EXHIBIT 10 A
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF FEBRUARY 1, 1999
AMONG
ALLIED PRODUCTS CORPORATION,
THE BANKS NAMED HEREIN
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
INDIVIDUALLY AND AS AGENT
TABLE OF CONTENTS
PAGE NO.
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SECTION 1 COMMITMENTS OF THE BANKS; TYPES OF LOANS; LETTER OF CREDIT,
BORROWING AND CONVERSION PROCEDURES.. . . . . . . . . . . . . 1
SECTION 1.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1.1 Revolving Loan Commitment . . . . . . . . . . . . . . . . . . 2
SECTION 1.1.2 Letter of Credit Commitments. . . . . . . . . . . . . . . . . 2
SECTION 1.1.3 Commitment Limits . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2 Various Types of Loans. . . . . . . . . . . . . . . . . . . . 3
SECTION 1.3 Borrowing Procedures. . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.4 Conversion Procedures . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.5 Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.6 Letter of Credit Procedures . . . . . . . . . . . . . . . . . 4
SECTION 1.7 Participation in Letters of Credit. . . . . . . . . . . . . . 4
SECTION 1.8 Reimbursement Obligations . . . . . . . . . . . . . . . . . . 5
SECTION 1.9 Limitation on Bank of America's Obligations . . . . . . . . . 5
SECTION 1.10 Funding by Banks to Bank of America . . . . . . . . . . . . . 5
SECTION 1.11 Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 1.12 Warranty. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 1.13 Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2 NOTES EVIDENCING LOANS. . . . . . . . . . . . . . . . . . . . 6
SECTION 2.1 Revolving Notes . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2 Recordation of Loans. . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.3 Replacement Notes . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3 INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.1 Interest Rates. . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2 Interest Payment Dates. . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 Interest Periods. . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.4 Setting and Notice of Eurodollar Rates. . . . . . . . . . . . 8
SECTION 3.5 Computation of Interest . . . . . . . . . . . . . . . . . . . 8
SECTION 4 RESERVED. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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SECTION 5 FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 5.1 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . 8
SECTION 5.2 Facility Fee. . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 5.3 Agent's Fees. . . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS; VOLUNTARY
PREPAYMENTS.. . . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 6.1 Reduction or Termination of the Commitments . . . . . . . . .10
SECTION 6.2 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . .10
SECTION 6.3 Mandatory Prepayment. . . . . . . . . . . . . . . . . . . . .11
SECTION 6.4 Certain Prepayment Mechanics. . . . . . . . . . . . . . . . .11
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF. . . . . . . . . . .11
SECTION 7.1 Making of Payments. . . . . . . . . . . . . . . . . . . . . .11
SECTION 7.2 Application of Certain Payments . . . . . . . . . . . . . . .12
SECTION 7.3 Due Date Extension. . . . . . . . . . . . . . . . . . . . . .12
SECTION 7.4 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 7.5 Proration of Payments . . . . . . . . . . . . . . . . . . . .12
SECTION 7.6 Withholding Tax . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS. . .14
SECTION 8.1 Increased Costs . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 8.2 Basis for Determining Interest Rate Inadequate or Unfair. . .15
SECTION 8.3 Changes in Law Rendering Certain Loans Unlawful . . . . . . .15
SECTION 8.4 Funding Losses. . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 8.5 Right of Banks to Fund through Other Offices. . . . . . . . .16
SECTION 8.6 Discretion of Banks as to Manner of Funding . . . . . . . . .16
SECTION 8.7 Mitigation. . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 8. Conclusiveness of Statements; Survival of Provisions. . . . .17
SECTION 9 WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 9.1 Organization and Qualification. . . . . . . . . . . . . . . .17
SECTION 9.2 Authorization: No Conflict and Validity of Obligations. . . .17
SECTION 9.3 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 9.4 Financial Statements. . . . . . . . . . . . . . . . . . . . .17
SECTION 9.5 No Material Adverse Change. . . . . . . . . . . . . . . . . .18
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SECTION 9.6 Litigation and Contingent Liabilities . . . . . . . . . . . .18
SECTION 9.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 9.8 Pension and Welfare Plans . . . . . . . . . . . . . . . . . .18
SECTION 9.9 Investment Company Act. . . . . . . . . . . . . . . . . . . .18
SECTION 9.10 Regulation U. . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 9.11 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 9.12 Company's Material Agreements . . . . . . . . . . . . . . . .19
SECTION 9.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 9.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 9.15 Business Locations. . . . . . . . . . . . . . . . . . . . . .19
SECTION 9.16 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 9.17 Environmental Matters . . . . . . . . . . . . . . . . . . . .19
SECTION 9.18 Treatment and Storage . . . . . . . . . . . . . . . . . . . .19
SECTION 9.19 Compliance With Laws. . . . . . . . . . . . . . . . . . . . .20
SECTION 9.20 Information . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 9.21 Year 2000 Problem . . . . . . . . . . . . . . . . . . . . . .20
SECTION 10 COVENANTS.. . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 10.1 Reports, Certificates and Other Information . . . . . . . . .20
SECTION 10.1.1 Audit Report. . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 10.1.2 Quarterly Reports . . . . . . . . . . . . . . . . . . . . . .21
SECTION 10.1.3 Monthly Reports . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 10.1.4 Compliance Certificates . . . . . . . . . . . . . . . . . . .21
SECTION 10.1.5 Reports to SEC and to Shareholders. . . . . . . . . . . . . .21
SECTION 10.1.6 Notice of Default, Litigation and ERISA Matters . . . . . . .21
SECTION 10.1.7 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 10.1.8 Projections . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 10.1.9 Other Information . . . . . . . . . . . . . . . . . . . . . .22
SECTION 10.2 Books, Records and Inspections. . . . . . . . . . . . . . . .22
SECTION 10.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 10.5.1 Capital Expenditures. . . . . . . . . . . . . . . . . . . . .22
SECTION 10.5.2 Minimum Consolidated Operating Cash Flow. . . . . . . . . . .22
SECTION 10.5.3 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . .23
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SECTION 10.6 Funded Debt/Operating Cash Flow Ratio . . . . . . . . . . . .23
SECTION 10.7 Consolidated Fixed Charge Coverage. . . . . . . . . . . . . .23
SECTION 10.8 Minimum Debt Coverage . . . . . . . . . . . . . . . . . . . .23
SECTION 10.9 Purchase or Redemption of Company's Securities; Dividend
Restrictions. . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 10.10 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 10.11 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 10.12 Guaranties, Loans or Advances . . . . . . . . . . . . . . . .25
SECTION 10.13 Mergers, Consolidations, Sales. . . . . . . . . . . . . . . .25
SECTION 10.14 Investments . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 10.15 Environmental Covenants.. . . . . . . . . . . . . . . . . . .27
SECTION 10.15.1 Environmental Response Obligation . . . . . . . . . . . . . .27
SECTION 10.15.2 Environmental Liabilities . . . . . . . . . . . . . . . . . .27
SECTION 10.16 Unconditional Purchase Obligations. . . . . . . . . . . . . .27
SECTION 10.17 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . .27
SECTION 10.18 Regulation U. . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 10.19 Significant Subsidiary. . . . . . . . . . . . . . . . . . . .27
SECTION 10.20 Other Agreements. . . . . . . . . . . . . . . . . . . . . . .28
SECTION 10.21 Compliance With Laws. . . . . . . . . . . . . . . . . . . . .28
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING. . . . . . . . . . . . .28
SECTION 11.1 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 11.1.1 Revolving Notes . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 11.1.2 Certificate . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 11.1.3 Resolutions . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 11.1.4 Consents and Approvals. . . . . . . . . . . . . . . . . . . .28
SECTION 11.1.5 Incumbency and Signatures . . . . . . . . . . . . . . . . . .29
SECTION 11.1.6 Opinions of Counsel for the Company . . . . . . . . . . . . .29
SECTION 11.1.7 Other Documents . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 11.2 All Loans and Letters of Credit . . . . . . . . . . . . . . .29
SECTION 11.2.1 No Default. . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 11.2.2 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT. . . . . . . . . . . . . .30
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SECTION 12.1 Events of Default . . . . . . . . . . . . . . . . . . . . . .30
SECTION 12.1.1 Non-Payment of Notes, etc . . . . . . . . . . . . . . . . . .30
SECTION 12.1.2 Non-Payment of Other Indebtedness for Borrowed Money. . . . .30
SECTION 12.1.3 Other Material Obligations. . . . . . . . . . . . . . . . . .30
SECTION 12.1.4 Bankruptcy, Insolvency. . . . . . . . . . . . . . . . . . . .30
SECTION 12.1.5 Non-Compliance with This Agreement. . . . . . . . . . . . . .30
SECTION 12.1.6 Warranties. . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 12.1.7 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 12.1.8 Material Adverse Change . . . . . . . . . . . . . . . . . . .31
SECTION 12.1.9 Change of Control . . . . . . . . . . . . . . . . . . . . . .31
SECTION 12.2 Effect of Event of Default. . . . . . . . . . . . . . . . . .31
SECTION 13 CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . .32
SECTION 14 THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 14.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 14.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 14.3 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 14.4 Credit Investigation. . . . . . . . . . . . . . . . . . . . .49
SECTION 14.5 Agent and Affiliates. . . . . . . . . . . . . . . . . . . . .49
SECTION 14.6 Resignation . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 14.7 Letters of Credit . . . . . . . . . . . . . . . . . . . . . .50
SECTION 15 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 15.1 Waiver; Amendments. . . . . . . . . . . . . . . . . . . . . .50
SECTION 15.2 Confirmations . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 15.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 15.4 Computations. . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 15.5 Regulation U. . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 15.6 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . .51
SECTION 15.7 Subsidiary References . . . . . . . . . . . . . . . . . . . .52
SECTION 15.8 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 15.9 Indemnification . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 15.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 15.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .52
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PAGE NO.
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SECTION 15.12 Successors and Assigns. . . . . . . . . . . . . . . . . . . .53
SECTION 15.13 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . .53
SECTION 15.14 Securities Laws . . . . . . . . . . . . . . . . . . . . . . .53
SECTION 15.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . .53
SECTION 15.16 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . .54
SECTION 15.17 Assignments and Participations. . . . . . . . . . . . . . . .54
EXHIBITS
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Exhibit A Commitment Limits and Percentages
Exhibit B Revolving Note
Exhibit C Opinion of Counsel
Exhibit D Borrowing Base Report
Exhibit E Assignment And Acceptance Agreement
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SCHEDULES
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I. Existing Letters of Credit
9.1 Foreign Jurisdictions
9.3 Subsidiaries
9.4 Financial Statements
9.5 Adverse Change
9.6 Litigation
9.8 Pension and Welfare
9.14 Insurance
9.15 Business Locations
9.17 Environmental Matters
9.18 Treatment and Storage
10.1.3 Monthly Reports
10.10 Indebtedness
10.11 Liens
10.14 Investments
13. Verson Division Special Expenses
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 1, 1999
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 1,
1999 (herein, as amended or otherwise modified from time to time, called this
"Agreement"), is entered into among ALLIED PRODUCTS CORPORATION, a Delaware
corporation (herein called the "Company"), the undersigned banks (together with
Bank of America herein collectively called the "Banks" and individually each
called a "Bank"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (as
successor to Bank of America Illinois) (herein, in its individual capacity,
called "Bank of America"), and as agent for the Banks (herein, in such capacity,
called the "Agent"). Certain terms are used in this Agreement as hereinafter
defined.
W I T N E S S E T H:
WHEREAS, the Company and the Banks are party to an Amended and Restated
Credit Agreement, dated as of August 23, 1996 as amended or modified (as so
amended or modified to date, the "Existing Credit Agreement"), whereby the Banks
have agreed to make loans and certain other financial accommodations to the
Company;
WHEREAS, pursuant to the Existing Credit Agreement, Bank of America has
issued, and the Banks have acquired participations in, the letters of credit
listed in Schedule I hereto (the "Existing Letters of Credit");
WHEREAS, effective as of the Effective Date, the Company desires that the
Banks waive for the Fiscal Quarter ending December 31, 1998 (but not any period
thereafter), non-compliance by the Company with the financial covenants
contained in SECTIONS 10.5, 10.6 AND 10.7 of the Existing Credit Agreement; and
WHEREAS, the Company and the Banks desire to amend and restate the Existing
Credit Agreement in its entirety, subject to the terms and conditions of this
Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that as
of the Effective Date the Existing Credit Agreement is amended and restated in
its entirety, as follows:
SECTION 1 COMMITMENTS OF THE BANKS; TYPES OF LOANS; LETTER OF CREDIT,
BORROWING AND CONVERSION PROCEDURES.
SECTION 1.1 COMMITMENTS. On and subject to the terms and conditions of
this Agreement, each of the Banks, severally and for itself alone, agrees to
make loans to the Company as follows:
-1-
SECTION 1.1.1 REVOLVING LOAN COMMITMENT. Loans on a revolving basis
(herein collectively called the "Revolving Loans" and each individually called a
"Revolving Loan") from time to time before the Revolving Termination Date in
such Bank's Percentage of such aggregate amounts as the Company may from time to
time request from all Banks, subject to the terms and conditions of this
Agreement.
SECTION 1.1.2 LETTER OF CREDIT COMMITMENTS. (a) Bank of America and the
Banks agree that Bank of America will issue documentary and standby letters of
credit containing such terms and conditions as shall be permitted pursuant to
this Agreement and reasonably satisfactory to Bank of America (herein, together
with the Existing Letters of Credit, collectively called the "Letters of Credit"
and each individually called a "Letter of Credit") at the request of and for the
account of the Company from time to time before the Revolving Termination Date
and (b) as more fully set forth in SECTION 1.7, each Bank agrees to purchase a
participation in all such Letters of Credit.
SECTION 1.1.3 COMMITMENT LIMITS. Notwithstanding any other provision of
this Agreement (a) the aggregate principal amount of the Revolving Loans which
all Banks are committed to lend to the Company together with the Stated Amount
of all Letters of Credit then outstanding shall not at any one time exceed the
lesser of (i) the Borrowing Base or (ii) the following amounts (less in each
case any reductions made pursuant to SECTION 6.1 or SECTION 6.3) during the
following period:
PERIOD AMOUNT
------ ------
December 31, 1998 $145,000,000
February 1, 1999 $140,000,000
February 28, 1999 $140,000,000
March 31, 1999 $140,000,000
April 30, 1999 $135,000,000
May 31, 1999 $135,000,000
June 30, 1999 $135,000,000
July 31, 1999 $110,000,000
August 31, 1999 $105,000,000
September 30, 1999 $ 95,000,000
October 31, 1999 $ 95,000,000
November 30, 1999 $ 90,000,000
December 31, 1999 $ 80,000,000
(b) the aggregate Stated Amount of all Letters of Credit shall not at any time,
exceed $20,000,000; (c) the aggregate principal amount of each Bank's
participation in the Revolving Loans shall not exceed the amounts set forth
opposite such Bank's name in Column I of EXHIBIT A (less such Bank's Percentage
of any reductions made pursuant to SECTION 1.1.3(a)(ii), SECTION 6.1 or SECTION
6.3), and (d) the aggregate principal amount of each Bank's participation in all
Letters of Credit shall not exceed such Bank's Percentage of the amounts set
forth above for the applicable period (less such Bank's Percentage of any
reductions made pursuant to SECTION 1.1.3(a)(ii), SECTION 6.1 or SECTION 6.3).
SECTION 1.2 VARIOUS TYPES OF LOANS. Each Revolving Loan shall be either a
Floating Rate Loan or a Eurodollar Loan as the Company shall specify in the
related notice of borrowing or
-2-
Conversion pursuant to SECTION 1.3 or 1.4. Eurodollar Loans having the same
Interest Period are sometimes called a "Group" or collectively "Groups".
Floating Rate Loans and Eurodollar Loans may be outstanding at the same time,
it being understood, however, that (i) there shall not at any time be more
than eight Groups of Eurodollar Loans and (ii) the aggregate principal amount
of each Group of Eurodollar Loans shall be at least $500,000 and in an
integral multiple of $100,000.
SECTION 1.3 BORROWING PROCEDURES. (a) Provided that the conditions in
SECTION 11 are satisfied, the Company shall give notice to the Agent of each
proposed borrowing by 11:00 A.M., Chicago time, on the proposed date of such
borrowing, in the case of a Floating Rate borrowing, and on a Business Day at
least two Business Days prior to the proposed date of such borrowing, in the
case of a Eurodollar borrowing. Each such notice shall be effective upon
receipt by the Agent, shall be in writing (or by telephone to be promptly
confirmed in writing by the Company), and shall specify the date, amount and
type of borrowing and, in the case of a Eurodollar borrowing, the initial
Interest Period for such borrowing. Promptly upon receipt of such notice, but
in any event by 12:30 P.M., the Agent shall advise each Bank thereof. Not later
than 2:00 P.M. Chicago time, on the date of the proposed borrowing, each Bank
shall provide the Agent at the principal office of the Agent in Chicago with
immediately available funds covering such Bank's Percentage of the borrowing,
and, subject to the satisfaction of the conditions precedent set forth in
SECTION 11 with respect to such borrowing, the Agent shall pay over the
requested amount to the Company on the requested borrowing date. Each Floating
Rate Loan borrowing shall be on a Business Day and shall be in an aggregate
amount of at least $100,000 and an integral multiple of $100,000. Each
Eurodollar Loan borrowing shall be on a Business Day and shall be in an
aggregate amount of at least $500,000 and an integral multiple of $100,000.
(b) Unless the Agent shall have received notice from a Bank prior to the
proposed date of any borrowing in the case of a Eurodollar borrowing, or prior
to 12:30 P.M., Chicago time, on the proposed date of any Floating Rate
borrowing, that such Bank will not make available to the Agent such Bank's
ratable portion of such borrowing, the Agent may assume that such Bank has made
such portion available to the Agent on the date of such borrowing in accordance
with SUBSECTION (a) above and the Agent may, in reliance upon such assumption,
make available to the Company on such date a corresponding amount. If and to
the extent such Bank shall not have so made such ratable portion available to
the Agent, such Bank and the Company severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Company until
the date such amount is repaid to the Agent, (i) in the case of the Company, at
the interest rate applicable at the time to the Revolving Loans comprising such
borrowing and (ii) in the case of such Bank, at the Federal Funds Rate. If such
Bank shall repay to the Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Revolving Loan as part of such borrowing for
purposes of this Agreement. Nothing in this SUBSECTION (b) shall be deemed to
diminish the Commitment of any Bank.
(c) The failure of any Bank to make the Revolving Loan to be made by it as
part of any borrowing shall not relieve any other Bank of its obligation
hereunder to make its Revolving Loan on the date of such borrowing, but no Bank
shall be responsible for the failure of any other Bank to make the Revolving
Loan to be made by such other Bank on the date of any borrowing.
-3-
SECTION 1.4 CONVERSION PROCEDURES. Subject to the provisions of SECTION
1.2, the Company may Convert all or any part of any outstanding Revolving Loan
into a Revolving Loan of a different type by giving notice to the Agent of such
Conversion by 11:00 A.M., Chicago time, on the proposed date of such Conversion,
in the case of Conversion into a Floating Rate Loan, and at least two Business
Days prior to the proposed date of such Conversion, in the case of Conversion
into a Eurodollar Loan. Each such notice shall be effective upon receipt by the
Agent, shall be in writing (or by telephone to be promptly confirmed in writing
by the Company), shall specify the date and amount of such Conversion, the
Revolving Loan or portion thereof to be so Converted, the type of Revolving Loan
such Revolving Loan shall be Converted into and, in the case of a Conversion
into a Eurodollar Loan, the initial Interest Period. Promptly upon receipt of
such notice the Agent shall advise each Bank thereof. Subject to SECTIONS 1.12
and 1.13, such Revolving Loan shall be so Converted on the requested date of
Conversion. Each Conversion shall be on a Business Day and shall be in an
aggregate principal amount of at least $500,000 and an integral multiple of
$100,000.
SECTION 1.5 PRO RATA TREATMENT. All borrowings, Conversions and
repayments shall be effected so that after giving effect thereto all types and
Groups of Revolving Loans shall be pro rata among the Banks according to their
respective Percentages.
SECTION 1.6 LETTER OF CREDIT PROCEDURES. Provided that the conditions in
SECTION 11.2 are satisfied, the Company shall give notice to Bank of America of
the proposed issuance of each Letter of Credit on a Business Day which is at
least two (2) Business Days prior to the proposed date of issuance of such
Letter of Credit. Each such notice shall be accompanied by a Letter of Credit
Application, duly executed by the Company and in all respects satisfactory to
Bank of America, together with such other documentation as Bank of America may
request in support thereof, it being understood that each Letter of Credit
Application shall specify, among other things, the date on which the proposed
Letter of Credit is to be issued, the expiration date of such Letter of Credit
(which shall not extend beyond the earlier of (a) one year from the date of
issuance of the Letter of Credit or (b) the Revolving Termination Date) and
whether such Letter of Credit is to be transferable in whole or in part.
Subject to the satisfaction of the conditions precedent set forth in SECTION 11
with respect to the issuance of such Letter of Credit, Bank of America shall
issue such Letter of Credit on the requested issuance date.
SECTION 1.7 PARTICIPATION IN LETTERS OF CREDIT. Concurrently with the
issuance of each Letter of Credit Bank of America shall notify each Bank of such
issuance and shall be deemed to have sold and transferred to each other Bank,
and each other Bank shall be deemed irrevocably and unconditionally to have
purchased and received from Bank of America, without recourse or warranty, an
undivided interest and participation, to the extent of such other Bank's
Percentage, in such Letter of Credit and the Company's reimbursement obligations
with respect thereto. For the purposes hereof, all Existing Letters of Credit
shall be deemed to have been issued under this Agreement and each Bank hereby
acknowledges its participation therein. For the purpose of this Agreement, the
unparticipated portion of each Letter of Credit shall be deemed to be Bank of
America's "participation" therein. Bank of America hereby agrees to deliver to
such Bank a list of outstanding Letters of Credit, copies of such Letters of
Credit, Letter of Credit Applications and related documentation as such other
Bank may from time to time reasonably request.
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SECTION 1.8 REIMBURSEMENT OBLIGATIONS. The Company hereby unconditionally
and irrevocably agrees to reimburse Bank of America for each payment or
disbursement made by Bank of America under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, on the date that such
payment or disbursement is made. Any amount not reimbursed on the date of such
payment or distribution shall bear interest from and including the date of such
payment or disbursement to but not including the date that Bank of America is
reimbursed by the Company therefor, payable monthly in arrears, at a rate per
annum equal to the Alternate Reference Rate from time to time in effect (but not
less than the Alternate Reference Rate in effect at the date of such payment or
disbursement by Bank of America) PLUS 2% per annum. Bank of America shall
notify the Company whenever any demand for payment is made under any Letter of
Credit by the beneficiary thereunder; PROVIDED, however, that the failure of
Bank of America to so notify the Company shall not affect the rights of Bank of
America or the Banks in any manner whatsoever.
SECTION 1.9 LIMITATION ON BANK OF AMERICA'S OBLIGATIONS. In determining
whether to pay under any Letter of Credit, Bank of America shall have no
obligation to the Company or any Bank other than to confirm that any documents
required to be delivered under such Letter of Credit appear to have been
delivered and that they appear to comply on their face with the requirements of
such Letter of Credit. Any action taken or omitted to be taken by Bank of
America under or in connection with any Letter of Credit, if taken or omitted in
the absence of gross negligence or willful misconduct, shall not impose upon
Bank of America any liability to the Company or any Bank and shall not reduce or
impair the Company's reimbursement obligations set forth in SECTION 1.8 or the
funding obligations of the Banks pursuant to SECTION 1.10.
SECTION 1.10 FUNDING BY BANKS TO BANK OF AMERICA. In the event that Bank
of America makes any payment or disbursement under any Letter of Credit and the
Company shall not have reimbursed Bank of America in full for such payment or
disbursement by 10:00 A.M., Chicago time, on the date of such payment or
disbursement, or in the event that any reimbursement received by Bank of America
from the Company is or must be returned or rescinded upon or during any
bankruptcy or reorganization or otherwise, each Bank shall be obligated to pay
to Bank of America, in full or partial payment of the purchase price of its
participation in such Letter of Credit, its pro rata share, according to its
Percentage, of such payment or disbursement (but such obligation of the Banks
shall not diminish the obligation of the Company under SECTION 1.8), and the
Agent shall promptly notify each other Bank thereof. Each other Bank
irrevocably and unconditionally agrees to so pay to the Agent in immediately
available funds for Bank of America's account the amount of such other Bank's
Percentage of such payment or disbursement. If and to the extent any Bank shall
not have made such amount available to the Agent by 2:00 P.M., Chicago time, on
the Business Day on which such Bank receives notice from the Agent of such
payment or disbursement (it being understood that any such notice received after
noon, Chicago time, on any Business Day shall be deemed to have been received on
the next following Business Day), such Bank agrees to pay interest on such
amount to the Agent for Bank of America's account forthwith on demand for each
day from and including the date such amount was to have been delivered to the
Agent to but not including the date such amount is paid, at a rate per annum
equal to the Federal Funds Rate. Any Bank's failure to make available to the
Agent its Percentage of any such payment or disbursement shall not relieve any
other Bank of its obligation hereunder to make available to the Agent such other
Bank's Percentage of such payment, but no Bank shall be responsible for the
failure of any
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other Bank to make available to the Agent such other Bank's Percentage of any
such payment or disbursement.
SECTION 1.11 CASH COLLATERAL. If any Letter of Credit remains outstanding
on the Revolving Termination Date, the Company shall deposit with the Agent, as
security for all outstanding Letters of Credit and pursuant to documentation in
form and substance satisfactory to the Banks, cash collateral in an amount equal
to the Stated Amount of all outstanding Letters of Credit, which cash collateral
may be placed in an interest bearing account acceptable to the Required Banks
and the Company.
SECTION 1.12 WARRANTY. Each notice of borrowing and/or of Conversion
pursuant to SECTION 1.3 or 1.4, and the delivery of each Letter of Credit
Application pursuant to SECTION 1.6 shall automatically constitute a warranty by
the Company to the Agent and each Bank to the effect that on the date of such
requested borrowing or Conversion (other than any Conversion from a Eurodollar
Loan to a Floating Rate Loan required by SECTION 1.13 or 8.3) or the issuance of
the requested Letter of Credit, as the case may be, (a) the warranties of the
Company contained in SECTION 9 of this Agreement shall be true and correct in
all material respects as of such requested date as though made on the date
thereof and (b) no Event of Default or Unmatured Event of Default shall have
then occurred and be continuing or will result therefrom.
SECTION 1.13 CONDITIONS. Notwithstanding any other provision of this
Agreement, no Bank shall be obligated to make any Revolving Loan or to Convert
into or permit the continuation at the end of the applicable Interest Period of
any Eurodollar Loan, and Bank of America shall not be obligated to issue any
Letter of Credit, if an Event of Default or Unmatured Event of Default exists or
would result therefrom.
SECTION 2 NOTES EVIDENCING LOANS.
SECTION 2.1 REVOLVING NOTES. The Revolving Loans of each Bank shall be
evidenced by a promissory note (herein individually called a "Revolving Note" or
"Note", and collectively for all Banks called the "Revolving Notes" or "Notes"),
substantially in the form set forth in EXHIBIT B, with appropriate insertions,
dated the Effective Date payable to the order of such Bank in the principal
amount of the Revolving Loan Commitment of such Bank (or, if less, in the
aggregate unpaid principal amount of such Bank's Revolving Loans). Each
Revolving Note (including all Revolving Loans) shall be due and payable on the
Revolving Termination Date.
SECTION 2.2 RECORDATION OF LOANS. Each Bank shall record in its records,
or at its option on the schedule attached to its Revolving Note, the date and
amount of each Revolving Loan made by such Bank, each repayment or Conversion
thereof and, in the case of each Eurodollar Loan the dates on which each
Interest Period for such Revolving Loan shall begin and end and, in the event
that any Bank assigns or transfers its Revolving Note, such Bank shall record on
the schedule attached to its Revolving Note, the aggregate unpaid principal
amount of Revolving Loans of such Bank on the date of such assignment or
transfer. The aggregate unpaid principal amount so recorded shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on such Revolving
Note. The failure to so record any such amount or any error in so recording any
such amount shall not, however, limit or otherwise affect the obligations of the
Company hereunder
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or under any Revolving Note to repay the principal amount of the Revolving
Loans evidenced by such Revolving Note together with all interest accruing
thereon.
SECTION 2.3 REPLACEMENT NOTES. The Revolving Note to each Bank is issued
in replacement of the Note ("Existing Note") issued to such Bank under the
Existing Credit Agreement (and each Bank agrees to add a legend to such effect
to its Existing Note). Each Bank is authorized to add to the schedule attached
to its Revolving Note the information contained on the schedule attached to its
Existing Note.
SECTION 3 INTEREST.
SECTION 3.1 INTEREST RATES. The Company hereby promises to pay interest on
the unpaid principal amount of each Revolving Loan for the period commencing on
the date of such Revolving Loan until such Revolving Loan is paid in full, as
follows:
(a) At all times while such Revolving Loan is a Floating Rate Loan, at a
rate per annum equal to the Alternate Reference Rate from time to time in
effect, plus the applicable Margin in effect from time to time;
(b) At all times while such Revolving Loan is a Eurodollar Loan, at a rate
per annum equal to the Eurodollar Rate (Reserve Adjusted) applicable to each
Interest Period for such loan, plus the applicable Margin in effect from time to
time; and
(c) Notwithstanding the provisions of the preceding CLAUSES (A) and (B),
in the event that any principal of any Revolving Loan is not paid when due
(whether by acceleration or otherwise), interest shall accrue after the due date
of such principal until such principal is paid, at a rate per annum equal to the
applicable interest rate from time to time in effect (but not less than the
applicable interest rate in effect for such Revolving Loan as at such due date),
plus 2% per annum.
SECTION 3.2 INTEREST PAYMENT DATES. Accrued interest on each Floating
Rate Loan shall be payable on the last day of each calendar quarter and at
maturity, commencing with the first of such dates to occur after the date
hereof. Subject to SECTION 3.3 below, accrued interest on each Eurodollar Loan
shall be payable on the last day of each Interest Period relating to such Loan
and at maturity; provided that accrued interest on any Eurodollar Loan with an
Interest Period in excess of 3 months shall also be payable at the end of each
three month period of such Interest Period. After maturity, accrued interest on
all Revolving Loans shall be payable on demand.
SECTION 3.3 INTEREST PERIODS. Each Interest Period for a Eurodollar Loan
shall commence on the date such Eurodollar Loan is made or Converted from a
Floating Rate Loan, or on the expiration of the immediately preceding Interest
Period for such Eurodollar Loan, and shall end on the date which is 1, 2, 3 or 6
months thereafter, as the Company may specify:
(a) in the case of an Interest Period which commences on the date a
Eurodollar Loan is made or Converted from a Floating Rate Loan, in the related
notice of borrowing or Conversion pursuant to SECTION 1.3 or 1.4, or
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(b) in the case of a succeeding Interest Period with respect to any
Eurodollar Loan, by notice to the Agent by 11:00 A.M., Chicago time, at least
two Business Days prior to the first day of such succeeding Interest Period,
being understood that (i) each such notice shall be effective upon receipt by
the Agent and shall be in writing (or by telephone to be promptly confirmed in
writing) and (ii) if the Company fails to give such notice, such Eurodollar Loan
shall automatically become a Floating Rate Loan at the end of its then-current
Interest Period.
Each Interest Period for a Eurodollar Loan which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business Day
(unless such next succeeding Business Day is the first Business Day of a
calendar month, in which case such Interest Period shall end on the next
preceding Business Day). Notwithstanding any other provision of this Agreement,
the Company may not select any Interest Period that extends beyond the Revolving
Termination Date. After giving effect to any Revolving Loan, there shall not be
more than eight (8) different Interest Periods in effect for all Revolving Loans
then outstanding.
SECTION 3.4 SETTING AND NOTICE OF EURODOLLAR RATES. The applicable
Eurodollar Rate for each Interest Period shall be determined by the Agent, and
notice thereof shall be given by the Agent promptly to the Company and each
Bank. Each determination of the applicable Eurodollar Rate by the Agent shall
be conclusive and binding upon the parties hereto, in the absence of
demonstrable error. The Agent shall, upon written request of the Company or any
Bank, deliver to the Company or such Bank a statement showing the computations
used by the Agent in determining any applicable Eurodollar Rate hereunder.
SECTION 3.5 COMPUTATION OF INTEREST. Interest shall be computed for the
actual number of days elapsed on the basis of a year of 360 days. The
applicable interest rate under CLAUSES (a) and (c) of SECTION 3.1 shall (to the
extent applicable in the case of CLAUSE (c)) change simultaneously with each
change in the Alternate Reference Rate and/or the applicable Margin.
SECTION 4 RESERVED.
SECTION 5 FEES.
SECTION 5.1 LETTER OF CREDIT FEES.
(a) The Company agrees to pay to the Agent for the account of the Banks
pro rata according to their respective Percentages a letter of credit fee for
each Letter of Credit in an amount equal to the applicable Margin at the time of
issuance of such Letter of Credit (computed for the actual number of days
elapsed on the basis of a year of 360 days) of the face amount of such Letter of
Credit, such fee to be payable in arrears on the last day of each calendar
quarter and on the Revolving Termination Date for the period from and including
the date of the issuance of such Letter of Credit to and including such payment
date or the date upon which such Letter of Credit expired or was terminated.
(b) In addition, with respect to each Letter of Credit, the Company agrees
to pay to Bank of America such fees and expenses as Bank of America shall
customarily require in connection with the issuance, negotiation, processing
and/or administration of letters of credit in
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similar situations, including, but not limited to, an agency administration
fee for each Letter of Credit in an amount equal to 1/4% per annum (computed
for the actual number of days elapsed on the basis of a 360 day year) of the
face amount of such Letter of Credit, payable in arrears on the last day of
each calendar quarter and on the Revolving Termination Date for the period
from and including the date of the issuance of such Letter of Credit to and
including such date or the date upon which such Letter of Credit expired or
was terminated.
SECTION 5.2 FACILITY FEE. The Company agrees to pay each Bank a facility
fee, for the period from and including the Effective Date to and including the
Revolving Termination Date, on the total Commitments (whether used or unused)
(as the same may be reduced by SECTION 6.1 or SECTION 6.3). Such facility fee
shall be payable in arrears on the last day of each Fiscal Quarter and on the
Revolving Termination Date for any period then ending for which such facility
fee shall not have been theretofore paid. Prior to the date (the "3Q1999
Compliance Certificate Delivery Date") which is five business days after the
date by which the Company is required to furnish the compliance certificate to
the Banks pursuant to Section 10.1.4 for the quarter ended September 30, 1999,
the facility fee shall be computed at the rate of 0.50% per annum. On and after
the 3Q1999 Compliance Certificate Delivery Date, the facility fee shall be
computed for any period at the applicable facility fee rate set forth below. In
all cases the facility fee rate shall be computed for the actual number of days
elapsed on the basis of a year of 360 days. The facility fee shall be
determined without regard to any Borrowing Base limitation or any Event of
Default or Unmatured Event of Default.
Funded Debt/Operating
CASH FLOW RATIO FACILITY FEE RATE
FDOCFR less than 1.0 0.225%
FDOCFR greater than 1.0 but less than or equal to 1.5 0.250%
FDOCFR greater than 1.5 but less than or equal to 2.0 0.300%
FDOCFR greater than 2.0 but less than or equal to 2.5 0.325%
FDOCFR greater than 2.5 but less than or equal to 3.0 0.350%
FDOCFR greater than 3.0 but less than or equal to 3.5 0.375%
FDOCFR greater than 3.5 but less than or equal to 3.75 0.400%
FDOCFR greater than 3.75 0.400%
For purposes of the foregoing, FDOCFR means the Funded Debt/Operations Cash
Flow Ratio. The applicable facility fee rate shall be adjusted, to the
extent applicable, 45 days (or in the case of the last Fiscal Quarter of any
fiscal year, 90 days) after the end of each Fiscal Quarter beginning on the
45th day after the first Fiscal Quarter ending after the Effective Date,
based on the Funded Debt/Operating Cash Flow Ratio as of the last day of such
Fiscal Quarter; IT BEING UNDERSTOOD that if the Company fails to deliver the
certificate required by SECTION 10.1.4 by the 45th day (or, if applicable,
the 90th day) after any Fiscal Quarter, the applicable facility fee rate
shall be 0.500% per annum until such certificate is delivered.
SECTION 5.3 AGENT'S FEES. The Company agrees to pay to the Agent for its
own account such fees as are provided for pursuant to the terms of a letter
agreement between the Company and the Agent.
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SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS; VOLUNTARY
PREPAYMENTS.
SECTION 6.1 REDUCTION OR TERMINATION OF THE COMMITMENTS. (a) The Company
may from time to time prior to the Revolving Termination Date on at least five
Business Days, prior written notice received by the Agent (which shall promptly
advise each Bank thereof) permanently reduce the amount of the Revolving Loan
Commitments and/or the Letter of Credit Commitments (such reduction to be pro
rata among the Banks according to their respective Percentages) to an amount not
less than (i) the sum of the aggregate unpaid principal amount of the Revolving
Loans then outstanding in the case of a reduction in the Revolving Loan
Commitments, or (ii) the aggregate Stated Amount of all Letters of Credit then
outstanding, in the case of a reduction in the Letter of Credit Commitments.
Any such reduction shall be in an aggregate amount of at least $500,000 and an
integral multiple of $500,000. The Company may at any time on like notice
terminate the Revolving Loan Commitments and/or the Letter of Credit Commitments
upon payment in full of the Revolving Notes and all other obligations of the
Company hereunder in respect of the Revolving Loans or, in the case of
obligations arising with respect to the Letters of Credit, upon cash
collateralization thereof in full pursuant to documentation in form and
substance satisfactory to the Banks.
(b) Concurrent with each reduction of the Commitments pursuant to SECTION
1.1.3(a)(ii), the Company shall make a mandatory prepayment so that after giving
effect thereto the aggregate unpaid principal amount of the Revolving Loans PLUS
the aggregate Stated Amount of all Letters of Credit shall not exceed the
aggregate Commitments as so reduced.
(c) On any date that the aggregate unpaid principal amount of the
Revolving Loans, PLUS the aggregate Stated Amount of all Letters of Credit
exceeds the aggregate Commitments of the Banks, the Company shall immediately
repay the Revolving Loans or, in the case of the Letters of Credit, furnish to
the Agent cash collateral, in an amount equal to such excess.
(d) Concurrent with each prepayment pursuant to SECTION 6.3, the
Commitments shall be reduced by the amount of such prepayment, such reduction to
be pro rata among the Banks according to their respective Percentages and to be
applied first to the Revolving Loan Commitments prior to the Letter of Credit
Commitments.
SECTION 6.2 VOLUNTARY PREPAYMENTS. The Company may from time to time
prepay the Revolving Loans in whole or in part, provided that (a) the Company
shall give the Agent (which shall promptly advise each Bank) notice thereof no
later than (i) 11:00 A.M., Chicago time, on the proposed date of prepayment with
respect to Floating Rate Loans and (ii) three Business Days' prior to the
proposed date of prepayment with respect to Eurodollar Loans, specifying the
Revolving Loans to be prepaid and the date and amount of prepayment, (b) any
prepayment of a Eurodollar Loan prior to the end of the Interest Period relating
thereto shall be subject to SECTION 8.4, (c) each partial prepayment shall be in
a principal amount of at least $100,000 and an integral multiple of $100,000,
and (d) any prepayment of any Eurodollar Loan or of the entire principal amount
of all Floating Rate Loans shall include accrued interest to the date of
prepayment.
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SECTION 6.3 MANDATORY PREPAYMENT. If the Company shall issue new common
or preferred equity or any Indebtedness for borrowed money, the Company shall
promptly notify the Agent of the estimated Net Issuance Proceeds of such
issuance to be received by the Company in respect thereof. Promptly upon, and
in no event later than 5 Business Days after, receipt by the Company of Net
Issuance Proceeds of such issuance, the Company shall prepay the Revolving Loans
in an aggregate amount equal to 100% of the amount of such Net Issuance
Proceeds. Net Issuance Proceeds which arise from the incurrence of purchase
money Indebtedness or Capital Lease Obligations shall not be required to be
applied as a prepayment pursuant to this Section 6.3.
SECTION 6.4 CERTAIN PREPAYMENT MECHANICS. Except to the extent otherwise
specified by the Company in a prepayment notice to the Agent, but subject to
Sections 6.2, 6.3 and 8.4, any prepayment pursuant to Sections 6.2 or 6.3 shall
be applied first to any Floating Rate Loan then outstanding and then to
Eurodollar Loans with the shortest Interest Periods remaining. The Company
shall pay, together with each prepayment under this Section 6.3, accrued
interest on the amount prepaid and any amounts required pursuant to Section 8.4.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF.
SECTION 7.1 MAKING OF PAYMENTS. All payments to be made by the Company
shall be made without set-off, recoupment or counterclaim. All payments
(including those made pursuant to SECTION 6.2) of principal of, or interest on,
the Revolving Loans shall be made by the Company to the Agent in immediately
available funds for the account of the holders of the Revolving Notes pro rata
according to their respective Percentage of the unpaid principal amount of the
Revolving Loans. All payments of Letter of Credit fees pursuant to SECTIONS
5.1(a) AND 5.2 shall be made by the Company to the Agent for the account of the
Banks. All payments of Letter of Credit fees and expenses pursuant to SECTION
5.1(b) shall be made to the Agent for the account of Bank of America. All such
payments shall be made to the Agent at its office in Chicago not later than
noon, Chicago time, on the date due; and funds received after that time shall be
deemed to have been received by the Agent on the next following Business Day.
The Company hereby authorizes the Agent to charge any demand deposit account
maintained by the Company with Bank of America for the amount of any such
payment on the due date therefor, but the Agent's failure to so charge such
account shall in no way affect the obligation of the Company to make any such
payment. The Agent shall notify the Company after any charge is so made by the
Agent against any demand deposit account maintained by the Company with Bank of
America; PROVIDED that the failure of the Agent to so notify the Company shall
not affect the rights of the Agent or the Banks in any manner whatsoever. The
Agent shall promptly remit to each Bank or other holder of a Revolving Note its
share of all such payments received in collected funds by the Agent for the
account of such Bank or holder.
All payments under SECTIONS 8.1 and 8.4 shall be made by the Company
directly to the Bank or Banks entitled thereto.
SECTION 7.2 APPLICATION OF CERTAIN PAYMENTS. Each payment of principal
shall be applied to such Revolving Loans as the Company shall direct by notice
to be received by the Agent on or before the date of such payment, or in the
absence of such notice, as the Agent shall determine
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in its discretion. Concurrently with each remittance to any Bank of its share
of any such payment the Agent shall advise such Bank as to the application of
such payment.
SECTION 7.3 DUE DATE EXTENSION. If any payment of principal or interest
with respect to any of the Revolving Loans or the Notes falls due on a Saturday,
Sunday or other day which is not a Business Day, then such due date shall be
extended to the next following Business Day, and additional interest shall
accrue and be payable for the period of such extension.
SECTION 7.4 SETOFF. The Company agrees that Bank of America and LaSalle,
and each remaining Bank and each remaining holder of a Revolving Note provided
it obtains the prior consent of the Agent (it being understood that Bank of
America and LaSalle may exercise the rights provided in this Section 7.4 without
obtaining the prior consent of the Agent), have all rights of setoff and
bankers' lien provided by applicable law, and in addition thereto, the Company
agrees that at any time (i) any payment or other amount owing by the Company
under this Agreement is then due to Bank of America, LaSalle or any Bank or (ii)
any Event of Default or Event of Default described in SECTION 12.1.4 exists, the
Agent, Bank of America, LaSalle, and each remaining Bank and each remaining
holder of a Revolving Note provided it obtains the prior consent of the Agent,
may apply to the payment of such payment or other amount (or, in the case of
CLAUSE (ii) above, any obligation of the Company hereunder, whether or not then
due) any and all balances, credits, deposits, accounts or moneys of the Company
then or thereafter with the Agent, Bank of America, LaSalle or any such Bank.
The Agent, Bank of America, LaSalle and each remaining Bank shall undertake to
notify the Company following the exercise by the Agent, Bank of America, LaSalle
and each such Bank of any of the rights described in this SECTION 7.4; provided
that the failure by the Agent, Bank of America, LaSalle, or any other Bank to so
notify the Company shall not affect the rights of the Agent, Bank of America,
LaSalle, the other Banks, or the holder of any Revolving Note in any manner
whatsoever.
SECTION 7.5 PRORATION OF PAYMENTS. If any Bank or other holder of a
Revolving Note shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of offset or otherwise) on account of principal of
or interest on any Revolving Loan or Revolving Note (or on account of its
participation in any Letter of Credit) in excess of its pro rata share of
payments and other recoveries obtained by all Banks or other holders of on
account of principal of and interest on the Revolving Loan or Revolving Notes
(or such participation) then held by them, such Bank or other holder shall
purchase from the other Banks or holders such participation in the Notes held by
them (or sub-participation in such Letter of Credit) as shall be necessary to
cause such purchasing Bank or other holder to share the excess payment or other
recovery ratably with each of them; PROVIDED, HOWEVER, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Bank or holder, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery.
SECTION 7.6 WITHHOLDING TAX.
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of the Agent, to deliver to the Agent:
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(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, two properly completed
and executed copies of IRS Form 1001 before the payment of any interest in
the first calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Bank claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Bank, two properly
completed and executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Bank and in each
succeeding taxable year of such Bank during which interest may be paid
under this Agreement; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001
and such Bank sells, assigns, grants a participation in, or otherwise
transfers all or part of the obligations of the Company under this Agreement
to such Bank, such Bank agrees to notify the Agent of the percentage amount
in which it is no longer the beneficial owner of obligations of the Company
under this Agreement to such Bank. To the extent of such percentage amount,
the Agent will treat such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the obligations of the Company under
this Agreement to such Bank, such Bank agrees to undertake sole responsibility
for complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Bank not providing such forms or
other documentation an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other governmental authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because such
Bank failed to notify the Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason)
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such Bank shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, together with all costs and expenses
(including attorney fees and expenses). The obligation of the Banks under
this subsection shall survive the payment of all obligations of the Company
under this Agreement and the resignation or replacement of the Agent.
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS.
SECTION 8.1 INCREASED COSTS.
(a) If (i) Regulation D of the Board of Governors of the Federal Reserve
System, or (ii) after the Effective Date hereof, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any Eurodollar Office of such Bank) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency
(A) shall subject any Bank (or any Eurodollar Office of such Bank) to
any tax, duty or other charge with respect to its Eurodollar Loans, its
Revolving Note or its obligation to make Eurodollar Loans, or shall change
the basis of taxation of payments to any Bank of the principal of or
interest on its Eurodollar Loans or any other amounts due under this
Agreement in respect of its Eurodollar Loans or its obligation to make
Eurodollar Loans (except for changes in the rate of tax on the overall net
income of such Bank or its Eurodollar Office imposed by the jurisdiction in
which such Banks principal executive office or Eurodollar Office is
located); or
(B) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve included in the
determination of interest rates pursuant to SECTION 3), special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Bank (or any Eurodollar Office of such Bank); or
(C) shall impose on any Bank (or its Eurodollar Office) any other
condition affecting its Eurodollar Loans, any of its Revolving Notes or its
obligation to make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D referred to above, to impose a cost on) such Bank (or any
Eurodollar Office of such Bank) of making or maintaining any Eurodollar Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Eurodollar Office) under this Agreement or under any of its Revolving Notes with
respect thereto, then within 10 days after demand by such Bank (which demand
shall be accompanied by a statement setting forth the basis of such demand), the
Company shall pay directly to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or such reduction.
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(b) If any Bank shall reasonably determine that after the Effective Date
the adoption or phase-in of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Eurodollar Office) or any Person controlling such Bank with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Bank's or such
controlling Person's capital as a consequence of such Bank's obligations
hereunder (including, without limitation, such Bank's Revolving Loan Commitment
or Letter of Credit Commitment) to a level below that which such Bank or such
controlling Person could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's or such controlling Person's
policies with respect to capital adequacy) by an amount deemed by such Bank or
such controlling Person to be material, then from time to time, within 10 days
after demand by such Bank (which demand shall be accompanied by a statement
setting forth the basis of such demand), the Company shall pay to such Bank such
additional amount or amounts as will compensate such Bank or such controlling
Person for such reduction.
(c) Each Bank will promptly notify the Company and the Agent of any event
of which it has knowledge which will entitle such Bank to compensation pursuant
to this SECTION 8.1.
SECTION 8.2 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR. If
with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being offered
to one or more Banks in the relevant market for such Interest Period, or the
Agent otherwise determines (which determination shall be binding and conclusive
on all parties) that by reason of circumstances affecting the interbank
eurodollar market adequate and reasonable means do not exist for ascertaining
the applicable Eurodollar Rate; or
(b) Banks having an aggregate Percentage of 20% or more advise the Agent
that the Eurodollar Rate (Reserve Adjusted) as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of maintaining or funding
Eurodollar Loans for such Interest Period, or that the making or funding of
Eurodollar Loans has become impracticable as a result of an event occurring
after the date of this Agreement which in the opinion of such Banks materially
affects such Loans, then the Agent shall promptly notify the other parties
thereof and, so long as such circumstances shall continue, (i) no Bank shall be
under any obligation to make or Convert into Eurodollar Loans and (ii) on the
last day of the current Interest Period for each Eurodollar Loan, such Loan
shall, unless then repaid in full, automatically Convert to a Floating Rate
Loan.
SECTION 8.3 CHANGES IN LAW RENDERING CERTAIN LOANS UNLAWFUL. In the event
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Bank raise a substantial question as to whether it is) unlawful for any Bank (an
"Affected Bank") to make, maintain or fund Eurodollar Loans, then the Affected
Bank shall promptly notify each of the other parties hereto and, so long as such
circumstances shall continue, (a) the Affected Bank shall have no
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obligation to make or Convert into Eurodollar Loans (but shall make Floating
Rate Loans concurrently with the making of or Conversion into Eurodollar
Loans by the Banks which are not Affected Banks, in each case in an amount
equal to the Affected Bank's Percentage of all Eurodollar Loans which would
be made or Converted into at such time in the absence of such circumstances)
and (b) on the last day of the current Interest Period for each Eurodollar
Loan (or, in any event, if the Affected Bank so requests, on such earlier
date as may be required by the relevant law, regulation or interpretation),
such Eurodollar Loan shall, unless then repaid in full, automatically Convert
to a Floating Rate Loan. Each Floating Rate Loan made by an Affected Bank
which, but for the circumstances described in the foregoing sentence, would
be a Eurodollar Loan (an "Affected Loan") shall, notwithstanding any other
provision of this Agreement, remain outstanding for the same period as the
Group of Eurodollar Loans of which such Affected Loan would be a part absent
such circumstances.
SECTION 8.4 FUNDING LOSSES. The Company hereby agrees that upon demand by
any Bank (which demand shall be accompanied by a statement setting forth the
basis for the calculations of the amount being claimed) the Company will
indemnify such Bank against any net loss or expense which such Bank may sustain
or incur (including, without limitation, any net loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Bank to fund or maintain Eurodollar Loans), as reasonably determined by
such Bank, as a result of (a) any payment or prepayment or Conversion of any
Eurodollar Loan of such Bank on a date other than the last day of an Interest
Period for such Loan (including, without limitation, any Conversion pursuant to
SECTION 8.3) or (b) any failure of the Company to borrow or Convert any
Revolving Loans on a date specified therefor in a notice of borrowing or
Conversion pursuant to this Agreement. For this purpose, all notices to the
Agent pursuant to this Agreement shall be deemed to be irrevocable.
SECTION 8.5 RIGHT OF BANKS TO FUND THROUGH OTHER OFFICES. Each Bank may,
if it so elects, fulfill its commitment as to any Eurodollar Loan by causing a
foreign branch or Affiliate of such Bank to make such Eurodollar Loan, PROVIDED
that in such event for the purposes of this Agreement such Eurodollar Loan shall
be deemed to have been made by such Bank and the obligation of the Company to
repay such Eurodollar Loan shall nevertheless be to such Bank and shall be
deemed held by it, to the extent of such Eurodollar Loan, for the account of
such branch or Affiliate.
SECTION 8.6 DISCRETION OF BANKS AS TO MANNER OF FUNDING. Notwithstanding
any provision of this Agreement to the contrary, each Bank shall be entitled to
fund and maintain its funding of all or any part of its Revolving 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 such Bank had
actually funded and maintained each Eurodollar Loan during each Interest Period
for such Loan through the purchase of deposits having a maturity corresponding
to such Interest Period and bearing an interest rate equal to the Eurodollar
Rate for such Interest Period.
SECTION 8.7 MITIGATION. Any Bank claiming any additional amounts payable
pursuant to Section 8.1 shall use its best efforts (consistent with its internal
policy and legal and regulatory restrictions) to change its lending branch or
Affiliate (as applicable) if the making of such change would avoid the need for,
or reduce the amount of, any such additional amounts which may
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thereafter accrue and would not, in the reasonable judgment of such Bank, be
otherwise disadvantageous to such Bank.
SECTION 8.8 CONCLUSIVENESS OF STATEMENTS; SURVIVAL OF PROVISIONS.
Determinations and statements of any Bank pursuant to SECTION 8.1, 8.2, 8.3 or
8.4 shall be conclusive absent demonstrable error. Banks may use reasonable
averaging and attribution methods in determining compensation under SECTIONS 8.1
and 8.4, and the provisions of such Sections shall survive termination of this
Agreement.
SECTION 9 WARRANTIES.
To induce the Agent and the Banks to enter into this Agreement and to make
Revolving Loans and issue or purchase participation in Letters of Credit
hereunder, the Company warrants to the Agent and the Banks that:
SECTION 9.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly existing and in good standing under the laws of the State of Delaware; each
Subsidiary is a corporation duly existing and in good standing under laws of the
state of its incorporation; and the Company and each Subsidiary is duly
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction where, because of the nature of its activities or
properties, such qualification is required and the failure to so qualify would
materially and adversely affect the financial condition, operations, or business
prospects of the Company and its Subsidiaries on a consolidated basis. SCHEDULE
9.1 lists the foreign jurisdictions of the Company.
SECTION 9.2 AUTHORIZATION: NO CONFLICT AND VALIDITY OF OBLIGATIONS. The
Company has full right and authority to enter into this Agreement, to make the
borrowings herein provided for, to request that Letters of Credit be issued
hereunder, to issue its Revolving Notes and to perform all of its obligations
under the Loan Documents; each Loan Document delivered by the Company has been
duly authorized, executed and delivered by the Company and constitutes the valid
and binding obligations of the Company, enforceable in accordance with their
terms; and the Loan Documents do not, nor does the performance or observance by
the Company of any of the matters or things therein provided for, contravene any
provision of law or the certificate of incorporation or bylaws of the Company or
any material covenant, indenture or agreement of or affecting the Company.
SECTION 9.3 SUBSIDIARIES. The Subsidiaries of the Company and their
respective states of incorporation and foreign jurisdictions are designated on
SCHEDULE 9.3.
SECTION 9.4 FINANCIAL STATEMENTS The Company's audited consolidated
financial statement as at December 31, 1997 and, except as disclosed on SCHEDULE
9.4, its unaudited consolidated financial statements as at September 30, 1998
and November 30, 1998, copies of which have been furnished to the Banks, have
been prepared in conformity with GAAP applied on a basis consistent with that of
the preceding fiscal year, and fairly present in all material respects the
consolidated financial condition of the Company and its Subsidiaries as at such
dates and the results of their operations for the periods then ended.
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SECTION 9.5 NO MATERIAL ADVERSE CHANGE. Except as disclosed in the SEC
Reports or on SCHEDULE 9.5, since the dates of the financial statements referred
to in SECTION 9.4 there has been no material adverse change in the condition
(financial or otherwise), operations or business prospects of the Company and
its Subsidiaries taken as a whole.
SECTION 9.6 LITIGATION AND CONTINGENT LIABILITIES. Except as disclosed in
the SEC Reports or in SCHEDULE 9.6, there is no litigation (including, without
limitation, derivative actions), arbitration proceedings or governmental
proceedings pending or, to the best of the Company's knowledge, threatened
against the Company or any Subsidiary which if adversely determined would (i)
result in any material adverse change in the financial condition, business
prospects or continued operations of the Company and its Subsidiaries taken as a
whole, or (ii) impair the validity or enforceability of, or materially impair
the ability of the Company to perform its obligations hereunder or under any of
the Loan Documents. Other than any liability incident to such litigation or
proceedings, neither the Company nor any Subsidiary has any contingent
liabilities singly or in the aggregate in excess of $500,000 not provided for or
disclosed in the financial statements referred to in SECTION 9.4.
SECTION 9.7 LIENS. None of the assets of the Company or any Subsidiary is
subject to any mortgage, pledge, title retention lien, or other lien,
encumbrance or security interest, EXCEPT liens permitted by SECTION 10.11.
SECTION 9.8 PENSION AND WELFARE PLANS. Except as disclosed in Schedule
9.8, each of the Company and Subsidiaries is in compliance in all material
respects with ERISA with respect to all employee benefit plans maintained by the
Company or such Subsidiaries and has received no notice to the contrary from the
PBGC or any other governmental entity or agency. During the twelve consecutive
month period prior to the date of the execution and delivery of this Agreement,
no steps have been taken to terminate any Pension Plan, and no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise to
a lien under Section 302(f) of ERISA. No condition exists or event or
transaction has occurred with respect to any Pension Plan which could result in
the incurrence by the Company of any material liability, fine or penalty.
Except as described in SCHEDULE 9.8, the Company has no contingent liability
with respect to any post-retirement benefits under a Welfare Plan, other than
liability for continuation coverage described in Part 6 of title I to ERISA and
described in applicable state continuation coverage laws.
SECTION 9.9 INVESTMENT COMPANY ACT. The Company is not an "investment
company" or a company "controlled" by an "investment company" with the meaning
of the Investment Company Act of 1940, as amended.
SECTION 9.10 REGULATION U. The Company is not engaged principally, or as
one of its important activities, in the business of extending credit, and will
not use the proceeds of any of the Revolving Loans, for the purpose of
purchasing or carrying Margin Stock and the Company will not use the proceeds of
the Revolving Loans or the Letters of Credit in a manner that violates any
provision of Regulations U or X of the Board of Governors of the Federal Reserve
System.
SECTION 9.11 APPROVALS. No authorization, consent, license, exemption or
filing or registration with any court or governmental department, agency or
instrumentality, or any approval
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or consent from any other Person is necessary in connection with the valid
execution, delivery or performance by the Company of the Loan Documents.
SECTION 9.12 COMPANY'S MATERIAL AGREEMENTS. The Company is not in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is a party,
which default might have a material adverse affect on the business, properties
or assets, operations or condition (financial or otherwise) of the Company or
(ii) any agreement or instrument evidencing or governing indebtedness.
SECTION 9.13 TAXES. Each of the Company and the Subsidiaries has filed
all tax returns which are required to have been filed and has paid, or made
adequate provision for the payment of all of its taxes which are due and
payable, except such taxes, if any, as are being contested in good faith and by
appropriate proceedings and as to which such reserves or other appropriate
provisions as may be required by GAAP have been maintained. The Company is not
aware of any proposed assessment against the Company or any Subsidiaries for
additional taxes (or any basis for any such assessment) which might be material
to the Company.
SECTION 9.14 INSURANCE. SCHEDULE 9.14 completely and accurately
summarizes the property and casualty insurance program carried by the Company
and the Subsidiaries and includes any self insurance program that is in effect.
SECTION 9.15 BUSINESS LOCATIONS. The office where the Company keeps its
books and records and the principal place of business of the Company is set
forth on the signature pages of this Agreement.
SECTION 9.16 USE OF PROCEEDS. The proceeds of the Revolving Loans and the
Letters of Credit shall be used for working capital and general corporate
purposes, including but not limited to, acquisitions under Section 10.13(b).
SECTION 9.17 ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE 9.17,
to the best of the Company's knowledge, (a) the Company and its Subsidiaries
comply in all material respects with all applicable Environmental Laws, (b) the
Company and its Subsidiaries have obtained all Governmental Approvals required
for its operations, and its use and/or occupancy of any real property by any
applicable Environmental Law, except those that would not have a Material
Adverse Effect, (c) there are no pending or threatened claims, notices,
investigations or litigation involving the Company or any of its Subsidiaries
relating to any Release, threatened Release or disposal of any Hazardous
Material which might have a Material Adverse Effect, and (d) the Company and its
Subsidiaries have no pending material liability for response or corrective
action, natural resource damage, or other harm pursuant to CERCLA, RCRA, or any
comparable state law.
SECTION 9.18 TREATMENT AND STORAGE. Except in compliance with applicable
law in all material respects, or as otherwise described on SCHEDULE 9.18, any
real property currently owned by or leased to the Company and any of its
Subsidiaries does not contain any of the following: (a) underground storage
tanks, (b) any landfills or dumps, or (c) hazardous waste management facilities
as defined pursuant to RCRA or comparable state law.
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SECTION 9.19 COMPLIANCE WITH LAWS. To the best of the Company's
knowledge, the Company and its Subsidiaries are in compliance in all material
respects with all applicable statutes, laws, rules and regulations applicable
thereto.
SECTION 9.20 INFORMATION. All information heretofore or contemporaneously
herewith furnished by the Company to any Bank for purposes of or in connection
with this Agreement and the transactions contemplated hereby is, and all
information hereafter furnished by or on behalf of the Company to any Bank will
be, true and accurate in every material respect on the date as of which such
information is dated or certified, and none of such information is or will be
incomplete by omitting to state any material fact necessary to make such
information not misleading.
SECTION 9.21 YEAR 2000 PROBLEM. The Company and its Subsidiaries have
reviewed or are reviewing the areas within their business and operations (which
are within their control) which could be adversely affected by, and have
developed or are developing a program to address on a timely basis, the "Year
2000 Problem" (that is, the risk that computer applications used by the Company
and its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999). Based on such review and program, the Company reasonably
believes that the "Year 2000 Problem" will not have a Material Adverse Effect.
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Company hereunder and under the Revolving Notes are paid
in full and all Letters of Credit have been terminated, the Company agrees that,
unless at any time the Banks shall otherwise expressly consent in writing, it
will:
SECTION 10.1 REPORTS, CERTIFICATES AND OTHER INFORMATION. Furnish to each
Bank:
SECTION 10.1.1 AUDIT REPORT. Within 90 days after each fiscal year of the
Company, a copy of an annual audit report of the Company and the Subsidiaries
for such fiscal year then ended prepared on a consolidating and consolidated
basis and in conformity with GAAP (except for such consolidating statements)
applied on a basis consistent with the audited consolidated financial statement
of the Company and the Subsidiaries as at December 31, 1997, duly certified
(except for such consolidating statements) by Coopers & ▇▇▇▇▇▇▇, or other
independent certified public accountants of recognized standing selected by the
Company and reasonably acceptable to the Banks, certified without qualification
by such independent certified public accountants together with a certificate to
the effect that, in making the examination necessary for the signing of such
annual audit report by such independent certified public accountants, they have
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing, or if they have become aware of any such event,
stating the nature and status thereof.
SECTION 10.1.2 QUARTERLY REPORTS. Within 45 days after the end of each
Fiscal Quarter (except the fourth Fiscal Quarter), a copy of (a) the unaudited
consolidated and consolidating balance sheets of the Company and the
Subsidiaries as of the close of such Fiscal Quarter and the related consolidated
changes in financial position for that portion of the fiscal year and (b) the
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unaudited consolidated and consolidating statements of income of the Company and
the Subsidiaries, in each case prepared in substantially the same manner as the
audit report referred to in SECTION 10.1.1 and signed by the Chief Accounting
Officer of the Company.
SECTION 10.1.3 MONTHLY REPORTS. Within 30 days after the end of each
calendar month, a Directors' Statement which at a minimum provides the unaudited
financial statements of the Company and its Subsidiaries prepared in
substantially the same manner as Schedule 10.1.3, and is signed by the Chief
Accounting Officer of the Company. Notwithstanding the foregoing, the
Directors' Statement for the last month of the Company's fiscal year shall be
due within sixty (60) days after the end of that month. In addition, within ten
(10) days after the end of each calendar month, the Company shall deliver to
Agent an updated Borrowing Base Report and a receivables aging certificate in a
form reasonably acceptable to the Agent.
SECTION 10.1.4 COMPLIANCE CERTIFICATES. Within 45 days after the end of
each Fiscal Quarter (or, in the case of the last Fiscal Quarter of any fiscal
year, within 90 days), a certificate signed by the President or the Chief
Accounting Officer of the Company 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 a computation of, and showing compliance with, each of the financial
covenants set forth in Sections 10.5 through 10.8 and the other restrictions
contained in SECTION 10.
SECTION 10.1.5 REPORTS TO SEC AND TO SHAREHOLDERS. Copies of each filing
and report made by the Company or any Subsidiary with or to any securities
exchange or the Securities and Exchange Commission, and of each communication
from the Company or any Subsidiary to shareholders of the Company generally,
promptly upon the filing or making thereof.
SECTION 10.1.6 NOTICE OF DEFAULT, LITIGATION AND ERISA MATTERS. As soon
as possible, but in no event later than 30 days, after the Company learns of the
occurrence of any of the following, written notice thereof, describing the same
and the steps being taken by the Company or the Subsidiary affected with respect
thereto: (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 proceeding or governmental proceeding which is
materially adverse to the Company and its Subsidiaries on a consolidated basis,
or (iii) the institution of any steps by the Company or any other Person to
terminate any Pension Plan, or the failure to make a required contribution to
any Pension Plan if such failure is sufficient to give rise to a lien under
Section 302(f) of ERISA, or the taking of any action with respect to a Pension
Plan which could result in the requirement that the Company furnish a bond or
other security to the PBGC or such Pension Plan, or the occurrence of any event
with respect to any Pension Plan which could result in the incurrence by the
Company of any material liability, fine or penalty, or any material increase in
the contingent liability of the Company with respect to any post-retirement
Welfare Plan benefit.
SECTION 10.1.7 SUBSIDIARIES. A written report of any changes in the list
of its Subsidiaries within thirty (30) days of such change.
SECTION 10.1.8 PROJECTIONS. Within 60 days after the end of each fiscal
year of the Company, a copy of the one-year projections (quarter by quarter) of
the Company and its
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Subsidiaries, including balance sheets and statements of earnings and cash
flow prepared on a consolidated and on a divisional basis.
SECTION 10.1.9 OTHER INFORMATION. From time to time such other
information concerning the Company and its Subsidiaries as the Agent or any Bank
may reasonably request.
SECTION 10.2 BOOKS, RECORDS AND INSPECTIONS. Maintain, and cause each
Subsidiary to maintain, complete and accurate books and records; permit, and
cause each Subsidiary to permit, access by the Agent and each Bank to the books
and records of the Company and of any Subsidiary; permit, and cause each
Subsidiary to permit, the Agent and each Bank to inspect the properties and
operations of the Company and of any Subsidiary; and, if the Agent and each Bank
are unable to conduct such review, permit, and cause each Subsidiary to permit,
any accounting firm selected by the Agent which is reasonably satisfactory to
the Company, on a semiannual basis, to conduct, at the Company's expense, such
reviews of the books and records of the Company and of any Subsidiary as the
Agent shall reasonably request.
SECTION 10.3 INSURANCE. Maintain, and cause each Subsidiary to maintain,
such insurance as may be required by law and such other insurance, to such
extent and against such hazards and liabilities, as is customarily maintained by
companies similarly situated.
SECTION 10.4 TAXES AND LIABILITIES. Pay, and cause each Subsidiary to
pay, when due all taxes, assessments and other liabilities except as contested
in good faith and by appropriate
proceedings.
SECTION 10.5.1 CAPITAL EXPENDITURES. Not permit the consolidated capital
expenditures of the Company and its Subsidiaries (including Capital Lease
Obligations) in any fiscal year to exceed the amount applicable to such fiscal
year as follows:
FISCAL YEAR ENDING AMOUNT
------------------ ------
December 31, 1999 $10,000,000
December 31, 2000 $15,000,000
December 31, 2001 $20,000,000
provided; however, that the amount applicable to fiscal year 1999 shall exclude
Capital Expenditures of up to $5,000,000 related to the Verson Division's
facility expansion project as reflected in the Company's accounts payable as of
December 31, 1998.
SECTION 10.5.2 MINIMUM CONSOLIDATED OPERATING CASH FLOW. Not permit its
Consolidated Operating Cash Flow in respect of any Fiscal Quarter, to be less
than the amount applicable to such Fiscal Quarter, as follows:
FISCAL QUARTER ENDING AMOUNT
--------------------- ------
March 31, 1999 $4,000,000
June 30, 1999 $4,000,000
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FISCAL QUARTER ENDING AMOUNT
--------------------- ------
September 30, 1999 $4,000,000
December 31, 1999 $3,150,000
March 31, 2000 $7,750,000
June 30, 2000 $8,500,000
SECTION 10.5.3 NET WORTH. Not permit the Company's Consolidated Net Worth
at any time to be less than (a) $95,000,000, PLUS (b) twenty five percent (25%)
of the Company's positive consolidated net income for each Fiscal Quarter ended
after December 31, 1998, LESS (c) the amount of any cash dividends paid or
declared after December 31, 1998 in an amount not to exceed $7,500,000, LESS (d)
Verson Division Special Expenses up to but not exceeding $18,000,000 in the
aggregate.
SECTION 10.6 FUNDED DEBT/OPERATING CASH FLOW RATIO. Not permit the ratio
("Consolidated Funded Debt/Operating Cash Flow Ratio") of (x) Consolidated Total
Funded Debt to (y) Consolidated Operating Cash Flow to exceed 3.75:1:00 from and
after July 1, 2000 through December 30, 2000, and 3.50:1.00 thereafter.
SECTION 10.7 CONSOLIDATED FIXED CHARGE COVERAGE. Not permit for any
Fiscal Quarter the ratio ("Consolidated Fixed Charge Ratio") of (a) Consolidated
Adjusted Operating Cash Flow to (b) interest expense (before any deferral and
capitalization of such interest, but including attributable interest from
Capitalized Lease Obligations) plus rental expense of the Company and its
Subsidiaries on a consolidated basis during such period, to be less than the
ratio applicable to such Fiscal Quarter, as follows:
FISCAL QUARTER ENDING RATIO
--------------------- -----
March 31, 1999 0.80:1
June 30, 1999 0.80:1
September 30, 1999 1.00:1
December 31, 1999 1.00:1
March 31, 2000 1.75:1
June 30, 2000 1.75:1
provided, however, that on and after July 1, 2000, the Company shall not permit
for any period consisting of 4 consecutive Fiscal Quarters, the Consolidated
Fixed Charge Ratio to be less than 2.00:1.
SECTION 10.8 MINIMUM DEBT COVERAGE. Not permit the ratio of (a) the sum
of (i) the accounts receivable of the Company and its Subsidiaries, plus (ii)
the book value of inventory of the Company and its Subsidiaries (provided that
the value of such inventory shall not exceed 150% of the net amount of accounts
receivable under clause (i) above), plus (iii) cash and cash equivalents
(determined according to GAAP) of the Company and its Subsidiaries to (b) the
aggregate principal amount of all Indebtedness of the Company and its
Subsidiaries, to be less than 1:1.00 during the period from September 30, 1998
through September 30, 2000 or less than 1.25:1 thereafter.
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SECTION 10.9 PURCHASE OR REDEMPTION OF COMPANY'S SECURITIES; DIVIDEND
RESTRICTIONS. Not purchase or redeem any shares of the capital stock of the
Company, declare or pay any dividends thereon (other than stock dividends), make
any distribution to stockholders or set aside any funds for any such purpose,
and not prepay, purchase or redeem, and not permit any Subsidiary to purchase,
any subordinated indebtedness of the Company; PROVIDED HOWEVER , that so long as
no Event of Default or Unmatured Event of Default exists or would result
therefrom, the Company may, in its sole discretion pay or declare cash dividends
to the holders of common stock of the Company.
SECTION 10.10 INDEBTEDNESS. Not, and not permit any Subsidiary to, incur
or permit to exist any Indebtedness or liability on account of deposits or
advances or for borrowed money or for the deferred purchase price of any
property or services, except (i) the obligations arising under the Commitments,
(ii) obligations under any Capital Lease, (iii) indebtedness of any Subsidiary
to the Company or any other Subsidiary, (iv) indebtedness of the Company
relating to any hedging agreements entered into by the Company with respect to
interest rate exposure resulting from its obligations under this Agreement, (v)
current liabilities of the Company arising in the ordinary course of business,
(vi) the obligations of the Company in connection with the Letter of Credit
Applications or the Letters of Credit, (vii) debt in respect of taxes,
assessments or governmental charges to the extent that payment thereof shall not
at the time be required to be made, (viii) indebtedness subordinated to the
obligations of this Agreement, with terms and conditions acceptable to Agent,
(ix) indebtedness assumed by the Company in connection with acquisitions
permitted by SECTION 10.13, (x) indebtedness described in SCHEDULE 10.10, (xi)
Indebtedness evidenced by the 1999 Senior Notes, and (xii) other indebtedness of
the Company not to exceed $10,000,000 in the aggregate. Schedule 10.10
specifically describes the indebtedness of the Company and Subsidiaries which
will remain after the Effective Date.
SECTION 10.11 LIENS. Not, and not permit any Subsidiary to, create or
permit to exist, any mortgage, pledge, title retention lien, or other lien,
encumbrance or security interest with respect to any assets now owned or
hereafter acquired, EXCEPT (i) for current taxes not delinquent or for taxes
being contested in good faith and by appropriate proceedings, (ii) liens arising
in the ordinary course of business for sums not due or sums being contested in
good faith and by appropriate proceedings and not involving any deposits or
advances or borrowed money or the deferred purchase price of property or
services (iii) those granted by any Subsidiary to secure indebtedness of such
Subsidiary to the Company or any Subsidiary, (iv) liens in favor of the Agent
and the Banks in connection herewith, (v) preexisting liens on or security
interests affecting assets acquired pursuant to SECTION 10.13, (vi) liens
arising in the ordinary course of business and consistent with past practices
not to exceed $1,000,000 in the aggregate, (vii) liens on Verson work in
progress inventory securing obligations arising from progress payments to
Verson, provided that the obligations so secured shall be limited to such
progress payments and that the security therefore shall be limited to the
related Verson work in progress inventory, (viii) liens listed in SCHEDULE
10.11, (ix) liens representing the interests of the lessor under a Capital
Lease, or (x) extensions or renewals of the forgoing.
SECTION 10.12 GUARANTIES, LOANS OR ADVANCES. Not, and not permit any
Subsidiary to, become or be a guarantor or surety of, 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
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advance any funds, assets, goods or services, or otherwise) with respect to,
any undertaking of any advances to any other person or entity, EXCEPT for (i)
the endorsement, in the ordinary course of collection, of instruments payable
to it or to its order, (ii) loans or advances by the Company to any
Subsidiary, (iii) advances not to exceed, in the aggregate for the Company
and all Subsidiaries at any one time outstanding, $150,000 to officers and
employees and $100,000 to subcontractors or suppliers other than
Subsidiaries, (iv) customary and usual indemnities given in connection with
any Permitted Dispositions, (v) indemnities of the ▇▇▇▇ Hog and Verson
Divisions given to certain of their customers and dealers in the ordinary
course of business and consistent with past practices, (vi) customary and
usual indemnities given by the Company in connection with past divestitures,
(vii) deposits not to exceed, in the aggregate for the Company and all
Subsidiaries at any one time outstanding, $1,000,000 to the sellers of fixed
assets in connection with the purchase by the Company of such fixed assets.
SECTION 10.13 MERGERS, CONSOLIDATIONS, SALES. Not, and not permit any
Subsidiary to, be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets, or any stock of any
class of, or any partnership or joint venture interest in, any other Person, or,
except in the ordinary course of its business, sell, transfer, convey or lease
all or any substantial part of its assets or sell or assign with or without
recourse any receivables, EXCEPT for:
(a) any such merger or consolidation, sale, transfer, conveyance, lease or
assignment of or by any wholly-owned Subsidiary into the Company or into, with
or to any other wholly-owned Subsidiary;
(b) negotiated acquisitions of any Person (including any acquisition of
all or substantially all of the assets of any Person or the stock or partnership
interest or other ownership interest in any Person) which is in a line of
business substantially similar to the businesses of the Company and its
Subsidiaries, provided that (i) the written consent or approval of the Board of
Directors or equivalent governing body of the Person to be acquired shall have
been obtained prior to consummation and acquisition; (ii) the total
consideration paid or given for all such acquisitions during any consecutive
twelve month period shall not exceed $25,000,000 exclusive of (x) consideration
given in respect of acquisitions consummated prior to August 1, 1998 and (y)
exclusive of the value of common stock of the Company used as consideration in
connection with any such acquisition); (iii) the pro-forma combined Funded
Debt/Operating Cash Flow Ratio as of the effective date of any such acquisition
of the Company and the acquired Person, for the four Fiscal Quarters most
recently ended at the time of such effective date does not exceed 3.25:1; (iv)
no Event of Default or Unmatured Event of Default shall exist before or after
giving effect to such acquisition; (v) any acquisition of stock of a Person
shall not be less than 80% of the issued and outstanding capital stock of such
Person; and (vi) the Agent shall have received a certificate from the Company
satisfactory to the Agent as to compliance by the Company with preceding clauses
(i) through (v).
(c) the sale, transfer or disposition of any fixed asset(s), as long as
either: (i) during any fiscal year, the aggregate consideration paid or given to
the Company or any Subsidiary is less than 5% of the Company's consolidated
assets as reflected on the Company's then most recent audited financial
statements, or (ii) the Company uses the proceeds of such transaction to finance
the
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purchase of replacement fixed asset(s), delivers to the Agent written
evidence of the use of the proceeds, and such replacement fixed asset(s) is
free and clear of all liens;
PROVIDED, HOWEVER, that as to all mergers, consolidations, acquisitions, sales
and transfers no Event of Default or Unmatured Event of Default shall have
occurred and be continuing or will result therefrom. For purposes of this
SECTION 10.13, for all such transactions, the term "consideration" shall include
the amount of any indebtedness for borrowed money assumed by the Company or a
Subsidiary, PLUS the amount, if any, by which the liabilities of the acquired
Person assumed by the Company or a Subsidiary (exclusive of the amount of the
indebtedness for borrowed money assumed by the Company or a Subsidiary) exceeds
the value of the Tangible Assets of such acquired Person.
SECTION 10.14 INVESTMENTS. Not, and not permit any Subsidiary to, make or
permit any Investment in any Person, except for:
(a) Extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale of goods and services in the ordinary course of
business consistent with past
practices;
(b) Investments and securities with maturities of one year or less from
the date of acquisition issued or fully guaranteed or insured by the United
States of America or any
agency thereof;
(c) Investments and commercial paper maturing within 270 days or less from
the date of issuance rated in the highest grade by a nationally recognized
credit agency;
(d) Investments and certificates of deposit maturing within one year from
the date of acquisition issued by a bank or trust company organized under the
laws of the United States or any State thereof having capital, surplus and
undivided profits aggregating at least $100,000,000;
(e) Investments of the Company outstanding on the date hereof to the
extent disclosed in the financial statements referred to in SECTION 9.4 or
disclosed on Schedule 10.14;
(f) Investments in overnight repurchase or reverse repurchase transactions
involving marketable direct obligations issued or unconditionally guaranteed by
the United States of America or any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within one year from the
date of acquisition thereof, entered into with a counter party with a net worth
in excess of $100,000,000;
(g) Investments of the Company evidenced by promissory or demand notes
issued by purchasers of assets of the Company permitted by the terms of this
Agreement;
(h) Investments permitted under Sections, 10.10, 10.12 and 10.13; and
(i) Investments in shares of a money market fund which (1) is a registered
investment company under the Investment Company Act of 1940 (the "Act"); (2)
complies with Rule 270.2(a)-7
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of the Act (the "Rule"); and (3) is either (a) rated in one of the two
highest rating categories by Standard and Poors or ▇▇▇▇▇'▇ Investor Service,
or (b)(i) has assets of at least $200,000,000 at all times upon and after the
purchase of shares by the Company, and (ii) will limit its portfolio
investments to instruments that are, at the time of acquisition "First Tier
Securities" or "Government Securities" as such terms are defined in this Rule.
SECTION 10.15 ENVIRONMENTAL COVENANTS.
SECTION 10.15.1 ENVIRONMENTAL RESPONSE OBLIGATION. (a) Comply, and cause
each Subsidiary to comply, in all material respects with all applicable
Environmental Laws, or judicial or administrative orders requiring the
performance at any real property owned, operated, or leased by the Company or
any subsidiary of activities in response to the release or threatened release of
a Hazardous Material except for the period of time that the Company or such
Subsidiary is diligently in good faith contesting such order; (b) notify the
Bank within 30 days of the receipt of any written claim, demand, proceeding,
action, or notice of material liability by any Person arising out of or relating
to the release or threatened release of a Hazardous Material; and (c) notify the
Bank promptly, but in no event later than thirty (30) days, after the occurrence
of any release, threat of release, or disposal of Hazardous Material reported to
any governmental regulatory authority at any real property owned, operated, or
leased by the Company or any Subsidiary.
SECTION 10.15.2 ENVIRONMENTAL LIABILITIES. Not violate in any material
respect any applicable Environmental Law and, without limiting the foregoing,
not commence disposal of any Hazardous Material into or onto any real property
owned, operated, or leased by the Company or any Subsidiary nor allow any lien
imposed pursuant to any law, regulation or order relating to Hazardous Materials
or the disposal thereof to remain on such real property.
SECTION 10.16 UNCONDITIONAL PURCHASE OBLIGATIONS. Not, and not permit any
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services.
SECTION 10.17 EMPLOYEE BENEFIT PLANS. Maintain, and cause each Subsidiary
to maintain, each Pension Plan in compliance in all material respects with all
applicable requirements of the law and regulations.
SECTION 10.18 REGULATION U. Not use or permit any proceeds of the
Revolving Loans or the Letters of Credit to be used, either directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
"purchasing or carrying" any Margin Stock.
SECTION 10.19 SIGNIFICANT SUBSIDIARY. Cause each present or future
Significant Subsidiary to forthwith execute and deliver to the Agent a guaranty
of the Company's obligations under this Agreement, such guaranty to be in form
and substance satisfactory to the Agent and to be supported by such supporting
documents as the Agent shall require.
SECTION 10.20 OTHER AGREEMENTS. Not, and not permit any of its
Subsidiaries to, enter into any agreement containing any provision which (a)
would be violated or breached by the
-27-
performance of its obligations hereunder or under any instrument or document
delivered or to be delivered by it hereunder or in connection herewith, (b)
prohibits or restricts the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter acquired, (c)
prohibits or restricts the ability of any Subsidiary to make dividends or
advances to the Company, or (d) prohibits or restricts the ability of the
Company or any Subsidiary to amend or otherwise modify this Agreement or any
other document executed in connection herewith.
SECTION 10.21 COMPLIANCE WITH LAWS. Comply, and cause each Subsidiary to
comply in all material respects with all applicable statutes, laws, rules and
regulations.
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING
Section 11.1 EFFECTIVENESS. This Agreement shall become effective as of
February 1, 1999 (herein called the "Effective Date") provided that each of the
following conditions shall have been satisfied (it being understood that until
satisfaction such conditions in the Existing Agreement shall remain in full
force and effect): (i) the conditions specified in SECTION 11.2 have been
satisfied, (ii) the Agent shall have received the fees described in SECTIONS
5.1, 5.2 AND 5.3 (to the extent then due), and (iii) the Agent shall have
received all the following, each duly executed and dated the Effective Date (or
such later date as shall be satisfactory to the Agent), in form and substance
satisfactory to the Agent, and each (except for the Notes, of which only the
originals shall be signed) in sufficient number of signed counterparts to
provide one for each Bank:
SECTION 11.1.1 REVOLVING NOTES. The Revolving Notes of the Company
payable to the order of each Bank.
SECTION 11.1.2 CERTIFICATE. A certificate of the Chief Accounting Officer
of the Company to the effect that on the Effective Date, (i) the aggregate
principal amount of the Revolving Loans together with the stated amount of all
Letters of Credit does not exceed $145,000,000, and (ii) the conditions set
forth in SECTION 11.2.1 are satisfied as of the Effective Date with the same
effect as if a Revolving Loan were made on such date.
SECTION 11.1.3 RESOLUTIONS. Certified copies of resolutions of the Board
of Directors of the Company authorizing the execution, delivery and performance
of this Agreement, the Notes, the Letter of Credit Applications, and the other
documents to be executed by the Company pursuant to this Agreement.
SECTION 11.1.4 CONSENTS AND APPROVALS. The required consents and
governmental approvals (if any) with respect to this Agreement, the Revolving
Notes, the Letter of Credit Applications, and the other documents to be executed
by the Company pursuant to this Agreement.
SECTION 11.1.5 INCUMBENCY AND SIGNATURES. A certificate of the Secretary
or an Assistant Secretary of the Company certifying the names of the officer or
officers of the Company authorized to sign this Agreement, the Notes, the Letter
of Credit Applications, and the other documents provided for in this Agreement,
together with a sample of the true signature of each such officer (it being
understood that the Agent and the Banks may conclusively rely on such
certificate until formally advised by a like certificate of any changes
therein).
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SECTION 11.1.6 OPINIONS OF COUNSEL FOR THE COMPANY. The opinions of
▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq. as counsels for the Company,
substantially in the forms set forth in EXHIBIT C.
SECTION 11.1.7 OTHER DOCUMENTS. Such other documents as the Agent or any
Bank may reasonably request.
SECTION 11.2 ALL LOANS AND LETTERS OF CREDIT. The occurrence of the
Effective Date and the obligation of each Bank to make any Revolving Loan and to
issue any Letter of Credit is subject to the conditions precedent that:
SECTION 11.2.1 NO DEFAULT. (a) No Event of Default, or Unmatured Event of
Default, has occurred and is continuing or will result from the making of such
Revolving Loan or the issuance of such Letter of Credit and (b) the warranties
of the Company contained in Section 9 are true and correct as of the date of
such requested Revolving Loan or the issuance of such Letter of Credit, with the
same effect as though made on such date.
SECTION 11.2.2 LITIGATION. No litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental proceedings not
disclosed in writing by the Company to the Banks prior to the date of the last
previous Revolving Loan hereunder (or, in the case of the initial Revolving Loan
prior to the date of execution and delivery of this Agreement) are pending or
known to be threatened against the Company or any Subsidiary which if adversely
determined could reasonably be expected to (i) result in any material adverse
change in the financial condition, business prospects or continued operations of
the Company and its Subsidiary on a consolidated basis or (ii) impair the
validity or enforceability of, or materially impair the ability of the Company
to perform its obligations hereunder or under any of the other Loan Documents,
and no material development not so disclosed has occurred in any such litigation
(including, without limitation, derivative actions), arbitration proceedings or
governmental proceedings so disclosed, which could reasonably be expected to
cause such a material adverse change.
Each request by the Company for a Loan or a Letter of Credit shall
automatically constitute a representation and warranty of the Company to the
effect that all conditions to the making of such Loan or issuance of such Letter
of Credit will be satisfied as of the date of the making of such Loan or
issuance of such Letter of Credit.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
SECTION 12.1 EVENTS OF DEFAULT. Each of the following
shall constitute an Event of Default under this Agreement:
SECTION 12.1.1 NON-PAYMENT OF NOTES, ETC. Default in the payment when due
of (a) any principal of, or interest on, any Revolving Note or (b) any
reimbursement obligation with respect to any Letter of Credit or any fees
payable by the Company hereunder.
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SECTION 12.1.2 NON-PAYMENT OF OTHER INDEBTEDNESS FOR BORROWED MONEY.
Default in the payment when due (subject to any applicable grace period),
whether by acceleration or otherwise, of any other indebtedness for borrowed
money of, or guaranteed by, the Company or any Subsidiary in excess of $250,000
in the aggregate or default in the performance or observance of any obligation
or condition with respect to any such other indebtedness if the effect of such
default is to accelerate the maturity of any such indebtedness or to permit the
holder or holders thereof, or any trustee or agent for such holders, to cause
such indebtedness to become due and payable prior to its expressed maturity.
SECTION 12.1.3 OTHER MATERIAL OBLIGATIONS. Default in the payment when
due, or in the performance or observance of, any material obligation of, or
condition agreed to by the Company or any Subsidiary with respect to any
material purchase or lease of goods or services reasonably valued in excess of
$750,000 in the aggregate (and not constituting an Event of Default under any of
the other provisions of this SECTION 12) and except only to the extent that the
existence of any such default is being contested by the Company or such
Subsidiary in good faith and by appropriate proceedings.
SECTION 12.1.4 BANKRUPTCY, INSOLVENCY. The Company or any Subsidiary
becomes insolvent or generally fails to pay, or admits in writing its inability
or refusal to pay, debts as they become due; or the Company or any Subsidiary
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for the Company or such Subsidiary or any property
thereof, or makes a general assignment for the benefit of creditors; or in the
absence of such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for the Company or any Subsidiary or for a
substantial part of the property of any thereof and is not discharged within 30
days; or any bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding (except the voluntary dissolution, not under any
bankruptcy or insolvency law, of a Subsidiary), is commenced in respect of the
Company or any Subsidiary, and if such case or proceeding is not commenced by
the Company or such Subsidiary, it is consented to or acquiesced in by the
Company or such Subsidiary or remains for 30 days undismissed; or the Company or
any Subsidiary takes any corporate action to authorize, or in furtherance of,
any of the foregoing.
SECTION 12.1.5 NON-COMPLIANCE WITH THIS AGREEMENT. Failure by the Company
to comply with or to perform any provision of this Agreement (and not
constituting an Event of Default under any other provision of this SECTION 12)
and continuance of such failure for 15 days after notice thereof to the Company
from the Agent, any Bank, or the holder of any Revolving Note.
SECTION 12.1.6 WARRANTIES. Any warranty made by the Company herein or in
any Instrument is breached or is false or misleading in any material respect, or
any schedule, certificate, financial statement, report, notice, or other writing
furnished by the Company to the Agent or any Bank is false or misleading in any
material respect on the date as of which the facts therein set forth are stated
or certified.
SECTION 12.1.7 PENSION PLANS. (a) Institution of any steps by the Company
or any other Person to terminate a Pension Plan if as a result of such
termination the Company could be required to make a contribution to such Pension
Plan, or could incur a liability or obligation to such Pension
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Plan, in excess of $100,000, or (b) a contribution failure occurs with
respect to any Pension Plan sufficient to give rise to a lien under section
302(f) of ERISA.
SECTION 12.1.8 MATERIAL ADVERSE CHANGE. There is a material adverse
change in the financial or business conditions or prospects of the Company and
its Subsidiaries taken as a whole.
SECTION 12.1.9 CHANGE OF CONTROL. The acquisition, through purchase or
otherwise (including the agreement to act in concert without more), by any
Person or group of Persons acting in concert directly or indirectly, in one or
more transactions, of beneficial ownership or control of securities representing
more than fifty percent (50%) of the combined voting power of the Company's
voting stock. For purposes of this definition, "beneficial ownership" shall
have the meaning set forth in Rule 13d-3 under the Securities and Exchange Act
of 1934. A merger or consolidation pursuant to Section 10.13 with respect to
which the voting stock of the surviving corporation is not more than fifty
percent (50%) owned by the Company shall constitute a "Change of Control."
SECTION 12.2 EFFECT OF EVENT OF DEFAULT. If any Event of Default
described in SECTION 12.1.4 shall occur, the Commitments (if they have not
theretofore terminated) shall immediately terminate and the Revolving Notes and
all other obligations hereunder shall become immediately due and payable and the
Company shall become immediately obligated to deliver to the Agent cash
collateral in an amount equal to the outstanding face amount of all Letters of
Credit, all without presentment, demand, protest or notice of any kind; and, in
the case of any other Event of Default, the Agent may (and upon written request
of the Banks shall) declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Revolving Notes and all other
obligations hereunder to be due and payable and/or demand that the Company
immediately deliver to the Agent cash collateral in an amount equal to the
outstanding face amount of all Letters of Credit, whereupon the Commitments (if
they have not theretofore terminated) shall immediately terminate and/or all
Revolving Notes and all other obligations hereunder shall become immediately due
and payable and/or the Company shall immediately become obligated to deliver to
the Agent cash collateral in an amount equal to the face amount of all Letters
of Credit, all without presentment, demand, protest or notice of any kind. The
Agent shall promptly advise the Company of any such declaration, but failure to
do so shall not impair the effect of such declaration. Any collateral delivered
by the Company to the Agent shall be held by the Agent (without liability for
interest thereon) and applied to obligations arising in connection with any
drawing under a Letter of Credit. After the expiration or termination of all
Letters of Credit, such cash collateral shall be applied by the Agent to any
remaining obligations hereunder and any excess shall be delivered to the Company
or as a court of competent jurisdiction may elect.
SECTION 13 CERTAIN DEFINITIONS. When used herein the following terms
shall have the following meaning (such definitions to be applicable to both the
singular and plural forms of such terms):
ACCEPTANCE AND ASSIGNMENT - see EXHIBIT E.
AFFILIATE shall mean, with respect to any Person, a Person: (a) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with,
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such Person; (b) which beneficially owns or holds, directly or indirectly,
five percent (5%) or more of any class of the Voting Stock (or, in the case
of a Person which is not a corporation, five percent (5%) or more of the
equity interested such Person; or (c) five percent (5%) or more of the Voting
Stock (or, in the case of a Person which is not a corporation, five percent
(5%) or more of the equity interest) of which is beneficially owned or held,
directly or indirectly, by such Person; PROVIDED, HOWEVER, that no Bank shall
in any event be deemed to be an Affiliate of the Company or any Subsidiary.
The term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting Stock or an equity interest, by
contract, or otherwise.
AGENT - see PREAMBLE.
AGREEMENT - see PREAMBLE.
ALTERNATE REFERENCE RATE shall mean, on any date and with respect to all
Floating Rate Loans, a fluctuating rate of interest per annum (rounded upward to
the next highest one-eighth (1/8) of one percent (1%) if not already an integral
multiple of one-eighth (1/8) of one percent (1%)) equal to the higher of (a) the
rate of interest most recently announced by the Agent at its Chicago office as
its Reference Rate; or (b) the Market Federal Funds Rate most recently
determined by the Agent plus one-half percent (.50%).
The Alternate Reference Rate is not necessarily intended to be the lowest
rate of interest determined by the Agent in connection with extensions of
credit. For purposes of this Agreement (i) any change in the Alternate
Reference Rate due to a change in the Reference Rate shall be effective, on the
date such change in the Reference Rate is announced and (ii) any change in the
Alternate Reference Rate due to a change in the Market Federal Funds Rate shall
be effective on the effective date of such change in the Market Federal Funds
Rate. If for any reason the Agent shall have determined (which determination
shall be conclusive in the absence of manifest error) that it is unable to
ascertain the Market Federal Funds Rate for any reason, including, without
limitation, the inability or failure of the Agent to obtain sufficient bids or
publications in accordance with the terms hereof, the Alternate Reference Rate
shall be the Reference Rate until the circumstances giving rise to such
inability no longer exist. The Agent will give notice promptly to the Company
and the Banks of changes in the Alternate Reference Rate.
ASSIGNEE - see SECTION 15.17.
BANK - see PREAMBLE.
BANK OF AMERICA - see PREAMBLE.
BORROWING BASE shall mean at any date an amount equal to the sum of the
following:
RECEIVABLES:
(A) 80% of the Net ▇▇▇▇ Hog 0 - 90 days Eligible Receivables;
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(B) 75% of the Net ▇▇▇▇ Hog 91 - 180 Days Eligible Receivables;
(C) 65% of the Net ▇▇▇▇ Hog 181 - 240 Days Eligible Receivables;
(D) 50% of the Net ▇▇▇▇ Hog Over 240 Days Eligible Receivables;
(E) 85% of the Net Verson Eligible Receivables;
(F) 80% of the Net Great Bend 0 -90 days Eligible Receivables;
(G) 75% of the Net Great Bend 91-180 days Eligible Receivables;
(H) 65% of the Net Great Bend 181-240 Days Eligible Receivables;
(I) 50% of the Net Great Bend Over 240 Days Eligible Receivables;
(J) 80% of the Net Precision Press Eligible Receivables;
INVENTORY:
(K) 45% of the Net ▇▇▇▇ Hog Eligible Raw Material Inventory;
(L) 45% of the Net Great Bend Eligible Raw Material Inventory;
(M) 45% of the Net ▇▇▇▇ Hog Purchased Parts Inventory;
(N) 45% of the Net Great Bend Purchased Parts Inventory;
(O) 55% of the Net ▇▇▇▇ Hog Eligible Finished Goods Inventory;
(P) 55% of the Net Great Bend Eligible Finished Goods Inventory;
(Q) 50% of the Net Verson Eligible Raw Material Inventory;
(R) 50% of the Net Precision Press Industries Eligible Raw Material
Inventory;
(S) 20% of the Net Verson Eligible Work-In-Process Inventory;
(T) 20% of the Net Precision Press Industries Eligible Work-In-Process;
EQUIPMENT:
(U) 35% of the consolidated gross (undepreciated) value of the machinery
and equipment of the Company and its Subsidiaries; and
(V) the Borrowing Base Overadvance.
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Measurement of the Borrowing Base shall be as of the close of the Company's
business on the last day of each month.
BORROWING BASE OVERADVANCE shall for each month set forth below mean an
amount as follows:
MONTH OVERADVANCE AMOUNT
----- ------------------
January 1999 $40,000,000
February 1999 $40,000,000
March 1999 $40,000,000
April 1999 $35,000,000
May 1999 $35,000,000
June 1999 $35,000,000
July 1999 $10,000,000
August 1999 $ 5,000,000
On and after September 1, 1999 the Borrowing Base Overadvance shall be zero.
BORROWING BASE REPORT shall mean the report, together with the supporting
calculations attached thereto, executed on behalf of the Company by its chief
accounting officer or treasurer substantially in the form of EXHIBIT D.
BUSINESS DAY shall mean any day on which banks are open for commercial
banking business in Chicago, Illinois and, in the case of a Business Day which
relates to a Eurodollar Loan, on which dealings are carried on in the interbank
eurodollar market.
CAPITAL EXPENDITURES shall mean all payments for any fixed assets or
improvements or for replacements, substitutions or additions thereto, that have
a useful life of more than one year and which are required to be capitalized
under GAAP.
CAPITAL LEASE shall mean, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, either would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person or otherwise be
disclosed as such in a note to such balance sheet,
CAPITAL LEASE OBLIGATION shall mean, with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP,
would appear on a balance sheet of such lessee in respect of such Capital Lease
or otherwise be disclosed in a note to such balance sheet.
CERCLA shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 USC 9601 ET SEQ., and any future amendments.
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CODE shall mean the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
COMMITMENT shall mean the Revolving Loan Commitment and the Letter of
Credit Commitment of each Bank.
COMMITMENTS shall mean the Revolving Loan Commitments and the Letter of
Credit Commitments of all Banks.
COMPANY - see PREAMBLE.
CONSOLIDATED ADJUSTED OPERATING CASH FLOW shall mean (a) the sum of (i)
consolidated net income for such period, plus (ii) consolidated interest expense
for such period, plus (iii) the aggregate amount which was deducted by the
Company in respect of Federal, state and local income taxes by the Company and
its Subsidiaries in determining the Company's consolidated net income for such
period, plus (iv) all rental expense (including attributable interest from
Capitalized Lease Obligations) less (b) the sum of (i) interest income for the
period, plus (ii) extraordinary gains for the period, all as determined for the
Company and its Subsidiaries on a consolidated basis.
CONSOLIDATED FIXED CHARGE RATIO-see SECTION 10.7.
CONSOLIDATED FUNDED DEBT/OPERATING CASH FLOW RATIO - see SECTION 10.6.
CONSOLIDATED OPERATING CASH FLOW shall mean (a) the sum of (i) consolidated
net income for such period, plus (ii) consolidated interest expense for such
period, plus (iii) the aggregate amount which was deducted by the Company in
respect of Federal, state and local income taxes by the Company and its
Subsidiaries in determining the Company's consolidated net income for such
period, plus (iv) depreciation and amortization for such period, less (b) the
sum of (i) interest income for the period, plus (ii) extraordinary gains for the
period, all as determined for the Company and its Subsidiaries on a consolidated
basis.
CONSOLIDATED NET WORTH shall mean, as of the date of any determination
thereof, the assets minus the sum of the liabilities of the Company and
Subsidiaries on a consolidated basis. Assets and liabilities of the Company and
Subsidiaries shall have the meanings usually given to such terms in accordance
with GAAP.
CONSOLIDATED TOTAL FUNDED DEBT shall mean the total of all Funded Debt of
the Company and such Subsidiaries outstanding on such date determined in
accordance with GAAP applied on a consistent basis.
CONVERT, CONVERSION AND CONVERTED shall refer to a conversion of Loans
pursuant to SECTION 1.4, 3.3, 8.2 or 8.3.
DEFAULTED RECEIVABLE shall mean at any time, a Receivable: (a) on which any
amount (i) to the ▇▇▇▇ Hog Division or the Great Bend Division remains unpaid
sixty-one days or more, or (ii) to the Verson Division or the Precision Press
Industries Division remains unpaid ninety-one days or
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more, in each instance, after the scheduled maturity of such amount; (b) as
to which any of the Related Equipment has been repossessed or returned, or
the related Obligor is subject to any Insolvency Event; (c) which should
have been written off in accordance with the Company's practice as of the
Effective Date; or (d) in respect of which payments have been extended or
rewritten (i) for a purpose other than enhancing the ultimate collectability
thereof, or (ii) more than once or for an additional period longer than
thirty days, it being understood that if payments are extended or rewritten
by the Company, such new terms shall govern for the purpose of subsection (a)
above.
DIRECTORS STATEMENT shall mean the report prepared by the Company in the
form of SCHEDULE 10.1.3.
DIVISION as to ▇▇▇▇ Hog, Great Bend, Precision Press Industries and/or
Verson shall mean a division of the Company.
DOLLAR and the sign "$" shall mean lawful money of the United States of
America.
EFFECTIVE DATE - see SECTION 11.1.
ELIGIBLE ASSIGNEE shall mean (a) a commercial bank organized under the laws
of the United States, or any state thereof, and having a combined capital and
surplus of at least $100,000,000; (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
country in which it is organized or in the United States; and (c) a Person that
is primarily engaged in the business of commercial banking and that is (i) a
Subsidiary of a Bank, (ii) a Subsidiary of a Person of which a Bank is a
Subsidiary, or (iii) a Person of which a Bank is a Subsidiary.
ELIGIBLE PROGRESS BILLING RECEIVABLE shall mean a Progress Billing
Receivable which meets each of the requirements set forth in the definition of
"Eligible Receivable" other than the requirement that it not be a Progress
Billing Receivable. Any Progress Billing Receivable which is at any time an
Eligible Progress Billing Receivable, but which subsequently fails to meet any
of the foregoing requirements, shall forthwith cease to be an Eligible Progress
Billing Receivable until such time as it once again meets all of the foregoing
requirements. For purposes of determining the Borrowing Base, the "amount" of
each Eligible Progress Billing Receivable at any time shall be the book value
thereof at such time.
ELIGIBLE RAW MATERIAL INVENTORY shall mean any Inventory which meets each
of the following requirements; (a) it consists of raw materials; (b) it is in
good condition; and (c) it is owned by the Company or a Subsidiary and is not
subject to any lien or security interest whatsoever other than any security
interest in favor of the Banks under the Loan Documents. Any Inventory which is
at any time Eligible Raw Material Inventory, but which subsequently fails to
meet any of the foregoing requirements, shall forthwith cease to be Eligible Raw
Material Inventory until such time as it once again meets all of the foregoing
requirements. For purposes of determining the
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Borrowing Base, the "amount" of Eligible Raw Material Inventory at any time
shall be the book value thereof at such time.
ELIGIBLE RECEIVABLE shall mean each Receivable of the Company and/ or a
Subsidiary:
(a) which complies with all applicable legal requirements, including,
without limitation, to the extent applicable, all state and federal usury
laws;
(b) which constitutes a legal, valid and binding payment obligation
(not (i) evidencing "consumer credit" within the meaning of 12 C.F.R.
226.2(p), as amended or replaced from time to time after the Effective Date
or (ii) secured by Related Equipment deemed by the Company to be "consumer
use equipment") of the related obligator, enforceable in accordance with
its terms;
(c) with respect to which, if such Receivable arose from the sale of
goods, such goods were free of any liens or encumbrances at the time of
sale, and if such Receivable is secured by a security interest in the
Related Equipment, such equipment has been delivered to the related Obligor
and is located in one of the 50 States, the District of Columbia, Canada,
Mexico, or Russia; provided that with respect to a Receivable which arises
from an Obligor located in Mexico or Russia, the payment thereof is secured
by a letter of credit acceptable to Agent;
(d) which provides for payment by the related Obligor (other than an
Obligor obligated with regard to such Receivable solely on account of a
guaranty or a recourse obligation), which is a Person (which, if a
corporation, the principal place of business of which is) located in one of
the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ and is not the Company
or an Affiliate of the Company, in United States dollars with terms (of
payment or otherwise) which do not vary materially from industry practice
for similar receivables.
(e) which was originated in conformity with credit standards which
were not materially lower than the standards of the Company in effect on
the Effective Date;
(f) which is not a Defaulted Receivable, a Progress Billing
Receivable or an Unbilled Receivable; and
(g) which has not been owed by any entity as to which an Insolvency
Event has occurred.
Notwithstanding the foregoing, if a standby or commercial letter of credit has
been issued in form and substance (including amount) satisfactory to the Agent
in its sole discretion to support an account receivable of the Company, such
account receivable shall be deemed to meet the requirements in clause (d) above
as to the location of the related Obligor. A Receivable which is at any time an
Eligible Receivable, but which subsequently fails to meet any of the foregoing
requirements, shall forthwith cease to be an Eligible Receivable until such time
as it once again meets all of the foregoing requirements. For purposes of
determining the Borrowing Base, the "amount" of each Eligible Receivable at any
time shall be the net amount of such Eligible
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Receivable (reduced by the amount of any refund, rebate, allowance, discount,
or other concession to the Obligor in connection therewith) at such time.
ELIGIBLE UNBILLED RECEIVABLE shall mean an Unbilled Receivable which arises
in the ordinary course of business of the Company and which meets each of the
requirements set forth in the definition of "Eligible Receivable" other than
the requirement that it not be an Unbilled Receivable. Any Unbilled
Receivable which is at any time an Eligible Unbilled Receivable, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be an Eligible Unbilled Receivable until such time as it once
against meets all of the foregoing requirements. For purposes of determining
the Borrowing Base, the "amount" of each Eligible Unbilled Receivable shall
be the book value thereof at such time.
ELIGIBLE WORK-IN-PROCESS INVENTORY shall mean any Inventory which meets
each of the following requirements; (a) it consists of work-in-process; (b) it
is in good condition; and (c) it is owned by the Company and is not subject to
any lien or security interest whatsoever other than a security interest in favor
of the Banks under the Loan Documents. Any Inventory which is at any time
Eligible Work-In-Process Inventory, but which subsequently fails to meet any of
the foregoing requirements, shall forthwith cease to be Eligible Work-In-Process
Inventory until such time as it once again meets all of the foregoing
requirements. For purposes of determining the Borrowing Base, the "amount" of
Eligible Work-In-Process Inventory at any time shall be the book value thereof
at such time (after giving effect to related contra asset accounts, including
without limitation, such accounts for customer down payments).
ENVIRONMENTAL LAW shall mean any current or future legal requirement
pertaining to (a) the protection of health, safety, and the indoor or outdoor
environment, (b) the conservation, management, or use of natural resources and
wildlife, (c) the protection or use of surface water and groundwater, (d) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, Release, threatened Release, abatement, removal,
remediation or handling of, or exposure to, any Hazardous Material or (e)
pollution (including any Release to air, land, surface water and groundwater),
and includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 USC 906 ET SEQ.; Solid Waste Disposal Act,
as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous
and Solid Waste Amendments of 1984, 42 USC 6901 ET SEQ.; Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 ET SEQ.;
Clean Air Act of 1966, as amended, 42 USC 7401 ET SEQ.; Toxic Substances Control
Act of 1976, 15 USC 2601 ET SEQ.; Hazardous Materials Transportation Act, 49 USC
App. 1801 ET SEQ.; Occupational Safety and Health Act of 1970, as amended, 29
USC 651 ET SEQ.; Oil Pollution Act of 1990, 33 USC 2701 ET SEQ.; Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 ET SEQ.; National
Environmental Policy Act of 1969, 42 USC 4321 ET SEQ.; Safe Drinking Water Act
of 1974, as amended, 42 USC 300(f) ET SEQ.; and any similar, implementing or
successor law, and any amendment, rule, regulation, order, or directive issued
thereunder.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
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EUROCURRENCY RESERVE PERCENTAGE shall mean, with respect to each Interest
Period, a percentage (expressed as a decimal) equal to the daily average during
such Interest Period of the percentage in effect on each day of such Interest
Period, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor), for determining the aggregate maximum reserve requirements
applicable to "Eurocurrency Liabilities" pursuant to Regulation D or any other
then applicable regulation of the Board of Governors which prescribes reserve
requirements applicable to "Eurocurrency Liabilities" as presently defined in
Regulation D.
EURODOLLAR LOAN or Eurodollar borrowing shall mean any Revolving Loan which
bears interest at a rate determined by reference to the Eurodollar Rate (Reserve
Adjusted).
EURODOLLAR OFFICE shall mean with respect to any Bank the office or offices
of such Bank which shall be making or maintaining the Eurodollar Loans of such
Bank hereunder or such other office or offices through which such Bank
determines its Eurodollar Rate. A Eurodollar Office of any Bank may be, at the
option of such Bank, either a domestic or foreign office.
EURODOLLAR RATE shall mean, with respect to any Eurodollar Loan for any
Interest Period, the rate per annum equal to the rate at which Dollar deposits
in immediately available funds are offered to the Eurodollar Office of Bank of
America two Business Days prior to the beginning of such Interest Period by
major banks in the interbank eurodollar market as at or about the relevant local
time of such Eurodollar Office, for delivery on the first day of such Interest
Period, for the number of days comprised therein and in an amount equal or
comparable to the amount of the Eurodollar Loan of Bank of America for such
Interest Period. As used herein, "relevant local time" as to any Eurodollar
Office shall mean 11:00 A.M., London time, when such Eurodollar Office is
located in Europe or the Middle East, or 11:00 A.M., Chicago time, when such
Eurodollar office is located in North America or the Caribbean.
EURODOLLAR RATE (RESERVE ADJUSTED) shall mean, with respect to any
Eurodollar Loan for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:
Eurodollar Rate = EURODOLLAR RATE
(Reserve Adjusted) 1-Eurocurrency
Reserve Percentage
EVENT OF DEFAULT shall mean any of the events described in SECTION 12.1.
EXISTING LETTERS OF CREDIT-see RECITALS.
FEDERAL FUNDS RATE shall mean, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Board of Governors of the Federal Reserve System
(including any such successor publication, "H.15(519)") for such day opposite
the caption "Federal Funds (Effective)". If on any relevant day such rate is
not yet published in H.15(519), the rate for such day will be the rate set forth
in the daily statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
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publication, the "Composite 3:30 p.m. Quotations") for such day under the
caption "Federal Funds Effective Rate". If on any relevant day the appropriate
rate for such day is not yet published in either H.15(519) or the Composite 3:30
p.m. Quotations, that rate for such day will be the arithmetic mean of the rates
for the last transaction in overnight Federal funds arranged prior to 9:00 a.m.,
New York City time, on such day by each of three leading brokers of Federal
funds transactions in New York City, selected by the Agent. The rate for any
day which is not a Business Day shall be the rate for the immediately preceding
Business Day.
FISCAL QUARTER shall mean the period ending on either March 31, June 30,
September 30 or December 31 of each year.
FLOATING RATE LOAN or Floating Rate borrowing shall mean any Revolving Loan
which bears interest at or by reference to the Alternate Reference Rate.
FUNDED DEBT shall mean all indebtedness of the Company and its Subsidiaries
which by the terms of the agreement governing or instrument evidencing such
indebtedness matures more than one year from, or is directly or indirectly
renewable or extendable at the 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 creation thereof, including current
maturities of long-term debt, revolving credit, short-term debt extendable
beyond one-year at the option of the debtor, the present value of all Capital
Lease Obligations and without duplication, the Revolving Loans from time to time
outstanding.
GAAP shall mean generally accepted accounting principles in the United
States of America as in effect from time to time.
GOVERNMENTAL APPROVAL shall mean any permit, license, variance,
certificate, consent, letter, clearance, closure, exemption, decision or action
or approval of a governmental authority.
GROUP - see SECTION 1.2.
HAZARDOUS MATERIAL shall mean: (a) any "hazardous substance" as now defined
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601(14) as amended by the Superfund Amendments and
Reauthorization Act, and including the judicial interpretation thereof; (b) any
"pollutant or contaminant" as defined in 42 U.S.C.A. Section 9601(33); (c) any
material now defined as "hazardous waste" pursuant to 40 C.F.R. Part 261; (d)
any petroleum, including crude oil and any fraction thereof; (e) natural gas,
natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel;
(f) any "hazardous chemical, as defined pursuant to 29 C.F.R. Part 1910; (g) any
asbestos, polychlorinated biphenyl (PCB), or isomer or dioxin, and (h) any other
substance, regardless of physical form, that is regulated under any
environmentally related federal, state or local government statute, rule or
regulation.
INDEBTEDNESS shall mean, with respect to any Person at any date, without
duplication: (i) all obligations of such Person with respect to borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments including, without limitation, all obligations
comprising subordinated indebtedness of such Person; (iii) all reimbursement
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obligations in respect of letters of credit, issued for the account of such
Person, following any draw under such letters of credit, if not paid when due;
(iv) all obligations in respect of bankers' acceptances issued for the account
of such person after designation of, and delivery to, a payee; (v) all
Capitalized Lease Obligations of such Person; and (vi) whether or not included
as liabilities in accordance with GAAP, obligations secured by a Lien on
property owned or being purchased by such Person (including obligations arising
under conditional sales or other title retention agreements) whether or not such
obligations shall have been assumed by such Person or are limited in recourse.
INSOLVENCY EVENT shall mean, with respect to any Person, (i) the
application for, consent to, or acquiescence in, the appointment of a receiver,
trustee, custodian or liquidator of or for it or its business or of or for all
or a substantial part of its assets; (ii) the filing of a voluntary petition or
answer seeking reorganization or an arrangement with creditors or seeking to
take advantage, as a debtor, of any other law (whether federal, state or
foreign) relating to relief of debtors, or the admission (by answer, by default
or otherwise) of the material allegations of a petition filed against it in any
bankruptcy, reorganization, arrangement, insolvency or other proceeding whether
federal, state or foreign) relating to relief of debtors, or the admission in
writing of its inability to pay its debts generally as they become due; (iii)
the permitting to continue unstayed for ten (10) days any judgment, decree or
order which adjudges it a bankrupt or insolvent or approves as properly filed
petition seeking its reorganization or arrangement or appoints receiver,
trustee, custodian or liquidator of or for it or its business or of or for all
or a substantial part of its assets or decrees the winding up or liquidation of
its affairs; (iv) the filing against it, by Persons other than Banks prior to
the occurrence of a Default, of any bankruptcy, reorganization, arrangement,
insolvency or other proceeding (whether federal, state or foreign) relating to
the relief of debtors, which proceeding shall not be dismissed within thirty
(30) days after the commencement thereof; (v) the commencement by or against it
of a proceeding seeking its dissolution, liquidation or winding up, and, in the
case of a proceeding commenced against it, the consent to such proceeding by it
or its failure to cause such proceeding to be dismissed within thirty (30) days
after the commencement thereof; or (vi) the taking of any corporate action in
furtherance of any of the foregoing.
INTEREST PERIOD - see SECTION 3.3.
INVENTORY shall mean any and all now owned or hereafter acquired inventory,
goods, merchandise, and other tangible personal property intended for sale or
lease, in the custody or possession, actual or constructive, of the Company or
any of its Subsidiaries, or in transit to the Company or any of its
Subsidiaries, including such inventory as is on consignment to third parties,
leased to customers of the Company or any of its Subsidiaries, or otherwise
temporarily out of the custody or possession of the Company or any of its
Subsidiaries.
INVESTMENT shall mean any investment, made in cash or by delivery of any
kind of property or asset, in any Person, whether by acquisitions of stock or
similar interest, or any other obligation or security, or by loan, advance or
capital contribution, or otherwise. The term Investment shall include any joint
venture investment.
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"ISSUE" shall mean, with respect to any Letter of Credit, to issue or to
extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "ISSUED," "ISSUING" and "ISSUANCE" shall have
corresponding meanings.
LASALLE shall mean LaSalle National Bank, a national banking association.
LETTER OF CREDIT - see SECTION 1.1.3.
LETTER OF CREDIT APPLICATION shall mean a letter of credit application in
the form then used by Bank of America for the type of letter of credit requested
(with appropriate adjustments to indicate that any letter of credit issued
thereunder is to be issued pursuant to, and subject to the terms and conditions
of, this Agreement).
LETTER OF CREDIT COMMITMENTS shall mean the commitment of Bank of America
to issue, and of each Bank to participate in, the Letters of Credit pursuant to
SECTION 1.1.3.
LOAN DOCUMENTS shall mean this Agreement, the Revolving Notes, the Letter
of Credit Applications and all schedules, certificates, exhibits and notices
delivered pursuant to any of the foregoing.
MARGIN shall mean, subject to the next sentence, the following rate based
on the Funded Debt/Operating Cash Flow Ratio as of the end of the Fiscal Quarter
most recently ended, as follows:
FUNDED DEBT/OPERATING EURODOLLAR LOAN FLOATING RATE
CASH FLOW RATIO (AND LETTERS OF CREDIT) LOAN
--------------------- ----------------------- -------------
FDOCFR less than 1.0 0.500% 0.000%
FDOCFR greater than 1.0 but less than or equal to 1.5 0.625% 0.000%
FDOCFR greater than 1.5 but less than or equal to 2.0 0.750% 0.000%
FDOCFR greater than 2.0 but less than or equal to 2.5 1.000% 0.000%
FDOCFR greater than 2.5 but less than or equal to 3.0 1.250% 0.250%
FDOCFR greater than 3.0 but less than or equal to 3.5 1.500% 0.500%
FDOCFR greater than 3.5 but less than or equal to 3.75 1.750% 0.750%
FDOCFR greater than 3.75 2.000% 0.750%
For purposes of the foregoing, FDOCFR means the Funded Debt/Operations Cash Flow
Ratio. The applicable Margin shall be adjusted, to the extent applicable, 45
days (or in the case of the last Fiscal Quarter of any fiscal year, 90 days)
after the end of each Fiscal Quarter beginning on the 45th day after the first
Fiscal Quarter ending after the Effective Date, based on the Funded
Debt/Operating Cash Flow Ratio as of the last day of such Fiscal Quarter; IT
BEING UNDERSTOOD that if the Company fails to deliver the certificate required
by SECTION 10.1.4 by the 45th day (or, if applicable, the 90th day) after any
Fiscal Quarter, the applicable Margin shall be 2.0% per annum until such
certificate is delivered. Notwithstanding the foregoing, prior to the 3Q1999
Compliance Certificate Delivery Date, the Margin applicable to Eurodollar Loans
and Letters of Credit shall be 2.5%, and the Margin applicable to Floating Rate
Loans shall be 1.00%, and (b) on and after November 1, 1999, and only for so
long as, if the 1999 Debt/Equity Issuance has not occurred, the
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Margin applicable to the portion of the aggregate principal amount of
Revolving Loans outstanding which is equal to $50,000,000 shall be increased
by 0.25% over the margin then otherwise in effect.
MARGIN STOCK shall mean any "margin stock" as defined in Regulation U of
the Board of Governors of the Federal Reserve System.
MARKET FEDERAL FUNDS Rate means, for any period, a fluctuating interest
rate per annum equal for each day during such period to (a) the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York; or (b) if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
MATERIAL ADVERSE EFFECT means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of the
Company to perform under this Agreement and to avoid any Event of Default; or
(c) a material adverse effect upon the legality, validity, binding effect or
enforceability against the Company under this Agreement.
NET ▇▇▇▇ HOG ELIGIBLE FINISHED GOODS INVENTORY shall mean the finished
goods inventory carried on the books and records of the ▇▇▇▇ Hog Division less:
(i) reserves for excess and/or obsolete inventory; (ii) component parts
manufactured by ▇▇▇▇ Hog Division; (iii) inventory held by sales representatives
for demonstration purposes; and (iv) inventory not included on the perpetual
inventory records.
NET ▇▇▇▇ HOG ELIGIBLE PURCHASED PARTS INVENTORY shall mean the book value
of the purchased parts included in the ▇▇▇▇ Hog Raw Material Inventory, less any
reserves for obsolete and/or excess purchased parts.
NET ▇▇▇▇ HOG ELIGIBLE RAW MATERIAL INVENTORY shall mean the book value of
the steel in the ▇▇▇▇ Hog Raw Material Inventory.
NET ▇▇▇▇ HOG ELIGIBLE RECEIVABLES shall mean the Eligible Receivables of
the ▇▇▇▇ Hog Division reduced by all of the following: (i) the Eligible
Receivables of any Obligors at least fifty percent (50%) of whose total
Receivables are more than sixty (60) days past due; (ii) Eligible Receivables
the Obligors of which are ▇▇▇▇ Hog sales representatives or salesmen; (iii)
Eligible Receivables representing interest charges and/or chargebacks to
Obligors for disallowed deductions from payments; (iv) all reserves for foreign
exchange, service parts, warranties, and customer deposits, (v) all Obligor
prepayments not already deducted from Receivables; (vi) cash received by the
▇▇▇▇ Hog Division but not yet applied to the reduction of Receivables; (vii)
Eligible Receivables with respect to Kewanee Service Parts sales; and (viii)
Eligible Receivables with extended terms beyond original date.
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NET ▇▇▇▇ HOG 0 - 90 DAYS ELIGIBLE RECEIVABLES shall mean those Net ▇▇▇▇ Hog
Eligible Receivables on which the number of days elapsed from the invoice date
is no more than ninety (90) days.
NET ▇▇▇▇ HOG 91 - 180 DAYS ELIGIBLE RECEIVABLES shall mean those Net ▇▇▇▇
Hog Eligible Receivables on which the number of days elapsed from the invoice
date is between ninety-one (91) and one hundred eighty-one (181) days.
NET ▇▇▇▇ HOG 181 - 240 DAYS ELIGIBLE RECEIVABLES shall mean those Net ▇▇▇▇
Hog Eligible Receivables on which the number of days elapsed from the invoice
date is between one hundred eighty-one (181) and two hundred forty (240) days.
NET ▇▇▇▇ HOG OVER 240 DAYS ELIGIBLE RECEIVABLES shall mean those Net ▇▇▇▇
Hog Eligible Receivables on which the number of days elapsed from the invoice
date is more than two hundred forty (240) days.
NET GREAT BEND ELIGIBLE FINISHED GOODS INVENTORY shall mean the finished
goods inventory carried on the books and records of the Great Bend Division
less: (i) reserves for excess and/or obsolete inventory; (ii) component parts
manufactured by Great Bend Division; (iii) inventory held by sales
representatives for demonstration purposes; and (iv) inventory not included on
the perpetual inventory records.
NET GREAT BEND ELIGIBLE PURCHASED PARTS INVENTORY shall mean the book value
of the purchased parts included in the Great Bend Raw Material Inventory, less
any reserves for obsolete and/or excess purchased parts.
NET GREAT BEND ELIGIBLE RAW MATERIAL INVENTORY shall mean the book value of
the steel in the Great Bend Raw Material Inventory.
NET GREAT BEND ELIGIBLE RECEIVABLES shall mean the Eligible Receivables of
the Great Bend Division reduced by all of the following: (i) the Eligible
Receivables of any Obligors at least fifty percent (50%) of whose total
Receivables are more than sixty (60) days past due; (ii) Eligible Receivables
the Obligors of which are Great Bend sales representatives or salesmen; (iii)
Eligible Receivables representing interest charges and/or chargebacks to
Obligors for disallowed deductions from payments; (iv) all reserves for foreign
exchange, service parts, warranties, and customer deposits, (v) all Obligor
prepayments not already deducted from Receivables; (vi) cash received by the
Great Bend Division but not yet applied to the reduction of Receivables; (vii)
[reserved]; and (viii) Eligible Receivables with extended terms beyond original
date.
NET GREAT BEND 0 - 90 DAYS ELIGIBLE RECEIVABLES shall means those Net
Great Bend Eligible Receivables on which the number of days elapsed from the
invoice date is no more than ninety (90) days.
NET GREAT BEND 91 - 180 DAYS ELIGIBLE RECEIVABLES shall mean those Net
Great Bend Eligible Receivables on which the number of days elapsed from the
invoice date is between ninety-one (91) and one hundred eighty-one (181) days.
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NET GREAT BEND 181 - 240 DAYS ELIGIBLE RECEIVABLES shall mean those Net
Great Bend Eligible Receivables on which the number of days elapsed from the
invoice date is between one hundred eighty-one (181) and two hundred forty (240)
days.
NET GREAT BEND OVER 240 DAYS ELIGIBLE RECEIVABLES shall mean those Net
Great Bend Eligible Receivables on which the number of days elapsed from the
invoice date is more than two hundred forty (240) days.
NET ISSUANCE PROCEEDS shall mean, as to any issuance of debt or equity by
any Person, cash proceeds and non-cash proceeds received or receivable by such
Person in connection therewith, net of reasonable out-of-pocket costs and
expenses paid or incurred in connection therewith in favor of any Person, such
costs and expenses not to exceed 7% of the gross proceeds of such issuance or
such other amounts permitted by law which are reasonable under then current
market conditions.
NET PRECISION PRESS INDUSTRIES ELIGIBLE RAW MATERIAL INVENTORY shall mean
the book value of the Eligible Raw material Inventory of the Precision Press
Industries Division less the values of the castings and forgings, reserves for
excess raw material, other raw material valuation reserves and customer rework.
NET PRECISION PRESS INDUSTRIES ELIGIBLE RECEIVABLES shall mean the Eligible
Receivables of the Precision Press Industries Division less any credit balances
aged past ninety (90) days and less any Eligible Receivables of any Obligor
fifty percent (50%) or more of whose total Receivables are more than ninety (90)
days past due and less all contra advance payments.
NET PRECISION PRESS INDUSTRIES ELIGIBLE WORK-IN-PROGRESS INVENTORY shall
mean the Eligible Work-In-Progress Inventory of the Precision Press Industries
Division.
NET VERSON ELIGIBLE RAW MATERIAL INVENTORY shall mean the book value of the
Eligible Raw material Inventory of the Verson Division less the values of the
castings and forgings, reserves for excess raw material, other raw material
valuation reserves and customer rework.
NET VERSON ELIGIBLE RECEIVABLES shall mean the Eligible Receivables of the
Verson Division less any credit balances aged past ninety (90) days and less any
Eligible Receivables of any Obligor fifty percent (50%) or more of whose total
Receivables are more than ninety (90) days past due and less all contra advance
payments.
NET VERSON ELIGIBLE WORK-IN-PROGRESS INVENTORY shall mean the Eligible
Work-In-Progress Inventory of the Verson Division.
1999 DEBT/EQUITY ISSUANCE shall mean receipt by the Company of Net Issuance
Proceeds of at least $50,000,000 arising from the issuance by the Company of
(i) 1999 Senior Notes or (ii) common or preferred equity stock of the Company.
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1999 SENIOR NOTES shall mean the senior notes proposed to be issued by the
Company, in the original aggregate amount of at least $50,000,000 on or before
September 1, 1999, provided, that the terms and provisions thereof (including,
without limitation, the terms and provisions as to amount, pricing, maturity,
covenants, and intercreditor issues) shall be in form and substance satisfactory
to the Required Banks.
OBLIGOR shall mean any Person obligated in respect of any Receivable, and
"RELATED OBLIGOR", when used with reference to any Receivable, shall mean any
Obligor in respect thereof.
PBGC shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
PENSION PLAN shall mean a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Company or any corporation, trade or business that is, along with the Company, a
member of a controlled group of corporations or a controlled group of trades or
businesses, as described in sections 414(b) and 414(c), respectively, of the
Internal Revenue Code of 1986, as amended or section 4001 of ERISA may have any
liability, including any liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under section 4069 of ERISA.
PERCENTAGE shall mean as to any Bank the percentage set forth opposite such
Banks name under COLUMN IV of EXHIBIT A. Upon any assignment pursuant to
SECTION 15.17, the Agent shall appropriately revise each Bank's Percentage and
EXHIBIT A so as to give effect to such assignment.
PERSON shall mean any natural person, corporation, partnership, trust,
association, governmental authority or unit, or any other entity, whether acting
in an individual, fiduciary or other capacity.
PERMITTED DISPOSITIONS shall mean the dispositions of the assets of the
Company set forth on Schedule 10.13.
PROGRESS BILLING RECEIVABLE shall mean a Receivable which arose from the
obligation of the related Obligor to make progress payments or similar payments.
RCRA shall mean the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 USC 6901 ET SEQ., and any future amendments.
RECEIVABLES shall mean and include all of the present and future rights of
the Company and its Subsidiaries to payment for goods, merchandise or Inventory
sold or leased or for services rendered (including, without limitation, those
which are not evidenced by instruments or chattel paper), whether or not they
have been earned by performance, and all accounts, proceeds of any letters of
credit on which the Company is named as beneficiary, contract rights, chattel
paper, instruments, documents, insurance proceeds (to the extent payable to the
Agent as its interest may
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appear), and all other such obligations whatsoever, owing to the Company or
its subsidiaries, together with all instruments and all documents of title
representing any of the foregoing, all rights in any goods, merchandise or
inventory which any of the same may represent, all rights in any returned or
repossessed goods, merchandise and Inventory, and all rights, title, security
and guaranties with respect to each of the foregoing, including, without
limitation, any right of stoppage in transit.
REFERENCE RATE shall mean at any time the rate of interest then most
recently announced by Bank of America at Chicago, Illinois as its reference
rate.
RELATED EQUIPMENT shall mean with respect to any Receivable the equipment,
the sale of which gave rise to such Receivable, and any other property which
secures such Receivable.
RELEASE shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the indoor or outdoor environment, including, without limitation, the
abandonment or discarding of barrels, drums, containers, tanks, and other
receptacles containing or previously containing any Hazardous Material.
REQUIRED BANKS shall mean (I) if Bank of America and LaSalle are the only
Banks, then both of the Banks, and (ii) if there are more than two (2) Banks,
then Banks holding at least 51% of the then aggregate outstanding principal
amount of the Revolving Loans then held by the Banks, or, if no such principal
amount is then outstanding, Banks having at least 51% of the Commitments.
REVOLVING LOAN - see SECTION 1.1.1.
REVOLVING LOAN COMMITMENT shall mean the commitment of each
Bank to make Revolving Loans pursuant to SECTION 1.1.1.
REVOLVING NOTE - see SECTION 2.1.
REVOLVING TERMINATION DATE shall mean September 30, 2001; provided that such
date may be extended in writing by the Banks, in their sole and absolute
discretion, until September 30, 2002 upon the written request by the Company to
the Agent no later than June 30, 2001. Nothing contained herein shall be deemed
to require the Banks to extend the Revolving Termination Date.
SEC REPORT shall mean (i) the Company's 10-K report as filed with the
Securities and Exchange Committee for its fiscal year ended December 31, 1997
and (ii) all of the Company's forms 10-Q and 8-K filed with the Securities and
Exchange Commission since December 31, 1997.
SIGNIFICANT SUBSIDIARY shall mean any Subsidiary as to which the assets or
operating income exceeds 10% of the assets or operating income of the Company
and its Subsidiaries on a consolidated basis.
STATED AMOUNT shall mean with respect to any Letter of Credit at any date
of determination thereof, the maximum aggregate amount available thereunder at
any time during the then ensuing
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term of such Letter of Credit under any and all circumstances, plus the
aggregate amount of all unreimbursed payments and disbursements under such
Letter of Credit.
SUBSIDIARY shall mean, with respect to any Person, a corporation of which
such Person and/or its other Subsidiaries own, directly or indirectly, such
number of outstanding shares as have more than 50% of the ordinary voting power
for the election of directors. Unless the context otherwise requires, each
reference to Subsidiaries herein shall be a reference to Subsidiaries of the
Company.
TANGIBLE ASSETS shall mean with respect to any Person, the book value of
all of the assets of such Person less the book value of any intangible assets,
including without limitation, goodwill, franchises, licenses, patents,
trademarks, trade names, service marks and brand names.
3Q1999 COMPLIANCE CERTIFICATE DELIVERY DATE - see SECTION 5.2.
TYPE OF LOAN OR BORROWING means either Floating Rate Loans or borrowings or
Eurodollar Loans or borrowings.
UNMATURED EVENT OF DEFAULT shall mean any event which if it continues
uncured will, with lapse of time or notice or lapse of time and notice,
constitute an Event of Default.
VERSON DIVISION SPECIAL EXPENSES shall mean all of the expenses identified
in relation to the Verson Division, as specified in Schedule 13 hereto.
VOTING STOCK shall mean securities of any class or classes of a
corporation, the holders of which are ordinarily, in the absence of
contingencies, or which are in fact, entitled to elect a majority of the
corporate directors (or Persons performing similar functions) of such
corporation.
WELFARE PLAN shall mean a "welfare plan", as such term is defined in
section 3(l) of ERISA.
SECTION 14 THE AGENT.
SECTION 14.1 AUTHORIZATION. Each Bank and the holder of each Note
authorizes the Agent to take such actions on behalf of such Bank or holder and
to exercise such powers hereunder, any Letter of Credit Application or any other
document or instrument delivered hereunder or in connection herewith as are
granted to the Agent and/or the Banks pursuant to such documents and are
specifically delegated to the Agent herein and therein in connection with the
administration of and the enforcement of any rights or remedies with respect to
this Agreement, the Revolving Notes, the Letter of Credit Applications or any
other document or instrument delivered hereunder or in connection herewith. The
general administration of the Revolving Loans shall be with the Agent, subject
to control by the Banks.
SECTION 14.2 INDEMNIFICATION. Each Bank and the holder of each Revolving
Note agrees to reimburse and indemnify the Agent for, and hold the Agent
harmless against, a share (determined in accordance with the percentage which
(x) the sum of (A) the participation in all outstanding Letters of Credit of
such Bank plus (E) the principal amount of the Revolving Loans of such Bank
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or holder is of (y) the sum of (A) all outstanding Letters of Credit plus (B)
the aggregate principal amount of all Revolving Loans) of any loss, damages,
penalty, action, judgment, obligation, cost, disbursement, liability or
expense (including attorneys, fees) incurred without gross negligence or
willful misconduct on the part of the Agent arising out of or in connection
with the performance of its obligations or the exercise of its powers
hereunder or under any document or instrument delivered hereunder or in
connection herewith, as well as the costs and expenses of defending against
any claim against the Agent arising hereunder or thereunder.
SECTION 14.3 EXCULPATION. The Agent shall be entitled to rely upon advice
of counsel concerning legal matters, and upon this Agreement and any Revolving
Note, Letter of Credit Application, schedule, certificate, statement, report,
notice or other writing which it believes to be genuine or to have been
presented by a proper person. Neither the Agent nor any of its directors,
officers, employees or agents shall (a) be responsible for any recitals,
representations or warranties contained in, or for the execution, validity,
genuineness, effectiveness or enforceability of, this Agreement, any Revolving
Note, any Letter of Credit Application or any other instrument or document
delivered hereunder or in connection herewith, (b) be responsible for the
validity, genuineness, perfection, effectiveness, enforceability, existence,
value or enforcement of any collateral security, (c) be under any duty to
inquire into or pass upon any of the foregoing matters, or to make any inquiry
concerning the performance by the Company or any other Obligor of its
obligations, or (d) in any event, be liable as such for any action taken or
omitted by it or them, except for its or their own gross negligence or willful
misconduct. The agency hereby created shall in no way impair or affect any of
the rights and powers of, or impose any duties or obligations upon Bank of
America in its individual capacity.
SECTION 14.4 CREDIT INVESTIGATION. Each Bank acknowledges that it has
made such inquiries and taken such care on its own behalf as would have been the
case had such Bank's Commitment been granted, the Letters of Credit issued and
such Bank's Revolving Loans been made directly by such Bank to the Company
without the intervention of the Agent or any other Bank. Each Bank agrees and
acknowledges that the Agent makes no representations or warranties about the
credit worthiness of the Company or any other party to this Agreement or with
respect to the legality, validity, sufficiency or enforceability of this
Agreement, any Revolving Note or any Letter of Credit Application.
SECTION 14.5 AGENT AND AFFILIATES. The Agent shall have the same rights
and powers hereunder as any other Bank and may exercise or refrain from
exercising the same as though it were
not the Agent, and the Agent and its Affiliates may accept deposits from and
generally engage in any kind of business with the Company or any Subsidiary as
if the Agent were not the Agent hereunder.
SECTION 14.6 RESIGNATION. The Agent may resign as such at any time upon
at least 30 days prior notice to the Company and the Banks. In the event of any
such resignation, the Banks shall as promptly as practicable appoint a successor
Agent. If no successor shall have been so appointed, and shall have accepted
such appointment, within 30 days after the giving of notice of such resignation,
then the retiring Agent may, on behalf of the Banks, appoint a successor Agent,
which shall be a commercial bank organized under the laws of the United States
of America having a combined capital, surplus and undivided profits of at least
$400,000,000. Upon the acceptance of
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any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from all further duties and obligations under this Agreement.
After any resignation pursuant to this SECTION 14.6, the provisions of this
SECTION 14 shall inure to the benefit of the retiring Agent as to any actions
taken or omitted to be taken by it while it was Agent hereunder.
SECTION 14.7 LETTERS OF CREDIT. The provisions of SECTION 14 hereof shall
apply to Bank of America as the issuer of the Letters of Credit with the same
effect as if Bank of America as issuer were the Agent.
SECTION 15 GENERAL.
SECTION 15.1 WAIVER; AMENDMENTS. The provisions of this Agreement and of
each other Loan Document may from time to time be amended, modified or waived,
if such amendment, modification or waiver is in writing and consented to by the
Company and the Required Banks; PROVIDED, however, that no such amendment,
modification or waiver which would:
(a) modify any requirement hereunder that any particular action be taken
by all the Banks or by the Required Banks shall be effective unless consented to
by each Bank;
(b) modify this SECTION 15.1, change the definition of "Required Banks",
increase the Commitment or the Percentage of any Bank, reduce any fees described
in Section 5, or extend the Revolving Termination Date shall be made without the
consent of each Bank and each holder of a Revolving Note;
(c) extend the due date for, or reduce the amount of, any scheduled
repayment or prepayment of principal or of interest on any Revolving Loan (or
reduce the principal amount of or rate of interest on any Revolving Loan) shall
be made without the consent of each Bank and the holder of the Revolving Note
evidencing such Revolving Loan; or
(d) affect adversely the interests, rights or obligations of the Agent QUA
the Agent shall be made without consent of the Agent.
No failure or delay on the part of the Agent, any Bank or the, holder of any
Revolving Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Company in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Agent, any Bank or
the holder of any Revolving Note under this Agreement or any other Loan Document
shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 15.2 CONFIRMATIONS. The Company and each holder of a Revolving
Note agree from time to time, upon written request received by it from the
other, to confirm to the other in
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writing (with a copy of each such confirmation to the Agent) the aggregate
unpaid principal amount of the Revolving Loans then outstanding under the
applicable Revolving Note.
SECTION 15.3 NOTICES. Except as otherwise provided in SECTIONS 1.3, 1.4
and 3.3, all notices hereunder shall be in writing (including, without
limitation, telex or facsimile transmission) and shall be sent to the applicable
party at its address shown below its signature hereto or at such other address
as such party may, by written notice received by the other parties hereto, have
designated as its address for such purpose. Notices sent by telex or facsimile
transmission shall be deemed to have been given when sent; notices sent by mail
shall be deemed to have been given three Business Days after the date when sent
by registered or certified mail, postage prepaid; and notices sent by hand
delivery shall be deemed to have been given when received.
SECTION 15.4 COMPUTATIONS. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP applied on a basis consistent with those in effect as at
the date of the Company's most recent financial statements referred to in
SECTION 10.1.1. If there should be any material change in GAAP after the date
hereof which materially affects the financial covenants in this Agreement, the
parties hereto agree to negotiate in good faith appropriate revisions of such
covenants.
SECTION 15.5 REGULATION U. Each Bank represents that it in good faith is
not relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
SECTION 15.6 COSTS, EXPENSES AND TAXES. The Company agrees to pay on
demand (a) all reasonable out-of-pocket costs and expenses of the Agent
(including the reasonable fees and out-of-pocket expenses of counsel for the
Agent) in connection with the preparation, administration, amendment or waiver
of this Agreement and the other Loan Documents and (b) all reasonable
out-of-pocket costs and expenses (including reasonable attorneys fees and legal
expenses and allocated costs of staff counsel) incurred by the Agent and each
Bank in connection with the enforcement of this Agreement, or any other Loan
Documents. Each Bank agrees to reimburse the Agent for such Banks pro rata
share (based on its respective Percentage) of any such costs and expenses not
paid by the Company. In addition, the Company agrees to pay, and to save the
Agent and the Banks harmless from all liability for, any stamp or other taxes
which may be payable in connection with the execution and delivery of this
Agreement, the borrowings hereunder, the issuance of the Revolving Notes or the
execution and delivery of any other Loan Documents provided for herein or
delivered or to be delivered hereunder or in connection herewith. All
obligations provided for in this SECTION 15.6 shall survive repayment of the
Revolving Loans, cancellation of the Revolving Notes or any termination of the
Commitments or this Agreement.
SECTION 15.7 SUBSIDIARY REFERENCES. The provisions of this Agreement
relating to Subsidiaries shall apply only during such times as the Company has
one or more Subsidiaries.
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SECTION 15.8 CAPTIONS. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
SECTION 15.9 INDEMNIFICATION.
(a) The Company hereby agrees to indemnify, exonerate and hold each of the
Agent and each Bank and each of the officers, directors, employees and agents of
each of the Agent and each Bank (collectively herein called the "Bank Parties"
and individually each called a "Bank Party") free and harmless from and against
any and all actions, causes of action, suits, losses, liabilities, damages and
expenses, including, without limitation, reasonable attorneys, fees and
disbursements (collectively herein called the "Indemnified Liabilities"),
incurred by the Banks or any of them as a result of, or arising out of, or
relating to this Agreement, the Revolving Notes, the Letter of Credit
Applications, or any other agreements executed and delivered in connection
therewith, except for any such Indemnified Liabilities arising on account of any
such Bank's gross negligence or willful misconduct. If and to the extent that
the foregoing undertaking may be unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law.
(b) The Company agrees to reimburse the Agent and each Bank and each of
their respective directors, officers, employees and agents (each an "Indemnified
Party") against any and all losses, claims, damages, penalties, judgments,
liabilities and expenses (including all reasonable attorneys and consultants
fees) which any Indemnified Party may pay, incur or become subject to arising
out of or relating to the use, handling, emission, discharge, transportation,
storage, treatment or disposal of any Hazardous Material at any real property
owned, operated or leased by the Company, except to the extent caused by the
acts or omissions of any Indemnified Party. All obligations provided for in
this SECTION 15.9 shall survive any termination of this Agreement.
SECTION 15.10 GOVERNING LAW. This Agreement and each Revolving Note shall
be a contract made under and governed by the internal laws of the State of
Illinois. Whenever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement. All obligations of the Company
and rights of the Agent, the Banks and any other holder of a Revolving Note
expressed herein or in any Revolving Note shall be in addition to and not in
limitation of those provided by applicable law.
SECTION 15.11 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
SECTION 15.12 SUCCESSORS AND ASSIGNS. Subject to SECTION 15.17, this
Agreement shall be binding upon the Company, the Banks and the Agent and their
respective permitted successors and assigns, and shall inure to the benefit of
the Company, the Banks and the Agent and the permitted successors and assigns of
the Banks and the Agent.
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SECTION 15.13 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND
EACH BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY REVOLVING NOTE, ANY
LETTER OF CREDIT APPLICATION, AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
SECTION 15.14 SECURITIES LAWS. Each Bank represents that it is the
present intention of such Bank to acquire each Revolving Note drawn to its order
for its own account and not with a view to the distribution or sale thereof,
subject, nevertheless, to the necessity that such Bank remain in control at all
times of the disposition of property held by it for its own account; it being
understood that the foregoing representation shall not affect the character of
the Revolving Loans as commercial lending transactions.
SECTION 15.15 CONFIDENTIALITY. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company and provided to it by the Company or any Subsidiary, or
by the Agent on the Company's or such Subsidiary's behalf, under this Agreement
or any other Loan Document, and neither it nor any of its Affiliates shall use
any such information other than in connection with or in enforcement of this
Agreement and the other Loan Documents or in connection with other business now
or hereafter existing or contemplated with the Company or any Subsidiary; except
to the extent such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; PROVIDED, HOWEVER, that any Bank may disclose such
information (A) at the request or pursuant to any requirement of any
governmental authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable requirement of law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Bank's independent auditors and other
professional advisors; (G) to any participant or assignee, actual or potential,
provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Banks hereunder; (H) as to any
Bank or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Bank or such Affiliate; and (I)
to its Affiliates, provided that each Affiliate agrees to keep such information
confidential to the same extent required of the Banks herewith.
SECTION 15.16 WAIVER. Effective as of the Effective Date, the Banks hereby
waive for the Fiscal Quarter ending December 31, 1998 (but not for any period
thereafter), non-compliance by the
-53-
Company, with the financial covenants contained in SECTIONS 10.5, 10.6 AND
10.7 of the Existing Credit Agreement.
SECTION 15.17 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Bank may, with the written consent of the Company (at all
times other than during the existence of an Event of Default) and the
Agent, which consent of the Company shall not be unreasonably withheld, at
any time assign and delegate to one or more Eligible Assignees (provided
that no written consent of the Company or the Agent shall be required in
connection with any assignment and delegation by a Bank to an Eligible
Assignee that is an Affiliate of such Bank) (each an "ASSIGNEE") all, or
any ratable part of all, of the Revolving Loans, the Commitment and the
other rights and obligations of such Bank hereunder, in a minimum amount of
$5,000,000; PROVIDED, HOWEVER, that the Company and the Agent may continue
to deal solely and directly with such Bank in connection with the interest
so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Company and the Agent
by such Bank and the Assignee; (ii) such Bank and its Assignee shall have
delivered to the Company and the Agent an Assignment and Acceptance in the
form of EXHIBIT E ("ASSIGNMENT AND ACCEPTANCE") together with any Revolving
Note or Revolving Notes subject to such assignment and (iii) the assignor
Bank or Assignee has paid to the Agent a processing fee in the amount of
$3,000.
(b) From and after the date that the Agent notifies the assignor Bank
that it has received (and provided its consent with respect to) an executed
Assignment and Acceptance (accompanied by any written consent of the
Company to the extent required) and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, shall have the rights and
obligations of a Bank under the Loan Documents, and (ii) the assignor Bank
shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations
under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the
Agent that it has received an executed Assignment and Acceptance
(accompanied by any written consent of the Company to the extent required)
and payment of the processing fee, (and provided that it consents to such
assignment in accordance with subsection 15.7(a)), the Company shall
execute and deliver to the Agent, new Revolving Notes evidencing such
Assignee's assigned Revolving Loans and Commitment and, if the assignor
Bank has retained a portion of its Revolving Loans and its Commitment,
replacement Revolving Notes in the principal amount of the Revolving Loans
retained by the assignor Bank (such Revolving Notes to be in exchange for,
but not in payment of, the Revolving Notes held by such Bank). Immediately
upon each Assignee's making its processing fee payment under the Assignment
and Acceptance, this Agreement shall be deemed to be amended to the extent,
but only to the extent, necessary to reflect the addition of the Assignee
and the resulting adjustment of the Commitments (and the related Percentage
of each Bank) arising
-54-
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitment(s) of the assigning Bank PRO TANTO.
(d) Any Bank may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Company (a "PARTICIPANT") participating
interests in any Revolving Loans, the Commitment of that Bank and the other
interests of that Bank (the "originating Bank") hereunder and under the
other Loan Documents; PROVIDED, HOWEVER, that (i) the originating Bank's
obligations under this Agreement shall remain unchanged, (ii) the
originating Bank shall remain solely responsible for the performance of
such obligations, (iii) the Company and the Agent shall continue to deal
solely and directly with the originating Bank in connection with the
originating Bank's rights and obligations under this Agreement and the
other Loan Documents, and (iv) no Bank shall transfer or grant any
participating interest under which the Participant has rights to approve
any amendment to, or any consent or waiver with respect to, this Agreement
or any other Loan Document, except to the extent such amendment, consent or
waiver would require unanimous consent of the Banks as described in the
PROVISO to Section 15.1. In the case of any such participation, the
Participant shall be entitled to the benefit of SECTION 15.9 as though it
were also a Bank hereunder, and if amounts outstanding under this Agreement
are due and unpaid, or shall have been declared or shall have become due
and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly
to it as a Bank under this Agreement.
Notwithstanding any other provision in this Agreement, any Bank may at any time
create a security interest in, or pledge, all or any portion of its rights under
and interest in this Agreement and the Note held by it in favor of any Federal
Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR Section 203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
-55-
[SIGNATURE PAGES FOLLOW]
-56-
Delivered to Chicago, Illinois, as of the day and year first above written.
ALLIED PRODUCTS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Number for confirmation of
facsimiles: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Title: Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Number for confirmation of
facsimiles: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: Senior Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Number for confirmation of
facsimiles: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
LASALLE NATIONAL BANK
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Number for confirmation of
facsimiles: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
EXHIBIT A
COMMITMENT LIMITS AND PERCENTAGES
Column I: Column II: Column III: Column IV:
Amount of Revolving Amount of Letter of Total Amount of
Name of Bank Loan Commitment Credit Commitment Commitments Percentage
BANK OF AMERICA $ 101,500,000* $14,000,000 $ 101,500,000* 70%
NATIONAL TRUST AND
SAVINGS ASSOCIATION
LASALLE NATIONAL BANK $ 43,500,000* $ 6,000,000 $ 43,500,000* 30%
------------- ----------- ------------ ---
TOTALS $ 145,000,000* $20,000,000 $145,000,000* 100%
* Subject to reductions pursuant to Sections 1.1.3(a)(ii) and 6.1.
EXHIBIT B
FORM OF
RESTATED REVOLVING NOTE
$ __________________ February 1, 1999
Chicago, Illinois
On or before the Revolving Termination Date (as defined in the Credit
Agreement referred to below), the undersigned, for value received, promises to
pay to the order of __________________ _______________ Dollars ($_______) or,
if less, the aggregate unpaid amount of all Revolving Loans made by the payee to
the undersigned pursuant to the Credit Agreement referred to below, (as shown in
the records of the payee or, at the payee's option, on the schedule attached
hereto and any continuation thereof).
The undersigned further promises to pay interest on the unpaid principal
amount of each Revolving Loan evidenced hereby from the date of such Revolving
Loan until such Revolving Loan is paid in full, payable at the rate(s) and at
the time(s) set forth in the Credit Agreement. Payments of both principal and
interest are to be made in lawful money of the United States of America.
This Restated Revolving Note evidences indebtedness incurred under, and is
subject to the terms and provisions of, the Second Amended and Restated Credit
Agreement, dated as of February 1, 1999, as amended (herein, as further amended
or otherwise modified from time to time, called the "Credit Agreement"), between
the undersigned, various banks (including the payee) and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as agent for the Banks, to which Credit
Agreement reference is hereby made for a statement of the terms and provisions
under which this Restated Revolving Note may or must be paid prior to its due
date or may have its due date accelerated. Terms used but not otherwise defined
herein are used herein as defined in the Credit Agreement.
In addition to and not in limitation of the foregoing and the provisions of
the Credit Agreement, the undersigned further agrees, subject only to any
limitation imposed by applicable law, to pay all reasonable expenses, including
reasonable attorneys' fees and legal expenses, incurred by the holder of this
Restated Revolving Note in endeavoring to collect any amounts payable hereunder
which are not paid when due, whether by acceleration or otherwise.
This Restated Revolving Note is made under and governed by the internal
laws of the State of Illinois.
This Restated Revolving Note is issued in replacement of a Revolving Note
issued pursuant to the Credit Agreement on August 21, 1998. The indebtedness
evidenced by this Note represents an extension and renewal of indebtedness owing
to the payee.
ALLIED PRODUCTS CORPORATION
By:
-----------------------------------
Title:
--------------------------------
Schedule Attached to Restated Revolving Note dated February 1, 1999 of THE
COMPANY PAYABLE TO THE ORDER OF
Date and Amount of Date and Amount
Revolving Loan or of of Repayment or of
Conversion from Conversion into Unpaid
another type of another type of Principal
Revolving Loan Revolving Loan Interest Period Balance Notation Made by
1. FLOATING RATE LOANS
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
2. EURODOLLAR LOANS
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
EXHIBIT C
[▇▇▇▇▇▇▇, CARTON & ▇▇▇▇▇▇▇ Letterhead]
____________, 1999
Bank of America National Trust
and Savings Association,
individually and as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel to Allied Products Corporation, a Delaware
corporation ("Borrower"), in connection with the transactions effected and to be
effected pursuant to the following agreements and documents:
(i) that certain Second Amended and Restated Credit Agreement, dated
as of February 1, 1999 (the "Credit Agreement"), between the Borrower and each
of you;
(ii) those certain Revolving Notes evidencing loans under the
Credit Agreement (the "Notes").
The Credit Agreement and the Notes are collectively referred to herein
as the "Transaction Documents."
All capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Credit Agreement.
For purposes of this opinion, we have relied as to factual matters on
the representations and warranties contained in the Transaction Documents and we
have assumed the completeness and accuracy of all such representations and
warranties as to factual matters. Although we have made inquiries with respect
to such matters, and relied upon representations of officers and employees of
the Borrower, we have not, except as specifically noted herein, made any
independent review or investigation of facts in connection with this opinion.
Without limiting the generality of the foregoing, we have not made any
independent review or investigation of any decree, order, judgment, writ or
injunction to which Borrower may be a party or be subject or by which any of its
properties or assets may be bound or of any court or agency docket, nor have we
made any independent investigation as to the existence of any actions, suits,
investigations or proceedings, if any, pending or threatened against the
Borrower. While our firm represents the Borrower on a regular basis, our
engagement is limited to specific matters as to which we are consulted by the
Borrower from time to time. We have examined originals or copies, certified to
our satisfaction, of such (i) certificates of public officials, (ii)
certificates of officers and representatives of the Borrower and (iii) other
documents, records, financial statements and papers, and we have made such
inquiries of officers and representatives of the Borrower, as we have deemed
relevant or necessary for purposes of this opinion. We have assumed the
genuineness of all signatures (other than those of officers of the Borrower) and
the authenticity of all documents submitted to us as originals and the
conformity to original documents of all documents submitted to us as certified
or photostatic copies. As to the good standing of the Borrower, we have relied
exclusively upon a certificate of good standing as of recent date issued by the
Secretary of State of the State of Delaware. Based upon an subject to our
examination as aforesaid and subject to the qualifications hereinafter set
forth, we are of the opinion that:
1. The Borrower is a corporation validly existing and in good standing
under the General Corporation Law of the State of Delaware and has the requisite
corporate power and authority to conduct its business and to enter into and
consummate the transactions contemplated by, and perform all of its obligations
under, each of the Transaction Documents to which it is a party.
2. The execution, delivery and performance by the Borrower of each of the
Transaction Documents to which it is a party and the consummation by the
Borrower of each of the transactions on its part contemplated by the Transaction
Documents: (i) are within the corporate power of the Borrower; (ii) have been
duly authorized by all necessary corporate action on the part of the Borrower
and (iii) are not in contravention of any provision of the Certificate of
Incorporation or by-laws of the Borrower.
3. The respective Transaction Documents to which the Borrower is a party
have each been duly executed and delivered by the Borrower and, assuming due
authorization, execution and delivery thereof by the Agent and the Lenders,
constitute valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms, except to the extent that enforcement of
the Transaction Documents may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws of general
application relating to or affecting the enforcement of the rights of creditors
or secured parties, the application of general principles of equity or by the
availability of equitable remedies and further subject to the qualifications set
forth in the next succeeding sentence. We express no opinion herein as to the
validity or enforceability of any provision of the Transaction Documents to the
extent that such provision purports to require the Borrower to indemnify or to
hold harmless you or any other person or entity from the consequences of any
negligent or other wrongful act or omission of you or such other person or
entity.
The foregoing opinions are limited to the laws of the United States, the
State of Illinois and the General Corporation Law of the State of Delaware and
we have not considered and express no opinion on the laws of any other
jurisdiction.
This opinion is furnished by us solely for your benefit and it may not be
relied upon, quoted from or delivered to any person other than counsel to you,
your agents, employees, successors, assigns and participants.
Very truly yours,
[ALLIED PRODUCTS CORPORATION LETTERHEAD]
__________, 1999
Bank of America National Trust
and Savings Association,
individually and as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am General Counsel of Allied Products Corporation, a Delaware
corporation ("Borrower"), and have represented the Borrower in connection
with the transactions effected and to be effected pursuant to the following
agreements and documents:
(i) that certain Second Amended and Restated Credit Agreement, dated
as of February 1, 1999 (the "Credit Agreement"), between the Borrower and each
of you; and
(ii) the Revolving Notes evidencing loans under the Credit
Agreement (the "Notes").
The Credit Agreement and the Notes are collectively referred to herein
as the "Transaction Documents."
All capitalized terms used herein but not defined herein have the
meanings assigned to them in the Credit Agreement.
I have examined originals or copies, certified to my satisfaction, of
such (i) certificates of public officials, (ii) certificates of officers and
representatives of the Borrower and (iii) other documents, records, financial
statements and papers, and I have made such inquiries of officers and
representatives of the Borrower, as I have deemed relevant or necessary for
purposes of this opinion. I have relied upon, and assumed the accuracy of, such
certificates and other statements, documents, records, financial statements and
papers with respect to the factual matters set forth therein and I have assumed
the genuineness of all signatures, other than those of representatives therein
and I have assumed the genuineness of all signatures, other than those of
representatives of the Borrower, and the authenticity of all documents submitted
to me as originals and the conformity to original documents of all documents
submitted to me as certified or photostatic copies.
1. The Borrower (i) is a corporation organized, validly existing and in
good standing under the General Corporation Law of Delaware; (ii) is
qualified to do business in each jurisdiction in which it owns or leases real
property or in which it conducts any business, except for those jurisdictions
in which the failure to do so qualify would not have a Material Adverse
Effect; (iii) has
the requisite corporate power and authority to own, pledge, mortgage and
operate its properties, to lease any properties it operates under lease, to
conduct its business and to enter into, consummate all of the transactions
contemplated by, and perform all of its obligations under, each of the
Transaction Documents; and (iv) has all licenses, permits, consents or
approvals from or by, has made all filings with, and has given all notices
to, all governmental authorities having jurisdiction, which are required for
such ownership, operation and conduct and where a failure to have such
license, permit, consent or approval would have a Material Adverse Effect.
2. Each active Subsidiary incorporated in the United States is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation and is duly qualified to do business in
each jurisdiction in which it owns or leases real property or in which it
conducts any business, except for those jurisdictions in which the failure to
qualify would not have a Material Adverse Effect.
3. The execution, delivery and performance by the Borrower of each of
the Transaction Documents, and the consummation by the Borrower of each of
the transactions contemplated by such Transaction Documents, are within the
corporate power of the Borrower; have been duly authorized by all necessary
or proper action on the part of the Borrower; are not in contravention of any
provision of the Certificate of Incorporation or by-laws of the Borrower;
will not violate any law or regulation (including any order or decree of any
court or governmental instrumentality) to which Borrower is subject; will not
result in the breach of, or constitute a default under, any indenture,
license, mortgage, deed of trust, lease or sublease agreement or other
instrument of which I have knowledge after due inquiry and to which the
Borrower is a party or by which any of the Borrower's properties are bound;
will not result in the creation or imposition of any lien upon any of the
property of the Borrower; and do not require the consent or approval of, or
any filing with, any governmental body, agency, authority or any other person
(other than those which have been delivered on or prior to the date hereof to
you and except for any filings required to be made with the Securities and
Exchange Commission).
4. To the best of my knowledge after due inquiry, except as disclosed
on Schedule 9.6 of the Credit Agreement, there are no judgments outstanding
against the Borrower, nor is there now pending or threatened, any action,
suit or proceeding before any court or any governmental or regulatory
authority, by, against or involving the Borrower, which, individually or in
the aggregate, would have a Material Adverse Effect. To the best of my
knowledge after due inquiry, the Borrower is not in default with respect to
any order, writ, injunction or decree of any court nor is the Borrower in
default under or in violation of any applicable law, order, regulation or
demand of any governmental agency or instrumentality where such default or
violation would result in a Material Adverse Effect.
5. To the best of my knowledge after due inquiry, there is no default
by the Borrower or any Subsidiary under any contract, lease agreement,
instrument or commitment to which the Borrower or any of its Subsidiaries is
a party which has not been waived, or which has, or would have, a Material
Adverse Effect.
The opinions expressed herein are subject to (i) general principles of
equity, regardless of whether enforcement is sought in a proceeding in equity or
at law and (ii) bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium and similar laws affecting creditors'
rights generally. The foregoing opinions are limited to the laws of the
United States, the State of Illinois and the General Corporation Law of the
State of Delaware.
This opinion is furnished by me solely for your benefit and it may not be
relied upon, quoted from or delivered to any person other than counsel to the
Borrower, counsel to you, your agents, employees, successors, assigns and
participants.
Very truly yours,
EXHIBIT D
BORROWING BASE REPORT
ALLIED PRODUCTS CORPORATION
MONTHLY ASSET REPORT
_________ 199_
Report submitted pursuant to the requirements of Section 10.1.3 of the Second
Amended and Restated Credit Agreement dated as of February 1, 1999, among Allied
Products Corporation, the Banks named therein, and Bank of America Illinois as
Agent.
Receivables as of the close of the Company's business on ______ __, 199_:
80% of the Net ▇▇▇▇ Hog 1 - 90 Days Eligible Receivables $
75% of the Net ▇▇▇▇ Hog 91 - 180 Days Eligible Receivables $
65% of the Net ▇▇▇▇ Hog 181 - 240 Days Eligible Receivables $
50% of the Net ▇▇▇▇ Hog Over 240 Days Eligible Receivables $
85% of the Verson Eligible Receivables $
80% of the Net Great Bend 1 - 90 Days Eligible Receivables $
75% of the Net Great Bend 91 - 180 Days Eligible Receivables $
65% of the Net Great Bend 181 - 240 Days Eligible Receivables $
50% of the Net Great Bend Over 240 Days Eligible Receivables $
80% of the Net Precision Press Eligible Receivables $
Inventories as of the close of the Company's business on ______ __, 199_:
45% of the Net ▇▇▇▇ Hog Eligible Raw Material Inventory $
45% of the Net Great Bend Eligible Raw Material Inventory $
45% of the Net ▇▇▇▇ Hog Purchased Parts Inventory $
45% of the Net Great Bend Purchased Parts Inventory $
55% of the Net ▇▇▇▇ Hog Eligible Finished Goods Inventory $
55% of the Net Great Bend Eligible Finished Goods Inventory $
50% of the Net Verson Eligible Raw Material Inventory $
50% of the Net Precision Press Industries Eligible
Raw Material Inventory $
20% of the Net Verson Eligible Work-in-Process Inventory $
20% of the Net Precision Press Eligible Work-in-Process Inventory $
Machinery and equipment as of the close of the Company's business on _______ __,
199_:
35% of the consolidated gross (undepreciated) value of the machinery and
equipment of the Company and its Subsidiaries
$______
Total Asset Report $______
______
Capitalized terms used but not defined herein shall have the respective meanings
assigned to such terms in the Credit Agreement.
IN WITNESS WHEREOF, the Company has executed this Report on the __day of _____,
199_.
ALLIED PRODUCTS CORPORATION
By:
------------------------------
Its: Vice President
EXHIBIT E
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "ASSIGNMENT AND
ACCEPTANCE") dated as of __________, 199__ is made between
_________________________ (the "ASSIGNOR") and __________________________ (the
"ASSIGNEE").
RECITALS
WHEREAS, the Assignor is party to that certain Second Amended and
Restated Credit Agreement dated as of February 1, 1999 (as amended, amended and
restated, modified, supplemented or renewed, the "CREDIT AGREEMENT") among
Allied Products Corporation, a Delaware corporation (the "COMPANY"), the several
financial institutions from time to time party thereto (including the Assignor,
the "BANKS"), and Bank of America National Trust and Savings Association, as
agent for the Banks (the "AGENT"). Any terms defined in the Credit Agreement
and not defined in this Assignment and Acceptance are used herein as defined in
the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has committed to
making Loans (the "REVOLVING LOANS") to the Company in an aggregate amount not
to exceed $__________ (the "COMMITMENT");
WHEREAS, [the Assignor has made Revolving Loans in the aggregate
principal amount of $__________ to the Company] [no Revolving Loans are
outstanding under the Credit Agreement];
WHEREAS, [the Assignor has acquired a participation in the Issuing
Bank's liability under Letters of Credit in an aggregate principal amount of
$____________ (the "L/C OBLIGATIONS")] [no Letters of Credit are outstanding
under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the Credit Agreement in
respect of its Commitment, [together with a corresponding portion of each of its
outstanding Revolving Loans and L/C Obligations,] in an amount equal to
$__________ (the "ASSIGNED AMOUNT") on the terms and subject to the conditions
set forth herein and the Assignee wishes to accept assignment of such rights and
to assume such obligations from the Assignor on such terms and subject to such
conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) __% (the "ASSIGNEE'S PERCENTAGE
SHARE") of (A) the Commitment [and the Revolving Loans and the L/C Obligations]
of
the Assignor and (B) all related rights, benefits, obligations, liabilities
and indemnities of the Assignor under and in connection with the Credit
Agreement and the Loan Documents.
[IF APPROPRIATE, ADD PARAGRAPH SPECIFYING PAYMENT TO ASSIGNOR BY
ASSIGNEE OF OUTSTANDING PRINCIPAL OF, ACCRUED INTEREST ON, AND FEES WITH RESPECT
TO, REVOLVING LOANS AND L/C OBLIGATIONS ASSIGNED.]
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Bank under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform
in accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank. It is the intent
of the parties hereto that the Commitment of the Assignor shall, as of the
Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Sections __ and __ of the Credit Agreement to the extent such rights relate to
the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $__________.
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $__________.
2. PAYMENTS.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Revolving Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section [ ](__) of the Credit
Agreement.
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment[,] [and] Revolving Loans [and L/C Obligations] shall
be for the account of the Assignor. Any interest, fees and other payments
accrued on and after the Effective Date with respect to the Assigned Amount
shall be for the account of the Assignee. Each of the Assignor and the Assignee
agrees that it will hold in trust for the other party any interest, fees and
other amounts which it may receive to which the other party is entitled pursuant
to the preceding sentence and pay to the other party any such amounts which it
may receive promptly upon receipt.
4. INDEPENDENT CREDIT DECISION.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in Section 9.4 of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Credit Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance shall be __________, 199__ (the "EFFECTIVE
DATE"); PROVIDED that the following conditions precedent have been satisfied on
or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Company and the Agent required for an
effective assignment of the Assigned Amount by the Assignor to the Assignee
under Section [ ](__) of the Credit Agreement shall have been duly obtained
and shall be in full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with Section [ ](__)
of the Credit Agreement (if applicable);
(v) the processing fee referred to in Section 2(b) hereof and in
Section [ ](__) of the Credit Agreement shall have been paid to the Agent; and
(vi) the Assignor shall have assigned and the Assignee shall have
assumed a percentage equal to the Assignee's Percentage Share of the rights and
obligations of the Assignor under the Credit Agreement (if such agreement
exists).
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Company and the Agent for
acknowledgement by the Agent, a Notice of Assignment [substantially] in the form
attached hereto as SCHEDULE 1.
6. AGENT.
(a) The Assignee hereby appoints and authorizes the Assignor to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the Banks pursuant to the terms of
the Credit Agreement.
[(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Credit Agreement.] [INCLUDE ONLY IF
ASSIGNOR IS AGENT]
7. WITHHOLDING TAX.
The Assignee (a) represents and warrants to the Assignor, the Agent and the
Company that under applicable law and treaties no tax will be required to be
withheld by the Assignor with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent and
the Company prior to the time that the Agent or Company is required to make any
payment of principal, interest or fees hereunder, duplicate executed originals
of either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein the Assignee claims entitlement to the benefits of a
tax treaty that provides for a complete exemption from U.S. federal income
withholding tax on all payments hereunder) and agrees to provide new Forms 4224
or 1001 upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and amendments
thereto, duly executed and completed by the Assignee, and (c) agrees to comply
with all applicable U.S. laws and regulations with regard to such withholding
tax exemption.
8. REPRESENTATIONS AND WARRANTIES.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and
(iv) this Assignment and Acceptance has been duly executed and delivered by it
and constitutes the legal, valid and binding obligation of the Assignor,
enforceable against the Assignor in accordance with the terms hereof, subject,
as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and
other laws of general application relating to or affecting creditors' rights and
to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Company, or the performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute
and deliver this Assignment and Acceptance and any other documents required
or permitted to be executed or delivered by it in connection with this
Assignment and Acceptance, and to fulfill its obligations hereunder; (ii) no
notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance; and apart from
any agreements or undertakings or filings required by the Credit Agreement,
no further action by, or notice to, or filing with, any Person is required of
it for such execution, delivery or performance; (iii) this Assignment and
Acceptance has been duly executed and delivered by it and constitutes the
legal, valid and binding obligation of the Assignee, enforceable against the
Assignee in accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application relating to or affecting creditors' rights and to general
equitable principles; and (iv) it is an Eligible Assignee.
9. FURTHER ASSURANCES.
The Assignor and the Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Company or the Agent, which may be required in connection
with the assignment and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA [NOTE: CONFIRM CHOICE OF
LAW]. The Assignor and the Assignee each irrevocably submits to the
non-exclusive jurisdiction of any State or Federal court sitting in [Illinois]
over any suit, action or proceeding arising out of or relating to this
Assignment and Acceptance and irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in such [Illinois] State
or Federal court. Each party to this Assignment and Acceptance hereby
irrevocably waives, to
the fullest extent it may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER
ORAL OR WRITTEN).
[OTHER PROVISIONS TO BE ADDED AS MAY BE NEGOTIATED BETWEEN THE
ASSIGNOR AND THE ASSIGNEE, PROVIDED THAT SUCH PROVISIONS ARE NOT INCONSISTENT
WITH THE CREDIT AGREEMENT.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
--------------------------------
Title:
-----------------------------
By:
--------------------------------
Title:
-----------------------------
Address:
[ASSIGNEE]
By:
--------------------------------
Title:
-----------------------------
By:
--------------------------------
Title:
-----------------------------
Address:
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 19__
Bank of America National Trust
and Savings Association, as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
[Name and Address of Company]
Ladies and Gentlemen:
We refer to the Second Amended and Restated Credit Agreement dated as of
February 1, 1999 (as amended, amended and restated, modified, supplemented or
renewed from time to time the "CREDIT AGREEMENT") among Allied Products
Corporation (the "COMPANY"), the Banks referred to therein and Bank of America
National Trust and Savings Association, as agent for the Banks (the "AGENT").
Terms defined in the Credit Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "ASSIGNOR") to _______________ (the
"ASSIGNEE") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor[,] [and] all
outstanding Loans made by the Assignor [and the Assignor's participation in the
Letters of Credit]) pursuant to the Assignment and Acceptance Agreement attached
hereto (the "ASSIGNMENT AND ACCEPTANCE"). Before giving effect to such
assignment the Assignor's Commitment is $ ___________[,] [and] the aggregate
amount of its outstanding Loans is $_____________[, and its participation in L/C
Obligations is $_____________].
2. The Assignee agrees that, upon receiving the consent of the Agent[,
the Issuing Bank] and, if applicable, [NAME OF COMPANY] to such
assignment, the Assignee will be bound by the terms of the Credit Agreement as
fully and to the same extent as if the Assignee were the Bank originally holding
such interest in the Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
---------------------------------------------
Assignee name:
---------------------------------------------
Address:
---------------------------------------------
---------------------------------------------
---------------------------------------------
Attention:
---------------------------------------------
Telephone: ( )
---------------------------------------------
Telecopier: ( )
---------------------------------------------
Telex (Answerback):
---------------------------------------------
(B) Payment Instructions:
Account No.:
---------------------------------------------
At:
---------------------------------------------
---------------------------------------------
---------------------------------------------
Reference:
---------------------------------------------
Attention:
---------------------------------------------
4. You and the Company are entitled to rely upon the representations,
warranties and covenants of each of the Assignor and Assignee contained in the
Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
[NAME OF ASSIGNOR]
By:
--------------------------------
Title:
-----------------------------
By:
--------------------------------
Title:
-----------------------------
[NAME OF ASSIGNOR]
By:
--------------------------------
Title:
-----------------------------
By:
--------------------------------
Title:
-----------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
[COMPANY]
By:
--------------------------------
Title:
-----------------------------
By:
--------------------------------
Title:
-----------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
--------------------------------
Title:
-----------------------------
