1
EXHIBIT 4.1
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
dated as of May 28, 1999
by and among
CMI INDUSTRIES, INC.
the Lenders named herein
and
BANKBOSTON, N.A., as Agent
2
TABLE OF CONTENTS*
Page
----
ARTICLE I. - DEFINITIONS ......................................................................... 1
SECTION 1.1 Definitions ....................................................................... 1
SECTION 1.2 General ........................................................................... 1
SECTION 1.3 Other Definitions and Provisions .................................................. 2
ARTICLE II. - REVOLVING CREDIT FACILITY .......................................................... 2
SECTION 2.1 Revolving Credit Loans . .......................................................... 2
SECTION 2.2 Manner of Borrowing Revolving Credit Loans ........................................ 3
SECTION 2.3 Repayment of Revolving Credit Loans ............................................... 4
SECTION 2.4 Revolving Credit Notes ............................................................ 5
SECTION 2.5 Termination of Revolving Credit Facility .......................................... 5
SECTION 2.6 Voluntary Reduction of Revolving Credit Facility; Termination of Agreement ........ 5
ARTICLE III. - LETTER OF CREDIT FACILITY AND INTEREST RATE PROTECTION OBLIGATIONS ................ 7
SECTION 3.1 Letter of Credit Facility ......................................................... 7
SECTION 3.2 Method of Issuance of Letters of Credit ........................................... 7
SECTION 3.3 Drawings; Interest Rate Protection Obligations .................................... 7
SECTION 3.4 Letter of Credit Reimbursement; IRPA Obligation Reimbursement ..................... 10
SECTION 3.5 Supporting Letter of Credit; Cash Collateral Account .............................. 11
ARTICLE IV. - GENERAL LOAN PROVISIONS ............................................................ 13
SECTION 4.1 Interest .......................................................................... 13
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans .......................... 14
SECTION 4.3 Commitment, Agency and Letter of Credit Fees ...................................... 14
SECTION 4.4 Manner of Payment ................................................................. 15
SECTION 4.5 General ........................................................................... 16
SECTION 4.6 Statements of Account ............................................................. 16
SECTION 4.7 Fees Not Interest ................................................................. 17
SECTION 4.8 Nature of Obligations of Lenders to Make Loans; Assumption by Agent................ 17
SECTION 4.9 Changed Circumstances ............................................................. 17
SECTION 4.10 Payments Not at End of Interest Period ........................................... 18
ARTICLE V. - CONDITIONS PRECEDENT ................................................................ 20
SECTION 5.1 Conditions Precedent to Effectiveness ............................................. 20
SECTION 5.2 All Loans ......................................................................... 22
SECTION 5.3 Conditions as Covenants ........................................................... 22
* This Table of Contents is included for reference purposes only and
does not constitute part of the Loan and Security Agreement.
3
ARTICLE VI. - REPRESENTATIONS AND WARRANTIES OF BORROWER .................................. 23
SECTION 6.1 Representations and Warranties ............................................. 23
SECTION 6.2 Survival of Representations and Warranties. Etc ............................ 28
ARTICLE VII. - SECURITY INTEREST .......................................................... 30
SECTION 7.1 Security Interest .......................................................... 30
SECTION 7.2 Continued Priority of Security Interest .................................... 30
ARTICLE VIII.- COLLATERAL COVENANTS ....................................................... 32
SECTION 8.1 Collection of Receivables . ................................................ 32
SECTION 8.2 Verification and Notification . ............................................ 33
SECTION 8.3 Adjustments ................................................................ 33
SECTION 8.4 Invoices ................................................................... 33
SECTION 8.5 Delivery of Instruments .................................................... 33
SECTION 8.6 Returned Goods ............................................................. 33
SECTION 8.7 Ownership and Defense of Title ............................................. 33
SECTION 8.8 Insurance .................................................................. 34
SECTION 8.9 Location of Offices and Collateral ......................................... 34
SECTION 8.10 Records Relating to Collateral. The Borrower will at all times: ........... 35
SECTION 8.11 Information and Reports ................................................... 35
ARTICLE IX. - AFFIRMATIVE COVENANTS ....................................................... 37
SECTION 9.1 Preservation of Corporate Existence and Similar Matters .................... 37
SECTION 9.2 Compliance with Applicable Law ............................................. 37
SECTION 9.3 Maintenance of Property .................................................... 37
SECTION 9.4 Conduct of Business ........................................................ 37
SECTION 9.5 Insurance .................................................................. 37
SECTION 9.6 Payment of Taxes and Claims ................................................ 38
SECTION 9.7 Accounting Methods and Financial Records ................................... 38
SECTION 9.8 Visits and Inspections ..................................................... 38
SECTION 9.9 Use of Proceeds ............................................................ 39
SECTION 9.10 Hazardous Waste and Substances: Environmental Requirements ................ 39
SECTION 9.11 ERISA ..................................................................... 39
SECTION 9.12 Year 2000 ................................................................. 39
SECTION 9.13 Notification of IRPA and Swap Reserves .................................... 40
ARTICLE X. - INFORMATION .................................................................. 41
SECTION 10.1 Financial Statements . .................................................... 41
SECTION 10.2 Accountants' Certificate .................................................. 42
SECTION 10.3 Officer's Certificate ..................................................... 42
SECTION 10.4 Copies of Other Reports ................................................... 42
SECTION 10.5 Notice of Litigation and Other Matters .................................... 43
SECTION 10.6 Accuracy of Information ................................................... 43
SECTION 10.7 Revisions or Updates to Schedules ......................................... 43
ARTICLE XI. - NEGATIVE COVENANTS .......................................................... 44
4
SECTION 11.1 Financial Covenants ............................. 44
SECTION 11.2 Indebtedness for Money Borrowed ................. 44
SECTION 11.3 Guaranties ...................................... 45
SECTION 11.4 Acquisitions; Investments ....................... 45
SECTION 11.5 Restricted Dividend Payments and Purchases, Etc.. 45
SECTION 11.6 Transactions with Insiders ...................... 45
SECTION 11.7 Liens ........................................... 46
SECTION 11.8 Merger, Consolidation and Disposition of Assets.. 46
SECTION 11.9 Plans ........................................... 46
SECTION 11.10 Sales and Leasebacks ........................... 46
SECTION 11.11 Prepayments of Indebtedness for Money Borrowed.. 46
SECTION 11.12 Amendment of Indenture ......................... 47
ARTICLE XII. - DEFAULT .......................................... 48
SECTION 12.1 Events of Default ............................... 48
SECTION 12.2 Remedies ........................................ 51
SECTION 12.3 Application of Proceeds ......................... 54
SECTION 12.4 Power of Attorney ............................... 54
SECTION 12.5 Miscellaneous Provisions Concerning Remedies .... 55
SECTION 12.6 Cash Collateral Account ......................... 56
ARTICLE XIII. - THE AGENT ....................................... 58
SECTION 13.1 Appointment ..................................... 58
SECTION 13.2 Delegation of Duties ............................ 58
SECTION 13.3 Exculpatory Provisions .......................... 58
SECTION 13.4 Reliance by Agent ............................... 58
SECTION 13.5 Notice of Default ............................... 59
SECTION 13.6 Non-Reliance on Agent and Other Lenders ......... 59
SECTION 13.7 Indemnification ................................. 60
SECTION 13.8 Agent in Its Individual Capacity ................ 60
SECTION 13.9 Successor Agent ................................. 60
ARTICLE XIV. - MISCELLANEOUS .................................... 61
SECTION 14.1 Notices ......................................... 61
SECTION 14.2 Expenses ........................................ 61
SECTION 14.3 Stamp and Other Taxes ........................... 62
SECTION 14.4 Setoff .......................................... 62
SECTION 14.5 Litigation ...................................... 63
SECTION 14.5 A Waiver Of Trial By Jury ...................... 63
SECTION 14.6 Reversal of Payments ............................ 63
SECTION 14.7 Injunctive Relief ............................... 64
SECTION 14.8 Accounting Matters .............................. 64
SECTION 14.9 Successors and Assigns; Participations .......... 64
SECTION 14.10 Amendments ..................................... 66
SECTION 14.11 Performance of Borrower's Duties ............... 67
SECTION 14.12 Indemnification ................................ 67
5
SECTION 14.13. All Powers Coupled with Interest .............. 68
SECTION 14.14. Survival ...................................... 68
SECTION 14.15. Titles and Captions ........................... 68
SECTION 14.16. Severability of Provisions . .................. 68
SECTION 14.17. Governing Law ................................. 68
SECTION 14.18. Counterparts .................................. 68
SECTION 14.19. Reproduction of Documents ..................... 68
SECTION 14.20. Term of Agreement ............................. 69
SECTION 14.21. Adjustments ................................... 69
SECTION 14.22. Increased Capital . ........................... 69
SECTION 14.23. Representation of Lenders ..................... 70
SECTION 14.24. Effect of Effectiveness of this Agreement ..... 70
6
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
dated as of May 28, 1999
by and among
CMI INDUSTRIES, INC.
the Lenders named herein
and
BANKBOSTON, N.A., as Agent
7
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as of May
28, 1999 by and among CMI INDUSTRIES, INC., a Delaware corporation, the
financial institutions party to this Agreement from time to time as the Lenders,
and BANKBOSTON, N.A., as agent for the Lenders.
PRELIMINARY STATEMENT
CMI Industries, Inc. ("CMI"), BankBoston, N.A. (f/k/a The First
National Bank of Boston), as a lender and as the agent for the lenders
thereunder, Wachovia Bank, N.A. (f/k/a Wachovia Bank of South Carolina, N.A.)
and NationsBank, N.A. are parties to a Loan and Security Agreement dated as of
March 19, 1996 (as amended to date, the "Existing Loan Agreement").
At the request of CMI, BankBoston, N.A. and NationsBank, N.A. have
agreed (1) to permit Wachovia Bank, N.A. to be paid in full under the Existing
Loan Agreement and thereafter (2) to decrease the amount available to be
borrowed by CMI on a revolving credit basis, (3) to consent to certain stock
repurchases and debt redemptions by CMI, (4) to modify certain covenants and (5)
to make certain other changes to the Existing Loan Agreement, and for the
convenience of the parties, have elected to effect such modifications and other
changes by amending and restating the Existing Loan Agreement in its entirety as
hereinafter set forth, upon and subject to all of the terms, conditions and
provisions hereof.
Accordingly, in consideration of the Existing Loan Agreement, the
financial accommodations outstanding thereunder, the mutual promises hereinafter
set forth and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree that the Existing Loan
Agreement is hereby amended and restated in its entirety to read as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions. The definitions of certain terms used in
this Agreement are set forth in Appendix I hereto.
SECTION 1.2 General. All terms of an accounting nature not specifically
defined herein shall have the meaning ascribed thereto by GAAP. The terms
accounts, chattel paper, contract rights, documents, equipment, instruments,
general intangibles and inventory, as and when used in this Agreement or the
Security Documents, shall have the meanings given those terms in the Uniform
Commercial Code in effect from time to time in the State of Georgia or other
appropriate jurisdiction. Unless otherwise specified, a reference in this
Agreement to a particular section or subsection is a reference to that section
or subsection of this Agreement. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall
8
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, the feminine and the neuter.
Wherever in this Agreement there shall be a reference to articles of
incorporation or bylaws or shareholder agreements with respect to a Subsidiary
which is a limited liability company, the reference shall be deemed to include
articles of organization, operating agreements and any other agreement among
members and managers, as such.
SECTION 1.3 Other Definitions and Provisions.
(a) Unless otherwise defined therein, all terms defined in
this Agreement shall have the defined meanings when used in the Notes
and the other Loan Documents or any certificate, report or other
document made or delivered pursuant to this Agreement.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Appendix, Section, Subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
ARTICLE II.
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, each of the Lenders, severally but not jointly, agrees to
make Revolving Credit Loans to the Borrower from time to time from the Effective
Date through the Termination Date, as requested by the Borrower in accordance
with the terms of Section 2.2; provided, however, that (a) the aggregate
principal amount of all Outstanding Revolving Credit Loans (after giving effect
to the amounts requested) shall not exceed the lesser of: (i) the Revolving
Facility Amount and (ii) the Borrowing Base, and (b) the principal amount of
Outstanding Revolving Credit Loans from any Lender to the Borrower shall not at
any time exceed in the aggregate an amount equal to such Lender's Revolving
Facility Percentage of the Revolving Facility Amount. Each Revolving Credit Loan
by a Lender shall be in a principal amount equal to such Lender's Revolving
Facility Percentage of the aggregate principal amount of Revolving Credit Loans
requested or deemed requested on each occasion. It is expressly understood and
agreed that the Lenders may and at present intend to use the lesser of the
amounts referred to in the foregoing subclauses (i) and (ii) as a maximum
ceiling on Revolving Credit Loans; provided, however, that it is agreed that
should Revolving Credit Loans exceed the ceiling so determined or any other
limitation set forth in this Agreement, such Revolving Credit Loans shall
nevertheless constitute Secured Obligations and, as such, shall be entitled to
all benefits thereof and security therefor. The principal amount of any
Revolving Credit Loan which is repaid pursuant to Section 2.3(a), (c), (d) or
(e) may be reborrowed by the Borrower in accordance with the terms of this
Section 2.1. The Agent is hereby authorized to, and shall, record each
repayment of principal of the Revolving Credit Loans in its books and records,
such books and records constituting prima facie evidence of the accuracy of the
information contained therein.
2
9
SECTION 2.2 Manner of Borrowing Revolving Credit Loans. Borrowings
under the Revolving Credit Facility shall be made as follows:
(a) Requests for Borrowing. A request for a borrowing shall be
made, or shall be deemed to be made, in the following manner:
(i) with respect to each Revolving Credit Loan, the
Borrower shall give the Agent prior written notice (a "Notice
of Borrowing/Conversion/Continuation") not later than 2:00
p.m. (Boston time) on (x) the date of each Base Rate Loan, and
(y) the third Business Day before each Eurodollar Loan, of its
intention to borrow, specifying
(A) the date of such borrowing, which shall
be a Business Day,
(B) the aggregate amount of such borrowing,
(C) whether the Loans are to be Eurodollar
Loans or Base Rate Loans, and
(D) in the case of a Eurodollar Loan, the
duration of the Interest Period applicable thereto,
and
(ii) unless payment is otherwise made by the Borrower,
the becoming due of any amount required to be paid under this
Agreement or any Note as interest shall be deemed to be a
request for a borrowing on the due date in the amount required
to pay such interest, and
(iii) unless payment is otherwise made by the
Borrower, the becoming due of any other Secured Obligations
shall be deemed to be a request for a borrowing on the due
date in the amount then so due, such request shall be
irrevocable and the Agent will notify the Borrower of the
amount of any such borrowing;
provided, that if any notice referred to in clause (i) above is received after
2:00 p.m. (Boston time) on the proposed borrowing date, the proposed borrowing
will be postponed automatically for one Business Day. The Agent shall promptly
notify the Lenders of such notice. Not later than 3:00 p.m. (Boston time) on the
proposed borrowing date, each Lender will make available to the Agent, for the
account of the Borrower, at the office of the Agent in funds immediately
available to the Agent, such Lender's Revolving Facility Percentage of the
Revolving Credit Loans to be made on such borrowing date. Notwithstanding any
other provision hereof, the Borrower shall not have outstanding at any time more
than ten (10) Loans which are Eurodollar Loans.
(b) Disbursement of Loans. The Borrower hereby irrevocably
authorizes the Agent to disburse the proceeds of each borrowing
requested, or deemed to be requested, pursuant to this Section 2.2 as
follows:
3
10
(i) the amount of funds with respect to each
borrowing requested under Section 2.2(a) (i) and made
available by the Lenders to the Agent in accordance with
subsection (a) of this Section 2.2 shall be disbursed by the
Agent in lawful money of the United States of America in
immediately available funds, (A) in the case of the initial
borrowing in accordance with the terms of the letter from the
Borrower to the Agent referred to in Section 5.1(a)(xii), and
(B) in the case of each subsequent borrowing by wire transfer
to the Designated Deposit Account or such other account as may
be agreed upon by the Borrower and the Agent from time to
time, with the Agent using its reasonable best efforts to
initiate any such wire transfer no later than 3:00 p.m.,
Boston time, on the borrowing date determined in accordance
with Section 2.2(a), and
(ii) the proceeds of each borrowing requested under
Sections 2.2(a)(ii) or (iii) shall be disbursed by the Agent
by way of direct payment of the relevant interest or other
Secured Obligation, as the case may be.
SECTION 2.3 Repayment of Revolving Credit Loans. The Revolving Credit
Loans will be repaid as follows:
(a) The Borrower hereby irrevocably instructs the Agent to
repay the Revolving Credit Loans outstanding on any day in an amount
equal to the amount received by the Agent on such day pursuant to
Section 8.1.
(b) The outstanding principal amount of all the Revolving
Credit Loans is due and payable, and shall be repaid by the Borrower in
full, together with all accrued but unpaid interest thereon, on the
Termination Date.
(c) If at any time the aggregate unpaid principal amount of
the Revolving Credit Loans then outstanding exceeds the lesser of the
amounts referred to in subclauses (i) and (ii) of Section 2.1,
determined at such time in accordance with Section 2.1, the Borrower
shall repay immediately upon notice from the Agent, by payment to the
Agent for the account of the Lenders, the Revolving Credit Loans in an
amount sufficient to reduce the aggregate unpaid principal amount of
such Loans by an amount equal to such excess.
(d) The Borrower shall prepay the Revolving Credit Loans made
to the Borrower hereunder in an amount equal to the amount by which the
Borrower's Free Cash on Hand exceeds, at the close of business on the
last Business Day of any calendar week, $6,000,000; such mandatory
prepayment being due and payable on the first Business Day following
the Business Day on which Free Cash on Hand exceeds $6,000,000.
(e) The Borrower may, at its option, at any time or from time
to time, prepay (i) the Base Rate Revolving Credit Loans and (ii)
subject to compliance with the provisions of Section 4.10, the
Eurodollar Rate Revolving Credit Loans, made to the Borrower hereunder
as a whole or in part, without premium or penalty; provided that the
4
11
Agent may require one (1) Business Day's written, facsimile or
telephonic notice to the Agent of such prepayments. All optional
prepayments of principal of Revolving Credit Loans shall be made to the
Agent and applied among the Lenders based upon their respective
Revolving Facility Percentages.
SECTION 2.4 Revolving Credit Notes. Each Lender's Revolving Credit
Loans and the obligation of the Borrower to repay such Loans shall also be
evidenced by a Revolving Credit Note in the form of Exhibit A payable to the
order of such Lender representing the Borrower's obligation to pay such Lender's
Revolving Facility Percentage of the Revolving Credit Facility or, if less, the
aggregate unpaid principal amount of all Revolving Credit Loans made and to be
made by such Lender to the Borrower hereunder, plus interest thereon. Each
Revolving Credit Note shall be dated the Agreement Date and be duly and validly
executed and delivered by the Borrower.
SECTION 2.5 Termination of Revolving Credit Facility. The Revolving
Credit Facility shall terminate on the Termination Date.
SECTION 2.6 Voluntary Reduction of Revolving Credit Facility;
Termination of Agreement.
(a) The Borrower shall have the right, at any time and from
time to time, upon at least three Business Days' prior irrevocable,
written notice to the Agent, to reduce permanently all or a portion of
the Revolving Facility Amount; provided, however, that any such
reduction shall be made in an amount not less than $2,000,000 or
increments of $1,000,000 in excess thereof and shall not reduce the
Revolving Credit Facility below the sum of (i) the amount of the
aggregate Stated Amount of all Letters of Credit outstanding and the
amount of any unreimbursed Drawings under Letters of Credit at such
time, less the amount of cash Collateral and the amount available to be
drawn under any Supporting Letter of Credit furnished in accordance
with the provisions of Section 3.5 and held by the Agent at such time,
(ii) the Swap Reserve and (iii) the Interest Rate Exposure Reserve. As
of the date of reduction set forth in such notice, the Revolving
Facility Amount shall be permanently reduced to the amount stated in
the Borrower's notice for all purposes herein, and the Borrower shall
pay the amount necessary to reduce the amount of the Revolving Credit
Loans outstanding under the Revolving Credit Facility to the Revolving
Facility Amount as so reduced, together with accrued interest on the
amounts so prepaid. In the event of such reduction, each Lender's
Revolving Facility Percentage Amount shall be reduced in an amount
equal to such Lender's Revolving Facility Percentage of the amount of
such reduction.
(b) In connection with any such permanent reduction of the
Revolving Credit Facility to zero accompanied by repayment in full of
all outstanding Revolving Credit Loans, termination in accordance with
its terms of any Interest Rate Protection Agreement and any Swap and
payment of any and all amounts owing thereunder, and any payment or
delivery of a Supporting Letter of Credit required in compliance with
the provisions of Section 3.5 (as if the date of reduction and
repayment were the Termination Date) prior to January 1, 2002, the
Borrower shall also pay to the Agent, for the ratable
5
12
benefit of the Lenders, a fee in an amount equal to one percent (1%) of the
Revolving Facility Amount in effect on January 1, 2001 or on the date of such
termination, if earlier, except that such fee shall not be payable under any of
the following circumstances: (i) the Agent is the agent of or a significant
participant in a credit facility which the Borrower enters into essentially
contemporaneously with such repayment or termination; or (ii) such repayment and
termination occur in connection with a Change in Control; or (iii) such
repayment and termination occur in connection with the acquisition by one or
more Persons who are or whose equity owners include shareholders of the Borrower
as of the date of this Agreement of a majority of the voting stock or all or
substantially all of the assets of the Borrower, whether by merger, stock or
asset acquisition, or (iv) such repayment and termination occur in connection
with the consummation by the Borrower of any other merger, stock or asset
acquisition, redemption or repurchase of the capital stock of the Borrower, or
other business combination in which a refinancing is contemplated that either
(a) requires more than the sum of Availability at such time plus an amount in
the Borrower's reasonable judgment equal to its borrowing requirements for
ongoing working capital needs, or (b) does not require more than the sum of
Availability at such time plus an amount in the Borrower's reasonable judgment
equal to its borrowing requirements for ongoing working capital needs, but the
Agent and the Lenders do not consent to such transaction on terms reasonably
acceptable to the Borrower. Upon completion of any such repayment and
termination, except as otherwise contemplated by Section 3.5, this Agreement and
the obligation of the Lenders to make Loans hereunder shall terminate and the
Agent, at the Borrower's expense, shall execute and deliver such documents and
instruments as the Borrower may reasonably request and as are necessary to
evidence the release of the Security Interest.
6
13
ARTICLE III.
LETTER OF CREDIT FACILITY AND
INTEREST RATE PROTECTION AGREEMENTS
SECTION 3.1 Letter of Credit Facility. Subject to the terms and
conditions hereof, each Facing Bank severally agrees to issue for the account of
the Borrower one or more documentary or standby nontransferable letters of
credit, in form and substance satisfactory to the Designated Facing Bank in its
sole discretion, from and including the Effective Date to the Termination Date,
up to a maximum aggregate Stated Amount at any one time outstanding equal to
$5,000,000; provided, however, that the Stated Amount of any Letter of Credit
issued pursuant to this Section 3.1 shall not exceed the lesser of (a) the
Revolving Facility Amount less the outstanding Revolving Credit Loans and (b)
the Borrowing Base less all outstanding Revolving Credit Loans.
SECTION 3.2 Method of Issuance of Letters of Credit.
(a) The Borrower shall give the Agent and the Designated
Facing Bank written notice or telephonic notice confirmed in writing at
least five (5) Business Days prior to the requested Date of Issuance of
a Letter of Credit. Such notice shall specify (i) the Stated Amount,
(ii) the requested Date of Issuance, (iii) the Beneficiary and the
address at which the Letter of Credit is to be delivered to the
Beneficiary, (iv) the Expiration Date, which Date shall not be later
than the Termination Date, (v) a description or copies of the
stipulated documents, if any, against which payment under such Letter
of Credit is conditioned, (vi) the anticipated Payment Date, which Date
shall not be later than the Termination Date, (vii) the name of the
Facing Bank, and (viii) such other information as the Designated Facing
Bank shall reasonably request in connection with the issuance of such
Letter of Credit.
(b) provided the Borrower has given the notice prescribed by
Section 3.2(a) and subject to the other terms and conditions of this
Agreement, the Designated Facing Bank shall issue the Letter of Credit
on the Date of Issuance for the benefit of the stipulated Beneficiary
and the Designated Facing Bank shall deliver the original of such
Letter of Credit to the Beneficiary at the address specified in such
notice. The Designated Facing Bank shall deliver a copy of each Letter
of Credit to the Borrower and the Agent within a reasonable time after
the Date of Issuance thereof and shall notify the Lenders in writing of
the terms of the Letter of Credit.
SECTION 3.3 Drawings; Interest Rate Protection Obligations.
(a) Upon a Drawing by a Beneficiary on a Letter of Credit or
the occurrence of an IRPA Obligation, the Designated Facing Bank or the
Agent, as the case may be, shall immediately notify the Lenders and the
Borrower of such Drawing or IRPA Obligation. Such notice shall specify
either (a) the Beneficiary, the Letter of Credit, the aggregate amount
of the Drawing, and shall be accompanied by copies of any
7
14
documentation presented by the Beneficiary in connection with the
Drawing or (b) the amount of any such IRPA Obligation.
(b) Each Lender severally agrees that it shall be
unconditionally and irrevocably liable, without regard to the
occurrence of any Default or Event of Default or any condition
precedent whatsoever, to the extent of such Lender's Revolving Facility
Percentage of the amount of any Drawing or IRPA Obligation, to
reimburse the Designated Facing Bank or the Agent, as the case may be,
on demand, the amount of each Drawing paid by the Designated Facing
Bank or IRPA Obligation to the extent such amount is not reimbursed or
paid by the Borrower pursuant to Section 3.4. Each Lender's obligation
to reimburse the Designated Facing Bank or to pay the Agent, as the
case may be, pursuant to this subsection shall not be affected or
limited in any way by any circumstance, including without limitation,
(i) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against the Designated Facing Bank, the Borrower,
any Beneficiary of any Letter of Credit, the Agent, or any other Person
whatsoever, (ii) the occurrence or continuance of a Default or an Event
of Default (including any Event of Default described in Section 12.1
(g) or (h)); (iii) any adverse change in the condition (financial or
otherwise) of the Borrower; (iv) any breach of this Agreement by the
Borrower, the Agent or any other Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing, provided, however, that no Lender shall be obligated to
reimburse the Designated Facing Bank pursuant to this Section if the
Designated Facing Bank has made payment pursuant to a Drawing that does
not strictly comply with the terms of such Letter of Credit with
respect to such Drawing (whether by reason of the presentment of
insufficient or non-complying documents or otherwise). Each Lender's
obligation to reimburse the Designated Facing Bank or the Agent, as the
case may be, shall continue to be effective, or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any
Reimbursement Obligation of the Borrower is rescinded or must otherwise
be restored or returned by the Designated Facing Bank or the Agent upon
the occurrence of any event described in Section 12.1 (g) or (h).
(c) Each such payment made by a Lender pursuant to Section
3.3(b) shall be treated as the purchase by such Lender of a
participating interest in the Borrower's reimbursement and payment
obligations under Section 3.4 in an amount equal to such payment. Each
Lender, so long as it has made the payment required to be made by it
pursuant to Section 3.3(b), shall share in accordance with its
Revolving Facility Percentage in any interest which accrues pursuant to
Section 3.4(a)(ii).
(d) If and to the extent that a Lender shall fail to make
available to the Designated Facing Bank or the Agent, as the case may
be, the amount required to be paid by such Lender pursuant to Section
3.3(b), (i) the Agent or the Designated Facing Bank, as the case may
be, shall be subrogated to the rights under this Agreement of the
Lender so failing to make available such amount to the extent of such
failure and shall thereafter (until such defaulting Lender shall make
such amount available) be entitled to the voting rights of such
defaulting Lender under this Agreement and (ii) such unpaid or
unreimbursed amount shall bear interest from the date of demand
therefor until paid at the
8
15
Base Rate for the account of the Designated Facing Bank or the Agent,
as the case may be.
(e) The relationship between the Designated Facing Bank and
the other Lenders shall be that of principal and agent only and nothing
herein shall be construed to deem the Designated Facing Bank a trustee
for any other Lender nor to impose duties or obligations other than as
expressly provided for herein. As to any matters not expressly provided
for by the Loan Documents, with respect to matters relating to a Letter
of Credit, the Designated Facing Bank shall act or refrain from acting
(and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions
shall be binding upon all Lenders and all holders of Revolving Credit
Notes; provided, however, that the Designated Facing Bank shall not be
required to take any action which exposes it to personal liability or
which is contrary to this Agreement, any other Loan Document or the
Letter of Credit or Applicable Law.
(f) Neither the Designated Facing Bank, nor any of its
directors, officers, agents, employees or counsel shall be liable for
any action taken or omitted to be taken by it or them under or in
connection with any Letter of Credit issued by the Designated Facing
Bank, except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, such
Designated Facing Bank: (a) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice
of such counsel, accountants or experts; (b) makes no warranty or
representation to any other Lender with respect to such Letter of
Credit; and (c) except as otherwise provided in Section 3.3(b), shall
incur no liability under or in respect of this Agreement or any other
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy, cable or
telex) delivered or given to it in connection with such Letter of
Credit believed by it to be genuine and signed or sent by the proper
party or parties.
(g) Each other Lender expressly acknowledges that neither the
Designated Facing Bank nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates has made, or will make, any
representations or warranties to such Lender and that no act by the
Designated Facing Bank hereafter taken, including any review of the
affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Designated Facing Bank to any Lender.
Each other Lender acknowledges that it has, independently and without
reliance upon the Designated Facing Bank, and based on the financial
statements of the Borrower, its review of the Loan Documents, the legal
opinions required to be delivered to it hereunder, the advice of its
own counsel and such other documents and information as it has deemed
appropriate, made its own credit and legal analysis and decision to
enter into this Agreement and the transactions contemplated hereby.
(h) The other Lenders agree to indemnify the Designated Facing
Bank (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so) pro rata in
accordance with the Lenders' respective Revolving Facility
9
16
Percentages, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever which may at any time
be imposed on, incurred by, or asserted against the Designated Facing
Bank in any way relating to or arising out of each Letter of Credit
issued by the Designated Facing Bank or any action taken or omitted by
the Designated Facing Bank; provided, however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the gross negligence or willful
misconduct of the Designated Facing Bank. Without limiting the
generality of the foregoing, each Lender agrees to reimburse the
Designated Facing Bank promptly upon demand for its ratable share of
any out-of-pocket expenses (including reasonable counsel fees) incurred
by the Designating Facing Bank in connection with the administration or
enforcement of, or legal advice with respect to the rights or
responsibilities of the parties under, each Letter of Credit issued by
the Designated Facing Bank, to the extent that such Facing Bank is not
reimbursed for such expenses by the Borrower. The agreements in this
Section shall survive the termination of this Agreement.
(i) The failure of any Lender to honor its obligations
hereunder or under a Letter of Credit shall not relieve any other
Lender of its duty to honor its obligations hereunder or under a Letter
of Credit.
SECTION 3.4 Letter of Credit Reimbursement; IRPA Obligation
Reimbursement.
(a) The Borrower hereby agrees to pay to the Agent for the
account of the Agent or the Designated Facing Bank, as applicable, in
the manner provided in Section 4.4:
(i) On each Payment Date, an amount equal to the
amount paid by the Designated Facing Bank under any Letter of
Credit plus associated fees and charges and an amount equal to
the IRPA Obligation plus associated fees and charges; and
(ii) If any Drawing or IRPA Obligation is reimbursed
to the Agent for its own account or the account of the
Designated Facing Bank after 2:00 p.m. (Boston time) on the
Payment Date, interest on any and all amounts required to be
paid pursuant to the immediately preceding clause (i), from
and after the due date thereof until paid in full, payable on
demand, at an annual rate of interest equal to the Base Rate
plus two (2) percent.
(b) If the Borrower fails to make the payment required by
Section 3.4(a)(i), and if the conditions set forth in Section 5.2 have
been fulfilled and sufficient funds are available within the limits of
the amount of Revolving Credit Loans that may be borrowed as provided
in Section 2.1, then the Borrower shall be deemed to have requested a
Revolving Credit Loan in accordance with the provisions of Section
2.2(a)(iii) the proceeds of which the Lenders shall be deemed to have
disbursed by making available to the Designated Facing Bank or the
Agent, as the case may be, the
10
17
amounts required under Section 3.3(b). Such Revolving Credit Loan shall
initially be a Base Rate Loan. In the event a Revolving Credit Loan is
advanced in the amounts required under Section 3.3(b), the Borrower's
failure to have made the direct payment required by Section 3.4(a)(i)
shall not be deemed a Default.
(c) The obligation of the Borrower under this Section to repay
the Designated Facing Bank for a Drawing under a Letter of Credit and
to pay the Agent for an IRPA Obligation shall be absolute,
unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under all circumstances
whatsoever, including without limitation, the following circumstances:
(i) any lack of validity or enforceability of all or
any of this Agreement, any of the other Loan Documents or any
Interest Rate Protection Agreement, document, instrument or
agreement evidencing or relating to the underlying transaction
between the Borrower and the Agent or the Borrower and the
Beneficiary of such Letter of Credit (all of the foregoing,
collectively the "Related Documents"),
(ii) any amendment or waiver of or any consent to or
departure from the terms of the Related Documents,
(iii) the existence of any claim, set-off, defense or
other rights which the Borrower may have at any time against
such Beneficiary, any Lender, the Agent, the Designated Facing
Bank or any other Person, whether in connection with the
Related Documents or any unrelated transaction,
(iv) any statement or any other document presented
under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever,
(v) payment by the Designated Facing Bank under such
Letter of Credit against presentation of a sight draft or
certificate which does not comply with the terms of such
Letter of Credit, and
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
SECTION 3.5 Supporting Letter of Credit; Cash Collateral Account.
In connection with any proposed reduction of the Revolving Credit
Facility contemplated by Section 2.6 to an amount which, after deducting the
Interest Rate Protection Reserve and the Swap Reserve is less than the amount of
the aggregate Stated Amount of all Letters of Credit outstanding and the amount
of any unreimbursed Drawings under Letters of Credit, or in addition to the
rights provided in Section 12.2, if, notwithstanding the provisions of Section
3.2, any Letter of Credit is outstanding on the Termination Date, then on or
prior to the Termination Date, the Borrower shall promptly on demand by the
Agent, deposit with the Agent, for the ratable benefit of the Lenders, with
respect to each Letter of Credit then outstanding, as the Agent shall
11
18
specify, either (a) a standby letter of credit (a "Supporting Letter of Credit")
in form and substance satisfactory to the Agent, issued by an issuer
satisfactory to the Agent in its sole and absolute judgment in an amount equal
to 105% of the greatest amount for which such Letter of Credit may be drawn,
under which Supporting Letter of Credit the Agent shall be entitled to draw
amounts necessary to reimburse the Agent and the Lenders for payments made by
the Designated Facing Bank or the Agent and the Lenders under such Letter of
Credit or under any reimbursement or guaranty agreement with respect thereto, or
(b) cash Collateral in an amount necessary to reimburse the Agent and the
Lenders for payments made by the Designated Facing Bank or the Agent and the
Lenders under such Letter of Credit or under any reimbursement or guaranty
agreement with respect thereto. Such Supporting Letter of Credit or cash
Collateral shall be held by the Agent for the benefit of the Lenders, as
security for, and to provide for the payment of, the Secured Obligations arising
under any and all Letters of Credit. In addition, the Agent may at any time
pursuant to Section 12.2 or after the Termination Date apply any or all of such
cash Collateral to the payment of any or all of the Secured Obligations then due
and payable. The cash Collateral shall be deposited in the Cash Collateral
Account and, so long as no Event of Default has occurred and is continuing, be
invested and reinvested by the Agent in instruments of the types described in
clauses (a)(i) and (a)(ii) of the definition "Permitted Investments." Upon
receipt of such Supporting Letter of Credit or cash Collateral and repayment in
full of all outstanding Secured Obligations, all Collateral (other than such
Supporting Letter of Credit or cash Collateral) shall be released from the
Security Interest and the covenants contained in Articles VIII, IX, X and XI
shall be terminated and be of no further force and effect.
12
19
ARTICLE IV.
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the day such Loan is made until it
becomes due or is converted into a Eurodollar Loan, at a rate per annum equal to
the Base Rate for such day plus the Applicable Margin. Such interest shall be
payable on the fifth day of each January, April, July and October, and on the
date the Loans are paid in full.
(b) Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the Eurodollar Rate plus the Applicable Margin. Such interest
shall be payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of three months after
the first day thereof.
(c) If the Borrower shall fail to pay any principal of, or interest on,
any Loan when due, such amount shall then bear interest at a rate per annum
equal to the Base Rate in effect from time to time plus 2%, such interest
together with such overdue amount, to be payable on demand.
(d) The interest rates provided for in Sections 4. 1 (a) and (c) shall
be computed on the basis of a year of 365 or 366 days, as applicable and the
actual number of days elapsed; the interest rate provided for in Section 4. 1
(b) shall be computed on the basis of a year of 360 days and the actual numbers
of days elapsed.
(e) It is not intended by the Lenders, and nothing contained in this
Agreement or any Note shall be deemed, to establish or require the payment of a
rate of interest in excess of the maximum rate permitted by Applicable Law (the
"Maximum Rate"). If, in any month, the interest charged hereunder, absent such
limitation, would have exceeded the Maximum Rate, then interest shall accrue on
the Loans during such month at the Maximum Rate and not the interest rate
provided for herein, and, if, in future months, the interest rate provided for
herein is less than the Maximum Rate, then interest shall continue to accrue on
the Loans at the Maximum Rate and not the interest rate provided for herein
until such time as the amount of interest accrued hereunder equals the amount of
interest which would have been accrued if the same had not been limited by the
Maximum Rate. In the event that upon payment in full of the Secured Obligations
the total amount of interest paid under the terms of this Agreement is less than
the total amount of interest which would have been paid if the interest rate
provided for herein had at all times been in effect, then the Borrower shall, to
the extent permitted by Applicable Law, pay to the Agent on behalf of the
Lenders an amount equal to the difference between (i) the lesser of (A) the
amount of interest which would have been paid if the Maximum Rate had, at all
times, been in effect, or (B) the amount of interest which would have been paid
if the interest rate provided for herein had, at all times, been in
13
20
effect and (ii) the amount of interest actually paid under this Agreement. In
the event any Lender receives, collects or applies as interest any sum in
excess of the Maximum Rate, such excess amount shall be applied to the reduction
of the principal balance of the Secured Obligations, and, if no such principal
is then outstanding, such excess or part thereof remaining shall be paid to
Borrower.
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans. Provided
that no Event of Default has occurred and is continuing on the date a Notice of
Borrowing/Conversion/Continuation is given in accordance with the provisions of
this Section 4.2, the Borrower may convert all or any part of any outstanding
Base Rate Loans in a principal amount equal to $1,000,000 or an integral
multiple of $500,000 in excess thereof into a Eurodollar Loan. Whenever the
Borrower desires to convert outstanding Base Rate Loans or a portion thereof
into a Eurodollar Loan or to continue an outstanding Eurodollar Loan for a
subsequent Interest Period, the Borrower shall notify the Agent (which notice
shall be irrevocable) by telex, telegraph, telecopy or telephone not later than
12:00 noon (Boston time) three Business Days before the day on which a proposed
conversion of Base Rate Loans into, or continuation of a Eurodollar Loan as, a
Eurodollar Loan is to be effective (which effective date shall be a Business Day
and, in the case of a continuation, the last day of the then current Interest
Period for the Eurodollar Loan to be continued). Each such notice (a "Notice of
Borrowing/Conversion/Continuation") shall (i) identify the Loans to be converted
or continued, the aggregate outstanding principal balance thereof and, in the
case of a Eurodollar Loan to be continued, the last day of the Interest Period
therefor, (ii) specify the effective date of such conversion or continuation,
(iii) specify the principal amount of such Loans to be converted or continued,
and (iv) specify the Interest Period to be applicable to such converted or
continued Eurodollar Loan, and shall be immediately followed by a written
confirmation thereof by such Borrower substantially in the form of Exhibit E
attached hereto; provided, however, that if such written confirmation differs in
any material respect from the action taken by the Agent, the records of the
Agent shall control absent manifest error. If the Borrower fails to deliver to
the Agent such notice with respect to a Eurodollar Loan by the time required
therefor, such Eurodollar Loan shall automatically convert into a Base Rate Loan
on the last day of the Current Interest Period for such Eurodollar Loan.
SECTION 4.3 Commitment, Agency and Letter of Credit Fees.
(a) The Borrower shall pay to the Agent, for the account of the
Lenders, an unused commitment fee (the "Unused Commitment Fee") at an initial
rate per annum equal to one-quarter of one percent (1/4%), as subsequently
adjusted on each Margin Adjustment Date in accordance with the provisions of the
definition "Applicable Margin," on the average daily unused portion of the
Revolving Credit Facility. The Unused Commitment Fee shall be (a) payable in
arrears on the fifth day of each calendar quarter during the term of the
Agreement, and on the date the Revolving Credit Facility has been terminated in
full; and (b) distributed by the Agent to the Lenders pro rata in accordance
with the Lenders' respective Revolving Facility Percentages. With respect to any
calendar quarter (or portion thereof) for which an Unused Commitment Fee is to
be calculated (each such quarter (or portion thereof), a "Relevant Quarter"),
the phrase "the
14
21
average daily unused portion of the Revolving Credit Facility" shall mean an
amount determined by dividing (1) the sum of the amounts by which the Revolving
Credit Facility in effect for each day during the Relevant Quarter exceeds the
sum of (A) the Stated Amount of all Letters of Credit outstanding on the same
day during the Relevant Quarter plus (B) the principal amount of Revolving
Credit Loans outstanding on the same day during the Relevant Quarter by (ii) the
number of calendar days in such Relevant Quarter.
(b) The Borrower shall pay to the Agent, for its own account and not for
the account of the Lenders, an agency fee of $25,000 per quarter, payable on the
Effective Date (prorated for the period beginning on the Effective Date and
ending on July 5, 1999, deducting therefrom, if applicable, the prorated portion
of the $12,500 per quarter agency fee previously paid by the Borrower under the
Existing Loan Agreement for the calendar quarter ending on June 30, 1999) and on
the fifth day of each calendar quarter thereafter, so long as this Agreement has
not been terminated. The fee shall be fully earned when paid.
(c) With respect to each Letter of Credit, the Borrower shall pay to the
Agent (i) for the account of the Lenders a Letter of Credit fee (x) at a rate
per annum equal to the Applicable Margin for Eurodollar Rate Loans in effect on
the date of issuance thereof on the average daily Stated Amount of any standby
Letter of Credit, and (y) equal to 3/8% per annum of the Stated Amount of any
documentary Letter of Credit, such Letter of Credit fees to be calculated on the
average daily Stated Amount from the date of issuance to the earlier of the
Expiration Date or of the final drawing with respect to such Letter of Credit,
based on a year of 360 days and the actual number of days elapsed, and payable
quarterly in arrears and (ii) for the account of the Designated Facing Bank, all
out-of-pocket fees and disbursements incurred by the Designated Facing Bank in
connection with the issuance or amendment of a Letter of Credit and any
administrative fee normally charged by Designated Facing Bank in connection with
the issuance or amendment of letter of credit.
SECTION 4.4 Manner of Payment.
(a) Each payment (including prepayments) by the Borrower on account of
the principal of or interest on the Loans, any Reimbursement Obligation or of
any fee or other amounts payable to the Lenders under this Agreement or any Note
shall be made not later than 3:00 p.m. (Boston time) on the date specified for
payment under this Agreement to the Agent for the account of the Lenders pro
rata in accordance with their respective Revolving Facility Percentages at the
Agent's Office, in Dollars, in immediately available funds and shall be made
without any setoff, counterclaim or deduction whatsoever. Any payment received
after such time but before 4:00 p.m. (Boston time) on such day shall be deemed a
payment on such date for the purposes of Section 12.1, but for all other
purposes shall be deemed to have been made on the next succeeding Business Day.
Upon receipt by the Agent of each such payment the Agent shall credit each
Lender's account with its pro rata share of such payment in accordance with such
Lender's respective Revolving Facility Percentage and shall wire advice of the
amount of such credit to each Lender.
15
22
(b) If the conditions set forth in Section 5.2 have been fulfilled and
sufficient funds are available within the limits of the amount of Revolving
Credit Loans that may be borrowed as provided in Section 2. 1, then the
Borrower shall be deemed to have requested a Revolving Credit Loan under
Section 2.1 in an amount equal to the amount of any interest or fees coming
due hereunder. The Agent shall be deemed to have given the notice to each
Lender required by Section 2.2 at such time as the Agent has notified the
Lenders of the amount of the interest or fee due, and each Lender shall be
deemed to have made available to the Borrower a Revolving Credit Loan in
its Revolving Facility Percentage of the amount of the interest or fee upon
receipt by the Lender of notice from the Agent. Such Revolving Credit Loan
shall initially be a Base Rate Loan. The parties agree that the notice
provisions for making Revolving Credit Loans as provided in Section 2.2
shall not apply to the making of Revolving Credit Loans as contemplated by
this subsection.
(c) The Borrower hereby irrevocably authorizes the Agent, each Lender
and each Affiliate thereof to charge any account of the Borrower maintained
with such Person (other than any account designated as a "payroll" account)
with such amounts as may be necessary from time to time to pay any Secured
Obligations which are not paid when due.
(d) Notwithstanding the foregoing, as between the Agent and the
Lenders, no Lender shall be deemed to have received any amounts paid
hereunder until the credits referred to in subsection (a) of this Section
4.4 have been made and if the Borrower makes any payment prior to 2:00 p.m.
(Boston time) on any Business Day and the Agent fails to make such credits
by 4:00 p.m. (Boston time) on the same Business Day or if the Borrower
makes any payment after 3:00 p.m. (Boston time) on any Business Day and the
Agent fails to make such credits by 11:00 a.m. (Boston time) on the
following Business Day, the Agent shall pay interest to each Lender to whom
any portion of such payments are payable, at the Federal Funds Effective
Rate, on the amount of such payments payable to such lender for the period
from (but not including) the date on which such amount should have been
credited to such Lender as provided above through (and including) the date
on which such credits are actually made. If, on any date on which payments
are due from the Borrower hereunder, the actual payments received from the
Borrower are insufficient to pay in full all principal of, and accrued
interest on, the Loans which are due and payable on such date, such amounts
received shall be applied to repay such Secured Obligations pro rata among
the Lenders based on the Lenders' respective Revolving Facility
Percentages.
SECTION 4.5 General. If any payment under this Agreement or any Note shall
be specified to be made upon a day which is not a Business Day, it shall be made
on the next succeeding day which is a Business Day and such extension of time
shall in such case be included in computing, interest, if any, in accordance
with such payment.
SECTION 4.6 Statements of Account. The Agent will account to the Borrower
monthly with a statement of Loans, charges and payments made pursuant to this
Agreement, and such account rendered by the Agent shall be deemed prima facie
evidence of the matters therein. Borrower shall have 60 days from the date any
such report is received in which to notify the
16
23
Agent in writing of any objection to any item in such report, after which time
all matters not objected to shall be conclusive. If Borrower shall object to any
interest amount in accordance with this Section 4.6 and the report shall be
determined to have been in error with respect to such interest amount, the
Agent will make appropriate adjustments so that the excess interest paid will
not result in any cost to the Borrower. Failure of the Agent to render such
account shall in no way affect its, or any Lender's, rights hereunder.
SECTION 4.7 Fees Not Interest. All fees are for compensation for services
and are not, and shall not be deemed to be, interest or a charge for the use of
money.
SECTION 4.8 Nature of Obligations of Lenders to Make Loans; Assumption by
Agent. The obligations of the Lenders under this Agreement to make the Revolving
Credit Loans are several and are not joint or joint and several. Unless the
Agent shall have received notice from a Lender prior to a proposed borrowing
date that such Lender will not make available to the Agent such Lender's ratable
portion of the amount to be borrowed on such date, the Agent may assume that
such Lender has made such portion available to the Agent on the proposed
borrowing date in accordance with Sections 2.2(a) or 3.4 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent such Lender shall not have so made
such ratable portion available to the Agent, such Lender and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Agent, (a) in the case of the Borrower, at the interest rate applicable at the
time to the Revolving Credit Loans, and (b) in the case of such Lender, at the
Base Rate plus 1-1/4 percent. If such Lender shall repay to the Agent such
corresponding amount, the amount so repaid shall constitute such Lender's
Revolving Facility Percentage of the Loan made on such borrowing date for
purposes of this Agreement. The failure of any Lender to make its Revolving
Facility Percentage of any Loan available shall not relieve it or any other
Lender of its obligation, if any, hereunder to make its Revolving Facility
Percentage of such Loan available on such borrowing date, but no Lender shall be
responsible for the failure of any other Lender to make its Revolving Facility
Percentage of such Loan available on the borrowing date.
SECTION 4.9 Changed Circumstances.
(a) If the introduction of or any change in or in the binding
interpretation (in each case, after the date hereof) of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts, after the date hereof, that it is impractical or
unlawful, for any Lender to perform its obligations hereunder or to
maintain Eurodollar Loans hereunder, or adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate, the Agent shall notify the
Borrower of such event and the right of the Borrower in connection with any
subsequent continuation of any Eurodollar Loan as, or conversion of any
Base Rate Loan to, a Eurodollar Loan shall be suspended until the Agent
shall notify the Borrower that the circumstances causing such suspension no
longer exist, and all Eurodollar Loans then outstanding shall forthwith be
converted into Base Rate Loans and if the date of such conversion is not
the last day of the Interest Period
17
24
applicable to any such Eurodollar Loan, the Borrower shall also pay any
amount due pursuant to Section 4. 10.
(b) If any Lender shall, at least one Business Day before the date of
any conversion of any outstanding Base Rate Loan into, or the continuation
of any existing Eurodollar Loan as, a Eurodollar Loan, notify the Borrower
that the Eurodollar Rate for such Eurodollar Loan will not adequately
reflect the effective cost to such Lender of making, funding or maintaining
such Eurodollar Loan, the right of the Borrower to convert any outstanding
Base Rate Loan to or continue any outstanding Eurodollar Loan as a
Eurodollar Loan shall be suspended until such Lender shall notify the
Borrower and the Agent that the circumstances causing such suspension no
longer exist, and each such Loan requested to be converted or continued
shall thereupon be continued as, or converted into, a Base Rate Loan.
(c) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
included in the Eurodollar Reserve Percentage) in or in the binding
interpretation of, in each case after the date hereof, any law or
regulation (except to the extent such introduction, change or
interpretation affects taxes measured by net income) or (ii) the compliance
with any guideline or request (except to the extent such guideline or
request affects taxes measured by net income) from any central bank or
other governmental authority (having the force of law or, in the opinion of
counsel, required) made after the date hereof, there shall be any increase
in the cost to any Lender of agreeing to make or making, funding or
maintaining Eurodollar Loans, then the Borrower shall, from time to time,
within five Business Days of a demand for payment by such Lender (with a
copy of such demand to the Agent), pay to the Agent, for the account of
such Lender, additional amounts sufficient to compensate such Lender for
such increased cost; provided, however, that such Lender shall not be
entitled to demand, nor shall the Borrower be obligated to pay, any such
amount attributable to a period more than 90 days prior to the date of
such demand.
(d) The provisions of Section 14.22 (with respect to increased
capital) of the Loan Agreement shall apply to Eurodollar Loans to the same
extent as to all other Loans outstanding under the Loan Agreement, but
amounts recovered thereunder shall not also be recovered hereunder.
(e) A certificate of a Lender claiming compensation under Section
4.9(c) of this Loan Agreement shall be prima facie evidence of such
amounts. Such certificate shall set forth the nature of the occurrence
giving rise to such compensation, the additional amount or amounts to be
paid to it hereunder and the method by which such amounts were determined.
In determining such amount, a Lender may use any reasonable averaging and
attribution methods.
SECTION 4. 10 Payments Not at End of Interest Period. If, for any reason,
any payment of principal with respect to any Eurodollar Loan is made on any day
other than the last
18
25
day of the Interest Period for such Eurodollar Loan, the Borrower shall pay to
the Agent, for the account of the Lenders, an amount computed pursuant to the
following, formula:
L = (R - T) x P x D
-------------------
365
L = amount payable to the Lenders
R = Eurodollar Rate applicable to the Eurodollar Loan
T = effective interest rate per annum at which any readily marketable
bonds or other obligations of the United States, selected at the
Agent's sole discretion, maturing on or near the last day of the then
applicable Interest Period for such Eurodollar Loan and in
approximately the same amount as such Eurodollar Loan, can be purchased
by the Agent on the day of such payment of principal
P = the amount of principal paid
D = the number of days remaining in the Interest Period as of the date of
such payment
The Borrower shall pay such amount within five Business Days of presentation by
the Agent to the Borrower of a statement setting forth the amount and the
Agent's calculation thereof pursuant hereto, which statement shall be conclusive
absent manifest error.
19
26
ARTICLE V.
CONDITIONS PRECEDENT
SECTION 5.1 Conditions Precedent to Effectiveness. Notwithstanding any
other provision of this Agreement, this Agreement shall become effective and the
Lenders shall be obligated, in accordance with the terms hereof, to make Loans
and issue Letters of Credit, only upon fulfillment of each of the following
conditions:
(a) Closing Documents. The Agent shall have received each of the
following documents, all of which shall be satisfactory in form and
substance to the Agent:
(i) certified copies of the articles of incorporation and
bylaws of the Borrower as in effect on or about the Effective Date;
(ii) certified copies of all corporate action (including
stockholder approval, if necessary) taken by the Borrower to authorize
the execution, delivery and performance of this Agreement and the Loan
Documents, and the borrowings under this Agreement;
(iii) certificates of incumbency and specimen signatures with
respect to each of the officers of the Borrower who is authorized to
execute and deliver this Agreement or any Loan Document on behalf of
the Borrower or any document, certificate or instrument to be
delivered in connection with this Agreement or the Loan Documents and
to request borrowings under this Agreement;
(iv) a certificate evidencing the good standing of the Borrower
in the respective jurisdiction of its incorporation and in each other
jurisdiction in which it is qualified as a foreign corporation to
transact business;
(v) copies of all the financial statements referred to in
Section 6.1 (m) and meeting the requirements thereof;
(vi) an opinion of ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP in
substantially the form of Exhibit C hereto and opining as to such
other matters in connection with this Agreement as the Agent may
reasonably request;
(vii) evidence satisfactory to the Agent and each Lender as to
the filing of the Financing Statements and other documents as
appropriate naming the Borrower as debtor and the Agent as secured
party, duly executed by the Borrower, in each jurisdiction or with
each agency of the United States of America where such filing may be
necessary or appropriate to perfect the Security Interest and evidence
that such filings have created a first priority security interest in
the Collateral;
20
27
(viii) the Revolving Credit Notes complying with the terms of
Section 2.4, duly executed and delivered by the Borrower;
(ix) certificates or binders of insurance relating to each of
the policies of insurance covering any of the Collateral together with
loss payable clauses which comply with the terms of Section 8.8(b) and
are otherwise satisfactory to the Agent and the Lenders;
(x) a Certificate of the chief executive officer or chief
financial officer of the Borrower stating that, to the best of his
knowledge and based on an examination sufficient to enable him to make
an informed statement,
(A) all of the representations and warranties made or
deemed to be made under this Agreement are materially true and correct
as of the Effective Date, both with and without giving effect to the
Loans to be made at such time and the application of the proceeds
thereof, and
(B) no Default or Event of Default exists;
(xi) a letter from the Borrower to the Agent requesting any
Loans to be made, specifying the method of disbursement, and Letters
of Credit to be issued on the Effective Date;
(xii) a Borrowing Base Certificate and a Schedule of Inventory
and a Schedule of Receivables, based upon the end of the Fiscal Month
next preceding the Effective Date;
(xiii) any Security Documents to be delivered in connection with
the Collateral, duly executed and delivered by the parties thereto;
(xiv) evidence satisfactory to the Lenders that all "Letters of
Credit" as defined in and issued by Wachovia Bank, N.A. under the
Existing Loan Agreement have been returned by the beneficiaries
thereof for cancellation; and
(xv) such other documents and instruments as the Agent or any
Lender may reasonably request.
(b) No Injunctions. Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any court, governmental agency or legislative body to
enjoin, restrain, or prohibit, or to obtain substantial damages in respect
of, or which is related to or arises out of this Agreement or the
consummation of the transactions contemplated hereby, in the judgment of
the Agent, would make it inadvisable to consummate the transactions
contemplated by this Agreement.
(c) Material Adverse Change. As of the Effective Date, there shall not
have occurred any change not previously disclosed in writing by Borrower to
the Lenders
21
28
which is materially adverse, in the judgment of the Lenders, to the assets,
liabilities, businesses, operations, condition, (financial or otherwise) or
prospects of the Borrower from those presented in the financial statements
previously delivered to the Agent.
SECTION 5.2 All Loans. At the time of the making of each Loan, including
any Loan made on the Effective Date, and as of the Date of Issuance of each
Letter of Credit, including each Letter of Credit issued on the Effective Date:
(a) all of the representations and warranties made or deemed to be
made under this Agreement shall be true and correct in all material
respects at such time both with and without giving effect to the Loans to
be made at such time or the Letters of Credit to be issued and the
application of the proceeds thereof (except to the extent of changes
resulting from transactions contemplated or permitted by this Agreement and
changes occurring in the ordinary course of business that singly or in the
aggregate have not had and are not expected to have a Material Adverse
Effect, and unless stated to relate solely to an earlier date, in which
case such representations and warranties shall be true and correct as of
such earlier date), and
(b) the corporate actions of the Borrower referred to in Section 5.1
(a)(ii) shall remain in full force and effect and the incumbency of
officers shall be as stated in the certificates of incumbency delivered
pursuant to Section 5.1 (a) (iii) or as subsequently modified and reflected
in a certificate of incumbency delivered to the Agent.
The Agent may, without waiving either condition consider the conditions
specified in Sections 5.2(a) and (b) fulfilled and a representation by the
Borrower to such effect made, if no written notice to the contrary is received
by the Agent from the Borrower prior to the making of the Loans then to be made,
or the issuance of the Letters of Credit then to be issued.
SECTION 5.3 Conditions as Covenants.
Unless agreed in writing by the Agent and the Lenders, if a condition
precedent set forth in Section 5.1 is not satisfied prior to the Lenders
agreeing that this Agreement has become effective, the Borrower covenants and
agrees to satisfy such condition (and to deliver to the Agent the documents and
instruments satisfying or evidencing the satisfaction of such condition) within
thirty days after the Effective Date.
22
29
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF BORROWER
SECTION 6.1 Representations and Warranties. The Borrower represents and
warrants to the Lenders, as of the Effective Date as follows:
(a) Organization; Power; Qualification. The Borrower and each
Restricted Subsidiary is a corporation, duly organized, validly existing
and in good standing under the laws of the respective jurisdiction of its
incorporation, has the power and authority to own its properties and to
carry on its business as now being and hereafter proposed to be conducted
and is duly qualified and authorized to do business in each jurisdiction in
which the character of its properties or the nature of its business
requires such qualification or authorization and the failure to so qualify
would have a Materially Adverse Effect. The jurisdictions in which the
Borrower and each such Subsidiary is qualified to do business as a foreign
corporation are listed on Schedule 6.1(a).
(b) Subsidiaries and Ownership) of the Borrower. Except as set forth
on Schedule 6.1(b), the Borrower has no Subsidiaries. The outstanding stock
of the Borrower has been duly and validly issued and is fully paid and
nonassessable by the Borrower and the number and owners of such shares of
capital stock of the Borrower are set forth on Schedule 6.1(b).
(c) Authorization of Agreement. Notes, Loan Documents and Borrowing.
The Borrower has the right and power, and has taken all necessary action to
authorize it to execute, deliver and perform this Agreement and each of the
Loan Documents to which it is a party in accordance with their respective
terms. This Agreement and each of the Loan Documents to which it is a party
have been duly executed and delivered by the duly authorized officers of
the Borrower and each is, or when executed and delivered in accordance with
this Agreement will be, a legal, valid and binding obligation of the
Borrower, enforceable against it in accordance with its terms, except as
such enforceability against it may be limited by bankruptcy or other
similar laws affecting creditor's rights.
(d) Compliance of Agreement. Notes. Loan Documents and Borrowing with
Laws. Etc. The execution, delivery and performance of this Agreement and
each of the Loan Documents to which the Borrower is a party, in accordance
with their respective terms, the borrowings hereunder and the transactions
contemplated hereby do not and will not, by the passage of time, the giving
of notice or otherwise,
(i) require any Governmental Approval or violate any Applicable
Law relating to the Borrower or any of its Affiliates,
(ii) conflict with, result in a breach of or constitute a default
under the certificate of incorporation or bylaws of the Borrower or
any of its Restricted
23
30
Subsidiaries, any indenture, agreement or other instrument to which the
Borrower or any of its Restricted Subsidiaries is a party or by which any
of its respective properties may be bound or any Governmental Approval
relating to the Borrower or any of its Restricted Subsidiaries which
conflict, breach or default could have a Materially Adverse Effect, or
(iii) result in or require the creation or imposition of any Lien upon
or with respect to any property now owned or hereafter acquired by the
Borrower or any of its Restricted Subsidiaries other than the Security
Interest and Permitted Liens.
(e) Compliance with Law: Governmental Approvals. Except as set forth in
Schedule 6.1(e), the Borrower and each Restricted Subsidiary:
(i) has all Governmental Approvals, including permits relating to
federal, state and local Environmental Laws, ordinances and regulations
required by any Applicable Law for it to conduct its business, each of
which is in full force and effect, is final and not subject to review on
appeal and is not the subject of any pending or, to its knowledge,
threatened attack by direct or collateral proceeding, and
(ii) is in compliance with each Governmental Approval applicable to
it and in compliance with all other Applicable Law relating to it,
including, without being limited to, all Environmental Laws and all
occupational health and safety laws applicable to the Borrower, any such
Subsidiary or their respective properties,
except for instances of noncompliance which would not, singly or in the
aggregate, cause a Default or Event of Default or have a Materially Adverse
Effect or in respect of which adequate reserves have been established on the
books of the Borrower in accordance with GAAP.
(f) Titles to Properties. Except as set forth in Schedule 6.1(f), the
Borrower and each Restricted Subsidiary has good and marketable title to its
respective real properties and valid and legal title to all of its respective
personal property and assets, including, but not limited to, those reflected on
the consolidated balance sheet of the Borrower delivered pursuant to Section
6.1(m), except for defects in title that, singly or in the aggregate have not
had and are not reasonably expected to have a Material Adverse Effect, and
except those which have been disposed of by the Borrower or the Restricted
Subsidiary subsequent to such date which dispositions have been in the ordinary
course of business or otherwise permitted by this Loan Agreement.
(g) Liens. Except as set forth in Schedule 6.1(g), none of the
properties and assets of the Borrower or any Restricted Subsidiary is subject to
any Lien, except Permitted Liens. Other than the Financing Statements, no
financing statement under the Uniform Commercial Code of any State which names
the Borrower or any such
24
31
Subsidiary or any of their trade names or divisions as debtor and which has
not been terminated, has been filed in any state or other jurisdiction and
neither the Borrower nor any Restricted Subsidiary has not signed any such
financing statement or any security agreement authorizing any secured party
thereunder to file any such financing statement, except to perfect those
Liens listed in Schedule 6.1(g).
(h) Indebtedness for Money Borrowed and Guaranties. Schedule 6.1(h) is
a complete and correct listing of all (i) Indebtedness for Money Borrowed
and (ii) Guaranties, in each case of the Borrower and its Restricted
Subsidiaries. The Borrower and each such Subsidiary has performed and is in
compliance with all of the terms of such Indebtedness for Money Borrowed
and Guaranties and all instruments and agreements relating thereto, and no
default or event of default, or event or condition which with notice or
lapse of time or both would constitute such a default or event of default
on the part of the Borrower or any such Subsidiary, as the case may be,
exists with respect to any such Indebtedness for Money Borrowed or
Guaranty.
(i) Litigation. Except as set forth on Schedule 6.1(i), there are no
actions, suits or proceedings pending (nor, to the knowledge of the
Borrower, are there any actions, suits or proceedings threatened) against
or in any other way relating adversely to or affecting the Borrower or any
Restricted Subsidiary or any of their respective property in any court or
before any arbitrator of any kind or before or by any governmental body.
(j) Patents and Trademarks. The Borrower and each Restricted
Subsidiary owns or possesses rights to use all patents, patent rights or
licenses, patent applications, trademarks, trademark rights, trade names,
trade name rights, copyrights and rights with respect to the foregoing
which are required to conduct its business as now and presently planned to
be conducted without conflict with the rights of others and Schedule 6.1(j)
lists all patents and material trademarks owned by the Borrower and each
such Subsidiary.
(k) Tax Returns and Payments. Except as set forth on Schedule 6.1(k),
all United States federal, state and local and all other tax returns of the
Borrower and each Restricted Subsidiary required by Applicable Law to be
filed have been duly filed, and all United States federal, state and local
and all other taxes, assessments and other governmental charges or levies
upon the Borrower or any such Subsidiary and its property, income, profits
and assets which are due and payable have been paid, except any such
nonpayment which is at the time permitted under Section 9.6. All United
States federal income tax returns of the Borrower and each such Subsidiary
through [1989] have been examined and reported on by the Internal Revenue
Service (or closed by applicable statutes). The charges, accruals and
reserves on the books of the Borrower and each such Subsidiary in respect
of United States federal, state and local taxes for all fiscal years and
portions thereof since the organization of the Borrower or the respective
Subsidiary are in the judgment of the Borrower adequate, and the Borrower
does not anticipate any additional assessments for any of such years.
25
32
(1) Burdensome Provisions. Except as set forth on Schedule 6.1(1),
neither the Borrower nor any Restricted Subsidiary is a party to any
indenture, agreement, lease other instrument, or subject to any charter or
corporate restriction, Governmental Approval or Applicable Law compliance
with the terms of which might have a Materially Adverse Effect.
(m) Financial Statements. The consolidated balance sheet of the
Borrower delivered to the Lender pursuant to Section 5.1(xi) was prepared
in accordance with GAAP. The Borrower did not have as of January 2, 1999
nor has it incurred since that date, any material liabilities, contingent
or otherwise, that would be required to be disclosed on such balance sheet
under GAAP that are not so disclosed.
(n) ERISA. Schedule 6.1(n) is a complete and correct listing of all
Plans of the Borrower and of each Restricted Subsidiary as of the Agreement
Date, each of which has been directed and administered in all material
respects in accordance with ERISA and, as of the date of and based on the
most recent actuarial report with respect thereto, the current value of all
accrued vested benefits under each of such Plans which is subject to Title
IV of ERISA did not, as of the latest valuation date, exceed the then
current value of the assets of such plans allocable to such accrued vested
benefits based upon the actuarial assumptions used for such Plans.
(o) Absence of Defaults. Neither the Borrower nor any Restricted
Subsidiary is in default under its certificate of incorporation or bylaws
and no event has occurred, which has not been remedied, cured or waived,
(i) which constitutes a Default or an Event of Default, or
(ii) which constitutes, or which with the passage of time or
giving of notice or both would constitute, a default or event of
default by the Borrower or any Restricted Subsidiary, under any
material agreement (other than this Agreement) or judgment, decree or
order to which the Borrower or any such Subsidiary is a party or by
which the Borrower or any such Subsidiary or any of their respective
properties may be bound or which would require the Borrower or such
Subsidiary to make any payment thereunder prior to the scheduled
maturity date therefor, except, in the case only of any such
agreement, for alleged defaults which are being contested in good
faith by appropriate proceedings and with respect to which adequate
reserves, to the extent required by GAAP, have been established on the
books of the Borrower or any such Subsidiary, as the case may be, and
except for defaults and events of default that, singly or in the
aggregate, have not had and are not reasonably expected to have a
Materially Adverse Effect.
(p) Accuracy and Completeness of Information. All written information,
reports and other papers and data produced by or on behalf of the Borrower
and furnished to the Lenders, other than the Financial Statements referred
to in Section 6.1(m) and any projections or forecasts so furnished, were,
at the time the same were so furnished, complete and correct in all
material respects to the extent necessary to give the recipient a
26
33
true and accurate knowledge of the subject matter. No document furnished or
written statement made to the Agent or the Lenders by the Borrower in
connection with the negotiation, preparation or execution of this Agreement
or any of the Loan Documents contains or will contain any untrue statement
of a fact material to the creditworthiness of the Borrower or omits or will
omit to state a material fact necessary in order to make the statements
contained therein not misleading.
(q) Receivables.
(i) Status. To the knowledge of the Borrower, after reasonable
investigation:
(A) each Receivable reflected in the computations included
in any Borrowing Base Certificate meets the criteria enumerated
in clauses (a) through (o) of the definition of Eligible
Receivables, except as disclosed in such Borrowing Base
Certificate or as disclosed in a timely manner in a subsequent
Borrowing Base Certificate or otherwise in writing to the Agent;
and
(B) no fact or circumstance not disclosed to the Lenders in
a Borrowing Base Certificate or otherwise in writing exists which
would impair the validity or collectibility of any single
Eligible Receivable of $50,000 or more listed or referred to
therein or of Eligible Receivables listed or referred to therein
that (regardless of the individual amount thereof) aggregate
$250,000 or more.
(ii) Chief Executive Office. The chief executive office of the
Borrower and the books and records relating to the Receivables are
located at the address or addresses set forth on Schedule 6.1(q); the
Borrower has not maintained its chief executive office or the books
and records relative to any Receivables at any other address at any
time during the five years immediately preceding the Agreement Date.
(r) Inventory. To the knowledge of the Borrower, after reasonable
investigation, all Inventory included in any Schedule of Inventory
delivered to the Lenders pursuant to Section 8.11(b) meets the criteria
enumerated in clauses (a) through (e) of the definition of Eligible
Inventory, except as disclosed in such Schedule of Inventory or in a
subsequent schedule of Inventory, or as otherwise specifically disclosed in
writing to the Agent. Notwithstanding the foregoing, the Borrower
establishes on its books certain reserves for inventory in accordance with
GAAP.
(s) Equipment. All material manufacturing Equipment is in good order
and repair in all material respects and is located on the premises set
forth on Schedule 6.1(s).
(t) Real Property. The Borrower owns no real property and leases as
lessee no real property other than that summarized on Schedule 6.1(t).
27
34
(u) Corporate and Fictitious Names. Except as otherwise disclosed on
Schedule 6.1(u), during the five-year period preceding the Agreement Date,
the Borrower has not used any corporate or fictitious name other than the
corporate name of the Borrower on the Effective Date.
(v) Federal Reserve Regulations. The Borrower is not engaged and will
not engage, principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" (as each of the quoted terms is defined or used in
Regulation U of the Board of Governors of the Federal Reserve System). No
part of the proceeds of any of the Loans will be used for so purchasing or
carrying margin stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation T, U or X of such Board of
Governors. If requested by the Agent or any one or more of the Lenders, the
Borrower will furnish to the Agent a statement or statements in conformity
with the requirements of said Regulation T, U or X to the foregoing effect.
(w) Investment Company Act. The Borrower is not an "investment
company" or a company "controlled" by an "investment company" (as each of
the quoted terms is defined or used in the Investment Company Act of 1940,
as amended).
(x) Employee Relations. The Borrower has a stable work force in place
and is not, except as set forth on Schedule 6.1(x), party to any collective
bargaining agreement nor has any labor union been recognized as the
representative of the Borrower's employees, and the Borrower knows of no
pending, threatened or contemplated strikes, work stoppage or other
collective labor disputes involving its employees or those of its
Subsidiaries.
(y) Fiscal Year. The fiscal year end of the Borrower is the Saturday
closest to December 31 of each year, and the Borrower shall not change its
Fiscal Year end without the prior written consent of the Lenders.
(z) Year 2000 Compliance. The Borrower has (i) initiated a review and
assessment of its and its Subsidiaries' computer systems and applications
(including those affected by its suppliers, vendors and customers) that
could be materially adversely affected by the Year 2000 Problem, (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a
timely basis, and (iii) to date, made corrections and taken other actions
required by that plan on a timely basis. Based on the foregoing, the
Borrower believes that all of the above-referenced computer applications
that are material to the Borrower's or any of its Subsidiaries' business
and operations (including those affected by its suppliers, vendors and
customers) will be Year 2000 Compliant.
SECTION 6.2 Survival of Representations and Warranties. Etc. All
representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this
28
35
Agreement shall be made or deemed to be made at and as of the Agreement Date,
and as of the Effective Date. All representations and warranties made or deemed
to be made under this Agreement shall survive the Agreement Date and the
Effective Date and not be waived by the execution and delivery of this
Agreement, any investigation made by or on behalf of the Lenders or any
borrowing hereunder.
29
36
ARTICLE VII.
SECURITY INTEREST
SECTION 7.1 Security Interest.
(a) To secure the payment, observance and performance of the Secured
Obligations, the Borrower hereby confirms the mortgage, pledge and assignment of
any and all Collateral to the Agent for the benefit of the Lenders pursuant to
the Existing Loan Agreement and hereby re-mortgages, re-pledges and re-assigns
all of such Collateral to the Agent for the benefit of the Lenders, and confirms
the grant to the Agent for itself and the benefit of the Lenders pursuant to the
Existing Loan Agreement and re-grants to the Agent for its benefit and the
benefit of the Lenders a first and exclusive continuing security interest in,
and a first and exclusive continuing Lien upon, all of the Collateral, subject
only to the Permitted Liens.
(b) As additional security for all of the Secured Obligations, the Borrower
grants to the Agent on behalf of the Lenders a first and exclusive security
interest in, and assigns to the Agent for its benefit and the ratable benefit of
the Lenders, all of the Borrower's right, title and interest in and to, any
deposits or other sums at any time credited by or due from the Agent, each
Lender and each Affiliate thereof to the Borrower or otherwise in the possession
of such Persons. The Borrower hereby authorizes the Agent, each Lender and any
Affiliate thereof to pay or deliver to the Agent, without any prior necessity on
the Agent's part to resort to other security or sources of reimbursement for the
Secured Obligations, at any time upon the occurrence and during the continuance
of any Event of Default and without further notice to the Borrower (such notice
being expressly waived), any of the aforesaid deposits (general or special, time
or demand, provisional or final) or other sums for application to any Secured
Obligation, irrespective of whether any demand has been made, and the rights
given the Agent hereunder are cumulative with the Agent's other rights and
remedies, including other rights of set-off. The Agent will promptly notify the
Borrower of its receipt of any such funds for application to the Secured
Obligations, but failure to do so will not affect the validity or enforceability
thereof. The Agent may give notice of the above grant of a security interest in
and assignment of the aforesaid deposits and other sums, and authorization, to,
and make any suitable arrangements with, any such Affiliate of the Agent for
effectuation thereof, and the Borrower hereby irrevocably appoints the Agent as
its attorney upon the occurrence and during the continuance of any Event of
Default to collect any and all such deposits or other sums to the extent any
such payment is not made to the Agent by such Affiliate.
SECTION 7.2 Continued Priority of Security Interest.
30
37
(a) The Security Interest granted by the Borrower shall at all times
be first priority, and be valid, perfected and enforceable against the Borrower
and all third parties in accordance with the terms of this Agreement, as
security for the Secured Obligations.
(b) The Borrower shall, at its sole cost and expense, take all action
that may be necessary or desirable, or that the Agent may request, so as at all
times to maintain the validity, perfection, enforceability and rank of the
Security Interest in the Collateral in conformity with the requirements of
Section 7.2(a), or to enable the Lenders and the Agent to exercise or enforce
their rights hereunder, including but not limited to:
(i) paying all taxes, assessments and other claims lawfully
levied or assessed on any of the Collateral, except to the extent that
such taxes, assessments and other claims constitute Permitted Liens;
(ii) diligently seeking to obtain, after the Agreement Date,
landlords', mortgagees' or mechanics' releases, subordinations or
waivers;
(iii) delivering to the Agent, upon request, for the benefit of
the Lenders, endorsed or accompanied by such instruments of assignment
as the Agent may specify, and stamping or marking in such manner as
the Agent may specify, any and all chattel paper, instruments, letters
and advices of guaranty and documents evidencing or forming a part of
the Collateral; and
(iv) executing and delivering financing statements, pledges,
designations, hypothecations, notices and assignments, in each case in
form and substance satisfactory to the Agent, relating to the
creation, validity, perfection, maintenance or continuation of the
Security Interest under the Uniform Commercial Code or other
Applicable Law.
(c) The Agent is hereby authorized to execute and file one or more
financing or continuation statements or amendments thereto on behalf of the
Borrower. The Agent will give the Borrower notice of the filing of any such
statements or amendments, which notice shall specify the locations where such
statements or amendments were filed. A carbon, photographic, xerographic or
other reproduction of this Agreement or of any of the Security Documents or of
any financing statement filed in connection with this Agreement is sufficient as
a financing statement.
(d) The Borrower shall ▇▇▇▇ its books and records in any manner the
Agent shall request to evidence, protect and perfect the Security Interest and
shall cause its financial statements to reflect the existence of the Security
Interest.
31
38
ARTICLE VIII.
COLLATERAL COVENANTS
Until the Revolving Credit Facility has been terminated and all the Secured
Obligations have been indefeasibly paid in full, unless consent has been
obtained in the manner provided in Section 14.10:
SECTION 8.1 Collection of Receivables.
(a) The Borrower will cause all moneys, checks, notes, drafts and
other payments relating to or constituting proceeds of Receivables, or of
any other Collateral, to be deposited in an Agency Account in accordance
with the procedures set out in the corresponding Agency Account Agreement;
or, at the Borrower's option (or, upon the occurrence of a Default or Event
of Default, at the Agent's request) the Borrower will advise each Account
Debtor to address all remittances with respect to amounts payable on
account of any Receivables to a specified Lockbox, and stamp all invoices
relating to any such amounts with a legend satisfactory to the Agent
indicating that payment is to be made to the Borrower via a specified
Lockbox.
(b) The Borrower and the Agent shall cause all collected balances in
each Agency Account or Lockbox to be transmitted daily by wire transfer or
depository transfer check or automated clearinghouse ("ACH") transfer in
accordance with the procedures set forth in the corresponding Agency
Account Agreement or Lockbox Agreement to the Agent at the Agent's Office,
(i) for application, on account of the Secured Obligations, as
provided in Sections 2.3(a), 14.2 and 14.3, such credits to be entered
upon receipt and to be conditioned upon final payment in cash or
solvent credits of the items giving rise to them, and
(ii) with respect to any balance remaining after such
application, so long as no Default or Event of Default has occurred
and is continuing, for transfer to such account of the Borrower as the
Borrower and the Agent may agree.
(c) Any moneys, checks, notes, drafts or other payments referred to in
subsection (a) of this Section 8.1 which are received by or on behalf of
the Borrower will be held in trust for the Lenders and will be delivered to
the Agent at the Agent's Office as promptly as possible in the exact form
received, together with any necessary endorsements.
(d) Notwithstanding the provisions of Section 8.1 (b) or (c), so long
as (x) no Default or Event of Default exists hereunder, and (y) the
Borrower has Availability in an amount in excess of $10,000,000, the
Borrower will not be required to comply with the requirements of Sections
8.1 (b) or (c).
32
39
SECTION 8.2 Verification and Notification. The Borrower's independent
public accountants annually in connection with preparation of the Borrower's
audited financial statements shall verify for the Lenders the validity, amount
or any other matter relating to any Receivable as requested by the Agent.
SECTION 8.3 Adjustments. The Borrower may, in the ordinary course of
business (provided no Event of Default has occurred and is continuing), grant
any extension of time for payment of any Receivable or compromise, compound or
settle the same for less than the full amount thereof, or release wholly or
partly any Person liable for the payment thereof, or allow any credit or
discount (other than in accordance with the original terms thereof) whatsoever
thereon; provided, that no such action results in the reduction of more than
$300,000 in the amount payable with respect to any Receivable, or of more than
$1,500,000 with respect to all Receivables in any Fiscal Year.
SECTION 8.4 Invoices. Upon the occurrence of an Event of Default and during
the continuance thereof, at the request of the Agent or the Lenders, the
Borrower shall deliver to the Agent, at the Borrower's expense, copies of
customers' invoices or the equivalent, original shipping and delivery receipts
or other proof of delivery, customers' statements, the original copy of all
documents, including, without limitation, repayment histories and present status
reports, relating to Receivables and such other documents and information
relating to the Receivables as the Agent shall specify.
SECTION 8.5 Delivery of Instruments. After the occurrence of an Event of
Default and during the continuance thereof, in the event any Receivable is at
any time evidenced by a promissory note, trade acceptance or any other
instrument for the payment of money, the Borrower will immediately thereafter
deliver such instrument to the Agent, appropriately endorsed to the Agent for
the benefit of the Lenders.
SECTION 8.6 Returned Goods. The Security Interest in the Inventory shall,
without further act, attach to the cash and non-cash proceeds resulting from the
sale or other disposition of Inventory thereof and to all Inventory which is
returned to the Borrower by customers or is otherwise recovered.
SECTION 8.7 Ownership and Defense of Title.
(a) Except for Permitted Liens, the Borrower shall at all times be the
sole owner of each and every item of Collateral and shall not create any
Lien on, or sell, lease, exchange assign, transfer, pledge, hypothecate,
grant a security interest or security title in or otherwise dispose of, any
of the Collateral or any interest therein, except for (i) sales of
Inventory in the ordinary course of business and (ii) the sale of other
Inventory provided that the Inventory so disposed of pursuant to this
clause (ii) in any Fiscal Year does not have a book value in excess of
$500,000 in the aggregate. The inclusion of "proceeds" of the Collateral
under the Security Interest shall not be deemed a consent by the Lenders to
any other sale or other disposition of any part or all of the Collateral.
33
40
(b) Except with respect to Permitted Liens, the Borrower shall defend
its title in and to, and the Security Interest in, the material Collateral
against the claims and demands of all Persons.
SECTION 8.8 Insurance.
(a) The Borrower shall at all times maintain insurance on the tangible
Collateral against loss or damage by fire, theft, burglary, pilferage,
flood, loss in transit and such other hazards as the Agent shall reasonably
specify, in amounts and under policies issued by insurers reasonably
acceptable to the Agent. All premiums on such insurance shall be paid by
the Borrower and copies of the policies delivered to the Agent.
(b) All insurance policies required under Section 8.8(a) shall name
the Agent and the Lenders as additional named insureds and shall contain
loss payable clauses in the form submitted to the Borrower by the Agent, or
otherwise in form and substance satisfactory to the Agent and the Lenders,
naming the Agent as loss payee as its interests may appear, and providing:
(i) that all proceeds thereunder in excess of $4,000,000 shall
be payable to the Agent, for the ratable benefit of the Lenders;
(ii) that no such insurance shall be affected by any act or
neglect of the insured or owner of the property described in such
policy; and
(iii) that such policy and loss payable clauses may not be
cancelled, amended or terminated unless at least ten days' prior
written notice is given to the Agent.
(c) Any proceeds of insurance referred to in this Section 8.8 which
are paid to the Agent for the ratable benefit of the Lenders shall be
either (i) applied to restore or replace the damaged or destroyed property,
or (ii) applied to the payment or prepayment of the Secured Obligations, as
determined by the Lenders in their reasonable discretion after consultation
with the Borrower.
(d) The Agent and the Borrower agree to endorse and deliver checks and
other drafts representing such proceeds so as to give effect to the
foregoing provisions of this Section 8.8.
SECTION 8.9 Location of Offices and Collateral.
(a) The Borrower will not change the location of its chief executive
office or the place where it keeps its books and records relating to the
Collateral or change its name, identity or corporate structure without
giving the Agent sixty (60) days' prior written notice thereof.
(b) All Inventory, other than Inventory in transit to any such
location (including from one such location to any other such location),
will at all times be kept by
34
41
the Borrower at one or the other of the locations set forth in Schedule 6.1
(t), and shall not, without the prior written consent of the Agent, be
removed therefrom except, so long as no Event of Default shall have
occurred and be continuing, for sales of Inventory as permitted by Section
8.7(a).
(c) If any Inventory is in the possession or control of any of the
Borrower's agents or processors, upon the occurrence of an Event of
Default, the Borrower at the request of the Agent, or the Agent shall
notify such agents or processors of the Security Interest and shall
instruct them (and cause them to acknowledge such instruction) to hold all
such Inventory during the continuance of an Event of Default for the
account of the Agent for the ratable benefit of the Lenders, subject to the
instructions of the Agent.
SECTION 8. 10 Records Relating to Collateral. The Borrower will at all
times:
(a) keep complete and accurate records of Inventory on a basis
consistent with past practices of the Borrower and its predecessors; and
(b) keep complete and accurate records of all other Collateral.
SECTION 8.11 Information and Reports.
(a) Schedule of Receivables. The Borrower shall deliver to the Agent
and the Lenders on or before the Effective Date and by the 15th Business
Day after the end of each Fiscal Month thereafter a Schedule of Receivables
which
(i) shall be as of the last Business Day of the immediately
preceding Fiscal Month of the Borrower,
(ii) shall be reconciled to the Borrowing Base Certificate as of
such last Business Day,
(iii) shall set forth a detailed report for such Fiscal Month,
specifying the balance due on each Account Debtor's account, the aging
of each Account Debtor's account and the amount of any rebate owed to
that Account Debtor in the ordinary course of the Borrower's business.
(b) Schedule of Invent . The Borrower shall deliver to the Agent and
the Lenders on or before the Effective Date and no later than the 15th
Business Day after the end of each Fiscal Month thereafter a Schedule of
Inventory as of the last Business Day of the immediately preceding Fiscal
Month of the Borrower, summarizing the kind and quantity of Inventory and
the Borrower's cost thereof.
(c) Borrowing Base Certificate. The Borrower shall deliver to the
Agent and the Lenders on or before the Effective Date and no later than the
15th Business Day of each Fiscal Month thereafter a Borrowing Base
Certificate prepared as of the close of business on the last Business Day
of the preceding Fiscal Month.
35
42
(d) Projections. The Borrower shall deliver to the Agent and the
Lenders on or before January 30 of each year a copy of the Borrower's
financial projections for the coming year, in such form and detail as the
Agent may approve.
(e) Other Information. The Agent may in its discretion from time to
time require as may be reasonable under the circumstances, the Borrower to
deliver the schedules and certificate described in Sections 8.11 (a), (b),
and (c) more or less often and on different schedules than specified in
such Sections and the Borrower will comply with such requests. The Borrower
shall also furnish to the Agent such other information with respect to the
Collateral or the business of the Borrower, as the Agent may from time to
time reasonably request.
36
43
ARTICLE IX.
AFFIRMATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and all the Secured
Obligations have been indefeasibly paid and satisfied in full, unless consent
has been obtained in the manner provided for in Section 14.10, the Borrower
will, and with respect to all of the following Sections except Section 9.9 will
cause each Restricted Subsidiary to:
SECTION 9.1 Preservation of Corporate Existence and Similar Matters.
Preserve and maintain its corporate existence, rights, franchises, licenses and
privileges in the jurisdiction of its incorporation and qualify and remain
qualified as a foreign corporation and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization and the failure to so
qualify or obtain such authorization would have a Materially Adverse Effect.
SECTION 9.2 Compliance with Applicable Law. Comply with all Applicable Law
including all Governmental Approvals, relating to the Borrower or such
Subsidiary, if the failure to so comply would or could have a Materially Adverse
Effect; provided that the Borrower or such Subsidiary may contest in good faith
any application of Applicable Law in any reasonable manner which will not in the
Agent's or the Required Lenders' opinion, adversely affect Agent's and the
Lenders' rights or priority in any Collateral or the ability of the Borrower to
perform its obligations hereunder.
SECTION 9.3 Maintenance of Property. In addition to, and not in derogation
of, the requirements of any of the Security Documents:
(a) protect and preserve all properties material to its business,
including copyrights, patents, trade names and trademarks, maintain in good
and workable condition in all material respects, with reasonable allowance
for wear and tear, and from time to time make or cause to be made all
needed and appropriate repairs to, all tangible properties; and
(b) from time to time make or cause to be made all renewals,
replacements and additions to such properties necessary for the conduct of
its business, so that the business carried on in connection therewith may
be properly and advantageously conducted at all times; provided, however,
that no such renewal, replacement or addition the purchase or lease of
which would result in a violation of Article II hereof shall be required
hereunder.
SECTION 9.4 Conduct of Business. Engage only in businesses in substantially
the same fields as the businesses conducted on the Agreement Date.
SECTION 9.5 Insurance. Maintain in addition to that required by Section 8.8
or any of the Security Documents, insurance with responsible insurance companies
against such risks and
37
44
in such amounts as is customarily maintained by similar businesses or as may be
required by Applicable Law, and from time to time deliver to the Agent upon its
request a detailed list of the insurance then in effect, stating the names of
the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
SECTION 9.6 Payment of Taxes and Claims. Pay or discharge when due
(a) all taxes, assessments and governmental charges or levies imposed
upon it or upon its respective income or profits or upon any properties
belonging to it, and
(b) all lawful claims of materialmen, mechanics, carriers,
warehousemen, processors and landlords for labor, materials, supplies and
rentals which, if unpaid, might become a Lien on any properties of the
Borrower or such Subsidiary;
except that this Section 9.6 shall not require the payment or discharge of any
such tax, assessment, charge, levy or claim which is being contested in good
faith by appropriate proceedings and for which adequate reserves have been
established on the appropriate books to the extent required by GAAP.
SECTION 9.7 Accounting Methods and Financial Records. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete in all material respects), as may be required or as may be necessary to
permit the preparation of financial statements in accordance with GAAP
consistently applied.
SECTION 9.8 Visits and Inspections. Permit representatives of the Agent and
any of the Lenders, from time to time, as often as may be reasonably requested,
but only during normal business hours (except upon and during the continuance of
an Event of Default), to
(a) visit and inspect its properties,
(b) inspect, audit and make extracts from its books, records and
files, including, but not limited to, management letters prepared by
independent accountants, and
(c) discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial condition,
results of operations and business prospects
Nothing in this Section shall be construed as imposing any limitation on the
rights of the Agent or the Lenders under Section 8.2, nor shall the Borrower's
failure to provide immediate access to its properties, records or personnel at a
time other than during normal business hours in connection with the exercise by
the Lenders (or any of them) of their rights under this Section 9.8 constitute a
breach hereof.
38
45
SECTION 9.9 Use of Proceeds.
(a) Use the proceeds of Revolving Credit Loans to repay in full amounts
owing to Wachovia Bank, N.A. under the Existing Loan Agreement, to make
Restricted Payments and Restricted Purchases in accordance with the provisions
of Section 11.5, and for permissible capital expenditures and working capital
and general business purposes (including the repayment of Indebtedness described
in Section 11.2(b)) and the purchase of Purchased Receivables.
(b) Not use any part of such proceeds to purchase or carry, or to reduce or
retire or refinance any credit incurred to purchase or carry, any margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System) or for any other purpose which would involve a violation of such
Regulation U or Regulation T or X of such Board of Governors, or for any other
purpose prohibited by law or by the terms and conditions of this Agreement.
SECTION 9.10 Hazardous Waste and Substances: Environmental Requirements.
In addition to, and not in derogation of, the requirements of Section 9.2
and of the Security Documents, comply with and cause each Restricted Subsidiary
to comply with all Environmental Laws, promptly notify the Lenders of the
receipt by the employee of the Borrower designated to ensure compliance with
Environmental Laws or by any officer of the Borrower of any notice of a
violation of any such law, rule, standard or regulation, and indemnify and hold
the Agent and the Lenders harmless from all loss, cost, damage, liability, claim
and expense incurred by or imposed upon the Agent or any Lender on account of
the Borrower's failure to perform its obligations under this Section 9.10. With
respect to any violations of any Environmental Law, to the extent (a) such
violations have been disclosed in writing to the Lenders prior to the Effective
Date, (b) the Borrower has established procedures acceptable to the Lenders to
remedy such violations and is diligently pursuing such procedures with
appropriate authorization and agencies, and (c) the Borrower's liability in
connection with the remedy of such violations (after taking into account
indemnities in favor of the Borrower with respect thereto) does not exceed in
the aggregate $15,000,000, the Borrower will be deemed in compliance with
Environmental Law for the purposes of this Section.
SECTION 9.11 ERISA. At all times make, or cause to be made, prompt payment
of contributions required to meet the minimum funding standards set forth in
ERISA with respect to its and its ERISA Affiliates' Plans; upon the request of
any Lender, furnish to the Agent copies of any annual report required to be
filed pursuant to ERISA in connection with each such Plan of it and its ERISA
Affiliates; notify the Lenders as soon as practicable of any Termination Event
and of any additional act or condition arising in connection with any such Plan
which the Borrower believes might constitute grounds for the termination thereof
by the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer such Plan; and to furnish to the Lenders,
promptly upon the Lenders' request therefor, such additional information
concerning any such Plan as may be reasonably requested by the Lenders.
SECTION 9.12 Year 2000. The Borrower will promptly notify the Agent in the
event the Borrower discovers or determines that any computer application
(including those of its
39
46
suppliers, vendors and customers) that is material to the business and
operations of the Borrower and its Subsidiaries taken as a whole will not be
Year 2000 Compliant.
SECTION 9.13 Notification of IRPA and Swap Reserves.
As soon as practicable and prior to the effectiveness thereof, the Borrower
and the Lender party to any Interest Rate Protection Agreement or the Swap
Counterparty under any Swap, as applicable, will notify the Agent of the IRPA
Reserve or Swap Reserve, as the case may be, established by such Lender or Swap
Counterparty under such Interest Rate Protection Agreement or Swap, provided
that any Lender's or Swap Counterparty's failure to give such notice shall not
affect the rights or obligations of the Borrower thereunder.
40
47
ARTICLE X.
INFORMATION
Until the Revolving Credit Facility has been terminated and all the Secured
Obligations have been indefeasibly paid and satisfied in full, unless consent
has been obtained in the manner set forth in Section 14.10, the Borrower will
furnish to the Agent at its office then designated for notices pursuant to
Section 14.1 and each Lender at the address set forth under such Lender's
signature, or such other office as may be designated by such Lender from time to
time:
SECTION 10.1 Financial Statements.
(a) Audited Year-End Statements. As soon as available, but in any
event within one hundred twenty (120) days after the end of each Fiscal
Year of the Borrower, copies of the consolidating and consolidated balance
sheets of the Borrower and its consolidated Subsidiaries as at the end of
such Fiscal Year and the related consolidating and consolidated statements
of earnings, shareholders' equity and cash flows for such Fiscal Year, in
each case, if applicable, setting forth in comparative form the
consolidating and consolidated figures for the previous year of the
Borrower and its consolidated Subsidiaries, reported on, as to the
consolidated statements only, without qualification as to the scope of the
audit, by independent certified public accountants of nationally recognized
standing; and
(b) Monthly Financial Statements. As soon as available after the end
of each Fiscal Month (commencing with the Fiscal Month ending May 1, 1999)
but in any event within 30 days after the end of each Fiscal Month, copies
of (i) the unaudited consolidating and consolidated balance sheets of the
Borrower and its consolidated Subsidiaries as at the end of such Fiscal
Month and the related unaudited consolidating and consolidated statement of
earnings for the Borrower and its consolidated Subsidiaries for such Fiscal
Month, and for the portion of the Fiscal Year through such Fiscal Month,
certified by a Financial Officer of the Borrower as presenting fairly, in
all material respects, the consolidating and consolidated financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries (subject to normal year-end audit adjustments and the omission
of footnotes), (ii) if such Fiscal Month is the last Fiscal Month of a
Fiscal Year, a forecast of consolidating and consolidated cash flow from
operations for the ensuing twelve months, and (iii) if such Fiscal Month is
the last Fiscal Month of a Fiscal Year, a forecast of consolidating and
consolidated sales and operating earnings for the next succeeding Fiscal
Year; and, upon the request of the Agent, if such Fiscal Month is the last
Fiscal Month of a Fiscal Quarter, a forecast of consolidating and
consolidated sales and operating earnings for the next succeeding Fiscal
Quarter;
all such financial statements (other than forecasts) to present fairly, in all
material respects, the financial condition of the Borrower and its consolidated
Subsidiaries and be prepared in accordance with GAAP (except, with respect to
interim financial statements, for the omission of
41
48
footnotes and for the effect of normal year-end audit adjustments) applied
consistently throughout the periods reflected therein, and the financial
statements and forecasts described in subsection (b) of this Section 10.1 to be
prepared in good faith and in such form and substance as has been approved by
the Agent on behalf of the Lenders prior to the Effective Date, or as may be
requested by the Agent and agreed to by the Borrower.
SECTION 10.2 Accountants' Certificate. Together with the audited
financial statements referred to in Section 10.1(a), the Borrower shall deliver
a certificate of such accountants addressed to the Agent, for the benefit of the
Lenders
(a) stating that in making the examination necessary for the
certification of such financial statements, nothing has come to their
attention to lead them to believe that any Default or Event of Default
exists and, in particular, they have no knowledge of any Default or Event
of Default or, if such is not the case, specifying such Default or Event of
Default and its nature, and
(b) having attached the calculations, prepared by the Borrower and
reviewed by such accountants, required to establish whether or not the
Borrower is in compliance with the covenants contained in Section 11.1, as
at the date of such financial statements.
SECTION 10.3 Officer's Certificate. At the time monthly unaudited
financial statements are delivered pursuant to Section 10.1(b) at the end of a
Fiscal Quarter, and, as to clause (b) hereof, at such other times as the Agent
shall reasonably request, the Borrower shall also furnish a certificate of its
president or a Financial Officer
(a) setting forth as at the end of such Fiscal Quarter or Fiscal Year,
as the case may be, the calculations required to establish whether or not
the Borrower was in compliance with the requirements of Section 11.1, as
at the end of each respective period; and
(b) stating that to such officer's knowledge, based on a reasonable
examination sufficient to enable him to make an informed statement, no
Default or Event of Default exists, or, if such is not the case specifying
such Default or Event of Default and its nature, when it occurred, whether
it is continuing and the steps being taken by the Borrower with respect to
such Default or Event of Default.
SECTION 10.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors by its independent
public accountants in connection with their auditing function, including,
without limitation, any management report.
(b) As soon as practicable, copies of all financial statements and
reports that the Borrower shall send to its stockholders and copies of all
registration statements and all regular or periodic reports which the
Borrower shall file with the Securities and Exchange Commission or any
successor commission.
42
49
(c) If requested by the Agent or the Lenders, the Borrower will
furnish to the Agent statements in conformity with the requirements of
Federal Reserve Form U-1 referred to in Regulation U of the Board of
Governors of the Federal Reserve System.
SECTION 10.5 Notice of Litigation and Other Matters. Prompt notice of:
(a) the commencement, to the extent the Borrower is aware of the same,
of all proceedings and investigations by or before any governmental or
nongovernmental body and all actions and proceedings in any court or before
any arbitrator against or involving the Borrower or any Restricted
Subsidiary of the Borrower or any of their respective property, assets or
businesses, which might singly or in the aggregate, cause a Default or an
Event of Default, or have a Materially Adverse Effect;
(b) any amendment of the certificate of incorporation or bylaws of the
Borrower;
(c) any Default or Event of Default or any event which constitutes or
which with the passage of time or giving of notice or both would constitute
a default or event of default by the Borrower under any material agreement
(other than this Agreement) to which the Borrower, or any Restricted
Subsidiary is a party or by which the Borrower, any Restricted Subsidiary
or any of their respective property may be bound; and
(d) execution and delivery of any Swap, together with a copy of the
agreement governing the Borrower's obligations thereunder.
SECTION 10.6 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of the Borrower
to the Agent or any Lender (other than financial statements or forecasts)
whether pursuant to this Article 10 or any other provision of this Agreement, or
any of the Security Documents, shall be, at the time the same is so furnished,
complete and correct in all material respects to the extent necessary to give
the Agent and the Lenders complete, true and accurate knowledge of the subject
matter based on the Borrower's knowledge thereof.
SECTION 10.7 Revisions or Updates to Schedules. To the extent required by
Section 5.2(a), should any of the information or disclosures provided on any of
the Schedules originally attached hereto become outdated or incorrect in any
material respect, the Borrower shall provide promptly to the Agent such
revisions or updates to such Schedule(s) as may be necessary or appropriate to
update or correct such Schedule(s).
43
50
ARTICLE XI.
NEGATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and all the Secured
Obligations have been indefeasibly paid and satisfied in full, unless consent
has been obtained in the manner set forth in Section 14.10, the Borrower will
not directly or indirectly:
SECTION 11.1 Financial Covenants.
(a) Interest Coverage. Permit the ratio of EBITDA to Interest for any
period of four consecutive Fiscal Quarters ending after the Effective Date
and (i) prior to the last day of Fiscal Year 1999, to be less than 1.25 to
1 or (ii) on or after the last day of Fiscal Year 1999, to be less than 1.5
to 1.0.
(b) Net Worth. Permit the sum of (i) the consolidated Net Worth of the
Borrower and its consolidated Subsidiaries, (ii) the Restructuring Charge,
and (iii) the sum of (A) the Restricted Payment in an amount up to
$2,500,000 made to ▇.▇. ▇▇▇▇▇▇▇ on or about May 27, 1999 and (B) all
Restricted Payments made after the Effective Date and on or prior to the
date of determination in accordance with Section 11.5(b)(i), at any time
after the Effective Date to be less than $30,000,000.
(c) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio for any period of four consecutive Fiscal Quarters ending after the
Effective Date to be less than 1.1 to 1.0.
(d) Minimum Availability. Permit Availability at any time to be less
than $1,000,000.
SECTION 11.2 Indebtedness for Money Borrowed. Create, assume, or otherwise
become or remain obligated in respect of, or permit or suffer to exist or to be
created, assumed or incurred or to be outstanding any Indebtedness for Money
Borrowed, except that this Section 11.2 shall not apply to:
(a) Indebtedness for Money Borrowed of the Borrower represented by the
Loans and the Notes;
(b) unsecured Indebtedness for Money Borrowed not to exceed an amount
equal to $8,000,000 in the aggregate, at any one time outstanding, due
within one year after the date incurred (subject to renewal by the
lender(s) in its (their) discretion);
(c) Indebtedness evidenced by the Senior Subordinated Notes;
(d) Indebtedness for Money Borrowed incurred in connection with
Financing Leases or incurred for the purpose of acquiring equipment (to the
extent such funds are
44
51
used for such purpose), provided that the aggregate of such Indebtedness
shall not exceed $10,500,000 at any one time outstanding;
(e) Indebtedness of the Borrower to a New Subsidiary and Indebtedness
of a New Subsidiary to the Borrower; and
(f) for the avoidance of doubt, the Laurens FILOT.
SECTION 11.3 Guaranties. Become or remain liable with respect to any
Guaranty of any obligation of any other Person, except for or pursuant to
Existing Guaranties or which are Permitted Investments.
SECTION 11.4 Acquisitions; Investments. Make or permit to exist, with
respect to the Borrower or any Restricted Subsidiary, after the Agreement Date,
any Investment other than (i) Permitted Investments, (ii) the Investments set
forth in Schedule 11.4, provided that at no time shall the sum of all
Investments in Unrestricted Subsidiaries exceed $5,000,000 and (iii) Investments
of the Borrower or any Subsidiary in a New Subsidiary and Investments of a
Subsidiary in the Borrower.
SECTION 11.5 Restricted Dividend Payments and Purchases, Etc. Declare or
make, or permit any Restricted Subsidiary to declare or make, any Restricted
Dividend Payment, Restricted Payment or Restricted Purchase, except that this
Section 11.5 shall not apply to (a) dividends or distributions by a Subsidiary
to the Borrower or the repayment by a Subsidiary to the Borrower of any loans or
advances from the Borrower to such Subsidiary or (b) provided that no Default or
Event of Default has occurred and is continuing at the time of such Restricted
Purchase or Restricted Payment and that immediately after giving effect thereto,
Availability on a pro forma basis is not less than $10,000,000, (i) Restricted
Purchases of the Borrower's capital stock from former officers and employees of
the Borrower (or from their heirs or executors or from trusts created by any
such former officer or employee) in an aggregate amount not to exceed
$10,000,000 or (ii) Restricted Payments arising from purchases by the Borrower
of up to (A) $15,000,000 in principal amount of its Senior Subordinated Notes in
accordance with the terms of any Swap and (B) an additional $10,000,000
principal amount of its Senior Subordinated Notes.
SECTION 11.6 Transactions with Insiders. Effect, or permit any Restricted
Subsidiary to effect, any transaction with any stockholder, director, officer,
agent or employee of the Borrower or any Restricted Subsidiary, or any relative
thereof, or any Person in which any one or more of such officers, directors,
etc. have directly or indirectly in the aggregate more than a 5% beneficial
interest, on a basis less favorable to the Borrower or such Restricted
Subsidiary than would be the case in such transaction had been effected on an
arm's length basis with an independent third party; provided that (i) the
payment of fees to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and its Affiliates (excluding M L Capital
Partners and its controlled Affiliates) for consulting, investment banking or
financial services rendered to the Borrower or a Restricted Subsidiary, and (ii)
employment agreements, split-dollar agreements, and other compensation
arrangements, shall not be subject to the limitations of this Section 11.6.
45
52
SECTION 11.7 Liens. Create, assume or permit or suffer to exist or to be
created or assumed any Lien on (i) any of the property or assets of the
Borrower, real, personal or mixed, tangible or intangible, or (ii) any revenues
or profits of the Borrower, other than Permitted Liens; provided that, if
contrary to the provisions of this Section 11.7 Borrower does create, assume or
permit or suffer to exist or to be created or assumed such other Lien, then
Borrower shall, simultaneously therewith, equally and ratably secure the Secured
Obligations.
SECTION 11.8 Merger, Consolidation and Disposition of Assets
(a) Become, or permit any Restricted Subsidiary of the Borrower to
become, a party to any merger or consolidation, except (i) the merger or
consolidation of one or more of its Subsidiaries with and into the
Borrower, (ii) the merger or consolidation of the Borrower with any other
Person, provided, that the surviving entity in any such merger or
consolidation shall be the Borrower, and further provided, that immediately
following any such merger or consolidation of the Borrower there shall
exist no Default or Event of Default hereunder, or (iii) the merger or
consolidation of any Restricted Subsidiary provided, that such merger or
consolidation would be permitted under Section 11.8(b) hereof.
(b) Sell, lease or transfer or otherwise dispose of assets (other than
the Laurens FILOT, sales or other dispositions of Collateral in accordance
with Section 8.7(a) hereof or other dispositions of obsolete assets, or the
sale or other disposition of other assets which are replaced in the
ordinary course of business) in the aggregate during the term of this
Agreement with a book value in excess of $10,000,000.
SECTION 11.9 Plans. Permit any employee pension benefit plan (as that term
is defined in Section 3 of ERISA) maintained by the Borrower or any Subsidiary
to (i) engage in any "prohibited transaction" as such term is defined in Section
4975 of the Internal Revenue Code of 1986, as amended, that is likely to result
in a material liability for the Borrower; or (ii) incur any "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA, whether or not
waived; or (iii) terminate any such benefit plan in a manner which could result
in the imposition of a lien or encumbrance on the assets of the Borrower
pursuant to Section 4068 of ERISA.
SECTION 11.10 Sales and Leasebacks. Enter into any arrangement with any
Person, other than the Laurens FILOT, providing for its leasing from such Person
of real or personal property which has been or is to be sold or transferred,
directly or indirectly, by the Borrower to such Person.
SECTION 11.11 Prepayments of Indebtedness for Money Borrowed. Except for
prepayments of Indebtedness described in Sections 11.2(b) and (c) and of Senior
Subordinated Notes permitted by Section 11.5(b)(ii), make any prepayments,
directly or indirectly, on account of the principal of any Indebtedness for
Money Borrowed except the Loans, or amend in any way the interest rate or
principal amount or schedule of payments of principal and interest with respect
to any such Indebtedness other than to reduce the interest rate or extend the
schedule of payments with respect thereto.
46
53
SECTION 11.12 Amendment of Indenture. Amend, supplement or otherwise
modify any material provision of the Indenture.
47
54
ARTICLE XII.
DEFAULT
SECTION 12.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body:
(a) Default in Payment of Loans. The Borrower shall default in any
payment of principal of, or interest on, any Loan or Note when and as due
(whether at maturity, by reason of acceleration or otherwise) and such
default shall continue for five days after such due date.
(b) Other Payment Default. The Borrower shall default in the
payment, when and as due, of principal of, or interest on, any other
Secured Obligation, and such default shall continue for five days after
such due date.
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by the Borrower under this Agreement, any Loan Document
or Security Document, or any amendment hereto or thereto, shall at any time
prove to have been incorrect or misleading in any material respect when
made.
(d) Default in Performance. The Borrower shall default in the
performance or observance of any material term, covenant, condition or
agreement contained in
(i) Articles 7, 8, 9, 10 or 11, or
(ii) this Agreement (other than as specifically provided
for otherwise in this Section 12.1) and such default shall continue
for a period of 30 days after written notice thereof has been given to
the Borrower by the Agent.
(e) Indebtedness Cross-Default.
(i) The Borrower or any Restricted Subsidiary shall fail
to pay when due and payable the principal of or interest on any
Indebtedness for Money Borrowed (other than the Loans or the Notes)
where the principal amount of such Indebtedness is in excess of
$1,500,000, except to the extent any amount of such Indebtedness is
disputed in good faith by the Borrower or such Subsidiary and the
amount claimed to be due and payable is reserved on the Borrower's
accounts in accordance with GAAP, and except for the nonpayment of the
Senior Subordinated Notes as a result of the subordination provisions
thereof or the Indenture, or
48
55
(ii) the maturity of any such Indebtedness shall have (A)
been accelerated in accordance with the provisions of any indenture,
contract or instrument providing for the creation of or concerning
such Indebtedness or (B) been required to be prepaid prior to the
stated maturity thereof.
(f) Other Cross-Defaults. The Borrower or any Subsidiary shall default
in the payment when due, or in the performance or observance, of any material
obligation or condition of any agreement, contract or lease, the breach of
which could have a Materially Adverse Effect (other than the Security Documents
or any such agreement, contract or lease relating to Indebtedness for Money
Borrowed) unless, but only as long as, the existence of any such default is
being contested by the Borrower or the Subsidiary, as the case may be, in good
faith by appropriate proceedings and adequate reserves in respect thereof have
been established on the books of the Borrower or such Subsidiary, as the case
may be, to the extent required by GAAP.
(g) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary
shall
(i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect),
(ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an involuntary
case under such bankruptcy laws or other laws,
(iv) apply for or consent to, or fail to contest in a
timely and appropriate manner, the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of itself
or of a substantial part of its property, domestic or foreign,
(v) admit in writing its inability to pay its debts as
they become due,
(vi) make a general assignment for the benefit of
creditors, or
(vii) take any corporate action for the purpose of
authorizing any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against the Borrower or any Subsidiary in any court of
competent jurisdiction seeking
(i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or
adjustment of debts, or
49
56
(ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of the Borrower or of all or any substantial
part of the assets, domestic or foreign, of the Borrower, and such
case or proceeding shall continue undismissed or unstayed for a period
of 60 consecutive calendar days, or an order granting the relief
requested in such case or proceeding against the Borrower (including,
but not limited to, an order for relief under such federal bankruptcy
laws) shall be entered.
(i) Failure of Agreements. Any material provision of this
Agreement, or of any Loan Document after delivery thereof hereunder, shall for
any reason cease to be valid and binding on the Borrower, or the Borrower shall
so state in writing, or this Agreement or any Loan Document, after delivery
thereof hereunder, shall for any reason (other than any action taken
independently by the Agent or any Lender and except to the extent permitted by
the terms hereof or thereof) cease to create a valid and perfected first
priority Lien on, or security interest in, any of the Collateral purported to
be covered thereby.
(j) Judgment. A judgment or order for the payment of money which
exceeds $1,000,000 in amount shall be entered against the Borrower by any
court and such judgment or order shall continue undischarged or unstayed for 60
days.
(k) Attachment. A warrant or writ of attachment or execution or
similar process shall be issued against any property of the Borrower which
exceeds $500,000 in value and such warrant or process shall continue
undischarged or unstayed for 30 days.
(1) Litigation. The Borrower shall challenge or contest in any
action, suit or proceeding in any court or before any arbitrator or
governmental body the validity or enforceability of this Agreement or any
Security Document or the perfection or priority of the Security Interest or any
Lien granted to the Agent for the benefit of the Lenders under any Security
Document.
(m) Loan Documents. Any event of default under any Loan Document
other than this Agreement shall occur.
(n) Change of Control. Any Change of Control of the Borrower
occurs.
(o) Senior Subordinated Notes. Any Event of Default under and as
defined in the Indenture shall occur.
(p) ERISA. There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect to
any Plan maintained by any of the Borrower and its ERISA Affiliates, or to
which the Borrower or any of its ERISA Affiliates has any liabilities, or any
trust created thereunder; or a trustee shall be appointed by a United States
District Court to administer any such Plan; or the Pension Benefit Guaranty
Corporation shall institute proceedings to terminate any such Plan; or any of
the Borrower and its ERISA Affiliates shall incur any liability to the Pension
50
57
Benefit Guaranty Corporation in connection with the termination of any such
Plan; or any Plan or trust created under any Plan of any of the Borrower and
its ERISA Affiliates shall engage in a non-exempt "prohibited transaction" (as
such term is defined in Section 406 of ERISA or Section 4975 of the Code) which
would subject any such Plan, any trust created thereunder, any trustee or
administrator thereof, or any party dealing with any such Plan or trust to the
tax or penalty on "prohibited transactions" imposed by Section 502 of ERISA or
Section 4975 of the Code; or any of the Borrower and its ERISA Affiliates shall
enter into or become obligated to contribute to a Multiemployer Plan.
SECTION 12.2. Remedies.
(a) Acceleration; Termination of Facilities. (i) Upon the
occurrence of an Event of Default specified in Section 12.1(g) or (h), (A) the
principal of and the interest on the Loans and the Notes at the time
outstanding, and all other amounts owed to the Agent and to the Lenders under
this Agreement or any of the Loan Documents and all other Secured Obligations,
shall thereupon become due and payable without presentment, demand, protest, or
other notice of any kind, all of which are expressly waived, anything in this
Agreement or any of the Loan Documents to the contrary notwithstanding, (B) the
Revolving Loan Facility and the right of the Borrower to request borrowings
under this Agreement and the obligation of the Facing Banks to issue Letters of
Credit shall immediately terminate, and (c) the Borrower shall immediately pay
to the Agent for deposit into the Cash Collateral Account an amount equal to
the aggregate Stated Amount of all Letters of Credit outstanding; and (ii) upon
the occurrence of any other Event of Default, with the consent of the Required
Lenders, the Agent may, or upon the request of the Required Lenders, the Agent
shall, by notice to the Borrower (A) declare the principal of and interest on
the Loans and the Notes at the time outstanding, and all other amounts owed to
the Lenders and to the Agent under this Agreement or any of the Loan Documents
and all other Secured Obligations, to be forthwith due and payable, whereupon
the same shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived,
anything in this Agreement or the Loan Documents to the contrary
notwithstanding, (B) terminate the Revolving Loan Facility and any right of the
Borrower to request borrowings hereunder or the issuance of Letters of Credit,
and (C) demand that the Borrower pay, and upon such demand the Borrower shall
immediately pay, to the Agent for deposit in the Cash Collateral Account, an
amount equal to the aggregate Stated Amount of all Letters of Credit then
outstanding.
(b) Other Remedies. If any Event of Default shall have occurred,
and during the continuance of any such Event of Default, the Agent may, upon
the consent of the Required Lenders, and shall, upon direction of the Required
Lenders, do any of the following:
(i) in the name of the Borrower or the Lenders verify the
validity, amount or any other matter relating to any Receivables by
mail, telephone, telegraph or otherwise and notify, or request the
Borrower to notify, in writing or otherwise, any Account Debtor or
obligor with respect to any one or more of the
51
58
Receivables to make payment to the Agent or any designee of the Agent for the
ratable benefit of the Lenders at such address as may be specified by the Agent
and if, notwithstanding, the giving of any notice, any Account Debtor or other
such obligor shall make payments to the Borrower, the Borrower shall hold all
such payments it receives in trust for the ratable benefit of the lenders,
without commingling the same with other funds or property of, or held by, the
Borrower, and shall deliver the same to the Agent or any such designee
immediately upon receipt by the Borrower in the identical form received,
together with any necessary endorsements;
(ii) settle or adjust disputes and claims directly with Account
Debtors and other obligors on Receivables for amounts and on terms which the
Agent considers advisable acting reasonably and in good faith and in all such
cases only the net amounts received by the Agent in payment of such amounts,
after deductions of costs and attorneys' fees, shall constitute Collateral and
the Borrower shall have no further right to make any such settlements or
adjustments or to accept any returns of merchandise;
(iii) enter upon any premises on which Inventory may be located and,
without resistance or interference by the Borrower, take physical possession of
any or all thereof and maintain such possession on such premises or move the
same or any part thereof to such other place or places as the Agent shall
choose, without being liable to the Borrower on account of any loss, damage or
depreciation that may occur as a result thereof, so long as the Agent shall act
reasonably and in good faith;
(iv) require the Borrower to and the Borrower shall, without charge
to the Agent or the Lenders, assemble the Inventory and maintain or deliver it
into the possession of the Agent or any agent or representative of the Agent at
such place or places as the Agent may designate and as are reasonably
convenient to both the Agent and the Borrower;
(v) at the expense of the Borrower, cause any of the Inventory to
be placed in a public or field warehouse, and neither the Agent nor the Lenders
shall be liable to the Borrower on account of any loss, damage or depreciation
that may occur as a result thereof, so long as the Agent shall act reasonably
and in good faith;
(vi) without notice, demand or other process, and without payment of
any rent or any other charge, enter any of the Borrower's premises and, without
breach of the peace, until the Agent completes the enforcement of the Lenders'
rights in the Collateral, take possession of such premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of the Borrower's equipment for the purposes of (A) completing any work in
process, preparing any Inventory for disposition and disposing thereof, and (B)
collecting any Receivable;
52
59
(vii) in the exercise of the rights of the Agent and the Lenders
under this Agreement, without payment of compensation of any kind, use any and
all trademarks, trade styles, trade names, licenses, franchises and the like to
the extent of the rights of the Borrower therein, and the Borrower grants, or
in the case of any federally registered trademark, shall grant, a license to
the Agent and the Lenders for this purpose, provided that any use of any
federally registered trademarks as to any goods shall be subject to the control
as to quality of such goods of the owner of such trademarks and the goodwill of
the business symbolized thereby;
(viii) exercise any and all of its rights under any and all of the
Security Documents;
(ix) subject to Section 12.3, apply any cash Collateral to the
payment of the Secured Obligations in any order in which the Agent may elect or
use such cash in connection with the exercise of any of its other rights
hereunder or under any of the Security Documents;
(x) cause all collected balances in any account of the Borrower to
be transmitted daily by wire transfer or depository transfer check or ACH to
the Agent at the Agent's Office;
(xi) establish or cause to be established one or more arrangements
for the deposit of proceeds of Receivables;
(xii) exercise all of the rights and remedies of a secured party
under the Uniform Commercial Code and under any other Applicable Law,
including, without limitation, the right, without notice except as specified
below and with or without taking possession thereof, to sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any
location chosen by the Agent for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as the Agent may deem
commercially reasonable. The Borrower agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Borrower of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification, but notice given in any other
reasonable manner or at any other reasonable time shall also constitute
reasonable notification. The Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Agent may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned;
(xiii) do or cause to be done any act or thing which the Borrower has
covenanted to do under this Agreement or any of the Loan Documents and has
failed to do, either in the name of the Lenders or on behalf of the Borrower;
and
53
60
(xiv) after 30 days' prior written notice to the
Borrower, cause all outstanding amounts under the Notes to bear
interest at a per annum rate equal to the Base Rate in effect
from time to time plus 2% for so long as such Event of Default
shall continue (provided that no Event of Default arising
solely from the Borrower's failure to perform any obligation to
be performed by it within a specified period or on or prior to
a specified date within such period or on or prior to such date
shall be deemed continuing if such obligation has been
performed and such performance accepted by the Lenders).
SECTION 12.3. Application of Proceeds. All proceeds from each sale
of, or other realization upon, all or any part of the Collateral following an
Event of Default shall be applied or paid over as follows:
(a) First: to the payment of all costs and expenses incurred
in connection with such sale or other realization, including
reasonable attorneys' fees actually incurred;
(b) Second: subject to subsection (c) below, to the payment
of Secured Obligations on a pro rata basis (with the Borrower remaining
liable for any deficiency) with current Secured Obligations being paid
first and then other Secured Obligations, within each category in any
order which the Agent may elect;
(c) Third: subsection (b) above notwithstanding, only after
all other Secured Obligations have been paid in full, any balance shall
be applied to the payment of any amounts due to any Lender under any
Interest Rate Protection Agreement or to any Swap Counterparty under
any Swap if such Lender or Swap Counterparty did not notify the Agent
of the amount of the IRPA Reserve or Swap Reserve, as applicable,
associated therewith contemporaneously with entering into such
arrangement or promptly thereafter; and
(d) Fourth: the balance (if any) of such proceeds shall be
paid to the Borrower, subject to any duty imposed by law or otherwise
to whomsoever will be entitled thereto.
The Borrower shall remain liable and will pay, on demand, any deficiency
remaining in respect of the Secured Obligations, together with interest thereon
at a rate per annum equal to the highest rate then payable hereunder on such
Secured Obligations, which interest shall constitute part of the Secured
Obligations.
SECTION 12.4. Power of Attorney. In addition to the authorizations
granted to the Agent under any of the Loan Documents, upon and after an Event
of Default and during the continuance thereof, the Borrower hereby irrevocably
designates, makes, constitutes and appoints the Agent for the benefit of the
Lenders (and all Persons designated by the Agent from time to time) as the
Borrower's true and lawful attorney, and agent in fact, and the Agent or any
agent of the Agent may, without notice to the Borrower, and at such time or
times as the Agent or any such agent in its sole discretion may determine, in
the name of the Borrower or the Agent for the benefit of the Lenders,
54
61
(i) demand payment of the Receivables,
(ii) enforce payment of the Receivables by legal
proceedings or otherwise,
(iii) exercise all of the Borrower's rights and remedies
with respect to the collection of Receivables,
(iv) settle, adjust, compromise, extend or renew any or
all of the Receivables,
(v) settle, adjust or compromise any legal proceedings
brought to collect the Receivables,
(vi) discharge and release the Receivables or any of them,
(vii) prepare, file and sign the name of the Borrower on
any proof of claim in bankruptcy or any similar document against any
Account Debtor,
(viii) prepare, file and sign the name of the Borrower on
any notice of Lien, assignment or satisfaction of Lien, or similar
document in connection with any of the Collateral,
(ix) endorse the name of the Borrower upon any chattel
paper, document, instrument, notice, freight ▇▇▇▇, ▇▇▇▇ of lading or
similar document or agreement relating to the Receivables, the
Inventory or any other Collateral,
(x) use the stationery of the Borrower and sign the name
of the Borrower to verifications of the Receivables and on any notice
to the Account Debtors,
(xi) open the Borrower's mail,
(xii) notify the post office authorities to change the
address for delivery of the Borrower's mail to an address designated by
the Agent, and
(xiii) use the information recorded on or contained in any
data processing equipment and computer hardware and software relating
to the Receivables, Inventory or other Collateral to which the
Borrower or any Subsidiary of the Borrower has access.
SECTION 12.5. Miscellaneous Provisions Concerning Remedies.
(a) Rights Cumulative. The rights and remedies of the Agent and
the Lenders under this Agreement, the Notes and each of the Loan Documents
shall be cumulative and not exclusive of any rights or remedies which they
would otherwise have. In exercising such rights and remedies, the Agent and the
Lenders may be selective and no
55
62
failure or delay by the Agent or the Lenders in exercising any right shall
operate as a waiver of such right, nor shall any single or partial exercise of
any power or right preclude its other or further exercise or the exercise of
any other power or right.
(b) Waiver of Marshalling. The Borrower hereby waives any
right to require any marshalling of assets and any similar right.
(e) Limitation of Liability. Nothing contained in this
Article 12 or elsewhere in this Agreement or in any of the Loan
Documents shall be construed as requiring or obligating the Lenders,
the Agent or any agent or designee of the Lenders to make any demand,
or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice or take any
action, with respect to any Receivable or any other Collateral or the
moneys due or to become due thereunder or in connection therewith, or
to take any steps necessary to preserve any rights against prior
parties, and neither of the Lenders, the Agent, nor any of its or
their agents or designees shall have any liability to the Borrower for
actions taken pursuant to this Article 12, any other provision of this
Agreement or any of the Loan Documents so long as the Lenders, the
Agent, or such agent or designee shall act reasonably and in good
faith.
(d) Appointment of Receiver. In any action under this
Article 12, the Agent shall be entitled to the appointment of a
receiver, without any notice other than may be specifically required
by Applicable Law, to take possession of all or any portion of the
Collateral and to exercise such power as the court shall confer upon
such receiver.
SECTION 12.6. Cash Collateral Account. The Cash Collateral Account
shall be in the name of the Agent, for the benefit of the Designated Facing
Banks and the Lenders as a cash collateral account and the Agent shall have
sole dominion and control over, and sole access to, the Cash Collateral
Account. Neither the Borrower nor any Person claiming on behalf of or through
the Borrower shall have any right to withdraw any of the funds held in the Cash
Collateral Account. The Borrower agrees that it will not (a) sell or otherwise
dispose of any interest in the Cash Collateral Account or any funds held
therein or (b) create or permit to exist any lien upon or with respect to the
Cash Collateral Account or any funds held therein, except as provided in or
contemplated by this Agreement. The Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Cash Collateral Account and
shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Agent accords other funds
deposited with the Agent, it being understood that the Agent shall not have any
responsibility for taking any necessary steps to preserve fights against any
parties with respect to any funds held in the Cash Collateral Account. Subject
to the right of the Agent to withdraw funds from the Cash Collateral Account,
as provided herein, the Agent may in its sole discretion invest Funds on
deposit in the Cash Collateral Account, reinvest proceeds of any such
investments which may mature or be sold, and invest interest or other income
received from any such investments in each case, in Permitted Investments
described in clauses (a)(i) and (ii) of the definition thereof, as the Agent
may select. Such proceeds, interest and income which are not so invested or
reinvested in Authorized Investments shall be deposited and held by the Agent
in the Cash Collateral Account. For purposes of this Section, Permitted
Investments described in clauses (a)(i) and (ii) of the definition thereof
shall be considered to be
56
63
funds on deposit in the Cash Collateral Account. Upon the payment by any
Designated Facing Bank of any amount due under any Letter of Credit, the Agent
shall distribute to such Designated Facing Bank, to the extent available, funds
from the Cash Collateral Account to satisfy the Borrower's Obligations under
Section 3.4(a)(i).
57
64
ARTICLE XIII.
THE AGENT
SECTION 13.1. Appointment. Each of the Lenders hereby irrevocably
designates and appoints BankBoston as the Agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes BankBoston as the Agent for such Lender to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of this Agreement and such other Loan Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or
such other Loan Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the Agent. To
the extent any provision of this Agreement permits action by the Agent, the
Agent shall, subject to the provisions of Section 14.10 and this Article XIII,
take such action if directed in writing to do so by the Required Lenders.
SECTION 13.2. Delegation of Duties. The Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-
fact selected by it with reasonable care.
SECTION 13.3. Exculpatory Provisions. Neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or the other Loan
Documents (except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or the other Loan Documents or in
any certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, this Agreement or
the other Loan Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or for any failure of the Borrower to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement, or to inspect
the properties, books or records of the Borrower.
SECTION 13.4. Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed,
58
65
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the Agent. The Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless such Note shall have been transferred in accordance with Section 14.9.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement and the other Loan Documents unless it shall first receive
such advice or concurrence of the Required Lenders as it deems appropriate or
it shall first be indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action except for its own gross negligence or
willful misconduct. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the Notes in accordance
with a request of the Required Lenders, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and
all future holders of the Notes.
SECTION 13.5. Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing 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, the Agent shall promptly give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by the Required Lenders; 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 Lenders.
SECTION 13.6. Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower or the other Loan
Parties, shall be deemed to constitute any representation or warranty by the
Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon
the Agent or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder or by the other Loan Documents, the Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, financial and
other condition or creditworthiness of the Borrower which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
59
66
SECTION 13.7. Indemnification. The Lenders agree to indemnify the
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
the respective amounts of their Revolving Facility Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or
the other Loan Documents, or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's bad faith, gross negligence or willful misconduct. The agreements in
this subsection shall survive the payment of the Notes and all other amounts
payable hereunder.
SECTION 13.8. Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though the Agent were not the Agent
hereunder. With respect to Loans made or renewed by it and any Note issued to
it, the Agent shall have the same rights and powers under this Agreement and
the other Loan Documents as any Lender and may exercise the same as though it
were not the Agent, and the terms "Lender" and "Lenders" shall include the
Agent in its individual capacity.
SECTION 13.9. Successor Agent. The Agent may resign as Agent upon
ten days' notice to the Lenders, and the Required Lenders may remove the Agent
as Agent upon ten days' notice to the Agent. If the Agent shall resign or be
removed as Agent under this Agreement, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders which successor agent
shall be approved by the Borrower (which approval shall not be unreasonably
withheld), whereupon such successor agent shall succeed to the rights, powers
and duties of the Agent, and the term "Agent" shall mean such successor agent
effective upon its appointment, and the former Agent's rights, powers and
duties as Agent shall be terminated, without any other or further act or deed
on the part of such former Agent or any of the parties to this Agreement or any
holders of the Notes. After any Agent's resignation or removal hereunder as
Agent, the provisions of Section 13.7 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
60
67
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1. Notices.
(a) Method of Communication. Except as specifically provided in
this Agreement or in any of the Loan Documents, all notices and the
communications hereunder and thereunder shall be in writing, or by telephone
subsequently confirmed in writing. Notices in writing shall be delivered
personally or sent by certified or registered mail, postage pre-paid, or by
facsimile, and shall be deemed received, in the case of personal delivery, when
delivered, in the case of mailing, on the third day after mailing, and in the
case of a facsimile upon confirmation of receipt. A telephonic notice to the
Agent as understood by the Agent will be deemed to be the controlling and
proper notice in the event of a discrepancy with or failure to receive a
confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it
at the following addresses, or any other address of which all the other parties
are notified in writing.
If to the Borrower: CMI Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to a Lender: To the address specified on such
Lender's signature page hereto.
(c) Agent's Office. The Agent hereby designates its office located
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or any subsequent office
which shall have been specified for such purpose by written notice to the
Borrower, as the office to which payments due are to be made and at which Loans
will be disbursed.
SECTION 14.2. Expenses.
(a) The Borrower will pay all out-of-pocket expenses of the Agent,
the Lenders and each Affiliate of the Lenders (other than expenses in
connection with an assignment pursuant to Section 14.9) in connection with
(i) the preparation, execution and delivery of this
Agreement and each of the Loan Documents, whenever the same shall be
executed and delivered, including appraisers fees, search fees,
recording fees, taxes and the reasonable fees and disbursements of
counsel for the Agent, and of each local counsel retained by the
Agent,
61
68
(ii) the preparation, execution and delivery of any
waiver, amendment or consent by the Agent or the Lenders
relating to this Agreement or any of the Loan Documents
including fees and disbursements of counsel for the Lenders
or any such Affiliate actually incurred, search fees,
recording fees, taxes imposed in connection therewith and
title insurance premiums,
(iii) if reasonable under the circumstances,
consulting with one or more Persons, including appraisers,
accountants and lawyers, concerning or related to the nature,
scope or value of any right or remedy of the Lenders or any
Affiliate of the Lenders hereunder or under any of the Loan
Documents, including any review of factual matters in
connection therewith, which expenses shall include the fees
and disbursements of such Persons, and
(iv) prosecuting or defending any claim (other than
a claim arising from the negligence of the Agent or the
Lenders) in any way arising out of, related to, connected
with, or enforcing any provision of, this Agreement or any of
the Loan Documents, which expenses shall include the fees and
disbursements of counsel and of experts and other consultants
retained by the Lenders or any Affiliate of the Lenders.
(b) The Borrower will pay to the Agent an amount determined
by the Agent to be the reasonable charge for all services provided by
the Agent's auditors in connection with any review or examination of
the Collateral.
SECTION 14.3. Stamp and Other Taxes. The Borrower will pay any and all
stamp, registration, recordation and similar taxes, fees or charges and shall
indemnify the Lenders against any and all liabilities with respect to or
resulting from any delay in the payment or omission to pay any such taxes, fees
or charges which may be payable or determined to be payable in connection with
the execution, delivery, performance or enforcement of this Agreement and any
of the Loan Documents or the perfection of any rights or security interest
thereunder.
SECTION 14.4. Setoff. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the
continuance thereof, the Lenders, any Affiliates of the Lenders and any
assignee of a Lender in accordance with Section 14.9 are hereby authorized by
the Borrower at any time or from time to time, without notice to the Borrower
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and to apply any and all deposits (general or special,
time or demand, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured, excluding government
securities required by Applicable Law to be held as securities for worker's
compensation and similar claims) and any other indebtedness at any time held or
owing by the Lenders or any Affiliate of the Lenders or any participant to or
for the credit or the account of the Borrower against and on account of the
Secured Obligations (applied to current Secured Obligations first) irrespective
or whether or not:
62
69
(a) the Lenders shall have made any demand under this
Agreement or any of the Loan Documents; or
(b) the Agent shall have declared any or all of the Secured
Obligations to be due and payable as permitted by Section 12.2 and
although such Secured Obligations shall be contingent or unmatured.
SECTION 14.5. Litigation. THE BORROWER, THE AGENT AND THE LENDERS
HEREBY AGREE THAT THE FEDERAL COURT OF THE NORTHERN DISTRICT OF GEORGIA OR, AT
THE OPTION OF THE LENDERS, ANY COURT IN WHICH THE LENDERS SHALL INITIATE LEGAL
OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE
MATTER IN CONTROVERSY AND WHICH SITS IN A JURISDICTION IN WHICH THE BORROWER
TRANSACTS BUSINESS, SHALL HAVE NONEXCLUSIVE JURISDICTION TO HEAR AND DETERMINE
ANY CLAIMS OR DISPUTES AMONG THE AGENT, THE BORROWER, AND THE LENDERS,
PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE LOAN DOCUMENTS OR TO
ANY MATTER ARISING THEREFROM. THE BORROWER EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH
COURTS, HEREBY WAIVING PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER
PROCESS OR PAPERS ISSUED THEREIN AND AGREEING THAT SERVICE OF SUCH SUMMONS AND
COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO THE BORROWER AT THE ADDRESS SET FORTH IN SECTION 14.1(B). THE
EXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO
PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH FORUM OR THE TAKING
OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY APPROPRIATE
JURISDICTION.
SECTION 14.5A Waiver Of Trial By Jury. EACH PARTY HERETO ACKNOWLEDGES
THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY
OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT.
ACCORDINGLY, EACH OF THE LENDERS, THE AGENT AND THE BORROWER HEREBY WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR
TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST THE BORROWER ARISING
OUT OF THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT OR IN CONNECTION
WITH THE COLLATERAL OR ANY SECURITY INTEREST, LIEN OR ASSIGNMENT THEREOF OR BY
REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE BORROWER,
THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE.
SECTION 14.6. Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Agent for the ratable benefit of the Lenders or the
Agent receives any payment or proceeds of the Collateral for the Borrower's
benefit, which payment(s) or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set
63
70
aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the Secured
Obligations or part thereof intended to be satisfied shall be revived and
continued in full force and effect, as if such payment or proceeds had not been
received by the Agent.
SECTION 14.7. Injunctive Relief. The Borrower recognizes that, in the
event the Borrower fails to perform, observe or discharge any of its
obligations or liabilities under this Agreement, any remedy of law may prove to
be inadequate relief to the Lenders; therefore, the Borrower agrees that the
Lenders, at the Lenders' option, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
SECTION 14.8. Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower to determine whether it is in compliance with any covenant contained
herein, shall, except as otherwise expressly contemplated hereby or unless
there is an express written direction by the Agent to the contrary agreed to by
the Borrower, be performed in accordance with GAAP.
SECTION 14.9. Successors and Assigns; Participations.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Agent, all future holders of
the Notes, and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of
each Lender. For purposes of this Section 14.9(a), any Change in
Control of the Borrower shall be deemed to be an assignment hereunder.
(b) Each Lender may, with the consent of the Borrower, which
consent shall not be unreasonably withheld, assign to one or more
Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including, without limitation, all
or a portion of the Loans at the time owing to it and the Notes held
by it); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Lender's
rights and obligations under this Agreement, (ii) the Revolving
Facility Percentage Amount so assigned shall not be less than
$10,000,000, (iii) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the
Register, defined hereinbelow, an Assignment and Acceptance in the
form of Exhibit D, together with any Note or Notes subject to such
assignment and such assignee's pro rate share of Agent's syndication
expenses, (iv) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with
the Securities and Exchange Commission or apply to or qualify the
Loans or the Notes under the blue sky laws of any state and (v) the
representation contained in Section 14.23 hereof shall be true with
respect to any such proposed assignee. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution thereof, (x) the assignee
64
71
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (y) the Lender assignor thereunder shall, to the extent provided in such
assignment, be released from its obligations under this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such
Lender assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity. enforceability, genuineness, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant hereto; (ii) such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 6.1 (m) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such Lender
assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the Agent
by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders and the Revolving Facility Percentage of, and
principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may treat each
person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Eligible Assignee together with any Note or Notes
subject to such assignment and the written consent to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and is in the
form of Exhibit D,
65
72
(i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register, (iii) give prompt notice thereof to the
Lenders and the Borrower, and (iv) promptly deliver a copy of such Acceptance
and Assignment to the Borrower. Within five Business Days after receipt of
notice, the Borrower shall execute and deliver to the Agent in exchange for the
surrendered Note or Notes a new Note or Notes to the order of such Eligible
Assignee in amounts equal to the Revolving Facility Percentage Amount assumed
by it pursuant to such Assignment and Acceptance and a new Note or Notes to the
order of the assigning Lender in an amount equal to the commitments retained by
it hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes,
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes delivered to the
assignor Lender. Each surrendered Note or Notes shall be cancelled and returned
to the Borrower.
(f) Each Lender may, without the consent of the Borrower, sell
participations to one or more banks or other entities in all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its commitments hereunder and the Loans owing to it and the
Notes held by it); provided, however, that (i) each such participation shall be
in an amount not less than $10,000,000, (ii) such Lender's obligations under
this Agreement (including, without limitation, its commitments hereunder) shall
remain unchanged, (iii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iv) such Lender
shall remain the holder of the Notes held by it for all purposes of this
Agreement, (v) the Borrower, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, including the approval of waivers
or amendments which would reduce the principal of or the interest rate on any
Loan, extend the term or increase the amount of the commitments of such
participant, reduce the amount of any fees to which such participant is
entitled, extend any scheduled payment date for principal or release Collateral
securing the Loans (other than Collateral sold in the ordinary course of
business), and (vi) any such disposition shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission to apply to qualify the Loans or the Notes
under the blue sky law of any state.
(g) Any Lender may, in connection with any assignment, proposed
assignment, participation or proposed participation pursuant to this Section
14.9, disclose to the assignee, participant, proposed assignee or proposed
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
each such assignee, proposed assignee, participant or proposed participant
shall agree with the Borrower or such Lender (which in the case of an agreement
with only such Lender, the Borrower shall be recognized as a third party
beneficiary thereof) to preserve the confidentiality of any confidential
information relating to the Borrower received from such Lender.
SECTION 14.10. Amendments.
66
73
(a) Except as set forth in subsection (b) below, any term,
covenant, agreement or condition of this Agreement or any of the Loan Documents
may be amended or waived, and any departure therefrom may be consented to by
the Required Lenders, if, but only if, such amendment, waiver or consent is in
writing signed by the Required Lenders and, in the case of an amendment, by the
Borrower, and in any such event, the failure to observe, perform or discharge
any such term, covenant, agreement or condition (whether such amendment is
executed or such waiver or consent is given before or after such failure) shall
not be construed as a breach of such term, covenant, agreement or condition or
as a Default or an Event of Default. Unless otherwise specified in such waiver
or consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.
(b) No amendment, consent or waiver shall affect the amount or
extend the time of the obligation of the Lenders to make Loans or extend the
originally scheduled time or times of payment of the principal of any Loan or
alter the time or times of payment of interest on any Loan or the amount of the
principal thereof or the rate of interest thereon or permit any subordination
of the principal or interest on such Loan or amend the provisions of Article 11
or of this Section 14.10(b), and no Collateral shall be released by the Agent
other than as specifically permitted in this Agreement and the Borrowing Base
shall not be amended without the prior unanimous written consent of the
Lenders.
SECTION 14.11. Performance of Borrower's Duties. The Borrower's
obligations under this Agreement and each of the Loan Documents shall be
performed by the Borrower at its sole cost and expense.
SECTION 14.12. Indemnification. The Borrower agrees to reimburse
the Agent and the Lenders for all reasonable costs and expenses, including
counsel fees and disbursements, incurred, and to indemnify and hold the Lenders
harmless from and against all losses suffered by, the Agent and the Lenders in
connection with
(i) the exercise by the Lenders of any right or remedy
granted to them under this Agreement or any of the Loan Documents,
(ii) any claim, and the prosecution or defense thereof,
arising out of or in any way connected with this Agreement or any of
the Loan Documents,
(iii) collection or enforcement of the Secured Obligations or
any of them, and
(iv) failure or refusal of any Lender to issue, renew or
reissue any Letter of Credit requested by the Borrower.
provided, however, that the Borrower shall not be obligated to reimburse the
Agent or the Lenders for costs and expenses, or indemnify the Agent or the
Lenders for any loss, resulting from the negligence of the Agent or the
Lenders.
67
74
SECTION 14.13. All Powers Coupled with Interest. All powers of
attorney and other authorizations granted to the Lenders, the Agent and any
Persons designated by the Lenders pursuant to any provisions of this Agreement
or any of the Loan Documents shall be deemed coupled with an interest and shall
be irrevocable so long as any of the Secured Obligations remain unpaid or
unsatisfied or the Revolving Credit Facility has not been terminated.
SECTION 14.14. Survival. Notwithstanding any termination of this
Agreement,
(a) except to the extent otherwise provided by Section 2.6,
until all Secured Obligations (other than the indemnification
obligations provided for in Section 14.12) have been paid in full and
the Revolving Credit Facility terminated, the Lenders shall retain
the Security Interest and shall retain all rights under this Agreement
and each of the Security Documents with respect to such Collateral as
fully as though this Agreement had not been terminated, and
(b) the indemnities to which the Agent and the Lenders are
entitled under the provisions of this Article 14 and any other
provision of this Agreement and the Loan Documents shall continue in
full force and effect and shall protect the Agent and the Lenders
against events arising after such termination as well as before.
SECTION 14.15. Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
SECTION 14.16. Severability of Provisions. Any provision of this
Agreement or any Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or enforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 14.17. Governing Law. This Agreement and the Notes shall be
construed in accordance with and governed by the law of the State of Georgia
without giving effect to the conflicts of laws principles thereof.
SECTION 14.18. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and shall be binding upon all parties, their successors and assigns, and all of
which taken together shall constitute one and the same agreement.
SECTION 14.19. Reproduction of Documents. This Agreement, each of the
Loan Documents (other than the Notes) and all documents relating thereto,
including, without limitation, (a) consents, waivers and modifications that may
hereafter be executed, (b) documents received by the Agent or the Lenders, and
(e) financial statements, certificates and other information previously or
hereafter furnished to the Lenders, may be reproduced by the Agent or the
Lenders by any photographic, photostatic, microcard, microfilm, miniature
photographic or other similar process, and such Person may destroy any original
document so produced. Each
68
75
party hereto stipulates that, to the extent permitted by Applicable Law, any
such reproduction shall be as admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original shall be
in existence and whether or not such reproduction was made by the Agent or such
Lender in the regular course of business), and any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION 14.20. Term of Agreement. This Agreement shall remain in
effect from the Agreement Date through the Termination Date and thereafter
until all Secured Obligations shall have been irrevocably paid and satisfied in
full. No termination of this Agreement shall affect the rights and obligations
of the parties hereto arising prior to such termination.
SECTION 14.21. Adjustments. If any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or if any Lender shall at any time receive any Collateral in respect
to its Loans (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 12(g) and (h), or
otherwise) in a greater proportion than any such payment to and Collateral
received by any other Lender, if any, in respect of such other Lender's Loans,
or interest thereon, such Benefitted Lender shall purchase for cash from the
other Lenders such portion of each such other Lender's Loan, or shall provide
such other Lenders with the benefits of any such Collateral, or the proceeds
thereof, as shall be necessary to cause such Benefitted Lender to share the
excess payment or benefits of such Collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned to
the extent of such recovery, but without interest. The Borrower agrees that
each Lender so purchasing a portion of another Lender's Loan may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
SECTION 14.22. Increased Capital. If any Lender determines that
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (having the force of law or, in
the opinion of counsel for the Lenders, required) affects or would affect the
amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender and that the amount of such capital is
increased by or based upon the existence of such Lender's agreement to lend
hereunder and other agreements of this type, then, such Lender shall notify
Borrower of such increase and of the basis upon which such amounts are deemed
payable. The Borrower shall pay to such Lender, from time to time as specified
by such Lender, additional amounts sufficient to compensate such Lender in the
light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such
Lender's agreement to lend hereunder; provided, however, that the Borrower
shall be obligated to pay to such Lender only those amounts which arise, accrue
or are attributable to the period beginning on the later of 120 days from the
date of such notice or the date on which such additional amounts become
applicable. A certificate as to such amounts submitted to the Borrower by such
Lender shall constitute prima facie evidence of such amounts.
69
76
SECTION 14.23. Representation of Lenders. Each Lender hereby
represents that it will make each Loan hereunder as a commercial loan for its
own account in the ordinary course of its business; provided, however, that
subject to Section 14.9 hereof, the disposition of the Notes or other evidence
of the Secured Obligations held by any Lender shall at all times be within its
exclusive control.
SECTION 14.24. Effect of Effectiveness of this Agreement. From and
after the Effective Date, all references in the Existing Loan Agreement or this
Agreement or in any other Loan Document (whether delivered pursuant to this
Agreement or pursuant to the Existing Loan Agreement) to "this Agreement" or
the "Loan Agreement," and the words "herein," "hereof' and words of like import
referring to the Existing Loan Agreement or this Agreement, shall mean and be
references to the Existing Loan Agreement as amended and restated in its
entirety by this Agreement and all references in the Existing Loan Agreement or
this Agreement, in any other Loan Document (whether delivered pursuant to this
Agreement or pursuant to the Existing Loan Agreement) or in any Note to a
"Revolving Credit Note," a "Note" and the words "hereof," "herein" and words of
like import referring to any Note, shall mean and be references to the Amended
and Restated Revolving Credit Notes in the form attached to this Agreement as
Exhibit A, appropriately completed and duly executed and delivered by the
Borrower.
70
77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers in several counterparts all as of
the day and year first written above.
BORROWER:
CMI INDUSTRIES, INC.
By:
--------------------------------
Title: Exec. Vice President and CFO
----------------------------
[Corporate Seal]
[Signatures continued on next page]
S-1
78
AGENT:
BANKBOSTON, N.A., as Agent
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
-----------------------------
Facility
Percentage
55.556% LENDER:
BANKBOSTON, N.A.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
-----------------------------
ADDRESS FOR NOTICE:
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signatures continued on next page]
S-2
79
Facility
Percentage
44.444% LENDER:
NATIONSBANK, N.A.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Senior Vice President
-----------------------------
ADDRESS FOR NOTICE:
NationsBank, N.A.
Corporate Plaza
100 North ▇▇▇▇▇ Street, 17th floor
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Final signature page to Loan and Security Agreement]
S-3
80
APPENDIX I
The following terms when used in the Agreement shall have the meanings
ascribed to them below:
"Account Debtor" means a Person who is obligated on a Receivable.
"Acquire" or "Acquisition", as applied to any Business Unit or
Investment means the acquiring or acquisition of such Business Unit or
Investment by purchase, exchange, issuance of stock or other securities, or by
merger, reorganization or any other method.
"Adjusted Average Availability" means, for any period, an amount
determined by dividing (i) the sum of the Availability in effect for each day
during such period plus the sum of 50% of the Swap Reserve in effect for each
day during such period by (ii) the number of days in such period.
"Affiliate" means, with respect to a Person, any other Person (other
than a Subsidiary) that, (a) directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such given Person, (b) directly or indirectly beneficially owns or holds fifty
percent (50%) or more of any class of voting stock of-such Person or any
Subsidiary of such Person, or (c) fifty percent (50%) or more of the voting
stock of which is directly or indirectly beneficially owned or held by such
Person or a Subsidiary of such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Agency Account" means an account of the Borrower maintained by it with
a Clearing Bank pursuant to an Agency Account Agreement.
"Agency Account Agreement" means an agreement among the Borrower, the
Agent and a Clearing Bank (if other than the Agent) concerning the collection of
payments which represent the proceeds of Receivables or of any other Collateral.
"Agent" means BankBoston, N.A., in its capacity as agent for the
Lenders and any successor agent appointed pursuant to Section 13.9 hereof.
"Agent's Office" means the office of the Agent specified in or
determined in accordance with the provisions of Section 14.1.
"Agreement" means the Loan and Security Agreement dated as of March 19,
1996 as amended and restated in its entirety by the Amended and Restated Loan
and Security Agreement dated as of May , 1999, to which the Borrower, the
Lenders and the Agent are parties, and all amendments, amendments and
restatements, modifications and supplements thereto and thereof.
"Agreement Date" means the date as of which the Agreement is dated.
1
81
"Applicable Law" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all governmental bodies or officials
and all orders and decrees of all courts and arbitrators.
"Applicable Margin" means (a) as to Base Rate Loans, 0% and (b) as to
Eurodollar Rate Loans, 1.25%, subject in each case to quarterly adjustment based
upon Funded Debt to EBITDA and Average Availability as of the most recent Margin
Adjustment Date in accordance with the matrix set forth below:
Adjusted
Funded Debt Average Base Rate Eurodollar Unused Commitment
to EBITDA Availability Loans Rate Loans Fee
----------- ------------ --------- ---------- -----------------
< 4.0 to 1 > $25,000,000 0% 1.00% .20
>= 4.0 to 1 > $25,000,000 0% 1.25% .25%
< 4.0 to 1 <= $25,000,000 0% 1.50% .35%
>= 4.0 to 1 <= $25,000,000 .25% 1.75% .50%
The Unused Commitment Fee provided for in Section 4.3(a) of the Agreement shall
be adjusted quarterly on the same date as any Applicable Margin is adjusted.
where
"Margin Adjustment Date" means the first day of the month
following the date the Borrower's quarterly financial statements and
the related compliance certificate are received for each Fiscal Quarter
ending after the Effective Date, delivered in accordance with the
provisions of Sections 10.1(b) and 10.2, that reflect Funded Debt to
EBITDA and Adjusted Average Availability corresponding to Applicable
Margins different from those in effect at the date of such receipt;
provided, that if such financial statements and related certificate are
not delivered on or before the due date specified in Sections 10.1(b)
and 10.2, then the Applicable Margins for the period from said due date
until the fifth Business Day after such financial statements and
related certificate are delivered shall be the highest rates provided
in the above matrix.
and
2
82
"Funded Debt to EBITDA" means the ratio as of the last day of
a specified Fiscal Quarter of (a) Funded Debt as of such day to (b)
EBITDA for the period of four consecutive Fiscal Quarters ended on such
day.
"Availability" means, at any time, (a) the lesser of (i) the Revolving
Facility Amount or (ii) the Borrowing Base then in effect, less (b) the
aggregate principal amount of all Revolving Credit Loans then outstanding.
"Average Availability" means, for any period, an amount determined by
dividing (i) the sum of the Availability in effect for each day during such
period, by (ii) the number of days in such period.
"Average Borrowings" means, for any period, an amount determined by
dividing (i) the sum of the Revolving Credit Loans outstanding on each day of
such period, by (ii) the number of days in such period.
"BankBoston" means BankBoston, N.A., a national banking association in
its capacity as a Lender.
"Base Rate" means at any time the rate of interest publicly announced
from time to time by BankBoston at its head office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ as its "base rate" as in effect at such time.
"Base Rate Loans" means Loans that bear interest based upon the Base
Rate.
"Beneficiary" means any third Person designated by the Borrower on
whose order payment is to be made under a Letter of Credit.
"Benefited Lender" shall have the meaning ascribed to it in Section
14.21 of the Agreement.
"Borrower" means CMI Industries, Inc., a Delaware corporation, and its
successors and assigns.
"Borrowing Base" means at any time an amount equal to the sum of:
(a) eighty-five percent (85%) of the face amount of Eligible
Receivables of the Borrower due and owing at such time, plus
(b) as to Eligible Inventory,
(i) fifty percent (50%) of the lesser of cost, determined
on a first-in-first-out or FIFO basis, and market value (as
determined in accordance with GAAP) of finished goods
inventory of the Borrower's Chatham Division (excluding any
finished goods of Chatham Fabrics, LLC) at such time, plus
(ii) sixty percent (60%) of the lesser of cost, determined on
a first in, first out or FIFO basis, and market value (as
3
83
determined in accordance with GAAP) of finished greige goods
inventory of the Borrower at such time, plus (iii) seventy
percent (70%) of the lesser of cost, determined on a first in,
first out or FIFO basis and market value of raw baled fiber
inventory of the Borrower at such time, plus (iv) fifty
percent (50%) of the lesser of cost, determined on a first in,
first out or FIFO basis and market value of other raw
materials of the Borrower at such time, plus (v) fifty percent
(50%) of the lesser of cost, determined on a first in, first
out or FIFO basis and market value of uninspected finished
fabric which is included in work in progress, less
(c) the aggregate Stated Amount of all Letters of Credit
outstanding at such time, less
(d) the Interest Rate Exposure Reserve, less
(e) the Swap Reserve.
The Agent may adjust the percentages set forth in clause (a) and clause (b)
above if, as a result of an examination, on-site review or other audit of the
Borrower's business performed by the Agent's in-house auditors from time to
time, the Agent reasonably determines that the quality or collectibility of the
Receivables or the Inventory is materially worse than the quality or
collectibility as of the date hereof. Any such adjustment shall be proportionate
to reflect the change in the Collateral quality or collectibility, and shall be
reversed by the Agent if the condition of the Collateral subsequently improves
so that the quality and collectibility of the Receivables or Inventory is
comparable to the quality and collectibility as of the date hereof. The Agent
shall give the Borrower 60 days' notice of any decrease in the percentages.
"Borrowing Base Certificate" means a certificate in the form attached
hereto as Exhibit B or in such other form as the Borrower and the Agent may
agree.
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Boston, Massachusetts are open for the conduct of a substantial
part of their commercial banking business; and (ii) with respect to all notices
and determinations in connection with, and payments of principal and interest
on, any Eurodollar Loan, any day that is a Business Day described in clause (i)
and that is also a day for trading by and between banks in Dollar deposits in
the London interbank market.
"Business Unit" means the assets constituting the business or a
division or operating unit thereof of any Person.
"Cash Collateral Account" means any deposit account or investment
account maintained by the Borrower with the Agent in which and in the property
in such account, the Agent has, for the benefit of the Lenders, a perfected,
first priority security interest.
4
84
"Change of Control" means any purchase or other acquisition of voting
securities of the Borrower, as a result of which any Person and its Affiliates
collectively beneficially own or control, directly or indirectly, more than
fifteen percent (15%) of the outstanding voting securities of the Borrower on a
fully diluted basis, if such Person was not a shareholder of the Borrower on the
date of the Agreement. For purposes of this definition, "shareholder" shall
include any Person holding an option to acquire voting securities of the
Borrower.
"Clearing Bank" means the Agent and any other banking institution with
which an Agency Account has been established pursuant to an Agency Account
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means and includes all of the Borrower's right, title and
interest in and to each of the following, wherever located and whether now or
hereafter existing or now owned or hereafter acquired or arising:
(a) all Receivables,
(b) all Inventory,
(c) all Contract Rights of the Borrower, unless the grant of the
Security Interest would violate the terms thereof,
(d) all rights of the Borrower as an unpaid vendor or lienor
(including, without limitation, stoppage in transit, replevin and reclamation)
with respect to such goods and other properties,
(e) all files, correspondence, computer programs, tapes, discs and
related data processing software, in each case owned by the Borrower, which
contain information identifying or pertaining to any of the Receivables or any
Account Debtor, or showing the amounts thereof or payments thereon or otherwise
necessary or helpful in the realization thereon or the collection thereof,
(f) any Cash Collateral Account and any and all cash and other property
deposited therein and any and all cash otherwise deposited with the Agent, any
Lender or any Affiliate thereof or which the Agent or any Lender is entitled to
retain or otherwise possess as collateral pursuant to the terms of the Agreement
or any of the Security Documents,
(g) all general intangibles of the Borrower, including, without
limitation, all tax refunds, trademarks, trade names, patents, patent
applications, trade secrets and proprietary information, and
(h) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items referred to in
this
5
85
definition, and any claims against third parties for loss of, damage
to or destruction of any or all of, the Collateral or for proceeds
payable under or unearned premiums with respect to policies of
insurance) in whatsoever form, including, but not limited to, cash,
negotiable instruments and other instruments for the payment of money,
chattel paper, security agreements and other documents.
"Contract Rights" means any rights (but not the obligations) of the
Borrower under contracts to which it is a party not yet earned by performance
and not evidenced by an instrument or chattel paper.
"Date of Issuance" means the date of issuance by the Designated Facing
Bank of a Letter of Credit under the Agreement.
"Default" means any of the events specified in Section 12.1 which with
the passage of time or giving of notice or both would constitute an Event of
Default.
"Designated Deposit Account" means a deposit account or accounts
maintained by the Borrower with BankBoston, or any other financial institution,
as from time to time designated by the Borrower by written notice to the Agent.
"Designated Facing Bank" means, as to each Letter of Credit, the Facing
Bank designated by the Borrower to issue such Letter of Credit.
"Dollar" and "$" means freely transferable United States dollars.
"Drawing" means a drawing by a Beneficiary under any Letter of Credit
made in the manner, and only in the manner, specified in such Letter of Credit
and accompanied by the documents, if any, and the draft required by such Letter
of Credit.
"EBIT" for any period means the consolidated net income of the
Borrower and its consolidated Subsidiaries for such period (without deduction of
income and franchise taxes) plus interest expense determined for the period in
accordance with GAAP.
"EBITDA" means, with respect to any specified period of consecutive
Fiscal Quarters, EBIT plus, without duplication, depreciation and amortization
expense of the Borrower and its consolidated Subsidiaries for such period, plus,
for any such period that includes the second Fiscal Quarter of Fiscal Year 1999,
an amount (such amount, the "Restructuring Charge") equal to the lesser of (i)
the amount of the non-recurring restructuring charges actually recorded in such
Fiscal Quarter minus the excess, if any, of such charges that are paid in cash
over $1,000,000 (such excess, the "excess cash restructuring charge") and (ii) $
10,000,000 minus the excess cash restructuring charge.
"Effective Date" means the later of:
(a) the Agreement Date; and
6
86
(b) the first date on which all of the conditions set forth in
Article 5 shall have been fulfilled or waived by the Lenders.
"Eligible Assignee" means (i) a commercial bank organized under the
laws of the United States, or any State thereof, having total assets in excess
of $100,000,000; (ii) a savings and loan association or savings bank organized
under the laws of the United States or any State thereof, having a net worth of
at least $50,000,000 calculated in accordance with GAAP; (iii) any Lender listed
on the signature page of the Agreement; and (iv) a non-financial institution
having total assets in excess of $1,000,000,000, provided in each case that the
representation contained in Section 14.23 hereof shall be applicable with
respect to such institution or Lender.
"Eligible Inventory" means Inventory which meets all of the following
requirements:
(a) such Inventory is owned by the Borrower, is subject to the
Security Interest, which is perfected as to such Inventory, and is
subject to no other Lien;
(b) if finished goods, such Inventory is in good condition and
meets all standards imposed by any governmental agency, or department
or division thereof, having regulatory authority over such goods, their
use or sale;
(c) such Inventory is currently usable or salable in the
normal course of the Borrower's business;
(d) such Inventory is located at one of the locations set
forth in the most recent Schedule of Inventory; and
(e) such Inventory does not constitute work in progress, other
than any uninspected finished fabric included in work in progress.
"Eligible Receivable" means a Receivable which meets all of the
following requirements:
(a) such Receivable is owned by the Borrower and represents a
bona fide transaction which requires no further act under any
circumstances on the part of the Borrower to make such Receivable
payable by the Account Debtor;
(b) such Receivable is not past due more than 60 days from the
due date of the original invoice;
(c) the goods the sale of which gave rise to such Receivable
were shipped or delivered to the Account Debtor on an absolute sale
basis, and not on a consignment sale basis, a guaranteed sale basis, a
sale or return basis, or on the basis of any other similar
understanding, and no material part of such goods has been returned or
rejected;
7
87
(d) such Receivable is not evidenced by chattel paper or an
instrument of any kind unless such chattel paper or instrument has been
delivered to and is in the possession of the Agent;
(e) the Account Debtor with respect to such Receivable is not
insolvent or the subject of any bankruptcy or insolvency proceedings of
any kind or of any other proceeding or action, threatened or pending,
which might have a Materially Adverse Effect on such Account Debtor;
(f) if such Receivable arises from the performance of
services, such services have been fully rendered;
(g) if the Account Debtor with respect thereto is located
outside of the United States of America (excluding for this purpose the
Commonwealth of Puerto Rico or Canada), the goods which gave rise to
such Receivable were shipped after receipt by the Borrower from the
Account Debtor of an irrevocable letter of credit, payable in the full
face amount of the face value of the Receivable in Dollars at a place
of payment located within the United States and the right to draw under
such letter of credit and to receive the proceeds of such drawing has
been duly and validly collaterally assigned by the Borrower to the
Agent;
(h) such Receivable is a valid, legally enforceable obligation
of the Account Debtor with respect thereto and is not subject to any
present, or contingent, and to the Borrower's knowledge no facts exist
which are the basis for any future, offset, deduction or counterclaim,
dispute or other defense on the part of such Account Debtor;
(i) such Receivable is subject to the Security Interest, which
is perfected as to such Receivable, and is subject to no other Lien
whatsoever other than a Permitted Lien;
(j) such Receivable is evidenced by an invoice or other
documentation customary to the Borrower's or a New Subsidiary's
business;
(k) such Receivable does not arise out of any transaction with
any Subsidiary or Affiliate of the Borrower other than as a result of a
purchase thereof by the Borrower pursuant to the New Subsidiary
Factoring Agreement;
(1) such Receivable is not subject to the Assignment of Claims
Act of 1940, as amended from time to time, or any Applicable Law now or
hereafter existing similar in effect thereto, as determined in the sole
discretion of the Agent, or to any provision prohibiting its assignment
or requiring notice of or consent to such assignment;
(m) the goods giving rise to such Receivable were not, at the
time of the sale thereof, subject to any Lien, except the Permitted
Liens;
8
88
(n) such Receivable is not owing by an Account Debtor or a
group of affiliated Account Debtors whose then-existing accounts owing
to the Borrower exceed in face amount 25% of the Borrower's total
Eligible Receivables; and
(o) the due date of the original invoice evidencing the
Receivable is not more than sixty days after the date of the invoice
(provided that up to $7,000,000 of Receivables may have due dates more
than sixty days after the dates of the invoices evidencing such
Receivables, and, provided such Receivables meet all other requirements
for eligibility, be deemed Eligible Receivables).
"Environmental Laws" means all federal, state, local and foreign laws
now or hereafter in effect relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes into the environment (including without
limitation ambient air, surface water, ground water, or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, removal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes, and any and
all regulations, notices or demand letters issued, entered, promulgated or
approved thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"Eurocurrency Liability" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Eurodollar Loan" means any Loan bearing interest at a rate determined
with reference to the Eurodollar Rate.
"Eurodollar Rate" means for each Interest Period for each Eurodollar
Loan a rate per annum equal to the rate per annum at which deposits in Dollars
are offered to the principal office of the Agent in London, England by prime
banks in the London interbank market at 10:00 a.m. (Boston time) two Business
Days before the first day of such Interest Period in an amount approximately
equal to the principal amount of such Eurodollar Loan and for a period
approximately equal to such Interest Period, divided by the result of 1 minus
the Eurodollar Reserve Percentage (expressed as a decimal).
"Eurodollar Reserve Percentage" for each Interest Period for each
Eurodollar Loan means the reserve percentage applicable during such Interest
Period (or if more than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) under regulations issued from time
to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other
9
89
marginal reserve requirement) for the Agent with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"Event of Default" means any of the events specified in Section 12.1.
provided that any requirement for notice or lapse of time or any other condition
has been satisfied.
"Excluded Transaction" means (a) any sale, issuance or other
disposition of voting securities registered under the Securities Act of 1933, as
amended; or (b) any sale, issuance or other disposition of voting securities to
any employee stock ownership trust created in connection with an employee stock
ownership plan or any other arrangement for the benefit of one or more employees
of the Borrower or any of its Subsidiaries.
"Existing Guaranties" means the Guaranties outstanding on the Agreement
Date to the extent set forth on Schedule 6.1 (h).
"Existing Indebtedness for Money Borrowed" means Indebtedness for Money
Borrowed issued and outstanding on the Agreement Date to the extent set forth on
Schedule 6.1 (h) and any renewals or extensions thereof, but not any increases
in principal amounts thereof outstanding on the date of such renewal or
extension.
"Existing Liens" means the Liens outstanding on the Agreement Date to
the extent set forth on Schedule 6.1 (g).
"Existing Loan Agreement" has the meaning set forth in the Preliminary
Statement.
"Expiration Date" means, as to any Letter of Credit, the date by which
the Beneficiary must have presented such Letter of Credit, drafts, and any
required documents for payment, acceptance, or negotiation in accordance with
the terms of such Letter of Credit, or if such Letter of Credit is extended to a
later date, such later date.
"Facing Bank" means either BankBoston or NationsBank, N.A.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"Financial Officer" means the chief financial or accounting officer of
the Borrower.
10
90
"Financing Lease" means (a) any lease of property, real or personal,
the obligations of which are capitalized on a balance sheet of the Borrower, and
(b) any such other lease to the extent that the then present value of the
minimum rental commitment thereunder should, in accordance with GAAP, be
capitalized on a balance sheet of the Borrower.
"Financing Statements" means the Uniform Commercial Code financing
statements executed and delivered by the Borrower to the Agent, naming the Agent
as "Secured Party" and the Borrower as "Debtor", filed in connection with the
Existing Loan Agreement or to be filed in connection with the Agreement.
"Fiscal Month" means each fiscal month of the Borrower.
"Fiscal Quarter" means each accounting period of the Borrower
consisting of three Fiscal Months constituting a fiscal quarter.
"Fiscal Year" means the fiscal year of the Borrower ending on the
Saturday closest to December 31.
"Fixed Charge Coverage Ratio' means, for any specified period of
consecutive Fiscal Quarters, the result obtained by dividing (i) the sum of
EBITDA plus tax refunds received in cash minus cash outlays for income taxes and
Capital Expenditures of the Borrower and its consolidated Subsidiaries for such
period by (ii) the sum of Interest plus scheduled principal payments on long
term Indebtedness (including scheduled payments of capitalized lease
obligations) of the Borrower and its consolidated Subsidiaries during such
period, provided that for purposes of this definition, for any Fiscal Quarter
ending on or prior to October 2, 1999 included in such specified period, Capital
Expenditures shall be deemed to be an amount equal to the lesser of (x) actual
Capital Expenditures of the Borrower and its consolidated Subsidiaries during
such Fiscal Quarter and (y) $1,250,000.
"Free Cash on Hand" means fully collected cash in the direct possession
of the Borrower or on deposit in an account of the Borrower, other than (i) cash
on deposit in an account to the extent the Borrower has, or will within three
Business Days have, outstanding drafts, checks, wire transfer instructions or
other orders to pay, drawn on or ordered with respect to such account; (ii) cash
on deposit in an account to the extent the Borrower has declared (but not paid)
a dividend as permitted hereby; (iii) funds on deposit in a payroll account of
the Borrower in the ordinary course of business; and (iv) funds withheld by the
Borrower from its employees for payroll or other withholding taxes or for
transmission to third parties.
"Funded Debt" means the aggregate outstanding principal amount of all
Indebtedness for Money Borrowed of the Borrower and its consolidated
Subsidiaries on a consolidated basis.
11
91
"GAAP" means generally accepted accounting principles consistently
applied and maintained throughout the period indicated and consistent with the
prior financial practice of the Person referred to.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
governmental bodies, whether federal, state, local, foreign national or
provincial, and all agencies thereof.
"Guaranty", "Guaranteed" or to "Guarantee" as applied to any
obligation of another Person means and includes
(a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business),
directly or indirectly, in any manner, of any part or all of such
obligation of such other Person, and
(b) an agreement, direct or indirect, contingent or otherwise,
and whether or not constituting a guaranty, the practical effect of
which is to assure the payment or performance (or payment of damages in
the event of nonperformance) of any part or all of such obligation of
such other Person by
(i) the purchase of securities or obligations,
(ii) the supplying of funds to or in any other manner
investing in the obligor with respect to such obligation, or
(iii) reimbursement obligations under any letter of credit
other than a Letter of Credit.
"Indebtedness" of any Person means, without duplication,
(a) all items (except items of capital stock, additional
paid-in capital or retained earnings, or of general contingency or
deferred tax reserves) which, in accordance with GAAP, would be
included in determining total liabilities as shown on the liability
side of a balance sheet of such Person as at the date as of which
Indebtedness is to be determined,
(b) all obligations for Money Borrowed or for the deferred
purchase price of property or services,
(c) all liabilities (including, during the noncancellable term
of any lease in the nature of a title retention agreement, all future
payment obligations under such lease discounted to their present value
in accordance with GAAP) secured by any Lien to which any property or
asset owned or held by such Person is subject, whether or not such
Person has assumed the liability or becomes liable for the payment
thereof, and
12
92
(d) in the case of the Borrower (without duplication) all
obligations under the Loans.
"Indenture" means that certain Indenture dated as of October 28, 1993
by and between Chemical Bank, as Trustee and the Borrower, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"Interest" means, with respect to any period, interest expense of the
Borrower and its consolidated Subsidiaries (other than interest due but not
payable on the Senior Subordinated Notes under the terms of the Indenture)
during such period, minus any amortization of debt issuance costs during such
period and minus any amounts received or accrued during such period by Borrower
or a Subsidiary pursuant to any interest cap, swap or collar agreement to which
Borrower or a Subsidiary is a party on the Agreement Date or thereafter.
"Interest Period" means, with respect to each Eurodollar Loan, the
period commencing on the date of such Loan, the continuation of any outstanding
Eurodollar Loan as, or conversion of any Base Rate Loan to, a Eurodollar Loan
and ending one, two, three, six or, if then available, twelve months thereafter,
as the Borrower may elect in the applicable Notice of
Borrowing/Conversion/Continuation; provided, however, that:
(i) any Interest Period (other than an Interest Period
determined pursuant to clause (iii) below) that would otherwise end on
a day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in the next
calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) below, end on the last Business
Day of a calendar month;
(iii) any Interest Period applicable to a Eurodollar Loan that
would otherwise end after the final maturity date of the Loan shall end
on said final maturity date; and
(iv) notwithstanding clause (iii) above, no Interest Period
shall have a duration of less than one month and if any applicable
Interest Period would be for a shorter period, such Interest Period
shall not be available hereunder.
"Interest Rate Exposure Reserve" means at any time an amount equal to
the aggregate of all IRPA Reserves then in effect.
"Interest Rate Protection Agreement" means any interest rate swap, cap
or collar agreement or similar arrangement between the Borrower and a Lender
selected by the
13
93
Borrower in its discretion providing for the transfer or mitigation of interest
rate risks either generally or under specific contingencies.
"Inventory" means and includes the following:
(a) all goods intended for sale or lease by the Borrower, or
for display or demonstration,
(b) all work in process,
(c) all raw materials and other materials, and supplies of
every nature and description used or which might be used in connection
with the manufacture, packing, shipping, advertising, selling, leasing
or furnishing of such goods or otherwise used or consumed in the
Borrower's business, and
(d) all documents evidencing and general intangibles relating
to any of the foregoing.
"Investment" means, with respect to any Person:
(a) any share of capital stock, evidence of Indebtedness or
other security issued by any other Person,
(b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person, excluding advances to
employees in the ordinary course of business for business expenses,
(c) any other investment in any other Person, and
(d) any commitment or option to make an Investment if, in the
case of an option, the consideration therefor exceeds $1000.
"IRPA Obligation" shall mean any amount due and owing by the Borrower
to a Lender pursuant to an Interest Rate Protection Agreement.
"IRPA Reserve" with respect to any Interest Rate Protection Agreement,
means an amount equal to the Borrower's estimated contingent liability
thereunder, as determined by the Lender that is the counterparty to such
Interest Rate Protection Agreement in accordance with such Lender's customary
methodology for similar agreements.
"Laurens FILOT" means (if consummated) the transaction between the
Borrower or a Restricted Subsidiary and Laurens County, South Carolina or a
related governmental entity, pursuant to which the Borrower or such Restricted
Subsidiary will pay to said County or such related governmental entity a fee in
lieu of taxes, which transaction may be accounted for as a sale-leaseback.
14
94
"Lender" means any Person that is a party to the Agreement as a
"Lender."
"Letter of Credit" means (i) any "Letter of Credit" as defined in the
Existing Loan Agreement and outstanding on the Effective Date and (ii) all
letters of credit issued by the Facing Banks for the account of the Borrower
pursuant to the provisions of Article III of the Agreement.
"Lien" as applied to the property of any Person means:
(a) any mortgage, deed to secure debt, deed of trust, lien,
pledge, charge, lease constituting a Financing Lease, conditional sale
or other title retention agreement, or other security interest,
security title or encumbrance of any kind in respect of any property of
such Person, or upon the income or profits therefrom,
(b) any arrangement, express or implied, under which any
property of such Person is transferred, sequestered or otherwise
identified for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person,
(e) any Indebtedness which is unpaid more than 60 days after
the same shall have become due and payable and which, if unpaid, might
by law (including, but not limited to, bankruptcy and insolvency laws),
or otherwise, be given any priority whatsoever over general unsecured
creditors of such Person, and
(d) the filing of, or any agreement to give, any financing
statement under the Uniform Commercial Code or its equivalent in any
jurisdiction.
"Loan" means any Revolving Credit Loan as well as all such loans
collectively as the context requires.
"Loan Documents" means, collectively, the Agreement, the Notes, the
Security Documents and each other instrument, agreement and document executed
and delivered by the Borrower in connection with the Agreement, the Letters of
Credit and each other instrument, agreement or document referred to therein or
contemplated thereby as such may be amended or supplemented from time to time.
"Lockbox" means the U.S. Post Office Box(es) specified in the Lockbox
Agreement.
"Lockbox Agreement" means the agreement between the Borrower and the
Agent or another Clearing Bank concerning the establishment of a Lockbox for the
collection of Receivables.
15
95
"Materially Adverse Effect" means, with respect to any Person, a
materially adverse effect upon such Person's business, assets, liabilities,
condition (financial or otherwise) or results of operations or business
prospects.
"Maximum Rate" shall have the meaning ascribed to it in Section 4.1(e).
"Money Borrowed" means, as applied to Indebtedness,
(a) Indebtedness for money borrowed,
(b) Indebtedness, whether or not in any such case the same was
for money borrowed,
(i) represented by notes payable, and drafts accepted,
that represent extensions of credit,
(ii) constituting obligations evidenced by bonds,
debentures, notes or similar instruments, or
(iii) upon which interest charges are customarily paid
(other than income taxes) or that was issued or assumed as
full or partial payment for property other than trade payables
in the ordinary course of business and payable in accordance
with customary trade terms, and
(c) Indebtedness that constitutes a Financing Lease.
"Multiemployer Plan" has the meaning set forth in Section 4001(a) (3)
of ERISA.
"Net Amount" means, with respect to any Investments made by any Person,
the gross amount of all such Investments minus the aggregate amount of all cash
received and the fair value, at the time of receipt by such Person, of all
property received or payments of principal or premiums, returns of capital,
liquidating liabilities or dividends, proceeds of sale or other dispositions
with respect to such Investments.
"Net Worth" means, with respect to any Person, such Person's total
shareholder's equity (including capital stock, additional paid-in capital and
retained earnings, after deducting treasury stock) which would appear as such on
a balance sheet of such Person prepared in accordance with GAAP, but shall in no
event include subordinated debt.
"New Subsidiary" means one of Chatham Fabrics, LLC, Elastic Fabrics of
America, LLC or Chatham Consumer Products, LLC, each a Delaware limited
liability company and each a Restricted Subsidiary wholly-owned, directly or
indirectly, by the Borrower.
"New Subsidiary Factoring Agreement" means each nonrecourse accounts
receivable purchase agreement between the Borrower and a New Subsidiary
providing for the purchase by the Borrower of Receivables of such New Subsidiary
from time to time
16
96
free of all Liens.
"Note" means each of the Revolving Credit Notes and "Notes" means more
than one of such notes.
"Notice of Borrowing/Conversion/Continuation" has the meaning set forth
in Section 4.2 of the Agreement.
"Outstanding" means, with respect to the Loans, the unpaid principal
amount thereof as of the date of determination.
"Patent Security Agreement" means that certain Patent Security
Agreement and Conditional Assignment dated as of March , 1996 executed and
delivered by the Borrower in favor of the Agent.
"Payment Date" means any date funds are disbursed under a Letter of
Credit by the Facing Bank to or on the order of a Beneficiary in response to a
drawing.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.
"Permitted Indebtedness" means Indebtedness for Money Borrowed
permitted by Section 11.2 of the Agreement.
"Permitted Investments" means:
(a) Investments of the Borrower or any Subsidiary in:
(i) cash and negotiable certificates of deposit, time
deposits and banker's acceptances issued by the Agent, any
Affiliate of the Agent, or by any United States bank or trust
company having capital, surplus and undivided profits in
excess of $100,000,000, and overnight commercial paper issued
by any such bank or trust company,
(ii) any direct obligation of the United States of America
or any agency or instrumentality thereof which has a remaining
maturity at the time of purchase of not more than one year and
repurchase agreements relating to the same,
(iii) sales on credit in the ordinary course of business,
(iv) notes, accepted in the ordinary course of business,
evidencing overdue accounts payable arising in the ordinary
course of business, and
(v) long-term government securities required to secure
obligations for worker's compensation, and
17
97
(b) Investments of the Borrower in:
(i) its Subsidiaries as in effect on the Effective
Date (as increased by earnings retention by such
Subsidiaries),
(ii) Acquisitions (i) to the extent that the consideration
is the Borrower's capital stock or (ii) which, in the
aggregate from the date of the Agreement, do not have a cost
in excess of $3,000,000. For purposes of this definition,
"cost" means the cash purchase price paid or the fair market
value of property contributed by the Borrower, plus any
liabilities (other than normal trade payables or accruals)
assumed or Guaranteed by the Borrower in the Acquisition. Any
indebtedness of any Unrestricted Subsidiary which is
Guaranteed by the Borrower or by any Restricted Subsidiary,
whether or not Guaranteed in connection with an Acquisition,
shall be deemed a "cost" incurred in an Acquisition for
purposes of this definition, and
(iii) loans, advances or extensions of credit to Chatham &
Borgstena, Inc., not to exceed $2,000,000 at any one time
outstanding.
"Permitted Liens" means:
(a) Liens securing taxes, assessments and other governmental
charges or levies (excluding any Lien imposed pursuant to any of the
provisions of ERISA) not yet due or as to which the period of grace
(not to exceed 60 days), if any, related thereto has not expired or
which are being contested in good faith and by appropriate proceedings
if adequate reserves are maintained on the books of the Borrower to the
extent required by GAAP,
(b) the claims of materialmen, mechanics, carriers,
warehousemen, processors or landlords for labor, materials, supplies or
rentals incurred in the ordinary course of business, (i) which are not
overdue for a period of more than 60 days or (ii) which are being
contested in good faith and by appropriate proceedings,
(c) Liens consisting of deposits or pledges made in the
ordinary course of business in connection with, or to secure payment
of, obligations under workers' compensation, unemployment insurance or
similar legislation,
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the
use of real property, which in the aggregate are not substantial in
amount and which do not, in any case, materially detract from the value
of such property or impair the use thereof in the ordinary conduct of
the business of the Borrower,
18
98
(e) Liens of the Agent for the benefit of the Lenders arising
under the Agreement and the Loan Documents,
(f) Liens arising out of or resulting from any judgment or
award, the time for the appeal or petition for rehearing of which shall
not have expired, or in respect of which the Borrower is fully
protected by insurance or in respect of which the Borrower shall at any
time in good faith be prosecuting an appeal or proceeding for a review
and in respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured, and as to which the
Borrower has established appropriate reserves or security,
(g) Liens securing Permitted Indebtedness, provided that such
Lien shall be confined solely to the item or items of property acquired
with the proceeds of such Indebtedness or which is or are the subject
of a Financing Lease permitted by Section 11.2(d) and such Lien shall
be on terms and conditions satisfactory to the Required Lenders,
(h) Liens in existence on the Effective Date and listed on
Schedule 6.1 (g), and
(i) Financing Statements filed by the Borrower, as purchaser,
against the New Subsidiaries, as sellers, in connection with the
acquisition by the Borrower of the Purchased Receivables.
"Person" means an individual, corporation, partnership, association,
trust or unincorporated organization, or a government or any agency or political
subdivision thereof.
"Plan" means an employee benefit plan maintained for employees of the
Borrower that is covered by Title IV of ERISA, including such plans as may be
established after the Agreement Date.
"Purchased Receivables" means Receivables purchased by the Borrower
from the New Subsidiaries from time to time pursuant to the New Subsidiary
Factoring Agreement at a purchase price not greater than the face amount
thereof.
"Receivables" means and includes
(a) any and all rights to the payment of money or other forms
of consideration of any kind classified under the Uniform Commercial
Code as accounts, chattel paper, accounts receivable, letters of credit
and the right to receive payment thereunder, insurance proceeds, notes,
drafts, instruments, and acceptances from any Person, and
(b) all Guaranties in favor of a Person, security and Liens
for payment thereof.
19
99
"Register" shall have the meaning ascribed to it in Section 14.9(d) of
the Agreement.
"Reportable Event" has the meaning set forth in Section 4043(b) of
ERISA, but shall not include a Reportable Event as to which the provision for 30
days' notice to the PBGC is waived under applicable regulations.
"Required Lenders" means, at any time, any combination of at least two
Lenders whose Revolving Facility Percentages aggregate at least 51%.
"Restricted Dividend Payment" means any dividend, distribution or
payment on or with respect to any shares of a Person's capital stock (other than
dividends payable solely in shares of its capital stock), other than a dividend,
distribution or payment by any Restricted Subsidiary to the Borrower or any
Restricted Subsidiary.
"Restricted Payment" means (a) any redemption or prepayment, prior to
the stated maturity thereof or prior to the due date of any regularly scheduled
installment or amortization payment with respect thereto, of any Indebtedness
that is junior and subordinate to the Loans, and (b) the payment by any Person
of the principal amount of or interest on any Indebtedness owing to a
shareholder of such Person (other than to the parent of such Person) or to any
Affiliate of any such shareholder.
"Restricted Purchase" means any payment on account of the purchase,
redemption or other acquisition or retirement of any shares of a Person's
capital stock (except shares acquired on the conversion thereof into other
shares of capital stock of such Person).
"Restricted Subsidiary" means any Subsidiary of the Borrower, whether
existing on or after the date of the Agreement, unless such Subsidiary is an
Unrestricted Subsidiary or is designated as an Unrestricted Subsidiary on the
date it becomes a Subsidiary.
"Restructuring Charge" has the meaning specified in the definition
"EBITDA".
"Revolving Credit Facility" means $45,000,000.
"Revolving Credit Loans" means the "Revolving Credit Loans" made
pursuant to the Existing Loan Agreement and outstanding on the Effective Date
and the loans made to the Borrower pursuant to Section 2.1 of the Agreement.
"Revolving Credit Notes" means the separate Amended and Restated
Revolving Credit Notes made by the Borrower payable to the order of each of the
Lenders evidencing the obligation of the Borrower to pay such Lender's Revolving
Facility Percentage of the Revolving Credit Facility or, if less, the aggregate
unpaid principal amount of all Revolving Credit Loans made and to be made to it
by such Lender, plus interest thereon (and any promissory note or notes that may
be issued from time to time in substitution, renewal, extension, replacement or
exchange therefor, whether payable to
20
100
such Lender or a different Lender, whether issued in connection with a Person
becoming a Lender after the Effective Date or otherwise) substantially in the
form of Exhibit A to the Agreement, with all blanks properly completed, either
as originally executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or refinanced.
"Revolving Facility Amount" means $45,000,000, as reduced pursuant to
the provisions of Section 2.6 of the Agreement, less the sum of (a) the Stated
Amount of any outstanding Letter of Credit from time to time and the amount of
any unreimbursed Drawing under any Letters of Credit, (b) the Interest Rate
Exposure Reserve and (c) the Swap Reserve.
"Revolving Facility Percentage" means, as to any Lender, the percentage
of the Revolving Credit Facility obtained by dividing such Lender's Revolving
Facility Percentage Amount by the Revolving Credit Facility as such percentage
is set forth opposite such Lender's name on the signature pages hereof
"Revolving Facility Percentage Amount" means: as to BankBoston,
$25,000,000, and as to NationsBank, N.A., $20,000,000, or such other amount as
may from time to time be reflected on the records of the Agent as a result of an
assignment by a Lender pursuant to Section 14.9 hereof.
"Schedule of Inventory" means a schedule delivered by the Borrower to
the Agent pursuant to the provisions of Section 8.11(b).
"Schedule of Receivables" means a schedule delivered by the Borrower to
the Agent pursuant to the provisions of Section 8.11(a).
"Secured Obligations" means, in each case, whether now in existence or
hereafter arising,
(a) the principal of, and interest and premium, if any, on the
Revolving Credit Loans,
(b) the aggregate Stated Amount of all outstanding Letters of
Credit,
(c) the principal of, and interest and premium, if any, on the
amounts advanced under any Letter of Credit,
(d) amounts due to any Lender under any Interest Rate
Protection Agreement or to any Swap Counterparty, and
(e) all other indebtedness, loans, liabilities, financial
accommodations, obligations, covenants and duties owing by the Borrower
to the Lenders or to the Agent, of every kind, nature and description,
direct or indirect, absolute or contingent, due or to become due,
contractual or tortious, liquidated or
21
101
unliquidated, and whether or not evidenced by any note, and whether or
not for the payment of money under or in respect of the Agreement, any
Note, or any of the other Loan Documents.
"Security Documents" means each of the following:
(a) the Financing Statements;
(b) the Trademark Security Agreement;
(c) the Patent Security Agreement; and
(d) each other writing executed and delivered by the Borrower
or other Person pursuant to which the Borrower or such Person grants to
the Agent for the benefit of the Lenders a lien or encumbrance on real
or personal property to secure the payment and/or performance of the
Secured Obligations or pursuant to which such Person guaranties the
payment and/or performance of the Secured Obligations.
"Security Interest" means the Liens in favor of the Agent for the
benefit of the Lenders on and in the Collateral effected hereby or by any of the
Security Documents or pursuant to the terms hereof or thereof.
"Stated Amount" means at any time the amount available to be drawn by a
Beneficiary under a Letter of Credit outstanding under the Agreement from time
to time, as the Stated Amount of any such Letter of Credit may be increased or
reduced from time to time in accordance with the terms of such Letter of Credit.
"Senior Subordinated Notes" means the Securities as such term is
defined in the Indenture.
"Subsidiary"
(a) when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of 50% or more of
the stock of any class or classes or 50% or more of other ownership
interests is owned of record or beneficially by such other Person, or
by one or more Subsidiaries of such other Person, or by such other
Person and one or more Subsidiaries of such Person,
(i) if the holders of such stock, or other ownership
interests, are ordinarily, in the absence of contingencies,
entitled to vote for the election of a majority of the
directors (or other individuals performing similar functions)
of such Person, even though the right so to vote has been
suspended by the happening of such a contingency, or (B) are
entitled, as such holders, to vote for the election of a
majority of the directors (or individuals performing similar
functions) of such Person,
22
102
whether or not the right so to vote exists by reason of the
happening of a contingency, or
(ii) in the case of such other ownership interests, if
such ownership interests constitute a majority voting
interest, and
(b) when used with respect to a Plan, ERISA or a provision of
the Code pertaining to employee benefit plans, also means any
corporation, trade or business (whether or not incorporated) which is
under common control with the Borrower and is treated as a single
employer with the Borrower under Section 414(b) or (c) of the Code and
the regulations thereunder.
"Swap" means any derivative or capital markets transaction entered
into between the Borrower and a Lender designed to maximize the total rate of
return to the Borrower on a portion of the Senior Subordinated Notes through a
combination of an interest rate swap and a hedge on the price of said Notes,
PROVIDED THAT such hedging arrangements shall not cover more than $15,000,000 in
aggregate principal amount of said Notes.
"Swap Counterparty" means with respect to any Swap, the Lender party
thereto.
"Swap Obligation" means any amount due and owing by the Borrower to a
Swap Counterparty.
"Swap Reserve" means, with respect to all Swaps, the sum of the
reserves determined by the relevant Swap Counterparties, each as specified in
the relevant Swap documents or, if not so specified, in accordance with its
customary methodology for similar agreements and, when used with respect to any
single Swap, means the amount of the reserve determined by the Swap Counterparty
thereto, provided that in no event shall the reserve with respect to any Swap
exceed 100% of the face amount of the Senior Subordinated Notes covered thereby.
"Taxes Paid" means, with respect to any period, the amount of income
taxes due and actually paid during such period.
"Termination Date" means March 31, 2002 or such earlier date as all
Secured Obligations shall have been irrevocably paid in full and the Revolving
Credit Facility terminated or such later date to which the same may be extended
by agreement of the Borrower and all of the Lenders.
"Termination Event" means
(a) a Reportable Event,
(b) the filing of a notice of intent to terminate a Plan or
the treatment of a Plan amendment as a termination under Section 4041
of ERISA, or
23
103
(c) the institution of proceedings to terminate a Plan by the
PBGC under Section 4042 of ERISA or the appointment of a trustee to
administer any Plan.
"Total Liabilities" means, as to any Person, the aggregate amount
(excluding capital stock, additional paid-in capital and retained earnings)
which should properly be classified as liabilities of such Person in accordance
with GAAP, less the sum of cash and deferred taxes, determined in accordance
with GAAP.
"Trademark Security Agreement" means that certain Trademark Security
Agreement and Conditional Assignment dated as of March , 1996 and executed by
the Borrower in favor of the Agent.
"Unfunded Vested Accrued Benefits" means, with respect to any Plan at
any time, the amount (if any) by which
(a) the present value of all vested nonforfeitable benefits
under such Plan exceeds
(b) the fair market value of all Plan assets allocable to such
benefits, as determined using such reasonable actuarial assumptions and
methods as are specified in the Schedule B (Actuarial Information) to
the most recent Annual Report (Form 5500) filed with respect to such
Plan.
"Unrestricted Subsidiary" means (i) any Subsidiary that at the time of
determination will be designated an Unrestricted Subsidiary by the Borrower as
provided below, (ii) any Subsidiary of an Unrestricted Subsidiary, and (iii)
Clinton Mexico, Inc., Chatham & Borgstena, Inc., Chatham Real Properties, Inc.,
and North American Lace Co., Inc. The Borrower may designate any Subsidiary as
an Unrestricted Subsidiary so long as (a) neither the Borrower nor any
Restricted Subsidiary is directly or indirectly liable for any Indebtedness of
such Subsidiary, (b) no default with respect to any Indebtedness of such
Subsidiary would permit (upon notice, lapse of time or otherwise) any holder of
any other Indebtedness of the Borrower or any Restricted Subsidiary to declare a
default on such other Indebtedness or cause the payment thereto to be
accelerated or payable prior to its stated maturity and (c) neither the Borrower
nor any Restricted Subsidiary has made an Investment in such Subsidiary unless
such Investment was permitted under Section 9.2; provided, however, that with
respect to clause (a) the Borrower or a Restricted Subsidiary may be liable for
Indebtedness of an Unrestricted Subsidiary if (x) such liability resulted in an
Investment permitted under Section 11.4 at the time of incurrence or (y) the
liability is permitted under Section 11.4 at the time of designation of such
Unrestricted Subsidiary. Any such designation by the Borrower shall be evidenced
to the Agent by filing a notice with the Agent giving effect to such
designation. The Borrower may designate any Unrestricted Subsidiary as a
Restricted Subsidiary if, immediately after giving effect to such designation,
there would be no Default or Event of Default under the Agreement.
24
104
"Unused Commitment Fee" has the meaning specified in Section 4.3 of the
Agreement.
"Year 2000 Compliant" means, as to any computer application, that such
computer application will not be negatively affected by the Year 2000 Problem
and that such computer application is reasonably expected on a timely basis to
be able to properly recognize and perform date-sensitive functions for all dates
prior to, on and after January 1, 2000.
"Year 2000 Problem" means the risk that computer applications used by
the Borrower or any of its Subsidiaries (including those affected by any
suppliers, vendors or customers of the foregoing), or with which the Borrower's
or such Subsidiaries' data processing systems communicate electronically may be
unable to recognize properly and perform date-sensitive functions involving
dates prior to, on or after January 1, 2000.
25
105
EXHIBIT 10.2
AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$20,000,000 Atlanta, Georgia
May 28, 1999
FOR VALUE RECEIVED, the undersigned, CMI INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of BANKBOSTON, NA (the "Lender") at the offices of BANKBOSTON, NA, as
agent for the Lenders (together with its successor agents, the "Agent") located
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place
within the United States as shall be designated from time to time by the Agent,
on the Termination Date, the principal amount of TWENTY-FIVE MILLION AND NO/100
DOLLARS ($25,000,000), or such lesser principal amount as may then constitute
the aggregate unpaid balance of all Revolving Credit Loans made by the Lender to
the Borrower pursuant to the Loan Agreement (as hereinafter defined), in lawful
money of the United States of America in federal or other immediately available
funds.
The Borrower also unconditionally promises to pay interest on the
unpaid principal amount of this Note outstanding from time to time for each day
from the date hereof until such principal amount is paid in full at the rates
per annum and on the dates specified in the Loan Agreement applicable from time
to time in accordance with the provisions thereof. Nothing contained in this
Note or in the Loan Agreement shall be deemed to establish or require the
payment of a rate of interest in excess of the maximum rate permitted by any
Applicable Law. In the event that any rate of interest required to be paid
hereunder exceeds the maximum rate permitted by Applicable Law, the provisions
of the Loan Agreement relating to the payment of interest under such
circumstances shall control.
This Amended and Restated Revolving Credit Note constitutes an
amendment and restatement of that certain Revolving Credit Note dated March 19,
1996 made by the Borrower in favor of the Lender in the original principal
amount of $34,782,400, and is issued by the Borrower in exchange for and
substitution for such Revolving Credit Note, but not in extinguishment of the
Indebtedness evidenced by such Note.
This Note is one of the Amended and Restated Revolving Credit Notes
referred to in that certain Amended and Restated Loan and Security Agreement
dated as of May 28, 1999 (as amended, modified, supplemented or restated from
time to time, the "Loan Agreement"; terms defined in the Loan Agreement being
used herein as therein defined) among the Borrower, the Lender, the other
financial institutions party thereto from time to time as "Lenders" and the
Agent, is subject to, and entitled to, all provisions and benefits of the Loan
Documents, is secured by the Collateral and other property as provided in the
Loan Documents, is subject to optional and mandatory prepayment in whole or in
part and is subject to acceleration prior to
106
Presentment for payment, demand, protest and notice of demand, notice
of dishonor, notice of non-payment and all other notices are hereby waived by
the Borrower, except to the extent expressly provided in the Loan Agreement. No
failure to exercise, and no delay in exercising, any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.
The Borrower hereby agrees to pay on demand all costs and expenses
incurred in collecting the Secured Obligations hereunder or in enforcing or
attempting to enforce any of the Lender's rights hereunder, including, but not
limited to, reasonable attorneys' fees and expenses actually incurred if
collected by or through an attorney, whether or not suit is filed.
THE PROVISIONS OF SECTION 14.5A OF THE LOAN AGREEMENT ARE HEREBY
EXPRESSLY INCORPORATED HEREIN.
THIS AMENDED AND RESTATED REVOLVING CREDIT NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF
IN WITNESS WHEREOF, the undersigned has executed this Amended and
Restated Revolving Credit Note as of the day and year first above written.
BORROWER:
[CORPORATE SEAL]
CMI INDUSTRIES, INC.
Attest:
By: ▇. ▇. ▇▇▇▇▇▇▇
-----------------------------
By: A. ▇▇▇▇▇▇▇ ▇▇▇▇ Name: ▇. ▇. ▇▇▇▇▇▇▇
---------------------------- -----------------------------
Name: A. ▇▇▇▇▇▇▇ ▇▇▇▇ Exec. Vice President and CFO
---------------------------- -----------------------------
Title: Vice President
----------------------------
107
AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$20,000,000 Atlanta, Georgia
May 28, 1999
FOR VALUE RECEIVED, the undersigned, CMI INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of NATIONSBANK, N.A. (the "Lender") at the offices of BANKBOSTON, N.A., as
agent for the Lenders (together with its successor agents, the "Agent") located
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place
within the United States as shall be designated from time to time by the Agent,
on the Termination Date, the principal amount of TWENTY MILLION AND NO/100
DOLLARS ($20,000,000), or such lesser principal amount as may then constitute
the aggregate unpaid balance of all Revolving Credit Loans made by the Lender to
the Borrower pursuant to the Loan Agreement (as hereinafter defined), in lawful
money of the United States of America in federal or other immediately available
funds.
The Borrower also unconditionally promises to pay interest on the
unpaid principal amount of this Note outstanding from time to time for each day
from the date hereof until such principal amount is paid in full at the rates
per annum and on the dates specified in the Loan Agreement applicable from time
to time in accordance with the provisions thereof. Nothing contained in this
Note or in the Loan Agreement shall be deemed to establish or require the
payment of a rate of interest in excess of the maximum rate permitted by any
Applicable Law. In the event that any rate of interest required to be paid
hereunder exceeds the maximum rate permitted by Applicable Law, the provisions
of the Loan Agreement relating to the payment of interest under such
circumstances shall control.
This Amended and Restated Revolving Credit Note constitutes an
amendment and restatement of that certain Revolving Credit Note dated March 19,
1996 made by the Borrower in favor of the Lender in the original principal
amount of $26,087,200, and is issued by the Borrower in exchange for and
substitution for such Revolving Credit Note, but not in extinguishment of the
Indebtedness evidenced by such Note.
This Note is one of the Amended and Restated Revolving Credit Notes
referred to in that certain Amended and Restated Loan and Security Agreement
dated as of May 28, 1999 (as amended, modified, supplemented or restated from
time to time, the "Loan Agreement"; terms defined in the Loan Agreement being
used herein as therein defined) among the Borrower, the Lender, the other
financial institutions party thereto from time to time as "Lenders" and the
Agent, is subject to, and entitled to, all provisions and benefits of the Loan
Documents, is secured by the Collateral and other property as provided in the
Loan Documents, is subject to optional and mandatory prepayment in whole or in
part and is subject to acceleration prior to maturity upon the occurrence of one
or more Events of Default, all as provided in the Loan Documents.
108
Presentment for payment, demand, protest and notice of demand, notice
of dishonor, notice of non-payment and all other notices are hereby waived by
the Borrower, except to the extent expressly provided in the Loan Agreement. No
failure to exercise, and no delay in exercising, any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.
The Borrower hereby agrees to pay on demand all costs and expenses
incurred in collecting the Secured Obligations hereunder or in enforcing or
attempting to enforce any of the Lender's rights hereunder, including, but not
limited to, reasonable attorneys' fees and expenses actually incurred if
collected by or through an attorney, whether or not suit is filed.
THE PROVISIONS OF SECTION 14.5A OF THE LOAN AGREEMENT ARE HEREBY
EXPRESSLY INCORPORATED HEREIN.
THIS AMENDED AND RESTATED REVOLVING CREDIT NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF
IN WITNESS WHEREOF, the undersigned has executed this Amended and
Restated Revolving Credit Note as of the day and year first above written.
BORROWER:
[CORPORATE SEAL]
CMI INDUSTRIES, INC.
Attest:
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
---------------------------------------
By: /s/ A. ▇▇▇▇▇▇▇ ▇▇▇▇ Name: ▇.▇. ▇▇▇▇▇▇▇
------------------------------ ----------------------------------
Name: A. ▇▇▇▇▇▇▇ ▇▇▇▇
------------------------- Title: Executive Vice President and CFO
---------------------------------
Title: Vice President
------------------------