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EXHIBIT 10.2
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U.S. $90,000,000
CREDIT AGREEMENT
by and among
▇▇▇▇▇▇ INDUSTRIAL GROUP, INC.
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
individually and as Agent
and
the Lenders
which are or become parties hereto
Dated as of May __, 1998
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE CREDITS.............................................1
Section 1.1. Revolving Credit........................................1
(a) Generally...............................................1
(b) Revolving Loans.........................................1
Section 1.2. Term Credit.............................................2
Section 1.3. Letters of Credit.......................................3
(a) General Terms...........................................3
(b) Applications............................................3
(c) The Reimbursement Obligation............................4
(d) The Participating Interests.............................5
(e) Indemnification.........................................6
(f) Change in Laws..........................................6
Section 1.4. Manner and Disbursement of Borrowings...................7
(a) Generally...............................................7
(b) Reimbursement Obligation................................7
(c) Agent Reliance on Bank Funding..........................7
Section 1.5. Manner of Obtaining Letters of Credit...................8
Section 1.6. The Swing Line..........................................8
SECTION 2. INTEREST AND CHANGE IN CIRCUMSTANCES...................11
Section 2.1. Interest Rate Options..................................11
Section 2.2. Minimum Amounts........................................12
Section 2.3. Computation of Interest................................12
Section 2.4. Manner of Rate Selection...............................12
Section 2.5. Change of Law..........................................13
Section 2.6. Unavailability of Deposits or Inability to Ascertain
Adjusted LIBOR...................................13
Section 2.7. Taxes and Increased Costs..............................14
Section 2.8. Change in Capital Adequacy Requirements................15
Section 2.9. Funding Indemnity......................................15
Section 2.10. Lending Branch.........................................16
Section 2.11. Lender's Duty to Mitigate..............................16
Section 2.12. Discretion of Lenders as to Manner of Funding..........17
Section 2.13. Replacement of Lender..................................17
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SECTION 3. FEES, PREPAYMENTS, TERMINATIONS, APPLICATIONS AND
NOTATIONS..............................................18
Section 3.1. Fees...................................................18
Section 3.2. Voluntary Prepayments of Revolving Credit and Term
Notes............................................19
Section 3.3. Mandatory Prepayments..................................20
Section 3.4. Terminations of Revolving Credit Commitments...........22
Section 3.5. Place and Application of Payments......................22
Section 3.6. Notations and Requests.................................24
SECTION 4. COLLATERAL.............................................24
Section 4.1. Collateral.............................................24
Section 4.2. Guaranties.............................................24
Section 4.3. Further Assurances.....................................25
SECTION 5. DEFINITIONS; INTERPRETATION............................25
Section 5.1. Definitions............................................25
Section 5.2. Interpretation.........................................40
Section 5.3. Change in Accounting Principles........................41
SECTION 6. REPRESENTATIONS AND WARRANTIES.........................41
Section 6.1. Organization and Qualification.........................41
Section 6.2. Subsidiaries...........................................42
Section 6.3. Margin Stock...........................................43
Section 6.4. Financial Reports......................................43
Section 6.5. Full Disclosure........................................43
Section 6.6. Good Title.............................................43
Section 6.7. Litigation and Other Controversies.....................44
Section 6.8. Taxes..................................................44
Section 6.9. Approvals..............................................44
Section 6.10. Affiliate Transactions.................................44
Section 6.11. Investment Company; Public Utility Holding Company.....44
Section 6.12. ERISA..................................................45
Section 6.13. Compliance with Laws...................................45
Section 6.14. Other Agreements.......................................45
Section 6.15. Mid-Central and SMP Acquisitions.......................45
Section 6.16. Year 2000 Compliance...................................47
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Section 6.17. No Default.............................................47
SECTION 7. CONDITIONS PRECEDENT...................................47
Section 7.1. All Advances...........................................47
Section 7.2. Initial Advance........................................48
Section 7.3. Initial Loans..........................................51
Section 7.4. Real Estate Surveys....................................51
SECTION 8. COVENANTS..............................................51
Section 8.1. Maintenance of Business................................52
Section 8.2. Maintenance of Property................................52
Section 8.3. Taxes and Assessments..................................52
Section 8.4. Insurance..............................................52
Section 8.5. Financial Reports......................................52
Section 8.6. Interest Coverage Ratio................................54
Section 8.7. Cash Flow Leverage Ratio...............................54
Section 8.8. EBITDA.................................................54
Section 8.9. Fixed Charge Coverage Ratio............................55
Section 8.10. Capital Expenditures...................................55
Section 8.11. Indebtedness...........................................55
Section 8.12. Liens..................................................56
Section 8.13. Investments, Loans, Advances and Guaranties............57
Section 8.14. Leases. (a) Sales and Leasebacks......................58
Section 8.15. Dividends and Certain Other Restricted Payments........59
Section 8.16. Mergers, Consolidations and Sales......................59
Section 8.17. Acquisitions...........................................60
Section 8.18. Maintenance of Subsidiaries............................61
Section 8.19. Formation of Subsidiaries..............................62
Section 8.20. ERISA..................................................62
Section 8.21. Compliance with Laws...................................62
Section 8.22. Burdensome Contracts With Affiliates...................62
Section 8.23. Changes in Fiscal Year.................................63
Section 8.24. Change in the Nature of Business.......................63
Section 8.25. Use of Loan Proceeds...................................63
Section 8.26. Interest Rate Protection...............................63
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.........................63
SECTION 10. THE AGENT..............................................67
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Section 10.1. Appointment and Authorization..........................67
Section 10.2. Rights as a Lender.....................................67
Section 10.3. Standard of Care.......................................67
Section 10.4. Costs and Expenses.....................................68
Section 10.5. Indemnity..............................................68
Section 10.6. Interest Rate Hedging Arrangements.....................69
SECTION 11. JOINT AND SEVERAL LIABILITY AND GUARANTIES.............69
Section 11.1. Joint and Several Liability and Guaranties.............69
Section 11.2. Guaranty Unconditional.................................70
Section 11.3. Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances'.............................71
Section 11.4. Waivers................................................71
Section 11.5. Limit on Recovery......................................71
Section 11.6. Stay of Acceleration...................................72
Section 11.7. Benefit to Guarantors..................................72
Section 11.8. Guarantor Covenants....................................72
SECTION 12. MISCELLANEOUS..........................................72
Section 12.1. Holidays...............................................72
Section 12.2. No Waiver, Cumulative Remedies.........................72
Section 12.3. Waivers, Modifications and Amendments..................73
Section 12.4. Costs and Expenses.....................................73
Section 12.5. Documentary Taxes......................................74
Section 12.6. Survival of Representations............................74
Section 12.7. Survival of Indemnities................................74
Section 12.8. Notices................................................74
Section 12.9. Headings...............................................75
Section 12.10. Severability of Provisions.............................75
Section 12.11. Counterparts...........................................75
Section 12.12. Binding Nature, Governing Law, Etc.....................75
Section 12.13. Entire Understanding...................................75
Section 12.14. Participations.........................................76
Section 12.15. Assignment Agreements..................................76
Section 12.16. Confidentiality........................................77
Signature....................................................................78
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Exhibit A -- Revolving Credit Note
Exhibit B -- Term Note
Exhibit C -- Term Note
Exhibit D -- Swing Line Note
Exhibit E -- Compliance Certificate
Attachment to Compliance Certificate
Exhibit F -- Notice of Payment Request
Exhibit G -- Guaranty
Exhibit H -- Opinion of Counsel
Schedule 6.2 -- Subsidiaries
Schedule 8.12 -- Other Liens
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▇▇▇▇▇▇ INDUSTRIAL GROUP, INC.
CREDIT AGREEMENT
To Each of the Lenders Signatory Hereto
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇ Industrial Group, Inc., a Georgia corporation
(the "Borrower") applies to you for your several commitments, subject to all of
the terms and conditions hereof and on the basis of the representations and
warranties hereinafter set forth, to make a revolving credit (the "Revolving
Credit"), a term credit (the "Term Credit") and a swing line (the "Swing Line")
in each case available to the Borrower, all as more fully hereinafter set forth.
SECTION 1. THE CREDITS.
Section 1.1. Revolving Credit.
(a) Generally. Subject to the terms and conditions hereof, each
Lender severally agrees to extend credit to the Borrower on a revolving basis
under the Revolving Credit which may be availed of by the Borrower from time to
time, and borrowings thereunder may be repaid and used again, during the period
from the date hereof to and including the Termination Date, at which time the
commitments of the Lenders to extend credit under the Revolving Credit shall
expire. The maximum amount of the Revolving Credit which each Lender agrees to
extend to the Borrower, taken together, shall not exceed its Revolving Credit
Commitment. The Revolving Credit may be utilized by the Borrower in the form of
Revolving Loans and Letters of Credit, all as more fully hereinafter set forth;
provided, however, that the aggregate amount of Revolving Loans, L/C Obligations
and Swing Loans outstanding at any one time from the Borrower shall not exceed
the Revolving Credit Commitments then in effect. For all purposes of this
Agreement, where a determination of the unused or available amount of the
Revolving Credit Commitments is necessary, the Revolving Loans and L/C
Obligations shall be deemed to utilize the Revolving Credit Commitments then in
effect. The obligations of the Lenders hereunder are several and not joint, and
no Lender shall under any circumstances be obligated to extend credit under the
Revolving Credit in excess of its Revolving Credit Commitment.
(b) Revolving Loans. Subject to the terms and conditions hereof, the
Revolving Credit may be availed of by the Borrower in the form of loans in U.S.
Dollars (individually a "Revolving Loan" and collectively the "Revolving
Loans"). Each Revolving Loan by the Lenders shall be in a minimum amount of
$500,000 or such greater amount which is an integral
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multiple of $100,000, except to the extent Section 2 provides otherwise in the
case of LIBOR Portions. Each Revolving Loan shall be made pro rata by the
Lenders in accordance with the amounts of their respective Revolver Percentages.
Each advance made by a Lender of its pro rata share of each Revolving Loan shall
be evidenced by the same Revolving Credit Note of the Borrower (individually,
for each Lender, its "Revolving Credit Note" and collectively, for all the
Lenders, their "Revolving Credit Notes"), jointly and severally, payable to the
order of such Lender in the amount of its Revolving Credit Commitment, with each
Revolving Credit Note to be in the form (with appropriate insertions) attached
hereto as Exhibit A. Each Revolving Credit Note shall be dated the date of
issuance thereof, be expressed to bear interest as provided in Section 2 hereof
and be expressed to mature on the Termination Date. Without regard to the
principal amount of each Revolving Credit Note stated on its face, the actual
principal amount at any time outstanding and owing by the Borrower on account
thereof shall be the sum of all advances then or theretofore made thereon less
all payments of principal actually received.
Section 1.2. Term Credit.
(a) Term A Loan. Subject to all of the terms and conditions hereof,
the Lenders severally agree to make a term loan in U.S. Dollars (the "Term A
Loan") to the Borrower under the Term Credit in an amount not to exceed their
Term A Credit Commitments. Term A Loan shall be disbursed in a single advance
made, if at all, on or before June 15, 1998, at which time the commitments of
the Lenders to make Term A Loan shall expire. Each Lender shall advance a pro
rata share of Term A Loan in accordance with the amounts of their respective
Term A Percentages. Each Lender's pro rata share of the Term A Loan shall be
evidenced by a Term A Note of the Borrower (individually a "Term A Note" and
collectively the "Term A Notes") payable to the order of such Lender in the
amount of its pro rata share of Term A Loan, each Term A Note to be in the form
(with appropriate insertions) attached hereto as Exhibit B. Each Term A Note
shall be expressed to mature in installments, commencing on September 30, 1998
and continuing on the last day of each calendar quarter occurring thereafter to
and including March 31, 2003 plus the final installment due on May 31, 2003,
with the principal installments on the Term A Notes to aggregate $500,000 per
installment through and including December 31, 1998, $1,000,000 per installment
thereafter and through and including December 31, 1999, $1,250,000 per
installment thereafter and through and including December 31, 2001, $1,500,000
per installment thereafter and through and including December 31, 2002,
$2,000,000 on March 31, 2003 and with the final principal installment on all the
Term A Notes to aggregate in an amount equal to all principal and interest not
sooner paid, and with the amount of each installment due on the Term A Note held
by each Lender to be equal to such Lender's Term A Percentage of such
installment.
(b) Term B Loan. Subject to all of the terms and conditions hereof,
the Lenders severally agree to make a term loan in U.S. Dollars (the "Term B
Loan") to the Borrower under
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the Term Credit in an amount not to exceed their Term B Credit Commitments. Term
B Loan shall be disbursed in a single advance made, if at all, on or before June
15, 1998, at which time the commitments of the Lenders to make Term B Loan shall
expire. Each Lender shall advance a pro rata share of Term B Loan in accordance
with the amounts of their respective Term B Percentages. Each Lender's pro rata
share of Term B Loan shall be evidenced by a Term B Note of the Borrower
(individually a "Term B Note" and collectively the "Term B Notes") payable to
the order of such Lender in the amount of its pro rata share of Term B Loan,
each Term B Note to be in the form (with appropriate insertions) attached hereto
as Exhibit C. Each Term B Note shall be expressed to mature in twenty-eight (28)
installments, commencing on September 30, 1998 and continuing on the last day of
each calendar quarter occurring thereafter to and including March 31, 2005 plus
the final twenty-eighth installment due on May 31, 2005, with the principal
installments on the Term B Notes to aggregate $125,000 per installment through
and including June 30, 2003, $3,437,500 per installment thereafter and through
and including March 31, 2005 and with the final principal installment on all the
Term B Notes to aggregate in an amount equal to all principal and interest not
sooner paid, and with the amount of each installment due on the Term B Note held
by each Lender to be equal to such Lender's Term B Percentage of such
installment.
Section 1.3. Letters of Credit.
(a) General Terms. Subject to the terms and conditions hereof, as
part of the Revolving Credit, the Agent shall issue standby and commercial
letters of credit (each a "Letter of Credit") for the account of the Borrower
(whether for its own account individually or also for the account of any
Subsidiary) in U.S. Dollars in an aggregate undrawn face amount up to the amount
of the L/C Commitment as then in effect; provided, however, that the aggregate
L/C Obligations at any time outstanding shall not exceed the difference between
the Revolving Credit Commitments in effect at such time and the aggregate
principal amount of Revolving Loans and Swing Loans then outstanding. Each
Letter of Credit shall be issued by the Agent, but each Lender shall be
obligated to reimburse the Agent for its Revolver Percentage of the amount of
each drawing thereunder and, accordingly, the undrawn face amount of each Letter
of Credit shall constitute usage of the Revolving Credit Commitment of each
Lender pro rata in accordance with each Lender's Revolver Percentage.
(b) Applications. At any time before the Termination Date, the Agent
shall, at the request of the Borrower, issue one or more Letters of Credit for
the account of the Borrower (whether for its own account individually or also
for the account of any Subsidiary), in a form satisfactory to the Agent, in an
aggregate face amount as set forth above, upon the receipt of an application for
the Letter of Credit in the form customarily prescribed by the Agent duly
executed by the Borrower for whose account such Letter of Credit was issued
(each an "Application"). Each Letter of Credit issued hereunder which is a
standby letter of credit shall
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expire not later than the earlier of (i) twelve (12) months from the date of
issuance and each renewal or (ii) the Termination Date. Each Letter of Credit
issued hereunder which is a commercial letter of credit shall expire not later
than the earlier of (i) one hundred eighty (180) days from the date of issuance
and each renewal or (ii) the Termination Date. The current forms of the Agent's
Applications for standby and commercial Letters of Credit attached hereto as
Schedule 1.3 (Standby) and Schedule 1.3 (Commercial), respectively. The Agent
shall provide the Borrower and each Lender with copies of any new form of
Application that may, from time to time, be adopted by the Agent.
Notwithstanding anything contained in any Application to the contrary (i) the
Borrower shall be liable for all obligations in respect of each Letter of
Credit, (ii) the Borrower's obligation to pay fees in connection with each
Letter of Credit shall be as exclusively set forth in Section 3.1(b) hereof,
(iii) except during the continuance of an Event of Default, the Agent will not
call for the funding by the Borrower of any amount under a Letter of Credit, or
any other form of collateral security for the Borrower's obligations in
connection with such Letter of Credit, before being presented with a drawing
thereunder, and (iv) if the Agent is not timely reimbursed for the amount of any
drawing under a Letter of Credit on the date such drawing is paid, the
Borrower's obligation to reimburse the Agent for the amount of such drawing
shall bear interest (which the Borrower hereby promises to pay) from and after
the date such drawing is paid at a rate per annum equal to the sum of 2-1/4%
plus the Domestic Rate from time to time in effect. The Agent will promptly
notify the Lenders of each issuance by it of a Letter of Credit. If the Agent
issues any Letters of Credit with expiration dates that are automatically
extended unless the Agent gives notice that the expiration date will not so
extend beyond its then scheduled expiration date, the Agent will give such
notice of non-renewal before the time necessary to prevent such automatic
extension if before such required notice date (i) the expiration date of such
Letter of Credit if so extended would be after the Termination Date, (ii) the
Revolving Credit Commitments have been terminated or (iii) an Event of Default
exists and the Required Lenders have given the Agent instructions not to so
permit the extension of the expiration date of such Letter of Credit. The Agent
agrees to issue amendments to the Letter(s) of Credit increasing the amount, or
extending the expiration date, thereof at the request of the Borrower subject to
the conditions of Section 7 and the other terms of this Section 1.3. Without
limiting the generality of the foregoing, the Agent's obligation to issue, amend
or extend the expiration date of a Letter of Credit is subject to the conditions
of Section 7 and the other terms of this Section 1.3 and the Agent will not
issue, amend or extend the expiration date of any Letter of Credit if any Lender
notifies the Agent of any failure to satisfy or otherwise comply with such
conditions and terms and directs the Agent not to take such action.
(c) The Reimbursement Obligation. Subject to Section 1.3(b) hereof,
the obligation of the Borrower to reimburse the Agent for all drawings under a
Letter of Credit (a "Reimbursement Obligation") shall be governed by the
Application related to such Letter of Credit, except that reimbursement of each
drawing shall be made in immediately available funds at the Agent's principal
office in Chicago, Illinois by no later than 12:30 p.m. (Chicago time) on
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the date when such drawing is paid or, if drawing was paid after 11:30 a.m.
(Chicago time), by the end of such day. If the Borrower does not make any such
reimbursement payment on the date due and the Participating Lenders fund their
participations therein in the manner set forth in Section 1.3(d) below, then all
payments thereafter received by the Agent in discharge of any of the relevant
Reimbursement Obligations shall be distributed in accordance with Section 1.3(d)
below.
(d) The Participating Interests. Each Lender (other than the Lender
then acting as Agent in issuing Letters of Credit), by its acceptance hereof,
severally agrees to purchase from the Agent, and the Agent hereby agrees to sell
to each such Lender (a "Participating Lender"), an undivided percentage
participating interest (a "Participating Interest"), to the extent of its
Revolver Percentage, in each Letter of Credit issued by, and each Reimbursement
Obligation owed to, the Agent. Upon any failure by the Borrower to pay any
Reimbursement Obligation in respect of a Letter of Credit issued for the
Borrower's account at the time required on the date the related drawing is paid,
as set forth in Section 1.3(c) above, or if the Agent is required at any time to
return to the Borrower or to a trustee, receiver, liquidator, custodian or other
Person any portion of any payment of any Reimbursement Obligation, each
Participating Lender shall, not later than the Business Day it receives a
certificate in the form of Exhibit F hereto from the Agent to such effect, if
such certificate is received before 1:00 p.m. (Chicago time), or not later than
the following Business Day, if such certificate is received after such time, pay
to the Agent an amount equal to its Revolver Percentage of such unpaid or
recaptured Reimbursement Obligation together with interest on such amount
accrued from the date the related payment was made by the Agent to the date of
such payment by such Participating Lender at a rate per annum equal to (i) from
the date the related payment was made by the Agent to the date two (2) Business
Days after payment by such Participating Lender is due hereunder, the Federal
Funds Rate for each such day and (ii) from the date two (2) Business Days after
the date such payment is due from such Participating Lender to the date such
payment is made by such Participating Lender, the Domestic Rate in effect for
each such day. Each such Participating Lender shall thereafter be entitled to
receive its Revolver Percentage of each payment received in respect of the
relevant Reimbursement Obligation and of interest paid thereon, with the Agent
retaining its Revolver Percentage as a Lender hereunder.
The several obligations of the Participating Lenders to the Agent under
this Section 1.3 shall be absolute, irrevocable and unconditional under any and
all circumstances whatsoever (except to the extent the Borrower is relieved from
its obligation to reimburse the Agent for a drawing under a Letter of Credit
because of the Agent's gross negligence or willful misconduct in determining
that documents received under the Letter of Credit comply with the terms
thereof) and shall not be subject to any set-off, counterclaim or defense to
payment which any Participating Lender may have or have had against the
Borrower, the Agent, any other Lender or any other Person whatsoever. Without
limiting the generality of the foregoing, such obligations
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shall not be affected by any Default or Event of Default or by any reduction or
termination of any Revolving Credit Commitment of any Lender, and each payment
by a Participating Lender under this Section 1.3 shall be made without any
offset, abatement, withholding or reduction whatsoever. The Agent shall be
entitled to offset amounts received for the account of a Lender under this
Agreement against unpaid amounts due from such Lender to the Agent hereunder
(whether as fundings of participations, indemnities or otherwise), but shall not
be entitled to offset against amounts owed to the Agent by any Lender arising
outside this Agreement.
(e) Indemnification. Each Participating Lender shall, to the extent
of its respective Revolver Percentage, indemnify the Agent (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the Agent's gross negligence or willful misconduct)
that the Agent may suffer or incur in connection with any Letter of Credit. The
obligations of the Participating Lenders under this Section 1.3(d) and all other
parts of this Section 1.3 shall survive termination of this Agreement and of all
other L/C Documents.
(f) Change in Laws. If the Agent or any Lender shall determine in
good faith that any change in any applicable law, regulation or guideline
(including, without limitation, Regulation D of the Board of Governors of the
Federal Reserve System) or any new law, regulation or guideline, or any
interpretation of any of the foregoing by any governmental authority charged
with the administration thereof or any central bank or other fiscal, monetary or
other authority having jurisdiction over the Agent or such Lender (whether or
not having the force of law), shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against the Letters of Credit, or the
Agent's or such Lender's or the liability of the Borrower with respect
thereto; or
(ii) impose on the Agent or such Lender any penalty with
respect to the foregoing or any other condition regarding this
Agreement, the Applications or the Letters of Credit;
and the Agent or such Lender shall determine in good faith that the result of
any of the foregoing is to increase the cost (whether by incurring a cost or
adding to a cost) to the Agent or such Lender of issuing, maintaining or
participating in the Letters of Credit hereunder (without benefit of, or credit
for, any prorations, exemptions, credits or other offsets available under any
such laws, regulations, guidelines or interpretations thereof), then the
Borrower shall pay on demand to the Agent or such Lender from time to time as
specified by the Agent or such Lender such additional amounts as the Agent or
such Lender shall determine are sufficient to compensate and indemnify it for
such increased cost in respect of each such Letter of Credit;
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provided, however, that the Borrower shall not be obligated to pay any such
amount or amounts to the extent such additional cost was incurred or paid by
such Lender more than sixty (60) days prior to the date of the delivery of the
certificate referred to in the immediately following sentence (nothing herein to
impair or otherwise affect the Borrower's liability hereunder for costs
subsequently incurred or paid by such Lender).
Section 1.4. Manner and Disbursement of Borrowings. (a) Generally.
The Borrower shall give written or telephonic notice to the Agent (which notice
shall be irrevocable once given and, if given by telephone, shall be promptly
confirmed in writing) by no later than 11:00 a.m. (Chicago time) on any Business
Day of each request for a Loan, in each case specifying the type of Loan
(whether a Revolving Loan or a Term Credit Loan) which is to be made, the amount
of such Loan and the date such Loan is to be made. The Agent shall promptly
notify each Lender of the Agent's receipt of each such notice. Each Loan shall
initially constitute part of the applicable Domestic Rate Portion except to the
extent the Company has otherwise timely elected as provided in Section 2 hereof.
Not later than 12:00 noon (Chicago time) on the date specified for any Loan to
be made by a Lender hereunder, such Lender shall make the proceeds of its pro
rata share of such Loan available to the Agent in Chicago in immediately
available funds. Subject to the provisions of Section 7 hereof, the proceeds of
each Loan shall be made available to the Borrower at the principal office of the
Agent in Chicago, Illinois, in immediately available funds, upon receipt by the
Agent from each Lender of its pro rata share of such Loan.
(b) Reimbursement Obligation. In the event the Borrower fails to give
notice pursuant to Section 1.4(a) above of a Revolving Loan equal to the amount
of a Reimbursement Obligation and has not notified the Agent by 11:00 a.m.
(Chicago time) on the day such Reimbursement Obligation becomes due that it
intends to repay such Reimbursement Obligation through funds not borrowed under
this Agreement, the Borrower shall be deemed to have requested a Revolving Loan
constituting part of the Domestic Rate Portion on such day in the amount of the
Reimbursement Obligation then due, subject to Section 7.1 hereof, which
Revolving Loan shall be applied to pay the Reimbursement Obligation then due.
(c) Agent Reliance on Bank Funding. Unless the Agent shall have been
notified by a Lender prior to 11:30 a.m. (Chicago time) on the date a Loan is to
be made hereunder that such Lender does not intend to make its pro rata share of
such Loan available to the Agent, the Agent may assume that such Lender has made
such share available to the Agent on such date and the Agent may in reliance
upon such assumption make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by such
Lender and the Agent has made such amount available to the Borrower, the Agent
shall be entitled to receive such amount from such Lender forthwith upon the
Agent's demand, together with interest thereon in respect of each day during the
period commencing on the date such amount
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was made available to the Borrower and ending on but excluding the date the
Agent recovers such amount at a rate per annum equal to the effective rate
charged to the Agent for overnight federal funds transactions with member banks
of the federal reserve system for each day as determined by the Agent (or in the
case of a day which is not a Business Day, then for the preceding day). If such
amount is not received from such Lender by the Agent immediately upon demand,
the Borrower will, on demand, repay to the Agent the proceeds of the Loan
attributable to such Lender with interest thereon at a rate per annum equal to
the interest rate applicable to the relevant Loan, but without such payment
being considered a payment or prepayment of a Loan, so that the Borrower will
have no liability under Section 2.9 hereof with respect to such payment.
Section 1.5. Manner of Obtaining Letters of Credit. The Borrower
shall provide at least four (4) Business Days' advance written notice to the
Agent of a Borrower's request for the issuance for the Borrower's account of a
Letter of Credit, such notice in each case to be accompanied by an Application
for such Letter of Credit properly completed and executed by the Borrower and in
the case of an extension or an increase in the amount of a Letter of Credit, a
written request therefor, in a form acceptable to the Agent, in each case,
together with the fees called for by this Agreement. The Agent shall promptly
notify each Lender of the Agent's receipt of each such notice.
Section 1.6. The Swing Line. (a) Swing Loans. Subject to all of the
terms and conditions hereof, ▇▇▇▇▇▇ Trust and Savings Bank ("▇▇▇▇▇▇") agrees to
make loans in U.S. Dollars to the Borrower under the Swing Line ("Swing Loans")
which shall not in the aggregate at any time outstanding exceed the lesser of
(i) the Swing Line Commitment or (ii) the difference between the Revolving
Credit Commitments in effect at such time and the sum of Revolving Loans and L/C
Obligations outstanding at the time of computation. The Swing Line Commitment
shall be available to the Borrower and may be availed of by the Borrower from
time to time and borrowings thereunder may be repaid and used again during the
period ending on the Termination Date; provided that each Swing Loan must be
repaid on the last day of the Interest Period applicable thereto. All Swing
Loans shall be evidenced by a single promissory note of the Borrower issued to
▇▇▇▇▇▇ in the form of Exhibit D hereto (the "Swing Line Note"). Without regard
to the face principal amount of the Swing Line Note, the actual principal amount
at any time outstanding and owing by the Borrower on account of the Swing Line
Note during the period ending on the Termination Date shall be the sum of all
Swing Loans then or theretofore made thereon less all payments actually received
thereon during such period.
(b) Payment. Each Swing Loan shall be due and payable on the last day
of the Interest Period selected therefor. The Borrower may voluntarily prepay
any Swing Loan bearing interest at the Domestic Rate before its maturity at any
time upon notice to ▇▇▇▇▇▇ prior to 1:00 p.m. (Chicago time) on the date fixed
for prepayment, each such prepayment to be made by the
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payment of the principal amount to be prepaid and accrued interest thereon to
the date of prepayment; provided, however, the Borrower may not voluntarily
prepay any Swing Loan bearing interest at ▇▇▇▇▇▇' Quoted Rate before its
maturity.
(c) Minimum Borrowing Amount. Each Swing Loan which bears interest
with reference to the Domestic Rate shall be in an amount not less than
$100,000. Each Swing Loan which bears interest at ▇▇▇▇▇▇' Quoted Rate shall be
in an amount not less than $500,000.
(d) Interest on Swing Loans. Each Swing Loan shall bear interest at
(x) the sum of the Domestic Rate from time to time in effect plus the Applicable
Margin or (y) if the Borrower so elects in accordance with the following
provisions, ▇▇▇▇▇▇' Quoted Rate; provided, however, that if any Swing Loan is
not paid when due (whether by lapse of time, acceleration or otherwise) such
Swing Loan shall bear interest, whether before or after judgment, until payment
in full thereof through the end of the Interest Period then applicable thereto
at a rate per annum equal to the sum of two percent (2%) plus the interest rate
which would otherwise be applicable thereto and, thereafter, at a rate per annum
equal to the sum of two percent (2%) plus the Applicable Margin plus the
Domestic Rate from time to time in effect. Interest on each Swing Loan shall be
due and payable on the last day of each Interest Period applicable thereto, and
interest after maturity (whether by lapse of time, acceleration or otherwise)
shall be due and payable upon demand.
(e) Requests for Swing Loans. The Borrower shall give ▇▇▇▇▇▇ prior
notice (which may be written or oral) no later than 12:00 Noon (Chicago time) on
the date upon which the Borrower requests that any Swing Loan be made, of the
amount and date of such Swing Loan and the Interest Period selected therefor.
Within thirty (30) minutes after receiving such notice, ▇▇▇▇▇▇ shall in its
discretion quote an interest rate to the Borrower at which ▇▇▇▇▇▇ would be
willing to make such Swing Loan available to the Borrower for a given Interest
Period (the rate so quoted for a given Interest Period being herein referred to
as "▇▇▇▇▇▇' Quoted Rate"). The Borrower acknowledges and agrees that the
interest rate quote is given for immediate and irrevocable acceptance, and if
the Borrower does not so immediately accept ▇▇▇▇▇▇' Quoted Rate for the full
amount requested by the Borrower for such Swing Loan, the ▇▇▇▇▇▇' Quoted Rate
shall be deemed immediately withdrawn and such Swing Loan shall bear interest at
the sum of the Applicable Margin plus the Domestic Rate from time to time in
effect. Subject to all of the terms and conditions hereof, the proceeds of such
Swing Loan shall be made available to the Borrower on the date so requested at
the offices of the Agent in Chicago, Illinois. Anything contained in the
foregoing to the contrary notwithstanding, (i) the obligation of ▇▇▇▇▇▇ to make
Swing Loans shall be subject to all of the terms and conditions of this
Agreement and (ii) ▇▇▇▇▇▇ shall not be obligated to make more than one Swing
Loan during any one day.
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(f) Refunding Loans. In its sole and absolute discretion, ▇▇▇▇▇▇ may
at any time, on behalf of the Borrower (which hereby irrevocably authorizes
▇▇▇▇▇▇ to act on its behalf for such purpose) and with notice to the Borrower,
request each Lender to make a Revolving Loan constituting the Domestic Rate
Portion of the Revolving Credit Notes in an amount equal to such Lender's
Revolver Percentage of the amount of the Swing Loans outstanding on the date
such notice is given. Unless any of the conditions of Section 7.2 are not
fulfilled on such date, each Bank shall make the proceeds of its requested pro
rata share of such Revolving Loan available to ▇▇▇▇▇▇, in immediately available
funds, at ▇▇▇▇▇▇' principal office in Chicago, Illinois, before 12:00 Noon
(Chicago time) on the Business Day following the day such notice is given. The
proceeds of such Revolving Loan shall be immediately applied to repay the
outstanding Swing Loans; provided, however, that unless any Default or Event of
Default has occurred and is continuing or the Borrower otherwise permits, the
proceeds of such Revolving Loan shall not be applied to repay any outstanding
Swing Loan bearing interest at ▇▇▇▇▇▇' Quoted Rate prior to the end of the
Interest Period applicable thereto.
(g) Participations. If any Lender refuses or otherwise fails to make
its pro rata share of a Revolving Loan when requested by ▇▇▇▇▇▇ pursuant to
Section 1.6(f) above (because the conditions in Section 7.2 are not satisfied or
otherwise), such Lender will, by the time and in the manner such share of such
Revolving Loan was to have been funded to ▇▇▇▇▇▇, purchase from ▇▇▇▇▇▇ an
undivided participating interest in the outstanding Swing Loans in an amount
equal to its Revolver Percentage of the aggregate principal amount of Swing
Loans that were to have been repaid with such Revolving Loans, provided no
purchase of a participation in a Swing Loan bearing interest at ▇▇▇▇▇▇' Quoted
Rate need be made until after expiration of the Interest Period applicable
thereto. Each Lender that so purchases a participation in a Swing Loan shall
thereafter be entitled to receive its Revolver Percentage of each payment of
principal received on the Swing Loan and of interest received thereon accruing
from the date such Bank funded to ▇▇▇▇▇▇ its participation in such Loan. The
several obligations of the Lenders under this Section 1.6(g) shall be absolute,
irrevocable and unconditional under any and all circumstances whatsoever and
shall not be subject to any set-off, counterclaim or defense to payment which
any Lender may have or have had against the Borrower, any other Lender or any
other Person whatever. Without limiting the generality of the foregoing, such
obligations shall not be affected by any Default or Event of Default or by any
reduction or termination of the Commitments of any Lender, and each payment made
by a Lender under this Section 1.6(g) shall be made without any offset,
abatement, withholding or reduction whatsoever.
SECTION 2. INTEREST AND CHANGE IN CIRCUMSTANCES.
Section 2.1. Interest Rate Options. (a) Subject to the terms and
conditions of this Section 2, portions of the principal indebtedness evidenced
by the Revolving Credit Notes and Term Notes (all of the indebtedness evidenced
by such Notes, whether or not such Notes are of
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the same class, bearing interest at the same rate for the same period of time
being hereinafter referred to as a "Portion") may, at the option of the
Borrower, bear interest with reference to the Domestic Rate (the "Domestic Rate
Portion") or with reference to the Adjusted LIBOR ("LIBOR Portions"), and
Portions of a particular class of Notes may be converted from time to time from
one basis for such Notes to the other. All of the indebtedness evidenced by the
Revolving Credit Notes and Term Notes which is not part of a LIBOR Portion shall
constitute a single Domestic Rate Portion. All of the indebtedness evidenced by
the Revolving Credit Notes and Term Notes which bears interest with reference to
a particular Adjusted LIBOR for a particular Interest Period shall constitute a
single LIBOR Portion. Anything contained herein to the contrary notwithstanding,
the obligation of the Lenders to create, continue or effect by conversion any
LIBOR Portion shall be conditioned upon the fact that at the time no Default or
Event of Default shall have occurred and be continuing. The Borrower hereby
promises to pay interest on each Portion at the rates and times specified in
this Section 2.
(b) Domestic Rate Portion. Each Domestic Rate Portion shall bear
interest (which the Borrower hereby promises to pay at the times herein
provided) at the rate per annum determined by adding the Applicable Margin to
the Domestic Rate as in effect from time to time, provided that if a Domestic
Rate Portion or any part thereof is not paid when due (whether by lapse of time,
acceleration or otherwise) such Portion shall bear interest (which the Borrower
hereby promises to pay at the times herein provided), before as well as after
judgment, until payment in full thereof at the rate per annum determined by
adding 2% to the interest rate which would otherwise be applicable thereto from
time to time. Interest on the Domestic Rate Portion shall be payable monthly on
the last day of each month in each year (commencing June 30, 1998) and at
maturity of the applicable Notes, and interest after maturity shall be due and
payable upon demand. Any change in the interest rate on the Domestic Rate
Portions resulting from a change in the Domestic Rate shall be effective on the
date of the relevant change in the Domestic Rate.
(c) LIBOR Portions. Each LIBOR Portion shall bear interest (which the
relevant Borrower hereby promises to pay at the times herein provided) for each
Interest Period selected therefor at a rate per annum determined by adding the
Applicable Margin to the Adjusted LIBOR for such Interest Period, provided that
if any LIBOR Portion is not paid when due (whether by lapse of time,
acceleration or otherwise) such Portion shall bear interest (which the Borrower
hereby promises to pay at the times herein provided), whether before or after
judgment, until payment in full thereof through the end of the Interest Period
then applicable thereto at the rate per annum determined by adding 2% to the
interest rate which would otherwise be applicable thereto, and effective at the
end of the Interest Period such LIBOR Portion shall automatically be converted
into and added to the Domestic Rate Portion and shall thereafter bear interest
at the interest rate applicable to the Domestic Rate Portion of the applicable
Notes after default. Interest on each LIBOR Portion shall be due and payable on
the
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last day of each Interest Period applicable thereto and, with respect to any
Interest Period applicable to a LIBOR Portion in excess of three (3) months, on
the date occurring every three (3) months after the date such Interest Period
began and at the end of such Interest Period, and interest after maturity shall
be due and payable upon demand. The Borrower shall notify the Agent on or before
11:00 a.m. (Chicago time) on the third Business Day preceding the end of an
Interest Period applicable to a LIBOR Portion whether such LIBOR Portion is to
continue as a LIBOR Portion, in which event the Borrower shall notify the Agent
of the new Interest Period selected therefor, and in the event the Borrower
shall fail to so notify the Agent, such LIBOR Portion shall automatically be
converted into and added to the Domestic Rate Portion of the applicable Notes as
of and on the last day of such Interest Period. The Agent shall promptly notify
each Lender of each notice received from the Borrower pursuant to the foregoing
provision.
Section 2.2. Minimum Amounts. Each LIBOR Portion shall be in a
minimum amount of $1,000,000 or such greater amount which is an integral
multiple of $100,000.
Section 2.3. Computation of Interest. All interest on each LIBOR
Portion shall be computed on the basis of a year of 360 days for the actual
number of days elapsed. All interest on the Domestic Rate Portion shall be
computed on the basis of a year of 365 days (or, in a leap year, 366 days) for
the actual number of days elapsed.
Section 2.4. Manner of Rate Selection. The Borrower shall notify the
Agent by 11:00 a.m. (Chicago time) at least three (3) Business Days prior to the
date upon which it requests that any LIBOR Portion be created or that any part
of the Domestic Rate Portion be converted into a LIBOR Portion (each such notice
to specify in each instance the amount thereof and the Interest Period selected
therefor), and the Agent shall advise each Lender of each notice by 2:00 p.m.
(Chicago time) on the same Business Day the Agent receives such notice. If any
request is made to convert a LIBOR Portion into the Domestic Rate Portion, such
conversion shall only be made so as to become effective as of the last day of
the Interest Period applicable thereto. All requests for the creation,
continuance or conversion of Portions under this Agreement shall be irrevocable.
Section 2.5. Change of Law. Notwithstanding any other provisions of
this Agreement or of the Notes, if at any time any Lender shall determine in
good faith that any change in applicable laws, treaties or regulations or in the
interpretation thereof makes it unlawful for such Lender to create or continue
to maintain any LIBOR Portion, it shall promptly so notify the Agent (which
shall in turn promptly notify the Borrower and the other Lenders) and the
obligation of such Lender to create, continue or maintain LIBOR Portions under
this Agreement shall terminate until it is no longer unlawful for such Lender to
create, continue or maintain LIBOR Portions. The Borrower, on demand, shall, if
the continued maintenance of
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any such LIBOR Portion is unlawful, thereupon prepay the outstanding principal
amount of the affected LIBOR Portions, together with all interest accrued
thereon and all other amounts payable to the affected Lender with respect
thereto under this Agreement; provided, however, that the Borrower may instead
elect to convert the principal amount of the affected LIBOR Portion into the
Domestic Rate Portion of the applicable Notes, subject to the terms and
conditions of this Agreement.
Section 2.6. Unavailability of Deposits or Inability to Ascertain
Adjusted LIBOR. Notwithstanding any other provision of this Agreement or of the
Notes, if prior to the commencement of any Interest Period:
(a) the Agent or Required Lenders in good faith determine
that deposits in the amount of any LIBOR Portion scheduled to be
outstanding during such Interest Period are not readily available to
the Lenders in the relevant market;
(b) the Agent or Required Lenders in good faith determine
that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining Adjusted
LIBOR; or
(c) the Agent or Required Lenders in good faith determine
that (i) LIBOR as determined by the Agent will not adequately and
fairly reflect the cost to the Lenders of funding their LIBOR
Portions for such Interest Period and (ii) the Lenders' rights to
payment under Section 2.7 hereof will not reasonably compensate them
for such inadequate or unfair reflection of such cost;
then the Agent or Required Lenders, as the case may be, shall promptly give
notice thereof to the other Lenders and the Company and the obligations of the
Lenders to create, continue or effect by conversion any LIBOR Portion in such
amount and for such Interest Period shall terminate until deposits in such
amount and for the Interest Period selected by or on behalf of the relevant
Borrower shall again be readily available in the relevant market and adequate
and reasonable means exist for ascertaining Adjusted LIBOR.
Section 2.7. Taxes and Increased Costs. With respect to any LIBOR
Portion, if any Lender shall determine in good faith that any change in any
applicable law, treaty, regulation or guideline (including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or any new
law, treaty, regulation or guideline, or any interpretation of any of the
foregoing by any governmental authority charged with the administration thereof
or any central bank or other fiscal, monetary or other authority having
jurisdiction over such Lender or its lending branch or the LIBOR Portions
contemplated by this Agreement (whether or not having the force of law) shall:
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(i) impose, increase, or deem applicable any reserve, special
deposit or similar requirement against assets held by, or deposits in
or for the account of, or loans by, or any other acquisition of funds
or disbursements by, such Lender which is not in any instance already
accounted for in computing Adjusted LIBOR;
(ii) subject such Lender, any LIBOR Portion or a Note to the
extent it evidences such a Portion, to any tax (including, without
limitation, any United States interest equalization tax or similar
tax however named applicable to the acquisition or holding of debt
obligations and any interest or penalties with respect thereto),
duty, charge, stamp tax, fee, deduction or withholding in respect of
this Agreement, any LIBOR Portion or a Note to the extent it
evidences such a Portion, except such taxes as may be measured by the
overall net income or gross receipts of such Lender or its lending
branches and imposed by the jurisdiction, or any political
subdivision or taxing authority thereof, in which such Lender's
principal executive office or its lending branch is located;
(iii) change the basis of taxation of payments of principal
and interest due from the Borrower to such Lender hereunder or under
a Note to the extent it evidences any LIBOR Portion (other than by a
change in taxation of the overall net income or gross receipts of
such Lender); or
(iv) impose on such Lender any penalty with respect to the
foregoing or any other condition regarding this Agreement, the
disbursement of credit hereunder, any LIBOR Portion or a Note to the
extent it evidences any LIBOR Portion;
and such Lender shall determine that the result of any of the foregoing is to
increase the cost (whether by incurring a cost or adding to a cost) to such
Lender of creating or maintaining any LIBOR Portion hereunder or to reduce the
amount of principal or interest received or receivable by such Lender (without
benefit of, or credit for, any prorations, exemption, credits or other offsets
available under any such laws, treaties, regulations, guidelines or
interpretations thereof), then the Borrower shall pay on demand to such Lender
from time to time as specified by such Lender such additional amounts as such
Lender shall reasonably determine are sufficient to compensate and indemnify it
for such increased cost or reduced amount; provided, however, that the Borrower
shall not be obligated to pay any such amount or amounts to the extent such
additional cost or payment was incurred or paid by such Lender more than sixty
(60) days prior to the date of the delivery of the certificate referred to in
the immediately following sentence (nothing herein to impair or otherwise affect
the Borrower's liability hereunder for costs or payments subsequently incurred
or paid by such Lender). If a Lender makes such a claim for compensation, it
shall provide to the Borrower (with a copy to the Agent) a certificate setting
forth the computation of the increased cost or reduced amount as a result of any
event
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mentioned herein in reasonable detail and such certificate shall be conclusive
if reasonably determined.
Section 2.8. Change in Capital Adequacy Requirements. If any Lender
shall determine that the adoption after the date hereof of any applicable law,
rule or regulation regarding capital adequacy, or any change in any existing
law, rule or regulation, 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 such Lender
(or any of its branches or any corporation controlling such Lender) 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 Lender's or such
corporation's capital, as the case may be, as a consequence of such Lender's
obligations hereunder or for the credit which is the subject matter hereof to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to liquidity and capital adequacy)
by an amount deemed by such Lender to be material, then from time to time,
within fifteen (15) days after demand by such Lender, the Borrower shall pay to
the Lender such additional amount or amounts reasonably determined by such
Lender as will compensate such Lender for such reduction; provided, however,
that the Borrower shall not be obligated to compensate such Lender to the extent
its rate of return was so reduced more than sixty (60) days prior to the date of
such demand (nothing herein to impair or otherwise affect the Borrower's
liability hereunder to compensate for subsequent reductions in such Lender's
rate of return).
Section 2.9. Funding Indemnity. In the event any Lender shall incur
any loss, cost or expense (including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired or contracted to be acquired by such Lender to fund or
maintain its part of any Fixed Rate Loan or the relending or reinvesting of such
deposits or other funds or amounts paid or prepaid to such Lender) as a result
of:
(i) any payment of a Fixed Rate Loan on a date other than the
last day of the then applicable Interest Period for any reason,
whether before or after default, and whether or not such payment is
required by any provisions of this Agreement; or
(ii) any failure by any Borrower to create, borrow, continue
or effect by conversion a Fixed Rate Loan on the date specified in a
notice given pursuant to this Agreement, unless such failure results
from the Lenders' inability or unwillingness pursuant to Sections 2.5
and 2.6 hereof to create, continue or effect by conversion a LIBOR
Portion;
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then, upon the demand of such Lender, the Borrower shall pay to such Lender such
amount as will reimburse such Lender for such loss, cost or expense. If a Lender
requests such a reimbursement, it shall provide to the Borrower (with a copy to
the Agent) a certificate setting forth the computation of the loss, cost or
expense giving rise to the request for reimbursement in reasonable detail and
such certificate shall be conclusive if reasonably determined; provided,
however, that the Borrower shall not be obligated to pay any such amount or
amounts to the extent such loss, cost or expense was incurred by such Lender
more than sixty (60) days prior to the date of the delivery of such certificate
(nothing herein to impair or otherwise affect the Borrower's liability hereunder
to compensate for any subsequent loss, cost, or expense incurred by such
Lender).
Section 2.10. Lending Branch. Each Lender may, at its option, elect
to make, fund or maintain its pro rata share of the Loans hereunder at the
branches or offices specified on the signature pages hereof or on any Assignment
Agreement executed and delivered pursuant to Section 12.15 hereof or at such of
its branches or offices as such Lender may from time to time elect.
Section 2.11. Lender's Duty to Mitigate. Each Lender agrees that, as
promptly as practicable after it becomes aware of the occurrence of an event or
the existence of a condition that would cause it to be affected under Section
2.5, 2.6 or 2.7 hereof, such Lender will, after notice to the Borrower, to the
extent not inconsistent with such Lender's internal policies and customary
business practices, use its best efforts to make, fund or maintain the affected
LIBOR Portion or issue or participate in the affected Letter of Credit, as the
case may be, through another lending office of such Lender if as a result
thereof the unlawfulness which would otherwise require payment of such Portion
pursuant to Section 2.5 hereof would cease to exist or the circumstances which
would otherwise terminate such Lender's obligation to make such Portion under
Section 2.6 hereof would cease to exist or the increased costs which would
otherwise be required to be paid in respect of such Portion or Letter of Credit
pursuant to Section 2.7 hereof would be materially reduced, and if, as
determined by such Lender, in its sole discretion, the making, funding or
maintaining of such Portion, or issuance or participation in such Letter of
Credit, as the case may be, through such other lending office would not
otherwise adversely affect such Portion or such Lender. The Borrower hereby
agrees to pay all reasonable expenses incurred by each such Lender in utilizing
another lending office pursuant to this Section 2.11.
Section 2.12. Discretion of Lenders as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any part of its
Notes in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder (including, without
limitation, determinations under Sections 2.5, 2.6, 2.7 and 2.9 hereof) shall be
made as if each
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Lender had actually funded and maintained each LIBOR Portion during each
Interest Period applicable thereto through the purchase of deposits in the
relevant market in the amount of its share of such LIBOR Portion, having a
maturity corresponding to such Interest Period, and bearing an interest rate
equal to the LIBOR for such Interest Period.
Section 2.13. Replacement of Lender. (a) In the event that (x) the
Borrower receives from a Lender a certificate requesting an amount be paid to
such Lender under Section 1.3(f), 2.7 or 2.8 hereof and the Required Lenders
have not similarly made requests for payment arising out of the same
circumstances or (y) the obligation of any Lender to make or maintain any LIBOR
Portion has terminated under Section 2.5 or 2.6 hereof and the obligations of
the Required Lenders to make or maintain LIBOR Portions have not similarly
terminated by reason of the same circumstances or (z) any Lender becomes a
Defaulting Lender, then the Borrower may request other Lenders hereunder to
assume in full the Commitments then in effect of the Lender requesting such
amount be paid or whose obligations with respect to LIBOR Portions have so
terminated or of such Defaulting Lender, as the case may be (such Lender in each
case being herein referred to as the "Replaceable Lender"), and to purchase the
Notes issued to the Replaceable Lender at a price equal to the outstanding
principal amount of such Notes and the Replaceable Lender's share of any accrued
and unpaid interest on such Notes plus accrued and unpaid commitment fees owed
to the Replaceable Lender, and if any Lender or Lenders (each an "Assuming
Lender") in their sole discretion agree so to assume in full the Commitments of
the Replaceable Lender (provided only one Assuming Lender shall assume the Swing
Line Commitment, if relevant), and after payment by the Borrower to the
Replaceable Lender of all amounts due under this Agreement to such Lender
(including any amount specified as due in a certificate submitted under Section
1.3(f), 2.7 or 2.8 hereof) not so paid by the Assuming Lender, then such
assumption shall take place in the manner set forth in subsection (b) below. In
the event no Lender or Lenders agrees to assume in full the Commitments of the
Replaceable Lender, then the Borrower may nominate one or more Lenders not then
party to this Agreement so to assume in full the Commitments of the Replaceable
Lender, and if such nominated Lender or Lenders are acceptable to the Agent and
Required Lenders (excluding the Replaceable Lender), such assumption shall take
place in the manner set forth in subsection (b) below and each such Lender or
Lenders shall become a Lender hereunder (each a "New Lender") and the
Replaceable Lender shall no longer be a party hereto or have any rights
hereunder.
(b) In the event a Replaceable Lender's Commitments are to be assumed
in full by an Assuming Lender or a New Lender, then such assumption shall take
place on a date acceptable to the Borrower, the Replaceable Lender and the
Assuming Lender or New Lender, as the case may be, and such assumption shall
take place through the payment of all amounts due under this Agreement to the
Replaceable Lender and the execution of such instruments and documents as shall,
in the reasonable opinion of the Agent, be reasonably necessary or appropriate
for the Assuming Lender or New Lender to assume in full the Commitments of the
Replaceable Lender
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(including, without limitation, the issuance of new Notes and the execution of
an amendment hereto making any New Lender a party hereto). In the event no
Assuming Lender or New Lender agrees to assume in full the Commitments of the
Replaceable Lender, then such Replaceable Lender shall remain a party hereto and
its Commitments shall remain in effect.
(c) The rights and remedies against a Defaulting Lender under this
Agreement, including without limitation this Section 2.13, are in addition to
other rights and remedies that the Borrower may have against such Defaulting
Lender with respect to any Loan which such Defaulting Lender has not funded, and
that the Agent, or any Lender may have against such Defaulting Lender with
respect to any such Loan.
SECTION 3. FEES, PREPAYMENTS, TERMINATIONS, APPLICATIONS AND NOTATIONS.
Section 3.1. Fees.
(a) Commitment Fee. For the period from and including the date hereof
to but not including the Termination Date, the Borrower shall pay to the Agent
for the ratable benefit of the Lenders as hereinafter set forth, a commitment
fee at the Applicable Margin (computed on the basis of a year of 360 days for
the actual number of days elapsed) on the average daily Unused Revolving Credit
Commitments. Such commitment fee shall be payable quarterly in arrears on the
last day of each March, June, September and December in each year (commencing
June 30, 1998) and on the Termination Date. Such commitment fee shall be
allocated among the Lenders ratably in accordance with the amount of their
respective Revolving Credit Commitments which is not in use in the form of
Revolving Loans, but with Swing Loans to be deemed Revolving Loans which use
exclusively the Revolving Credit Commitment of ▇▇▇▇▇▇ (or if different, any
other Lender which then holds the Swing Line Commitment).
(b) Letter of Credit Fees. On the date of issuance or extension, or
increase in the amount, of each Letter of Credit pursuant to Section 1.3 hereof,
the Borrower shall pay to the Agent for its own account an issuance fee equal to
.125% of the face amount of (or the increase in the face amount of) such Letter
of Credit. On the last day of each calendar quarter (commencing on June 30,
1998) to, and on, the Termination Date, the Borrower shall pay to the Agent for
the ratable benefit of the Lenders in accordance with their percentages a fee
equal to the Applicable Margin for LIBOR Portions of the Revolving Loans
(computed on the basis of a year of 360 days for the actual number of days
elapsed) on the average daily outstanding undrawn amounts during the immediately
preceding calendar quarter of the Letters of Credit. In addition to the letter
of credit fees called for above, the Borrower further agrees to pay to the Agent
for its own account such processing and transaction fees and charges as the
Agent from
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time to time customarily imposes in connection with any issuance, amendment,
cancellation, negotiation and/or payment of letters of credit and drafts drawn
thereunder.
(c) Audit Fees. The Borrower shall pay to the Agent for its own use
and benefit charges for audits of the Collateral by the Agent or its agents or
representatives in such amounts as the Agent may from time to time request (the
Agent acknowledging and agreeing that such charges shall be computed in the same
manner as it at the time customarily uses for the assessment of charges for
similar collateral audits actually performed by it); provided, however, that in
the absence of any Default or Event of Default, (i) the Borrower shall not be
required to reimburse the Agent for more than two (2) such audits per year (a
"Scheduled Field Audit") plus one (1) audit of each target of an Acquisition and
(ii) the Borrower shall in no event be liable for more than $5,000 for any one
Scheduled Field Audit.
(d) Agent's Fee. The Borrower shall pay to the Agent the fees agreed
to in a letter exchanged between them.
Section 3.2. Voluntary Prepayments of Revolving Credit and Term
Notes.
(a) Revolving Credit Notes. The Borrower shall have the privilege of
prepaying the Revolving Credit Notes in whole or in part (but if in part, then
in a minimum amount of $100,000 or such greater amount which is an integral
multiple of $100,000) on any Business Day upon notice thereof to the Agent not
later than 11:00 a.m. (Chicago time) on such day, the Agent to promptly so
notify the Lenders, by the Borrower paying to the Agent for the account of the
Lenders the principal amount to be prepaid and (i) if such a prepayment prepays
such Notes in full and is accompanied by the termination in whole of the
Revolving Credit Commitments pursuant to which such Notes were issued, accrued
interest thereon to the date of prepayment plus any commitment fee which has
accrued and is unpaid and (ii) any amount due the Lenders under Section 2.9
hereof. Any amount so prepaid on the Revolving Credit Notes may, subject to the
terms and conditions of this Agreement, be reborrowed.
(b) Term Notes. The Borrower shall have the privilege of prepaying
the Term Notes in whole or in part (but if in part, then in a minimum amount of
$100,000 or such greater amount which is an integral multiple of $100,000 as to
any particular class of Term Notes being prepaid) at any time upon one (1)
Business Day's prior notice to the Agent (such notice, if received subsequent to
11:00 a.m. (Chicago time) on a given day, to be treated as though received at
the opening of business on the next Business Day), which shall promptly so
notify the Lenders, by paying to the Agent for the account of the Lenders the
principal amount to be prepaid and (i) if such a prepayment prepays such Notes
in full, accrued interest thereon to the date of prepayment and (ii) any amounts
due to the Lenders under Section 2.9 hereof. Voluntary prepayments of the
principal of each class of the Term Notes shall be applied in several
installments thereof due on
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such class of Notes in the inverse order of their respective maturities. No
amount paid or prepaid on the Term Notes may be reborrowed.
Section 3.3. Mandatory Prepayments.
(a) Excess Cash Flow. No later than April 30 of each calendar year
(commencing April 30, 1999), the Borrower shall pay over to the Agent for the
ratable benefit of the Lenders, as and for a mandatory prepayment on the Term
Notes an amount equal to 75% (the "Cash Flow Recapture Percentage") of Excess
Cash Flow for the then most recently completed fiscal year. Notwithstanding
anything contained herein to the contrary, if (i) the Cash Flow Leverage Ratio
is less than 3.00 to 1.00 for any two consecutive fiscal quarters of the
Borrower and (ii) no Default or Event of Default shall have occurred and then be
continuing, the Cash Flow Recapture Percentage shall be permanently reduced to
50%.
(b) Equity Offering. Within five (5) Business Days of receipt by the
Borrower of cash proceeds from any public offering or private placement of any
capital stock or other equity securities of the Borrower (other than proceeds
from (i) any sale of capital stock of Borrower pursuant to an employee stock
ownership plan or (ii) any sale of capital stock of Borrower, or any options to
acquire any such stock, to officers, directors or key employees of the Borrower
or any of its Subsidiaries as compensation for services rendered or (iii) any
exercise by such officers or directors of such options), the Borrower shall make
a mandatory prepayment in an amount equal to 100% of the net cash proceeds of
such issuance (net only of underwriting discounts and commissions and any other
reasonable out-of-pocket costs and expenses directly incurred and payable in
connection therewith).
(c) Asset Sales. Any and all proceeds derived from the sale or
disposition (whether voluntary or involuntary), or on account of damage or
destruction, of the real estate, furniture, fixtures, equipment or other fixed
assets of the Borrower or any Subsidiary shall be paid over to the Agent as and
for a mandatory prepayment on the Term Notes; provided, however, that (i) the
foregoing provisions shall be inapplicable to proceeds received by the Agent
under the Collateral Documents if and so long as, pursuant to the terms of the
Collateral Documents, the same are to be held by the Agent and disbursed for the
restoration, repair or replacement of the property in respect of which such
proceeds were received, (ii) no prepayment shall be required with respect to the
first $100,000 of net proceeds (i.e., gross proceeds net of out-of-pocket
expenses incurred in effecting the sale or other disposition) received during
any one calendar year from the sale or other disposition of equipment, furniture
and fixtures of the Borrower and its Subsidiaries, taken together, which are
worn out, obsolete or, in the good faith judgment of the Borrower or such
Subsidiary, no longer desirable to the efficient conduct of its business as then
conducted, (iii) no prepayment shall be required with respect to proceeds
received from the sale, damage or destruction of any of the equipment or other
assets subject to Liens permitted by Section 8.12
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hereof if and to the extent such proceeds are applied to reduce the indebtedness
secured by such Liens and (iv) so long as no Default or Event of Default has
occurred or is continuing the Borrower or such Subsidiary, as the case may be,
may retain the proceeds derived from the sale, damage or destruction of
fixtures, furniture and equipment if and to the extent that the Borrower or such
Subsidiary establishes to the reasonable satisfaction of the Agent that the
equipment sold, damaged, or destroyed has been replaced (or repaired in the case
of damaged property) with fixtures, furniture or equipment of at least equal
value and utility to that replaced (before any such damage or destruction) which
is subject to a first lien in favor of the Agent for the benefit of the Lenders.
Nothing herein contained shall in any manner impair or otherwise affect the
prohibitions against the sale or other disposition of Collateral contained
herein and in the Collateral Documents.
(d) Application. Each such prepayment required by this Section 3.3
shall, subject to Section 3.3(e) hereof, be applied to the Term Notes ratably in
accordance with the unpaid principal balances thereof, with the amount allocable
to each class of Term Notes to be applied ratably in reduction of all the
remaining installments of such class of Term Notes.
(e) Waiver. Notwithstanding anything to the contrary contained in
this Section 3.3 or elsewhere in this Agreement, any Lender with a share of an
outstanding Term B Loan shall have the option to waive any mandatory prepayment
of such Term B Loan pursuant to this Section 3.3 (each such prepayment a
"Waiveable Mandatory Term B Loan Prepayment") upon the terms and provisions set
forth in this Section 3.3(e). In the event any such Lender desires to waive such
Lender's right to receive any such Waiveable Mandatory Term B Loan Prepayment in
whole or in part, such Lender shall so advise the Agent no later than the date
on which such prepayment is to occur, which notice shall also include the amount
such Lender desires to receive in respect of such prepayment. If any such Lender
does not provide such notice, it will be deemed to have accepted 100% of the
total amount. In the event that any such Lender waives all or any part of such
right to receive any such Waiveable Mandatory Term B Loan Prepayment, the Agent
shall apply 100% of the amount so waived by such Lender to the Term A Loan in
accordance with the relevant clause of this Section 3.3, provided that no such
waiver request shall be honored following the prepayment in full of the Term A
Loans.
Section 3.4. Terminations of Revolving Credit Commitments. The
Borrower shall have the right as of the close of any calendar quarter, upon five
(5) Business Days' prior notice to the Agent (which shall promptly notify the
Lenders), to ratably terminate the Revolving Credit Commitments without premium
or penalty and in whole or in part (but if in part, then in an amount not less
than $5,000,000 or such greater amount which is an integral multiple of
$100,000), provided that the Revolving Credit Commitments may not be reduced to
an amount less than the aggregate principal amount of the Revolving Loans, Swing
Loans and L/C Obligations then outstanding. Any termination of the Revolving
Credit Commitments pursuant
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to this Section may not be reinstated. Any reduction of the Revolving Credit
Commitments to a level below the L/C Commitment shall effect a concurrent
reduction in the L/C Commitment so as to equal the total Revolving Credit
Commitments after giving effect to such reduction. Each reduction of the
Revolving Credit Commitments shall concurrently reduce the Swing Line Commitment
by the same percentage as such reduction in the Revolving Credit Commitments.
Section 3.5. Place and Application of Payments. All payments of
principal, interest, fees and all other amounts payable hereunder shall be made
to the Agent at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (or at
such other place as the Agent may specify) on the date any such payment is due
and payable. All such payments shall be made in lawful money of the United
States of America, in immediately available funds at the place of payment,
without setoff or counterclaim and without reduction for, and free from, any and
all present or future taxes, levies, imposts, duties, fees, charges, deductions,
withholdings, restrictions or conditions of any nature imposed by any government
or any political subdivision or taxing authority thereof (but excluding any
taxes imposed on or measured by the net income of the Lender). Payments received
by the Agent after 11:00 a.m. (Chicago time) shall be deemed received as of the
opening of business on the next Business Day. Except as herein provided, all
payments shall be received by the Agent for the ratable account of the Lenders
and shall be promptly distributed by the Agent ratably to the Lenders. Unless
the Borrower otherwise directs or this Agreement otherwise requires, principal
payments on any particular class of Notes shall be first applied to the Domestic
Rate Portion of such Notes until payment in full thereof, with any balance
applied to the LIBOR Portions of such Notes in the order in which their Interest
Periods expire. Any amount paid or prepaid on the Revolving Credit Notes or
Swing Line Note may, subject to all of the terms and conditions hereof, be
borrowed, repaid and borrowed again. No amount paid or prepaid on the Term Notes
may be reborrowed.
Anything contained herein to the contrary notwithstanding, all
payments and collections received in respect of the Loans and other Obligations
or the Hedging Liability by the Agent or any of the Lenders after the occurrence
of an Event of Default shall be remitted to the Agent and distributed as
follows:
(a) first, to the payment of any outstanding costs and
expenses incurred by the Agent in protecting, preserving or enforcing
rights under this Agreement and the other Loan Documents and in any
event including all costs and expenses of a character which the
Borrower has agreed to pay under Section 12.4 hereof (such funds to
be retained by the Agent for its own account unless it has previously
been reimbursed for such costs and expenses by the Lenders, in which
event such amounts shall be remitted to the Lenders to reimburse them
for payments theretofore made to the Agent);
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(b) second, to the payment of any outstanding interest or
other fees or indemnification amounts due under the Loan Documents
other than for principal of the Loans and L/C Obligations, ratably as
among the Agent and the Lenders in accord with the amount of such
interest and other fees or Obligations owing each;
(c) third, to the payment of the principal of the Swing
Loans;
(d) fourth, to the payment of the principal of the other
Loans and any liabilities in respect of Reimbursement Obligations and
to the Agent to be held as collateral security for any undrawn
Letters of Credit (until the Agent is holding an amount of cash equal
to the then outstanding amount of all such Letters of Credit), the
aggregate amount paid to or held as collateral security for the
Lenders to be allocated pro rata as among the Lenders in accord with
the then respective aggregate unpaid principal balances of such Loans
and the L/C Obligations;
(e) fifth, to the Agent, the Lenders ratably in accord with
the amounts of other Obligations and the Hedging Liability owing to
each of them (including their Affiliates in the case of Hedging
Liability) unless and until all such Obligations and the Hedging
Liability have been fully paid and satisfied; and
(f) sixth, to the Borrower or to whoever the Agent reasonably
determines to be lawfully entitled thereto.
Section 3.6. Notations and Requests. All Loans made by a Lender
against a Note, the status of all amounts evidenced by a Note (if relevant) as
constituting part of the Domestic Rate Portion or a LIBOR Portion, and the rates
of interest and Interest Periods applicable to such Portions shall be recorded
by such Lender on its books and records or, at its option in any instance,
endorsed on a schedule to its Note and the unpaid principal balance and status,
rates and Interest Periods so recorded or endorsed by such Lender shall be prima
facie evidence in any court or other proceeding brought to enforce its Note of
the principal amount remaining unpaid thereon, the status of the Loans evidenced
thereby and the interest rates and Interest Periods applicable thereto; provided
that the failure of a Lender to record any of the foregoing shall not limit or
otherwise affect the obligation of the Borrower to repay the principal amount of
each Note together with accrued interest thereon. Prior to any Lender's
negotiation of a Revolving Credit or Term Note, such Lender shall record on a
schedule thereto the status of all amounts evidenced thereby as constituting
part of the Domestic Rate Portion or LIBOR Portion and the rates of interest and
the Interest Periods applicable thereto.
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SECTION 4. COLLATERAL.
Section 4.1. Collateral. The payment and performance of the
Obligations and Hedging Liability shall at all times be secured by, among other
things, (a) all of the Borrower's and its Subsidiaries' accounts, chattel paper,
documents, instruments, general intangibles, inventory, equipment and certain
other assets and property of the Borrower and its Subsidiaries, in each case
whether now owned or held or hereafter acquired or arising, pursuant to that
certain Security Agreement from the Borrower and its Subsidiaries dated as of
even date herewith, as the same may be amended, modified or supplemented from
time to time (the "Security Agreement"), (b) all of the capital stock of the
Subsidiaries and certain other assets and property of the Borrower and its
Subsidiaries, in each case whether now owned or held or hereafter acquired or
arising, pursuant to that certain Pledge Agreement from the Borrower dated as of
even date herewith, as the same may be amended, modified or supplemented from
time to time (the "Pledge Agreement"), and (c) the real estate and related
assets and properties of the Borrower and its Subsidiaries, in each case whether
now owned or held or hereafter acquired or arising, pursuant to mortgages and
trust deeds reasonably acceptable to the Agent as to form and substance
(collectively the "Mortgages" and individually a "Mortgage").
Section 4.2. Guaranties. Payment of the Notes and the other
Obligations, as well as the Hedging Liability, shall at all times be jointly and
severally guaranteed by each Subsidiary pursuant hereto or pursuant to a
Guaranty issued by such Subsidiary. In the event any Subsidiary is hereafter
acquired or formed, the Borrower shall also cause such Subsidiary to execute
such Collateral Documents (having terms and conditions substantially similar to
those executed by the Borrower and its Subsidiaries in connection with the
initial Loans under this Agreement) as the Agent may then require granting the
Agent for the benefit of the Lenders a security interest in and lien on the
assets of such Subsidiary as collateral security for the Notes and the other
Obligations, as well as the Hedging Liability, together with such other
instruments, documents, certificates and opinions required by the Agent in
connection therewith.
Section 4.3. Further Assurances. The Borrower covenants and agrees
that it shall, and shall cause each Subsidiary to, comply with all terms and
conditions of each of the Collateral Documents and that the Borrower shall, and
shall cause each Subsidiary to, at any time and from time to time as requested
by the Agent, execute and deliver such further instruments and do such other
acts as the Agent or the Required Lenders may deem necessary or desirable to
provide for or protect or perfect the Lien of the Agent in the Collateral.
SECTION 5. DEFINITIONS; INTERPRETATION.
Section 5.1. Definitions. The following terms when used herein shall
have the following meanings:
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"Acquiree" means and includes each of SMP and Mid-Central.
"Acquisition" means (i) the acquisition of all or any substantial
part of the assets, property or business of any other person, firm or
corporation, (ii) any acquisition of a majority of the common stock or other
equity securities of any firm or corporation.
"Adjusted LIBOR" means a rate per annum determined by the Agent
pursuant to the following formula:
Adjusted LIBOR = LIBOR
--------------------
100%-Reserve Percentage
"Reserve Percentage" means, for the purpose of computing Adjusted LIBOR, the
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental or other special reserves) imposed by the
Board of Governors of the Federal Reserve System (or any successor) under
Regulation D on Eurocurrency liabilities (as such term is defined in Regulation
D) for the applicable Interest Period as of the first day of such Interest
Period, but subject to any amendments to such reserve requirement by such Board
or its successor, and taking into account any transitional adjustments thereto
becoming effective during such Interest Period. For purposes of this definition,
LIBOR Portions shall be deemed to be Eurocurrency liabilities as defined in
Regulation D without benefit of or credit for prorations, exemptions or offsets
under Regulation D. "LIBOR" means, for an Interest Period, (a) the LIBOR Index
Rate for such Interest Period, if such rate is available, and (b) if the LIBOR
Index Rate cannot be determined, the arithmetic average of the rate of interest
per annum (rounded upwards, if necessary, to nearest 1/100 of 1%) at which
deposits in U.S. dollars in immediately available funds are offered to the Agent
at 11:00 a.m. (London, England time) two (2) Business Days before the beginning
of such Interest Period by major banks in the interbank eurodollar market for a
period equal to such Interest Period and in an amount equal or comparable to the
principal amount of such LIBOR Portion which is scheduled to be made by the
Agent. Each determination of LIBOR made by the Agent shall be conclusive and
binding absent manifest error.
"Affiliate" means any Person, directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise; provided that, in any event, any
Person that owns, directly or indirectly, 5% or more of the securities having
the ordinary voting power for the election of directors or governing body of a
corporation or 5% or more of the partnership or other ownership interests of
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any other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person.
"Agent" means ▇▇▇▇▇▇ Trust and Savings Bank and any successor thereto
appointed pursuant to Section 10.1 hereof.
"Applicable Margin" means, for Revolving Loans, Term A Loans, Term B
Loans, the commitment fee and (to the extent bearing interest with reference to
the Domestic Rate) Swing Loans, the rate specified below, subject to quarterly
adjustment as hereinafter provided:
Applicable
Margin Applicable
For Domestic Rate Margin
Portion of For LIBOR Portions Applicable Applicable
Revolving Loans, of Revolving Loans Margin Margin
When Following Status Term A Loan and and Term A Loan For Domestic Rate For LIBOR Portions
Exists For Any Margin such Swing Loans Is: Portion of of Term B Loan
Determination Date Is: Term B Loan Is: Commitment Fee Is
Is:
Level I Status 0% 1.00% .25% 2.25% .25%
Level II Status 0% 1.25% .25% 2.25% .25%
Level III Status 0% 1.625% .25 2.25% .375%
Level IV Status .25% 2.00% .50 2.75% .50%
Level V Status .25% 2.25% .50 2.75% .50%
provided, however, that all of the foregoing is subject to the following:
(i) the initial Applicable Margin in effect through the first
Margin Determination Date shall be the Applicable Margin for Level V
Status;
(ii) on or before the date that is ten (10) Business Days
after the date on which the Borrower has delivered a Compliance
Certificate to the Agent for a given quarterly accounting period of
the Borrower (commencing with the quarterly accounting period ending
on or about December 31, 1998) pursuant to Section 8.5 hereof (such
date that is ten (10) Business Days after the date on which the
Company delivered a Compliance Certificate to the Agent being herein
referred to as the "Margin Determination Date"), the Agent shall
determine whether Level I Status, Level II Status, Level III Status,
Level IV Status or Level V Status exists as of the close of the
applicable accounting
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period, based upon the Compliance Certificate and financial
statements delivered to the Agent under Section 8.5 hereof for such
accounting period, and shall promptly notify the Borrower and the
Lenders of such determination and of any change in the Applicable
Margin resulting therefrom. Any such change in the Applicable Margin
shall be effective as of such Margin Determination Date, with such
new Applicable Margin to continue in effect until the next Margin
Determination Date. If the Borrower has not delivered a Compliance
Certificate by the date such Compliance Certificate is required to be
delivered under Section 8.5 hereof, until a Compliance Certificate is
delivered before the next Margin Determination Date, the Applicable
Margin shall be the Applicable Margin for Level V Status. If the
Borrower subsequently delivers a Compliance Certificate before the
next Margin Determination Date, the Applicable Margin established by
such Compliance Certificate shall take effect from the date of
delivery until the next Margin Determination Date; and
(iii) if and so long as any Event of Default has occurred and
is continuing hereunder, notwithstanding anything herein to the
contrary, the Applicable Margin shall be the Applicable Margin for
Level V.
"Application" is defined in Section 1.3 hereof.
"Authorized Representative" means those persons shown on the list of
officers and employees of the Borrower pursuant to Section 7.2(a) hereof or on
any update of any such list provided by the Borrower to the Agent, or any
further or different officers and employees so named by any Authorized
Representative in a written notice to the Agent.
"Borrower" is defined in the introductory paragraph hereof.
"Business Day" means any day (other than a Saturday or Sunday) on
which banks are not authorized or required to close in Chicago, Illinois and,
when used with respect to LIBOR Portions, a day on which banks are dealing in
United States Dollar deposits in the interbank market of London, England and
Nassau, Bahamas.
"Capital Expenditures" means for any period capital expenditures of
the Borrower and its Subsidiaries during such period as defined and classified
in accordance with GAAP, but in any event excluding amounts expended to effect a
Permitted Acquisition.
"Capital Lease" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
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"Capitalized Lease Obligation" means the amount of the liability
shown on the balance sheet of any Person in respect of a Capital Lease
determined in accordance with GAAP.
"Cash Flow Leverage Ratio" means, as of any date the same is to be
determined, the ratio of (x) Total Funded Debt as of such date to (y) EBITDA for
the four consecutive fiscal quarters of the Borrower ending on, or (if none so
end) most recently completed prior to such date; provided, however, that:
(a) the Cash Flow Leverage Ratio means, as of any date prior
to the fiscal quarter of the Borrower ending on or about June 30,
1998, the ratio of (i) Total Funded Debt as of the relevant date to
(ii) $19,272,000;
(b) the Cash Flow Leverage Ratio means, as of the close of
the fiscal quarter of the Borrower ending on or about June 30, 1998
and as of each date thereafter to (but not including) the close of
the immediately following fiscal quarter of the Borrower, the ratio
of (i) Total Funded Debt as of the relevant date to (ii) the product
of (1) EBITDA for the single fiscal quarter of the Borrower ending on
or about June 30, 1998 and (2) four;
(c) the Cash Flow Leverage Ratio means, as of the close of
the fiscal quarter of the Borrower ending on or about September 30,
1998 and as of each date thereafter to (but not including) the close
of the immediately following fiscal quarter of the Borrower, the
ratio of (i) Total Funded Debt as of the relevant date to (ii) the
product of (1) EBITDA for the two consecutive fiscal quarters of the
Borrower ending on or about September 30, 1998 and (2) two; and
(d) the Cash Flow Leverage Ratio means, as of the close of
the fiscal quarter of the Borrower ending on or about December 31,
1998 and as of each date thereafter to (but not including) the close
of the immediately following fiscal quarter of the Borrower, the
ratio of (i) Total Funded Debt as of the relevant date to (ii) the
product of (1) EBITDA for the three consecutive fiscal quarters of
the Borrower ending on or about December 31, 1998 and (2) a fraction,
the numerator of which is four and the denominator of which is three.
"Cash Maturities" means, with reference to any period, the aggregate
amount of payments required to be made by the Borrower and its Subsidiaries
during such period with respect to principal on all Indebtedness (whether at
maturity, as a result of mandatory sinking fund redemption, scheduled mandatory
prepayment or otherwise).
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"Cash Prepayments" means, with reference to any period, the aggregate
amount of payments voluntarily made by the Borrower and its Subsidiaries during
such period with respect to principal on all Indebtedness.
"Change of Control" means the occurrence, at any time after the date
hereof, of (i) any Person or two or more Persons acting in concert acquiring
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of Borrower (or other securities
convertible into such securities) representing more than 25% of the combined
voting power of all securities of the Borrower entitled to vote in the election
of directors; or (ii) commencing after the date hereof, individuals who as of
the date hereof were directors of the Borrower ceasing for any reason to
constitute a majority of the Board of Directors of the Borrower unless the
Persons replacing such individuals were nominated by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or the
Board of Directors of the Borrower; or (iii) any Person or two or more Persons
acting in concert acquiring by contract or otherwise, or entering into a
contract or arrangement which upon consummation will result in its or their
acquisition of, or control over, securities of the Borrower (or other securities
convertible into such securities) representing more than 25% of the combined
voting power of all securities of the Borrower entitled to vote in the election
of directors.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Collateral Documents" means the Security Agreement and all other
mortgages, deeds of trust, security agreements, assignments, financing
statements and other documents as shall from time to time secure the
Obligations.
"Commitments" means and includes the Revolving Credit Commitments,
the Swing Line Commitment and the Term Credit Commitments.
"Compliance Certificate" means a certificate in the form Exhibit E
hereto.
"Consolidated Net Income" means, with reference to any period, the
net income (or net deficit) of the Borrower and its Subsidiaries for such period
as computed on a consolidated basis in accordance with GAAP; provided, however,
that if any Permitted Acquisition occurs at any time during such period,
Consolidated Net Income shall be calculated on a proforma basis to include
earnings of the acquired entity or business for the entire period prior to such
Permitted Acquisition as if such Permitted Acquisition had taken place on the
first day of such period, all as reasonably calculated by the Borrower based on
actual results of operations of the acquired entity or business (without giving
retroactive effect to any operating efficiencies realized after such
Acquisition).
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"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any Subsidiary, are treated
as a single employer under Section 414 of the Code.
"Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
"Defaulting Lender" shall mean a Lender which has failed to fund as
and when required by the terms and conditions of this Agreement such Lender's
ratable share of any Loan hereunder, if any so long as such failure continues
unremedied.
"Domestic Rate" means, for any day, the greater of (i) the rate of
interest announced by the Agent from time to time as its prime commercial rate,
as in effect on such day; and (ii) the sum of (x) the rate determined by the
Agent to be the average (rounded upwards, if necessary, to the next higher 1/100
of 1%) of the rates per annum quoted to the Agent at approximately 10:00 a.m.
(Chicago time) (or as soon thereafter as is practicable) on such day (or, if
such day is not a Business Day, on the immediately preceding Business Day) by
two or more Federal funds brokers selected by the Agent for the sale to the
Agent at face value of Federal funds in an amount equal or comparable to the
principal amount owed to the Agent for which such rate is being determined, plus
(y) 1/2 of 1% (0.5%).
"Domestic Rate Portion" is defined in Section 2.1(a) hereof.
"EBIT" means, with reference to any period, Consolidated Net Income
for such period plus all amounts deducted in arriving at such Consolidated Net
Income for such period in respect of (i) Interest Expense for such period plus
(ii) federal, state and local income taxes for such period.
"EBITDA" means, with reference to any period, Consolidated Net Income
for such period plus all amounts deducted in arriving at such Consolidated Net
Income for such period in respect of (i) Interest Expense for such period, plus
(ii) federal, state and local income taxes for such period, plus (iii) all
amounts properly charged for depreciation of fixed assets and amortization of
intangible assets during such period on the books of the Borrower and its
Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Event of Default" means any event or condition identified as such in
Section 9.1 hereof.
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"Excess Cash Flow" means, as of any date the same is to be computed,
EBITDA for the period consisting of the four most recently completed fiscal
quarters of the Borrower, less Interest Expense paid in cash by the Borrower and
its Subsidiaries during such period, less payments in cash by the Borrower and
its Subsidiaries in respect of taxes on or measured by net income during such
period, less the aggregate amount of all Capital Expenditures during such period
other than any Capital Expenditures financed through any Capitalized Lease, less
(without duplication) Cash Maturities and Cash Prepayments during such period.
"Existing Bank Loans" means the loans outstanding from certain
Subsidiaries of the Borrower under their Credit Agreement dated as of January
20, 1998 with ▇▇▇▇▇▇ as agent and certain other lenders party thereto.
"Fixed Charge Coverage Ratio" means, as of any date the same is to be
determined, the ratio of (i) the amount (if any) by which (a) EBITDA for the
four consecutive fiscal quarters of the Borrower ending on, or (if none so end)
most recently completed prior to such date exceeds (b) Capital Expenditures
during the same four fiscal quarters to (ii) the sum (during the same four
fiscal quarters) of (a) Interest Expense and (b) Cash Maturities and (c)
Permitted Redemptions.
"Fixed Rate Loan" means any LIBOR Portion and (to the extent bearing
interest with reference to ▇▇▇▇▇▇' Quoted Rate) any Swing Loan.
"GAAP" means generally accepted accounting principles as in effect
from time to time, applied by the Borrower and its Subsidiaries on a basis
consistent with the preparation of the Borrower's most recent financial
statements furnished to the Lenders pursuant to Section 6.4 hereof.
"Guarantor" means each Subsidiary that is a signatory hereto or that
executes and delivers to the Agent a Guaranty along with the accompanying
closing documents required by Section 4.2 hereof.
"Guaranteed Obligations" is defined in Section 11.1 hereof.
"Guaranty" means this Agreement as to Guarantors party hereto and
otherwise, a letter to the Agent in the form of Exhibit G hereto executed by a
Subsidiary whereby it acknowledges it is party hereto as a Guarantor under
Section 11 hereof and also in the case of any Subsidiary not organized under the
laws of the United States of any State thereof, such other form of guaranty as
shall be reasonably acceptable to the Agent and the Required Lenders.
"▇▇▇▇▇▇" is defined in Section 1.6(a) hereof.
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"▇▇▇▇▇▇' Quoted Rate" is defined in Section 1.6(c) hereof.
"Hedging Arrangements" is defined in Section 8.26 hereof.
"Hedging Liability" means the liability of the Borrower to any of the
Lenders or their Affiliates in respect of any interest rate swaps, interest rate
caps, interest rate collars, or other interest rate hedging arrangements as the
Borrower may from time to time enter into with any one or more of the Lenders or
their Affiliates. Unless and until the amount of the Hedging Liability is fixed
and determined, the Hedging Liability shall be deemed to be the market value of
the notional amount of the hedge from the date of computation to the date the
hedge expires.
"Indebtedness" means for any Person (without duplication) (i) all
indebtedness created, assumed or incurred in any manner by such Person
representing money borrowed (including by the issuance of debt securities), (ii)
all indebtedness for the deferred purchase price of property or services (other
than trade accounts payable arising in the ordinary course of business which are
not more than 180 days past due), (iii) all indebtedness secured by any Lien
upon Property of such Person, whether or not such Person has assumed or become
liable for the payment of such indebtedness, (iv) all Capitalized Lease
Obligations of such Person, (v) all obligations of such Person on or with
respect to letters of credit, bankers' acceptances and other extensions of
credit whether or not representing obligations for borrowed money and (vi) each
"non-compete" and like payment owed by such Person in connection with an
Acquisition, to the extent such payment would be classified as a liability under
GAAP.
"Interest Coverage Ratio" means, as of any date the same is to be
determined, the ratio of (i) EBIT for the four consecutive fiscal quarters of
the Borrower ending on, or (if none so end) most recently completed prior to
such date to (ii) Interest Expense for the same four fiscal quarters; provided,
however, that:
(a) the Interest Coverage Ratio means, as of the fiscal
quarter of the Borrower ending on or about June 30, 1998, the ratio
of (i) EBIT for such fiscal quarter of the Borrower to (ii) Interest
Expense for such fiscal quarter;
(b) the Interest Coverage Ratio means, as of the fiscal
quarter of the Borrower ending on or about September 30, 1998, the
ratio of (i) EBIT for the two consecutive fiscal quarters of the
Borrower ending on such date to (ii) Interest Expense for the same
two fiscal quarters; and
(c) the Interest Coverage Ratio means, as of the fiscal
quarter of the Borrower ending on or about December 31, 1998, the
ratio of (i) EBIT for the three consecutive
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fiscal quarters of the Borrower ending on such date to (ii) Interest
Expense for the same three fiscal quarters.
"Interest Expense" means, with reference to any period (the
"measurement period"), the sum of all interest charges with respect to
Indebtedness (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the
Borrower and its Subsidiaries for such measurement period determined in
accordance with GAAP; provided, however, that if any Permitted Acquisition
occurs at any time during such measurement period, Interest Expense shall be
equal to the product of (x) interest charges with respect to Indebtedness, as
reasonably determined on a consolidated basis, from and including the date of
(and after giving effect to) the most recent such Permitted Acquisition
occurring during such period through the close of such measurement period,
multiplied by (y) a fraction, the numerator of which is the number of days in
such measurement period and the denominator of which is the number of those days
in such measurement period including and following the date of such Permitted
Acquisition.
"Interest Period" means, (a) with respect to any Swing Loan, the
period commencing on the date such Swing Loan is made and ending one to five,
inclusive, days thereafter as selected by the Borrower in the notice provided
herein and (b) with respect to any LIBOR Portion, the period commencing on, as
the case may be, the creation, continuation or conversion date with respect to
such LIBOR Portion and ending one (1), two (2), three (3) or six (6) months
thereafter as selected by the Borrower in its notice as provided herein;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period would otherwise end on a day which
is not a Business Day, that Interest Period shall be extended to the
next succeeding Business Day, unless the result of such extension
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) no Interest Period may extend beyond the final maturity
date of any Note evidencing such Portion;
(iii) the interest rate to be applicable to each LIBOR
Portion or Swing Loan for each Interest Period shall apply from and
including the first day of such Interest Period to but excluding the
last day thereof;
(iv) no Interest Period may be selected if after giving
effect thereto any Borrower will be unable to make a principal
payment scheduled to be made during such
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Interest Period without paying part of a LIBOR Portion on a date
other than the last day of the Interest Period applicable thereto;
and
(v) prior to July 2, 1998, unless the Agent in its discretion
agrees otherwise, no Interest Period over one month in length shall
be selected for any LIBOR Portion.
For purposes of determining an Interest Period, a month means a
period starting on one day in a calendar month and ending on a numerically
corresponding day in the next calendar month, provided, however, if an Interest
Period begins on the last day of a month or if there is no numerically
corresponding day in the month in which an Interest Period is to end, then such
Interest Period shall end on the last Business Day of such month.
"L/C Commitment" shall mean $10,000,000, in each case as the same may
be reduced pursuant to Section 3.4 hereof.
"L/C Document" shall mean the Letters of Credit, any draft or other
document presented in connection with a drawing thereunder, the Applications and
this Agreement.
"L/C Obligations" means as of any date the same is to be determined,
the sum of (i) the aggregate undrawn amount then available under the Letters of
Credit then outstanding (with the undrawn amount available under a Letter of
Credit to be the maximum amount which can then be drawn thereunder (after giving
effect to any prior reductions in such amount, whether scheduled on the face of
such Letter of Credit or due to prior partial drawings) under any circumstances
and over any period of time plus (ii) all unpaid Reimbursement Obligations then
outstanding (other than any such Reimbursement Obligations as are being repaid
the same day directly out of the proceeds of a Revolving Loan requested for such
purpose).
"Lender" means ▇▇▇▇▇▇ Trust and Savings Bank, the other signatories
hereto (other than the Borrower) and all other lenders becoming parties hereto
pursuant to Section 11.16 hereof.
"Letters of Credit" is defined in Section 1.3 hereof.
"Level I Status" means, for any Margin Determination Date, that as of
the close of the most recently completed fiscal quarter with reference to which
such Margin Determination Date was set, the Cash Flow Leverage Ratio is less
than 1.50 to 1.
"Level II Status" means, for any Margin Determination Date, that as
of the close of the most recently completed fiscal quarter with reference to
which such Margin Determination Date was set, the Cash Flow Leverage Ratio is
greater than or equal to 1.50 to 1 but less than 2.00 to 1.
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"Level III Status" means, for any Margin Determination Date, that as
of the close of the most recently completed fiscal quarter with reference to
which such Margin Determination Date was set, the Cash Flow Leverage Ratio is
greater than or equal to 2.00 to 1 but less than 3.00 to 1.
"Level IV Status" means, for any Margin Determination Date, that as
of the close of the most recently completed fiscal quarter with reference to
which such Margin Determination Date was set, the Cash Flow Leverage Ratio is
greater than or equal to 3.00 to 1 but less than 3.50 to 1.
"Level V Status" means, for any Margin Determination Date, that as of
the close of the most recently completed fiscal quarter with reference to which
such Margin Determination Date was set, the Cash Flow Leverage Ratio is greater
than or equal to 3.5 to 1.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in U.S. Dollars for a period equal to such
Interest Period, which appears on the Telerate Page 3750 as of 11:00 a.m.
(London, England time) on the day two (2) Business Days before the commencement
of such Interest Period.
"LIBOR Portions" is defined in Section 2.1(a) hereof.
"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, capital lease or other title
retention arrangement.
"Loan Documents" means this Agreement, the Notes, the Applications,
the L/C Documents, the Guaranties and the Collateral Documents.
"Loans" means and includes Revolving Loans, the Term Loans and the
Swing Loans.
"Material Plan" is defined in Section 9.1(h) hereof.
"Mid-Central" means Mid-Central Plastics, Inc., an Iowa corporation.
"Mid-Central Acquisition" means the acquisition by the Borrower of
Mid-Central pursuant to the Mid-Central Purchase Agreement.
"Mid-Central Purchase Agreement" means that certain Stock Purchase
Agreement dated as of April 27, 1998 by and among the Borrower and shareholders
of Mid-Central, all exhibits,
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schedules, and attachments thereto, and all instruments and documents to be
executed and delivered therewith.
"▇▇▇▇▇▇ South Carolina" means ▇▇▇▇▇▇ Metalcraft Co. of South
Carolina, a South Carolina corporation.
"Notes" means and includes the Revolving Credit Notes, the Swing Line
Note and the Term Notes. When used with reference to the Notes, the term "class"
of Notes refers to the status of such Notes as one of the following four types,
Revolving Credit Notes, Term A Notes, Term B Notes and the Swing Line Note, such
Notes to constitute four separate classes of Notes.
"Obligations" means all obligations of the Borrower to pay the
principal and interest on the Loans, all Reimbursement Obligations, all fees and
charges payable hereunder, and all other payment obligations of the Borrower
arising under or in relation to any Loan Document, in each case whether now
existing or hereafter arising, due or to become due, direct or indirect,
absolute or contingent, and howsoever evidenced, held or acquired.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Percentages" means, for each Lender, such Lender's Revolver
Percentage, Term A Percentage and Term B Percentage, unless the context in which
such term is used shall otherwise require.
"Permitted Acquisitions" means the Acquisitions permitted pursuant to
Section 8.17 hereof.
"Permitted Redemptions" is defined in Section 8.15 hereof.
"Person" means an individual, partnership, corporation, association,
trust, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
that either (i) is maintained by a member of the Controlled Group for employees
of a member of the Controlled Group, (ii) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which a member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions, or (iii) under which a member of the
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Controlled Group has 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 a contributing
sponsor under Section 4064 of ERISA.
"Portion" is defined in Section 2.1(a) hereof.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Reimbursement Obligation" is defined in Section 1.3(c) hereof.
"Required Lenders" means, as of the date of determination thereof,
any two (2) or more Lenders holding (including through participation interests)
at least 66-2/3% in aggregate principal amount of the Loans, L/C Obligations and
Unused Revolving Credit Commitments outstanding hereunder.
"Restricted Payments" is defined in Section 8.16 hereof.
"Revolver Percentage" means, for each Lender, the percentage of the
Revolving Credit Commitments represented by such Lender's Revolving Credit
Commitment or, if the Revolving Credit Commitments have been terminated, the
percentage held by such Lender (including through participation interests in L/C
Obligations) of the aggregate principal amount of all outstanding Revolving
Loans and L/C Obligations.
"Revolving Credit" is defined in the introductory paragraph hereof.
"Revolving Credit Commitments" means the aggregate amount of the
commitments of the Lenders to extend credit under the Revolving Credit, as such
amount may be reduced pursuant hereto. The Revolving Credit Commitments are
$35,000,000 as of the date hereof.
"Revolving Credit Notes" is defined in Section 1.1 hereof.
"Revolving Loans" is defined in Section 1.1 hereof.
"SMP" means SMP Steel Corporation, a South Carolina corporation.
"SMP Acquisition" means the acquisition by ▇▇▇▇▇▇ South Carolina of
the operating assets of SMP pursuant to the SMP Purchase Agreement.
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"SMP Purchase Agreement" means that certain Asset Purchase Agreement
dated as of May 19, 1998 by and among ▇▇▇▇▇▇ South Carolina, SMP and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, a North Carolina resident, all exhibits, schedules, and attachments
thereto, and all instruments and documents to be executed and delivered
therewith.
"Swing Line" is defined in the introductory paragraph hereof.
"Swing Line Commitment" means $5,000,000, as reduced pursuant to the
terms hereof.
"Swing Line Note" is defined in Section 1.6(a) hereof.
"Swing Loans" is defined in Section 1.6(a) hereof.
"Subordinated Debt" means (x) the currently outstanding Indebtedness
of the Borrower evidenced by those two Non-Negotiable Promissory Notes
(subordinated) each dated as of April 8, 1998, one payable to the order of
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. in the face principal amount of $2,474,000 and the second
payable to the order of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in the face principal amount of
$1,176,000 and (y) any other indebtedness for borrowed money subordinated in
right of payment to the prior payment of the Obligations by written provisions
acceptable to the Agent and Required Lenders in form and substance and otherwise
pursuant to documentation, in an amount, and containing interest rates, payment
terms, maturities, amortization schedules, covenants, defaults, remedies and
other material terms in form and substance satisfactory to the Agent and
Required Lenders.
"Subsidiary" means any corporation or other Person more than 50% of
the outstanding ordinary voting shares or other equity interests of which is at
the time directly or indirectly owned by the Borrower, by one or more of its
Subsidiaries, or by the Borrower and one or more of such Subsidiaries.
"Telerate Page 3750" means the display designated as "Page 3750" on
the Telerate Service (or such other page as may replace Page 3750 on that
service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar deposits).
"Term A Percentage" means, for each Lender, the percentage held by
such Lender of the aggregate principal amount of the outstanding Term A Loan.
"Term B Percentage" means, for each Lender, the percentage held by
such Lender of the aggregate principal amount of the outstanding Term B Loan.
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"Term Credit" is defined in the introductory paragraph hereof.
"Term Credit Commitments" means the Term A Loan Commitments and the
Term B Loan Commitments. The Term Credit Commitments are $55,000,000 as of the
date hereof.
"Term A Loan" is defined in Section 1.2(a) hereof.
"Term A Loan Commitments" means the commitments of the Lenders to
make Term A Loan in the amounts set forth opposite their signature hereto under
the headings "Term A Loan" and opposite their signatures on Assignment
Agreements delivered pursuant to Section 12.15 hereof under the heading "Term A
Loan", as such amount may be reduced pursuant hereto. The Term A Loan
Commitments are $25,000,000 as of the date hereof.
"Term Loans" means Term A Loan and Term B Loan.
"Term B Loan " is defined in Section 1.2(b) hereof.
"Term B Loan Commitments" means the commitments of the Lenders to
make Term B Loan in the amounts set forth opposite their signature hereto under
the headings "Term B Loan" and opposite their signatures on Assignment
Agreements delivered pursuant to Section 12.15 hereof under the heading "Term B
Loan", as such amount may be reduced pursuant hereto. The Term B Loan
Commitments are $30,000,000 as of the date hereof.
"Term A Note" is defined in Section 1.2(a) hereof.
"Term B Note" is defined in Section 1.2(b) hereof.
"Termination Date" means (x) May 31, 2003, or (y) if earlier, such
earlier date on which the Revolving Credit Commitments are terminated in whole
pursuant to Sections 3.4, 9.2 or 9.3 hereof, or (z) if later, such later date to
which the Revolving Credit Commitments are extended pursuant to Section 11.14
hereof.
"Term Notes" means Term A Notes and Term B Notes.
"Total Funded Debt" means, at any time the same is to be determined,
the aggregate of all Indebtedness of the Borrower and its Subsidiaries at such
time, plus all Indebtedness of any other Person which is directly or indirectly
guaranteed by the Borrower or any of its Subsidiaries or which the Company of
any of its Subsidiaries has agreed (contingently or otherwise) to purchase or
otherwise acquire or in respect of which the Borrower or any of its Subsidiaries
has otherwise assured a creditor against loss.
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"Unfunded Vested Liabilities" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"Unused Revolving Credit Commitments" means, at any time, the
difference between the Revolving Credit Commitments then in effect and the
aggregate outstanding principal amount of Revolving Loans, Swing Loans and L/C
Obligations.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"Wholly Owned Subsidiary" means a Subsidiary of the Borrower all of
the issued and outstanding shares of capital stock (other than directors'
qualifying shares as required by law) or other equity interests are owned by the
Borrower and/or one or more Wholly Owned Subsidiaries within the meaning of this
definition.
Section 5.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. All
references to time of day herein are references to Chicago, Illinois time unless
otherwise specifically provided. 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
purposes of this Agreement, it shall be done in accordance with GAAP except
where such principles are inconsistent with the specific provisions of this
Agreement.
Section 5.3. Change in Accounting Principles. If, after the date of
this Agreement, there shall occur any change in generally accepted accounting
principles from those used in the preparation of the financial statements
referred to in Section 6.4 hereof and such change shall result in a change in
the method of calculation of any financial covenant, standard or term found in
this Agreement, either the Borrower or the Required Lenders may by notice to the
Lenders and the Borrower, respectively, require that the Lenders and the
Borrower negotiate in good faith to amend such covenant, standard and term so as
equitably to reflect such change in accounting principles, with the desired
result being that the criteria for evaluating the financial condition of the
Borrower and its Subsidiaries shall be the same as if such change had not been
made. No delay by the Borrower or the Required Lenders in requiring such
negotiation shall limit their right to so require such a negotiation at any time
after such a change in accounting principles. Without limiting the generality of
the foregoing, the Borrower shall neither be deemed to be in compliance with any
financial covenant hereunder nor out of compliance with any financial covenant
hereunder if such state of compliance or noncompliance, as the case may be,
would not exist but for the occurrence of a change in accounting principles
after the date hereof.
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SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Lenders as follows:
Section 6.1. Organization and Qualification. The Borrower is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Georgia, and has full and adequate corporate power to own its
Property and carry on its business as now conducted. The Borrower is duly
licensed or qualified and in good standing in each jurisdiction in which the
nature of the business conducted by it or the nature of the Property owned or
leased by it requires such licensing or qualifying unless and to the extent that
the failure to be so licensed or qualified or to be in such good standing would
not have any material adverse effect on the financial condition, Properties,
business, or operations of the Borrower or in its ability to perform or the
Agent's ability to enforce performance of the Borrower's obligations under the
Loan Documents. The Borrower has full right and authority to enter into this
Agreement, to obtain the credit herein provided for, to issue its Notes in
evidence of the borrowings herein provided for, to execute and deliver each Loan
Document delivered by it, and to perform each and all of the matters and things
therein provided for; and the Loan Documents do not, nor does the performance or
observance by the Borrower of any of the matters and things therein provided
for, contravene or constitute a default under any provision of law or any
judgment, injunction, order or decree binding upon the Borrower or any charter
or by-law provision of the Borrower or any covenant, indenture or agreement of
or affecting the Borrower or any of its respective Properties, or result in the
creation or imposition of any Lien on any Property of the Borrower.
Section 6.2. Subsidiaries. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and carry on its business as now conducted, and is duly
licensed or qualified and in good standing in each jurisdiction in which the
nature of the business conducted by it or the nature of the Property owned or
leased by it requires such licensing or qualifying unless and to the extent that
the failure to be so licensed or qualified or to be in such good standing would
not have any material adverse effect on the financial condition, Properties,
business or operations of the Borrower and its Subsidiaries taken as a whole or
in its ability to perform or the Agent's ability to enforce performance of the
Borrower's obligations under the Loan Documents. Each Subsidiary has full right,
power and authority to execute and deliver each Loan Document delivered by it
and to observe and perform each and all of the matters and things therein
provided for, and the Loan Documents do not, nor will the performance or
observance by any Subsidiary of any of the matters and things therein provided
for, contravene any provision of law or any charter or by-law provision of any
Subsidiary or any covenant, indenture or agreement of or affecting the Borrower
or any Subsidiary or any of their respective Properties or require any
governmental approval or consent. Schedule 6.2 hereto identifies each
Subsidiary, the jurisdiction of its incorporation or
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organization, as the case may be, the percentage of issued and outstanding
shares of each class of its capital stock or other equity interests owned by the
Borrower and the Subsidiaries and, if such percentage is not 100% (excluding
directors' qualifying shares as required by law), a description of each class of
its authorized capital stock and other equity interests and the number of shares
of each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 6.2 as owned by the Borrower or a
Subsidiary are owned, beneficially and of record, by the Borrower or such
Subsidiary free and clear of all Liens. There are no outstanding commitments or
other obligations of any Subsidiary to issue, and no options, warrants or other
rights of any Person to acquire, any shares of any class of capital stock or
other equity interests of any Subsidiary.
Section 6.3. Margin Stock. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of any Loan or Letter of Credit issued hereunder will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock.
Section 6.4. Financial Reports. The consolidated balance sheet of the
Borrower and its Subsidiaries as at June 30, 1997 and the related consolidated
statements of income, retained earnings and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, and accompanying notes thereto,
which financial statements are accompanied by the audit report of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ L.L.C., independent public accountants, and the unaudited interim
consolidated balance sheet of the Borrower and its Subsidiaries as at March 31,
1998, and the related consolidated statements of income, retained earnings and
cash flows of the Borrower and its Subsidiaries for the three (3) months then
ended, heretofore furnished to the Lenders, fairly present the consolidated
financial condition of the Borrower and its Subsidiaries as at said dates and
the consolidated results of their operations and cash flows for the periods then
ended in conformity with GAAP applied on a consistent basis. Neither the
Borrower nor any of its respective Subsidiaries has contingent liabilities which
are material to it other than as indicated on such financial statements or, with
respect to future periods, on the financial statements furnished pursuant to
Section 8.5 hereof. Since March 31, 1998, or if later, the date as of which were
prepared the most recent financial statements for the Borrower furnished
pursuant to Section 8.5(a) or (b) hereof, there has been no material adverse
change in the condition (financial or otherwise) or business prospects of the
Borrower and its Subsidiaries taken as a whole.
Section 6.5. Full Disclosure. The statements and information
furnished to the Agent and the Lenders in connection with the negotiation of
this Agreement and the commitments by the Lenders to provide all or part of the
financing contemplated hereby do not contain any untrue
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statements of a material fact or omit a material fact necessary to make the
material statements contained therein or herein not misleading, the Lenders
acknowledging that as to any projections furnished to any Lender and the
Borrower only represent that the same were prepared on the basis of information
and estimates the Borrower believed to be reasonable.
Section 6.6. Good Title. The Borrower and its respective
Subsidiaries have good and defensible title to their respective material assets
as reflected on the most recent consolidated balance sheet of the Borrower and
its Subsidiaries furnished to the Lenders (except for sales of assets by the
Borrower and such Subsidiaries in the ordinary course of their respective
businesses), subject to no Liens other than such thereof as are permitted by
Section 8.12 hereof.
Section 6.7. Litigation and Other Controversies. There is no
litigation or governmental proceeding or labor controversy pending, nor to the
knowledge of the Borrower threatened, against the Borrower or any of its
Subsidiaries which if adversely determined would result in any material adverse
change in the financial condition, Properties, business or operations of the
Borrower and its Subsidiaries taken as a whole.
Section 6.8. Taxes. All tax returns with respect to any income tax
or other material tax required to be filed by the Borrower or any Subsidiary in
any jurisdiction have, in fact, been filed, and all taxes, assessments, fees and
other governmental charges upon the Borrower or any Subsidiary or upon any of
their respective Properties, income or franchises, which are shown to be due and
payable in such returns, have been paid. The Borrower does not know of any
proposed additional tax assessment against the Borrower or any Subsidiary which
if paid (taking into consideration any cash segregated for such purpose) would
result in any material adverse change in the financial condition, Properties,
business or operations of the Borrower and its Subsidiaries taken as a whole.
Adequate provisions in accordance with GAAP for taxes on the books of the
Borrower and each Subsidiary have been made, or (to the extent such provisions
have not been made) adequate cash reserves for such taxes have been segregated,
in each case for all open years, and for its current fiscal period.
Section 6.9. Approvals. No authorization, consent, license,
exemption, filing or registration with any court or governmental department,
agency or instrumentality, nor any approval or consent of the stockholders of
the Borrower or any other Person, is or will be necessary to the valid
execution, delivery or performance by the Borrower of this Agreement, the
Applications or the Notes.
Section 6.10. Affiliate Transactions. Neither the Borrower nor any
of its Subsidiaries is a party to any contracts or agreements with any of its
Affiliates (other than with Wholly Owned Subsidiaries) on terms and conditions
which are less favorable to the Borrower or such
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Subsidiary than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other.
Section 6.11. Investment Company; Public Utility Holding Company.
Neither the Borrower nor any of its Subsidiaries is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "public utility holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 6.12. ERISA. The Borrower and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA. Neither the Borrower nor any Subsidiary
has any contingent liabilities with respect to any post-retirement benefits
under a Welfare Plan, other than liability for continuation coverage described
in article 6 of Title I of ERISA.
Section 6.13. Compliance with Laws. The Borrower and its Subsidiaries
are in compliance with the requirements of all federal, state and local laws,
rules and regulations applicable to or pertaining to the Properties or business
operations of the Borrower or any such Subsidiary (including, without
limitation, the Occupational Safety and Health Act of 1970, the Americans with
Disabilities Act of 1990, and laws and regulations establishing quality criteria
and standards for air, water, land and toxic or hazardous wastes or substances),
non-compliance with which would reasonably be expected to have a material
adverse effect on the financial condition, Properties, business or operations of
the Borrower and its Subsidiaries taken as a whole. Neither the Borrower nor any
of its Subsidiaries has received notice to the effect that its operations are
not in compliance with any of the requirements of applicable federal, state or
local environmental, health and safety statutes and regulations or are the
subject of any governmental investigation evaluating whether any remedial action
is needed to respond to a release of any toxic or hazardous waste or substance
into the environment, which non-compliance or remedial action would reasonably
be expected to have a material adverse effect on the financial condition,
Properties, business or operations of the Borrower and its Subsidiaries taken as
a whole.
Section 6.14. Other Agreements. Neither the Borrower nor any of its
Subsidiaries is in default under the terms of any covenant, indenture or
agreement of or affecting the Borrower or any such Subsidiary or any of their
Properties, which default would have a material adverse effect on the financial
condition, Properties, business or operations of the Borrower and its
Subsidiaries taken as a whole.
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Section 6.15. Mid-Central and SMP Acquisitions. (a) Mid-Central. The
Borrower has heretofore delivered to the Agent a true and correct copy of the
Mid-Central Purchase Agreement and, except to the extent consented to in writing
by the Agent, the Mid-Central Purchase Agreement has not been amended or
modified in any material respect and no condition to the effectiveness thereof
or the obligations of the Borrower thereunder has been waived. The Borrower and,
to the best of the Borrower's knowledge, the shareholders of Mid-Central have
all necessary right, power, and authority to consummate the transactions
contemplated by the Mid-Central Purchase Agreement and to perform all of their
obligations thereunder. The Mid-Central Purchase Agreement has been duly
authorized, executed, and delivered by the Borrower and, to the best of the
Borrower's knowledge, the shareholders of Mid-Central, and the Mid-Central
Purchase Agreement constitutes the valid and binding obligation of the Borrower
and to the best of the Borrower's knowledge, such shareholders, enforceable
against each of them in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and the Mid-Central Purchase Agreement does
not, nor does the observance or performance by the Borrower or, to the best of
the Borrower's knowledge, the shareholders of Mid-Central of any of the matters
and things therein provided for, contravene or constitute a default under any
provision of law or any judgment, injunction, order, or decree binding upon such
Person or any provision of the charter, articles of incorporation, or by-laws of
such Person or any covenant, indenture, or agreement of or affecting such Person
or any of its Property, or result in the creation or imposition of any Lien on
any such Person's Property. No authorization, consent, license, or exemption
from, or filing or registration with, any court or governmental department,
agency, or instrumentality, nor any approval or consent of any other Person, is
or will be necessary to the valid execution, delivery, or performance by the
Borrower, to the best of the Borrower's knowledge, such shareholders of the
Mid-Central Purchase Agreement or of any other instrument or document executed
and delivered in connection therewith, except for such thereof that have
heretofore been obtained and remain in full force and effect. Neither the
Borrower nor, to the best of the Borrower's knowledge, any shareholder of the
Mid-Central are in default in any of their respective obligations under the
Mid-Central Purchase Agreement.
(b) SMP Acquisition. ▇▇▇▇▇▇ Metalcraft Co. of South Carolina ("Morton
South Carolina") has heretofore delivered to the Agent a true and correct copy
of the SMP Purchase Agreement and, except to the extent consented to in writing
by the Agent, the SMP Purchase Agreement has not been amended or modified in any
material respect and no condition to the effectiveness thereof or the
obligations of ▇▇▇▇▇▇ South Carolina thereunder has been waived. ▇▇▇▇▇▇ South
Carolina and, to the best of ▇▇▇▇▇▇ South Carolina's knowledge, the Acquiree has
all necessary right, power, and authority to consummate the transactions
contemplated by the SMP Purchase Agreement and to perform all of their
obligations thereunder. The SMP Purchase Agreement has been duly authorized,
executed, and delivered by ▇▇▇▇▇▇ South Carolina and, to
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the best of ▇▇▇▇▇▇ South Carolina's knowledge, the Acquiree and the SMP Purchase
Agreement constitutes the valid and binding obligation of ▇▇▇▇▇▇ South Carolina
and to the best of ▇▇▇▇▇▇ South Carolina's knowledge, the Acquiree, enforceable
against each of them in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and the SMP Purchase Agreement does not, nor
does the observance or performance by ▇▇▇▇▇▇ South Carolina or, to the best of
▇▇▇▇▇▇ South Carolina's knowledge, the Acquiree of any of the matters and things
therein provided for, contravene or constitute a default under any provision of
law or any judgment, injunction, order, or decree binding upon such Person or
any provision of the charter, articles of incorporation, or by-laws of such
Person or any covenant, indenture, or agreement of or affecting such Person or
any of its Property, or result in the creation or imposition of any Lien on any
such Person's Property. No authorization, consent, license, or exemption from,
or filing or registration with, any court or governmental department, agency, or
instrumentality, nor any approval or consent of any other Person, is or will be
necessary to the valid execution, delivery, or performance by ▇▇▇▇▇▇ South
Carolina, to the best of ▇▇▇▇▇▇ South Carolina's knowledge, the Acquiree of the
SMP Purchase Agreement or of any other instrument or document executed and
delivered in connection therewith, except for such thereof that have heretofore
been obtained and remain in full force and effect. Neither ▇▇▇▇▇▇ South Carolina
nor, to the best of ▇▇▇▇▇▇ South Carolina's knowledge, any Acquiree are in
default in any of their respective obligations under the SMP Purchase Agreement.
Section 6.16. Year 2000 Compliance. The Borrower and its Subsidiaries
are conducting a comprehensive review and assessment of its computer
applications, and have made inquiry of their material suppliers, vendors and
customers, with respect to any defect in computer software, data bases,
hardware, controls and peripherals related to the occurrence of the year 2000 or
the use of any date after December 31, 1999, in connection therewith. Based on
the foregoing review, assessment and inquiry, the Borrower believes that no such
defect could reasonably be expected to have a material adverse effect on the
financial condition, Properties, business or operations of the Borrower and its
Subsidiaries taken as a whole.
Section 6.17. No Default. No Default or Event of Default has occurred
and is continuing.
SECTION 7. CONDITIONS PRECEDENT.
The obligation of the Lenders to make any Loan or of the Agent to
issue any Letter of Credit under this Agreement is subject to the following
conditions precedent:
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Section 7.1. All Advances. As of the time of the making of each Loan
and the issuance of each Letter of Credit (including the initial Loan and the
initial Letter of Credit) hereunder:
(a) each of the representations and warranties set forth in
Section 6 hereof and the Applications shall be true and correct in
all material respects as of such time, except to the extent the same
relate expressly to an earlier date;
(b) the Borrower shall be in compliance with all of the terms
and conditions hereof, and no Default or Event of Default shall have
occurred and be continuing hereunder;
(c) in the case of each Revolving Loan and Letter of Credit,
after giving effect to such extension of credit, the aggregate
principal amount of all Revolving Loans, Swing Loans and L/C
Obligations outstanding under the Revolving Credit shall not exceed
the Revolving Credit Commitments then in effect;
(d) in the case of each Swing Loan, after giving effect to
such extension of credit, the aggregate principal amount of all Swing
Loans shall not exceed the Swing Line Commitment then in effect;
(e) such extension of credit shall not violate any order,
judgment or decree of any court or other authority or any provision
of law or regulation applicable to the Agent or any Lender
(including, without limitation, Regulation U of the Board of
Governors of the Federal Reserve System) as then in effect; and
(f) in the case of the issuance of any Letter of Credit, the
Agent shall have received a properly completed Application therefor
and, in the case of an extension or increase in the amount of the
Letter of Credit, the Agent shall have received a written request
therefor, in a form acceptable to the Agent, with such Application or
written request, in each case to be accompanied by the fees required
by this Agreement.
Each Borrower's request for any Loan or for any Letter of Credit,
shall constitute its warranty to the Agent and the Lenders on the date such
credit is to be extended as to the facts specified in paragraphs (a) and (b) of
this Section.
Section 7.2. Initial Advance. Prior to the making of the initial Loan
or the issuance of the initial Letter of Credit hereunder, the following
conditions precedent shall also have been satisfied:
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(a) the Agent shall have received the following for the
account of the Lenders (each to be properly executed and completed) and
the same shall have been approved as to form and substance by the
Lenders:
(i) the Notes;
(ii) the Guaranties;
(iii) the Collateral Documents and the UCC financing
statements requested by the Agent in connection therewith;
(iv) a mortgagee's policy of title insurance (or a
binding commitment therefor) for each Mortgage (the "Initial
Mortgages") on the following real estate (the "Initial
Mortgaged Real Estate") insuring the Lien of such Mortgage in
the amount set forth below to be a valid first Lien subject
to no defects or objections which are unacceptable to the
Agent, together with endorsements (including, without
limitation, a revolving credit endorsement and a
comprehensive endorsement) as the Agent may require;
PROPERTY TITLE INSURANCE COVERAGE
Illinois $8,250,000
Iowa
(a) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc. $2,250,000
(b) Mid-Central $2,200,000
North Carolina $4,050,000
(v) an ALTA survey prepared by a licensed surveyor
on the Initial Mortgaged Real Estate in Illinois;
(vi) a certification from a licensed surveyor or
independent firm acceptable to the Agent as to whether or not
any portion of the Initial Mortgaged Real Estate is in a
designated flood hazard area;
(vii) a report of an independent firm of
environmental engineers acceptable to the Agent concerning
the environmental hazards and matters with respect to the
Initial Mortgaged Real Estate;
(viii) certified copies of resolutions of the Board
of Directors of the Borrower and each Guarantor authorizing
the execution and delivery of the Loan
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Documents delivered by them and indicating the authorized
signers of such Loan Documents;
(ix) copies of the articles of incorporation and
by-laws of the Borrower and each Guarantor certified as true
and correct by the Secretary or other appropriate officer of
the Borrower or such Guarantor, as the case may be;
(x) a good standing certificate for the Borrower and
each Guarantor, dated as of a date no earlier than thirty
days prior to the date hereof, from the appropriate
governmental office in the jurisdiction of its incorporation;
and
(xi) an incumbency certificate containing the name,
title and genuine signatures of the Borrower's Authorized
Representatives; and
(b) the Agent shall have received for the account of and
addressed to the Lenders the favorable written opinion of counsel for
the Borrower and certain Guarantors in the form attached hereto as
Exhibit H;
(c) the Agent shall have received for itself and for the
Lenders the initial fees called for hereby;
(d) the Agent shall have received a Compliance Certificate
showing a computation of the calculation of the Cash Flow Leverage
Ratio as of, and after giving effect to, the initial extension of
credit hereunder, such computation to be in form and substance
reasonably satisfactory to the Agent and otherwise in reasonable
detail;
(e) the Liens granted to the Agent under the Collateral
Documents shall have been perfected in a manner satisfactory to each
Lender and its counsel;
(f) all conditions precedent to the Mid-Central Acquisition
and the SMP Acquisition shall have been satisfied except for the
Lenders' funding of not more than $26,000,000 of the purchase price for
the Mid-Central Acquisition and the SMP Acquisition and the Lenders
shall have received assurances satisfactory to them of the foregoing;
(g) The Agent shall have received and approved as to form and
substance: (i) the annual audit report and the Company financial
statements for Mid-Central for its fiscal year ending December 31,
1997; (ii) an internally prepared balance sheet for the Company and
each Subsidiary (other than Mid-Central) as at March 31, 1998 and an
internally prepared income statement for the quarter then ended; (iii)
the Mid-Central
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Purchase Agreement for the Mid-Central Acquisition; (iv) the SMP
Purchase Agreement for the SMP Acquisition; (v) the due diligence
reports relating to the Mid-Central Acquisition; and (vi) the field
audit by the Agent of Mid-Central relating to the Mid-Central
Acquisition;
(h) the Agent shall have received a payoff and lien release
letter from Banker's Trust Company setting forth, among other things,
the total amount of Indebtedness outstanding to it from Mid-Central
(including any outstanding letters of credit issued for Mid-Central's
account) and containing an undertaking to cause to be delivered to the
Agent each UCC termination statement and any other lien release
instrument necessary to release Banker's Trust Company's Lien on all
Assets on all Property of Mid-Central and its subsidiaries, if any,
which payoff and lien release letter shall be in form and substance
reasonably acceptable to the Agent; and
(i) the Agent shall have received for the account of the
Lenders such other agreements, instruments, documents, certificates and
opinions as the Agent or the Lenders may reasonably request.
References in this Section to Subsidiaries shall be deemed to include
each Acquiree and its subsidiaries prior to, as well as after, consummation of
each of the Mid-Central Acquisition and the SMP Acquisition.
Section 7.3. Initial Loans. The Borrower shall use the proceeds of the
initial Loans to finance the Mid-Central Acquisition and (at the Borrower's
option) the SMP Acquisition and to repay the Existing Bank Loans in full and
terminate the loan agreement under which such credit was extended. The Borrower
hereby irrevocably authorizes and directs the Lenders to so disburse such
proceeds.
Section 7.4. Real Estate Surveys. Not later than 60 days from the date
hereof, the Agent shall have received for the account of the Lenders and shall
have been approved as to form and substance by the Lenders, an ALTA survey
prepared by a licensed surveyor on the Initial Mortgaged Real Estate in ▇▇▇▇▇
Path, South Carolina, Northwood, Iowa, Welcome, North Carolina and West Des
Moines, Iowa. Any failure of the Borrower to satisfy the above conditions
precedent by the deadline also set forth above in this Section 7.4 will
constitute an Event of Default unless such Event of Default shall be waived by
the Required Lenders.
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SECTION 8. COVENANTS.
The Borrower agrees that, so long as any Loans, Letters of Credit or
Commitments are available to or in use by the Borrower hereunder, except to the
extent compliance in any case or cases is waived in writing by the Required
Lenders:
Section 8.1. Maintenance of Business. The Borrower shall, and shall
cause each of its Subsidiaries to, preserve and keep in force and effect its
corporate existence (except to the extent such existence terminates in mergers
and consolidations permitted by Section 8.16 hereof) and all licenses, permits
and franchises necessary to the proper conduct of its business.
Section 8.2. Maintenance of Property. The Borrower will maintain,
preserve and keep those of its Properties material to its business in good
repair, working order and condition (ordinary wear and tear excepted) and will
from time to time make all needful and proper repairs, renewals, replacements,
additions and betterments thereto so that at all times the efficiency thereof
shall be fully preserved and maintained, and will cause each of their respective
Subsidiaries to do so in respect of Property owned or used by it.
Section 8.3. Taxes and Assessments. The Borrower will duly pay and
discharge, and will cause each of its Subsidiaries to duly pay and discharge,
all federal and other material taxes, rates, assessments, fees and governmental
charges upon or against it or its Properties, in each case before the same
become delinquent and before penalties accrue thereon, unless and to the extent
that the same are being contested in good faith and by appropriate proceedings
which prevent enforcement of the matter under contest and adequate reserves are
provided therefor.
Section 8.4. Insurance. The Borrower will insure and keep insured, and
will cause each of its Subsidiaries to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Borrower will insure, and cause each of their respective
Subsidiaries to insure, such other hazards and risks (including employers' and
public liability risks) with other good and responsible insurance companies as
and to the extent usually insured by Persons similarly situated and conducting
similar businesses. The Borrower will upon request of the Agent furnish a
certificate setting forth in summary form the nature and extent of the insurance
maintained pursuant to this Section.
Section 8.5. Financial Reports. The Borrower will, and will cause each
of its Subsidiaries to, maintain a standard system of accounting in accordance
with GAAP, will permit the Agent, each Lender and their representatives to visit
and inspect the properties and assets (including books and records) of the
Borrower and its Subsidiaries at all reasonable times and
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will furnish to the Agent, each Lender and their duly authorized representatives
such information respecting the business and financial condition of the Borrower
and its Subsidiaries as the Agent or such Lender may reasonably request; and
without any request, the Borrower will furnish to the Lenders:
(a) as soon as available, and in any event within 45 days
after the close of each quarterly fiscal period of the Borrower, a copy
of the balance sheet and statements of income, retained earnings and
cash flows of the Borrower and its Subsidiaries for such period, all
prepared on a consolidated basis and in reasonable detail showing in
comparative form the figures for the corresponding date and period in
the previous fiscal year, prepared by the Borrower in accordance with
GAAP (subject to normal year-end audit adjustments and the absence of
notes) and certified to by the chief financial officer of the Borrower;
(b) as soon as available, and in any event within 90 days
after the close of each fiscal year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its Subsidiaries as of
the close of such fiscal year and the consolidated statements of
income, retained earnings and cash flows of the Borrower and its
Subsidiaries for such period, and accompanying notes thereto, all in
reasonable detail showing in comparative form the figures for the
previous fiscal year, accompanied by an unqualified opinion thereon of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ L.L.C. or another firm of independent public
accountants of recognized national standing, selected by the Borrower
and satisfactory to the Agent, to the effect that the financial
statements have been prepared in accordance with GAAP and present
fairly in accordance with GAAP the consolidated financial condition of
the Borrower and its Subsidiaries as of the close of such fiscal year
and the results of their operations and cash flows for the fiscal year
then ended and that an examination of such accounts in connection with
such financial statements has been made in accordance with generally
accepted auditing standards and, accordingly, such examination included
such tests of the accounting records and such other auditing procedures
as were considered necessary in the circumstances;
(c) if any Lender so requests, the Borrower, not later than
10 days after receipt thereof, a copy of any management letters on
internal accounting controls of the Borrower or any Subsidiary prepared
by its independent public accountants;
(d) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports the Borrower
sends to its shareholders, and copies of all other regular, periodic
and special reports (other than SEC Form 3, Form 4, Form 5, Form S-8 or
similar administrative reports) and all registration statements the
Borrower files
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with the Securities and Exchange Commission or any successor thereto,
or with any national securities exchanges; and
(e) promptly after knowledge thereof shall have come to the
attention of any responsible officer of the Borrower, written notice of
any threatened or pending litigation or governmental proceeding or
labor controversy against the Borrower or any Subsidiary which, if
adversely determined, would have a material adverse effect on the
financial condition, Properties, business or operations of the Borrower
and its Subsidiaries taken as a whole or of the occurrence of any
Default or Event of Default hereunder.
Each of the financial statements furnished to the Lenders pursuant to
clauses (a) and (b) of this Section shall be accompanied by a written
certificate in the form attached hereto as Exhibit E signed by the chief
financial officer of the Borrower to the effect that to the best of the chief
financial officer's knowledge and belief no Default or Event of Default is
continuing as of the close of the period covered by such statements or, if any
such Default or Event of Default is continuing as of the close of such period,
setting forth a description of such Default or Event of Default and specifying
the action, if any, taken by the Borrower to remedy the same. Such certificate
shall also set forth the calculations supporting such statements in respect of
Sections 8.6, 8.7, 8.8, 8.9 and 8.10 of this Agreement.
The Borrower will, and will cause each Subsidiary to, permit the Agent,
the Lenders and their duly authorized representatives to visit and inspect any
of the Properties of the Borrower and its Subsidiaries, to examine all of their
books of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants (and by
this provision the Borrower authorizes such accountants to discuss with the
Lenders (and such Persons as any Lender may designate) the finances and affairs
of the Borrower and its Subsidiaries) all at such reasonable times and as often
as may be reasonably requested.
Section 8.6. Interest Coverage Ratio. The Borrower will, as of the last
day of each fiscal quarter of the Borrower, maintain an Interest Coverage Ratio
of not less than (i) 1.75 to 1.0 from the date hereof through and including
September 30, 1999 and (ii) 2.00 to 1.0 at all times thereafter.
Section 8.7. Cash Flow Leverage Ratio. The Borrower will at all times
maintain its Cash Flow Leverage Ratio at not more than (i) 4.00 to 1.0 from the
date hereof through and including December 30, 1999 and (ii) 3.50 to 1.0 at all
times thereafter.
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Section 8.8. EBITDA. The Borrower will, maintain EBITDA for the fiscal
quarter ending on or about the date specified below in an amount not less than
the sum indicated to the right of such date below:
FOR FISCAL QUARTER ENDING EBITDA SHALL NOT BE LESS THAN:
September 30, 1998 $3,750,000
December 31, 1998 $4,500,000
March 31, 1999 $5,250,000
Section 8.9. Fixed Charge Coverage Ratio. The Borrower will, as of the
last day of each fiscal quarter of the Borrower (commencing with the fiscal
quarter of the Borrower ending on or about June 30, 1999), maintain the Fixed
Charge Coverage Ratio at not less than (i) 1.05 to 1.0 through and including
▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) 1.15 to 1.0 from December 31, 1999 through and including
December 30, 2000 and (iii) 1.25 to 1.0 at all times thereafter.
Section 8.10. Capital Expenditures. The Borrower will not, nor will it
permit any Subsidiary to, expend during any fiscal year, or (without
duplication) become obligated to expend during such fiscal year, in each case
for Capital Expenditures an aggregate amount in excess of $12,000,000 for the
Borrower and its Subsidiaries taken together.
Section 8.11. Indebtedness. The Borrower will not, nor will it permit
any of its Subsidiaries to, issue, incur, assume, create or have outstanding any
Indebtedness; provided, however, that the foregoing provisions shall not
restrict nor operate to prevent:
(a) the Obligations;
(b) purchase money indebtedness and Capitalized Lease
Obligations secured by Liens permitted by Section 8.12(d) hereof in an
aggregate amount which does not exceed $5,000,000 at any one time
outstanding;
(c) intercompany borrowings by and from the Borrower and its
Subsidiaries;
(d) indebtedness secured by Liens permitted by Section 8.12(e)
hereof in an aggregate amount which does not exceed $1,000,000 at any
one time outstanding;
(e) non-compete payments owing by ▇▇▇▇▇▇ to ▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇ ▇▇▇▇▇▇ aggregating not more than $500,000;
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(f) non-compete payments owing to sellers as part of the
consideration due them for the Borrower's Acquisition of ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Inc.;
(g) unsecured Subordinated Debt;
(h) after consummation of the SMP Acquisition, the liability of
▇▇▇▇▇▇ Metalcraft Co. of South Carolina for the currently outstanding
indebtedness of SMP to Little River Electric Cooperative, Inc. ("Little
River") evidenced by that certain Mortgage Note of SMP dated as of
November 22, 1996 payable to the order of Little River in the face
principal amount of $400,000 provided such liability at no time
aggregates in excess of $400,000; and
(i) unsecured indebtedness not otherwise permitted by this
Section 8.11 provided the aggregate amount at any one time outstanding
does not exceed $100,000.
Section 8.12. Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur or permit to exist any Lien of any kind on
any Property owned by the Borrower or any such Subsidiary; provided, however,
that this Section shall not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar
charges, good faith cash deposits in connection with tenders, contracts
or leases to which the Borrower or any of its Subsidiaries is a party
or other cash deposits required to be made in the ordinary course of
business, provided in each case that the obligation is not for borrowed
money and that the obligation secured is not overdue or, if overdue, is
being contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest and adequate reserves have been
established therefor;
(b) mechanics', workmen's, materialmen's, landlords',
carriers', or other similar Liens arising in the ordinary course of
business with respect to obligations which are not overdue or which are
being contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest;
(c) the pledge of assets for the purpose of securing an
appeal, stay or discharge in the course of any legal proceeding,
provided that the aggregate amount of liabilities of the Borrower and
its Subsidiaries secured by a pledge of assets permitted under this
clause, including interest and penalties thereon, if any, shall not be
in excess of $250,000 at any one time outstanding;
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(d) Liens securing indebtedness permitted by Section 8.11(b)
hereof in respect of Property now owned or hereafter acquired by the
Borrower or any of its Subsidiaries (not extending to any other
Property), or Liens on Property so acquired (not extending to any other
Property) existing at the time of acquisition thereof, or renewals,
extensions and refundings of any such Liens (not extending to any other
Property);
(e) any Lien existing on any Property (other than (i) shares
of stock in any Subsidiary, (ii) receivables, inventory and similar
working capital assets and (iii) patents, trademarks and similar
intangibles) prior to the acquisition thereof by the Borrower or any
Subsidiary, provided that such Lien is not created in contemplation of
or in connection with such acquisition;
(f) Liens on the real estate of ▇▇▇▇▇▇ Metalcraft Co. of
South Carolina in ▇▇▇▇▇ Path, Abbeville County, South Carolina and the
buildings and other improvements situated on such real estate securing
the indebtedness permitted by Section 8.11(h) hereof provided such
liens do not in any event after August 31, 1998 encumber any trade
fixtures or similar equipment;
(g) the Liens described on Schedule 8.12 hereof; and
(h) with respect to real property, easements, rights of way,
reservations and other minor defects or irregularities in title which
do not materially impair the use thereof for the purposes for which it
is held by the Borrower or any of its Subsidiaries.
Section 8.13. Investments, Loans, Advances and Guaranties. The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances (other
than for travel advances and other similar cash advances made to employees in
the ordinary course of business) to, any other Person, or be or become liable as
endorser, guarantor, surety or otherwise for any debt, obligation or undertaking
of any other Person, or otherwise agree to provide funds for payment of the
obligations of another, or supply funds thereto or invest therein or otherwise
assure a creditor of another against loss or apply for or become liable to the
issuer of a letter of credit which supports an obligation of another, or
subordinate any claim or demand it may have to the claim or demand of any other
Person; provided, however, that the foregoing provisions shall not apply to nor
operate to prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of
America, provided that any such obligations shall mature within one
year of the date of issuance thereof;
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(b) investments in commercial paper rated at least P-1 by
▇▇▇▇▇'▇ Investors Services, Inc. and at least A-1 by Standard & Poor's
Corporation maturing within 270 days of the date of issuance thereof;
(c) investments in certificates of deposit issued by any
United States commercial bank having capital and surplus of not less
than $100,000,000 which have a maturity of one year or less;
(d) endorsement of items for deposit or collection of
commercial paper received in the ordinary course of business;
(e) intercompany loans and advances by and from the Borrower
and its Subsidiaries;
(f) Permitted Acquisitions; and
(g) the Guaranties.
In determining the amount of investments, loans, advances and
guarantees permitted under this Section, investments shall always be taken at
the original cost thereof (regardless of any subsequent appreciation or
depreciation therein); loans and advances shall be taken at the principal amount
thereof then remaining unpaid; and guarantees shall be taken at the amount of
obligations guaranteed thereby.
Section 8.14. Leases. (a) Sales and Leasebacks. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into any arrangement with
any bank, insurance company or any other lender or investor providing for the
leasing by the Borrower or any such Subsidiary of any Property theretofore owned
by it and which has been or is to be sold or transferred by such owner to such
lender or investor.
(b) Operating Leases. The Borrower shall not, nor shall it
permit any of its Subsidiaries to, acquire the use or possession of any Property
under a lease or similar arrangement, whether or not the Borrower or any of its
Subsidiaries have the express or implied right to acquire title to or purchase
such Property, at any time if, after giving effect thereto, the aggregate amount
of fixed rentals and other consideration payable by the Borrower and its
Subsidiaries under all such leases and similar arrangements would exceed
$7,500,000 during any fiscal year of the Borrower. Capital Leases shall not be
included in computing compliance with this Section to the extent the Borrower's
and its Subsidiaries' liability in respect of the same is permitted by Section
8.11(b) hereof.
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Section 8.15. Dividends and Certain Other Restricted Payments. The
Borrower will not (a) declare or pay any dividends on or make any other
distributions in respect of any class or series of its capital stock or (b)
directly or indirectly purchase, redeem or otherwise acquire or retire any of
its capital stock; provided, however, that the foregoing shall neither apply to
nor operate to prevent the Borrower's expenditure of up to $63,000 in the
aggregate to redeem fractional shares of its common stock resulting from a
previous reverse stock split of the Borrower (the "Permitted Redemptions").
Section 8.16. Mergers, Consolidations and Sales. The Borrower will not,
and will not permit any of its Subsidiaries to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of any operating
unit or division or any rights to any trade name or similar intangible or all or
any substantial part of its Property (except for sales of inventory in the
ordinary course of business), or in any event sell or discount (with or without
recourse) any of its notes or accounts receivable; provided, however, that:
(a) any Subsidiary of the Borrower (including any corporation
which immediately after giving effect to an Acquisition permitted by
Section 8.16 hereof becomes such a Subsidiary, but in any event
excluding the Borrower) may merge or consolidate with or into the
Borrower or any Wholly Owned Subsidiary of the Borrower; provided that
in any such merger or consolidation involving the Borrower, the
Borrower shall be the surviving or continuing corporation, or, in the
case of any other merger or consolidation of a Subsidiary and a Wholly
Owned Subsidiary of the Borrower, such Wholly Owned Subsidiary shall be
the continuing or surviving corporation; and provided, further, that,
in the case of such a merger or consolidation involving a Guarantor,
the net worth of the continuing or surviving corporation shall not be
less than the net worth of such Guarantor immediately prior to such
merger or consolidation;
(b) any Subsidiary may in the ordinary course of its business
sell, lease or otherwise dispose of all or any substantial part of its
equipment to the Borrower or any Wholly Owned Subsidiary of the
Borrower; and
(c) the Borrower may merge with a Wholly Owned Subsidiary
incorporated in Delaware and directly owned by the Borrower solely for
the purpose of changing the Borrower's state of incorporation to
Delaware, with such Wholly Owned Subsidiary surviving such merger,
provided that:
(i) at the time of such merger, no Default or Event
of Default shall occur or be continuing;
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(ii) such Wholly Owned Subsidiary shall have
acknowledged in writing (in form and substance reasonably
satisfactory to the Agent and Required Lenders) its assumption
of all the Borrower's obligations under the Loan Documents to
the same extent, with the same force and effect, as if such
Wholly Owned Subsidiary were originally the Borrower
identified and defined therein;
(iii) the Agent shall have received an opinion of
counsel of the Borrower, and such other assurances that the
Agent or Required Lenders shall reasonably require, to confirm
that such merger has been effected in accordance with all
applicable laws and that the foregoing conditions set forth in
this subsection (c) have been satisfied; and
(iv) such merger shall have no adverse effect on the
financial condition Properties, business or operations the
Borrower or any Subsidiary or on the ability of any Subsidiary
to perform or the Agent's ability to enforce performance of
the obligations of any of them under the Loan Documents.
The term "substantial" as used herein shall mean the sale, transfer, lease or
other disposition in any fiscal year of five percent (5%) or more of the
Properties of the Borrower and its Subsidiaries taken as a whole.
Section 8.17. Acquisitions. Other than the Mid-Central Acquisition and
the SMP Acquisition, the Borrower will not, and will not permit any of its
Subsidiaries to, make or commit to make any Acquisitions; provided, however,
that the Borrower and its Wholly Owned Subsidiaries may make Acquisitions of
assets located primarily in the United States used or useful in a business
similar or related to the business of the Borrower, such Borrower or such
Subsidiary (or Acquisitions of the capital stock of a corporation engaged
primarily in such a business if (a) the corporation's primary operations are in
the United States and (b) immediately after giving effect to such Acquisition,
the corporation so acquired becomes a Subsidiary) if and only if: (i) the
Borrower has, prior to committing to the acquisition, notified the Lenders
thereof and demonstrated to the satisfaction of the Lenders that no Default or
Event of Default shall occur or be continuing at the time of or after giving
effect to the Acquisition in question, (ii) the board of directors or other
governing body of such Person whose Property, or voting stock or other interests
in which, are being so acquired has approved the terms of such Acquisition,
(iii) the Borrower shall have delivered to the Lenders an updated Schedule 6.2
to reflect any new Subsidiary resulting from such Acquisition, (iv) the
aggregate amount expended by the Borrower and its Subsidiaries as consideration
for such Acquisition (and in any event (1) including as such consideration, any
Indebtedness assumed or incurred as a result of such Acquisition, and (2)
excluding as such consideration, any equity securities issued by the Borrower as
consideration for such Acquisition), when taken together with the aggregate
amount expended as consideration
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(including Indebtedness and excluding equity securities as aforesaid) for all
other Acquisitions permitted under this Section 8.17 (other than the Mid-Central
Acquisition, the SMP Acquisition and other Acquisitions consummated prior to the
date hereof) during the then twelve most recently completed calendar months does
not exceed $5,000,000, (v) the Borrower has informed the Lenders of such
Acquisition at least twenty (20) Business Days in advance of its closing and
promptly informed the Lenders of any terms and conditions applicable to the
Acquisition which the Borrower in good faith believe are material, (vi) the
Borrower can demonstrate on a pro forma basis after giving effect to such
Acquisition that (x) the Cash Flow Leverage Ratio (such pro forma calculation of
the Cash Flow Leverage Ratio to be made on the basis of the information
contained in the then most recent Compliance Certificate required to be
submitted to each Lender with the following adjustments: (i) Total Funded Debt
shall include all indebtedness incurred directly or indirectly to finance such
Acquisition and (ii) EBITDA shall be computed as if such Acquisition had
occurred at the commencement of the four-quarter period with reference to which
the Cash Flow Leverage Ratio is being calculated) is less than 3.0 to 1.0 and
(y) the Borrower will continue to comply through the term of this Agreement with
Sections 8.6, 8.7, 8.9 and 8.10 of this Agreement (the Borrower to be liable to
reimburse the Agent and Lenders for their reasonable out-of-pocket costs of
conducting due diligence to verify such demonstration), (vii) at least twenty
(20) Business Days in advance of the closing of such Acquisition, the Borrower
has provided to the Lenders such financial and other information regarding the
Person whose Property or capital stock is being so acquired, including financial
statements, and a description of such Person, as the Agent or any Lender may
reasonably request and (viii) after giving effect to such Acquisition, the
Revolving Loans and L/C Obligations are at least $5,000,000 below the Revolving
Credit Commitments then in effect. Capital Expenditures for Property in
compliance with Section 8.10 hereof shall not be considered Acquisitions subject
to this Section.
Section 8.18. Maintenance of Subsidiaries. The Borrower will not
assign, sell or transfer, or permit any of its Subsidiaries to issue, assign,
sell or transfer, any shares of capital stock of a Subsidiary, provided that the
foregoing shall not operate to prevent the issuance, sale and transfer to any
person of any shares of capital stock of a Subsidiary solely for the purpose of
qualifying, and to the extent legally necessary to qualify, such person as a
director of such Subsidiary.
Section 8.19. Formation of Subsidiaries. In the event any Subsidiary is
formed or acquired after the date hereof, the Borrower shall within thirty (30)
Business Days thereof (x) furnish an update to Schedule 6.2 hereof to reflect
such new Subsidiary and (y) cause such newly-formed or acquired Subsidiary to
execute a Guaranty and execute such Collateral Documents to the extent required
by Section 4 hereof (on terms substantially similar to those executed in
connection with this Agreement) as the Agent may then require granting the Agent
for the benefit of the Lenders a security interest in and lien on the personal
property of such
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Subsidiary as collateral security for the Notes and the other Obligations, as
well as the Hedging Liability, together with documentation (including a legal
opinion) similar to that described in Section 7.2 hereof relating to the
authorization for, execution and delivery of, and validity of such Subsidiary's
obligations as a Guarantor hereunder and otherwise under its Loan Documents in
form and substance satisfactory to the Agent and such other instruments,
documents, certificates and opinions as are required by the Agent in connection
therewith.
Section 8.20. ERISA. The Borrower will, and will cause each of its
Subsidiaries to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed might result
in the imposition of a Lien against any material portion of its Properties. The
Borrower will, and will cause each of its Subsidiaries to, promptly notify the
Lenders of (i) the occurrence of any reportable event (as defined in ERISA) with
respect to a Plan, (ii) receipt of any notice from the PBGC of its intention to
seek termination of any Plan or appointment of a trustee therefor, (iii) its
intention to terminate or withdraw from any Plan, and (iv) the occurrence of any
event with respect to any Plan which would result in the incurrence by the
Borrower or any of its Subsidiaries of any material liability, fine or penalty,
or any material increase in the contingent liability of the Borrower or any such
Subsidiary with respect to any post-retirement Welfare Plan benefit.
Section 8.21. Compliance with Laws. The Borrower will, and will cause
each of its Subsidiaries to, comply in all respects with the requirements of all
federal, state and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to the Properties or business operations of the
Borrower or any such Subsidiary, non-compliance with which could have a material
adverse effect on the financial condition, Properties, business or operations of
the Borrower and its Subsidiaries taken as a whole or would reasonably be
expected to result in a Lien upon any of their Property.
Section 8.22. Burdensome Contracts With Affiliates. The Borrower will
not, and will not permit any of its Subsidiaries to, enter into any contract,
agreement or business arrangement with any of its Affiliates (other than with
Wholly Owned Subsidiaries) on terms and conditions which are less favorable to
the Borrower or such Subsidiary than would be usual and customary in similar
contracts, agreements or business arrangements between Persons not affiliated
with each other.
Section 8.23. Changes in Fiscal Year. Except to change (with notice to
the Lenders) its fiscal year to correspond with the calendar year, neither the
Borrower nor any of its Subsidiaries will change its fiscal year from its
present basis without the prior written consent of the Required Lenders.
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Section 8.24. Change in the Nature of Business. The Borrower will not,
and will not permit any of its Subsidiaries to, engage in any business or
activity if as a result the general nature of the business of the Borrower or
any such Subsidiary would be changed in any material respect from the general
nature of the business engaged in by the Borrower or such Subsidiary on the date
of this Agreement.
Section 8.25. Use of Loan Proceeds. The Borrower will use the Revolving
Credit and Term Loans solely to refinance currently outstanding Indebtedness, to
finance general corporate needs and to finance Permitted Acquisitions.
Section 8.26. Interest Rate Protection. On or before the date hereof,
the Borrower will hedge its interest rate risk on 50% of the principal amount
outstanding on the Term Loans, through the use of one or more interest rate
swaps, interest rate caps, interest rate collars or other recognized interest
rate hedging arrangements for a minimum of three years (collectively, "Hedging
Arrangements"), with all of the foregoing to effectively limit the amount of
interest that the Borrower must pay on notional amounts of not less than such
portion of the Term Loans to not more than a rate acceptable to the Agent in its
discretion for a period ending no earlier than June 1, 2001 and to be with the
Lenders, their respective Affiliates or with other parties reasonably acceptable
to the Required Lenders. If the Borrower enters into any Hedging Arrangements
with any Lender, the Borrower's obligations to such Lender in connection with
such Hedging Arrangements do not constitute usage of the Commitments of such
Lender.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.
Section 9.1. Any one or more of the following shall constitute an Event
of Default hereunder:
(a) default in the payment when due of all or any part of the
principal of any Note (whether at the stated maturity thereof or at any
other time provided for in this Agreement) or default in the
reimbursement when due of amounts drawn under a Letter of Credit; or
(b) default for five (5) days or more in the payment when due
of all or any part of interest on any Note (whether at the stated
maturity thereof or at any other time provided for in this Agreement)
or of any fee or other amount payable by the Borrower hereunder or
under any Application; or
(c) default in the observance or performance of any covenant
set forth in Sections 8.6, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.13, 8.15,
8.16, 8.17, 8.18 or 8.25 hereof; or
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(d) default in the observance or performance of any covenant
set forth in Section 8.5 hereof which is not remedied within ten (10)
days after written notice thereof to any Borrower by the Agent or any
Lender; or
(e) default in the observance or performance of any other
provision hereof or of any Application which is not remedied within
thirty (30) days after written notice thereof to any Borrower by the
Agent or any Lender; or
(f) any representation or warranty made by the Borrower
herein or in any Application, or in any statement or certificate
furnished by it pursuant hereto or thereto, or in connection with any
Loan made or Letter of Credit issued hereunder, proves untrue in any
material respect as of the date of the issuance or making thereof; or
(g) any Guaranty shall for any reason not be or shall cease
to be in full force and effect, or any Guarantor shall purport to
disavow, revoke, repudiate or terminate its Guaranty; or
(h) default shall occur under any evidence of Indebtedness
aggregating $1,000,000 or more issued, assumed or guaranteed by the
Borrower or any Subsidiary or under any indenture, agreement or other
instrument under which the same may be issued, and such default shall
continue for a period of time sufficient to permit the acceleration of
the maturity of any such Indebtedness (whether or not such maturity is
in fact accelerated) or any such Indebtedness shall not be paid when
due (whether by lapse of time, acceleration or otherwise); or
(i) any judgment or judgments, writ or writs, or warrant or
warrants of attachment, or any similar process or processes in an
aggregate amount in excess of $250,000 shall be entered or filed
against the Borrower or any of its Subsidiaries or against any of their
Property and which remains unvacated, unbonded, unstayed or unsatisfied
for a period of thirty (30) days; or
(j) the Borrower or any member of its Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess
$250,000 which it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a Plan
or Plans having aggregate Unfunded Vested Liabilities in excess of
$250,000 (collectively, a "Material Plan") shall be filed under Title
IV of ERISA by the Borrower or any other member of its Controlled
Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any
Material Plan or a proceeding shall be instituted by a fiduciary of any
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Material Plan against the Borrower or any member of its Controlled
Group to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within thirty (30) days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be terminated;
or
(k) the Borrower or any Subsidiary makes any payment or other
distribution on account of the principal of or interest on any
indebtedness which payment or other distribution is prohibited under
the terms of any instrument subordinating such indebtedness to the
Notes or the Borrower's other obligations hereunder;
(l) a Change of Control shall occur; or
(m) the Borrower or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent
to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part
of its Property, (v) institute any proceeding seeking to have entered
against it an order for relief under the United States Bankruptcy Code,
as amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, or (vi) fail to contest in good faith any appointment or
proceeding described in Section 9.1(m) hereof; or
(n) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any of its
Subsidiaries or any substantial part of any of their Property, or a
proceeding described in Section 9.1(l)(v) shall be instituted against
the Borrower or any of its Subsidiaries, and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a
period of sixty (60) days.
Section 9.2. When any Event of Default described in clauses (a) through
(k), both inclusive, of Section 9.1 has occurred and is continuing, the Agent
shall, upon request of the Required Lenders, by notice to the Borrower, take
either or both of the following actions:
(a) terminate the obligations of the Lenders to extend any
further credit hereunder on the date (which may be the date thereof)
stated in such notice;
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(b) declare the principal of and the accrued interest on the
Notes to be forthwith due and payable and thereupon the Notes,
including both principal and interest and all fees, charges and other
amounts payable hereunder, shall be and become immediately due and
payable without further demand, presentment, protest or notice of any
kind.
Section 9.3. When any Event of Default described in clauses (m) or (n)
of Section 9.1 has occurred and is continuing, then the Notes, including both
principal and interest, and all fees, charges and other amounts payable
hereunder, shall immediately become due and payable without presentment, demand,
protest or notice of any kind, and the obligations of the Lenders to extend
further credit pursuant to any of the terms hereof shall immediately terminate.
Section 9.4. When any Event of Default, other than an Event of Default
described in subsections (m) or (n) of Section 9.1, has occurred and is
continuing, the relevant Borrower shall, upon demand of the Agent (which demand
shall be made upon the request of the Required Lenders), and when any Event of
Default described in subsections (m) or (n) of Section 9.1 has occurred the
Borrower shall, without notice or demand from the Agent, immediately pay to the
Agent the full outstanding amount of each Letter of Credit (such amount to be
held as cash collateral for the Borrower's obligations in respect of the Letters
of Credit), the Borrower agreeing to immediately make each such payment and
acknowledging and agreeing the Agent and the Lenders would not have an adequate
remedy at law for failure of the Borrower to honor any such demand and that the
Agent shall have the right to require the Borrower to specifically perform such
undertaking whether or not any draws had been made under any such Letter of
Credit.
SECTION 10. THE AGENT.
Section 10.1. Appointment and Authorization. Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers hereunder and under the Guaranties and the Applications
as are designated to the Agent by the terms hereof and thereof together with
such powers as are reasonably incidental thereto. The Lenders expressly agree
that the Agent is not acting as a fiduciary of the Lenders in respect of the
Loan Documents, the Borrower or otherwise, and nothing herein or in any of the
other Loan Documents shall result in any duties or obligations on the Agent or
any of the Lenders except as expressly set forth herein. The Agent may resign at
any time by sending twenty (20) days prior written notice to the Borrower and
the Lenders and may be removed by the Required Lenders upon twenty (20) days
prior written notice to the Borrower and the Lenders. In the event of any such
resignation or removal the Required Lenders may appoint a new agent after
consultation with the Borrower, which shall succeed to all the rights, powers
and duties of the Agent hereunder and under the Guaranties and Applications. Any
resigning or removed Agent shall be
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entitled to the benefit of all the protective provisions hereof with respect to
its acts as an agent hereunder, but no successor Agent shall in any event be
liable or responsible for any actions of its predecessor. If the Agent resigns
or is removed and no successor is appointed, the rights and obligations of such
Agent shall be automatically assumed by the Required Lenders and (i) the
Borrower shall be directed to make all payments due each Lender hereunder
directly to such Lender and (ii) the Agent's rights in the Guaranties and
Applications shall be assigned without representation, recourse or warranty to
the Lenders as their interests may appear.
Section 10.2. Rights as a Lender. The Agent has and reserves all of the
rights, powers and duties hereunder and under its Notes and the Guaranties and
Applications as any Lender may have and may exercise the same as though it were
not the Agent and the terms "Lender" or "Lenders" as used herein and in all of
such documents shall, unless the context otherwise expressly indicates, include
the Agent in its individual capacity as a Lender.
Section 10.3. Standard of Care. The Lenders acknowledge that they have
received and approved copies of the Guaranties and such other information and
documents concerning the transactions contemplated and financed hereby as they
have requested to receive and/or review. The Agent makes no representations or
warranties of any kind or character to the Lenders with respect to the validity,
enforceability, genuineness, perfection, value, worth or collectibility hereof
or of the Notes or the Guaranties or of any other documents called for hereby or
thereby. Neither the Agent nor any director, officer, employee, agent or
representative thereof shall in any event be liable for any clerical errors or
errors in judgment, inadvertence or oversight, or for action taken or omitted to
be taken by it or them hereunder or under the Guaranties or Applications or in
connection herewith or therewith except for its or their own gross negligence or
willful misconduct. The Agent shall incur no liability under or in respect of
this Agreement or the Guaranties or Applications by acting upon any notice,
certificate, warranty, instruction or statement (oral or written) of anyone
(including anyone in good faith believed by it to be authorized to act on behalf
of the Borrower), unless it has actual knowledge of the untruthfulness of same.
The Agent may execute any of its duties hereunder by or through employees,
agents, and attorneys-in-fact and shall not be answerable to the Lenders for the
default or misconduct of any such agents or attorneys-in-fact selected with
reasonable care except for the gross negligence or willful misconduct of its
employees. The Agent shall be entitled to advice of counsel concerning all
matters pertaining to the agencies hereby created and its duties hereunder, and
shall incur no liability to anyone and be fully protected in acting upon the
advice of such counsel. The Agent shall be entitled to assume that no Default or
Event of Default exists unless notified to the contrary by a Lender. The Agent
shall in all events be fully protected in acting or failing to act in accord
with the instructions of the Required Lenders. The Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it shall be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by the Agent by reason of taking or continuing to
take any such action. The Agent may treat the owner of any
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Note as the holder thereof until written notice of transfer shall have been
filed with the Agent signed by such owner in form satisfactory to the Agent.
Each Lender acknowledges that it has independently and without reliance on the
Agent or any other Lender and based upon such information, investigations and
inquiries as it deems appropriate made its own credit analysis and decision to
extend credit to the Borrower. It shall be the responsibility of each Lender to
keep itself informed as to the creditworthiness of the Borrower and the Agent
shall have no liability to any Lender with respect thereto.
Section 10.4. Costs and Expenses. Each Lender agrees to reimburse the
Agent for all costs and expenses suffered or incurred by the Agent in performing
its duties hereunder and under the Guaranties and Applications, or in the
exercise of any right or power imposed or conferred upon the Agent hereby or
thereby, to the extent that the Agent is not promptly reimbursed for same by the
Borrower, all such costs and expenses to be borne by the Lenders ratably in
accordance with the amounts of their respective Commitments. If any Lender fails
to reimburse the Agent for such Lender's share of any such costs and expenses,
such costs and expenses shall be paid pro rata by the remaining Lenders, but
without in any manner releasing the defaulting Lender from its liability
hereunder.
Section 10.5. Indemnity. The Lenders, to the extent not prohibited by
applicable law, shall ratably indemnify and hold the Agent, and its directors,
officers, employees, agents or representatives harmless from and against any
liabilities, losses, costs and expenses suffered or incurred by them hereunder
or under the Guaranties or Applications or in connection with the transactions
contemplated hereby or thereby, regardless of when asserted or arising, except
to the extent they are promptly reimbursed for the same by the relevant Borrower
and except to the extent that any event giving rise to a claim was caused by the
gross negligence or willful misconduct of the party seeking to be indemnified.
If any Lender defaults in its obligations hereunder, its share of the
obligations shall be paid pro rata by the remaining Lenders, but without in any
manner releasing the defaulting Lender from its liability hereunder.
Section 10.6. Interest Rate Hedging Arrangements. By virtue of a
Lender's execution of this Agreement or an Assignment Agreement, as the case may
be, any Affiliate of such Lender with whom the Borrower has entered into an
agreement creating Hedging Liability shall be deemed a Lender party hereto for
purpose of any reference in a Loan Document to the parties for whom the Agent is
acting, it being understood and agreed that the rights and benefits of such
Affiliate under the Loan Documents consist exclusively of such Affiliate's right
to share in payments and collections out of the Collateral and the Guaranties as
more fully set forth in other provisions hereof.
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SECTION 11. JOINT AND SEVERAL LIABILITY AND GUARANTIES.
Section 11.1. Joint and Several Liability and Guaranties. To induce the
Lenders to provide the credit described herein and in consideration of benefits
expected to accrue to each Guarantor by reason of the Commitments and for other
good and valuable consideration, receipt of which is hereby acknowledged, each
Subsidiary party hereto and each Subsidiary which executes and delivers a
Guaranty (each such Subsidiary being hereinafter referred to individually as a
"Guarantor" and collectively as the "Guarantors") hereby unconditionally and
irrevocably guarantee jointly and severally to the Agent, the Lenders, their
Affiliates and each other holder of any of the Obligations or Hedging Liability,
(x) the due and punctual payment of all present and future Obligations,
including, but not limited to, the due and punctual payment of principal of and
interest on the Loans and Reimbursement Obligations, as and when the same shall
become due and payable, whether at stated maturity, by acceleration or
otherwise, according to the terms hereof and thereof and (y) the due and
punctual payment of all present and future Hedging Liability as and when the
same shall become due and payable, whether at its stated maturity, by
acceleration or otherwise, according to the terms thereof (the Obligations and
Hedging Liability so guaranteed being hereinafter referred to collectively as
the "Guaranteed Obligations"). In case of failure by the Borrower punctually to
pay any Guaranteed Obligations, each Guarantor hereby unconditionally agrees
jointly and severally to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration or otherwise, and as if such payment were made by the
Borrower.
Section 11.2. Guaranty Unconditional. The obligations of each Guarantor
as a guarantor or joint and several obligor under the Loan Documents, the
instruments or documents governing any Hedging Liability (the loan documents and
such other instruments and documents governing the Hedging Liability being
hereinafter referred to collectively as the "Guaranteed Debt Documents" and
individually as a "Guaranteed Debt Document," including this Section 11, shall
be unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower or of any other
Guarantor under this Agreement or any other Guaranteed Debt Document or
by operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any other Guaranteed Debt Document;
(c) any change in the corporate existence, structure or
ownership of, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting, the
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Borrower, any other Guarantor, or any of their respective assets, or
any resulting release or discharge of any obligation of the Borrower or
of any other Guarantor contained in any Guaranteed Debt Document;
(d) the existence of any claim, set-off or other rights which
the Guarantor may have at any time against the Agent, any Lender or any
other Person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or
demand or any exercise of, or failure to exercise, any rights or
remedies against the Borrower, any other Guarantor or any other Person
or Property;
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of the Borrower, regardless of
what obligations of the Borrower remain unpaid;
(g) any invalidity or unenforceability relating to or against
the Borrower or any other Guarantor for any reason of this Agreement or
of any other Guaranteed Debt Document or any provision of applicable
law or regulation purporting to prohibit the payment by the Borrower or
any other Guarantor of the principal of or interest on any Note or any
other amount payable by them under the Guaranteed Debt Documents; or
(h) any other act or omission to act or delay of any kind by
the Agent, any Lender or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the obligations of the
Guarantors under the Guaranteed Debt Documents.
Section 11.3. Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances. Each Guarantor's obligations under this Section 11 shall
remain in full force and effect until the Commitments are terminated and the
principal of and interest on the Notes and all other Guaranteed Obligations
shall have been paid in full. If at any time any payment of the principal of or
interest on any Note or any other amount payable by the Borrower under any of
the Guaranteed Debt Documents is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of the Borrower or of
any Guarantor, or otherwise, each Guarantor's obligations under this Section 11
with respect to such payment shall be reinstated at such time as though such
payment had become due but had not been made at such time.
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Section 11.4. Waivers.
(a) General. Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by the Agent, any Lender or
any other Person against the Borrower, another Guarantor or any other Person.
(b) Subrogation and Contribution. Each Guarantor hereby agrees not to
exercise or enforce any right of exoneration, contribution, reimbursement,
recourse or subrogation available to such Guarantor against any Person liable
for payment of the Guaranteed Obligations, or as to any security therefor,
unless and until the full amount owing on the Guaranteed Obligations has been
paid and the Commitments have terminated; and the payment by such Guarantor of
any amount pursuant to any of the Guaranteed Debt Documents on account of credit
extended to the Borrower shall not in any way entitle such Guarantor to any
right, title or interest (whether by way of subrogation or otherwise) in and to
any of the Guaranteed Obligations or any proceeds thereof or any security
therefor unless and until the full amount owing on the Guaranteed Obligations
has been paid and the Commitments have terminated.
Section 11.5. Limit on Recovery. Notwithstanding any other provision
hereof, the right of recovery against each Guarantor under this Section 11 shall
not (to the extent required by or as may be necessary or desirable to ensure the
enforceability against such Guarantor of its obligations hereunder or thereunder
in accordance with the laws of the jurisdiction of its incorporation or where it
carries on business) exceed (x) the amount which would render such Guarantor's
obligations under this Section 11 void or voidable under applicable law,
including without limitation fraudulent conveyance law minus (y) $1.00.
Section 11.6. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under this Agreement or any other
Loan Document is stayed upon the insolvency, bankruptcy or reorganization of the
Borrower, all such amounts otherwise subject to acceleration under the terms of
this Agreement or the other Guaranteed Debt Documents shall nonetheless be
payable jointly and severally by the Guarantors hereunder forthwith on demand by
the Agent made at the request of the Required Lenders.
Section 11.7. Benefit to Guarantors. All of the Guarantors are engaged
in related businesses and integrated to such an extent that the financial
strength and flexibility of each Guarantor has a direct impact on the success of
each other Guarantor. Each Guarantor will derive substantial direct and indirect
benefit from the extension of credit hereunder.
Section 11.8. Guarantor Covenants. Each Guarantor shall take such
action as the Borrower is required by this Agreement to cause such Guarantor to
take, and shall refrain from
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taking such action as the Borrower is required by this Agreement to prohibit
such Guarantor from taking.
SECTION 12. MISCELLANEOUS.
Section 12.1. Holidays. If any payment of principal or interest on any
Note or any fee hereunder shall fall due on a day which is not a Business Day,
principal together with interest at the rate the Note bears for the period prior
to maturity or any fee at the rate such fee accrues shall continue to accrue
from the stated due date thereof to and including the next succeeding Business
Day, on which the same is payable.
Section 12.2. No Waiver, Cumulative Remedies. No delay or failure on
the part of the Agent or any Lender or on the part of any other holder of any
Note in the exercise of any power or right shall operate as a waiver thereof,
nor as an acquiescence in any default, nor shall any single or partial exercise
of any power or right preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies hereunder of
the Agent, each Lender and each other holder of any Note are cumulative to, and
not exclusive of, any rights or remedies which any of them would otherwise have.
Section 12.3. Waivers, Modifications and Amendments. Any provision
hereof or of the Notes or the Guaranties may be amended, modified, waived or
released and any Default or Event of Default and its consequences may be
rescinded and annulled upon the written consent of the Required Lenders;
provided, however, that without the consent of all Lenders no such amendment,
modification or waiver shall increase the amount or extend the terms of any
Lender's Commitment or increase the L/C Commitment or reduce the interest rate
applicable to or extend the maturity (including any scheduled installment) of
its Notes or reduce the amount of the principal or interest or fees to which
such Lender is entitled hereunder or release any substantial (in value) part of
the collateral security afforded by the Collateral Documents (except in
connection with a sale or other disposition required to be effected by the
provisions hereof or of the Collateral Documents) or release any Guarantor or
change this Section or change the definition of "Required Lenders" or change the
number of Lenders required to take any action hereunder or under the Guaranties.
No amendment, modification or waiver of the Agent's protective provisions shall
be effective without the prior written consent of the Agent.
Section 12.4. Costs and Expenses. The Borrower agrees to pay on demand
the costs and expenses of the Agent in connection with the negotiation,
preparation, execution and delivery of the Loan Documents and the other
instruments and documents to be delivered hereunder or thereunder or in
connection with the transactions contemplated hereby or thereby or in connection
with any consents hereunder or waivers or amendments hereto or thereto,
including the fees and expenses of Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, counsel for the
Agent, with respect to all
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of the foregoing (whether or not the transactions contemplated hereby are
consummated), and all costs and expenses (including attorneys' fees), if any,
incurred by the Agent, the Lenders or any other holders of a Note in connection
with a default under or the enforcement of the Loan Documents or any other
instrument or document to be delivered hereunder or thereunder. The Borrower
agrees to pay on demand all costs and expenses for which it is liable in
accordance with the preceding sentence in connection with Letters of Credit
issued for its account. The Borrower agrees to indemnify and save the Lenders
and the Agent harmless from any and all liabilities, losses, costs and expenses
(collectively, "indemnified liabilities") incurred by the Lenders or the Agent
in connection with any action, suit or proceeding brought against the Agent or
any Lender by any Person (but excluding attorneys' fees for litigation solely
between the Lenders to which the Borrower is not a party) which arises out of
the transactions contemplated or financed hereby or out of any action or
inaction by the Agent or any Lender hereunder or thereunder, except for such
thereof as is caused by the gross negligence or willful misconduct of the party
seeking to be indemnified. The Borrower agrees to similarly indemnify and save
the Lenders and the Agent harmless from any and all indemnified liabilities as
relate to Letters of Credit issued for its account. The provisions of this
Section and the protective provisions of Section 2 hereof shall survive payment
of the Notes.
Section 12.5. Documentary Taxes. The Borrower agrees to pay on demand
any documentary, stamp or similar taxes payable in respect of this Agreement,
the Notes, the Applications, or any Guaranty including interest and penalties,
in the event any such taxes are assessed, irrespective of when such assessment
is made and whether or not any credit is then in use or available hereunder.
Section 12.6. Survival of Representations. All representations and
warranties made herein or in any other Loan Documents or in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Agreement and shall continue in full force and effect with respect to the date
as of which they were made as long as any credit is in use or available
hereunder.
Section 12.7. Survival of Indemnities. All indemnities and other
provisions relative to reimbursement to the Lenders of amounts sufficient to
protect the yield of the Lenders with respect to the Loans and Letters of
Credit, including, but not limited to, Sections 1.3, 2.7, 2.8 and 2.9 hereof,
shall survive the termination of this Agreement and the payment of the Notes.
Section 12.8. Notices. Except as otherwise specified herein, all
notices hereunder shall be in writing (including cable or telecopy) and shall be
given to the relevant party at its address or telecopier number set forth below,
in the case of the Borrower, or on the appropriate signature page hereof, in the
case of the Lenders and the Agent, or such other address or telecopier number as
such party may hereafter specify by notice to the Agent and the Borrower
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given by United States certified or registered mail or by telecopy. Notices
hereunder to the Borrower shall be addressed to the name of such Person at:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section and a confirmation of such telecopy has been received
by the sender, (ii) if given by mail, five (5) days after such communication is
deposited in the mail, certified or registered with return receipt requested,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the addresses specified in this Section; provided that any notice given pursuant
to Section 1 or Section 2 hereof shall be effective only upon receipt.
Section 12.9. Headings. Section headings used in this Agreement are for
convenience of reference only and are not a part of this Agreement for any other
purpose.
Section 12.10. Severability of Provisions. Any provision of this
Agreement which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. All rights, remedies
and powers provided in this Agreement and the Notes may be exercised only to the
extent that the exercise thereof does not violate any applicable mandatory
provisions of law, and all the provisions of this Agreement and the Notes are
intended to be subject to all applicable mandatory provisions of law which may
be controlling and to be limited to the extent necessary so that they will not
render this Agreement or the Notes invalid or unenforceable.
Section 12.11. Counterparts. This Agreement may be executed in any
number of counterparts, and by different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
Section 12.12. Binding Nature, Governing Law, Etc. This Agreement shall
be binding upon the Borrower and its successors and assigns, and shall inure to
the benefit of the Agent and the Lenders and the benefit of their successors and
assigns, including any subsequent holder of an interest in the Notes. This
Agreement and the rights and duties of the parties hereto shall be governed by,
and construed in accordance with, the internal laws of the State of Illinois
without
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regard to principles of conflicts of laws. The Borrower may not assign its
rights hereunder without the written consent of the Lenders.
Section 12.13. Entire Understanding. This Agreement, together with the
Notes, constitute the entire understanding of the parties with respect to the
subject matter hereof and any prior agreements, whether written or oral, with
respect thereto are superseded hereby except for prior understandings related to
fees payable to the Agent upon the initial closing of the transactions
contemplated hereby.
Section 12.14. Participations. Any Lender may, upon the prior written
consent of any Borrower (which consent shall not be unreasonably withheld),
grant participations in its extensions of credit hereunder to any other bank or
other lending institution (a "Participant") provided that (i) no Participant
shall thereby acquire any direct rights under this Agreement, (ii) no Lender
shall agree with a Participant not to exercise any of such Lender's rights
hereunder without the consent of such Participant except for rights which under
the terms hereof may only be exercised by all Lenders and (iii) no sale of a
participation in extensions of credit shall in any manner relieve the selling
Lender of its obligations hereunder.
Section 12.15. Assignment Agreements. Each Lender may, from time to
time upon at least five (5) Business Days' prior written notice to the Agent,
assign to other commercial lenders part of its rights and obligations under this
Agreement (including without limitation the indebtedness evidenced by any Note
then owned by such assigning Lender, together with an equivalent proportion of
the related Commitment for which such Note was issued) pursuant to written
agreements executed by such assigning Lender, such assignee lender or lenders,
the Borrower and the Agent, which agreements shall specify in each instance the
portion of the indebtedness evidenced by the Notes which is to be assigned to
each such assignee lender and the portion of the Commitments of the assigning
Lender to be assumed by it (the "Assignment Agreements"); provided, however,
that (i) the assignment of a Revolving Credit Note shall cover the same
percentage of such Lender's Revolving Credit Commitment, Revolving Loans and
interests in Letters of Credit; (ii) unless the Agent otherwise consents, the
aggregate amount of the Commitments, Loans and Notes of the assigning Lender
being assigned pursuant to each such assignment (determined as of the effective
date of the relevant Assignment Agreement) shall in no event be less than
$5,000,000 and shall be an integral multiple of $1,000,000; (iii) the Swing
Loans and Swing Line Commitment shall only be assigned (if at all) in total,
(iv) the Agent, each Lender originally party hereto and the Borrower must each
consent (such consent to not be unreasonably withheld by any such party), to
each such assignment to a party which was not an original signatory of this
Agreement (provided no such consent is required from the Borrower (x) for any
assignment to any Lender party hereto, whether an original signatory of this
Agreement or a party hereto by reason of an Assignment Agreement, (y) for any
assignment to any Affiliate of any such Lender and (z) for any such assignment
made during the continuance of
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any Event of Default); and (v) the assigning Lender must pay to the Agent a
processing and recordation fee of $2,500 and any out-of-pocket attorneys' fees
and expenses incurred by the Agent in connection with such Assignment Agreement.
Upon the execution of each Assignment Agreement by the assigning Lender
thereunder, the assignee lender thereunder, the Borrower and the Agent and
payment to such assigning Lender by such assignee lender of the purchase price
for the portion of the indebtedness of the Borrower being acquired by it, (i)
such assignee lender shall thereupon become a "Lender" for all purposes of this
Agreement with Commitments in the amounts set forth in such Assignment Agreement
and with all the rights, powers and obligations afforded a Lender hereunder,
(ii) such assigning Lender shall have no further liability for funding the
portion of its Commitments assumed by such other Lender and (iii) the address
for notices to such assignee Lender shall be as specified in the Assignment
Agreement executed by it. Concurrently with the execution and delivery of such
Assignment Agreement, the Borrower shall execute and deliver Notes to the
assignee Lender in the respective amounts of its Commitments under the Revolving
Credit and Swing Line and its Term Loans and new Notes to the assigning Lender
in the respective amounts of its Commitments under the Revolving Credit and its
Term Loans after giving effect to the reduction occasioned by such assignment,
all such Notes to constitute "Notes" for all purposes of this Agreement.
Section 12.16. Confidentiality. The Agent and each Lender shall hold in
confidence any material nonpublic information delivered or made available to
them by the Borrower or any Subsidiary. The foregoing to the contrary
notwithstanding, nothing herein shall prevent any Lender from disclosing any
information delivered or made available to it by the Borrower or any Subsidiary
(i) to any other Lender, (ii) to any other Person if reasonably incidental to
the administration of the credit contemplated hereby, (iii) upon the order of
any court or administrative agency, (iv) upon the request or demand of any
regulatory agency or authority, (v) which has been publicly disclosed other than
as a result of a disclosure by the Agent or any Lender which is not permitted by
this Agreement, (vi) in connection with any litigation to which the Agent, any
Lender, or any of their respective Affiliates may be a party, along with the
Borrower, any Subsidiary or any of their respective Affiliates, (vii) to the
extent reasonably required in connection with the exercise of any right or
remedy under this Agreement, the other L/C Documents or otherwise, (viii) to
such Lender's legal counsel and financial consultants and independent auditors,
and (ix) to any actual or proposed participant or assignee of all or part of its
rights under the credit contemplated hereby provided such participant or
assignee agrees in writing to be bound by the duty of confidentiality under this
Section to the same extent as if it were a Lender hereunder.
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Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall constitute a contract between us for the uses and purposes
hereinabove set forth.
Dated as of this day of May, 1998.
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▇▇▇▇▇▇ INDUSTRIAL GROUP, INC.
By
Its:
-----------------------------------
▇▇▇▇▇▇ METALCRAFT CO.
By
Its:
-----------------------------------
▇▇▇▇▇▇ METALCRAFT CO. OF NORTH CAROLINA
By
Its:
-----------------------------------
▇▇▇▇▇▇ METALCRAFT CO. OF SOUTH CAROLINA
By
Its:
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, INC.
By
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Its:
-----------------------------------
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B&W METAL FABRICATORS, INC.
By
Its:
-----------------------------------
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Accepted and Agreed to at Chicago, Illinois as of the day and year last
above written.
Each of the Lenders hereby agrees with each other Lender that if it
should receive or obtain any payment (whether by voluntary payment, by
realization upon collateral, by the exercise of rights of setoff or banker's
lien, by counterclaim or cross action, or by the enforcement of any rights under
this Agreement, the Notes, the Guaranties or otherwise) in respect of the
obligations of the Borrower under this Agreement, the Notes and the Guaranties
in a greater amount than such Lender would have received had such payment been
made to the Agent and been distributed among the Lenders as contemplated by
Section 2.4 hereof then in that event the Lender receiving such disproportionate
payment shall purchase for cash without recourse from the other Lenders an
interest in the obligations of the Borrower to such Lenders arising under this
Agreement the Notes, and the Guaranties in such amount as shall result in a
distribution of such payment as contemplated by Section 2.4 hereof. In the event
any payment made to a Lender and shared with the other Lenders pursuant to the
provisions hereof is ever recovered from such Lender, the Lenders receiving a
portion of such payment hereunder shall restore the same to the payor Lender,
but without interest.
Amount and Percentage of Commitments:
Revolving Credit Commitment: ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
$26,250,000 (75%)
Term A Loan Commitment: By
------------------------------
-----
$18,750,000 (75%) Its Vice President
Term B Loan Commitment: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
$22,500,000 (75%) ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
LIBOR Funding Office:
Nassau Branch
c/o ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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86
Amount and Percentage of Commitments:
Revolving Credit Commitment: FIRSTAR BANK MILWAUKEE, N.A.
$4,861,111.11 (13.888889%)
Term A Loan Commitment: By
$3,472,222.22 (13.888889%) ------------------------------
Its
-------------------------
Term B Loan Commitment: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
$4,166,666.67 (13.888889%) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Banking, ▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
LIBOR Funding ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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87
Amount and Percentage of Commitments:
Revolving Credit Commitment: NATIONAL CITY BANK
$3,888,888.89 (11.111111%)
Term A Loan Commitment: By
------------------------------
---- Its
$2,777,777.78 (11.111111%) -------------------------
----
Term B Loan Commitment: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
$3,333,333.33 (11.111111%) Locator #2094
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
LIBOR Funding ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ #▇▇▇▇
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