1
EXHIBIT 10.1
================================================================================
U.S. $50,000,000
CREDIT AGREEMENT
by and among
▇▇▇▇▇▇ INDUSTRIAL GROUP, INC.
and
CERTAIN OF ITS SUBSIDIARIES
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
individually and as Agent
and
the Lenders
which are or become parties hereto
2
Dated as of January __, 1998
================================================================================
-ii-
3
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE CREDITS...............................................1
Section 1.1. Revolving Credit........................................1
(a) Generally...............................................1
(b) Revolving Loans.........................................1
(c) Mandatory Conversion of Revolving Loans.................2
(d) Voluntary Conversion of Revolving Loans.................3
(e) Conversions Generally...................................3
Section 1.2. Term Credit.............................................3
Section 1.3. Letters of Credit.......................................4
(a) General Terms...........................................4
(b) Applications............................................4
(c) The Reimbursement Obligation............................5
(d) The Participating Interests.............................5
(e) Indemnification.........................................6
(f) Change in Laws..........................................7
Section 1.4. Manner and Disbursement of Borrowings...................7
(a) Generally...............................................7
(b) Reimbursement Obligation................................8
(c) Agent Reliance on Bank Funding..........................8
Section 1.5. Manner of Obtaining Letters of Credit...................8
Section 1.6. Appointment of ▇▇▇▇▇▇ as Agent for Borrowers; Reliance
by Agent................................................9
(a) Appointment.............................................9
(b) Reliance................................................9
SECTION 2. INTEREST AND CHANGE IN CIRCUMSTANCES......................9
Section 2.1. Interest Rate Options...................................9
Section 2.2. Minimum Amounts........................................10
Section 2.3. Computation of Interest................................10
Section 2.4. Manner of Rate Selection...............................11
Section 2.5. Change of Law..........................................11
Section 2.6. Unavailability of Deposits or Inability to Ascertain
Adjusted LIBOR.........................................11
Section 2.7. Taxes and Increased Costs..............................12
-i-
4
Section 2.8. Change in Capital Adequacy Requirements................13
Section 2.9. Funding Indemnity......................................13
Section 2.10. Lending Branch.........................................14
Section 2.11. Lender's Duty to Mitigate..............................14
Section 2.12. Discretion of Lenders as to Manner of Funding..........15
Section 2.13. Replacement of Lender..................................15
SECTION 3. FEES, PREPAYMENTS, TERMINATIONS, APPLICATIONS AND
NOTATIONS................................................16
Section 3.1. Fees...................................................16
Section 3.2. Voluntary Prepayments..................................17
Section 3.3. Mandatory Prepayments..................................17
Section 3.4. Terminations of Revolving Credit Commitments...........19
Section 3.5. Place and Application of Payments......................20
Section 3.6. Notations and Requests.................................21
SECTION 4. COLLATERAL.............................................21
Section 4.1. Collateral.............................................21
Section 4.2. Guaranties.............................................22
Section 4.3. Further Assurances.....................................22
SECTION 5. DEFINITIONS............................................22
Section 5.1. Definitions............................................22
Section 5.2. Interpretation.........................................35
Section 5.3. Change in Accounting Principles........................35
SECTION 6. REPRESENTATIONS AND WARRANTIES.........................35
Section 6.1. Organization and Qualification.........................35
Section 6.2. Non-Borrowing Subsidiaries.............................36
Section 6.3. Margin Stock...........................................37
Section 6.4. Financial Reports......................................37
Section 6.5. Full Disclosure........................................37
Section 6.6. Good Title.............................................37
Section 6.7. Litigation and Other Controversies.....................38
Section 6.8. Taxes..................................................38
Section 6.9. Approvals..............................................38
Section 6.10. Affiliate Transactions.................................38
-ii-
5
Section 6.11. Investment Company.....................................38
Section 6.12. ERISA..................................................38
Section 6.13. Compliance with Laws...................................39
Section 6.14. Other Agreements.......................................39
Section 6.15. Merger Documents.......................................39
SECTION 7. CONDITIONS PRECEDENT.....................................39
Section 7.1. All Advances...........................................39
Section 7.2. Initial Advance........................................40
SECTION 8. COVENANTS................................................42
Section 8.1. Maintenance of Business................................42
Section 8.2. Maintenance of Property................................42
Section 8.3. Taxes and Assessments..................................42
Section 8.4. Insurance..............................................43
Section 8.5. Financial Reports......................................43
Section 8.6. Interest Coverage Ratio................................45
Section 8.7. Leverage Ratio.........................................45
Section 8.8. Net Worth..............................................45
Section 8.9. Fixed Charge Coverage Ratio............................45
Section 8.10. Capital Expenditures...................................45
Section 8.11. Indebtedness...........................................45
Section 8.12. Liens..................................................46
Section 8.13. Investments, Loans, Advances and Guaranties............47
Section 8.14. Leases. (a) Sales and Leasebacks......................48
Section 8.15. Dividends and Certain Other Restricted Payments........48
Section 8.16. Mergers, Consolidations and Sales......................48
Section 8.17. Acquisitions...........................................49
Section 8.18. Maintenance of Subsidiaries............................50
Section 8.19. Formation of Subsidiaries..............................51
Section 8.20. ERISA..................................................51
Section 8.21. Compliance with Laws...................................51
Section 8.22. Burdensome Contracts With Affiliates...................51
Section 8.23. Changes in Fiscal Year.................................51
Section 8.24. Change in the Nature of Business.......................52
Section 8.25. Use of Loan Proceeds...................................52
SECTION 9. EVENTS OF DEFAULT AND REMEDIES...........................52
-iii-
6
SECTION 10. THE AGENT................................................55
Section 10.1. Appointment and Authorization..........................55
Section 10.2. Rights as a Lender.....................................55
Section 10.3. Standard of Care.......................................55
Section 10.4. Costs and Expenses.....................................56
Section 10.5. Indemnity..............................................56
SECTION 11. JOINT AND SEVERAL LIABILITY AND GUARANTIES...............57
Section 11.1. Joint and Several Liability and Guaranties.............57
Section 11.2. Guaranty Unconditional.................................57
Section 11.3. Discharge Only Upon Payment in Full; Reinstatement
in Certain Circumstances...............................58
Section 11.4. Waivers................................................58
Section 11.5. Limit on Recovery......................................59
Section 11.6. Stay of Acceleration...................................59
Section 11.7. Benefit to Guarantors..................................59
Section 11.8. Guarantor Covenants....................................59
SECTION 12. MISCELLANEOUS............................................59
Section 12.1. Holidays...............................................59
Section 12.2. No Waiver, Cumulative Remedies.........................59
Section 12.3. Waivers, Modifications and Amendments..................60
Section 12.4. Costs and Expenses.....................................60
Section 12.5. Documentary Taxes......................................61
Section 12.6. Survival of Representations............................61
Section 12.7. Survival of Indemnities................................61
Section 12.8. Notices................................................61
Section 12.9. Headings...............................................61
Section 12.10. Severability of Provisions.............................61
Section 12.11. Counterparts...........................................62
Section 12.12. Binding Nature, Governing Law, Etc.....................62
Section 12.13. Entire Understanding...................................62
Section 12.14. Participations.........................................62
Section 12.15. Assignment Agreements..................................62
Section 12.16. Confidentiality........................................63
Signature....................................................................65
-iv-
7
Exhibit A -- Revolving Credit Note
Exhibit B -- Term Credit Note
Exhibit C -- Mandatory Conversion Term Note
Exhibit D -- Voluntary Conversion Term 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
-v-
8
▇▇▇▇▇▇ INDUSTRIAL GROUP, INC.
CREDIT AGREEMENT
To Each of the Lenders Signatory Hereto
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇ Metalcraft Co., an Illinois corporation
("Morton"), and ▇▇▇▇▇▇ Metalcraft Co. of North Carolina, a North Carolina
corporation ("Morton North Carolina") (Morton and ▇▇▇▇▇▇ North Carolina being
hereinafter referred to collectively as the "Borrowers" and individually as a
"Borrower") apply 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") and a term credit (the "Term Credit") in each case available to the
Borrowers, all as more fully hereinafter set forth. The undersigned, ▇▇▇▇▇▇
Industrial Group, Inc., a Georgia corporation (the "Parent"), executes and
delivers this Agreement to confirm certain of its agreements made in connection
with the extension of such credit to the Borrowers.
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 Borrowers on a revolving basis
under the Revolving Credit which may be availed of by each and any 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 Borrowers, taken together, shall not exceed its Revolving Credit
Commitment. The Revolving Credit may be utilized by each and any 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 and L/C
Obligations outstanding at any one time from all the Borrowers, taken together,
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
9
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 each and any Borrower in the form of loans
(individually a "Revolving Loan" and collectively the "Revolving Loans"). Each
Revolving Loan by the Lenders shall be in a minimum amount of $100,000 or such
greater amount which is an integral 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 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
Borrowers (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
Borrowers on account thereof shall be the sum of all advances then or
theretofore made thereon less all payments of principal actually received.
(c) Mandatory Conversion of Revolving Loans. If the aggregate unpaid
principal balance of Revolving Loans shall exceed $15,000,000 for at least three
(3) consecutive days during any fiscal quarter prior to the Termination Date,
then $10,000,000 of the Revolving Loans outstanding (or such lesser amount of
the Revolving Loans as may then be outstanding) as of the close of the next
succeeding fiscal quarter shall as of such day be automatically converted (such
conversion to be made ratably among the Lenders in accordance with their
Percentages) into a term loan (a "Mandatory Conversion Term Loan") such that
each Lender shall be deemed to have made a pro rata share of such Mandatory
Conversion Term Loan in the amount of such Lender's Percentage of the Revolving
Loans so converted; provided, however, that (i) unless the Required Lenders
otherwise agree in their discretion, no such conversion shall occur if any
Default or Event of Default shall have occurred and be continuing and (ii) once
$20,000,000 of Revolving Loans have been converted (whether as a result of
voluntary or mandatory conversions), no further conversions of the Revolving
Loans shall be required by this Section. Each Lender's pro rata share of each
Mandatory Conversion Term Loan shall be made against and evidenced by a separate
Term Loan Note of the Borrowers (individually a "Mandatory Conversion Term Note"
and collectively the "Mandatory Conversion Term Notes"), jointly and severally,
one such Note per Lender for each Mandatory Conversion Term Loan, payable to the
order of such Lender in an amount equal to such Lender's Percentage of the
Revolving Loans so
-2-
10
converted, each Mandatory Conversion Term Note to be in the form (with
appropriate insertions) attached hereto as Exhibit C. Each Mandatory Conversion
Term Note shall be expressed to mature in consecutive quarterly installments
equal (except for the last such installment) to 1/28th of the principal amount
of the Mandatory Conversion Term Loan evidenced thereby, commencing on the first
close of a calendar quarter following the date on which the relevant Revolving
Loans were converted and continuing on the last day of each and every calendar
quarter thereafter, but with the final payment of both principal and interest,
if not sooner paid, due on the Termination Date.
(d) Voluntary Conversion of Revolving Loans. Any time during the
period from the date hereof to the Termination Date, upon five (5) Business
Days' prior written notice to the Agent (which shall promptly so inform the
Lenders), ▇▇▇▇▇▇ (which is acting on behalf of the Borrowers pursuant to Section
1.6 hereof) may elect to convert all or any part (but if in part, then in an
minimum amount of $5,000,000 or such greater amount which is an integral
multiple of $1,000,000 and such conversion to be made ratably as among the
Lenders in accordance with their Percentages) of the then outstanding Revolving
Loans to a term loan (individually a "Voluntary Conversion Term Loan") (the
Mandatory Conversion Term Loans and Voluntary Conversion Term Loans being
hereinafter referred to collectively as "Conversion Term Loans" and individually
as a "Conversion Term Loan") such that each Lender shall be deemed to have made
a pro rata share of such Voluntary Conversion Term Loan in the amount of such
Lender's Percentage of the amount of Revolving Loans so converted; provided,
however, that (i) no such conversion shall be permitted if any Default or Event
of Default shall have occurred and be continuing and (ii) no such conversion
shall be permitted unless at least one Mandatory Conversion Term Loan shall have
been made. Each Lender's share of a Voluntary Conversion Term Loan shall be made
against and evidenced by a separate Term Loan Note of the Borrowers
(individually a "Voluntary Conversion Term Note" and collectively the "Voluntary
Conversion Term Notes") (the Mandatory Conversion Term Notes and the Voluntary
Conversion Term Notes being hereinafter referred to collectively as the
"Conversion Term Notes" and individually as a "Conversion Term Note"), jointly
and severally, one such Note per Lender for each Voluntary Conversion Term Loan,
payable to the order of such Lender in an amount equal to such Lender's
Percentage of the Revolving Loans so converted, each Voluntary Conversion Term
Note to be in the form (with appropriate insertions) attached hereto as Exhibit
D. Each Voluntary Conversion Term Note shall be expressed to mature in
consecutive quarterly installments equal (except for the last such installment)
to 1/28th of the principal amount of the Voluntary Conversion Term Loan
evidenced thereby, commencing on the first close of a calendar quarter to follow
the date on which the relevant Revolving Loans were converted and continuing on
the last day of each and every calendar quarter thereafter, but with the final
payment of both principal and interest, if not sooner paid, due on the
Termination Date.
-3-
11
(e) Conversions Generally. The principal amount of each Conversion
Term Loan shall concurrently and permanently reduce by like amount the Revolving
Credit Commitments and hence the credit available under such Commitments, and no
amount repaid or prepaid on any Conversion Term Loan may be borrowed again. The
Lenders' respective shares of each Conversion Term Loan, and share of the
related concurrent reduction by like amount of the Revolving Credit Commitments,
shall be ratable in accordance with their respective Percentages.
Section 1.2. Term Credit. Subject to all of the terms and
conditions hereof, the Lenders severally agreed to make a term loan (the "Term
Credit Loan") to the Borrowers under the Term Credit in an amount not to exceed
their Term Credit Commitments. The Term Loan shall be disbursed in a single
advance made, if at all, on or before January 31, 1998, at which time the
commitments of the Lenders to make the Term Loan shall expire. Each Lender shall
advance a pro rata share of the Term Loan in accordance with the amounts of
their respective Percentages. Each Lender's pro rata share of the Term Loan
shall be evidenced by a Term Loan Note of the Borrowers (individually a "Term
Credit Note" and collectively the "Term Credit Notes") (the Conversion Term
Notes and the Term Credit Notes being hereinafter referred to collectively as
the "Term Notes" and individually as a "Term Note") payable to the order of such
Lender in the amount of its pro rata share of the Term Loan, each Term Credit
Note to be in the form (with appropriate insertions) attached hereto as Exhibit
B. Each Term Credit Note shall be expressed to mature in twenty-four (24)
installments commencing on March 31, 1998 and continuing on the last day of each
calendar quarter occurring thereafter to and including September 30, 2003, with
the final installment due on December 31, 2003, with the principal installments
on the Term Credit Notes to aggregate $500,000 per installment through and
including December 31, 1999, $625,000 per installment thereafter and through and
including December 31, 2001, $750,000 per installment thereafter and through and
including September 30, 2003 and with the final principal installment on all the
Term Credit 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 Credit
Note held by each Lender to be equal to such Lender's 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 each and any
Borrower 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 then outstanding. Each Letter of Credit shall be
issued by the Agent, but each
-4-
12
Lender shall be obligated to reimburse the Agent for its 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 Percentage.
(b) Applications. At any time before the Termination Date, the Agent
shall, at the request of ▇▇▇▇▇▇ (which is acting on behalf of the Borrowers
pursuant to Section 1.6 hereof), issue one or more Letters of Credit for the
account of any one or more of the Borrowers, 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 each 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 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 at least one of the
Borrowers 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 Borrowers shall be jointly and
severally liable for all obligations in respect of each Letter of Credit, (ii)
the Borrowers' 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 Borrowers of any amount under a Letter of Credit, or any other form of
collateral security for the Borrowers' 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 Borrowers' obligation to
reimburse the Agent for the amount of such drawing shall bear interest (which
the Borrowers hereby promise, jointly and severally, 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
-5-
13
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
Borrowers 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 a Borrower to reimburse the Agent for all drawings under a
Letter of Credit issued for such Borrower's account (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 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
relevant 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
Percentage, in each Letter of Credit issued by, and each Reimbursement
Obligation owed to, the Agent. Upon any failure by a Borrower to pay any
Reimbursement Obligation in respect of a Letter of Credit issued for such
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 a 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 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
-6-
14
(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 Percentage of
each payment received in respect of the relevant Reimbursement Obligation and
of interest paid thereon, with the Agent retaining its 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, without limiting the Borrowers' joint and
several obligations under each Application for a Letter of Credit issued for any
Borrower's account, to the extent such 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 any one or more of the
Borrowers, the Agent, any other Lender or any other Person whatsoever. 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 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 Percentage, indemnify the Agent (to the extent not reimbursed
by the Borrowers) 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:
-7-
15
(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 any 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
Borrowers 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; provided, however,
that the Borrowers 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 Borrowers' liability hereunder for costs subsequently incurred or
paid by such Lender).
Section 1.4. Manner and Disbursement of Borrowings. (a) Generally.
▇▇▇▇▇▇ (which is acting on behalf of the Borrowers pursuant to Section 1.6
hereof) 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
Borrower to which the proceeds of such Loan are to be disbursed (in the case of
a Loan of a Revolving Loan), 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
relevant 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.
-8-
16
(b) Reimbursement Obligation. In the event the Company 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 Company 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
Borrowing 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 relevant 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 relevant
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 was made available
to such 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, such 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 such Borrower will have no liability under
Section 2.9 hereof with respect to such payment.
Section 1.5. Manner of Obtaining Letters of Credit. ▇▇▇▇▇▇ (which
is acting on behalf of the Borrowers pursuant to Section 1.6 hereof) shall
provide at least four (4) Business Days' advance written notice to the Agent of
a Borrower's request for the issuance for such 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 such 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.
-9-
17
Section 1.6. Appointment of ▇▇▇▇▇▇ as Agent for Borrowers; Reliance
by Agent.
(a) Appointment. Each Borrower irrevocably appoints ▇▇▇▇▇▇ as its
agent hereunder to make requests on such Borrower's behalf under Section 1
hereof for borrowings to be made by such Borrower and for Letters of Credit to
be issued for such Borrower's sole or joint account, to select on such
Borrower's behalf the interest rate to be applicable under Section 2 hereof to
Loans made to such Borrower, effect conversions of Revolving Loans into
Voluntary Conversion Term Loans and to take any other action contemplated by the
Loan Documents with respect to credit extended hereunder to such Borrower. The
Agent and the Lenders shall be entitled to conclusively presume that any action
by ▇▇▇▇▇▇ under the Loan Documents is taken on behalf of any one or more of the
relevant Borrowers whether or not ▇▇▇▇▇▇ so indicates.
(b) Reliance. All requests for borrowings and selection of interest
rates to be applicable thereto may be written or oral, including by telephone or
facsimile. The Borrowers agree that the Agent may rely on any such notice given
by any person the Agent in good faith believes is an Authorized Representative
without the necessity of independent investigation (the Borrowers hereby
indemnifying the Agent and Lenders from any liability or loss ensuing from such
reliance), and in the event any such telephonic or other oral notice conflicts
with any written confirmation, such oral or telephonic notice shall govern if
the Agent has acted in reliance thereon.
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 Notes (all of the indebtedness evidenced by the Notes, whether or not
Notes of 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
▇▇▇▇▇▇, which is acting on behalf of the Borrowers pursuant to Section 1.6
hereof, 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
Notes which is not part of a LIBOR Portion shall constitute a single Domestic
Rate Portion. All of the indebtedness evidenced by the 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 Borrowers hereby promise to pay interest on each Portion at the
rates and times specified in this Section 2.
-10-
18
(b) Domestic Rate Portion. Each Domestic Rate Portion shall bear
interest (which the Borrowers hereby promise 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 Borrowers
hereby promise 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 January 31, 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 relevant
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 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. ▇▇▇▇▇▇ (which is acting on behalf
of the Borrowers pursuant to Section 1.6 hereof) 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 ▇▇▇▇▇▇ shall notify the Agent of
the new Interest Period selected therefor, and in the event ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ pursuant to the foregoing provision.
-11-
19
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. ▇▇▇▇▇▇ (which is acting on
behalf of the Borrowers pursuant to Section 1.6 hereof) 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 any of the Borrowers 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 Borrowers, on demand,
shall, if the continued maintenance of 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 ▇▇▇▇▇▇ (which is acting on behalf of the Borrowers
pursuant to Section 1.6 hereof) 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:
-12-
20
(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:
(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,
-13-
21
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 any 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 Borrowers 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 Borrowers
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 Borrowers' 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 any of the Borrowers (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 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
-14-
22
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 Borrowers 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 Borrowers 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 Borrowers'
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 LIBOR Portion 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 LIBOR Portion 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 LIBOR Portion 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 such LIBOR
Portion;
then, upon the demand of such Lender, the Borrowers 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 any of the Borrowers
(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 Borrowers 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
-15-
23
or otherwise affect the Borrowers' 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 any 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 Borrowers hereby
agree 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 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) any
Borrower receives from a Lender a certificate requesting an amount be paid to
such Lender under Section 1.3(f), 2.7
-16-
24
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 Company 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 in
their sole discretion agree so to assume in full the Commitments of the
Replaceable Lender (each an "Assuming Lender"), and after payment by the
Borrowers 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 Company 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 Company, 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 (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
-17-
25
Borrowers 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 Borrowers shall pay to the
Agent for the ratable benefit of the Lenders in accordance with their
Percentages, 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 portion of the 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 March 31, 1998) and on the Termination Date.
(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 Borrowers 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 March
31, 1998) to, and on, the Termination Date, the Borrowers 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 amounts during the immediately
preceding calendar quarter of the Letters of Credit. In addition to the letter
of credit fees called for above, the Borrowers further agree to pay to the Agent
for its own account such processing and transaction fees and charges as the
Agent from 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 Borrowers 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 Borrowers shall not be
required to reimburse the Agent for more than one (1) such audit per year (a
"Scheduled Field Audit") plus one (1) audit of each target of an Acquisition and
(ii) the Borrowers shall in no event be liable for more than $3,000 for any one
Scheduled Field Audit.
-18-
26
(d) Agent's Fee. The Borrowers shall pay to the Agent the fees
agreed to in a letter exchanged between them.
Section 3.2. Voluntary Prepayments.
(a) Revolving Credit Notes. The Borrowers 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 relevant Borrower or Borrowers 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 Borrowers 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 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. If the Leverage Ratio equals or exceeds 2.50
to 1.00 as of December 31 of any calendar year (commencing on December 31, 1998)
then, not later than April 15 of the immediately following year (commencing
April 15, 1999), the Borrowers 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 50% of Excess Cash Flow for the then most recently completed
fiscal year. Each such prepayment shall be applied to the remaining installments
of the Conversion Term Notes in the inverse order of maturity, ratably as among
installments on both
-19-
27
classes of Conversion Term Notes due on the same date in accordance with the
aggregate principal amount of the installments due on each such class of the
Conversion Term Notes, until the Conversion Term Notes have been fully paid and
satisfied, with any remaining balance of such prepayment applied to the
remaining installments of the Term Credit Notes in the inverse order of
maturity.
(b) Equity Offering. Within five (5) Business Days of receipt by
the Parent or any Borrower of cash proceeds from any public offering or private
placement of any capital stock or other equity securities of the Parent or any
Borrower (other than proceeds from (i) any sale of capital stock of any Borrower
pursuant to an employee stock ownership plan or (ii) any sale of capital stock
of the Parent or any Borrower, or any options to acquire any such stock, to
officers or directors of the Parent or any Borrower as compensation for services
rendered or (iii) any exercise by such officers or directors of such options),
the Parent or relevant Borrower (as the case may be) 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). Each such prepayment shall be applied to the remaining installments
of the Conversion Term Notes in the inverse order of maturity, ratably as among
installments on both classes of Conversion Term Notes due on the same date in
accordance with the aggregate principal amount of the installments due on each
such class of the Conversion Term Notes, until the Conversion Term Notes have
been fully paid and satisfied, with any remaining balance of such prepayment
applied to the remaining installments of the Term Credit Notes in the inverse
order of maturity.
(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 any Borrower shall be paid over to the Agent as and for a mandatory
prepayment on the Term Notes; provided, however, that if at the time of receipt
no amount is outstanding under the Term Notes or the amount received is in
excess of the amount necessary to prepay the Term Notes in full, then such
payment or excess (as appropriate) shall be held by the Agent as collateral
security for the Borrowers' L/C Obligations if the Term Loans have been prepaid
in full but Letters of Credit are outstanding and the Commitments shall be
ratably reduced by a like amount; 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
-20-
28
equipment, furniture and fixtures of the Borrowers, taken together, which are
worn out, obsolete or, in the good faith judgment of such Borrower, 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 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 Borrowers may retain the
proceeds derived from the sale, damage or destruction of fixtures, furniture and
equipment if and to the extent that the relevant Borrower 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. Each such prepayment shall be applied to the remaining
installments of the Conversion Term Notes in the inverse order of maturity,
ratably as among installments on both classes of Conversion Term Notes due on
the same date in accordance with the aggregate principal amount of the
installments due on each such class of the Conversion Term Notes, until the
Conversion Term Notes have been fully paid and satisfied, with any remaining
balance of such prepayment applied to the remaining installments of the Term
Credit Notes in the inverse order of maturity.
(d) Commitment Reductions. In the event the aggregate principal
amount of Revolving Loans and L/C Obligations exceeds the Revolving Credit
Commitments after giving effect to any reduction therein (whether such
reductions were voluntary or required), the Borrowers shall immediately and
without notice or demand pay over the amount of the excess to the Agent as and
for a mandatory prepayment on the principal of the Revolving Loans or, if the
Revolving Loans have been prepaid in full but Reimbursement Obligations are
outstanding, then, in such event, such excess shall be paid over to the Agent to
be applied against or held as collateral security for such Reimbursement
Obligations.
Section 3.4. Terminations of Revolving Credit Commitments.
(a) Voluntary. ▇▇▇▇▇▇ (which is acting on behalf of the Borrower
pursuant to Section 1.6 hereof) 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 and L/C
-21-
29
Obligations then outstanding. Any termination of the Revolving Credit
Commitments pursuant 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.
(b) Mandatory. Effective December 31, 2000, the Revolving Credit
Commitments shall automatically reduce to $15,000,000 if such Commitments have
not already been reduced to such amount or less (whether such reductions were
voluntary or required), such reduction to reduce the Revolving Credit
Commitments of the Lenders pro rata in accordance with their respective
Percentages.
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
▇▇▇▇▇▇ (which is acting on behalf of the Borrowers pursuant to Section 1.6
hereof) 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 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 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
Borrowers have agreed to pay under Section 11.4 hereof (such funds to
be retained by
-22-
30
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);
(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 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 the Loans and the L/C
Obligations;
(d) fourth, to the Agent and the Lenders ratably in accord
with the amounts of other Obligations owing to each of them (other than
those described above) unless and until all such Obligations have been
fully paid and satisfied; and
(e) fifth, to ▇▇▇▇▇▇ (each Borrower hereby agreeing that its
recourse for its share of such payment shall be to ▇▇▇▇▇▇ and not the
Agent or any Lender) 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 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 Borrowers to repay the principal amount
of each Note together with accrued interest thereon. Prior to any Lender's
negotiation of a 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.
-23-
31
SECTION 4. COLLATERAL.
Section 4.1. Collateral. The payment and performance of the
Obligations shall at all times be secured by, among other things, (a) all of the
Borrowers' and other Subsidiaries' accounts, chattel paper, documents,
instruments, general intangibles, inventory, equipment and certain other assets
and property of the Borrowers and the other Subsidiaries, in each case whether
now owned or held or hereafter acquired or arising, pursuant to that certain
Security Agreement from the Borrowers and the other 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 Parent, the Borrowers
and the other Subsidiaries, in each case whether now owned or held or hereafter
acquired or arising, pursuant to that certain Pledge Agreement from the Parent
and ▇▇▇▇▇▇ dated as of even date herewith, as the same may be amended, modified
or supplemented from time to time (the "Pledge Agreement"), (c) ▇▇▇▇▇▇'▇ real
estate in Morton, Illinois, commonly known as ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and related
assets and properties of Morton, in each case whether now owned or held or
hereafter acquired or arising, pursuant to that certain Mortgage and Security
Agreement with Assignment of Rents from ▇▇▇▇▇▇ dated as of January 19, 1998, as
the same may be amended, modified or supplemented from time to time (the
"Mortgage"), and (d) within 30 days from the date hereof, an assignment of the
Parent's life insurance policy maintained on the life of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, in
an amount not less than $4,000,000, such assignment being made pursuant to a
separate Assignment of Life Insurance Policy as Collateral dated of even date
herewith, as the same may be amended, modified or supplemented from time to time
(the "Life Insurance Assignment").
Section 4.2. Guaranties. Payment of the Notes and the other
Obligations 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, each Borrower shall
also cause such Subsidiary to execute such Collateral Documents (having terms
and conditions substantially similar to those executed by each 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, together with such other
instruments, documents, certificates and opinions required by the Agent in
connection therewith.
Section 4.3. Further Assurances. Each 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 each 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
-24-
32
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:
"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
-25-
33
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 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 the rate specified below, subject to
quarterly adjustment as hereinafter provided:
Applicable Applicable Applicable Applicable
When Following Status Margin Margin Margin Margin
Exists For Any Margin For Domestic Rate For LIBOR Portions For Domestic Rate For LIBOR Portions
Determination Date Portion of Revolving of Revolving and Portion of of Conversion Term
and Term Credit Loan Term Credit Loan Conversion Term Loans
Is: Is: Loans Is:
Commitment Fee Is Is:
Level I Status 0% 1.00% .25% 0% 1.25%
Level II Status 0% 1.25% .25% 0% 1.50%
Level III Status 0% 1.625% .375% 0% 1.875%
Level IV Status .25% 2.00% .50% .50% 2.25%
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 III
Status;
-26-
34
(ii) on or before the date that is ten (10) Business Days
after the date on which the Company has delivered a Compliance
Certificate to the Agent for a given quarterly accounting period of the
Parent (commencing with the quarterly accounting period ending on or
about June 30, 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 or Level IV Status exists as
of the close of the applicable accounting 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 Company 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 Company 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 IV Status. If the Company 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 IV Status.
"Application" is defined in Section 1.3 hereof.
"Authorized Representative" means those persons shown on the list of
officers and employees of the Borrowers provided by ▇▇▇▇▇▇ (which is acting on
behalf of the Borrowers pursuant to Section 1.6 hereof) pursuant to Section
7.2(a) hereof or on any update of any such list provided by ▇▇▇▇▇▇ to the Agent,
or any further or different officers and employees so named by any Authorized
Representative in a written notice to the Agent.
"Borrowers" is defined in the introductory paragraph hereof, with (i)
the term "Borrowers" to mean the Borrowers, collectively, and, also, each
individually, and (ii) all promises and covenants (including promises to pay)
and representations and warranties of and by the Borrowers made in the Loan
Documents or any instruments or documents delivered pursuant thereto to be and
constitute the joint and several promises, covenants, representations and
warranties of and by each and all of such corporations. The term "Borrower"
appearing in such
-27-
35
singular form shall be deemed a reference to any of the Borrowers unless the
context in which such term is used shall otherwise require.
"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
Parent 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.
"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.
"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 Parent (or other securities convertible
into such securities) representing more than 25% of the combined voting power of
all securities of the Parent 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 Parent ceasing for any reason to constitute a majority of
the Board of Directors of the Parent unless the Persons replacing such
individuals were nominated by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or the Board of Directors of the
Parent; 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 Parent (or other securities convertible into such securities)
representing more than 25% of the combined voting power of all securities of the
Parent 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.
-28-
36
"Commitments" means and includes the Revolving Credit Commitments 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 Parent 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 Borrowers based on
actual results of operations of the acquired entity or business (without giving
retroactive effect to any operating efficiencies realized after such
Acquisition).
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Parent or any Subsidiary, are treated as
a single employer under Section 414 of the Code.
"Conversion Term Loans" is defined in Section 1.1(d) hereof.
"Conversion Term Notes" is defined in Section 1.1(d) hereof.
"Current Maturities" means, as of any date, the aggregate amount of
payments scheduled to be made by the Parent and its Subsidiaries within the
twelve (12) calendar months following such date with respect to principal on all
Indebtedness (whether at maturity, as a result of mandatory sinking fund
redemption, scheduled mandatory prepayment or otherwise).
"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.
-29-
37
(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; provided, however,
that (x) if EBIT includes any Consolidated Net Income for any period ending on
or prior to December 31, 1997, EBIT shall be increased by all amounts deducted
in arriving at such Consolidated Net Income for such period in respect of the
non-cash charges taken against earnings on or prior to December 31, 1997 and (y)
if EBIT includes any Consolidated Net Income for any period ending on or prior
to March 31, 1998, EBIT shall be increased by all amounts deducted in arriving
at such Consolidated Net Income for such period in respect of the one-time
non-recurring charge (not to exceed $4,000,000) taken against earnings on or
prior to March 31, 1998 for bonus payments to management of the Parent and
Borrowers.
"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 Parent and its
Subsidiaries; provided, however, that (x) if EBITDA includes any Consolidated
Net Income for any period ending on or prior to December 31, 1997, EBITDA shall
be increased by all amounts deducted in arriving at such Consolidated Net Income
for such period in respect of the non-cash charges taken against earnings on or
prior to December 31, 1997 and (y) if EBITDA includes any Consolidated Net
Income for any period ending on or prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇▇▇ shall be
increased by all amounts deducted in arriving at such Consolidated Net Income
for such period in respect of the one-time non-recurring charge (not to exceed
$4,000,000) taken against earnings on or prior to March 31, 1998 for bonus
payments to ▇▇▇▇▇▇'▇ management of the Parent and Borrowers.
"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.
-30-
38
"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 Parent, less Interest Expense paid in cash by the Parent and its
Subsidiaries during such period, less payments in cash by the Parent 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
Current Maturities as at said date.
"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 Parent ending on, or (if none so end)
most recently completed prior to such date exceeds (b) Pro Forma Capital
Expenditures during the same four fiscal quarters (excluding 50% of such Pro
Forma Capital Expenditures which consist of Greenfield Expenses) to (ii) the sum
of (a) Pro Forma Interest Expense for the same four fiscal quarters and (b)
Current Maturities as at said date.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by the Parent and its Subsidiaries on a basis consistent
with the preparation of the Parent's most recent financial statements furnished
to the Lenders pursuant to Section 6.4 hereof.
"Greenfield Expenses" means Capital Expenditures made for construction
of an entirely new plant or other production facilities.
"Guarantor" means the Parent and 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; provided,
however, that the term "Guarantor", when used in Sections 6.2 and 7.2 hereof,
shall not include the Parent.
"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.
"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
-31-
39
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 Parent ending on, or (if none so end) most recently completed prior to such
date to (ii) Pro Forma Interest Expense for the same four fiscal quarters.
"Interest Expense" means, with reference to any 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 Parent and its Subsidiaries for such period
determined in accordance with GAAP.
"Interest Period" means, 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 ▇▇▇▇▇▇ 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 Portion for
each Interest Period shall apply from and including the first day of
such Interest Period to but excluding the last day thereof; and
(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
-32-
40
Interest Period without paying part of a LIBOR Portion on a date other
than the last day of the Interest Period applicable thereto.
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 $5,000,000, 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 Parent and the Borrowers) 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 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 Leverage Ratio is greater than or
equal to 1.50 to 1 but less than 2.00 to 1.
-33-
41
"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 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 Leverage Ratio is greater than or
equal to 3.00 to 1.
"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 Parent ending on, or (if none so end) most
recently completed prior to such date.
"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
Conversion Term Loans.
"Material Plan" is defined in Section 9.1(h) hereof.
"Mandatory Conversion Term Loans" is defined in Section 1.1(c) hereof.
"Mandatory Conversion Term Notes" is defined in Section 1.1(c) hereof.
"Merger" means that certain merger pursuant to the Merger Documents
pursuant to which ▇▇▇▇▇▇ Holding merges with and into the Parent (then known as
MLX Corp.), in which the Parent is the surviving corporation.
-34-
42
"Merger Documents" means that certain Agreement and Plan of Merger
dated as of October 20, 1997 by and between ▇▇▇▇▇▇ Holding and the Parent.
"Mortgage" is defined in Section 4.1 hereof.
"▇▇▇▇▇▇" is defined in the introductory paragraph hereof.
"▇▇▇▇▇▇ Holding" means ▇▇▇▇▇▇ Metalcraft Holding Co., a former Delaware
corporation of which ▇▇▇▇▇▇ was previously a subsidiary and which merges out of
existence in the Merger.
"▇▇▇▇▇▇ North Carolina" is defined in the introductory paragraph
hereof.
"Net Worth" means, at any time the same is to be determined, the total
shareholders' equity (including capital stock, additional paid-in capital and
retained earnings after deducting treasury stock, but excluding minority
interest in Subsidiaries) which would appear on the balance sheet of the Parent
and its Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Notes" means and includes the Revolving Credit Notes 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, Mandatory Conversion Term Notes, Voluntary Conversion Term Notes or Term
Credit Notes, such Notes to constitute four separate classes of Notes.
"Obligations" means all obligations of the Borrowers and either of them
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
Borrowers 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.
"Parent" is defined in the introductory paragraph hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"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
-35-
43
through participation interests in L/C Obligations) of the aggregate principal
amount of all outstanding Obligations.
"Permitted Acquisitions" means the Acquisitions permitted pursuant to
Section 8.17 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 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.
"Pro Forma Capital Expenditures" means, with reference to any period
(the "measurement period"), Capital Expenditures for such measurement period;
provided, however, that if the measurement period ends at any time prior to the
fourth fiscal quarter of the Parent to commence and end after the date of this
Agreement, Pro Forma Capital Expenditures shall mean the product of (x) Capital
Expenditures for each fully completed fiscal quarter of the Parent which
commenced and ended after the date of this Agreement (each, a "post-closing
quarter") and (y) a fraction, the numerator of which is 4 and the denominator of
which is the whole number of post-closing quarters included in such measurement
period.
"Pro Forma Interest Expense" means, with reference to any period (the
"measurement period"), Interest Expense for such measurement period; provided,
however, that if the measurement period ends at any time prior to the fourth
fiscal quarter of the Parent to commence and end after the date of this
Agreement, Pro Forma Interest Expense shall mean the product of (x) Interest
Expense for each fully completed fiscal quarter of the Parent which commenced
and ended after the date of this Agreement (each, a "post-closing quarter") and
(y) a fraction, the numerator of which is 4 and the denominator of which is the
whole number of post-closing
-36-
44
quarters included in such measurement period; further 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.
"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,
those Lenders holding at least 66-2/3% of the Revolving Credit Commitments or,
in the event that no Revolving Credit Commitments are outstanding hereunder,
those Lenders holding at least 66-2/3% in aggregate principal amount of the
Loans outstanding hereunder.
"Restricted Payments" is defined in Section 8.16 hereof.
"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 Loans" is defined in Section 1.2 hereof.
"Revolving Credit Notes" is defined in Section 1.2 hereof.
"Subordinated Debt" means 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.
-37-
45
"Subsidiary" means (x) when used with reference to the Parent, 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 Parent, by one or more of such Subsidiaries, or by the Parent and
one or more of such Subsidiaries and (y) when used with reference to any
Borrower, 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 such Borrower, by one or more of such
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 Credit" is defined in the introductory paragraph hereof.
"Term Credit Commitments" means the commitments of the Lenders to make
the Term Credit Loan in the amounts set forth opposite their signatures hereto
under the heading "Term Credit Commitment" and opposite their signatures on
Assignment Agreements delivered pursuant to Section 12.15 hereof under the
heading "Term Credit Commitment", as such amounts may be reduced pursuant
hereto. The Term Credit Commitments are $15,000,000 as of the date hereof.
"Term Credit Loan" is defined in Section 1.2 hereof.
"Term Credit Notes" is defined in Section 1.4 hereof.
"Termination Date" means (x) December 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" is defined in Section 1.2 hereof.
"Total Funded Debt" means, at any time the same is to be determined,
the aggregate of all Indebtedness of the Parent and its Subsidiaries at such
time, plus all Indebtedness of any other Person which is directly or indirectly
guaranteed by the Parent 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 Parent or any of its Subsidiaries
has otherwise assured a creditor against loss.
-38-
46
"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.
"Voluntary Conversion Term Loans" is defined in Section 1.1(d) hereof.
"Voluntary Conversion Term Notes" is defined in Section 1.1(d) hereof.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"Wholly Owned Subsidiary" means (x) when used with reference to the
Parent, a Subsidiary of which 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 Parent and/or one or more Wholly Owned
Subsidiaries within the meaning of this definition and (y) when used with
reference to any Borrower, a Subsidiary of which 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 such 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 Parent or the Required Lenders may by notice to the
Lenders and the Parent, respectively, require that the Lenders and the Parent
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
Parent and its Subsidiaries shall be the same as if such change had not been
made. No delay by the Parent or the Required Lenders in requiring such
negotiation shall limit their right to so require such a
-39-
47
negotiation at any time after such a change in accounting principles. Without
limiting the generality of the foregoing, the Parent 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.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Parent and each Borrower represents and warrants to the Lenders as
follows (provided that each Borrower is making such representations and
warranties only as to itself and its Subsidiaries):
Section 6.1. Organization and Qualification. (i) The Parent is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Georgia, (ii) ▇▇▇▇▇▇ is duly organized, validly existing and in
good standing as a corporation under the laws of the State of Illinois and (iii)
▇▇▇▇▇▇ North Carolina is duly organized, validly existing and in good standing
as a corporation under the laws of the State of North Carolina, and each has
full and adequate corporate power to own its Property and carry on its business
as now conducted. Each of the Parent and the Borrowers 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 Parent, ▇▇▇▇▇▇ or ▇▇▇▇▇▇ North Carolina or in the ability of
any of them to perform or the Agent's ability to enforce performance of the
obligations of any of them under the Loan Documents. The Parent and each
Borrower has full right and authority to enter into this Agreement, to obtain
(in the case of each Borrower) the credit herein provided for, to issue (in the
case of each Borrower) 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 Parent or any
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 Parent or any Borrower or any charter or by-law
provision of the Parent or any Borrower or any covenant, indenture or agreement
of or affecting the Parent or any Borrower or any of their respective
Properties, or result in the creation or imposition of any Lien on any Property
of the Parent or any Borrower.
Section 6.2. Non-Borrowing Subsidiaries. Each Guarantor is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated or
-40-
48
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 Parent and its Subsidiaries taken as a whole or, in the case of a Borrower,
in its ability to perform or the Agent's ability to enforce performance of such
Borrower's obligations under the Loan Documents. Each Guarantor 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 Guarantor of any of the matters and things therein provided
for, contravene any provision of law or any charter or by-law provision of any
Guarantor or any covenant, indenture or agreement of or affecting the Parent 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 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 Parent 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 Parent or a Subsidiary are owned, beneficially and
of record, by the Parent 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 Parent nor any Borrower nor
any of their respective 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
▇▇▇▇▇▇ and its Subsidiaries as at June 30, 1997 and the related consolidated
statements of income, retained earnings and cash flows of the Parent 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
-41-
49
consolidated balance sheet of ▇▇▇▇▇▇ and its Subsidiaries as at September 30,
1997, and the related consolidated statements of income, retained earnings and
cash flows of the Parent and its Subsidiaries for the three (3) months then
ended, heretofore furnished to the Lenders, fairly present the consolidated
financial condition of the Parent 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 Parent
nor any Borrower nor any of their 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 June 30, 1997, or if later, the
date as of which were prepared the most recent financial statements for ▇▇▇▇▇▇
or the Parent, as the case may be, 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 Parent 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 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, the Parent and the Borrowers only represent
that the same were prepared on the basis of information and estimates the Parent
and the Borrowers believed to be reasonable.
Section 6.6. Good Title. The Parent, each Borrower and their
respective Subsidiaries have good and defensible title to their respective
material assets as reflected on the most recent consolidated balance sheet of
the Parent and its Subsidiaries furnished to the Lenders (except for sales of
assets by the Parent, such 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 Parent or any Borrower threatened, against the Parent, such
Borrower or any of their respective Subsidiaries which if adversely determined
would result in any material adverse change in the financial condition,
Properties, business or operations of the Parent 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 Parent or any Subsidiary in
any jurisdiction have, in fact, been filed, and all taxes, assessments, fees and
other governmental charges upon the Parent or any Subsidiary
-42-
50
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 Parent does not
know of any proposed additional tax assessment against any subsidiary for which
adequate provision in accordance with GAAP has not been made on its accounts.
Adequate provisions in accordance with GAAP for taxes on the books of the Parent
and each Subsidiary have been made 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 Parent or any other Person, is or will be necessary to the valid execution,
delivery or performance by the Parent and the Borrowers of this Agreement, the
Applications or the Notes.
Section 6.10. Affiliate Transactions. Neither the Parent nor any
Borrower nor any of their respective 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 Parent,
such Borrower or such 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 Parent nor any Borrower nor any of their respective 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 Parent 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 Parent 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 Parent, each Borrower and
their respective 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 Parent, such 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
-43-
51
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 Parent and its Subsidiaries taken as a whole. Neither the
Parent nor any Borrower nor any of their respective 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 Parent and its Subsidiaries taken as a whole.
Section 6.14. Other Agreements. Neither the Parent nor any Borrower
nor any of their respective Subsidiaries is in default under the terms of any
covenant, indenture or agreement of or affecting the Parent, such 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 Parent and its Subsidiaries taken as a whole.
Section 6.15. Merger Documents. The Borrowers heretofore caused
▇▇▇▇▇▇ Holding to deliver to each Lender true and correct copies of the Merger
Documents and all exhibits thereto and the same have not been amended or
modified in any respect. ▇▇▇▇▇▇ Holding has all necessary corporate right, power
and authority to consummate the Merger and other transactions contemplated by
the Merger Documents and to perform and observe all of its obligations
thereunder. ▇▇▇▇▇▇ Holding is not in default in any material respect of any of
its obligations under the Merger Documents.
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:
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;
-44-
52
(b) the Parent and each 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) after giving effect to such extension of credit to the
relevant Borrower, (i) the aggregate principal amount of all Revolving
Loans and L/C Obligations outstanding under the Revolving Credit shall
not exceed the Revolving Credit Commitments then in effect;
(d) 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
(e) 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:
(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;
-45-
53
(iv) a mortgagee's policy of title insurance (or a
binding commitment therefor) for the Mortgage insuring the
Lien thereof in the amount of $7,500,000 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;
(v) an ALTA survey prepared by a licensed surveyor
on each parcel of real property subject to the lien of the
Mortgage, which survey shall also state whether or not any
portion of the real property is in a designated flood hazard
area;
(vi) a report of an independent firm of environmental
engineers acceptable to the Agent concerning the environmental
hazards and matters with respect to the parcels of real
property subject to the lien of the Mortgage;
(vii) certified copies of resolutions of the Board of
Directors of the Parent, each Borrower and each Guarantor
authorizing the execution and delivery of the Loan Documents
delivered by them and indicating the authorized signers of
such Loan Documents;
(viii) copies of the articles of incorporation and
by-laws of the Parent, each Borrower and each Guarantor
certified as true and correct by the Secretary or other
appropriate officer of the Parent, such Borrower or such
Guarantor, as the case may be;
(ix) a good standing certificate for the Parent, each
Borrower and 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;
(x) an incumbency certificate containing the name,
title and genuine signatures of the Borrowers' Authorized
Representatives;
(xi) certified copies of the Merger Documents,
together with all exhibits and attachments thereto; and
(xii) payoff letters from Connecticut General Life
Insurance Company and CIGNA Mezzanine Partners III, L.P.
(collectively, "Cigna") and Fleet Capital Corporation
("Fleet") which contain Cigna's and Fleet's promise to release
their
-46-
54
respective Liens on all assets of any of the Borrowers
upon its receipt of the payoff amount specified therein; and
(b) the Agent shall have received for the account of and
addressed to the Lenders the favorable written opinion of counsel for
the Parent and the Borrowers and certain Guarantors in the form
attached hereto as Exhibit H;
(c) the Merger shall have occurred subject to no conditions
subsequent which have not yet been satisfied except for the Lenders'
funding out of the initial Loans of not more than $25,000,000 of the
merger price therefor and the Agent shall have received evidence
satisfactory to it of the foregoing;
(d) the Agent shall have received for itself and for the
Lenders the initial fees called for hereby;
(e) each Lender shall have received a pro forma balance sheet
of the Parent and its Subsidiaries as of and immediately after giving
effect to the Merger and such other valuations and certifications, as
it may require in order to satisfy itself as to the value of the
Collateral, the financial condition of the Parent and of each Borrower
and their respective Subsidiaries, and the lack of material contingent
liabilities of the Parent, each Borrower and their respective
Subsidiaries;
(f) the Agent shall have received a Compliance Certificate
showing a pro forma computation (after giving effect to the Merger) of
the calculations contained therein (other than the Fixed Charge
Coverage Ratio) as of the close of the most recently completed fiscal
quarter of the Parent, such pro forma computation to be in form and
substance reasonably satisfactory to the Agent and otherwise in
reasonable detail;
(g) the Liens granted to the Agent under the Collateral
Documents shall have been perfected in a manner satisfactory to each
Lender and its counsel; and
(h) 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.
SECTION 8. COVENANTS.
The Parent and each Borrower agrees that, so long as any Loans, Letters
of Credit or Commitments are available to or in use by any Borrower hereunder,
except to the extent
-47-
55
compliance in any case or cases is waived in writing by the Required Lenders and
except that each Borrower is making such agreements only as to itself and its
Subsidiaries:
Section 8.1. Maintenance of Business. The Parent and each Borrower
shall, and shall cause each of their respective 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 Parent and each 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 Parent and each Borrower
will duly pay and discharge, and will cause each of their respective
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 Parent and each Borrower will insure
and keep insured, and will cause each of their respective 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 Parent and each 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 Parent and
each 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 Parent and each Borrower will,
and will cause each of their respective 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
-48-
56
properties and assets (including books and records) of the Parent, such Borrower
and their respective Subsidiaries at all reasonable times and will furnish to
the Agent, each Lender and their duly authorized representatives such
information respecting the business and financial condition of the Parent, such
Borrower and their respective Subsidiaries as the Agent or such Lender may
reasonably request; and without any request, the Parent 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 Parent, a copy
of the balance sheet and statements of income, retained earnings and
cash flows of the Parent 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 Parent 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 Parent;
(b) as soon as available, and in any event within 90 days
after the close of each fiscal year of the Parent, a copy of the
consolidated balance sheet of the Parent and its Subsidiaries as of the
close of such fiscal year and the consolidated statements of income,
retained earnings and cash flows of the Parent 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 Parent and satisfactory to the
Required Lenders, 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 Parent 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 Parent or any Borrower,
not later than 10 days after receipt thereof, a copy of any management
letters on internal accounting controls of the Parent 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 Parent 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
-49-
57
statements the Parent files 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 Parent or any Borrower,
written notice of any threatened or pending litigation or governmental
proceeding or labor controversy against the Parent or any Subsidiary
which, if adversely determined, would have a material adverse effect on
the financial condition, Properties, business or operations of the
Parent 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 Parent 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 Parent or any 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 Parent and Borrowers 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 Parent, the Borrowers and their
respective 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 Parent
and Borrowers authorize such accountants to discuss with the Lenders (and such
Persons as any Lender may designate) the finances and affairs of the Parent, the
Borrowers and its Subsidiaries) all at such reasonable times and as often as may
be reasonably requested.
Section 8.6. Interest Coverage Ratio. The Parent will, as of
the last day of each fiscal quarter of the Parent, maintain an Interest
Coverage Ratio of not less than 2.50 to 1.0.
Section 8.7. Leverage Ratio. The Parent will at all times maintain
its Leverage Ratio at not more than (i) 3.5 to 1.0 from the date hereof through
and including the third fiscal quarter of the Parent's fiscal year 2000 and (ii)
3.0 to 1.0 at all times thereafter.
Section 8.8. Net Worth. The Parent will, as of the last day of each
fiscal quarter of the Parent, maintain its Net Worth at not less than the
Minimum Required Amount. For purposes
-50-
58
of this Section 8.8, the term "Minimum Required Amount" shall mean $1,250,000
through March 30, 1998 and shall increase (but never decrease) as of March 31,
1998 and as of the close of each fiscal quarter of the Parent by sixty percent
(60%) of Consolidated Net Income (if positive) for the fiscal quarter of the
Parent then ended.
Section 8.9. Fixed Charge Coverage Ratio. The Parent will, as of
the last day of each fiscal quarter of the Parent, maintain the Fixed Charge
Coverage Ratio at not less than 1.25 to 1.0.
Section 8.10. Capital Expenditures. The Parent 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 (including any Greenfield Expenses) an aggregate amount
in excess of $8,000,000 for the Parent and its Subsidiaries taken together.
Section 8.11. Indebtedness. The Parent and each Borrower will not,
nor will it permit any of their respective 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 Parent 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 ▇▇▇▇▇▇ Lender and
▇▇▇ ▇▇▇▇▇▇ aggregating not more than $500,000;
(f) non-compete payments owing to sellers as part of the
consideration due them for Permitted Acquisitions;
(g) unsecured Subordinated Debt; and
-51-
59
(h) 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 Parent and each Borrower will not, and will
not permit any of their respective Subsidiaries to, create, incur or permit to
exist any Lien of any kind on any Property owned by the Parent, such 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 Parent, any Borrower or any of their respective
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 Parent 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;
(d) Liens securing indebtedness permitted by Section 8.11(b)
hereof in respect of Property now owned or hereafter acquired by the
Parent, any Borrower or any of their respective 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 Parent or any
-52-
60
Subsidiary, provided that such Lien is not created in contemplation of
or in connection with such acquisition;
(f) the Liens described on Schedule 8.12 hereof; and
(g) 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 Parent, any Borrower or any of their respective
Subsidiaries.
Section 8.13. Investments, Loans, Advances and Guaranties. The
Parent and each Borrower will not, and will not permit any of their respective
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;
(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;
-53-
61
(e) intercompany loans and advances by and from the
Parent 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 Parent and each
Borrower will not, and will not permit any of their respective Subsidiaries to,
enter into any arrangement with any bank, insurance company or any other lender
or investor providing for the leasing by the Parent, such 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 Parent and Borrowers shall not, nor
shall they permit any of their Subsidiaries to, acquire the use or possession of
any Property under a lease or similar arrangement, whether or not the Parent 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 Parent
and its Subsidiaries under all such leases and similar arrangements would exceed
$5,000,000 during any fiscal year of the Parent. Capital Leases shall not be
included in computing compliance with this Section to the extent the Parent's
and its Subsidiaries' liability in respect of the same is permitted by Section
8.11(b) hereof.
Section 8.15. Dividends and Certain Other Restricted Payments. The
Parent 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 Parent'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 at the Parent.
Section 8.16. Mergers, Consolidations and Sales. The Parent and each
Borrower will not, and will not permit any of their respective 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
-54-
62
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 Parent (including any corporation
which immediately after giving effect to an Acquisition permitted by
Section 8.17 hereof becomes such a Subsidiary, but in any event
excluding the Borrowers) may merge or consolidate with or into the
Parent, ▇▇▇▇▇▇ or any Wholly Owned Subsidiary of ▇▇▇▇▇▇; provided that
in any such merger or consolidation involving the Parent or a Borrower,
the Parent or such Borrower (as the case may be) shall be the surviving
or continuing corporation, or, in the case of any other merger or
consolidation of a Subsidiary (whether of the Parent or a Borrower) and
a Wholly Owned Subsidiary of the Parent or any 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 Parent, ▇▇▇▇▇▇ or any Wholly Owned Subsidiary of the
Company; and
(c) the Parent may merge with a Wholly Owned Subsidiary
incorporated in Delaware solely for the purpose of changing the
Parent'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;
(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 Parent'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 Parent identified
and defined therein;
(iii) the Agent shall have received an opinion of
counsel of the Parent, 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
-55-
63
(iv) such merger shall have no adverse effect on the
financial condition Properties, business or operations the
Parent, ▇▇▇▇▇▇ or ▇▇▇▇▇▇ North Carolina or in the ability of
any of them 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 Parent and its Subsidiaries taken as a whole.
Section 8.17. Acquisitions. The Parent and each Borrower will not,
and will not permit any of their respective Subsidiaries to, make or commit to
make any Acquisitions; provided, however, that the Parent, any Borrower and
their respective 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 Parent, 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 Parent or any 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 Parent
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 Parent 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 Parent as consideration for
such Acquisition), when taken together with the aggregate amount expended as
consideration (including Indebtedness and excluding equity securities as
aforesaid) for all other Acquisitions permitted under this Section 8.18 during
the then twelve most recently completed calendar months does not exceed
$15,000,000, (v) the Parent or any Borrower has informed the Lenders of such
Acquisition at least ten (10) Business Days in advance of its closing and
promptly informed the Lenders of any terms and conditions applicable to the
Acquisition which the Parent or any Borrower in good faith believe are material,
(vi) the Parent can demonstrate on a pro forma basis after giving effect to such
Acquisition that (x) the Leverage Ratio (such pro forma calculation of the
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
-56-
64
at the commencement of the four-quarter period with reference to which the
Leverage Ratio is being calculated) is less than 3.0 to 1.0 and (y) the Parent
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 Borrowers 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 ten (10) Business Days
in advance of the closing of such Acquisition, the Parent or any Borrower have
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 Parent and each
Borrower will not assign, sell or transfer, or permit any of their respective
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 Borrowers 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 Subsidiary as collateral security for the
Notes and the other Obligations, 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 Parent and each Borrower will, and will
cause each of their respective 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 Parent and each Borrower will, and will cause
each of their respective Subsidiaries to, promptly notify the Lenders of (i) the
occurrence of any
-57-
65
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 Parent, any Borrower or any of their
respective Subsidiaries of any material liability, fine or penalty, or any
material increase in the contingent liability of the Parent, such Borrower or
any such Subsidiary with respect to any post-retirement Welfare Plan benefit.
Section 8.21. Compliance with Laws. The Parent and each Borrower
will, and will cause each of their respective 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 Parent, such 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 Parent 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 Parent and
each Borrower will not, and will not permit any of their respective 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 Parent, such 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 Parent nor any Borrower nor any of their respective Subsidiaries will change
its fiscal year from its present basis without the prior written consent of the
Required Lenders.
Section 8.24. Change in the Nature of Business. The Parent and each
Borrower will not, and will not permit any of their respective Subsidiaries to,
engage in any business or activity if as a result the general nature of the
business of the Parent, such Borrower or any such Subsidiary would be changed in
any material respect from the general nature of the business engaged in by the
Parent, such Borrower or such Subsidiary on the date of this Agreement.
Section 8.25. Use of Loan Proceeds. The Borrowers will use the
Revolving Credit solely to refinance currently outstanding Indebtedness, to
finance general corporate needs and to finance the Permitted Acquisitions. The
Borrower will use the Term Loans solely to refinance currently outstanding
Indebtedness.
-58-
66
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 Parent or any 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
(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 Parent or any
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
Parent 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
-59-
67
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 Parent 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 Parent 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 Parent 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 Material Plan
against the Parent 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 Parent 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 Borrowers' other obligations hereunder;
(l) either Borrower shall cease at any time and for any
reason to be a Wholly Owned Subsidiary of the Parent;
(m) a Change of Control shall occur; or
(n) the Parent 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
-60-
68
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(p) hereof; or
(o) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Parent or any of its
Subsidiaries or any substantial part of any of their Property, or a
proceeding described in Section 9.1(n)(v) shall be instituted against
the Parent 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 (m), both inclusive, of Section 9.1 has occurred and is continuing, the
Agent shall, upon request of the Required Lenders, by notice to any 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;
(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 (n) or
(o) 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 (n) or (o) 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 (n) or (o) of Section 9.1 has occurred the
relevant Borrower shall, without notice or demand from the Agent, immediately
pay
-61-
69
to the Agent the full outstanding amount of each Letter of Credit (such
amount to be held as cash collateral for the applicable Borrower's obligations
in respect of the Letters of Credit), the relevant 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 relevant
Borrower to honor any such demand and that the Agent shall have the right to
require the relevant 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 Borrowers 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 any Borrower and
the Lenders and may be removed by the Required Lenders upon twenty (20) days
prior written notice to any Borrower and the Lenders. In the event of any such
resignation or removal the Required Lenders may appoint a new agent after
consultation with any 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 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) each 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
-62-
70
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 Borrowers or the Parent), 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 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 Borrowers. It shall be the responsibility of each Lender to keep itself
informed as to the creditworthiness of the Borrowers 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
Parent or any 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
-63-
71
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 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, the Parent, each Subsidiary party hereto and each Subsidiary which
executes and delivers a Guaranty (the Parent and 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 and each other holder of any of the
Obligations, and each Borrower hereby unconditionally and irrevocably agrees to
be jointly and severally liable to the Agent, the Lenders and such holders for,
the due and punctual payment of all present and future indebtedness of the
Borrowers evidenced by or arising out of the Loan Documents, including, but not
limited to, the due and punctual payment of principal of and interest on the
Notes and the due and punctual payment of all other Obligations now or hereafter
owed by the Borrowers under the Loan Documents 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. In case of failure by the Borrowers
punctually to pay any indebtedness or other Obligations guarantied hereby or for
which the Borrowers agree hereby to be jointly and severally liable, 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 Borrowers.
Section 11.2. Guaranty Unconditional. The obligations of each
Guarantor as a guarantor or joint and several obligor under the Loan Documents,
including this Section 11, shall
-64-
72
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 any Borrower or of any other
Guarantor under this Agreement or any other Loan Document or by
operation of law or otherwise;
(b) any modification or amendment of or supplement to
this Agreement or any other Loan Document;
(c) any change in the corporate existence, structure or
ownership of, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting, the Borrowers, any other Guarantor, or
any of their respective assets, or any resulting release or discharge
of any obligation of any Borrower or of any other Guarantor contained
in any Loan 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 any 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 any Borrower, regardless of
what obligations of the Borrowers remain unpaid;
(g) any invalidity or unenforceability relating to or against
any Borrower or any other Guarantor for any reason of this Agreement or
of any other Loan Document or any provision of applicable law or
regulation purporting to prohibit the payment by the Borrowers or any
other Guarantor of the principal of or interest on any Note or any
other amount payable by them under the Loan 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 Loan Documents.
-65-
73
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 amounts payable by the
Borrowers under this Agreement and all other Loan Documents 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 Borrowers under the Loan Documents is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of any 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.
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 Borrowers, 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 Obligations, or as to any security therefor, unless and until
the full amount owing on the Obligations has been paid and the Commitments have
terminated; and the payment by such Guarantor of any amount pursuant to any of
the Loan Documents on account of credit extended to any other 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 Obligations or any
proceeds thereof or any security therefor unless and until the full amount owing
on the Obligations has been paid and the Commitments have terminated.
Section 11.5. Limit on Recovery. Notwithstanding any other provision
hereof or of the Revolving Credit Notes, the right of recovery against each
Guarantor under this Section 11 or against a Borrower on the Notes issued by it
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 and the Notes 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 Borrowers under this Agreement or any other
Loan Document is stayed
-66-
74
upon the insolvency, bankruptcy or reorganization of any of the Borrowers, all
such amounts otherwise subject to acceleration under the terms of this Agreement
or the other Loan 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 Parent and the Borrowers are required by this Agreement to cause
such Guarantor to take, and shall refrain from taking such action as the Parent
and the Borrowers are 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
-67-
75
(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 Borrowers agree 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 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. Each Borrower agrees to pay on demand all costs and expenses for
which such Borrower is liable in accordance with the preceding sentence in
connection with Letters of Credit issued for such Borrower's account. The
Borrowers agree 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 neither the Parent nor any Borrower are 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. Each 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 Borrowers agree 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
-68-
76
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 Parent or the Borrowers, 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
any Borrower given by United States certified or registered mail or by telecopy.
Notices hereunder to the Parent or any Borrower shall be addressed to the name
of such Person in care of Morton 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
-69-
77
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 Parent, the Borrowers and their respective 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 regard to principles of conflicts of laws.
The Borrowers may not assign their 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 the Notes
then owned by such assigning Lender, together with an equivalent proportion of
its Commitments to make Loans hereunder) pursuant to written agreements executed
by such assigning Lender, such assignee lender or lenders, the Parent and the
Agent, which agreements shall specify in each instance the portion of the
indebtedness
-70-
78
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) each such assignment shall
be of a constant, and not a varying, percentage of the assigning Lender's rights
and obligations under this Agreement and the assignment shall cover the same
percentage of such Lender's Commitments, Loans and Notes; (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 Agent, each Lender originally party hereto and ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ (i) 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, (ii) for any assignment to any
Affiliate of any such Lender and (iii) for any such assignment made during the
continuance of any Event of Default); and (iv) 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 Parent and the
Borrowers 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
Borrowers 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 Borrowers shall execute
and deliver Notes to the assignee Lender in the respective amounts of its
Commitments under the Revolving Credit and Term Credit and new Notes to the
assigning Lender in the respective amounts of its Commitments under the
Revolving Credit and Term Credit 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 Parent 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 Parent 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
-71-
79
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 Parent, 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.
-72-
80
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 20th day of January, 1998.
▇▇▇▇▇▇ INDUSTRIAL GROUP, INC.
By
Its:__________________________________
▇▇▇▇▇▇ METALCRAFT CO.
By
Its:__________________________________
▇▇▇▇▇▇ METALCRAFT CO. OF NORTH CAROLINA
By
Its:__________________________________
-73-
81
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 any 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 such 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
$14,000,000 (40%)
Term Credit Commitment: By_____________________________
$6,000,000 (40%) Its Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
LIBOR Funding Office:
Nassau Branch
c/o ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-74-
82
Amount and Percentage of Commitments:
Revolving Credit Commitment: FIRSTAR BANK MILWAUKEE, N.A.
$7,000,000 (20%)
Term Credit Commitment: By______________________________
$3,000,000 (20%) Its________________________
_____________________________
_____________________________
_____________________________
_____________________________
Telephone: _________________
Telecopy: __________________
LIBOR Funding Office
_____________________________
_____________________________
_____________________________
-75-
83
Amount and Percentage of Commitments:
Revolving Credit Commitment: NATIONAL CITY BANK
$7,000,000 (20%)
Term Credit Commitment: By______________________________
$3,000,000 (20%) Its________________________
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
LIBOR Funding Office
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
-76-
84
Amount and Percentage of Commitments:
Revolving Credit Commitment: THE NORTHERN TRUST COMPANY
$7,000,000 (20%)
Term Credit Commitment: By______________________________
$3,000,000 (20%) Its________________________
________________________________
________________________________
________________________________
________________________________
Telephone: ___________________
Telecopy: ____________________
LIBOR Funding Office
_____________________________
_____________________________
_____________________________
-77-