AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Dated as of October 21, 1996
CONTINENTAL MATERIALS CORPORATION, a corporation organized
under the laws of the state of Delaware (the "Borrower"), THE
NORTHERN TRUST COMPANY, an Illinois banking corporation, as
administrative agent and as a lender (Northern in its capacity as
administrative agent referred to in this Agreement as "Agent" and
in its capacity as a lender as "Northern") and LASALLE NATIONAL
BANK as a lender("LaSalle Bank)" (Northern and LaSalle Bank each
referred to individually in this Agreement as a "Lender" and
collectively as the "Lenders"), agree as follows:
RECITALS:
A.The parties hereto have previously entered into that certain
Revolving Credit and Term Loan Agreement dated as of February 28,
1996 (said Revolving Credit and Term Loan Agreement being the
"Original Agreement").
B.Pursuant to the Original Agreement, the Lenders have issued
the following described letters of credit (the "Existing Letters
of Credit") for the account of the Borrower:
Issuing Lender No. Beneficiaries
Northern S262251W St. ▇▇▇▇ Fire & Marine Insurance
Northern S250188W CNA Insurance Company
Northern S250189W CNA Insurance Company
Northern S258180W The Home Insurance Co.
LaSalle 9200002188 St. ▇▇▇▇ Fire & Marine Insurance
LaSalle 9260137087 CNA Insurance Company
LaSalle 9260237088 CNA Insurance Company
LaSalle 9200000426 The Home Insurance Co.
C.The Original Agreement, the promissory notes of the Borrower
issued and remaining unpaid thereunder (the "Existing Notes"),
the Existing Letters of Credit, and the documents related to or
referenced therein are referred to herein as the "Prior
Documents".
D.Pursuant to that certain Acquisition Agreement dated October
__, 1996, (the "Acquisition Agreement") the Borrower wishes to
acquire certain assets of Valco, Inc. on the terms and conditions
and for the consideration set forth therein (the acquisition by
Borrower being the "Acquisition," and the date of consummation of
the Acquisition being the "Acquisition Date."
E.The parties to and/or bound by the Prior Documents wish to
consolidate and amend and restate the Prior Documents in their
entirety in order to provide for the Acquisition and certain
other changes, and to restate their agreements with respect to
the subject matter hereof.
NOW, THEREFORE, the parties hereto amend and restate the
Original Agreement in its entirety to read as follows:
SECTION 1 DEFINITIONS
SECTION 1.1 GENERAL. As used herein:
The term "affiliate" means any corporation of which the
Borrower owns directly or indirectly 20% or more, but less than
50%, of the outstanding voting stock, or any partnership, joint
venture, trust or other legal entity of which the Borrower has
effective control, by contract or otherwise.
The term "Agent-Related Person" shall mean the Agent and any
successor thereto appointed pursuant to Section 9.8 or otherwise
succeeding the Agent, together with their respective affiliates,
and the officers, directors, employees, agents and attorneys-in
fact of such entities and affiliates.
The term "Applicable LIBOR Margin," for purposes of determining
the interest rate on:
(a) a Revolving LIBOR Loan, shall mean (1) prior to the first
semi-annual adjustment pursuant to clause (2) of this
subparagraph (a), 1.5% (the "Normal Revolving LIBOR Margin"); and
(2) the Normal Revolving LIBOR Margin as modified by semi-annual
adjustments (such adjusted Normal Revolving LIBOR Margin, the
"Applicable Revolving LIBOR Margin") determined as follows:
If EBITDA, as determined no later than March 31, 1997, for the
period of four fiscal quarters ended December 28, 1996 is:
Applicable Revolving
LIBOR Margin is:
greater than $7,000,000 1.25%
$6,000,000 to $7,000,000 1.50%
$5,000,000 to 5,999,999 1.75%
$3,750,000 to 4,999,999 2.00%
less than $3,750,000 2.50%
If EBITDA, as determined no later than September 30, 1997, for
the period of four fiscal quarters ended June 28, 1997 is:
Applicable Revolving
LIBOR Margin is:
greater than $7,500,000 1.25%
$6,500,000 to $7,500,000 1.50%
$5,500,000 to 6,499,999 1.75%
$4,250,000 to 5,499,999 2.00%
less than $4,250,000 2.50%
If EBITDA, (A) as determined no later than March 31, 1998, for
the period of four fiscal quarters ended January 3, 1998, and
(B) as determined no later than September 30, 1998 and no
later than March 31 and September 30 (March 31 and September
30 of any year are each referred to hereinafter as an
"Applicable LIBOR Margin Reset Date") of each year occurring
after September 30, 1998, for the period of four fiscal
quarters, which (i) in the case of an Applicable LIBOR Margin
Reset Date occurring on March 31, ends on the same date as the
end of the fourth fiscal quarter of the Borrower's immediately
preceding fiscal year, and (ii) in the case of an Applicable
LIBOR Margin Reset Date occurring on September 30, ends on the
same date as the end of the second fiscal quarter of the
Borrower's then current fiscal year, is:
Applicable Revolving
LIBOR Margin is:
greater than $8,000,000 1.25%
$7,000,000 to $8,000,000 1.50%
$6,000,000 to 6,999,999 1.75%
$4,750,000 to 5,999,999 2.00%
less than $4,750,000 2.50%;
(b) a Term LIBOR Loan, shall mean either (1) the Normal
Revolving LIBOR Margin plus .25%, or (2) the Applicable Revolving
LIBOR Margin, plus .25%, in each case as determined in accordance
with subparagraph (a) hereof.
Not later than twenty (20) days after the Agent's receipt of the
quarterly financial statements required by Section 6.2(a) hereof
for the Borrower's second and fourth fiscal quarters, accompanied
by a certificate of the chief accounting officer or Treasurer of
the Borrower computing EBITDA for the period of the four fiscal
quarters ending on the same date as the end of such second and
fourth fiscal quarters, Agent will determine whether such
financial information indicates such a change in EBITDA as would
justify a change in the Applicable LIBOR Margin and shall then
notify the Borrower and the Lenders of such determination and of
any change in the Applicable LIBOR Margin resulting therefrom.
Any change in the Applicable LIBOR Margin, and in the rate of
interest applicable to LIBOR loans resulting therefrom, shall be
effective prospectively as of the first day after the relevant
Applicable LIBOR Margin Reset Date, and with such new Applicable
LIBOR Margin to continue in effect until the effectiveness of the
next redetermination thereof. Any determination by Agent of
EBITDA shall be conclusive and binding upon the Borrower and the
Lenders provided that it has been made reasonably and in good
faith, absent manifest error. If the Borrower fails to timely
submit the quarterly financial statements and certificate
referred to above, the rate of interest applicable to LIBOR Loans
as of the next determination date of the Applicable LIBOR Margin
shall be determined and based upon the Default Rate.
The term "Borrowing" shall mean the total of Loans of a single
type (i.e. LIBOR Loan or Prime Rate Loan) made by the Lenders to
the Borrower on a single date and for a single Interest Period.
Borrowings of Loans are made ratably from each of the Lenders
according to their respective commitments.
The term "Business Day" shall mean any day other than a
Saturday, Sunday or other day on which banks in Chicago, Illinois
are authorized to close, and with respect to LIBOR Loans, a day
on which dealings in United States Dollars may be carried on by
the Reference Bank in the London interbank eurodollar market.
The term "Commitment - Revolving Credit" shall mean each such
amount set forth below across from the name of each Lender:
Lender Amount
Northern $6,750,000
LaSalle Bank $6,750,000
Provided that the Commitment-Revolving Credit of each Lender
shall permanently reduce to a maximum of $5,750,000 on June 30,
1997.
The term "Commitment - Term Loan" shall mean each such amount
set forth below across from the name of each Lender:
Lender Amount
Northern $4,250,000
LaSalle Bank $4,250,000
The term "EBITDA", with reference to any period, shall mean,
on a consolidated basis, the sum of the Borrower's:
(i) consolidated net income or loss after all
provisions or credits for any Federal, state or other
income taxes, plus
(ii) Federal, state and other income taxes deducted in
the determination of consolidated net income, plus
(iii) Interest Expense deducted in the determination of
consolidated net income, plus
(iv) depreciation and amortization expense deducted in
the determination of consolidated net income, and minus
(v) any items of gain which are
extraordinary items to
the extent reflected in the determination of
consolidated net income.
The term "Fixed Charges" for any Measurement Period shall
mean, on a consolidated basis, the Interest Expense and scheduled
principal payments (including capitalized lease obligations) of
the Borrower.
The term "Fixed Charge Coverage Ratio" shall mean, for any
period (a "Measurement Period") consisting of the four fiscal
quarters of the Borrower ending as of the end of each fiscal
quarter of the Borrower, the ratio of Income Available for Fixed
Charges to Fixed Charges.
The term "Funded Debt" shall mean Indebtedness which by its
terms or by the terms of any instrument or agreement relating
thereto matures more than one year from, or is directly renewable
or extendible at the option of the debtor to a date more than one
year (including an option of the debtor under a revolving credit
or similar agreement obligating the lender or lenders to extend
credit over a period of more than one year) from the date of
creation thereof; provided, however, that in any event "Funded
Debt" includes all Revolving Credit Loans.
The term "Income Available for Fixed Charges" for any
Measurement Period shall mean on a consolidated basis, the sum of
the Borrower's:
(i) consolidated net income or loss before all
provisions or credits for any Federal, state or other
income taxes, plus
(ii) depreciation, depletion and amortization (other than
amortization of debt discount expense), plus
(iii) Interest Expense, minus
(iv) capital expenditures (but excluding therefrom
capital expenditures (a) financed with that portion of
Revolving Credit Loans converted, or intended or
anticipated to be converted, to the Term Loan pursuant to
Section 2.2(A) hereof, and (b) incurred by the Borrower
in order to fund all or any part of the Acquisition).
The term "Indebtedness" of any entity or consolidated group
means, without duplication:
(i) all obligations, contingent or otherwise, of such
entity for borrowed money and all obligations of such
entity evidenced by bonds, debentures, notes or other
similar instruments;
(ii) all obligations of such entity as lessee under
leases which have been or should be, in accordance with
generally accepted accounting principles, recorded as
capitalized lease liabilities;
(iii) all guaranties, whether direct or indirect,
secured or unsecured, of Indebtedness of another person
by such entity or any of its subsidiaries;
(iv) net liabilities of such entity under all interest
rate swap agreements, interest rate cap agreements,
interest rate collar agreements and all other agreements or
arrangements designed to protect such entity against
fluctuations in interest rates or currency exchange rates;
(v) whether or not so included as liabilities in
accordance with generally accepted accounting
principles, all obligations of such entity to pay the
deferred purchase price of property or services, and
indebtedness (excluding prepaid interest thereon)
secured by a lien on property owned or being purchased
by such entity (including indebtedness arising under
conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed
by such entity or is limited in recourse; and
(vi) all contingent liabilities of such entity in
respect of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any
entity shall include its pro rata share of Indebtedness of any
partnership or joint venture in which such entity is a general
partner or a joint venturer, except that any and all Indebtedness
of Oracle Ridge Mining Partners ("Oracle Ridge") shall be
excluded from the definition of Indebtedness for purposes of this
Agreement, if and so long as the Borrower is not the majority
owner of Oracle Ridge, Oracle Ridge is not consolidated with the
Borrower for financial reporting purposes, and the Borrower is
not legally responsible for said Indebtedness of Oracle Ridge.
The term "Interest Expense" shall mean, for any Measurement
Period of the Borrower, all interest accrued (whether or not
actually paid) during such period on Indebtedness of the Borrower
and its subsidiaries (determined on a consolidated basis),
provided that the term "Interest Expense" also shall include
(without limitation) (i) dividends paid on any preferred or
special stock issued by the Borrower, (ii) amortized discount in
respect to Indebtedness of the Borrower and its subsidiaries
issued at a discount and (iii) imputed interest on capitalized
lease obligations of the Borrower and its subsidiaries.
The term "Interest Period" shall mean the period commencing on
the date a Borrowing of LIBOR Loans is made and ending on the
date, as the Borrower may select, 30 days, 60 days, 90 days or
180 days thereafter; provided, however, that:
(a) the Borrower may not select an Interest Period that
extends beyond the Termination Date; and
(b) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of
such Interest Period shall be extended to the next succeeding
Business Day.
The term "LIBOR Loan" shall mean either a Revolving LIBOR Loan
or a Term LIBOR Loan (each as hereinafter defined), as
applicable.
The term "Loan Document" shall mean any instrument, document,
note, agreement, or guaranty delivered to either Lender in
connection with the Loans.
The term "Prime Rate" shall mean the rate of interest per year
announced from time to time by Agent called its prime rate, which
may or may not at any time be the lowest rate of interest charged
by Agent. Changes in the rate of interest resulting from a
change in the Prime Rate shall take effect on the date set forth
in each announcement.
The term "Prime Rate Loan" shall mean either a Term Prime Rate
Loan or a Revolving Prime Rate Loan (each as hereinafter
defined), as applicable.
The term "Reference Bank" shall mean Agent.
The term "Revolving LIBOR Loan" shall mean a Revolving Credit
Loan bearing interest at a rate determined by reference to
Adjusted LIBOR.
The term "Revolving Prime Rate Loan"shall mean a Revolving Loan
bearing interest at a rate determined by reference to the Prime
Rate.
The term "subsidiary" means any corporation, partnership,
joint venture, trust, or other legal entity of which the Borrower
owns directly or indirectly 50% or more of the outstanding voting
stock or interest, or of which the Borrower has effective
control, by contract or otherwise.
The term "Tangible Net Worth" means, at any date, net
stockholders' equity, minus goodwill, patents, trademarks,
service marks, trade names, copyrights, and all other intangible
assets and all items that are treated as intangible assets under
generally accepted accounting principles.
The term "Termination Date" shall mean June 15, 1998, subject
to any extension thereof pursuant to Section 2.1(A) hereof.
The term "Term LIBOR" Loan" shall mean a Term Loan bearing
interest at a rate determined by reference to Adjusted LIBOR.
The term "Term Prime Rate Loan"shall mean a Term Loan bearing
interest at a rate determined by reference to the Prime Rate.
The term "Unmatured Event of Default" means an event or
condition which would become an Event of Default with notice or
the passage of time or both.
SECTION 1.2 APPLICABILITY OF SUBSIDIARY AND AFFILIATE
REFERENCES. Terms hereof pertaining to any subsidiary or
affiliate shall apply only during such times as the Borrower has
any subsidiary or affiliate.
SECTION 1.3 ACCOUNTING TERMS. Except as and unless otherwise
specifically provided herein, all accounting terms in this
Agreement shall have the meanings given to them by generally
accepted accounting principles and shall be applied and all
reports required by this Agreement shall be prepared, in a manner
consistent with generally accepted accounting principles
consistently applied.
SECTION 2 LOANS
SECTION 2.1 REVOLVING CREDIT LOANS. Subject to the terms and
conditions of this Agreement, each Lender, severally and not
jointly, agrees to make loans to the Borrower, from time to time
from the date of this Agreement through the Termination Date, at
such times and in such amounts, not to exceed the amount of each
such Lender's Commitment - Revolving Credit, at any one time
outstanding, as the Borrower may request (the "Revolving Credit
Loan(s)"). During such period, the Borrower may borrow, repay
and reborrow hereunder. Each borrowing shall be in the amount of
at least $25,000.00 or the remaining unused amount of the
Commitment - Revolving Credit. Notwithstanding the generality of
the foregoing, neither Lender shall make any Revolving Credit
Loans under this Agreement or the Revolving Credit Note (as
hereinafter defined) if at any time the sum of: (a) the aggregate
principal amount outstanding under the Revolving Credit Notes and
due such Lender plus (b) the aggregate face amount of all Letters
of Credit (as hereinafter defined) issued by such Lender for the
benefit of the Borrower and any drawn and unpaid amounts
thereunder equals or exceeds such Lender's Commitment - Revolving
Credit.
SECTION 2.1(A) EXTENSIONS OF THE TERMINATION DATE. The
Borrower may advise the Lenders in writing of its desire to
extend the Termination Date for an additional one year, provided
(i) such request is made no later than 90 days prior to such
Termination Date, (ii) not more than one such request for the
extension of the Termination Date may be made in any one calendar
year, and (iii) in no event shall the Termination Date be
extended beyond June 15, 1999. Each Lender shall notify the
Borrower, the other Lender and the Agent, in writing within 45
days after such Lender receives such request from the Borrower,
whether such Lender in its sole discretion agrees to such
extension. In the event that a Lender shall fail to so notify
the Borrower, the other Lender and the Agent within such 45 day
period, whether it agrees to such extension, such Lender shall be
deemed to have refused to grant the requested extension. Upon
receipt by the Borrower, the Agent and all Lenders of the consent
of all Lenders within such 45 day period, the Termination Date
shall be automatically extended for an additional one year, and
the Agent shall confirm such automatic extension in writing to
the Borrower and the Lenders. In the event the Borrower and all
Lenders do not consent to the requested extension of the
Termination Date, such Termination Date shall take place as
scheduled.
SECTION 2.2 REVOLVING CREDIT NOTE. The Revolving Credit Loans
shall be evidenced by a revolving credit note (the "Revolving
Credit Note"), substantially in the form of Exhibit A, with
appropriate insertions, dated the date hereof, payable to the
order of each Lender, in the principal amount of the Commitment -
Revolving Credit of each such Lender, and with the amounts
borrowed and repaid and the balance indorsed on the grid by such
Lender. As long as such Lender is the holder of such Revolving
Credit Note it may, at its option, in lieu of endorsing the grid,
record the amounts borrowed and repaid under and the balance due
on the Revolving Credit Note in each such Lender's respective
books and records, which books and records may treat
each borrowing as a separate Revolving Credit Loan; such
endorsement or recording by such Lender shall be rebuttably
presumptive evidence of the principal balance due on each
Revolving Credit Note. Subject to Section 2.2(A) hereof, the
principal of each Revolving Credit Note shall be payable in full
on the Termination Date.
SECTION 2.2(A) CONVERSION OF PORTIONS OF REVOLVING CREDIT
LOANS. At any time on or before June 30, 1997, the Borrower may
advise the Lenders in writing (the "Conversion Notice(s)") of its
election to convert up to $1,000,000 of each Lender's Revolving
Credit Loans to such Lender's Term Loan. Any Conversion Notice
must be delivered to the Lenders no later than June 15, 1997, and
not more than one such election may be made. The Conversion
Notice must specify: (i) the amount of each Lender's Revolving
Credit Loans to be converted to such Lender's Term Loan (the
"Converted Amount", which cannot exceed $1,000,000 and which must
be the same amount for each Lender); and (ii) the date on which
the Converted Amount is to be converted to the relevant Term
Loan, which date (the "Conversion Date") cannot be less than
seven nor more than thirty days after the date on which the
Conversion Notice(s) is received by the Lenders, but in any event
can be no later than June 30, 1997. Any Conversion Notice(s),
and the election set forth therein, is irrevocable, but is
ineffective if an Event of Default has occurred and is continuing
on either the date of the Conversion Notice(s) or the Conversion
Date. From and after the Conversion Date, the Converted Amount
payable to each Lender shall be and become part of the Term Loan
payable to such Lender, and is repayable and bears interest as
set forth herein and in the Term Note of such Lender. From and
after the Conversion Date, each Lender's Commitment - Revolving
Credit is permanently reduced by $1,000,000.
SECTION 2.3 LETTERS OF CREDIT. Subject to the terms of this
Agreement, each Lender shall issue stand-by and/or commercial
letters of credit for the account of the Borrower (collectively,
the "Letter(s) of Credit"), from time to time from the date of
this Agreement through the Termination Date or such later date as
may from time to time be agreed upon in writing by the Borrower
and the Lenders, with a maturity date on any Letter of Credit no
later than the Termination Date, at such times and in such
amounts, as the Borrower may request, up to a maximum amount not
in excess of: (a) $13,500,000 minus (b) the aggregate amount of
Revolving Credit Loans outstanding under the Revolving Credit
Notes minus (c) the unexpired portion of all outstanding Letters
of Credit and any amount drawn under any such Letters of Credit
(including without limitation, any draft drawn under a Letter of
Credit and accepted by such Lender for which the Lender has not
been reimbursed). At any time the Borrower determines that it
desires the issuance of a Letter of Credit, the Borrower may
request such Letter of Credit from the Agent, which request shall
be in writing and irrevocable as to the Borrower. At the time
the Agent receives a request by the Borrower for the issuance of
a Letter of Credit, the Agent will inform the Lenders in writing
of the request and, subject to the terms hereof and each Lender's
respective internal rules regarding the issuance of letters of
credit, each Lender will each issue a Letter of Credit for one
half the face amount requested by the Borrower. Notwithstanding
the generality of the foregoing, neither Lender will issue a
Letter of Credit unless the other Lender agrees in writing to
simultaneously issue an identical Letter of Credit. The Borrower
shall execute, and be subject to, such documentation in form and
substance as may be required by each Lender. The Borrower shall
pay each Lender its standard fees, charges, commissions, and
discounts in connection with any Letter of Credit or any draft
drawn under any Letter of Credit, which, subject to the terms and
provisions of the forementioned documents, is three-quarters of
one percent (3/4%) per annum for each Letter of Credit with a
$250.00 minimum, said fee(s) being payable quarterly in arrears.
Any draft drawn under a Letter of Credit not paid on or before
its maturity shall constitute a Revolving Credit Loan and shall
bear interest at the rate and be payable as provided for other
Revolving Credit Loans. The Borrower shall not request the
issuance of any Letter of Credit and the Lenders shall not issue
any Letters of Credit if: (a) the aggregate face amount of all
unexpired Letters of Credit issued by all Lenders (including
without limitation, any draft drawn under a Letter of Credit and
accepted by any Lender for which the Lender has not been
reimbursed), equals or exceeds $5,000,000, or (b) issuance of a
new Letter of Credit in the amount contemplated by the Borrower
would cause the aggregate face amount of all unexpired Letters of
Credit issued by all Lenders (including without limitation, any
draft drawn under a Letter of Credit and accepted by any Lender
for which the Lender has not been reimbursed) to exceed
$5,000,000. For all purposes hereof, each Existing Letter of
Credit shall be deemed to be a Letter of Credit issued hereunder.
SECTION 2.4 TERM LOAN. Subject to the terms and conditions
of this Agreement, each Lender, severally and not jointly, agrees
to lend to the Borrower, and the Borrower agrees to borrow from
each Lender, on the date hereof, the amount of each Lender's
Commitment - Term Loan (the "Term Loan"; the Revolving Credit
Loans and the Term Loan, collectively, the "Loans"). Any amount
of Term Loans repaid may not be reborrowed.
SECTION 2.5 TERM NOTE. The Term Loan shall be evidenced by a
term note (the "Term Note"; the Revolving Credit Notes and the
Term Notes, collectively, the "Notes"), substantially in the form
of Exhibit B, with appropriate insertions, dated the date hereof,
payable to the order of each Lender, in the principal amount of
the Commitment - Term Loan of each such Lender. The principal
balance of the Term Loan is payable in ten (10) principal
payments as follows: (a) one (1) payment in the amount of
$500,000, due on December 15, 1996; (b) four (4) payments, each
in the amount of $750,000, due on June 15, 1997, December 15,
1997, June 15, 1998 and December 15, 1998; (c) four (4) payments,
each in the amount of $1,000,000, due June 15, 1999, December 15,
1999, June 15, 2000 and December 15, 2000; with all then unpaid
principal, due in full on June 15, 2001. Provided, however, that
if and when any Converted Amount is added to the Term Loans of
each Lender pursuant to Section 2.2(A) hereof, that portion of
such Term Loans is payable as follows: commencing on the first
semi-annual principal payment date (June 15 and December 15)
after the Conversion Date, and continuing on each such principal
payment date thereafter, each principal payment of the Term Loan
and Term Note (as set forth in this Section 2.5) then due shall
be increased by an amount equal to ten percent (10.0%) of the
Converted Amount.
SECTION 2.6 GUARANTY. The Loans and all of the Borrower's
other liabilities, obligations and indebtedness to each of the
Lenders, direct or indirect, absolute or contingent, due or to
become due, now or hereafter existing with respect to principal,
and interest accrued thereon, whether under this Agreement or any
other agreement with either or both of the Lenders or note
payable to either or both of the Lenders, shall be guaranteed by:
(a) Transit Mix Concrete Co., a Colorado corporation ("Transit
Mix"), by execution and delivery of a Guaranty in the form of
Exhibit C hereto with appropriate insertions (the foregoing
Guaranty, and all amendments, restatements, and replacements,
if any, thereto or therefor, collectively, the "Transit Mix
Guaranty");
(b) Phoenix Manufacturing, Inc., an Arizona corporation
("Phoenix"), by execution and delivery of a Guaranty in the
form of Exhibit D hereto with appropriate insertions (the
foregoing Guaranty, and all amendments, restatements, and
replacements, if any, thereto or therefor, collectively, the
"Phoenix Guaranty");
(c) ▇▇▇▇▇▇▇▇ Furnace Co., a Delaware corporation
("▇▇▇▇▇▇▇▇"), by execution and delivery of a Guaranty in the
form of Exhibit E hereto with appropriate insertions (the
foregoing Guaranty, and all amendments, restatements, and
replacements, if any, thereto or therefor, collectively, the
"▇▇▇▇▇▇▇▇ Guaranty");
(d) Castle Concrete Company, a Colorado corporation
("Castle"), by execution and delivery of a Guaranty in the
form of Exhibit F hereto with appropriate insertions (the
foregoing Guaranty, and all amendments, restatements, and
replacements, if any, thereto or therefor, collectively, the
"Castle Guaranty"); and
(e) Transit Mix of Pueblo, Inc., a Colorado corporation
("Pueblo"), by execution and delivery of a Guaranty in the
form of Exhibit G hereto with appropriate insertions (the
foregoing Guaranty, and all amendments, restatements, and
replacements, if any, thereto or therefor, collectively, the
"Pueblo Guaranty").
SECTION 3 INTEREST AND FEES
SECTION 3.1 INTEREST. The Borrower may elect that each
Borrowing of Loans be made by means of a Prime Rate Loan or a
LIBOR Loan; provided, however, that there shall not be more than
six Borrowings of LIBOR Loans outstanding at any time.
(a) Prime Rate Loans. Each Prime Rate Loan made by the
Lenders shall bear interest on the unpaid principal amount
thereof from the date such Loan is made until maturity (whether
by acceleration or otherwise) at a rate per annum equal to the
Prime Rate from time to time in effect.
(b) LIBOR Loans. Each LIBOR Loan made by the Lenders shall
bear interest on the unpaid principal amount thereof from the
date such Loan is made until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable
LIBOR Margin from time to time in effect plus the Adjusted LIBOR.
"Adjusted LIBOR" means, for any Borrowing of LIBOR Loans, a
rate per annum determined in accordance with the following
formula:
LIBOR
Adjusted LIBOR = 100% - Eurodollar Reserve Percentage
"LIBOR" means, for an Interest Period for a Borrowing of LIBOR
Loans, the rate of interest per annum (rounded upwards, if
necessary, to nearest 1/100 of 1%) at which deposits in U.S.
dollars in immediately available funds are offered by the
Reference Bank at approximately 11:00 a.m. (London, England time)
two (2) Business Days before the beginning of such Interest
Period by prime banks in the interbank eurodollar market for a
period equal to such Interest Period and in an amount equal or
comparable to the principal amount of the LIBOR Loans scheduled
to be made by the Lenders as part of such Borrowing.
"Eurodollar Reserve Percentage" means, for any Borrowing of
LIBOR Loans, the daily average for the applicable Interest Period
of the maximum rate at which reserves (including, without
limitation, any supplemental, marginal and emergency reserves)
are imposed during such Interest Period by the Board of Governors
of the Federal Reserve System (or any successor) under Regulation
D on "eurocurrency liabilities," as defined in such Board's
Regulation D, (or in respect of any other category of liabilities
that includes deposits by reference to which the interest rate on
LIBOR Loans is determined or any category of extension of credit
or other assets that include loans by non-United States offices
of any Lender to United States residents) subject to any
amendments of such reserve requirement by such Board or its
successor, taking into account any transitional adjustments
thereto. For purposes of this definition, the LIBOR Loans shall
be deemed to be "eurocurrency liabilities" as defined in
Regulation D.
(c) Rate Determinations. The Agent shall determine each
interest rate applicable to the Loans hereunder, and its
determination thereof shall be conclusive and binding except in
the case of manifest error.
SECTION 3.2 MINIMUM AND MAXIMUM BORROWING AMOUNTS. Each
Borrowing of Prime Rate Loans (other than an L/C Refinancing
Borrowing) shall be in an amount not less than $25,000 or any
larger amount that is an integral multiple of $25,000. Each
Borrowing of LIBOR Loans shall be in an amount not less than
$500,000, or any larger amount that is an integral multiple of
$100,000.
SECTION 3.3 BASIS OF COMPUTATION. Interest on all Loans shall
be computed for the actual number of days elapsed on the basis of
a year consisting of 360 days, including the date a Loan is made
and excluding the date a Loan or any portion thereof is paid or
prepaid.
SECTION 3.4 INTEREST PAYMENT DATES. Accrued interest on Prime
Rate Loans shall be paid on the fifteenth (15th) day of each
March, June, September and December of each year, at maturity and
upon payment in full, beginning with the first of such dates to
occur after the date of the first such Loan hereunder. Accrued
interest on LIBOR Loans shall be paid on the last day of the
applicable Interest Period and at maturity and, if the applicable
Interest Period is longer than ninety (90) days, on each day
occurring ninety (90) days after the date such LIBOR Loan is
made. After maturity, whether by acceleration or otherwise,
accrued interest on all Loans shall be paid upon demand.
SECTION 3.5 DEFAULT RATE. If the Borrower is in default under
any of the financial requirements set forth in Section 6.4
hereof, or if any payment of principal on any Loan or other
monetary obligation is not made when due (whether by acceleration
or otherwise), such Loan or other monetary obligation shall bear
interest, after as well as before judgment, from the date such
payment was due until paid in full, payable on demand, at a rate
per annum (the "Default Rate") equal to:
(a) with respect to any Prime Rate Loan, the sum of two
percent (2%) plus the interest rate from time to time in effect
with respect to such Prime Rate Loan pursuant to Section 3.1(a);
and
(b) with respect to any LIBOR Loan, the sum of two percent
(2%) plus the rate of interest in effect thereon at the time of
such default until the end of the Interest Period applicable
thereto and, thereafter, at a rate per annum equal to the sum of
two percent (2%) plus the Prime Rate from time to time in effect;
and
(c) with respect to other monetary obligations for which a
Default Rate is not otherwise specified, the sum of two percent
(2%) plus the Prime Rate from time to time in effect.
SECTION 3.6 CLOSING FEE. The Borrower agrees to pay each
Lender, on the date of execution hereof, a closing fee of $6,250.
SECTION 3.7 COMMITMENT FEE, REDUCTION OF COMMITMENT. The
Borrower agrees to pay each Lender a commitment fee (the
"Commitment Fee") of three-eighths of one percent (3/8%) per year
on the average daily unused amount of each Lender's Commitment
Revolving Credit. The Commitment Fee shall commence to accrue on
the date of this Agreement and shall be paid on the fifteenth
(15th) day of each March, June, September and December in each
year, beginning with the first of such dates to occur after the
date of this Agreement, at maturity and upon payment in full. At
any time or from time to time, upon at least ten days' prior
written notice, which shall be irrevocable, the Borrower may
reduce each Lender's Commitment - Revolving Credit in the amount
of at least $25,000.00 or in full, provided, however, that all
such reductions of Commitment - Revolving Credit shall reduce the
Commitment - Revolving Credit of each Lender on a pro rata basis
based on the Commitment - Revolving Credit of each Lender
immediately prior to such reduction. Upon any such reduction of
any part of the unused Commitment - Revolving Credit, the
Commitment Fee on the part reduced shall be paid in full as of
the date of such reduction.
SECTION 3.8 ADMINISTRATIVE AGENT FEE. The Borrower agrees to
pay the Agent an administrative agent fee of $2,500.00 per year.
Such administrative agent fee shall be paid in arrears in four
(4) equal payments of $625.00 due on March 15, June 15, September
15 and December 15 of each year. The first such payment shall be
due on December 15, 1996
SECTION 4 PAYMENTS AND PREPAYMENTS.
SECTION 4.1 PAYMENTS. All payments and prepayments of
principal, interest, closing fees and Commitment Fee shall be
made in immediately available funds to each respective Lender at
its main banking office in Chicago, Illinois.
SECTION 4.2 MANNER OF BORROWING. The Borrower shall give the
Agent written or telephonic prior irrevocable notice (a
"Borrowing Notice") by 11:00 a.m., Chicago, Illinois time, (i) on
the date at least three (3) Business Days prior to the date of
each requested Borrowing of LIBOR Loans and (ii) on the date of
any requested Borrowing of Prime Rate Loans. Each such notice
shall specify the date of Borrowing, which must be a Business
Day, the aggregate amount of the requested Borrowing, the type of
Loans to comprise such Borrowing and, if such Borrowing is to be
comprised of LIBOR Loans, the Interest Period applicable thereto.
The Agent will then notify the Lenders in writing or by telephone
by 12:00 noon on the date of receipt of the foregoing notice
(which such notice in the case of LaSalle Bank, if it relates to
Revolving Credit Loan Borrowings constituting Prime Rate Loans,
may be made before or after Northern has funded its 50% portion
of such requested Loans) and, if such notice requests the Lenders
to make LIBOR Loans, the Agent shall give notice to the Borrower
and to the Lenders of the interest rate applicable thereto
promptly after the Agent has made such determination. The
Lenders, on the date of Borrowing of any Revolving Credit Loan,
shall each remit 50% of any requested Revolving Credit Loan to
the Borrower's account, except to the extent such Borrowing is
either a reborrowing, in whole or in part, of the principal
amount of a maturing Borrowing of Loans (a "Refunding Borrowing")
or an L/C Refinancing Borrowing, in which case each Lender shall
record the Loan made by it as a part of such Refunding Borrowing
or L/C Refinancing Borrowing, as the case may be, on its books or
records or on a schedule to the appropriate Note, and shall
effect the repayment, in whole or in part, as appropriate, of its
maturing Loan or reimbursement obligation through the proceeds of
such new Loan. At the time Northern has made a Revolving Credit
Loan, LaSalle Bank shall be deemed to have funded its 50% share
of such Revolving Credit Loan and the obligation to remit to
Northern on such day its 50% of the Revolving Credit Loan shall
be absolute and irrevocable. Each borrowing from the Lenders
under this Agreement shall be made on a pro rata basis of their
respective Commitment - Revolving Credit and Commitment - Term
Loan. Each payment and prepayment made by the Borrower shall be
made to the Lenders pro rata on the basis of the respective
amounts of the Loans outstanding immediately prior to such
payment or prepayment. In the event the Borrower fails to give
notice pursuant to this Section 4.2 of the reborrowing of the
principal amount of any maturing Borrowing or of a Borrowing to
refinance a reimbursement obligation with respect to a Letter of
Credit (an "L/C Refinancing Borrowing") and has not notified the
Agent by 11:00 a.m. (Chicago time) on the day such Borrowing
matures or such reimbursement obligation becomes due that it
intends to repay such Borrowing or such reimbursement obligation
with funds not borrowed hereunder, the Borrower shall be deemed
to have requested a Borrowing of Prime Rate Loans on such day in
the amount of the maturing Borrowing or of the reimbursement
obligation then due, which new Borrowing shall be applied to pay,
as the case may be, the maturing Borrowing or reimbursement
obligation then due.
Each LIBOR Loan shall mature and become due and payable by the
Borrower on the last day of the Interest Period applicable
thereto.
SECTION 4.3 CHANGE IN CIRCUMSTANCES, ETC. (a) The Borrower
agrees to pay to each Lender such amounts as will compensate each
Lender for any increase in the cost to such Lender of making or
maintaining any Loans hereunder or of maintaining its Commitment
- Revolving Credit to make Revolving Credit Loans hereunder,
caused by any change in any reserve, tax, capital guidelines,
special deposit, or similar requirement with respect to assets
of, deposits with or for the account of, or credit extended by,
or commitments extended by, such Lender which are imposed on such
Lender and which are caused by any change in law, treaty, rule,
regulation (including, without limitation, Regulation D of the
Board of Governors of the Federal Reserve System), any
interpretation thereof by any governmental, fiscal, monetary or
other authority charged with the administration thereof or having
jurisdiction over such Loan or such Lender, or any requirement
imposed by any such authority, whether or not having the force of
law. Such additional amounts shall be payable on demand. Such
Lender's calculation of such additional amounts shall be final
and binding absent manifest error.
(b) Notwithstanding any other provisions of this Agreement or
any Note, if at any time after the date hereof any change in
applicable law or in the interpretation thereof makes it unlawful
for any Lender to make or continue to maintain LIBOR Loans or to
give effect to its obligations as contemplated hereby, such
Lender shall promptly give notice thereof to the Borrower, with a
copy to the Agent and the other Lender, and such Lender's
obligations to make or maintain LIBOR Loans under this Agreement
shall terminate until it is no longer unlawful for such Lender to
make or maintain LIBOR Loans. The Borrower shall prepay on
demand the outstanding principal amount of any such affected
LIBOR Loans, together with all interest accrued thereon and all
other amounts then due and payable to such Lender under this
Agreement; provided, however, subject to all of the terms and
conditions of this Agreement, the Borrower may then elect to
borrow the principal amount of the affected LIBOR Loan from such
Lender by means of a Prime Rate Loan from such Lender that shall
not be made ratably by the Lenders but only from such affected
Lender.
(c) If on or prior to the first day of any Interest Period
for any Borrowing of LIBOR Loans:
(i) The Agent advises the Borrower that deposits in United
States Dollars (in the applicable amounts) are not being offered
to it in the interbank eurodollar market, for such Interest
Period, or
(ii) either Lender advises the Borrower that LIBOR as
determined by the Agent will not adequately and fairly reflect
the cost to such Lender of funding its LIBOR Loans for such
Interest Period, then, until the Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist,
the obligation of the Lenders to make LIBOR Loans shall be
suspended.
SECTION 4.4 FUNDING INDEMNITY. In the event any Lender shall
incur any loss, cost or expense (including, without limitation,
any loss of profit, and any loss, cost or expense incurred by
reason of the liquidation or re-employment of deposits or other
funds acquired by such Lender to fund or maintain any LIBOR Loan
or the relending or reinvesting of such deposits or amounts paid
or prepaid to such Lender) as a result of:
(a) any payment (including prepayment) of a LIBOR Loan on a
date other than the last day of its Interest Period for any
reason, whether before or after default, and whether or not such
payment is required by any provisions of this Agreement, or
(b) any failure (because of a failure to meet the conditions
of borrowing or otherwise) by the Borrower to borrow a LIBOR Loan
on the date specified in a Borrowing Notice,
then, upon the demand of such Lender, the Borrower shall pay to
such Lender such amount as will reimburse such Lender for such
loss, cost or expense. If any Lender makes such a claim for
compensation, it shall provide to the Borrower, with a copy to
the Agent and the other Lender, a certificate executed by an
officer of such Lender setting forth the amount of such loss,
cost or expense in reasonable detail (including an explanation of
the basis for and the computation of such loss, cost or expense)
and the amounts shown on such certificate shall be deemed
rebuttably presumptive evidence of the correctness thereof.
SECTION 4.5 DISCRETION OF LENDERS AS TO MANNER OF FUNDING.
Notwithstanding any other provision of this Agreement, each
Lender shall be entitled to fund and maintain its funding of all
or any part of its Loans in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Lender had
actually funded and maintained each LIBOR Loan through the
purchase of deposits in the relevant market having a maturity
corresponding to such Loan's Interest Period and bearing an
interest rate equal to LIBOR, for such Interest Period.
SECTION 4.6 PREPAYMENTS. The Borrower shall have the
privilege of prepaying without premium or penalty and in whole or
in part (but, if in part, then: (i) in an amount not less than
$250,000 and in integral multiples of $25,000 in the case of
Prime Rate Loans, and in an amount not less than $500,000 and in
integral multiples of $100,000 in the case of LIBOR Loans and
(ii) in an amount such that the minimum amount required for a
Borrowing pursuant to Section 3.2 hereof remains outstanding) on
any Business Day upon prior notice to the Lenders which must be
received by the Lenders by no later than 11:00 a.m. (Chicago
time) on the date of such prepayment in the case of Prime Rate
Loans and by no later than 11:00 a.m. (Chicago time) on the date
three Business Days in advance of the date of such prepayment in
the case of LIBOR Loans, such prepayment to be made by the
payment of the principal amount to be prepaid and, in the case of
LIBOR Loans, any compensation required by Section 4.4 hereof.
Partial prepayments of any outstanding type of Loan shall be
applied to the various Borrowings thereof in the inverse order of
their maturity. Partial prepayments of the Term Loans shall be
applied to installments thereof in the inverse order of their
maturity. Unless otherwise designated by the Borrower,
prepayments of any outstanding type of Loan shall be deemed paid
with respect to such Loans which are Prime Rate Loans.
SECTION 4.7 MANDATORY REPAYMENT. If at any given time from
and after the date of this Agreement, the amount of Revolving
Credit Loans plus all outstanding and unpaid Letters of Credit
issued by all Lenders exceeds the then aggregate amount of the
Commitments-Revolving Credit of all Lenders, THEN the Borrower
shall immediately repay to the Lenders that amount necessary to
reduce the unpaid and outstanding principal amount of the
Revolving Credit Loans such that the amount of Revolving Credit
Loans plus all outstanding and unpaid Letters of Credit issued by
all Lenders is equal to or less than the then aggregate amount of
the Commitments-Revolving Credit of all Lenders. All repayments
of principal under this Section 4.7 shall include interest
accrued to the date of repayment on the principal amount repaid.
SECTION 5 REPRESENTATIONS AND WARRANTIES
To induce each Lender to make each of the Loans, the
Borrower represents and warrants, and at the time the Borrower
requests or accepts any Loan, the Borrower shall be deemed to
represent and warrant, to each Lender that:
SECTION 5.1 ORGANIZATION. The Borrower is a corporation
existing and in good standing under the laws of the state of
Delaware; any subsidiary is a corporation duly existing and in
good standing under the laws of the state of its formation as
indicated on Exhibit H; the Borrower and any subsidiary are duly
qualified, in good standing and authorized to do business in each
jurisdiction where, because of the nature of their activities or
properties, such qualification is required and failure to qualify
could have a material adverse effect on the Borrower and its
Subsidiaries taken as a whole; and the Borrower and any
subsidiary have the power and authority to own their properties
and to carry on their businesses as now being conducted.
SECTION 5.2 AUTHORIZATION; NO CONFLICT. The borrowings
hereunder, the execution and delivery of the Notes and the
performance by the Borrower of its obligations under this
Agreement and the Notes are within the Borrower's corporate
powers, have been authorized by all necessary corporate action,
have received all necessary governmental approval (if any shall
be required) and do not and will not contravene or conflict with
any provision of law or of the charter or by-laws of the Borrower
or any subsidiary or of any agreement binding upon the Borrower
or any subsidiary.
SECTION 5.3 FINANCIAL STATEMENTS. The Borrower's audited
consolidated financial statement as at December 30, 1995 and its
unaudited consolidated financial statement as at June 29, 1996,
copies of which have been furnished to the Agent, have been
prepared in conformity with generally accepted accounting
principles applied on a basis consistent with that of the
preceding fiscal year, and accurately present the financial
condition of the Borrower and any subsidiary as at such dates and
the results of their operations for the respective periods then
ended. Since the date of those financial statements, no
material, adverse change in the business, properties, assets,
operations, conditions or prospects of the Borrower or any
subsidiary has occurred of which the Agent has not been advised
in writing before this Agreement was signed. There is no known
contingent liability of the Borrower or any subsidiary which is
known to be in an amount in excess of $100,000.00 which is not
reflected in such financial statements or in Exhibit J hereto or
of which the Agent has not been advised in writing before this
Agreement was signed.
SECTION 5.4 TAXES. The Borrower and any subsidiary have filed
or caused to be filed all federal, state and local tax returns
which, to the knowledge of the Borrower or any subsidiary, are
required to be filed, and have paid or have caused to be paid all
taxes as shown on such returns or on any assessment received by
them, to the extent that such taxes have become due (except for
current taxes not delinquent and taxes being contested in good
faith and by appropriate proceedings for which adequate reserves
have been provided on the books of the Borrower or the
appropriate subsidiary, and as to which no foreclosure,
distraint, sale or similar proceedings have been commenced). The
Borrower and any subsidiary have set up reserves which are
adequate for the payment of additional taxes for years which have
not been audited by the respective tax authorities.
SECTION 5.5 LIENS. None of the assets of the Borrower or any
subsidiary are subject to any mortgage, pledge, title retention
lien, or other lien, encumbrance or security interest, except
for: (a) current taxes not delinquent or taxes being contested in
good faith and by appropriate proceedings; (b) liens arising in
the ordinary course of business for sums not due or sums being
contested in good faith and by appropriate proceedings, but not
involving any deposits or advances or borrowed money or the
deferred purchase price of property or services; (c) to the
extent specifically shown in the financial statements referred to
above; and (d) liens existing on the date hereof as listed in
Exhibit I hereto.
SECTION 5.6 ADVERSE CONTRACTS. Neither the Borrower nor any
subsidiary is a party to any agreement or instrument or subject
to any charter or other corporate restriction, nor is it subject
to any judgment, decree or order of any court or governmental
body, which may have a material and adverse effect on the
business, assets, liabilities, financial condition, operations or
business prospects of the Borrower and its subsidiaries taken as
a whole or on the ability of the Borrower to perform its
obligations under this Agreement or the Notes. Neither the
Borrower nor any subsidiary has, nor with reasonable diligence
should have had, knowledge of or notice that it is in default in
the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any such
agreement, instrument, restriction, judgment, decree or order.
SECTION 5.7 REGULATION U. The Borrower is not engaged
principally in, nor is one of the Borrower's important
activities, the business of extending credit for the purpose of
purchasing or carrying "margin stock" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereinafter in effect.
SECTION 5.8 LITIGATION AND CONTINGENT LIABILITIES, No
litigation (including derivative actions), arbitration
proceedings or governmental proceedings are pending or threatened
against the Borrower which would (singly or in the aggregate), if
adversely determined, have a material and adverse effect on the
financial condition, continued operations or prospects of the
Borrower or any subsidiary, except as set forth (including
estimates of the dollar amounts involved) in Exhibit J hereto.
SECTION 5.9 SUBSIDIARIES. Attached hereto as Exhibit H is a
correct and complete list of all subsidiaries and affiliates of
the Borrower.
SECTION 5.10 PURPOSE. The Borrower shall use the proceeds of
the Loans to refinance the amounts owing under the Prior
Documents, to finance the Acquisition, for working capital
purposes, and for general corporate purposes, including capital
expenditures.
SECTION 6 COVENANTS
Until all obligations of the Borrower hereunder and under the
Notes are paid and fulfilled in full, and as a condition
precedent to the Borrower requesting the Term Loans and any
Revolving Credit Loan, the Borrower agrees that it shall, and
shall cause any subsidiary to, comply with the following
covenants, unless the Lenders consent otherwise in writing:
SECTION 6.1 CORPORATE EXISTENCE, MERGERS, ETC. The Borrower
and any subsidiary shall preserve and maintain its corporate
existence, rights, franchises, licenses and privileges, and will
not liquidate, dissolve, or merge, or consolidate with or into
any other corporation, or sell, lease, transfer or otherwise
dispose of all or a substantial part of its assets, except that:
(a) Any subsidiary may merge or consolidate with or into any
one or more wholly-owned subsidiaries;
(b) Any subsidiary may sell, lease, transfer or otherwise
dispose of any of its assets to the Borrower or one or more
wholly-owned subsidiaries; and
(c) The Borrower may liquidate, dissolve, sell, lease,
transfer, or otherwise dispose of the net assets of any
subsidiary whose net assets constitute ten percent (10%) or
less of the Borrower's consolidated net assets. For purposes
of this Section 6.1(c), the Borrower's consolidated net assets
shall be determined immediately prior to any such liquidation,
dissolution, sale, lease, transfer, or other disposition, and
the ten percent limitation applies on a cumulative basis to all
such dispositions during the period beginning on the date
hereof and ending on the Termination Date.
SECTION 6.2 REPORTS, CERTIFICATES AND
OTHER INFORMATION. The Borrower shall furnish to Agent, with
sufficient copies for each Lender:
(a) Interim Reports. Within 45 days after the end of each
quarter of each fiscal year of the Borrower, a copy of an
unaudited financial statement of the Borrower and any
subsidiary prepared on a consolidated basis consistent with
the audited consolidated financial statements of the Borrower
and any subsidiary referred to above, signed by an authorized
officer of the Borrower and consisting of at least (i) a
balance sheet as at the close of such quarter and (ii) a
statements of earnings and cash flows for such quarter and for
the period from the beginning of such fiscal year to the close
of such quarter.
(b) Audit Report. Within 100 days after the end of each
fiscal year of the Borrower, a copy of an annual audit report
of the Borrower and any subsidiary prepared on a consolidated
basis and in conformity with generally accepted accounting
principles applied on a basis consistent with the audited
consolidated financial statements of the Borrower and any
subsidiary referred to above, duly certified by independent
certified public accountants of recognized standing
satisfactory to the Lender, accompanied by an opinion without
significant qualification.
(c) Certificates. Contemporaneously with the furnishing of a
copy of each quarterly report provided for in this Section, a
certificate dated the date of such quarterly report and signed
by either the President, the Chief Accounting officer or the
Treasurer of the Borrower, to the effect that no Event of
Default or Unmatured Event of Default has occurred and is
continuing, or, if there is any such event, describing it and
the steps, if any, being taken to cure it, and containing
(except in the case of the certificate dated the date of the
annual report) a computation of, and showing compliance with,
any financial ratio or restriction contained in this
Agreement, and also containing a description of the amount and
type of capital expenditures which are excluded from capital
expenditures pursuant to the parenthetical in clause (iv) of
the definition of Income Available for Fixed Charges.
(d) Reports to SEC and to Shareholders. Copies of each
filing and report made by the Borrower or any subsidiary with
or to any securities exchange or the Securities and Exchange
Commission, except in respect of any single shareholder, and
of each communication from the Borrower or any subsidiary to
Borrower's shareholders generally, promptly upon the filing or
making thereof.
(e) Notice of Default, Litigation and ERISA Matters.
Immediately upon learning of the occurrence of any of the
following, written notice describing the same and the steps
being taken by the Borrower or any subsidiary affected in
respect thereof: (i) the occurrence of an Event of Default or
an Unmatured Event of Default; or (ii) the institution of, or
any adverse determination in, any litigation, arbitration or
governmental proceeding which is material to the Borrower or
any subsidiary on a consolidated basis; or (iii) the
occurrence of a reportable event under, or the institution of
steps by the Borrower or any subsidiary to withdraw from, or
the institution of any steps to terminate, any employee
benefit plans as to which the Borrower or any of its
subsidiaries may have any liability.
(f) Subsidiaries. Promptly from time to time a written
report of any changes in the list of its subsidiaries.
(g) Other Information. From time to time such other
information, financial or otherwise, concerning the Borrower
or any subsidiary as the Agent or either Lender may reasonably
request.
SECTION 6.3 INSPECTION. The Borrower and any subsidiary
shall permit the Agent or any Lender and their agents at any time
during normal business hours to inspect their properties and to
inspect and make copies of their books and records.
SECTION 6.4 FINANCIAL REQUIREMENTS. Until all of the
obligations of the Borrower under this Agreement and the Notes
are fully paid and performed, neither the Borrower nor any
subsidiary will, unless at any time both Lenders shall otherwise
expressly consent in writing:
(a) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio, as determined as of December 28, 1996 and as of
the end of each fiscal quarter thereafter of the Borrower's
fiscal year, in all instances for the period of the four fiscal
quarters then ending, to be less than 1.25:1.0;
(b) Current Ratio. Permit the ratio of consolidated current
assets to current liabilities (with current liabilities not
including the final installment on the Term Loans due on June
15, 2001) as determined as of the end of each fiscal quarter of
the Borrower's fiscal year, to be less than 1.75:1.0;
(c) Tangible Net Worth. Permit the Borrower's consolidated
Tangible Net Worth, determined as of the end of each fiscal
quarter of the Borrower's fiscal year, to be less than
$25,000,000, plus fifty percent (50%) of the Borrower's
cumulative consolidated net income (disregarding losses) for
all periods subsequent to December 28, 1996.
(d) Leverage Ratio. Permit the Borrower's ratio of (i)
consolidated Funded Debt as at the end of each fiscal quarter
of the Borrower's fiscal year, to (ii) EBITDA for the
Measurement Period ending at the last day of such quarter, to
exceed 2.5:1.0 as at the end of each fiscal quarter ending
after September 28, 1996.
SECTION 6.5 INDEBTEDNESS, LIENS AND TAXES. The Borrower and
any subsidiary shall:
(a) Indebtedness. Not incur, permit to remain outstanding,
assume or in any way become committed for Indebtedness in
respect of borrowed money, except (i) Indebtedness incurred
hereunder or to either Lender; (ii) Indebtedness existing on
the date of this Agreement shown on the financial statements
furnished to both Lenders before this Agreement was signed;
(iii) other Indebtedness existing on the date hereof as listed
in Exhibit K hereto; (iv) other Indebtedness to which the
Lenders give the Borrower prior written consent; and (v)
Indebtedness in the aggregate amount not greater than five
percent (5%) of the Tangible Net Worth of the Borrower at any
time or from time to time.
(b) Liens. Not create, suffer or permit to exist any lien or
encumbrance of any kind or nature upon any of their assets now
or hereafter owned or acquired, or acquire or agree to acquire
any property or assets of any character under any conditional
sale agreement or other title retention agreement, but this
Section shall not be deemed to apply to: (i) liens existing on
the date of this Agreement which are listed on Exhibit I hereto
or of which the Lenders have been advised in writing before
this Agreement was signed; (ii) liens of landlords,
contractors, laborers or supplement, tax liens, or liens
securing performance or appeal bonds or other similar liens or
charges arising out of the Borrower's business, provided that
tax liens are removed before related taxes become delinquent
and other liens are promptly removed, in either case unless
contested in good faith and by appropriate proceedings, and as
to which adequate reserves shall have been established; and
(iii) liens securing borrowings or advances from the Borrower
to wholly-owned subsidiaries.
(c) Taxes. Pay and discharge all taxes, assessments and
governmental charges or levies imposed upon them, upon their
income or profits or upon any properties belonging to them,
prior to the date on which penalties attach thereto, and all
lawful claims for labor, materials and supplies when due,
except that no such tax, assessment, charge, levy or claim
need be paid which is being contested in good faith by
appropriate proceedings and as to which adequate reserves
shall have been established, and as to which no foreclosure,
distraint, sale or similar proceedings have commenced.
(d) Keep Well Agreements. Except as set forth in Exhibit J
hereto, not assume, guarantee, indorse or otherwise become or
be responsible in any manner (whether by agreement to purchase
any obligations, stock, assets, goods or services, or to
supply or advance any funds, assets, goods or services, or
otherwise) with respect to the obligation of any other person
or entity, except by the endorsement of negotiable instruments
for deposit or collection in the ordinary course of business
and except as permitted by this Agreement.
SECTION 6.6 INVESTMENTS AND LOANS. Neither the Borrower
nor any subsidiary shall make any loan, advance, extension of
credit or capital contribution to, or purchase or otherwise
acquire for a consideration, evidences of indebtedness,
capital stock or
other securities of, or all or substantially all of the assets
of, any person in an aggregate amount greater than $1,500,000 (as
determined for the period beginning on the date hereof and ending
on the Termination Date), except that the Borrower and any
subsidiary may:
(a) purchase or otherwise acquire and own short-term money
market items;
(b) extend credit upon customary terms to their customers in
the ordinary course of their business; and
(c) extend credit to officers and employees in accordance with
policies in effect on the date of this Agreement of which the
Lenders have been advised in writing.
SECTION 6.7 CAPITAL STRUCTURE AND DIVIDENDS. Neither the
Borrower nor any subsidiary shall purchase or redeem, or
obligate itself to purchase or redeem, any shares of the
Borrower's capital stock, of any class, issued and outstanding
from time to time, provided, however, that the Borrower may
purchase an amount of shares of the Borrower's capital stock in
a total amount not to exceed $1,000,000 in the aggregate (as
determined for the period beginning on the date hereof and
ending on the Termination Date); or declare or pay any dividend
(other than dividends payable in its own common stock or to the
Borrower) or make any other distribution in respect of such
shares other than to the Borrower. The Borrower shall continue
to own, directly or indirectly, the same (or greater)
percentage of the stock of each subsidiary that it held on the
date of this Agreement, and no subsidiary shall issue any
additional securities other than to
the Borrower.
SECTION 6.8 MAINTENANCE OF PROPERTIES. The Borrower and any
subsidiary shall maintain, or cause to be maintained, in good
repair, working order and condition, all their properties
(whether owned or held under lease), and from time to time make
or cause to be made all needed and appropriate repairs, renewals,
replacements, additions, betterments and improvements thereto, so
that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
SECTION 6.9 INSURANCE. The Borrower and any subsidiary shall
maintain insurance in responsible companies in such amounts and
against such risks as is usually carried by owners of similar
businesses and properties in the same general area in which the
Borrower or its subsidiaries operate. The Lenders agree that the
Borrower may self-insure certain risks and that the levels of
such self-insurance shall be reasonably and prudently determined
solely by the Borrower.
SECTION 6.10 USE OF PROCEEDS.
(a) General. The Borrower and any subsidiary shall not use
or permit any proceeds of the Loans to be used, either directly
or indirectly, for the purpose, whether immediate, incidental
or ultimate, of "purchasing or carrying any margin stock'
within the meaning of Regulations U or X of the Board of
Governors of the Federal Reserve System, as amended from time
to time. If requested by either Lender, the Borrower and any
subsidiary will furnish to such Lender a statement in
conformity with the requirements of Federal Reserve Form U-1 to
the foregoing effect. No part of the proceeds of the Loans
will be used for any purpose which violates or is inconsistent
with the provisions of Regulation U or X of the Board of
Governors.
(b) Tender Offers and Going Private. Neither the Borrower
nor any subsidiary shall use (or permit to be used) any
proceeds of the Loans to acquire any security in any
transaction which is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, as amended, or any regulations
or rulings thereunder.
SECTION 6.11 PURPOSE. The Borrower shall use the proceeds of
the Loans as set forth in Section 5.10 above.
SECTION 6.12 ACCOUNTING PERIODS. The Borrower shall not
alter the method by which it establishes the dates on which its
fiscal year and fiscal quarters end without prior written
notice to the Agent.
SECTION 7 CONDITIONS OF LENDING
The obligation of each Lender to make the Term Loan and each
of the Revolving Credit Loans is subject to the following
conditions precedent:
SECTION 7.1 DOCUMENTATION; FIRST LOAN. In addition to the
conditions precedent set forth in Section 7.2 hereinbelow, the
obligation of both Lenders to make the Term Loan and the first
Revolving Credit Loan is subject to the conditions precedent that
both Lenders shall have received all of the following, each duly
executed and dated the date of this Agreement, in form and
substance satisfactory to the Lenders and their counsel, at the
expense of the Borrower, and in such number of signed
counterparts as each Lender may request (except for the Notes, of
which only the original of each shall be signed):
(a) Revolving Credit Note. Revolving Credit Notes in the
form of Exhibit A, with appropriate insertions, each payable
to each Lender for the face amount of such Lender's Commitment
- Revolving Credit;
(b) Term Note. Term Notes in the form of Exhibit B, with
appropriate insertions, each payable to each Lender for the
face amount of such Lender's Commitment - Term Loan;
(c) Resolutions. A copy of a resolution of the Board of
Directors of the Borrower authorizing or ratifying the
execution, delivery and performance, respectively, of this
Agreement, the Notes and the other documents provided for in
this Agreement, certified by the Secretary of the Borrower;
copies of the resolutions of the Board of Directors of each
subsidiary authorizing or ratifying the execution, delivery
and performance of its guaranty, certified by its Secretary;
(d) Articles of Incorporation and By-laws; Good Standing
Certificates. A copy of the articles of incorporation and by
laws of the Borrower and each subsidiary, certified by the
Secretary of the Borrower and each subsidiary, respectively,
or, in lieu thereof, certification by the Secretary of the
Borrower and each subsidiary that there have been no changes
to said articles of incorporation and by-laws since the
date(s) when certified copies thereof were last furnished to
the Lenders; good standing certificates issued by the
Secretary of State of each state in which the Borrower or such
subsidiary is incorporated and qualified to do business;
(e) Certificates of Incumbency. A certificate of the
Secretary of the Borrower and each subsidiary certifying the
names of the officer or officers of the Borrower or such
subsidiary authorized to sign this Agreement, the Notes, its
guaranty and the other documents provided for in this
Agreement to be signed by the Borrower and such subsidiary,
together with a sample of the true signature of each such
officer (the Lender may conclusively rely on such certificate
until formally advised by a like certificate of any changes
therein);
(f) Guaranties. The Transit Mix Guaranty in the form of
Exhibit C, with appropriate insertions; the Phoenix Guaranty
in the form of Exhibit D, with appropriate insertions; the
▇▇▇▇▇▇▇▇ Guaranty in the form of Exhibit E, with appropriate
insertions; and the Castle Guaranty in the form of Exhibit F,
and the Pueblo Guaranty in the form of Exhibit G with
appropriate insertions;
(g) Certificate of No Default. A certificate signed by the
Chairman of the Board of Directors, the Chief Financial
Officer, the Treasurer or the Secretary of the Borrower to the
effect that: (i) no Event of Default or Unmatured Event of
Default has occurred and is continuing or will result from the
making of the Term Loan and the first Revolving Credit Loan;
and (ii) the representations and warranties of the Borrower
contained herein are true and correct as at the date of the
Term Loan and the first Revolving Credit Loan as though made
on that date;
(h) Opinion of Counsel to the Borrower and Subsidiaries. An
opinion of counsel to the Borrower and its subsidiaries to
such effect as the Lenders may require;
(i) Acquisition Agreement. A certified copy of the
Acquisition Agreement;
(j) Acquisition. The Agent shall have received evidence,
reasonably satisfactory to the Agent, that the Acquisition has
been completed on terms and conditions satisfactory to the
Lenders;
(k) Certificate of Financial Compliance. A certificate
signed by the Chairman of the Board of Directors, the Chief
Financial Officer, the Treasurer or the Secretary of the
Borrower, showing that as of September 28, 1996, the Borrower
was in full compliance with any financial ratio or restriction
contained in the Original Agreement and also containing a
description of the amount and type of capital expenditures
which are excluded from capital expenditures pursuant to the
parenthetical in clause (iv) of the definition of Income
Available for Fixed Charges as set forth in the Original
Agreement; and
(l) Miscellaneous. Such other documents and certificates as
the Agent or the Lenders may request.
SECTION 7.2 REPRESENTATIONS AND WARRANTIES: NO DEFAULT.
(a) Representations and Warranties. At the date of the Term
Loan and each Revolving Credit Loan, the Borrower's
representations and warranties set forth herein shall be true
and correct as at such date with the same effect as though
those representations and warranties had been made on and as
at such date.
(b) No Default. At the time of the Term Loan and each
Revolving Credit Loan, and immediately after giving effect to
the Term Loan and each Revolving Credit Loan, the Borrower
shall be in compliance with all the terms and provisions set
forth herein on its part to be observed or performed, and no
Event of Default or Unmatured Event of Default shall have
occurred and be continuing at the time of any Loan, or would
result from the making of any Loan.
SECTION 7.3 SUCCEEDING LOANS. The application by the
Borrower for any Revolving Credit Loan other than the first shall
be deemed a representation and warranty by the Borrower that the
statements in Section 7.2 are true and correct on and as of the
date of each such Loan.
SECTION 8 DEFAULT
SECTION 8.1 EVENTS OF DEFAULT. Each of the following
occurrences is hereby defined as an "Event of Default":
(a) Nonpayment or Non-Compliance with Financial Requirements.
The Borrower shall fail to make any payment of principal,
interest, or other amounts payable hereunder when and as due,
or shall fail to be in compliance with any of the Financial
requirements set forth at Section 6.4 hereof; or
(b) Default under Related Documents. Any default, event of
default, or similar event shall occur or continue beyond any
applicable grace or notice period under any Loan Document, or
any Loan Document shall not be, or shall cease to be,
enforceable in accordance with its terms; or
(c) Cross-Default. There shall occur any default or event of
default, or any event which might become such with notice or
the passage of time or both, or any similar event, or any
event which requires the prepayment of borrowed money or the
acceleration of the maturity thereof, under the terms of any
evidence of indebtedness or other agreement issued or assumed
or entered into by the Borrower or any subsidiary or under the
terms of any indenture, agreement or instrument under which
any such evidence of indebtedness or other agreement is
issued, assumed, secured or guaranteed, and such event shall
continue beyond any applicable period of grace; or
(d) Dissolutions, etc, The Borrower shall fail to comply with
any provision concerning its existence or that of any
subsidiary or any prohibition against dissolution,
liquidation, merger, consolidation or sale of assets; or
(e) Warranties. Any representation, warranty, schedule,
certificate, financial statement, report, notice or other
writing furnished by or on behalf of the Borrower or to the
Agent or to either Lender is false or misleading in any
material respect on the date as of which the facts therein set
forth are stated or certified; or
(f) Change in Control. A transfer of or an accumulation of
a majority of the outstanding capital stock of the Borrower
shall be acquired, directly or indirectly, by a person or
entity, or group of persons or entities acting in concert, who
own on the date hereof less than 5% of such voting stock; or
(g) ERISA. Any reportable event shall occur under the
Employee Retirement Income Security Act of 1974, as amended,
in respect of any employee benefit plan maintained for
employees of the Borrower or any subsidiary; or
(h) Litigation. Any suit, action or other proceeding
(judicial or administrative) commenced against the Borrower or
any subsidiary, or with respect to any assets of the Borrower
or any subsidiary, shall threaten to have a material and
adverse effect on the future operations of the Borrower or any
subsidiary; or a final judgment or settlement shall be entered
in, or agreed to in respect of, any such suit, action or
proceeding and said final judgment or settlement is for or in
an amount which would have a material adverse effect on the
Borrower and its subsidiaries taken as a whole; or
(i) Noncompliance with this Agreement. The Borrower shall
fail to comply with any material provision hereof, which
failure does not otherwise constitute an Event of Default, and
such failure shall continue for thirty days after notice
thereof to the Borrower by the Agent or either Lender or any
other holder of a Note; or
(j) Guaranty. Any guaranty of the Loans (specifically
including but not limited to the Transit Mix Guaranty, the
Phoenix Guaranty, the ▇▇▇▇▇▇▇▇ Guaranty, the Castle Guaranty
or the Pueblo Guaranty) shall be repudiated or become
unenforceable or incapable of performance; or
(k) Voluntary Bankruptcy. The Borrower or any subsidiary
shall file a petition or answer or consent seeking relief
under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other applicable federal, state
or foreign bankruptcy law or other similar law, or the
Borrower or any subsidiary shall consent to the institution of
proceedings thereunder or the filing of any such petition or
to the appointment or taking possession of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or
similar official of the Borrower or any subsidiary; or
(l) Involuntary Bankruptcy. There shall be entered a decree
or order by a court constituting an order for relief in
respect of the Borrower or any subsidiary under Title 11 of
the United States Code, as now constituted or hereafter
amended, or any other applicable federal, state or foreign
bankruptcy law or other similar law, or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or
similar official of the Borrower or any subsidiary or of any
substantial part of their respective properties, or ordering
the winding-up of or liquidation of the affairs of the
Borrower or any subsidiary and any such decree or order shall
continue unstayed and in effect for a period of forty-five
(45) consecutive calendar days; or
(m) Insolvency. The Borrower or any subsidiary shall become
insolvent or shall fail or be unable to pay its debts as they
mature, shall admit in writing its inability to pay its debts
as they mature, shall make a general assignment for the
benefit of its creditors, shall enter into any composition or
similar agreement, or shall suspend the transaction of all or
a substantial portion of its usual business.
SECTION 8.2 REMEDIES. Upon the
occurrence of any Event of Default set forth in subsections
(a)-(j) of Section 8.1 and during the continuance thereof,
Agent shall, at the request of,
or may, with the consent of the Lenders declare the Notes and any
other amounts owed to the Lenders, including without limitation
any accrued but unpaid Commitment Fee, to be immediately due and
payable, whereupon the Notes and any other amounts owed to the
Lenders shall forthwith become due and payable. Upon the
occurrence of any Event of Default set forth in subsections (k)
(m) of Section 8.1, all of the Notes and any other amounts owed
to both Lenders, including without limitation any accrued but
unpaid Commitment Fee, shall be immediately and automatically due
and payable without action of any kind on the part of either
Lender or any other holder of a Note. Upon the occurrence of any
Event of Default, any obligation of either Lender to make Loans
shall immediately and automatically terminate without action of
any kind on the part of the Agent or either Lender until such
Event of Default is waived by the Lenders, if ever. The Borrower
expressly waives presentment, demand, notice or protest of any
kind in connection herewith. The Agent shall promptly give the
Borrower written notice of any such declaration, but failure to
do so shall not impair the effect of such declaration. No delay
or omission on the part of the Agent, the Lenders or any holder
of a Note in exercising any power or right hereunder or under
such Note shall impair such right or power or be construed to be
a waiver of any Event of Default or any acquiescence therein, nor
shall any single or partial exercise of any power or right
hereunder preclude other or further exercise thereof, or the
exercise of any other power or right.
SECTION 9 THE AGENT
SECTION 9.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby
irrevocably appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms
of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement
or in any other Loan Document, the Agent shall not have any
duties or responsibilities, except those expressly
set forth herein, nor shall the Agent be deemed to have any
fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Documents or
otherwise exist against the Agent.
SECTION 9.2 DELEGATION OF DUTIES. The Agent may execute any
of its duties under this Agreement or any other Loan Document by
or through agents, employees 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 agent or attorney-in-fact that it
selects with reasonable care.
SECTION 9.3 LIABILITY OF AGENT. None of the Agent-Related
Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful
misconduct) or (ii) be responsible in any manner to any of the
Lenders for any recital, statement, representation or warranty
made by the Borrower, or any subsidiary or affiliate of the
Borrower, or any officer thereof, contained in this Agreement or
in any other Loan Document, 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 any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Borrower or
any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall 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 any other Loan Document, or
to inspect the properties, books or records of the Borrower or
any of the Borrower's subsidiaries or affiliates.
SECTION 9.4 RELIANCE BY AGENT. (a) the Agent shall be
entitled to rely, and shall be fully protected in relying upon
any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or
made by the proper person or persons, and upon advice and
statements of legal counsel (including counsel to the Borrower),
independent accountants and other experts selected by the Agent.
The Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document until
it shall have first received such advice or concurrence of the
Lenders as it deems appropriate and, if it so requests, 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. The
Agent shall in all cases be fully protected in acting, or in
refraining from acting under this Agreement or any other Loan
Document in accordance with a request or consent of the Lenders
and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lenders.
(b) for purposes of determining compliance with the
conditions specified in Section 7.1 hereof, each Lender shall be
deemed to have consented to, approved or accepted, or to be
satisfied with, each document or other matter sent by the Agent
to such Lender for consent, approval, acceptance or satisfaction,
or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Lender.
SECTION 9.5 NOTICE OF DEFAULT. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Event of
Default, except with regard to defaults in the payment of
principal, interest and fees required to be paid to the Agent for
the account of the Lenders, unless the Agent shall have received
written notice from a Lender or the Borrower referring to this
Agreement, describing such Event of Default and stating that such
notice is a "notice of default." The Agent shall promptly notify
the Lenders of its receipt of any such notice. The Agent shall
take such action with respect to such Event of Default as may be
requested by the Lenders in accordance with Section 8 hereof;
provided, however, that unless and until the Agent has received
any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with
respect to such Event of Default as it shall deem advisable or in
the best interest of the Lenders.
SECTION 9.6 CREDIT DECISION. Each Lender acknowledges that
none of the Agent-Related Persons has made any representation or
warranty to it, and that no act by the Agent hereinafter taken,
including any review of the affairs of the Borrower and its
subsidiaries, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender
represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such
documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and
creditworthiness of the Borrower and its subsidiaries, and all
applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower hereunder. Each
Lender also represents that it will, independently and without
reliance upon any Agent-Related Person 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 investigations as it
deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports
and other documents expressly herein required to be furnished to
the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations,
property, financial or other condition or creditworthiness of the
Borrower which may come into the possession of any of the Agent
Related Persons.
SECTION 9.7 INDEMNIFICATION OF AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders
shall indemnify upon demand the Agent-Related Persons (to the
extent not reimbursed by or on behalf of the Borrower and without
limiting the obligation of the Borrower to do so), pro rata, from
and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges,
expenses and disbursements (including legal fees) of any kind or
nature whatsoever which may at any time (including at any time
following the repayment of the Loans, the termination of the
Letters of Credit or the resignation or replacement of the Agent)
be imposed on, incurred by or asserted against such Agent-Related
Persons in any way relating to or arising out of this Agreement,
or any Loan document, or any of the transactions contemplated
hereby, or any action taken or omitted by such Agent-Related
Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or
proceeding relating to or arising out of this Agreement or the
Loans or the Letters of Credit or the use of the proceeds
thereof, whether or not the Agent-Related Person so indemnified
is a party thereto; provided, however, that the Lenders shall
have no obligation hereunder to indemnify any Agent-Related
Person under this Section 9.7 with respect to obligations
resulting solely from the gross negligence or willful misconduct
of such Agent-Related Person. Without limitation of the
foregoing, each Lender shall reimburse the Agent upon demand for
its ratable share of any costs or out-of-pocket expenses
(including legal fees) incurred by the Agent in connection with
the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice
in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all
obligations hereunder and the resignation or replacement of the
Agent.
SECTION 9.8 AGENT IN INDIVIDUAL CAPACITY. Northern and its
affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with the Borrower and
its subsidiaries and affiliates as though Northern were not the
Agent hereunder and without notice to or consent of the Lenders.
The Lenders acknowledge that, pursuant to such activities,
Northern or its affiliates may receive information regarding the
Borrower or its subsidiaries (including information that may be
subject to confidentiality obligations in favor of the Borrower
or such subsidiary) and acknowledge that the Agent shall be under
no obligation to provide such information to them. With respect
to its Loans, Northern shall have the same rights and powers
under this Agreement as any other Lender and may exercise the
same as though it were not the Agent.
SECTION 9.9 SUCCESSOR AGENT. The Agent may, and at the
request of the Lenders shall, resign as Agent upon 30 days'
notice to the Lenders. If the Agent resigns under this
Agreement, the Lenders shall appoint from among the Lenders a
successor agent for the Lenders. If no successor agent is
appointed prior to the effective date of the resignation of the
Agent, the Agent may appoint, after consulting with the Lenders
and the Borrower, a successor agent from among the Lenders. Upon
the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the applicable provisions of this
Section 9 shall inure to its benefit as to any actions taken or
omitted to be taken by its while it was Agent under this
Agreement. If no successor agent has accepted appointment as
Agent by the date which is 30 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Agent hereunder until such time,
if any, as the Lenders appoint a successor agent as provided for
above.
SECTION 10 MISCELLANEOUS
SECTION 10.1 WAIVER OF DEFAULT. The Lenders may, by written
notice to the Borrower, at any time and from time to time, waive
any default in the performance or observance of any condition,
covenant or other term hereof, or any Event of Default, which
shall be for such period and subject to such conditions as shall
be specified in any such notice. In the case of any such waiver,
the Lenders and the Borrower shall be restored to their former
position and rights hereunder and under the Notes, respectively,
and any default or Event of Default so waived shall be deemed to
be cured and not continuing; but no such waiver shall extend to
or impair any right consequent thereon or to any subsequent or
other default or Event of Default.
SECTION 10.2 NOTICES. All notices, requests and demands to or
upon the respective parties hereto shall be deemed to have been
given or made when deposited in the mail, postage prepaid, or
when sent if sent by facsimile, addressed:
(a) if to the Borrower to ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Attention: Treasurer)
(b) if to Northern, in its capacity as Agent, or in its
capacity as a Lender, to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President)
(c) if to LaSalle Bank to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice
President)
or to such other address as may be hereafter designated in
writing by the respective parties hereto.
SECTION 10.3 NONWAIVER: CUMULATIVE REMEDIES.
No failure to exercise, and no delay in exercising, on the part
of the Agent or either or all of the Lenders of any right,
power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies of the Lenders herein
provided are cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 10.4 SURVIVAL OF AGREEMENTS. All
agreements, representations and warranties made herein shall
survive the delivery of the Notes and the making of any Loan
hereunder.
SECTION 10.5 SUCCESSORS; PARTICIPATIONS.
This Agreement shall, upon execution and delivery by the
Borrower, and acceptance by the Lenders in Chicago, Illinois,
become effective and shall be binding upon and inure to the
benefit of the Borrower, the Agent, the Lenders and their
respective successors and assigns, except that the Borrower may
not transfer or assign any of its rights or interest hereunder
without the prior written consent of all Lenders. The Lenders
may, without notice or consent of any kind, sell, assign,
transfer or grant participations in all or any of the Loans.
In such event each and every immediate and successive assignee,
transferee or holder of or participant in all or any of the
Loans shall have the right to enforce this Agreement, the
Notes, and all of the other document or instrument executed in
connection herewith, by suit or otherwise, for the benefit of
such assignee, transferee, holder or participant as fully as if
such assignee, transferee, holder or participant were herein by
name specifically given such rights, powers and benefits, but
the Lenders shall have an unimpaired right, prior and superior
to that of any assignee, transferee or holder to enforce this
Agreement, the Notes, and all of the other documents or
instrument executed in connection herewith for the benefit of
the Lenders or any such participant,
as to so much of the Loans as it has not sold, assigned or
transferred.
SECTION 10.6 CAPTIONS. Captions in this
Agreement are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
References herein to Sections or provisions without reference
to the document in which they are contained are references to
this Agreement.
SECTION 10.7 SINGULAR AND PLURAL. Unless the
context requires otherwise, wherever used herein the singular
shall include the plural and vice versa, and the use of one
gender shall also denote the others where appropriate.
SECTION 10.8 COUNTERPARTS. This Agreement
may be executed by the parties on any number of separate
counterparts, and by each party on separate counterparts; each
counterpart shall be deemed an original instrument; and all of
the counterparts taken together shall be deemed to constitute
one and the same instrument.
SECTION 10.9 FEES. The Borrower agrees, upon
demand of the Lenders, to pay or reimburse the Lenders for all
reasonable costs, expenses (including attorneys' fees and legal
costs and expenses, and time charges of attorneys who may be
employees of either of the Lenders, in each case both in and
out of court and in original, appellate and bankruptcy
proceedings), and disbursements incurred or paid by the Lenders
in connection with the preparation, negotiation, documentation,
administration, amendment, modification, waiver or
interpretation of this Agreement, and/or in enforcing or
preserving its rights hereunder or under the Notes or any
document or instrument executed in connection herewith.
Notwithstanding the foregoing, the Borrower shall not be
obligated to pay expenses of the Lenders pertaining to any
lawsuit initiated by the Lenders if the Lender's complaint
shall be dismissed with prejudice or if judgment shall be
rendered, in whole, against the Lenders (and shall not be
reversed on appeal).
SECTION 10.10 CONSTRUCTION; PROVISIONS
SEVERABLE, This Agreement, the Notes and any document or
instrument executed in connection herewith shall be governed
by, and construed and interpreted in accordance with, the
internal laws of the State of Illinois, and shall be deemed to
have been executed in the State of Illinois. If any term or
provision of this Agreement, the Notes, or any other documents
or instrument executed in connection herewith shall be
unenforceable or invalid, such unenforceability or invalidity
shall not render any other term or provision hereof
unenforceable or invalid, and all other terms and provisions of
this Agreement, the Notes, and any other documents or
instrument executed in connection herewith shall be enforceable
and valid.
SECTION 10.11 SUBMISSION TO JURISDICTION;
VENUE. To induce the Lenders to make the Loans, as evidenced
by the Notes and this Agreement, the Borrower irrevocably
agrees that, subject to the Lender's sole and absolute
election, all suits, actions or other proceedings in any way,
manner or respect, arising out of or from or related to this
Agreement, the Notes or any document or instrument executed in
connection herewith, shall be subject to litigation in courts
having situs within Chicago, Illinois. The Borrower hereby
consents and submits to the jurisdiction of any local, state or
federal court located within Chicago, Illinois. The Borrower
hereby waives any right it may have to transfer or change the
venue of any suit, action or other proceeding brought against
the Borrower by the Lenders in accordance with this
Section.
SECTION 10.12 SET-OFF. At any time and without notice of any
kind, any account, deposit or other indebtedness owing by either
Lender to Borrower, and any securities or other property of
Borrower delivered to or left in the possession of either Lender
or its nominee or bailee, may be set off against and applied in
payment of any obligation hereunder (whether as Loans or Letters
of Credit), whether due or not. The Lenders hereby agree that if
either shall, through the exercise of any right of counterclaim,
set-off, banker's lien, or otherwise, receive payment of a
proportion of the aggregate amount of principal and interest due
with respect to its participation in the Loans that is greater
than the proportion received by the Lenders in respect of the
aggregate amount of principal and interest due with respect to
its pro rata share in the Loans, the party receiving such
proportionately greater payment shall increase (the "Set-Off
Increase") its Commitment - Revolving Credit or Commitment - Term
Loan (which it shall be deemed to have done simultaneously upon
receipt of such payment) in the Revolving Credit Loans or Term
Loan, respectively, so that all such recoveries of principal and
interest with respect to all Loans and Letters of Credit shall be
on a pro rata basis. If at any time either Lender is required to
return or refund all or any part of a payment, then after its
refund or repayment, its increased Commitment - Revolving Credit
or Commitment Term Loan shall be computed as if it had never
received such payment.
SECTION 10.13 DOCUMENTATION. Both Lenders represent,
warrant, and covenant to the other Lender that:
(a) In making its decision to enter into this Agreement
and the Notes:
(i) it independently has taken whatever steps it considers
necessary to evaluate the financial condition and affairs of
the Borrower;
(ii) it has made an independent credit judgment;
(iii) it has not relied upon any representation by the
other Lender; and
(iv) neither Lender shall be responsible or liable to the
other Lender for any statements in or omissions from this
Agreement, the Notes, or any other document or instrument
executed by the Borrower or by and among the Borrower and the
Lenders and document or instrument received by either Lender
from the Borrower or concerning the Borrower, and
(b) With respect to the Loans and Letters of Credit and so
long as any portion of the Loans and Letters of Credit,
respectively, remains outstanding, each Lender will continue to
make its own independent evaluation of the financial conditions
and affairs of the Borrower.
SECTION 10.14 LENDERS. The Lenders agree that neither Lender
may amend, waive, alter or agree to any other modification of
this Agreement, the Notes and all other documents or instruments
executed in connection herewith without the prior written consent
and agreement of the other Lender.
SECTION 10.15 MERGER AND INTEGRATION. Commencing as of the
date of this Agreement, this Agreement, the Notes, the Letters of
Credit, the Guaranties referred to herein, and the other
documents and instruments referred to herein contain the entire
agreement among the parties hereto and thereto with respect to
the subject matter hereof and thereof, and specifically
supersede, amend and restate in their entirety the Prior
Documents and the commitments thereunder shall be deemed
terminated. Notwithstanding the foregoing and without limiting
any other rights that may have accrued under the Prior Documents
prior to the date hereof, all rights of the Lenders under the
Prior Documents to payment under the Prior Documents that have
accrued or arose on or prior to the date hereof, shall survive
the termination of commitments under the Prior Documents, and the
principal amount of all advances made under the Prior Documents
shall not, however, be deemed paid in full but rather transferred
as provided herein. All Notes issued hereunder are, to the
extent of such outstanding indebtedness, in substitution for, and
not in repayment of, the principal indebtedness evidenced by the
Original Agreement.
CONTINENTAL MATERIALS CORPORATION
By:
Its:
THE NORTHERN TRUST COMPANY
By:
Its:
LASALLE NATIONAL BANK
By:
Its: