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EXHIBIT 10.24
SECOND AMENDMENT TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS SECOND AMENDMENT TO REVOLVING CREDIT AND TERM LOAN
AGREEMENT (this "Amendment") is made and entered into this 14th day of June,
1996, by and between FALCONITE, INC., an Illinois corporation ("Borrower"), and
CITIZENS BANK & TRUST COMPANY OF PADUCAH ("Lender").
W I T N E S S E T H:
WHEREAS, Borrower and Lender have heretofore entered into that
certain Revolving Credit and Term Loan Agreement dated October 5, 1995, as
amended by that certain First Amendment to Revolving Credit and Term Loan
Agreement dated January 5, 1996 (as so amended, the "Loan Agreement"; all
capitalized terms used and not otherwise defined in this Amendment shall have
the respective meanings ascribed to them in the Loan Agreement as amended by
this Amendment); and
WHEREAS, Borrower and Lender desire to amend the Loan
Agreement in the manner hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower and Lender hereby agree as follows:
1. The definition of "Borrowing Base" set forth in
Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
""Borrowing Base" shall mean, as of any date, the sum
of (i) the lesser of (A) Sixty-Five Percent (65%) of the
aggregate face amount of Eligible Accounts of Borrower or (B)
One Million Five Hundred Thousand Dollars ($1,500,000.00),
plus (ii) Eighty Percent (80%) of the aggregate value of all
Eligible Inventory of Borrower minus (iii) the then
outstanding principal balance of the Term Note. Lender
retains the right in its sole discretion to reduce the
allowable percentage of the Eligible Accounts and Eligible
Inventory (the "Eligible Collateral") to be used in
calculating the Borrowing Base based upon (i) the Eligible
Collateral changing in character (i.e., type or category) from
the Eligible Collateral originally presented to and agreed
upon between Borrower and Lender prior to signing this
Agreement and/or (ii) the present or projected operating or
financial condition of Borrower."
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2. The definition of "Commitment Termination Date" set
forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety
and the following substituted in lieu thereof:
""Commitment Termination Date" shall mean June 30,
1998, or, if such date is not a Business Day, the Business Day
next preceding such date."
3. The definition of "Continuing Guaranty" set forth in
Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
""Continuing Guaranty" shall mean that certain
Continuing Guaranty dated October 5, 1995, and executed by the
Guarantors in favor of Lender (an unexecuted copy of which is
attached hereto as Exhibit F), as amended by that certain
First Amendment to Continuing Guaranty dated January 5, 1996
(an unexecuted copy of which is attached hereto as Exhibit
F-1) and that certain Second Amendment to Continuing Guaranty
dated June 14, 1996 (an unexecuted copy of which is attached
hereto as Exhibit F-2), and as the same may from time to time
be further amended, modified, extended or renewed."
4. The definition of "Current Maturities of Debt" set
forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety
and the following substituted in lieu thereof:
""Current Maturities of Debt" shall mean, for any
period, the aggregate current portion of all principal
payments required, scheduled or anticipated to be made during
such period on account of all Debt (other than principal
payments on the Swing Line Loans and the Revolving Credit
Loans and the balloon payment on the Term Note which is due on
the Maturity Date) which would be reflected on a balance sheet
of Borrower prepared as of any date in accordance with
Generally Accepted Accounting Principles."
5. The definition of "Debt" set forth in Section 1.01 of
the Loan Agreement is hereby deleted in its entirety and the following
substituted in lieu thereof:
""Debt" of Borrower shall mean, as of the date of
determination thereof, the sum of (i) all Indebtedness of Borrower for borrowed
money or which has been incurred in connection with the purchase or other
acquisition of property or assets, plus (ii) all Capital Lease obligations of
Borrower, plus (iii) all Guaranties by Borrower of Debt of others plus (iv) all
Indebtedness of Borrower under any interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements and/or any other similar
agreements or arrangements designed to protect Borrower against fluctuations in
interest rates."
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6. The definition of "Indebtedness" set forth in Section
1.01 of the Loan Agreement is hereby deleted in its entirety and the following
substituted in lieu thereof:
""Indebtedness" shall mean, with respect to any
Person, all indebtedness, obligations and liabilities of such
Person, including, without limitation: (i) all "liabilities"
which would be reflected on a balance sheet of such Person,
prepared in accordance with Generally Accepted Accounting
Principles, (ii) all obligations of such Person in respect of
any Guaranty, (iii) all obligations of such Person in respect
of any Capital Lease, (iv) all obligations, indebtedness and
liabilities secured by any Lien or any security interest on
any property or assets of such Person, (v) all net liabilities
of such Person under any interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements
and/or any other similar agreements or arrangements designed
to protect such Person against fluctuations in interest rates
and (vi) all redeemable preferred stock of such Person valued
at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends."
7. The definition of "Interest Payment Date" set forth
in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
""Interest Payment Date" shall mean (i) with respect
to each Swing Line Loan and each Revolving Credit Loan, (A)
the last Business Day of each calendar month commencing on the
first of such days to occur after such Loan is made and (B)
the Commitment Termination Date and (ii) with respect to the
Term Loan, (A) the last business day of each calendar month
commencing on the first of such days to occur after such Loan
is made and (B) the Maturity Date."
8. The definitions of "Loan" and "Loans" set forth in
Section 1.01 of the Loan Agreement are hereby deleted in their entirety and the
following substituted in lieu thereof:
""Loan" shall mean each Swing Line Loan, each
Revolving Credit Loan, each Letter of Credit Loan and the Term
Loan and "Loans" shall mean any or all of the foregoing."
9. The definition of "Maturity Date" set forth in
Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
""Maturity Date" shall mean June 30, 1998, or, if
such date is not a Business Day, the Business Day next
preceding such date."
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10. The definition of "Notes" set forth in Section 1.01
of the Loan Agreement is hereby deleted in its entirety and the following
substituted in lieu thereof:
""Notes" shall mean the Swing Line Note, the Revolving
Credit Note and the Term Note."
11. The definition of "Permitted Investments" set forth
in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
"Permitted Investments" shall mean the following
types of Investments (i) direct obligations of the United
States of America or any agency thereof, or obligations fully
guaranteed by the United States of America or any agency
thereof, provided that such obligations mature within twelve
(12) months of the date of acquisition thereof by Borrower,
(ii) commercial paper rated in the highest grade by two or
more national credit rating agencies and which matures not
more than two hundred seventy (270) days from the date of
creation thereof, (iii) time deposits and money market
accounts with, and certificates of deposit and/or banker's
acceptances issued by, Lender or any other bank or trust
company organized under the laws of the United States of
America or any state thereof having capital surplus and
undivided profits aggregating at least $50,000,000.00, (iv)
repurchase agreements, which shall be collateralized for at
least 102% of face value, issued by Lender or any other bank
or trust company organized under the laws of the United States
of America or any state thereof having capital surplus and
undivided profits aggregating at least $50,000,000.00, (v)
Investments existing as of the date hereof as described in
Exhibit L attached hereto, and any future retained earnings in
respect thereof, (vi) loans or advances in the usual and
ordinary course of business to officers and/or employees of
Borrower for business expenses in the aggregate principal
amount of up to $50,000.00 at any one time outstanding, (vii)
loans to the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Irrevocable Trust U/T/A dated September 7, 1994, solely to
allow such trust to pay insurance premiums on life insurance
policies on the life of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and on the life of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and (viii) demand deposits which constitute
the normal operating checking accounts of the Borrower."
12. The definition of "Prime Rate" set forth in Section
1.01 of the Loan Agreement is hereby deleted in its entirety and the following
substituted in lieu thereof:
""Prime Rate" shall mean the highest annual rate of
interest identified as the "Prime Rate" as published from time
to time in the "Money Rates" section (or such other
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section title or caption) of The Wall Street Journal. In the
event that The Wall Street Journal, during the term hereof,
shall abolish or abandon the practice of publishing a Prime
Rate, or should the same become unascertainable, Lender shall
designate a comparable reference rate which shall be deemed to
be the Prime Rate for purposes hereof. With respect to the
Revolving Credit Loans, the Term Loan, the Letter of Credit
Loans and all of the other Obligations of Borrower other than
the Swing Line Loans, the Prime Rate shall be subject to
adjustment daily (without prior notice to Borrower) based on
the Prime Rate on such day and shall fluctuate as and when
said Prime Rate shall change. With respect to the Swing Line
Loans, the Prime Rate shall be subject to adjustment monthly
(without prior notice to Borrower) on the first day after the
last Business Day of every calendar month based on the Prime
Rate on such day."
13. The definitions of "Revolving Credit Commitment",
"Revolving Credit Loan", "Revolving Credit Loans" and "Revolving Credit
Note" set forth in Section 1.01 of the Loan Agreement are hereby deleted in
their entirety and the following substituted in lieu thereof:
""Revolving Credit Commitment" shall mean the sum of
Thirteen Million Dollars ($13,000,000.00).
"Revolving Credit Loan" and "Revolving Credit Loans"
shall have the meaning assigned to such terms in Section
2.01(b).
"Revolving Credit Note" shall have the meaning
assigned to such term in Section 2.03(b)."
14. The definition of "Total Outstandings" set forth in
Section 1.01 of the Loan Agreement is hereby deleted in its entirety
and the following substituted in lieu thereof:
""Total Outstandings" shall mean, as of any date, the
sum of (i) the aggregate principal amount of all Swing Line
Loans outstanding as of such date, plus (ii) the aggregate
principal amount of all Revolving Credit Loans outstanding as
of such date, plus (iii) the aggregate principal amount of all
Letter of Credit Loans outstanding as of such date plus (iv)
the aggregate undrawn face amount of all Letters of Credit
outstanding as of such date."
15. The following new definitions of "Borrowing Notice",
"Interest Expense", "Operating Cash Flow", "Swing Line Commitment",
"Swing Line Loan", "Swing Line Loans" and "Swing Line Note" are hereby added to
Section 1.01 of the Loan Agreement:
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""Borrowing Notice" shall have the meaning assigned
to such term in Section 2.02(b).
"Interest Expense" shall mean, for the period in
question, without duplication, all gross interest expense of
Borrower (including, without limitation, all commissions,
discounts and/or related amortization and other fees and
charges owed by Borrower with respect to letters of credit and
bankers' acceptance financing, the net costs associated with
interest swap obligations of Borrower, capitalized interest
expense, the interest portion of Capital Lease obligations and
the interest portion of any deferred payment obligation)
during such period, all determined in accordance with
Generally Accepted Accounting Principles.
"Operating Cash Flow" shall mean, for the period in
question, the sum of (a) Adjusted Net Income during such
period plus (b) to the extent deducted in determining Adjusted
Net Income, the sum of (i) Interest Expense during such
period, plus (ii) all provisions for any Federal, state, local
and/or foreign income taxes made by Borrower during such
period (whether paid or deferred) plus (iii) all depreciation
and amortization expenses of Borrower during such period, all
determined in accordance with Generally Accepted Accounting
Principles.
"Swing Line Commitment" shall mean the sum of Two
Million Dollars ($2,000,000.00).
"Swing Line Loan" and "Swing Line Loans" shall have
the meaning assigned to such terms in Section 2.01(a).
"Swing Line Note" shall have the meaning assigned to
such term in Section 2.03(a)."
16. Article II of the Loan Agreement is hereby deleted in
its entirety and the following substituted in lieu thereof:
"ARTICLE II
THE REVOLVING CREDIT LOANS
Section 2.01. Lender's Commitments. (a) Subject to
the terms and conditions of this Agreement and so long as no
Default or Event of Default under this Agreement has occurred,
during the Commitment Period, Lender hereby agrees to loan
funds to Borrower as Borrower may from time to time request
pursuant to Section 2.02(a) (individually, a "Swing Line Loan"
and collectively, the "Swing Line Loans"). The aggregate
principal amount of Swing Line Loans which Lender shall be
required to have outstanding hereunder at any one time shall
not exceed the sum of (i) the lesser of (A) the Lender's Swing
Line
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Commitment or (B) the sum of (1) the Borrowing Base minus (2)
the aggregate principal amount of all outstanding Revolving
Credit Loans, minus (3) the aggregate principal amount of all
outstanding Letter of Credit Loans minus (4) the aggregate
undrawn face amount of all outstanding Letters of Credit;
provided, however, that in no event shall (i) the sum of (A)
the aggregate principal amount of all outstanding Swing Line
Loans, plus (B) the aggregate principal amount of all
outstanding Letter of Credit Loans plus (C) the aggregate
undrawn face amount of all outstanding Letters of Credit
exceed the amount of the Lender's Swing Line Commitment or
(ii) the amount of the Total Outstandings exceed the sum of
(A) the amount of the Lender's Swing Line Commitment plus (B)
the amount of the Lender's Revolving Credit Commitment.
Within the limits set forth herein, Borrower may borrow, repay
and reborrow such sums.
(b) Subject to the terms and conditions of this
Agreement and so long as no Default or Event of Default under
this Agreement has occurred, during the Commitment Period,
Lender hereby agrees to loan funds to Borrower as Borrower may
from time to time request pursuant to Section 2.02(b)
(individually, a "Revolving Credit Loan" and collectively, the
"Revolving Credit Loans"). Each Revolving Credit Loan shall
be in the principal amount of at least One Hundred Thousand
Dollars ($100,000.00). The aggregate principal amount of
Revolving Credit Loans which Lender shall be required to have
outstanding hereunder at any one time shall not exceed the sum
of (i) the lesser of (A) the Lender's Revolving Credit
Commitment or (B) the sum of (1) the Borrowing Base minus (2)
the aggregate principal amount of all outstanding Swing Line
Loans, minus (3) the aggregate principal amount of all
outstanding Letter of Credit Loans minus (4) the aggregate
undrawn face amount of all outstanding Letters of Credit;
provided, however, that in no event shall the amount of the
Total Outstandings exceed the sum of (i) the amount of the
Lender's Swing Line Commitment plus (ii) the amount of the
Lender's Revolving Credit Commitment. Within the limits set
forth herein, Borrower may borrow, repay and reborrow such
sums.
(c) If at any time the Borrowing Base as shown on
the most recent Borrowing Base Certificate submitted to Lender
pursuant to Section 8.01(c) should be less than the Total
Outstandings, Borrower shall be automatically required
(without demand or notice of any kind by Lender, all of which
are hereby expressly waived by Borrower) to immediately either
(i) reduce the Total Outstandings to an amount less than or
equal to the most recent Borrowing Base or (ii) pledge cash or
cash equivalents with Lender as additional collateral for the
Total Outstandings in an
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amount at least equal to the difference between the Total
Outstandings and the Borrowing Base.
(d) If at any time the Total Outstandings are
greater than the sum of (i) the amount of the Lender's Swing
Line Commitment plus (ii) the amount of the Lender's Revolving
Credit Commitment, Borrower shall be automatically required
(without demand or notice of any kind by Lender, all of which
are hereby expressly waived by Borrower) to immediately reduce
the Total Outstandings to an amount less than or equal to the
sum of (i) the amount of the Lender's Swing Line Commitment
plus (ii) the amount of the Lender's Revolving Credit
Commitment.
(e) If at any time the sum of (i) the aggregate
principal amount of all outstanding Swing Line Loans, plus
(ii) the aggregate principal amount of all outstanding Letter
of Credit Loans plus (iii) the aggregate undrawn face amount
of all outstanding Letters of Credit exceed the amount of the
Lender's Swing Line Commitment, Borrower shall be
automatically required (without demand or notice of any kind
by Lender, all of which are hereby expressly waived by
Borrower) to immediately repay the Swing Line Loans and/or the
Letter of Credit Loans and/or surrender for cancellation the
outstanding Letters of Credit, in either case in an amount
sufficient to reduce the sum of (i) the aggregate principal
amount of all outstanding Swing Line Loans, plus (ii) the
aggregate principal amount of all outstanding Letter of Credit
Loans plus (iii) the aggregate undrawn face amount of all
outstanding Letters of Credit to an amount equal to or less
than the amount of the Lender's Swing Line Commitment.
Section 2.02. Manner of Borrowing. (a) Upon
fulfillment of all applicable conditions set forth herein and
so long as no Default or Event of Default has occurred
hereunder, Borrower hereby irrevocably requests and authorizes
Lender, without any other request or authorization from
Borrower and without any notice to Borrower, to automatically
make a Swing Line Loan to Borrower at the end of each Business
Day on which the collected balance in Borrower's operating
account with Lender, identified as Account No. ▇▇▇-▇▇▇▇-▇
("Borrower's Operating Account"), is below the amount set
forth in a cash management agreement executed herewith by and
between Borrower and Lender, as the same may from time to time
be amended (the "Floor Balance"), by crediting the amount of
such Swing Line Loan, which shall be in an amount sufficient
to bring such collected balance back up to the Floor Balance,
to Borrower's Operating Account. In addition, Borrower hereby
irrevocably requests and authorizes Lender to automatically
apply any collected balance in Borrower's Operating Account
with Lender at
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the end of any Business Day in excess of the Floor Balance to
the prepayment of the Swing Line Loans. Each Swing Line Loan
made in accordance with this Section 2.02(a) shall be
irrevocable and binding on Borrower, and Borrower shall
indemnify Lender and hold Lender harmless from and against any
and all claims, demands, damages, liabilities, costs, losses
or expenses (including, without limitation, reasonable
attorneys' fees and expenses) relating to or arising out of or
in connection with making Swing Line Loans or repayments
hereunder.
(b) Subject to the terms and conditions of this
Agreement, Lender shall cause the Revolving Credit Loans to be
made to Borrower at any time and from time to time during the
Commitment Period upon timely prior oral or written notice
("Borrowing Notice") to Lender specifying (i) the desired
amount of the Revolving Credit Loan and (ii) the date on which
the Revolving Credit Loan proceeds are to be made available to
Borrower, which must be a Business Day. Such Borrowing
Notice, if in writing, shall be in the form of the notice
attached hereto as Exhibit R. Each Borrowing Notice must be
received by Lender not later than 10:00 a.m. (Central Standard
Time) on the Business Day before the Business Day on which a
Revolving Credit Loan is to be made. A Borrowing Notice shall
not be revocable by Borrower. Subject to the terms and
conditions of this Agreement, provided that Lender has
received the Borrowing Notice, Lender shall (unless Lender
determines that any applicable condition specified in Article
VI has not been satisfied) make such Revolving Credit Loan to
Borrower by crediting the amount of such Revolving Credit Loan
to Borrower's Operating Account, not later than 2:30 p.m.
(Central Standard Time) on the Business Day specified in said
Borrowing Notice. Borrower hereby authorizes Lender to rely
on telephonic, telegraphic, telecopy, telex or written
instructions of any person identifying himself or herself as a
person authorized to request a Revolving Credit Loan or make a
repayment hereunder, and on any signature which Lender
believes to be genuine, and Borrower shall be bound thereby in
the same manner as if such person were actually authorized or
such signature were genuine. Borrower also hereby agrees to
indemnify Lender and hold Lender harmless from and against any
and all claims, demands, damages, liabilities, losses, costs
and expenses (including, without limitation, reasonable
attorneys' fees and expenses) relating to or arising out of or
in connection with the acceptance of instructions for making
Revolving Credit Loans or repayments hereunder.
Section 2.03. Swing Line Note and Revolving Credit
Note. (a) The Swing Line Loans made under Section 2.01(a)
hereof by Lender shall be evidenced by a Swing Line Note of
Borrower dated June 14, 1996, and
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payable to the order of Lender in a principal amount equal to
Lender's Swing Line Commitment in the form attached hereto as
Exhibit Q and incorporated herein by reference (as the same
may from time to time be amended, modified, extended or
renewed, the "Swing Line Note"). Notwithstanding the
principal amount of the Swing Line Note as stated on the face
thereof, the amount of principal actually owing on such Swing
Line Note at any given time shall be the aggregate principal
amount of all Swing Line Loans theretofore made by Lender to
Borrower hereunder less all payments of principal theretofore
actually received hereunder by Lender.
(b) The Revolving Credit Loans made under Section
2.01(b) hereof by Lender shall be evidenced by a Revolving
Credit Note of Borrower October 5, 1995, and payable to the
order of Lender in a principal amount equal to Lender's
Revolving Credit Commitment in the form attached hereto as
Exhibit A and incorporated herein by reference, as amended by
a First Amendment to Revolving Credit Note dated June 14,
1996, in the form attached hereto as Exhibit A-1 and
incorporated herein by reference (as so amended and as the
same may from time to time be further amended, modified,
extended or renewed, the "Revolving Credit Note").
Notwithstanding the principal amount of the Revolving Credit
Note as stated on the face thereof, the amount of principal
actually owing on such Revolving Credit Note at any given time
shall be the aggregate principal amount of all Revolving
Credit Loans theretofore made by Lender to Borrower hereunder
less all payments of principal theretofore actually received
hereunder by Lender.
Section 2.04. Interest Rates. (a) Each Swing Line
Loan shall bear interest prior to maturity at a rate per annum
equal to the Prime Rate, fluctuating as described in the
definition of "Prime Rate". From and after the maturity of
the Swing Line Note, whether by reason of acceleration or
otherwise, the unpaid principal balance of each Swing Line
Loan shall bear interest payable on demand until paid at a
rate per annum equal to Two Percent (2%) over and above the
Prime Rate, fluctuating as aforesaid. Interest shall be
computed with respect to all Swing Line Loans on an actual
day, 360-day year basis.
(b) Each Revolving Credit Loan shall bear interest
prior to maturity at a rate per annum equal to the Prime Rate,
fluctuating as described in the definition of "Prime Rate".
From and after the maturity of the Revolving Credit Note,
whether by reason of acceleration or otherwise, the unpaid
principal balance of each Revolving Credit Loan shall bear
interest payable on demand until paid at a rate per annum
equal to Two
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Percent (2%) over and above the Prime Rate, fluctuating as
aforesaid. Interest shall be computed with respect to all
Revolving Credit Loans on an actual day, 360-day year basis.
Section 2.05. Principal Payments. (a) The unpaid
principal amount of the Swing Line Note shall be due and
payable on the Commitment Termination Date.
(b) The unpaid principal amount of the Revolving
Credit Note shall be due and payable on the Commitment
Termination Date.
Section 2.06. Payment of Interest on the Swing Line
Note and the Revolving Credit Note. (a) Interest upon the
Swing Line Note shall be due and payable on each Interest
Payment Date. Borrower hereby irrevocably requests and
authorizes Lender to automatically debit Borrower's Operating
Account on each Interest Payment Date for all interest
payments due under the Swing Line Note on such Interest
Payment Date.
(b) Interest upon the Revolving Credit Note shall be
due and payable on each Interest Payment Date. Borrower
hereby irrevocably requests and authorizes Lender to
automatically debit Borrower's Operating Account on each
Interest Payment Date for all interest payments due under the
Revolving Credit Note on such Interest Payment Date.
Section 2.07. Prepayment. (a) Borrower shall have
the right to prepay all at any time or any portion from time
to time of the unpaid principal of any Swing Line Loan prior
to maturity, without penalty or premium. All prepayments
shall be applied solely to the payment of principal.
(b) Borrower shall have the right to prepay all at
any time or any portion from time to time of the unpaid
principal of any Revolving Credit Loan prior to maturity,
without penalty or premium. All partial prepayments of the
Revolving Credit Loans shall be in a minimum amount of
$100,000.00. All prepayments shall be applied solely to the
payment of principal.
Section 2.08. Manner and Application of Payments.
(a) All payments and prepayments of principal of, interest on
and fees and other amounts relating to the Swing Line Note to
or for the account of Lender shall be made by Borrower to
Lender before 2:00 p.m. (Central Standard Time), in
immediately available funds in Dollars at Lender's principal
banking office in Paducah, Kentucky. Any payment or
prepayment received by Lender after 2:00 p.m. (Central
Standard Time) shall be deemed
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to have been received by Lender on the next succeeding
Business Day. All payments (other than prepayments) made on
the Swing Line Note shall be allocated among the principal,
interest, late fees, collection costs and expenses and other
amounts due under the Swing Line Note in such order and manner
as Lender shall elect.
(b) All payments and prepayments of principal of,
interest on and fees and other amounts relating to the
Revolving Credit Note to or for the account of Lender shall be
made by Borrower to Lender before 11:00 a.m. (Central Standard
Time), in immediately available funds in Dollars at Lender's
principal banking office in Paducah, Kentucky. Any payment or
prepayment received by Lender after 11:00 a.m. (Central
Standard Time) shall be deemed to have been received by Lender
on the next succeeding Business Day. All payments (other than
prepayments) made on the Revolving Credit Note shall be
allocated among the principal, interest, late fees, collection
costs and expenses and other amounts due under the Revolving
Credit Note in such order and manner as Lender shall elect.
Section 2.09. Revolving Credit Fee. Upon execution
hereof, Borrower shall pay to Lender as consideration for the
Revolving Credit Commitment to be made in accordance herewith,
a revolving credit fee of $5,000.00. Said fee shall not be
subject to reduction and shall not be refundable. Lender
acknowledges receipt of said fee.
Section 2.10. Use of Proceeds. (a) The proceeds of
each Swing Line Loan shall be used for the general corporate
purposes of Borrower.
(b) The proceeds of each Revolving Credit Loan shall
be used for the general corporate purposes of Borrower."
17. Section 3.02 of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"Section 3.02. Term Note. The Term Loan made under
Section 3.01 hereof by Lender shall be evidenced by a Term
Loan Promissory Note of Borrower dated October 5, 1995, and
payable to the order of Lender in the original principal
amount of Seven Million Dollars ($7,000,000.00) in the form
attached hereto as Exhibit B and incorporated herein by
reference, as amended by a First Amendment to Term Loan
Promissory Note dated January 5, 1996, in the form attached
hereto as Exhibit B-1 and incorporated herein by reference and
a Second Amendment to Term Loan Promissory Note dated June 14,
1996, in the form attached hereto as Exhibit B-2 and
incorporated herein by reference (as so amended and as the
same may from time to
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time be further amended, modified, extended or renewed, the
"Term Note")."
18. Sections 3.04 and 3.05 of the Loan Agreement are
hereby deleted in their entirety and the following substituted in lieu thereof:
"Section 3.04. Principal Payments. Principal on the
Term Note shall be due and payable in thirty-three (33)
consecutive monthly installments as follows: three (3) equal
consecutive monthly installments in the amount of One Hundred
Sixteen Thousand Six Hundred Sixty-Six and 67/100 Dollars
($116,666.67) each, due and payable on the last day of each
calendar month commencing October 31, 1995; twenty-nine (29)
equal consecutive monthly installments in the amount of One
Hundred Fifty Thousand Dollars ($150,000.00) each, due and
payable on the last business day of each calendar month
commencing January 31, 1996; with the thirty-third (33rd) and
final installment in the amount of the then outstanding and
unpaid principal balance of the Term Note due and payable on
the Maturity Date. In addition to the scheduled monthly
principal payments set forth above, if at any time the
Borrowing Base as shown on the most recent Borrowing Base
Certificate submitted to Lender pursuant to Section 8.01(c)
should be less than Zero Dollars ($0.00), Borrower shall be
automatically required (without demand or notice of any kind
by Lender, all of which are hereby expressly waived by
Borrower) to immediately either (i) make a permanent
prepayment on the Term Note in an amount sufficient to
increase the amount of the Borrowing Base to at least Zero
Dollars ($0.00) or (ii) pledge cash or cash equivalents with
Lender as additional collateral for the Term Loan in an amount
at least equal to the difference between the amount of the
Borrowing Base and Zero Dollars ($0.00). Borrower hereby
irrevocably requests and authorizes Lender to automatically
debit Borrower's Operating Account on each date on which a
payment of principal is due on the Term Note for the principal
payment due under the Term Note on such date.
Section 3.05. Payment of Interest on the Term Note.
Interest upon the Term Note shall be due and payable on each
Interest Payment Date. Borrower hereby irrevocably requests
and authorizes Lender to automatically debit Borrower's
Operating Account on each Interest Payment Date for all
interest payments due under the Term Note on such Interest
Payment Date."
19. Clause (iv) of Section 4.01(a) of the Loan Agreement
is hereby deleted in its entirety and the following substituted in lieu
thereof:
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14
"(iv) (A) the sum of (1) the aggregate principal
amount of all outstanding Swing Line Loans, plus (2) the
aggregate principal amount of all outstanding Letter of Credit
Loans plus (3) the aggregate undrawn face amount of all
outstanding Letters of Credit shall not at any one time exceed
the lesser of (1) amount of the Lender's Swing Line Commitment
or (2) the sum of the Borrowing Base minus the aggregate
principal amount of all outstanding Revolving Credit Loans and
(B) the amount of the Total Outstandings shall not at any one
time exceed the lesser of (1) the sum of the amount of the
Lender's Swing Line Commitment plus the amount of the Lender's
Revolving Credit Commitment or (2) the Borrowing Base;"
20. Section 6.02 of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"Section 6.02. All Loans. Notwithstanding any
provision contained herein to the contrary, Lender shall have
no obligation to make any Loan hereunder unless:
(a) Lender shall have received a current
Borrowing Base Certificate;
(b) if such Loan is a Revolving Credit Loan,
Lender shall have received a Borrowing Notice for such
Revolving Credit Loan as required by Section 2.02(b);
(c) on the date of and immediately after such
Loan, no Default or Event of Default under this Agreement
shall have occurred and be continuing;
(d) no material adverse change in the properties,
assets, liabilities, business, operations, prospects, income
or condition (financial or otherwise) of Borrower shall have
occurred since the date of this Agreement and be continuing;
(e) all of the representations and warranties of
Borrower contained in this Agreement and in the other Loan
Documents shall be true and correct in all material respects
on and as of the date of such Loan as if made on and as of the
date of such Loan (and for purposes of this Section 6.02(e),
the representations and warranties made by Borrower in Section
7.06 shall be deemed to refer to the most recent financial
statements of Borrower delivered to Lender pursuant to Section
8.01); and
(f) no proceeding or case under the United States
Bankruptcy Code or similar law or any other reorganization,
receivership or liquidation proceedings shall have been
commenced by or against Borrower or any of the Guarantors.
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15
Each request for a Loan by Borrower hereunder shall
be deemed to be a representation and warranty by Borrower on
the date of such Loan as to the facts specified in clauses
(c), (d), (e) and (f) of this Section 6.02."
21. The lead-in language to Article VII of the Loan
Agreement is hereby deleted in its entirety and the following substituted in
lieu thereof:
"To induce Lender to make the Swing Line Loans, the
Revolving Credit Loans and the Term Loan and to issue the
Letters of Credit hereunder, Borrower represents and warrants
to Lender that:"
22. The first sentence of Section 7.12 of the Loan
Agreement is hereby deleted in its entirety and the following substituted in
lieu thereof:
"The proceeds of the Swing Line Loans, the Revolving Credit
Loans and the Term Loan will be used by Borrower solely for
the purposes specified in Sections 2.10 and 3.08."
23. Section 8.01(h) of the Loan Agreement is hereby
deleted in its entirety and the following substituted in lieu thereof:
"(h) Compliance Certificate. Within thirty (30)
days after the end of each fiscal month of Borrower other than
the last fiscal month of each fiscal year of Borrower and
within ninety (90) days after the end of the last fiscal month
of each fiscal year of Borrower, a certificate in the form of
Exhibit O attached hereto executed by the chief financial
officer or chief executive officer of Borrower, stating that a
review of the activities of Borrower during such fiscal month
has been made under his supervision and that Borrower has
observed, performed and fulfilled each and every obligation
and covenant contained herein and is not in default under any
of the same or, if any such default shall have occurred,
specifying the nature and status thereof, and setting forth a
computation in reasonable detail as of the end of the period
covered by such statements, of compliance with Sections 9.14
and 9.15 hereof;"
24. Section 8.13 of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"Section 8.13. Maintenance of Books and Records;
Consultations and Inspections. Borrower will maintain books
and records in accordance with Generally Accepted Accounting
Principles and in which full, true and correct entries shall
be made of all dealings and transactions in
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16
relation to its business and activities. Borrower will permit
Lender (and any accountants and/or other Persons appointed by
Lender to whom Borrower does not reasonably object) to discuss
the affairs, finances and accounts of Borrower with the
officers of Borrower and its independent public accountants,
all at such reasonable times and as often as Lender may from
time to time reasonably request. Borrower will also permit
inspection of its properties, books and records by Lender (and
by any accountants and/or other Persons selected by Lender to
whom Borrower does not reasonably object) during normal
business hours and at other reasonable times. Borrower will
reimburse Lender upon demand for all out-of-pocket costs and
expenses incurred by Lender in connection with any such
inspection conducted by Lender and/or by any accountants
and/or other Persons selected by Lender (including, without
limitation, any amounts paid by Lender to any accountants or
other third parties in connection with any such inspection);
provided, however, that without limiting the number of such
inspections which may be conducted by Lender, the maximum
amount of such out-of-pocket costs and expenses for which
Lender may seek reimbursement from Borrower shall not exceed
the sum of $750.00 during any calendar year so long as no
Default or Event of Default under this Agreement has occurred
and is continuing."
25. Section 8.16 of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"Section 8.16. Indemnity by Borrower. Borrower
shall indemnify, save and hold harmless Lender and its
directors, officers, agents, attorneys, and employees
(collectively, the "indemnitees") from and against: (i) any
and all claims, demands, actions or causes of action that are
asserted against any indemnitee by any Person if the claim,
demand, action or cause of action directly or indirectly
relates to a claim, demand, action or cause of action that the
Person asserts or may assert against Borrower or any Affiliate
of Borrower, (ii) any and all claims, demands, actions or
causes of action that are asserted against any indemnitee if
the claim, demand, action or cause of action directly or
indirectly relates to the Swing Line Commitment, the Revolving
Credit Commitment, the Term Loan Commitment, the use of
proceeds of the Swing Line Loans, the Revolving Credit Loans
or the Term Loan or the relationship of Borrower and Lender
under this Agreement or any transaction contemplated pursuant
to this Agreement, (iii) any administrative or investigative
proceeding by any Governmental Authority directly or
indirectly related to a claim, demand, action or cause of
action described in clauses (i) or (ii) above and (iv) any and
all liabilities, losses, costs or expenses (including
attorneys' fees and disbursements)
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17
that any indemnitee suffers or incurs as a result of any of
the foregoing; provided, however, that Borrower shall have no
obligation under this Section to Lender with respect to any of
the foregoing arising out of the gross negligence or willful
misconduct of Lender or the breach by Lender of this
Agreement. Any obligation or liability of Borrower to any
indemnitee under this Section shall survive the expiration or
termination of this Agreement and the repayment of the
Obligations."
26. Section 9.14 of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"Section 9.14. Financial Covenants.
(a) Minimum Tangible Net Worth. Borrower shall
not permit its Tangible Net Worth to be less than (i)
$5,800,000.00 at any time during the period commencing June
14, 1996, and ending December 30, 1996, (ii) $7,800,000.00
at any time during the period commencing December 31, 1996,
and ending December 30, 1997, or (iii) $9,300,000.00 at any
time on or after December 31, 1997.
(b) Maximum Indebtedness to Tangible Net Worth.
Borrower shall not permit the ratio of the Indebtedness of
Borrower, determined in accordance with Generally Accepted
Accounting Principles consistently applied but excluding the
Indebtedness and Guaranties of Borrower listed on Exhibit J
attached hereto and marked with an asterisk or a double
asterisk, to Tangible Net Worth to be greater than (i) 3.75 to
1.0 at any time during the period commencing June 14, 1996,
and ending December 30, 1996, or (ii) 3.35 to 1.0 at any time
on or after December 31, 1996.
(c) Minimum Net Cash Flow to Current Maturities
of Debt. Borrower shall not permit the ratio of Net Cash Flow
for any fiscal year of Borrower to the Current Maturities of
Debt for the next succeeding fiscal year of Borrower to be
less than 1.5 to 1.0. For the purposes of this Section,
Borrower's "Net Cash Flow" shall be that shown on the annual
officer's certificate delivered with respect to such fiscal
year unless Lender makes an independent, good faith
determination of Net Cash Flow for such fiscal year. If
Lender's determination of Net Cash Flow for any fiscal year
end is less than Net Cash Flow as stated in the applicable
officer's certificate: (i) such determination by Lender shall
be, if determined in accordance with the foregoing provision
and the definition of "Net Cash Flow" in this Agreement,
conclusive for purposes hereof and (ii) Lender shall promptly
advise Borrower of its determination.
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18
(d) Minimum Operating Cash Flow. Borrower shall
not permit its Operating Cash Flow to be less than (i)
$7,000,000.00 for the fiscal year of Borrower ending December
31, 1996, or (ii) $7,500,000.00 for the fiscal year of
Borrower ending December 31, 1997. For the purposes of this
Section, Borrower's "Operating Cash Flow" shall be that shown
on the annual officer's certificate delivered with respect to
such fiscal year unless Lender makes an independent, good
faith determination of Operating Cash Flow for such fiscal
year. If Lender's determination of Operating Cash Flow for
any fiscal year end is less than Operating Cash Flow as stated
in the applicable officer's certificate: (i) such
determination by Lender shall be, if determined in accordance
with the foregoing provision and the definition of "Operating
Cash Flow" in this Agreement, conclusive for purposes hereof
and (ii) Lender shall promptly advise Borrower of its
determination.
(e) Maximum Consolidated Indebtedness to
Consolidated Tangible Net Worth. Borrower shall not permit
the ratio of the Indebtedness of Borrower and its
Subsidiaries, determined on a consolidated basis and in
accordance with Generally Accepted Accounting Principles
consistently applied but excluding the Indebtedness and
Guaranties of Borrower listed on Exhibit J attached hereto and
marked with a double asterisk, to Consolidated Tangible Net
Worth to be greater than 4.5 to 1.0 as of the last day of any
fiscal year of Borrower commencing with the fiscal year of
Borrower ending December 31, 1996."
27. Clause (c) of Section 10.01 of the Loan Agreement is
hereby deleted in its entirety and the following substituted in lieu thereof:
"(c) Borrower shall fail or refuse to perform or
observe any of the terms, covenants, agreements or conditions
contained in Sections 2.01, 2.10, 4.01(iv), 4.01(v), 8.01(c),
8.01(e), 8.08, 8.11, 8.12, 8.13, 8.14, 8.15 or 8.17 or Article
IX herein;"
28. Exhibits ▇-▇, ▇-▇, ▇-▇, Q and R attached to this
Amendment are hereby added as Exhibits ▇-▇, ▇- ▇, ▇-▇, Q and R to the Loan
Agreement.
29. Exhibit I attached to the Loan Agreement is hereby
deleted in its entirety and the Exhibit I attached to this Amendment is
substituted in lieu thereof.
30. Exhibit O attached to the Loan Agreement is hereby
deleted in its entirety and the Exhibit O attached to this Amendment is
substituted in lieu thereof.
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19
31. Pursuant to Borrower's request, Lender hereby waives
the existing Events of Defaults under the Loan Agreement caused solely by (i)
Borrower's having Indebtedness not otherwise permitted by Section 9.01(i) of
the Loan Agreement in excess of $250,000.00 in the aggregate as of December 31,
1995, in violation of Section 9.01(i) of the Loan Agreement, (ii) Borrower's
having a Tangible Net Worth of less than $6,250,000.00 as of December 31, 1995,
in violation of Section 9.14(b) of the Loan Agreement, (iii) Borrower's having
a ratio of Indebtedness to Tangible Net Worth in excess of 2.25 to 1.00 as of
December 31, 1995, in violation of Section 9.14(c) of the Loan Agreement and
(iv) Borrower's making Capital Expenditures during its fiscal year ended
December 31, 1995, in excess of $350,000.00 in violation of Section 9.15 of the
Loan Agreement. This paragraph is not and shall not be construed as (i) a
waiver of any of the other terms, provisions, conditions or covenants contained
in the Loan Agreement or of any other Default or Event of Default, if any,
existing under the Loan Agreement as of the date hereof or (ii) a commitment on
the part of Lender to waive any future Default or Event of Default under the
Loan Agreement resulting from any subsequent violation of Sections 9.01(i),
9.14(b), 9.14(c) or 9.15 of the Loan Agreement or any other future Default or
Event of Default under the Loan Agreement.
32. Borrower hereby agrees to reimburse Lender upon
demand for all out-of-pocket costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by Lender in the preparation,
negotiation and execution of this Amendment and all other agreements, documents
and instruments relating to the amendment of Borrower's existing credit
facilities with Lender (collectively, the "Amendment Documents"). Borrower
further agrees to pay or reimburse Lender for (a) any stamp or other taxes
(excluding income or gross receipts taxes) which may be payable with respect to
the execution, delivery or recording of the Loan Documents and (b) the cost of
any filings and searches, including, without limitation, Uniform Commercial
Code filings and searches. All of the obligations of Borrower under this
paragraph shall survive the payment of the Borrower's Obligations and the
termination of the Loan Agreement.
33. All references in the Loan Agreement to "this
Agreement" and any other references of similar import shall henceforth mean the
Loan Agreement as amended by this Amendment.
34. Except to the extent specifically amended by this
Amendment, all of the terms, provisions, conditions, covenants, representations
and warranties contained in the Loan Agreement shall be and remain in full
force and effect and the same are hereby ratified and confirmed.
35. This Amendment shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns,
except that Borrower may not assign, transfer or delegate any of its rights or
obligations hereunder.
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36. Borrower hereby represents and warrants to Lender
that:
(a) the execution, delivery and performance by
Borrower of this Amendment are within the corporate powers of Borrower, have
been duly authorized by all necessary corporate action and require no action by
or in respect of, or filing with, any governmental or regulatory body, agency
or official or any other third party;
(b) the execution, delivery and performance by
Borrower of this Amendment do not conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under or result in
any violation of, the terms of the Articles of Incorporation or By-Laws of
Borrower, any applicable law, rule, regulation, order, writ, judgment or decree
of any court or governmental or regulatory agency or instrumentality or any
agreement, document or instrument to which Borrower is a party or by which it
is bound or to which it is subject;
(c) this Amendment has been duly executed and
delivered by Borrower and constitutes the legal, valid and binding obligation
of Borrower enforceable against Borrower in accordance with its terms; and
(d) as of the date hereof, all of the
representations, warranties and covenants of Borrower set forth in the Loan
Agreement are true and correct and no Default or Event of Default under or
within the meaning of the Loan Agreement has occurred and is continuing.
37. In the event of any inconsistency or conflict between
this Amendment and the Loan Agreement, the terms, provisions and conditions
contained in this Amendment shall govern and control.
38. This Amendment shall be governed by and construed in
accordance with the substantive laws of the Commonwealth of Kentucky (without
reference to conflict of law principles).
IN WITNESS WHEREOF, Borrower and Lender have executed this
Second Amendment to Revolving Credit and Term Loan Agreement this 14th day of
June, 1996.
FALCONITE, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Title: President
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CITIZENS BANK & TRUST COMPANY OF PADUCAH
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Title: Vice President
----------------------------------------
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