter enacted federal, state, or provincial statute, the Guarantor will pay
all such taxes, fees or other costs, including any applicable interest and
penalty, and will indemnify and hold the Agent and the Banks harmless from and
against liability in connection therewith.
IN WITNESS WHEREOF, the Guarantor and the Agent have executed
this Agreement and affixed their respective seals thereto.
AGENT:
WACHOVIA BANK, N.A.,
as Agent for the Banks (SEAL)
By:
---------------------------------------
Title:
Guarantor:
AVONDALE MILLS GRANITEVILLE FABRICS,
INC (SEAL)
By:
---------------------------------------
Title:
Attest:
--------------------------------
Title:
SECURITY AGREEMENT
EXHIBIT "A"
SCHEDULE OF COLLATERAL LOCATIONS
Graniteville, Aiken County, South Carolina
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<PAGE> 263
SECURITY AGREEMENT
EXHIBIT "B"
[NOTE: THE ONES IN FAVOR OF SCHLAFHORST AND DUPONT HAVE BEEN
DELETED. ARE THERE OTHERS WHICH SHOULD BE DELETED?]
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------- ------------ ----------
<S> <C> <C>
Olin Corporation Date Filed: 02/10/94 Leased Equipment
File Number 131059A
Secretary of State, SC
Olin Corporation Date Filed: 12/07/93 Leased Equipment
File Number: 110634A
Secretary of State, SC
BellSouth Financial Services Secretary of State, SC
Corporation Amendment: 09/28/92,
#134045A
Pitney Bowes Credit Corporation Date Filed: 01/29/92 Equipment Informational
File number: 92004503/ Filing
92004504
Secretary of State, SC
Pitney Bowes Credit Corporation Date Filed: 01/25/96 Leased Equipment
File number: 122033A
Secretary of State, SC
Primeco, Inc. d/b/a Prime Equipment Date Filed: 09/13/94 1 - Scissor Lift
File number: 100644A
Secretary of State, SC
Canon Financial Services, Inc. Date Filed: 01/12/93 Office Equipment
File number: 145328A
Secretary of State, SC
Primeco, Inc. d/b/a Prime Date Filed: 09/13/94 1 - Scissor Lift
Equipment File number: 1329
Aiken County, SC
</TABLE>
258
<PAGE> 264
<TABLE>
<CAPTION>
SECURED PARTY JURISDICTION COLLATERAL
------------- ------------ ----------
<S> <C> <C>
First United Leasing Corporation Date Filed: 01/22/93 1/Panafax Facsimile
File number: 014679
SOS New York
Pitney Bowes Date Filed: Equipment Lease
File number: 960412-
131615A
SOS South Carolina
</TABLE>
259
<PAGE> 265
EXHIBIT Q
MORTGAGE AND ASSIGNMENT OF LEASES, RENTS AND PROFITS
This Instrument Prepared By
and When Recorded Return to:
Jones, Day, Reavis & Pogue
3500 One Peachtree Center
303 Peachtree Street, N.E.
Atlanta, Georgia 30308-3242
By: Christopher L. Carson
MORTGAGE,
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT,
and
ASSIGNMENT OF LEASES, RENTS AND PROFITS
among
AVONDALE MILLS GRANITEVILLE FABRICS, INC.
as Mortgagor
and
WACHOVIA BANK, N.A.,
as
Agent for certain banks
260
<PAGE> 266
COLLATERAL IS OR INCLUDES FIXTURES.
THIS INSTRUMENT IS ALSO TO BE INDEXED IN THE INDEX OF FINANCING
STATEMENTS AS A FIXTURE FILING IN ACCORDANCE WITH THE UNIFORM COMMERCIAL CODE,
INCLUDING SECTIONS 9-313 AND 9-402, AS ADOPTED IN SOUTH CAROLINA.
THE NAMES OF THE DEBTOR AND THE SECURED PARTY, THE MAILING ADDRESS OF
THE SECURED PARTY FROM WHICH INFORMATION CONCERNING THE SECURITY INTEREST MAY BE
OBTAINED, THE MAILING ADDRESS OF THE DEBTOR AND A STATEMENT INDICATING THE
TYPES, OR DESCRIBING THE ITEMS, OF COLLATERAL, ARE AS DESCRIBED IN SUBSECTION
3.7.3 HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I DEFINITIONS...............................................................
ARTICLE II GRANTING CLAUSES..........................................................
2.1 Granting Clause..................................................
2.2 Warranty of Title................................................
2.3 Defeasance.......................................................
ARTICLE III COVENANTS OF BORROWER.....................................................
3.1 Payment of Indebtedness..........................................
3.2 Taxes, Liens and Other Charges...................................
3.3 Insurance........................................................
3.4 Condemnation.....................................................
3.5 Care of Premises.................................................
3.6 Leases, Contracts, Etc...........................................
3.7 Security Agreement...............................................
3.8 Further Assurances; After Acquired Property......................
3.9 Expenses.........................................................
3.10 Subrogation......................................................
3.11 Limit of Validity................................................
3.12 Junior Encumbrances..............................................
ARTICLE IV DEFAULT AND REMEDIES......................................................
4.1 Events of Default................................................
4.2 Acceleration of Maturity.........................................
4.3 Agent's Right to Enter and Take Possession,
Operate and Apply Revenues.......................................
</TABLE>
261
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<TABLE>
<S> <C> <C>
4.4 Performance by Agent of Defaults by Mortgagor....................
4.5 Receiver.........................................................
4.6 Enforcement......................................................
4.7 Purchase by Agent or any Bank....................................
4.8 Application of Proceeds of Sale..................................
4.9 Mortgagor as Tenant Holding Over.................................
4.10 Waiver of Appraisement, Valuation, Stay,
Extension and Redemption Laws....................................
4.11 Leases...........................................................
4.12 Discontinuance of Proceedings and Restoration
of the Parties...................................................
4.13 Remedies Cumulative..............................................
4.14 Waiver...........................................................
4.15 Suits to Protect the Premises....................................
4.16 Agent May File Proofs of Claim...................................
4.17 Multiple Sales...................................................
ARTICLE V MISCELLANEOUS PROVISIONS..................................................
5.1 Successors and Assigns...........................................
5.2 Terminology......................................................
5.3 Severability.....................................................
5.4 Applicable Law...................................................
5.5 Notices..........................................................
5.6 Replacement of Documents.........................................
5.7 Time of the Essence..............................................
5.8 Counterparts.....................................................
5.9 No Obligation to Marshal Assets..................................
5.10 Consent of Agent.................................................
5.11 Agent's Powers...................................................
5.12 No Liability or Obligation on Agent..............................
</TABLE>
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THIS MORTGAGE, UNIFORM COMMERCIAL CODE SECURITY AGREEMENT AND
ASSIGNMENT OF LEASES, RENTS AND PROFITS, including the cover sheet and table of
contents, made as of the__ day of _________, 199_ by and between AVONDALE MILLS
GRANITEVILLE FABRICS, INC. ("Mortgagor"), as party of the first part; and
WACHOVIA BANK, N.A., (f/k/a Wachovia Bank of Georgia, N.A.) as Agent for certain
Banks (as hereafter defined), as party of the second part.
WITNESETH THAT:
WHEREAS, on April 29, 1996, Avondale Mills, Inc. ("Borrower"),
Agent, The First National Bank of Chicago, as Documentation Agent, and Banks
entered into a certain Amended and Restated Credit Agreement, as amended by
First Amendment to Credit Agreement dated as of March 20, 1997 and Second
Amendment to Credit Agreement dated of August 29, 1997 (as amended, the "Credit
Agreement") regarding certain obligations of Borrower owed to Agent and Banks;
and
WHEREAS, Mortgagor, as a wholly owned subsidiary of Borrower,
entered into that certain Limited Guaranty Agreement dated of even date herewith
in favor of Agent for the benefit of the Banks (the "Guaranty") to guarantee the
payment when due of all principal, interest and other amounts that shall be at
any time payable by Borrower under the Credit Agreement and other documents
relevant to therein, subject to the limitation of liability provisions contained
in the Guaranty; and
WHEREAS, to secure the repayment and the performance of the
obligations of Mortgagor under the Guaranty, Mortgagor desires to convey, grant
and assign liens, security titles, security interests and collateral assignments
in certain property as hereinafter more particularly described;
NOW THEREFORE, for and in consideration of the sum of Ten and
No/100 Dollars ($10.00), the mutual agreements contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to secure the indebtedness hereinafter described, the parties
agree as follows:
ARTICLE 1
DEFINITIONS
For the purpose of this Instrument, the following defined
terms have the meanings set forth in this Article I:
"Agent" means Wachovia Bank, N.A., in its capacity as agent
for certain Banks as described in the Credit Agreement, and its permitted
successors and assigns.
"Bank" or "Banks" means Wachovia Bank, N.A., a national
banking association, acting as Agent hereunder and each Bank and its permitted
successors and assigns as defined in the Credit Agreement.
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"Borrower" means Avondale Mills, Inc., an Alabama corporation,
and its permitted successors and assigns.
"Credit Agreement" means the Amended and Restated Credit
Agreement dated April 29, 1996, by and between Borrower, Agent, The First
National Bank of Chicago, as Documentation Agent, and Banks, as amended by First
Amendment to Credit Agreement dated as of March 20, 1997 and Second Amendment to
Credit Agreement dated as of even date herewith, together with any and all
renewals, substitutions, modifications, amendments, consolidations and
extensions of the Credit Agreement.
"Default Condition" means any condition or event which
constitutes an Event of Default or which with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event of Default.
"Easements and Appurtenances" means and include all easements,
rights-of-way, strips and gores of land, vaults, streets, ways, alleys,
passages, sewer rights, waters, water courses, water rights and powers,
minerals, flowers, shrubs, crops, trees, timber and other emblements now or
hereafter located on the Land or under or above the same or any part or parcel
thereof, and all estates, rights, titles, interests, privileges, liberties,
tenements, hereditaments and appurtenances, reversion and reversions, remainder
and remainders, whatsoever, in any way belonging, relating or appertaining to
the Premises or any part thereof, or which hereafter shall in any way belong,
relate or be appurtenant thereto, whether now owned or hereafter acquired by
Mortgagor.
"Event of Default" has the meaning set forth in Section 4.1
hereof.
"Fixtures" means any and all items included in Plant,
Equipment and Personal Property which constitute fixtures under the law of the
state in which the Premises of which they constitute a part are located and any
and all other items of personal property which are physically attached to Land
or buildings thereon and any and all replacements and substitutions of any of
the foregoing.
"Guaranty" means the Limited Guaranty Agreement dated ___
July, 1997 from Mortgagor to Agent for the benefit of the Banks, as amended or
supplemented from time to time.
"Instrument" means this Mortgage, Uniform Commercial Code
Security Agreement and Assignment of Leases, Rents and Profits, together with
any and all renewals, substitutions, modifications, amendments, consolidations
and extensions of this Instrument.
"Land" means those certain tracts or parcels of land located
in Aiken County, South Carolina being more particularly described on Exhibit "A"
attached hereto and by this reference made a part hereof.
"Leases and Rents" means and include all leases, subleases,
tenant contracts and rental agreements pertaining to the Premises whether now or
hereafter existing and including, without limitation, all income, rents, issues,
profits and revenues of the Premises at any time and from time to time now or
hereafter accruing (including, without limitation, all payments under
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leases or tenancies, proceeds of insurance (including, without limitation,
business interruption insurance), condemnation payments with respect to such
income, rents, issues, profits and revenues, tenant security deposits, whether
held by Mortgagor or in a trust account, payments to Mortgagor in connection
with any sale of any Premises to a tenant or customer pursuant to the provisions
of any lease and escrow funds), and all the estate, right, title, interest,
property, possession, claim and demand whatsoever at law, as well as in equity,
of Mortgagor of, in and to the same whether now or hereafter existing.
"Mortgagor" means Avondale Mills Graniteville Fabrics, Inc., a
Delaware corporation, and a wholly owned subsidiary of Borrower.
"Permitted Encumbrances" means those matters identified as to
such Premises on Exhibit "B", attached hereto and by this reference made a part
hereof and, subject to the provisions of Section 5.11 of the Credit Agreement,
outstanding security interests in Plant, Equipment and Personal Property.
"Plant, Equipment and Personal Property" means and include all
buildings, structures and improvements of every nature whatsoever now or
hereafter situated on the Land now or hereafter owned by Mortgagor or in which
Mortgagor now or hereafter has rights (to the extent of such rights), and all
gas and electric fixtures, radiators, heaters, engines and machinery, boilers,
ranges, elevators and motors, plumbing and heating fixtures, carpeting and other
floor coverings, fire extinguishers and any other safety equipment required by
governmental regulation or law, washers, dryers, water heaters, mirrors,
mantels, air conditioning apparatus, refrigerating plants, refrigerators,
cooking apparatus and appurtenances, window screens, awning and storm sashes now
or hereafter owned by Mortgagor, which are or shall be attached to said
buildings, structures or improvements and all other furnishings, furniture,
fixtures, machinery, equipment, appliances, racks, forklifts, building supplies
and materials, books and records, chattels, contract rights, and personal
property (excluding any Receivables Program Assets) of every kind and nature
whatsoever now or hereafter owned by Mortgagor or in which Mortgagor now or
hereafter has rights (to the extent of such rights) and now or hereafter located
in, on or about, or used or intended to be used with or in connection with the
use, operation or enjoyment of the Premises, including all extensions,
additions, improvements, betterments, after-acquired property, renewals,
replacements and substitutions, or proceeds from a sale of any of the foregoing;
and all the right, title and interest of Mortgagor now or hereafter in any such
furnishings, furniture, fixtures, machinery, equipment, appliances and personal
property subject to or covered by any prior or superior security agreement,
conditional sales contract, chattel mortgage or similar lien or claim, together
with the benefit of any deposits or payments now or hereafter made by Mortgagor
or on behalf of Mortgagor; and all personal property constituting proceeds
hereafter acquired with cash proceeds of any of the Plant, Equipment and
Personal Property described hereinabove; all of which are hereby declared and
shall be deemed to be fixtures (except for the purpose of the definition of
"Fixtures" above), and accessions to the Land and a part of the Premises as
between the parties hereto and all persons claiming by, through or under them,
and which shall be deemed to be a portion of the security for the Secured
Obligations; provided, that the foregoing shall not include any equipment
described in Exhibit "B" to the "AMGF Security Agreement," as defined in the
Credit Agreement. The location of the Plant, Equipment and Personal Property is
also the location of the Land.
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"Premises" means and includes, collectively, the related Land,
the Plant, Equipment and Personal Property, the Easements and Appurtenances and
the Leases and Rents.
"Required Banks" has the meaning set forth in the Credit
Agreement.
"Secured Obligations" means and includes the following
collectively:
(a) Any and all indebtedness, obligations and liabilities
of Mortgagor to Agent and/or Banks now existing pursuant to, or hereafter
arising out of, or otherwise relating to the Guaranty, subject to the limitation
of liability provisions contained therein.
(b) Any and all indebtedness, obligations and liabilities
of Mortgagor to Agent and/or Banks now existing or hereafter arising, in either
instance, under, by virtue of or pursuant to this Instrument.
(c) Any and all advances hereafter made by Agent and/or
Banks at any time to protect or preserve the Premises or the lien hereof on the
Premises, or for taxes, assessments, insurance premiums or other advances
authorized under the terms of this Instrument (whether or not the original
Mortgagor remains the owner of the Premises at the time of any of such
advances).
"Transaction Documents" means the Credit Agreement, the
Guaranty, this Instrument, the "AMGF Documents" (as defined in the Credit
Agreement) and any other instrument, document or other writing executed on or
after the date hereof on behalf of Mortgagor evidencing, securing or otherwise
relating to any of the Secured Obligations.
ARTICLE II
GRANTING CLAUSES
2.1 Granting Clause. In order to secure the full and
prompt payment when due, whether by acceleration or otherwise, and full and
prompt performance, of the Secured Obligations in such order of priority as
Agent may elect, Mortgagor hereby does grant, bargain, sell, alien, remise,
release, assign, convey, transfer, mortgage, hypothecate, pledge, deliver, set
over, warrant and confirm into Agent, for the benefit of the Banks and their
successors or assigns, all right, title and interest of Mortgagor in and to the
Land, together with the Plant, Equipment and Personal Property, the Easements
and Appurtenances, and the Leases and Rents pertaining to the Land, to have and
hold forever.
2.2 Warranty of Title. Mortgagor does warrant and will
forever defend the title to the Premises against the claims of all persons
whomsoever, except as to the Permitted Encumbrances. Mortgagor represents and
warrants that it is lawfully seized of the Land in fee simple absolute, that
Mortgagor has good right and is lawfully authorized to sell, convey or encumber
the Premises and that the Premises are free and clear of all encumbrances except
liens for real property taxes not yet due and payable and Permitted
Encumbrances.
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2.3 Defeasance. Should the Secured Obligations secured by
this Instrument be paid and satisfied or otherwise released according to the
tenor and effect thereof when the same shall become due and payable and the
obligations of the Banks under the Credit Agreement be terminated in writing,
then this Instrument and the conveyance effected and the liens and security
interests granted hereby shall be released and terminated and shall be cancelled
and surrendered. Upon payment and satisfaction of the Secured Obligations in
full and the termination of the obligations of the Banks and the Agent under the
Credit Agreement, Agent shall execute, in recordable form, and deliver to
Mortgagor such instruments as are required to release and terminate of record
this Instrument.
ARTICLE III
COVENANTS OF BORROWER
3.1 Payment of Indebtedness. Mortgagor will pay the
Secured Obligations according to the tenor thereof and all other sums now or
hereafter secured hereby promptly as the same shall become due.
3.2 Taxes, Liens and Other Charges.
3.2.1 In the event of the passage of any state,
federal, municipal or other governmental law, order, rule or regulation,
subsequent to the date hereof, in any manner changing or modifying the laws now
in force governing the taxation of debts secured by mortgages, (not including
tax on interest or fee income associated with such debt) or the manner of
collecting taxes so as to adversely affect Agent or the Banks, Mortgagor will,
subject to Subsection 3.2.5, promptly pay any such additional tax.
3.2.2 Mortgagor will, subject to Subsection 3.2.5,
pay, before the same become delinquent, all taxes, liens, assessments and
charges of every character including all utility charges, whether public or
private, already levied or assessed or that may hereafter be levied or assessed
upon or against the Premises; and upon demand will furnish Agent receipted bills
evidencing such payment.
3.3.3 Mortgagor will not, subject to Subsection
3.2.5, suffer any mechanic's, materialman's, laborer's, statutory or other lien
to be created and to remain outstanding upon all or any part of the Premises,
except for inchoate liens securing obligations not for borrowed money which are
not yet due and payable and except for the Permitted Encumbrances.
3.3.4 Mortgagor, to the full extent permitted by
applicable law, shall, subject to Subsection 3.2.5, indemnify and hold Agent and
Banks harmless from, or shall reimburse Agent and Banks for, any and all
intangible tax, documentary stamp tax, mortgage tax, note tax or other like or
similar tax (excluding income, franchise or capital taxes imposed on the income
of Agent or Banks) imposed with respect to this Instrument or under any power of
sale herein granted, any of the other Transaction Documents, or the Secured
Obligations, and from any interest, charges or penalties assessed with respect
thereto.
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3.3.5 The Mortgagor shall have the right to
contest by appropriate proceedings any taxes, liens, assessments or other
charges described in Subsections 3.2.1 through 3.2.4, inclusive, provided that
it has established adequate reserves therefor.
3.3 Insurance.
3.3.1 So long as any portion of the Secured
Obligations remains unpaid, Mortgagor, at its expense, shall procure and
maintain for the benefit of Agent and Banks, insurance policies issued by such
insurance companies, and in such amounts as are required by Section 5.17 of the
Credit Agreement. All insurance required by this Subsection 3.3.1 which protect
against physical damage to the Plant, Equipment and Personal Property shall
contain a standard mortgagee clause (without contribution) in favor of Agent and
Banks, shall not be terminable without thirty (30) days' prior written notice to
Agent, and shall be evidenced by original policies or certified copies of
policies deposited with Agent, to be held by Agent until the Secured Obligations
shall have been fully paid and discharged. All other insurance policies, such as
general liability policies, required by the terms of this Instrument shall be
evidenced by certificates delivered to Agent and in case of cancellation, shall
provide for thirty (30) days' prior written notice to Agent.
3.3.2 Following the occurrence and during the
continuance of an Event of Default, Agent is hereby authorized and empowered, at
its option, to adjust or compromise any loss under any insurance policies
maintained pursuant to this Section 3.3, and to collect and receive the proceeds
from any such policy or policies, and each insurance company is hereby
authorized and directed to make payment for all such losses directly to Agent,
for the ratable benefit of the Banks, instead of to Mortgagor and Agent jointly.
In the event any insurance company fails to disburse directly and solely to
Agent but disburses instead either solely to Mortgagor or to Mortgagor and Agent
jointly, Mortgagor agrees immediately to endorse and transfer such proceeds to
Agent. Upon the failure of Mortgagor to endorse and transfer such proceeds as
aforesaid, Agent may execute such endorsements or transfers for and in the name
of Mortgagor and Mortgagor hereby irrevocably appoints Agent as Mortgagor's
agent and attorney-in-fact so to do. After deducting from said insurance
proceeds all of its expenses incurred in the collection and administration of
such sums, including attorneys' fees, Agent may apply the net proceeds or any
part thereof, at its option, (i) to the payment of the Secured Obligations,
whether or not due and in whatever order the Required Banks elect, (ii) to the
repair and/or restoration of the Premises or (iii) for any other purposes or
objects for which Agent is entitled to advance funds under this Instrument; all
without affecting the lien of this Instrument. Agent shall not be held
responsible for any failure to collect any insurance proceeds due under the
terms of any policy regardless of the cause of such failure absent gross
negligence or willful misconduct. Reference is made to Subsection 3.5.3.
3.3.3 Not less than thirty (30) days prior to the
expiration date of each policy maintained pursuant to this Section 3.3, evidence
of a renewal or replacement thereof satisfactory to Agent shall be delivered to
Agent. At the request of Agent, Mortgagor shall deliver to Agent receipts
evidencing the payment for all such insurance policies and renewals or
replacements. In the event of the foreclosure of this Instrument or any other
transfer of title to any of the Premises in extinguishment, in whole or in part,
of the Secured Obligations, all right,
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title and interest of Mortgagor in and to all insurance policies then in force
with respect to such Premises shall pass to the purchaser or grantee.
3.3.4 Any provision of this Instrument to the
contrary notwithstanding, this Section 3.3 and Section 3.4 and the rights and
obligations of Mortgagor and Agent hereunder with respect to insurance and
condemnation are in all respects subject to and subordinate to any security
agreements, mortgages, deeds of trust or deeds to secure debt prior or superior
to this Instrument and the rights of the lessors thereunder or parties secured
thereby relating to the collection and disposition of insurance and condemnation
proceeds.
3.4 Condemnation. Following the occurrence and during the
continuance of an Event of Default, if all or any material portion of the
Premises shall be damaged or taken through condemnation (the term "condemnation"
when used in this Instrument shall include any damage or taking by any
governmental or quasi-governmental authority and any transfer by private sale in
lieu thereof), either temporarily or permanently, then the Secured Obligations
shall, at the option of the Required Banks, become immediately due and payable,
and Agent, for the ratable benefit of the Banks, shall be entitled to receive
all compensation, awards and other payments or relief thereof. In such event,
Agent is hereby authorized, at its option, to commence, appear in and prosecute,
in its own or in Mortgagor's name, any action or proceeding relating to any
condemnation, and to settle or compromise any claim in connection therewith, and
all such compensation, awards, damages, claims, rights of action and proceeds
and the right thereto are hereby assigned by Mortgagor to Agent, for the ratable
benefit of the Banks. After deducting from said condemnation proceeds all of its
expenses incurred in the collection and administration of such sums, including
attorney's fees, Agent may apply the net proceeds or any part thereof, at the
option of the Required Banks, (a) to the payment of the Secured Obligations,
whether or not due and in whatever order the Required Banks elect, (b) to the
repair and/or restoration of the Premises, or (c) for any other purposes or
objects for which Agent is entitled to advance funds under this Instrument, all
without affecting the lien of this Instrument; and any balance of such moneys
then remaining shall be paid to Mortgagor. Mortgagor agrees to execute such
further assignment of any compensation, awards, damages, claims, rights of
action and proceeds as Agent may require. If, prior to the receipt by Agent of
such award or proceeds, the Premises shall have been sold on foreclosure of this
Instrument, Agent, for the ratable benefit of the Bank, shall have the right to
receive such award or proceeds to the extent of any unpaid Secured Obligations
following such sale, with interest thereon at the "Default Rate" (as defined in
the Credit Agreement), whether or not a deficiency judgment on this Instrument
shall have been sought or recovered, and to the extent of reasonable actual
counsel fees, costs and disbursements incurred by Agent in connection with the
collection of such award or proceeds. Reference is made to Subsections 3.3.4 and
3.5.3.
3.5 Care of Premises.
3.5.1 Mortgagor will keep the buildings, parking
areas, roads and walkways, recreational facilities, landscaping and all other
improvements of any kind now or hereafter erected on the Land or any part
thereof in good condition and repair, and in substantial compliance with all
applicable laws, except to the extent failure would not have a material adverse
effect on the usefulness or value of the Premises, and will not commit or suffer
any
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waste and will not do or suffer to be done anything (other than that which
is inherent in the ordinary course of Mortgagor's business operations) which
will unreasonably increase the risk of fire or other hazard to the Premises or
any part thereof.
3.5.2 Mortgagor will not remove or demolish nor
materially alter the structural character of any improvement located on the Land
without the written consent of the Agent (at the direction of the Required
Banks) except to the extent failure would not have a material adverse effect on
the usefulness or value of the Premises.
3.5.3 If the Premises or any part thereof is
materially damaged by fire or any other cause, or any material portion thereof
is taken by condemnation, Mortgagor will give immediate written notice thereof
to Agent. Mortgagor shall either (i) repair or restore such property to the
extent reasonably practical, and may use the proceeds of any insurance or
condemnation award for such purpose, with any amounts thereof not so used to be
paid to the Agent for application to the Secured Obligations, or (ii) treat such
event as a sale of assets for purposes of Sections 2.08(b) and 5.14 of the
Credit Agreement. The provisions of this Subsection 3.5.3 are subject to the
provisions of Subsection 3.3.2 (as to insurance) and Section 3.4 (as to
condemnation) upon the occurrence and during the continuance of an Event of
Default.
3.6 Leases, Contracts, Etc.
3.6.1 As additional collateral and further
security for the Secured Obligations, Mortgagor does hereby assign as a present
and absolute assignment (to the extent assignable pursuant to the terms thereof)
to Agent, for the benefit of Banks, all of Mortgagor's right, title and interest
now existing or hereafter arising in and to any and all Leases and Rents,
franchise agreements, management contracts, construction contracts, and other
contracts (not included in the definition of Leases and Rents), licenses and
permits now or hereafter affecting the Premises, or any part thereof, (reserving
only to Mortgagor the right to collect currently due and payable income, rents,
issues, profits, charges and revenues from the Premises until such time, if any,
as an Event of Default shall exist and be continuing). The foregoing is intended
to be a present and absolute assignment and not merely the passing of a security
interest. Mortgagor agrees to execute and deliver to Agent, such additional
instruments, in form and substance reasonably satisfactory to Agent, as may
hereafter be reasonably requested by Agent further to evidence and confirm said
assignment; provided, however, that acceptance of any such assignment shall not
be construed as a consent by Agent to any lease, tenant contract, rental
agreement, franchise agreement, management contract, construction contract, or
other contract, license or permit, or to impose upon Agent, any obligation with
respect thereto.
3.6.2 Mortgagor shall furnish to Agent, within
twenty (20) days after a receipt of a request by Agent to do so, such
information as Agent or any Bank from time to time may reasonably request
concerning the leases, tenant contracts and rental agreements.
3.7 Security Agreement.
3.7.1 Parts of the Premises are, or are to Become,
Fixtures on the Land. Insofar as the Plant, Equipment and Personal Property and
the Leases and Rents are concerned,
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this Instrument is hereby made and declared to be a security agreement, and a
security interest is hereby granted by Mortgagor to Agent, for the ratable
benefit of Banks, encumbering each and every item of Plant, Equipment and
Personal Property and of Leases and Rents in compliance with the provisions of
the Uniform Commercial Code. A financing statement or statements reciting this
Instrument to be a security agreement, affecting all of said personal property
aforementioned, shall be executed by Mortgagor and Agent and appropriately
filed. The remedies for any violation of the covenants, terms and conditions of
the security agreement herein contained shall be (i) as prescribed herein, or
(ii) as prescribed by general law, or (iii) as prescribed by the specific
statutory consequences now or hereafter enacted and specified in the Uniform
Commercial Code, all at Agent's sole election. Mortgagor and Agent agree that
the filing of such financing statement(s) in the records normally having to do
with personal property shall never be construed as in anywise derogating from or
impairing this declaration and hereby stated intention of Mortgagor and Agent
that everything used in connection with the production of income from the
Premises and/or adapted for use therein and which is described or reflected in
this Instrument as part of the Plant, Equipment or Personal Property, is, and at
all times and for all purposes and in all proceedings both legal or equitable
shall be, regarded as part of the real estate irrespective of whether (a) any
such item is physically attached to the improvements, (b) serial numbers are
used for the better identification of certain items capable of being thus
identified in a recital contained herein, or (c) any such item is referred to or
reflected in any such financing statement(s) so filed at any time. Similarly,
the mention in any such financing statement(s) of the rights in and to (aa) the
proceeds of any fire and/or hazard insurance policy, or (bb) any award in
eminent domain proceedings for a taking or for loss of value, or (cc)
Mortgagor's interest as lessor in any present or future lease or rights to
income growing out of the use and/or occupancy of the Premises, whether pursuant
to lease or otherwise, shall never be construed as in anywise altering any of
the rights of Agent, Banks or Mortgagor as determined by this instrument or
impugning the priority of Agent's lien granted hereby or by any other recorded
document, but such mention in such financing statement(s) is declared to be for
the protection of Agent and Banks in the event any court shall at any time hold
with respect to the foregoing (aa), (bb) or (cc), that notice of Agent's
priority of interest to be effective against a particular class of persons, must
be filed in the Uniform Commercial Code records.
3.7.2 Mortgagor warrants that (i) Mortgagor's
(that is, "Debtor's") name, identity or corporate structure and residence or
principal place of business are as set forth in Subsection 3.7.3 hereof; (ii)
Mortgagor (that is, "Debtor") has been using or operating under said name,
identity or corporate structure without change for the time period set forth in
Subsection 3.7.3 hereof; (iii) that Mortgagor is duly qualified to do business
in each state in which the Land is located; and (iv) the location of the Plant,
Equipment and Personal Property is upon the Land, except as permitted in the
Security Agreement. Mortgagor covenants and agrees that: (i) Mortgagor will
furnish Agent with notice of any change in the matters addressed by clauses (i)
or (iii) of this Subsection 3.7.2 within thirty (30) days of the effective date
of any such change; (ii) Mortgagor will promptly execute any financing
statements or other instruments deemed necessary by Agent to prevent any filed
financing statement from becoming misleading or losing its perfected status; and
(iii) and that Mortgagor will remain qualified to do business in each state in
which the Land is located.
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3.7.3 Upon execution by Agent (where local
practice requires the same), this Instrument shall constitute a financing
statement filed as a fixture filing under the Uniform Commercial Code in the
real estate records of the county or city in which the Premises is located with
respect to all fixtures which are a part of the Premises and with respect to any
goods or other personal property that may now be or hereafter become a fixture.
The information contained in this Subsection 3.7.3 is provided in order that
this Instrument shall comply with the requirements of the Uniform Commercial
Code for instruments to be filed as financing statements, to perfect the
security interests with respect to fixtures. The names of the "Debtor" and the
"Secured Party", the identity or corporate structure and residence or principal
place of business of "Debtor", and the time period for which "Debtor" has been
using or operating under said name and identity or corporate structure without
change, are as set forth in Exhibit "C", attached hereto and by this reference
made a part hereof; the mailing address of the "Secured Party" from which
information concerning the security interest may be obtained, and the mailing
address of Mortgagor (that is, "Debtor"), are as set forth in Section 5.5 of
this Instrument; and a statement indicating the types, or describing the items,
of collateral is set forth hereinabove.
3.7.4 Conflict with Security Agreement. To the
extent any of the provisions of this Instrument pertaining to Plant, Equipment
and Personal Property are in conflict with any provisions of the Security
Agreement, the conflicting provisions of the Security Agreement shall govern and
control over the conflicting provisions of this Instrument.
3.8 Further Assurances; After Acquired Property. At any
time, and from time to time, upon reasonable request by Agent, Mortgagor will
make, execute and deliver or cause to be made, executed and delivered, to Agent
and, where appropriate, cause to be recorded and/or filed and from time to time
thereafter to be re-recorded and/or refiled at such time and in such offices and
places as shall be deemed desirable by Agent, any and all such other and further
mortgages, deeds of trust, security agreements, financing statements,
continuation statements, instruments of further assurance, certificates and
other documents as may, in the opinion of Agent reasonably exercised, be
necessary or desirable in order to effectuate, complete, or perfect, or to
continue and preserve (a) the obligation of Mortgagor under the Secured
Obligations and under this Instrument and (b) the lien and security interests
granted by this Instrument as a first and prior lien (except for the Permitted
Encumbrances) upon and in and to all of the Premises, whether now owned or
hereafter acquired by Mortgagor, as well as any certificates, petitions or other
instruments reasonably requested by the Agent for allocation of stamp,
intangible, recording or similar tax liability relating to the filing of this
Instrument for record as to multiple Premises. Upon any failure by Mortgagor so
to do, Agent may make, execute, record, file, re-record and/or refile any and
all such mortgages, security agreements, deeds of trust, financing statements,
continuation statements, instruments, certificates and documents for and in the
name of Mortgagor and Mortgagor hereby irrevocably appoints Agent the agent and
attorney-in-fact of Mortgagor so to do. The lien of this Instrument and the
security interest created hereby will automatically attach, without further act,
to after-acquired personal property attached to, or located on, the Land and/or
used in connection with the operation of the Premises or any part thereof.
3.9 Expenses. Mortgagor will pay or reimburse Agent and
Banks, upon demand therefor, for all reasonable actual attorneys' fees, costs
and expenses incurred by Agent
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or any Bank in any suit, action, legal proceeding or dispute of any kind in
which Agent and/or Banks are made a party or appear as party plaintiff or
defendant, affecting the Secured Obligations secured hereby, this Instrument or
the interest created herein, or the Premises, including, but not limited to, the
exercise of the power of sale contained in this Instrument or the foreclosure of
this Instrument, any condemnation action involving the Premises or any action to
protect the security hereof; and any such amounts paid by Agent or any Bank
shall be included in the Secured Obligations secured by the lien of this
Instrument. Notwithstanding the foregoing, neither Agent nor any Bank shall be
entitled to recover any such expenses in any such suit by Agent or such Bank
against Mortgagor if such suit results in a judicial determination in favor of
Mortgagor with respect to the subject matter thereof or results in a
determination of liability against Agent or such Bank based on an act of gross
negligence or willful misconduct.
3.10 Subrogation. Agent shall be subrogated to all right,
title, equity liens and claims of all persons, firms or corporations to whom
Mortgagor has paid or pays, or to whom monies are paid, from the proceeds of the
Secured Obligations in the settlement of claims, liens or charges or for the
benefit of Mortgagor.
3.11 Limit of Validity. If from any circumstances
whatsoever fulfillment of any provision of this Instrument, the Guaranty or any
of the other Transaction Documents (as defined in the Credit Agreement) at the
time performance of such provision shall be due, shall involve transcending the
limit of validity presently prescribed by any applicable usury statute or any
other applicable law, with regard to obligations of like character and amount,
then ipso facto the obligation to be fulfilled shall be reduced to the limit of
such validity, so that in no event shall any exaction be possible under this
Instrument that is in excess of the current limit of such validity, but such
obligation shall be fulfilled to the limit of such validity.
3.12 Junior Encumbrances. Mortgagor shall not further
mortgage, encumber or pledge all or any part of the Premises or of Mortgagor's
interest in the Premises or any part thereof, except for Permitted Encumbrances.
ARTICLE IV
DEFAULT AND REMEDIES
4.1 Events of Default. The terms "Default", "Event of
Default" or "Events of Default", wherever used in this Instrument, mean the
failure of the Mortgagor to pay upon demand in accordance with the terms of the
Guaranty the Guaranteed Obligations (as defined in the Guaranty).
4.2 Acceleration of Maturity. If an Event of Default
shall have occurred and be continuing and shall not have been expressly waived
in writing by Agent, then the Secured Obligations secured hereby shall, by
written notice as provided in the Credit Agreement, immediately become due and
payable without further notice or demand, time being of the essence of this
Instrument and the rate of interest with respect thereto shall be as provided in
Section 2.05 of the Credit Agreement; and no omission on the part of Agent to
exercise such option when entitled to do so shall be construed as a waiver of
such right.
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4.3 Agent's Right to Enter and Take Possession, Operate
and Apply Revenues.
4.3.1 If an Event of Default shall have occurred
and be continuing and shall not have been expressly waived in writing by Agent,
then, subject to the provisions of Section 5.16, Mortgagor, upon demand of
Agent, shall forthwith surrender to Agent the actual possession of the Premises
and if, and to the extent, permitted by law, Agent itself, or by such officers
or agents as it may appoint, may enter and take possession of all the Premises
without the appointment of a receiver, or an application therefor, and may
exclude Mortgagor and its agents and employees wholly therefrom, and may have
access to the books, papers and accounts of Mortgagor. Mortgagor waives the
posting of any bond in the event Agent elects to take possession.
4.3.2 If Mortgagor shall for any reason fail to
surrender or deliver the Premises or any part thereof after such demand by
Agent, Agent may obtain a judgment or decree conferring upon Agent the right to
immediate possession or requiring Mortgagor to deliver immediate possession of
the Premises to Agent, to the entry of which judgment or decree Mortgagor hereby
specifically consents. Mortgagor will pay to Agent, upon demand, all reasonable
actual expenses of obtaining such judgment or decree, including reasonable
actual compensation to Agent, its attorneys and agents; and all such expenses
and compensation shall, until paid, be secured by the lien of this Instrument.
4.3.3 Upon every such entering upon or taking of
possession, Agent may hold, store, use, operate, manage and control the Premises
and conduct the business thereof, and, from time to time (i) make all necessary
and proper maintenance, repairs, renewals, replacements, additions, betterments
and improvements thereto and thereon and purchase or otherwise acquire
additional fixtures, personalty and other property; (ii) insure or keep the
Premises insured; (iii) manage and operate the Premises and exercise all the
rights and powers of Mortgagor to the same extent as Mortgagor could in its own
name or otherwise with respect to the same; and (iv) enter into any and all
agreements with respect to the exercise by others of any of the powers herein
granted Agent, all as Agent from time to time may determine to be in its best
interest. Agent may collect and receive all the rents, issues, profits and
revenues from the Premises, including those past due as well as those accruing
thereafter, and, after deducting (aa) all reasonable actual expenses of taking,
holding, managing and operating the Premises (including reasonable actual
compensation for the services of all persons employed for such purposes); (bb)
the cost of all such maintenance, repairs, renewals, replacements, additions,
betterments, improvements, purchases and acquisitions; (cc) the cost of such
insurance; (dd) such taxes, assessments and other similar charges as Agent may
at its option pay; (ee) other proper charges upon the Premises or any part
thereof; and (ff) the reasonable actual compensation, expenses and disbursements
of the attorneys and agents of Agent, Agent shall apply the remainder of the
moneys and proceeds so received by Agent, first to the payment of accrued
interest; second, to the payment and satisfaction of the Secured Obligations
currently due (whether by acceleration or otherwise); and third, to the
Mortgagor.
4.3.4 Whenever all that is due (whether by
acceleration or otherwise) upon such Secured Obligations and under any of the
terms, covenants, conditions and agreements of this Instrument, shall have been
paid and all Events of Default made good, Agent
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shall surrender possession of the Premises to Mortgagor, its successors or
assigns. The same right of taking possession, however, shall exist if any
subsequent Event of Default shall occur.
4.4 Performance by Agent of Defaults by Mortgagor. If
Mortgagor shall default in the payment, performance or observance of any term,
covenant or condition of this Instrument, Agent may, at its option and after
using best efforts to notify Mortgagor, pay, perform or observe the same, and
all payments made or costs or expenses incurred by Agent in connection
therewith, shall be secured hereby and shall be, without demand, immediately
repaid by Mortgagor to Agent with interest thereon at a rate per annum equal to
the "Default Rate" (as defined in the Credit Agreement) calculated on the basis
set forth in the Credit Agreement. Agent shall be the sole judge of the
necessity for any such actions and of the amounts to be paid, but shall exercise
such judgment reasonably and in good faith. Agent is hereby empowered to enter
and to authorize others to enter upon the Premises or any part thereof for the
purpose of performing or observing any such defaulted term, covenant or
condition without thereby becoming liable to Mortgagor or any person in
possession holding under Mortgagor except for gross negligence or willful
misconduct.
4.5 Receiver. If an Event of Default shall have occurred
and be continuing and shall not have been expressly waived by Agent, then, Agent
may apply to a court of competent jurisdiction pursuant to S.C. Code Ann.
15-65-10, et seq., as amended from time to time for the appointment of a
receiver to take possession of and to operate the Premises and to collect and
apply the rents, issues, profits and revenues thereof. Agent agrees to notify
Mortgagor of its application for the appointment of a receiver at least four (4)
days prior to such appointment, unless the court to which such application is
made prescribes a shorter time. The receiver shall have all of the rights and
powers permitted under the laws of the state wherein the Land is situated.
Mortgagor will pay to Agent upon demand all expenses, including receiver's fees,
reasonable actual attorneys' fees, costs and agent's compensation, incurred
pursuant to the provisions of this Section 4.5; and all such reasonable actual
expenses shall be secured by this Instrument.
4.6 Enforcement. If an Event of Default shall have
occurred and be continuing and shall not have been expressly waived by Agent,
concerning enforcement by judicial foreclosure or exercise of private power of
sale, Agent, at its option, may (a) commence proceedings to collect sums due
hereunder, foreclose this Instrument and sell the real property portion of the
Premises: At the foreclosure, Agent or any Bank shall be entitled to bid and to
purchase the real property portion of the Premises and shall be entitled to
apply the Secured Obligations, or any portion thereof, in payment for the real
property portion of the Premises; (b) collect and receive all the rents, issues,
profits and revenues from the Premises, including those past due as well as
those accruing thereafter; (c) with respect to the personalty that is located on
the Premises, exercise all rights, remedies and powers available to secured
parties under the Uniform Commercial Code in force in the State of South
Carolina; and (d) exercise any other rights or remedies provided in this
Instrument or by law, all of which rights and remedies may be exercised by Agent
independently, simultaneously or consecutively in any order without being deemed
to have waived any right or remedy previously or not yet exercised. Mortgagor
agrees that, to the extent permitted by law, legal process in connection with
the foreclosure of the debt secured hereby may be made by written notice to
Agent pursuant to Section 5.5. To the extent
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permitted by law, such process shall be deemed to be personally served on
Mortgagor as of the date of actual receipt thereof by the U.S. Mail. Such method
of service of process shall be in addition to all other methods permitted by
law. Agent may, in addition to and not in abrogation of the rights covered under
this Section 4.6, either with or without entry or taking possession as herein
provided or otherwise, proceed by a suit or suits in law or in equity or by any
other appropriate proceeding or remedy granted or conferred by applicable
statutes (i) to enforce payment of the Secured Obligations or the performance of
any term, covenant, condition or agreement of this Instrument or any other
right, and (ii) to pursue any other remedy available to it, all as Agent shall
determine most effectual for such purposes.
4.7 Purchase by Agent or any Bank. Upon any foreclosure
sale, either judicially or by private power of sale, Agent, for the benefit of
the Banks ratably, or, to the extent permitted by applicable law, any Bank may
bid for and purchase the Premises and shall be entitled to apply all or any part
of the Secured Obligations as a credit to the purchase price.
4.8 Application of Proceeds of Sale. Except as in
hereinabove expressly set forth, in the event of a foreclosure sale of the
Premises, either judicially or by private power of sale, the proceeds of said
sale shall be applied, unless applicable statutes shall specify otherwise,
first, to the expenses of such sale and of all proceedings in connection
therewith and the reasonable actual expenses of foreclosing this Instrument,
including reasonable actual attorneys' fees, then to payment of the Secured
Obligations in such order as the Required Banks shall elect, and finally the
remainder, if any, shall be paid as required by law, or in the absence of any
provision therefor in the law, shall be paid to the parties entitled thereto;
provided, however that as to such remainder, Agent shall not be bound by any
inheritance, devise, conveyance, assignment or lien of or upon Mortgagor's
equity, without actual notice thereof prior to distribution.
4.9 Mortgagor as Tenant Holding Over. In the event of any
such foreclosure sale by Agent, Mortgagor shall be deemed a tenant holding over
and shall forthwith deliver possession to the purchaser or purchasers at such
sale or be summarily dispossessed according to provisions of law applicable to
tenants holding over.
4.10 Waiver of Appraisement, Valuation, Stay, Extension
and Redemption Laws. Mortgagor agrees to the full extent permitted by law, that
in case of a Default on the part of Mortgagor hereunder, neither Mortgagor nor
anyone claiming through or under it shall or will set up, claim or seek to take
advantage of any appraisement, valuation, stay, extension, homestead, exemption,
redemption or moratorium laws, statutory or otherwise now or hereafter in force,
in order to prevent or hinder the enforcement or foreclosure of this Instrument,
or the absolute sale of the Premises, or the final and absolute putting into
possession thereof, immediately after such sale, of the purchasers thereat, and
Mortgagor, for itself and all who may at any time claim through or under it,
hereby waives to the full extent that it may lawfully so do, the benefit of all
such laws, and any and all right to have the assets comprised in the security
intended to be created hereby marshalled upon any foreclosure of the lien
hereof.
4.11 Leases. Agent, at its option, is authorized to
foreclose this Instrument subject to the rights of any tenants of the Premises,
and the failure to make any such tenants
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parties to any such foreclosure proceedings and to foreclose their rights will
not be, nor be asserted to be by Mortgagor, a defense to any proceedings
instituted by Agent to collect the Secured Obligations secured hereby.
4.12 Discontinuance of Proceedings and Restoration of the
Parties. In case Agent shall have proceeded to enforce any right, power or
remedy under this Instrument by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, then and
in every such case Mortgagor and Agent shall be restored to their former
positions and rights hereunder, and all rights, powers and remedies of Agent
shall continue as if no such proceeding had been taken.
4.13 Remedies Cumulative. No right, power or remedy
conferred upon or reserved to Agent by this Instrument is intended to be
exclusive of any other right, power or remedy or exclusive of any other right,
power or remedy conferred by statute, but each and every such right, power and
remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or
in equity or by statute.
4.14 Waiver.
4.14.1 No delay or omission of Agent to exercise
any right, power or remedy accruing upon any default or Event of Default shall
exhaust or impair any such right, power or remedy or shall be construed to be a
waiver of any such default, or acquiescence therein; and every right, power and
remedy given by this Instrument to Agent may be exercised from time to time and
as often as may be deemed expedient by Agent. No consent or waiver, expressed or
implied, by Agent or Banks to or of any breach or default by Mortgagor in the
performance of the obligations hereunder or any Event of Default shall be deemed
or construed to be a consent or waiver to or of any other breach or default in
the performance of the same or any other obligations of Mortgagor hereunder or
any Event of Default. Failure on the part of Agent or Banks to complain of any
act or failure to act or to declare an Event of Default, irrespective of how
long such failure continues, shall not constitute a waiver by Agent or Banks of
their rights hereunder or impair any rights, powers or remedies consequent on
any breach or default by Mortgagor. Agent or Banks may, at any time, or from
time to time, renew or extend this Instrument, or alter or modify the same in
any way, or waive any of the terms, covenants or conditions hereof in whole or
in part, and may release any portion of the Premises or any other security, and
grant such extensions and indulgences in relation to the Secured Obligations as
Agent may determine without the consent of any junior lienor or encumbrancer and
without any obligation to give notice of any kind thereto and without in any
manner affecting the priority of the lien hereof on any part of the Premises.
4.14.2 If Agent or Banks, as applicable, (i) grant
forbearance or an extension of time for the payment or satisfaction of the
Secured Obligations; (ii) take other or additional security for the payment of
the Secured Obligations; (iii) waive or do not exercise any right granted herein
or in any of the Secured Obligations; (iv) release any part of the Premises from
the lien of this Instrument or otherwise changes any of the terms, covenants,
conditions or agreements of any of the Secured Obligations; (v) consent to the
filing of any map, plat or replat
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affecting the Premises; (vi) consent to the granting of any easement or other
right affecting the Premises; or (vii) make or consent to any agreement
subordinating the lien hereof, any such act or omission shall not release,
discharge, modify, change or affect the original liability under any of the
Secured Obligations or any other obligation of Mortgagor or any subsequent
purchaser of the Premises or any part thereof, or any maker, co-signer,
endorser, surety or guarantor; nor shall any such act or omission preclude Agent
from exercising any right, power or privilege herein granted or intended to be
granted in the event of any default then made or of any subsequent default; nor,
except as otherwise expressly provided in an instrument or instruments executed
by Agent (and the Banks, if required) shall the lien of this Instrument be
altered thereby. In the event of the sale or transfer by operation of law or
otherwise of all or any part of the Premises, Agent, without notice, is hereby
authorized and empowered to deal with any such vendee or transferee with
reference to the Premises or the Secured Obligations, or with reference to any
of the terms, covenants, conditions or agreements hereof, as fully and to the
same extent as it might deal with the original parties hereto and without in any
way releasing or discharging any liabilities, obligations or undertakings.
4.15 Suits to Protect the Premises. Agent shall have power
to institute and maintain such suits and proceedings as it may reasonably deem
expedient (a) to prevent any impairment of the Premises by any acts which may be
unlawful or any violation of this Instrument, (b) to preserve or protect its
interest, in the Premises and in the rents, issues, profits and revenues arising
therefrom, and (c) to restrain the enforcement of or compliance with any
legislation or other governmental enactment, rule or order that Agent, in its
reasonable judgment, believes to be unconstitutional or otherwise invalid, if,
and only to the extent, the enforcement of or compliance with such enactment,
rule or order would impair the security hereunder or be prejudicial to the
interest of Agent, hereunder or under the other Transaction Documents.
4.16 Agent May File Proofs of Claim. In the case of any
receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition or other proceedings affecting Mortgagor, its creditors or its
property, Agent, to the extent permitted by law, shall be entitled to file such
proofs of claim and other documents as may be necessary or advisable in order to
have the claims of Agent allowed in such proceedings for the entire amount due
and payable by Mortgagor under this Instrument at the date of the institution of
such proceedings and for any additional amount which may become due and payable
by Mortgagor hereunder after such date.
4.17 Multiple Sales. To the extent permitted by law, in
any judicial proceedings to foreclose this Instrument or nonjudicial exercise of
power of sale or any other private or public sale, the Premises, at the option
of Agent, may be sold in whole or in part and in the event of such multiple
sales, the Secured Obligations shall not be merged into any foreclosure sale or
foreclosure judgment so long as there shall remain outstanding any amount
secured by this Instrument. Such a foreclosure judgment in any state in which
the Land is located shall not operate, in and of itself, as a release of the
other property hereby secured or a waiver of Agent's right to elect any other
remedy available to it hereunder.
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ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 Successors and Assigns. This Instrument shall inure
to the benefit of and be binding upon Mortgagor and Agent or their respective
legal representatives, permitted successors and assigns. Whenever a reference is
made in this Instrument to Mortgagor or Agent such reference shall be deemed to
include a reference to the legal representatives, permitted successors and
assigns of Mortgagor or Agent.
5.2 Terminology. All personal pronouns used in this
Instrument whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural, and vice
versa. Titles and Articles are for convenience only and neither limit nor
amplify the provisions of this Instrument itself, and all references herein to
Articles, Sections or Subsections shall refer to the corresponding Articles,
Sections or Subsections of this Instrument unless specific reference is made to
such Articles, Sections or Subsections of another document or instrument.
5.3 Severability. If any provision of this Instrument or
the application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Instrument and the
application of such provisions to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
5.4 Applicable Law. This Instrument and the obligations
created and secured hereby shall be interpreted, construed and enforced
according to the laws of the State of Georgia; except that, only for purposes of
determining (i) matters pertaining to real property, including the sufficiency
of the conveyance, warranties of title, perfection and the effect of
non-perfection and the foreclosure proceedings and remedies available to Agent,
and (ii) perfection and the effect of non-perfection of personal property, the
provisions of the Instrument shall be construed in accordance with the law of
the state of South Carolina.
5.5 Notices. All notices, requests and demands to or upon
the respective parties hereto, and all responses thereto, shall be in writing
and shall be deemed to have been properly given or served when personally
delivered or deposited in the mail, certified mail, return receipt requested,
postage prepaid, or delivered to a nationally recognized overnight courier
service, with all delivery charges paid or provided for, addressed to the
addresses set forth below. All notices, requests and demands, and all responses
thereto, shall be effective upon receipt thereof. Rejection or other refusal to
accept or the inability to deliver because of changed address of which no notice
was given shall be deemed to be receipt of the notice, demand or request sent.
By giving at least 30 days written notice hereof, Mortgagor or Agent shall have
the right from time to time and at any time during the term of this Agreement to
change their respective addresses and each shall have the right to specify as
its address any other address within the continental United States of America.
For the purpose of this Agreement, the following addresses apply:
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Mortgagor:
Avondale Mills Graniteville Fabrics, Inc.
506 South Broad Street
Monroe, Georgia 30655
Attn: Chairman and Chief Executive Officer
Agent:
Wachovia Bank, N.A.
191 Peachtree Street
Atlanta, Georgia 30303-1757
Attention: Commercial Group - GA212
5.6 Replacement of Documents. Upon receipt of evidence
reasonably satisfactory to Mortgagor or Agent of the loss, theft, destruction or
mutilation of any of the Transaction Documents and, in the case of any such
loss, theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory to Mortgagor or Agent or, in the case of any such mutilation, upon
surrender and cancellation of the appropriate document, the other party or
parties will execute and deliver, in lieu thereof, a replacement document or
instrument supplied by Mortgagor or Agent, identical in form and substance and
dated as of the date of the document being replaced and upon such execution and
delivery of such replacement document all references in this Instrument to the
document being replaced shall be deemed to refer to such replacement document.
5.7 Time of the Essence. Time is of the essence with
respect to each and every covenant, agreement and obligation of Mortgagor under
each of the Transaction Documents and any and all other instruments now or
hereafter evidencing, securing or otherwise relating to the Secured Obligations.
5.8 Counterparts. This Instrument may be executed in any
number of counterparts, each of which is deemed to be an original document, all
of which taken together shall constitute one and the same Instrument.
5.9 No Obligation to Marshal Assets. Notice is hereby
given that no holder of any mortgage, deed of trust, deed to secure debt, lien,
security interest or other encumbrance affecting all or any portion of the
Premises, which is inferior to the lien, security interest and security title of
the Instrument shall have the right or privilege to require Agent to marshal
assets.
5.10 Consent of Agent. Agent, by its acceptance of this
Instrument, agrees to be bound by the terms and conditions of this Instrument.
5.11 Agent's Powers. Without affecting the liability of
any other person liable for the payment of any obligation herein mentioned, and
without affecting the lien or charge of this Instrument upon any portion of the
Premises not then or theretofore released as security for the full amount of all
unpaid obligations, Agent (and the Banks) may, from time to time and
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without notice (i) release any person so liable, (ii) extend the maturity or
alter any of the terms of any such obligation, (iii) grant other indulgences,
(iv) cause to be released or reconveyed at any time at Agent's option, any
parcel, portion or all of the Premises, (v) take or release any other or
additional security for any obligation herein mentioned, or (vi) make
compositions or other arrangements with debtors in relation thereto.
5.12 No Liability or Obligation on Agent. Nothing in this
Instrument shall be construed to impose any obligation upon Agent to expend any
money or to take any other discretionary act herein permitted, and Agent shall
not have any liability or obligation for any delay or failure to take any
discretionary act in the absence of gross negligence or willful misconduct by
Agent.
IN WITNESS WHEREOF, Mortgagor has executed this instrument
under seal, as of the day and year first above written.
"Mortgagor"
Signed, sealed and delivered AVONDALE MILLS GRANITEVILLE
in the presence of: FABRICS, INC.
By:
---------------------------------- --------------------------------
Witness Name;
Title:
Attest:
---------------------------------- ----------------------------
Witness Name;
Title:
[CORPORATE SEAL]
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STATE OF SOUTH CAROLINA )
) SOUTH CAROLINA
COUNTY OF AIKEN ) PROBATE
BEFORE ME, the undersigned notary public, personally appeared
_________________, who being duly sworn, deposed and said that he saw
________________________________, the ______________________________ of Avondale
Mills Graniteville Fabrics, Inc., a Delaware corporation, sign, seal and deliver
the foregoing Instrument on behalf of Avondale Mills Graniteville Fabrics, Inc.,
a Delaware corporation, and he together with ___________________, witnessed the
execution thereof.
-------------------------------------------
Witness
SWORN TO and subscribed
before me this _____ day of
_____________, 1997.
--------------------------
Notary Public
My Commission Expires:
[NOTARIAL SEAL]
EXHIBIT "A"
THE LAND
Commencing from a Nail & Cap at the intersection of Whaley Pond Rd.
(S-2-780) & Bettis Academy Road (S-2-144). Thence continuing in a direction of N
0 50' 16" E for 584.37' to a #4 Rebar Set on the right of way of Bettis Academy
Rd, being known as the Point of Beginning. Thence S 76 20' 15" E for 776.98' to
a 1 1/2" open end Iron Pipe Set. Thence S 78 40'54" E for 1007.80' to a 3/4"
open end Iron Pipe Set. Thence S 13 14'31" E for 432.24' to a #4 Rebar Set.
Thence S 4 40'01" W for 563.65' to a #4 Rebar Set. Thence S 35 15'05" W for
151.22' to a #4 Rebar Set. Thence N 83 00'49" W for 102.41' to a #4 Rebar Set.
Thence N 78 12'34" W for 351.73' to a #4 Rebar Set. Thence N 9 51'29" E for
27.91' to a #4 Rebar Set. Thence N 78 32'05" W for 72.54' to a #4 Rebar Set.
Thence N 9 42'52" E for 33.29' to a #4 Rebar Set. Thence N 77 37' 57" W for
51.16' to a #4 Rebar Set. Thence S 9 35'06" W for 62.22' to a #4 Rebar Set.
Thence S 47 32'02" W for 54.39' to a #4 Rebar Set. Thence N 77 47'00" W for
84.21' to a #4 Rebar Set. Thence N 9 48'37" E for 43.87' to a #4 Rebar Set.
Thence N 78 21'46" W for 458.15' to a #4 Rebar Set. Thence S 11 35'47" W for
83.44' to a #4 Rebar Set. Thence N 78 00'24" W for 90.08' to a #4 Rebar Set.
Thence N 10 56'25" E for 96.44' to a #4 Rebar Set. Thence N 74 18'59" W for
451.61' to a #4 Rebar Set on the right of way of Bettis Academy Road. (S-2-144).
Thence N 2 24'21" W for 1169.88' along east right of way of Bettis
282
<PAGE> 288
Academy Road (S-2-144) to #4 Rebar Set also known as the point of beginning.
Having a total Area of 45.27 Acres.
283
<PAGE> 289
EXHIBIT "B"
PERMITTED ENCUMBRANCES
284
<PAGE> 290
EXHIBIT "C"
Description of "Debtor" and "Secured Party"
A. Debtor:
1. Name and Identity or Corporate Structure:
AVONDALE MILLS GRANITEVILLE FABRICS, INC., a Delaware
corporation
2. The principal place of business of Debtor in South Carolina is
in Graniteville, Aiken County, South Carolina, and its mailing
address and chief executive office is at 506 South Broad
Street, Monroe, Georgia 30655.
3. Debtor has been using or operating under said name (or its
former name, "Camp Helen Co.") and identity or corporate
structure without change for the following time period:
Not less than six years.
B. Secured Party: Wachovia Bank, N.A., a national banking association,
in its capacity as Agent for certain banks
285
<PAGE> 291
EXHIBIT R
FORM OF NOTICE
IN RESPECT OF ISSUANCE OF OTHER LETTERS OF CREDIT
TO: The Banks parties to the Second Amended and Restated Credit Agreement
dated as of September 28, 2000, as amended and supplemented from time to time
(the "Credit Agreement") by and among Avondale Mills, Inc., as the Borrower, and
Wachovia Bank, N.A., as the Agent, and the Banks parties thereto.
Pursuant to Section 2.13(a)(iv)(B) of the Credit Agreement, the Agent
hereby certifies to the Banks that it has issued the following Other Letters of
Credit pursuant to Section 2.13 of the Credit Agreement:
<TABLE>
<CAPTION>
Face Date of
Number Amount Issuance/Expiration Beneficiary Purpose
------ ------ ------------------- ----------- -------
<S> <C> <C> <C> <C>
</TABLE>
A copy of each of the Other Letters of Credit listed above has been
attached hereto.
Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meaning in this notice.
Date: , 200_.
WACHOVIA BANK, N.A.
By:
-------------------------
Name:
Title:
Enclosures
286
<PAGE> 292
Schedule 4.08
SUBSIDIARIES
<TABLE>
<CAPTION>
Owner of 100% Jurisdiction of
Subsidiary of Common Stock Incorporation
---------- --------------- ---------------
<S> <C> <C>
Avondale Mills Graniteville Fabrics, Inc. Avondale Mills, Inc. Delaware
Avondale Receivables Company Avondale Mills, Inc. Delaware
Avondale Foreign Sales Corporation Avondale Mills, Inc. Virgin Islands
</TABLE>
287
<PAGE> 293
Schedule 4.14
CERTAIN ENVIRONMENTAL MATTERS
AVONDALE MILLS, INC.
1. Avondale Mills discharges wastewater from its Alexander City, Alabama
textile manufacturing plant to the Alexander City Waste Water Treatment
Plant pursuant to a State Indirect Discharge permit. In 1999, the U.S.
Environmental Protection Agency notified Alexander City, Avondale
Mills, and Russell Mills (another indirect discharger to the Wastewater
Treatment Plant) of its intention to charge these parties with
violating the Clean Water Act alleging that Alexander City's direct
discharges from the Plant have violated the Plant's Clean Water Act
permit and that the indirect dischargers' influent to the Plant
"caused" that Plant's violations. Avondale Mills believes EPA's
position is incorrect and is prepared to defend the compliance record
of its Alexander City manufacturing plant. Avondale Mills had been
involved in discussions with EPA and the other parties regarding
resolution of this matter.
2. In 1987, the South Carolina Department of Health and Environmental
Control ("DHEC") notified Graniteville Company ("Graniteville") that
DHEC had discovered certain contamination in a pond near Graniteville,
South Carolina and that Graniteville may be one of the responsible
parties. In 1990 and 1991, Graniteville provided reports to DHEC
summarizing its required study and investigation of the alleged
pollution and its sources which concluded that pond sediments should be
left undisturbed and that other remediation alternatives either
provided no significant benefit or themselves involved adverse effects.
Since that time, Avondale Mills has performed sedimentation sampling
and analysis, reporting the results to DHEC. At the present time,
Avondale has been asked to perform no remedial work or further
evaluative work at this site.
3. Graniteville owned a nine acre property near Vaucluse in Aiken County,
South Carolina which was operated jointly by Graniteville and Aiken
County as a landfill from approximately 1950 through 1973. Pursuant to
various site investigations performed by U.S. EPA, DHEC and
Graniteville, DHEC asked Avondale Mills to prepare an evaluation of
various remedial actions that might be appropriate for the site.
Avondale Mills prepared and submitted such an evaluation, concluding
that a simple earthen cover, specified institutional controls and
specified periodic groundwater monitoring would be appropriate for this
site. DHEC has not yet responded to the recommended measures.
4. Litigation described in Item 1 of Schedule 4.05.
Avondale Mills does not now expect any of the foregoing to have or cause a
Material Adverse Effect, or to draw into question the validity of or impair the
ability of Avondale Mills to perform its obligations under the Credit Agreement,
the Notes, or any of the Loan Documents, or of Avondale Incorporated or Avondale
Mills Graniteville Fabrics to perform their respective obligations under the
Loan Documents to which they are parties.
288
<PAGE> 294
Schedule 5.11
Existing Liens as of April 29, 1996
<TABLE>
<CAPTION>
Secured Party Jurisdiction Collateral
------------- ------------ ----------
<S> <C> <C>
AVONDALE MILLS, INC.
Xerox Corporation Date Filed: 04/10/96 Xerox Leased Equipment
File number: 96-15376
SOS Alabama
Val Tech Computer Systems Date Filed: 03/06/96 Leased Equipment Notice
(assignee Nat'l Bank of File number: 96-09326 Filing
Commerce) SOS Alabama
Val Tech Computer Systems Date Filed: 08/09/95 Leased Equipment
(assignee First Alabama File number: 95-32698
Bank) SOS Alabama
Val Tech Computer Systems Date Filed: 05/24/95 Leased Equipment
(assignee First Alabama File number: 95-21606
Bank) SOS Alabama
Rieter Corporation Date Filed: 11/14/94 Equipment
File number: 94-43091
SOS Alabama
Rieter Corporation Date Filed: 11/14/94 Equipment
File number: 94-43090
SOS Alabama
Rieter Corporation Date Filed: 11/14/94 Equipment
File number: 94-43089
SOS Alabama
Val Tech Computer Systems Date Filed: 06/09/94 Leased Equipment Notice
File number: 94-20960 Filing
SOS Alabama
AT&T Credit Corporation Date Filed: 05/02/94 Leased Equipment
File number: 94-15516
SOS Alabama
</TABLE>
289
<PAGE> 295
<TABLE>
<CAPTION>
Secured Party Jurisdiction Collateral
------------- ------------ ----------
<S> <C> <C>
Wachovia Bank of Georgia, Date Filed: 04/04/94 Blanket Lien
as Agent File number: 94-11561
SOS Alabama
Val Tech Computer Systems Date Filed: 02/25/94 Leased Equipment Notice
(assignee Nat'l Bank of File number: 94-06560 Filing
Commerce re-assigned SOS Alabama
10/11/95 to Val Tech)
Pacific Atlantic Systems Date Filed: 12/28/93 Leased Equipment Notice
File number: 93-44875 Filing
SOS Alabama
Val Tech Computer Systems Date Filed: 12/20/93 Leased Equipment Notice
(assignee Nat'l Bank of File number: 93-43776 Filing
Commerce re-assigned SOS Alabama
10/11/95 to Val Tech)
Pacific Atlantic Systems Date Filed: 09/30/93 Leased Equipment Notice
File number: 93-34411 Filing
SOS Alabama
Xerox Corporation Date Filed: 04/27/93 Xerox Leased Equipment
File number: 93-14521
SOS Alabama
Xerox Corporation Date Filed: 04/27/93 Xerox Leased Equipment
File number: 93-14511
SOS Alabama
Bell Atlantic Systems Date Filed: 01/25/93 Leased Equipment Notice Filing
Leasing File number: 93-02601
SOS Alabama
(assignee: COS Computer
Systems)
SouthTrust Bank of Alabama Date Filed: 01/14/93 Leased Equipment,
File number: 93-01620 Insurance, Proceeds
SOS Alabama
Trust Company Bank Date Filed: 04/30/92 IRB Project and Equipment
(co-debtor: Industrial Dev. File number: 92-15816
Board Town on Bon Air) SOS Alabama
</TABLE>
290
<PAGE> 296
<TABLE>
<CAPTION>
Secured Party Jurisdiction Collateral
------------- ------------ ----------
<S> <C> <C>
SouthTrust Bank of Alabama Date Filed: 02/10/92 Equipment, Insurance, Proceeds
File number: 92-04907
SOS Alabama
Mayer Electric Supply Co., Date Filed: 04/18/91 Consignment of inventory to
Inc. File number: 91-14211 a Systems Contracting
SOS Alabama Agreement
CIT Group/Equipment Date Filed: 01/27/88 12 - Volvo Sleeper Tractors
Financing, Inc. Continued: 08/04/92
File number: A270067
SOS Alabama
CIT Group/Equipment Date Filed: 08/17/87 1 - Volvo Sleeper Tractor
Financing, Inc. Continued: 04/02/92
File number: A253773
SOS Alabama
Rieter Corporation Date Filed: 02/16/95 Rieter Drawframe
File number: 2046
Coosa County, Alabama
Wachovia Bank of Georgia, Date Filed: 04/07/94 Blanket Lien
as Agent File number: 94-069505
SOS California
Wachovia Bank of Georgia, Date Filed: 04/05/94 Blanket Lien
as Agent File number: 1052193
SOS Connecticut
Wachovia Bank of Georgia, Date Filed: 04/04/95 Blanket Lien
as Agent File number: 33817
Floyd County
Wachovia Bank of Georgia, Date Filed: 04/04/95 Blanket Lien
as Agent File number: 30395
Walton County
Wachovia Bank of Georgia, Date Filed: 04/04/95 Blanket Lien
as Agent File number: 225684
SOS Massachusetts
</TABLE>
291
<PAGE> 297
<TABLE>
<CAPTION>
Secured Party Jurisdiction Collateral
------------- ------------ ----------
<S> <C> <C>
Wachovia Bank of Georgia, Date Filed: 10/03/95 Property/items secured by
as Trustee File number: 1269123 UCC-1 #0588793, filed
SOS North Carolina 07/19/89 which has expired
Rieter Corporation Date Filed: 02/16/95 Rieter Drawframe
File number: 1162256
SOS North Carolina
Rieter Corporation Date Filed: 02/16/95 Rieter Drawframe
File number: 1162255
SOS North Carolina
Rieter Corporation Date Filed: 02/16/95 Rieter Drawframe
File number: 1162254
SOS North Carolina
Wachovia Bank of Georgia, Date Filed: 04/05/94 Blanket Lien
as Agent File number: 1093872
SOS North Carolina
Trust Company Bank of Date Filed: 12/04/92 IRB Project and Equipment
Georgia File number: 0947502
SOS North Carolina
Trust Company Bank of Date Filed: 12/03/92 IRB Project and Equipment
Georgia File number: 0947094
SOS North Carolina
Staunton Norris, as Deed of Date Filed: 07/08/88 IRB Project and Equipment
Trust Trustee and Trust Continued: 06/30/93
Company Bank and First File number: 0470504
Nat'l Bank of Atlanta, as Continued: 0011832
Indentured Trustee SOS North Carolina
Staunton Norris, as Deed of Date Filed: 07/19/89 IRB Project and Equipment
Trust Trustee and Trust File number: 0588793
Company Bank and First SOS North Carolina
Nat'l Bank of Atlanta, as
Indentured Trustee
Rieter Corporation Date Filed: 11/18/94 Rieter Drawframe
File number: 94-1512
Lee County, North Carolina
</TABLE>
292
<PAGE> 298
<TABLE>
<CAPTION>
Secured Party Jurisdiction Collateral
------------- ------------ ----------
<S> <C> <C>
Rieter Corporation Date Filed: 11/18/94 Rieter Drawframe
File number: 94-1511
Lee County, North Carolina
Trust Company Bank / Date Filed: 12/02/92 IRB Project and Equipment
Wachovia Bank of Georgia, File number: 92-1601
NA Lee County, North Carolina
Wachovia Bank of Georgia Date Filed: 09/26/95 Pertaining to UCC-1 #89-256
File number: 95-182 Filed 07/13/89 which has
Yancey County, North since expired
Carolina
Rieter Corporation Date Filed: 11/07/94 Rieter Drawframe RSB 951
File number: 94-203
Yancey County, North
Carolina
Trust Company Bank Date Filed: 12/04/92 IRB Project and Equipment
File number: 92-1976
Yancey County, North
Carolina
Staunton Norris, as Deed of Date Filed: 07/08/88 IRB Project and Equipment
Trust Trustee and Trust Continued: 06/25/93
Company Bank and First File number: 88-288
Nat'l Bank of Atlanta, as Continued as 93-103
Indentured Trustee Yancey County, North
Carolina
Staunton Norris, as Deed of Date Filed: 07/13/89 IRB Project and Equipment
Trust Trustee and Trust File number: 89-256
Company Bank and First Yancey County, North
Nat'l Bank of Atlanta, as Carolina
Indentured Trustee
Wachovia Bank of Georgia Date Filed: 04/12/94 Blanket Lien
File number: 1563871
SOS New Jersey
Wachovia Bank of Georgia Date Filed: 04/06/94 Blanket Lien
File number: 23000343
SOS Pennsylvania
</TABLE>
293
<PAGE> 299
<TABLE>
<CAPTION>
Secured Party Jurisdiction Collateral
------------- ------------ ----------
<S> <C> <C>
Rieter Corporation Date Filed: 11/10/94 Leased Equipment
File number: 941110-103225A
SOS South Carolina
Wachovia Bank of Georgia Date Filed: 04/05/94 Blanket Lien
File number: 940405-
132723A
SOS South Carolina
Trust Company Bank Date Filed: 12/04/92 IRB Project and Equipment
File number: 921204-
100723A
SOS South Carolina
Bell Atlantic Systems Date Filed: 04/08/91 Leased Equipment
Leasing File number: 91-017594
SOS South Carolina
Trust Company Bank Date Filed: 01/04/91 IRB Project and Equipment
File number: 91-00010
Oconee County, South Carolina
Trust Company Bank Date Filed: 12/02/92 IRB Project and Equipment
File number: 92-00694
Oconee County, South Carolina
Rieter Corporation Date Filed: 11/09/94 Rieter Drawframe
File number: 94-00681
Oconee County, South Carolina
Wachovia Bank of Georgia Date Filed: 04/05/94 Blanket Lien
File number: 94064691
SOS Texas
GRANITEVILLE
COMPANY
Schlafhorst, Inc. Date Filed: 02/06/92 Equipment
File number: 92-005960
Secretary of State, SC
</TABLE>
294
<PAGE> 300
<TABLE>
<CAPTION>
Secured Party Jurisdiction Collateral
------------- ------------ ----------
<S> <C> <C>
Schlafhorst, Inc. Date Filed: 01/14/92 Equipment
File number: 92-002008/92-
002009
Secretary of State, SC
Schlafhorst, Inc. Date Filed: 01/14/92 Equipment
File number: 92-002008
Secretary of State, SC
Olin Corporation Date Filed: 02/10/94 Leased Equipment
File number: 131059A
Secretary of State, SC
Olin Corporation Date Filed: 12/07/93 Leased Equipment
File number: 110634A
Secretary of State, SC
BellSouth Financial Services Secretary of State, SC
Corporation Amendment:
09/28/92, #134045A
Pitney Bowes Credit Date Filed: 01/29/92 Equipment Informational
Corporation File number: Filing
92004503/92004504
Secretary of State, SC
Schlafhorst, Inc. Date Filed: 08/19/91 3 - Rotor Autocoro
File number: 91-040929
Secretary of State, SC
Pitney Bowes Credit Date Filed: 01/25/96 Leased Equipment
Corporation File number: 122033A
Secretary of State, SC
Primeco, Inc. d/b/a Prime Date Filed: 09/13/94 1 - Scissor Lift
Equipment File number: 100644A
Secretary of State, SC
E.I. DuPont De Nemours & Date Filed: 12/27/91 Notice filing of a Service
Co. Separation Systems File number: 91-061914 Agreement
Secretary of State, SC
</TABLE>
295
<PAGE> 301
<TABLE>
<CAPTION>
Secured Party Jurisdiction Collateral
------------- ------------ ----------
<S> <C> <C>
Canon Financial Services, Date Filed: 01/12/93 Office Equipment
Inc. File number: 145328A
Secretary of State, SC
Primeco, Inc. d/b/a Prime Date Filed: 09/13/94 1 - Scissor Lift
Equipment File number: 1329
Aiken County, SC
Schlafhorst, Inc. Date Filed: 02/06/92 Rotor Autocoro(s)
File number: 192
Aiken County, SC
Schlafhorst, Inc. Date Filed: 01/15/92 Rotor Autocoro(s)
File number: 81
Aiken County, SC
Schlafhorst, Inc. Date Filed: 01/15/92 Rotor Autocoro(s)
File number: 80
Aiken County, SC
Schlafhorst, Inc. Date Filed: 08/20/91
File number: 1335
Aiken County, SC Rotor Autocoro(s)
First United Leasing Date Filed: 01/22/93 1/Panafax Facsimile
Corporation File number: 014679
SOS New York
Pitney Bowes Date Filed: Equipment Lease
File number: 960412-
131615A
SOS South Carolina
The CIT Group/Commercial N/A $260,000 cash deposit to
Services, Inc., secure certain reimbursement
and indemnity obligations
Bank of New York N/A Foreign Accounts Receivable
(successor-in-interest to FNB per Factoring Agreement
Financial Company)
</TABLE>
296
<PAGE> 302
<TABLE>
<CAPTION>
Secured Party Jurisdiction Collateral
------------- ------------ ----------
<S> <C> <C>
WALTON MONROE
MILLS, INC.
Trust Company Bank Date Filed: 06/15/92 IRB Project and Equipment
File number: 28353
Walton County, Georgia
Trust Company Bank Date Filed: 01/28/93 Partial Release - 5 Saurer
File number: 28353 Shutterless Weaving
Walton County, Georgia Machines, Type 400
NCC Leasing Date Filed: 07/25/91 NCR electronic data
File number: 27498 processing equipment
Walton County, Georgia
NCC Leasing Date Filed: 09/12/91 14 Terminal Green
File number: 27605 1010/keyboards
Walton County, Georgia
</TABLE>
297
<PAGE> 303
Schedule 5.17
Description of Insurance
[separate schedule to be attached]
298
<PAGE> 304
Schedule 5.25
PLANTS
Avondale Mills, Inc. Plants
<TABLE>
<CAPTION>
(iv) Third
Owned/ Party
Plant Name (i) City, State, County Leased (iii) Liens Consent
---------- ----------------------- ------ ---------- --------------
<S> <C> <C> <C> <C>
Revolver Collateral Plants:
Bevelle Alexander City, AL Owned None
Tallapoosa
Eva Jane Sylacauga, AL Owned None
Talladega
Sylacauga Sylacauga, AL Owned None
Finishing Talladega
Bon Air Bon Air, AL Leased* None
Talladega
Walhalla Walhalla, SC Owned None
Oconee
Catherine Sylacauga, AL Owned None
Talladega
Coosa Rockford, AL Owned None
Coosa
Pell City Pell City, AL Owned None
St. Clair
Sanford Sanford, NC Owned None
Lee
Tifton Tifton, GA Owned None
Tift
SunTrust Collateral Plants:
Lee Sanford, NC Owned SunTrust SunTrust
Lee
Burnsville Burnsville, NC Owned SunTrust SunTrust
</TABLE>
299
<PAGE> 305
<TABLE>
<CAPTION>
(iv) Third
Owned/ Party
Plant Name (i) City, State, County Leased (iii) Liens Consent
---------- ----------------------- ------ ---------- --------------
<S> <C> <C> <C> <C>
Yancey
Walton Monroe, GA Leased** SunTrust SunTrust
</TABLE>
* Leased under Refunding Revenue Bond agreements from The Industrial
Development Board of the Town of Bon Air
** Leased under Industrial Development Revenue Bond agreements from The
Development Authority of Walton County
300
<PAGE> 306
Graniteville Company. Plants
<TABLE>
<CAPTION>
(iv) Third
Owned/ Party
Plant Name (i) City, State, County Leased (iii) Liens Consent
---------- ----------------------- ------ ----------- ----------
<S> <C> <C> <C> <C>
Gregg Dyeing Graniteville, SC Owned None
and Finishing Aiken
Hickman Graniteville, SC Owned None
Aiken
Horse Creek Graniteville, SC Owned None
Aiken
Sibley August, GA Owned None
Richmond
Sibley Dyeing Augusta, GA Owned None
and Finishing Richmond
Swint Graniteville, SC Owned None
Aiken
Townsend Graniteville, SC Owned None
Aiken
Warren Dyeing Graniteville, SC Owned None
Aiken
Warren Garment Graniteville, SC Owned None
Processing Aiken
Woodhead Graniteville, SC Owned None
Aiken
</TABLE>
301
