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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: APRIL 8, 1994
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ALLIED PRODUCTS CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
1-5530 38-0292230
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(Commission File Number) (I.R.S. Employer
Identification Number)
10 SOUTH RIVERSIDE PLAZA, SUITE 1600, CHICAGO, ILLINOIS 60606
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(Address of principal executive offices)(zip code)
(312) 454-1020
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On March 17, 1994, Allied Products Corporation ("Allied") entered into a
Credit Agreement and a Security Agreement with Continental Bank N.A.,
individually and as Agent ("Agent"), and LaSalle National Bank ("LaSalle")
(together the Agent and LaSalle are referred to as the "Lenders"). Pursuant
to the Credit Agreement, the Lenders provided a credit facility not to exceed
$50,000,000 consisting of a Revolving Loan facility of up to $35,000,000 and a
facility of up to $15,000,000 to support standby and commercial letters of
credit. The facility is evidenced by Revolving Notes in the principal amounts
of $35,000,000 and $15,000,000 issued by the Agent and LaSalle, respectively.
On December 31, 1994, the aggregate amount of the Revolving Loan facility
provided by the Lenders will be reduced to $25,000,000 (such reduction being
pro rata between the Lenders according to their respective loan percentages).
The proceeds of the loans will be used by Allied for working capital and other
general operating purposes.
Pursuant to the Security Agreement and in exchange for the loans, Allied
granted to the Lenders a first priority security interest in the inventory,
accounts receivable, and other collateral of Allied related thereto. The
security interest granted to the Lenders will terminate after September 30,
1994 if Allied meets certain income projections as provided in the Security
Agreement.
Simultaneously with the funding under the Credit Agreements, Allied used a
portion of the loan amount to prepay the balance of outstanding loans made to
Allied's operating subsidiaries, Bush Hog Corporation, Coz Corporation, and
Verson Corporation (collectively, the "Subsidiaries"). The lenders to each of
the Subsidiaries simultaneously released all of their security interests in
the assets of the Subsidiaries. The Subsidiaries were then dissolved pursuant
to Plans of Liquidation and Dissolution by which Allied assumed all of the
assets and all of the liabilities of each of the Subsidiaries, which shall
continue to operate as divisions of Allied.
At the closing for the Credit Agreement, Allied also received a Termination
and Release delivered by Continental Bank N.A., as Agent, terminating the
Amended and Restated Credit and Debt Restructuring Agreement dated as of
January 28, 1993 and releasing all security interests previously held by the
lenders thereunder.
ITEM 7. EXHIBITS
(10) (i) Credit Agreement dated as of March 17, 1994 among Allied Products
Corporation,LaSalle National Bank, and Continental Bank N.A., individually and
as Agent
(ii) List of Exhibits and Disclosure Schedules to Credit Agreement
(iii) Security Agreement Dated as of March 17, 1994 between Allied
Products Corporation and Continental Bank N.A., as Agent
(iv) List of Exhibits to Security Agreement
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALLIED PRODUCTS CORPORATION
/S/ KENNETH B. LIGHT
By: Kenneth B. Light
Its: Executive Vice President
Date: April 8, 1994
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CREDIT AGREEMENT
dated as of March 17, 1994
among
ALLIED PRODUCTS CORPORATION,
THE BANKS NAMED HEREIN
and
CONTINENTAL BANK N.A.,
individually and as Agent
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TABLE OF CONTENTS
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PAGE
SECTION 1 COMMITMENTS OF THE BANKS; TYPES OF LOANS; LETTER OF CREDIT,
BORROWING AND CONVERSION PROCEDURES . . . . . . . . . . . . . 1
1.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1.1 Revolving Loan Commitment. . . . . . . . . . . . . . 1
1.1.2 Letter of Credit Commitments . . . . . . . . . . . . 1
1.1.3 Commitment Limits. . . . . . . . . . . . . . . . . . 2
1.1.4 Reduction in Revolving Loan Commitment Limits. . . . 2
1.2 Various Types of Loans. . . . . . . . . . . . . . . . . . . . 2
1.3 Borrowing Procedures. . . . . . . . . . . . . . . . . . . . . 2
1.4 Conversion Procedures . . . . . . . . . . . . . . . . . . . . 4
1.5 Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . . . 4
1.6 Letter of Credit Procedures . . . . . . . . . . . . . . . . . 4
1.7 Participation in Letters of Credit. . . . . . . . . . . . . . 5
1.8 Reimbursement Obligations . . . . . . . . . . . . . . . . . . 5
1.9 Limitation on Continental's Obligations . . . . . . . . . . . 5
1.10 Funding by Banks to Continental . . . . . . . . . . . . . . . 6
1.11 Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . 6
1.12 Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.13 Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2 NOTES EVIDENCING LOANS. . . . . . . . . . . . . . . . . . . . 7
2.1 Revolving Notes . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Interest Rates. . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Interest Payment Dates. . . . . . . . . . . . . . . . . . . . 8
3.3 Interest Periods. . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Setting and Notice of Eurodollar Rates. . . . . . . . . . . . 9
3.5 Computation of Interest . . . . . . . . . . . . . . . . . . . 9
SECTION 4 COLLATERAL. . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Security Interests. . . . . . . . . . . . . . . . . . . . . . 9
4.1.1 Grant of Security Interest . . . . . . . . . . . . . 9
4.1.2 Negative Pledge. . . . . . . . . . . . . . . . . . . 10
4.2 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Collateral Audits . . . . . . . . . . . . . . . . . . . . . . 11
4.4 Other Documents . . . . . . . . . . . . . . . . . . . . . . . 11
4.5 Release of Collateral . . . . . . . . . . . . . . . . . . . . 12
SECTION 5 FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.1 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . 12
5.2 Non-Use Fee . . . . . . . . . . . . . . . . . . . . . . . . . 13
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SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS;
VOLUNTARY PREPAYMENTS . . . . . . . . . . . . . . . . . . . . 13
6.1 Reduction or Termination of the Commitments . . . . . . . . . 13
6.2 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . 13
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF. . . . . . . . . . . 14
7.1 Making of Payments. . . . . . . . . . . . . . . . . . . . . . 14
7.2 Application of Certain Payments . . . . . . . . . . . . . . . 14
7.3 Due Date Extension. . . . . . . . . . . . . . . . . . . . . . 15
7.4 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.5 Proration of Payments . . . . . . . . . . . . . . . . . . . . 15
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS. . . 16
8.1 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . 16
8.2 Basis for Determining Interest Rate Inadequate or Unfair. . . 17
8.3 Changes in Law Rendering Certain Loans Unlawful . . . . . . . 18
8.4 Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . 18
8.5 Right of Banks to Fund through Other Offices. . . . . . . . . 19
8.6 Discretion of Banks as to Manner of Funding . . . . . . . . . 19
8.7 Conclusiveness of Statements; Survival of Provisions. . . . . 19
SECTION 9 WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.1 Organization and Qualification. . . . . . . . . . . . . . . . 20
9.2 Authorization; No Conflict and Validity of Obligations. . . . 20
9.3 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . 20
9.4 Financial Statements. . . . . . . . . . . . . . . . . . . . . 20
9.5 No Material Adverse Change. . . . . . . . . . . . . . . . . . 20
9.6 Litigation and Contingent Liabilities . . . . . . . . . . . . 21
9.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.8 Pension and Welfare Plans . . . . . . . . . . . . . . . . . . 21
9.9 Investment Company Act. . . . . . . . . . . . . . . . . . . . 21
9.10 Regulation U. . . . . . . . . . . . . . . . . . . . . . . . . 21
9.11 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.12 Company's Material Agreements . . . . . . . . . . . . . . . . 22
9.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.15 Business Locations. . . . . . . . . . . . . . . . . . . . . . 22
9.16 Control of Collateral; Personal Property Lease Agreements . . 22
9.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . 23
9.18 Treatment and Storage . . . . . . . . . . . . . . . . . . . . 23
9.19 Compliance With Laws. . . . . . . . . . . . . . . . . . . . . 23
9.20 Information . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.1 Reports, Certificates and Other Information . . . . . . . . . 24
10.1.1 Audit Report . . . . . . . . . . . . . . . . . . . . 24
10.1.2 Quarterly Reports. . . . . . . . . . . . . . . . . . 24
10.1.3 Monthly Reports. . . . . . . . . . . . . . . . . . . 24
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10.1.4 Compliance Certificates. . . . . . . . . . . . . . . 24
10.1.5 Reports to SEC and to Shareholders . . . . . . . . . 25
10.1.6 Notice of Default, Litigation and ERISA Matters. . . 25
10.1.7 Subsidiaries . . . . . . . . . . . . . . . . . . . . 25
10.1.8 Projections. . . . . . . . . . . . . . . . . . . . . 25
10.1.9 Other Information. . . . . . . . . . . . . . . . . . 25
10.2 Books, Records and Inspections. . . . . . . . . . . . . . . . 26
10.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.4 Taxes and Liabilities . . . . . . . . . . . . . . . . . . . . 26
10.5 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.6 Consolidated Operating Income . . . . . . . . . . . . . . . . 26
10.7 Funded Debt Ratio . . . . . . . . . . . . . . . . . . . . . . 27
10.8 Interest Coverage . . . . . . . . . . . . . . . . . . . . . . 27
10.9.1 Restriction on Certain Payments and Expenses . . . . 27
10.9.2 Purchase or Redemption of Company's Securities;
Dividend Restrictions. . . . . . . . . . . . . . . . 27
10.9.3 Capital Expenditures . . . . . . . . . . . . . . . . 27
10.9.4 Sales and Leasebacks . . . . . . . . . . . . . . . . 28
10.10 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . 28
10.11 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.12 Guaranties, Loans or Advances . . . . . . . . . . . . . . . . 29
10.13 Mergers, Consolidations, Sales. . . . . . . . . . . . . . . . 29
10.14 Investments . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.15 Environmental Covenants . . . . . . . . . . . . . . . . . . . 31
10.15.1 Environmental Response Obligation. . . . . . . . . . 31
10.15.2 Environmental Liabilities. . . . . . . . . . . . . . 31
10.16 Unconditional Purchase Obligations. . . . . . . . . . . . . . 32
10.17 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . 32
10.18 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 32
10.19 Other Agreements. . . . . . . . . . . . . . . . . . . . . . . 32
10.20 Compliance With Laws. . . . . . . . . . . . . . . . . . . . . 32
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING. . . . . . . . . . . . . 32
11.1 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . 32
11.1.1 Revolving Notes. . . . . . . . . . . . . . . . . . . 32
11.1.2 Security Agreement . . . . . . . . . . . . . . . . . 32
11.1.3 Resolutions. . . . . . . . . . . . . . . . . . . . . 33
11.1.4 Consents and Approvals . . . . . . . . . . . . . . . 33
11.1.5 Incumbency and Signatures. . . . . . . . . . . . . . 33
11.1.6 Opinions of Counsel for the Company. . . . . . . . . 33
11.1.7 Financing Statements, etc. . . . . . . . . . . . . . 33
11.1.8 Other Documents. . . . . . . . . . . . . . . . . . . 33
11.2 All Loans and Letters of Credit . . . . . . . . . . . . . . . 33
11.2.1 No Default . . . . . . . . . . . . . . . . . . . . . 33
11.2.2 Confirmatory Certificate . . . . . . . . . . . . . . 34
11.2.3 Litigation . . . . . . . . . . . . . . . . . . . . . 34
11.2.4 Corporate Reorganization.. . . . . . . . . . . . . . 34
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SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT. . . . . . . . . . . . . . 34
12.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . 34
12.1.1 Non-Payment of Notes, etc. . . . . . . . . . . . . . 34
12.1.2 Non-Payment of Other Indebtedness for
Borrowed Money . . . . . . . . . . . . . . . . . . . 35
12.1.3 Other Material Obligations . . . . . . . . . . . . . 35
12.1.4 Bankruptcy, Insolvency . . . . . . . . . . . . . . . 35
12.1.5 Non-Compliance with This Agreement . . . . . . . . . 35
12.1.6 Warranties . . . . . . . . . . . . . . . . . . . . . 36
12.1.7 Pension Plans. . . . . . . . . . . . . . . . . . . . 36
12.1.8 Collateral Documents . . . . . . . . . . . . . . . . 36
12.1.9 Continuing Validity. . . . . . . . . . . . . . . . . 36
12.2 Effect of Event of Default. . . . . . . . . . . . . . . . . . 37
SECTION 13 CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 37
SECTION 14 THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 54
14.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . 54
14.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 55
14.3 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . 55
14.4 Credit Investigation. . . . . . . . . . . . . . . . . . . . . 56
14.5 Agent and Affiliates. . . . . . . . . . . . . . . . . . . . . 56
14.6 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 15 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
15.1 Waiver; Amendments. . . . . . . . . . . . . . . . . . . . . . 56
15.2 Confirmations . . . . . . . . . . . . . . . . . . . . . . . . 57
15.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
15.4 Computations. . . . . . . . . . . . . . . . . . . . . . . . . 58
15.5 Regulation U. . . . . . . . . . . . . . . . . . . . . . . . . 58
15.6 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . 58
15.7 Subsidiary References . . . . . . . . . . . . . . . . . . . . 59
15.8 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . 59
15.9 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 59
15.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 60
15.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 60
15.12 Successors and Assigns. . . . . . . . . . . . . . . . . . . . 60
15.13 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . 60
15.14 Securities Laws . . . . . . . . . . . . . . . . . . . . . . . 60
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<PAGE>
CREDIT AGREEMENT
----------------
Dated as of March 17, 1994
THIS CREDIT AGREEMENT, dated as of March 17, 1994 (herein, as amended or
otherwise modified from time to time, called this "Agreement"), is entered into
among ALLIED PRODUCTS CORPORATION, a Delaware corporation (herein called the
"Company"), the undersigned banks (together with Continental herein collectively
called the "Banks" and individually each called a "Bank"), and CONTINENTAL BANK
N.A. (herein, in its individual capacity, called "Continental") and as agent for
the Banks (herein, in such capacity, called the "Agent"). Certain terms are
used in this Agreement as hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Company has asked Continental to provide or otherwise arrange
for a credit facility not to exceed $50,000,000 (herein called the "Facility");
and
WHEREAS, subject to the terms and conditions of this Agreement, the Agent
and the Banks have agreed to provide the Company with the use of the Facility
subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 COMMITMENTS OF THE BANKS; TYPES OF LOANS; LETTER OF CREDIT,
BORROWING AND CONVERSION PROCEDURES.
SECTION 1.1 COMMITMENTS. On and subject to the terms and conditions of
this Agreement, each of the Banks, severally and for itself alone, agrees to
make loans to the Company as follows:
SECTION 1.1.1 REVOLVING LOAN COMMITMENT. Loans on a revolving basis
(herein collectively called the "Revolving Loans" and each individually called a
"Revolving Loan") from time to time before the Revolving Termination Date in
such Bank's Percentage of such aggregate amounts as the Company may from time to
time request from all Banks, subject to the terms and conditions of this
Agreement.
SECTION 1.1.2 LETTER OF CREDIT COMMITMENTS. (a) Continental and the Banks
agree that Continental will issue documentary and standby letters of credit
containing such terms
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and conditions as shall be permitted pursuant to this Agreement and reasonably
satisfactory to Continental (herein collectively called the "Letters of Credit"
and each individually called a "Letter of Credit") at the request of and for the
account of the Company from time to time before the Revolving Termination Date
and (b) as more fully set forth in SECTION 1.7, each Bank agrees to purchase a
participation in all such Letters of Credit.
SECTION 1.1.3 COMMITMENT LIMITS. Notwithstanding any other provision of
this Agreement (i) the aggregate principal amount of the Revolving Loans which
all Banks are committed to lend to the Company is the lesser of (a) $35,000,000
(less any reductions made pursuant to Sections 1.1.4 and 6.1) or (b) the
Borrowing Base, (ii) the aggregate Stated Amount of all Letters of Credit shall
not at any time exceed the lesser of (a) $15,000,000 (less any reductions made
pursuant to SECTION 6.1) or (b) the Borrowing Base, and (iii) the aggregate
amount of each Bank's participation in the Revolving Loans shall not exceed the
amount set forth opposite such Bank's name in Column I of Exhibit A and the
aggregate amount of each Bank's participation in all Letters of Credit shall not
exceed the amount set forth opposite such Bank's name in Column II of EXHIBIT A
(less any reductions to the Facility or its availability pursuant to the terms
of this Agreement).
SECTION 1.1.4 REDUCTION IN REVOLVING LOAN COMMITMENT LIMITS.
Notwithstanding any other provision in this Agreement, on December 31, 1994, the
aggregate amount of the Revolving Loan Commitments shall permanently reduce to
$25,000,000 (such reduction shall be pro rata among the Banks according to their
respective Percentages).
SECTION 1.2 VARIOUS TYPES OF LOANS. Each Revolving Loan shall be either
a Floating Rate Loan or a Eurodollar Loan as the Company shall specify in the
related notice of borrowing or Conversion pursuant to SECTION 1.3 or 1.4.
Eurodollar Loans having the same Interest Period are sometimes called a Group or
collectively Groups. Floating Rate Loans and Eurodollar Loans may be
outstanding at the same time, it being understood, however, that (i) there shall
not at any time be more than three Groups of Eurodollar Loans and (ii) the
aggregate principal amount of each Group of Eurodollar Loans shall be at least
$500,000 and in an integral multiple of $100,000.
SECTION 1.3 BORROWING PROCEDURES.
(a) Provided that the conditions in SECTION 11.2 are satisfied, the
Company shall give notice to the Agent of each proposed borrowing by 11:00 A.M.,
Chicago time, on the proposed date of such borrowing, in the case of a Floating
Rate borrowing,
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and on a Business Day at least two Business Days prior to the proposed date of
such borrowing, in the case of a Eurodollar borrowing. Each such notice shall
be effective upon receipt by the Agent, shall be in writing (or by telephone to
be promptly confirmed in writing by the Company), and shall specify the date,
amount and type of borrowing and, in the case of a Eurodollar borrowing, the
initial Interest Period for such borrowing. Promptly, upon receipt of such
notice, but in any event by 12:30 P.M., the Agent shall advise each Bank
thereof. Not later than 2:00 P.M. Chicago time, on the date of the proposed
borrowing, each Bank shall provide the Agent at the principal office of the
Agent in Chicago with immediately available funds covering such Bank's
Percentage of the borrowing, and, subject to the satisfaction of the conditions
precedent set forth in SECTION 11 with respect to such borrowing, the Agent
shall pay over the requested amount to the Company on the requested borrowing
date. Each borrowing shall be on a Business Day and shall be in an aggregate
amount of at least $500,000 and an integral multiple of $100,000.
(b) Unless the Agent shall have received notice from a Bank prior to the
proposed date of any borrowing in the case of a Eurodollar borrowing, or prior
to 12:30 P.M., Chicago time, on the proposed date of any Floating Rate
borrowing, that such Bank will not make available to the Agent such Bank's
ratable portion of such borrowing, the Agent may assume that such Bank has made
such portion available to the Agent on the date of such borrowing in accordance
with SUBSECTION (a) above and the Agent may, in reliance upon such assumption,
make available to the Company on such date a corresponding amount. If and to
the extent such Bank shall not have so made such ratable portion available to
the Agent, such Bank and the Company severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Company until
the date such amount is repaid to the Agent, (i) in the case of the Company, at
the interest rate applicable at the time to the Revolving Loans comprising such
borrowing and (ii) in the case of such Bank, at the Federal Funds Rate. If such
Bank shall repay to the Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Revolving Loan as part of such borrowing for
purposes of this Agreement. Nothing in this SUBSECTION (b) shall be deemed to
diminish the Commitments of any Bank.
(c) The failure of any Bank to make the Revolving Loan to be made by it as
part of any borrowing shall not relieve any other Bank of its obligation
hereunder to make its Revolving Loan on the date of such borrowing, but no Bank
shall be responsible
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for the failure of any other Bank to make the Revolving Loan to be made by such
other Bank on the date of any borrowing.
SECTION 1.4 CONVERSION PROCEDURES. Subject to the provisions of SECTION
1.2, the Company may Convert all or any part of any outstanding Revolving Loan
into a Revolving Loan of a different type by giving notice to the Agent of such
Conversion by 11:00 A.M., Chicago time, on the proposed date of such Conversion,
in the case of Conversion into a Floating Rate Loan, and at least two Business
Days prior to the proposed date of such Conversion, in the case of Conversion
into a Eurodollar Loan. Each such notice shall be effective upon receipt by the
Agent, shall be in writing (or by telephone to be promptly confirmed in writing
by the Company), shall specify the date and amount of such Conversion, the
Revolving Loan or portion thereof to be so Converted, the type of Revolving Loan
to be Converted into and, in the case of a Conversion into a Eurodollar Loan,
the initial Interest Period. Promptly upon receipt of such notice the Agent
shall advise each Bank thereof. Subject to SECTIONS 1.12 and 1.13, such
Revolving Loan shall be so Converted on the requested date of Conversion. Each
Conversion shall be on a Business Day and shall be in an aggregate principal
amount of at least $500,000 and an integral multiple of $100,000.
SECTION 1.5 PRO RATA TREATMENT. All borrowings, Conversions and
repayments shall be effected so that after giving effect thereto all types and
Groups of Revolving Loans shall be pro rata among the Banks according to their
respective Percentages.
SECTION 1.6 LETTER OF CREDIT PROCEDURES. Provided that the conditions
in SECTION 11.2 are satisfied, the Company shall give notice to Continental of
the proposed issuance of each Letter of Credit on a Business Day which is at
least two (2) Business Days prior to the proposed date of issuance of such
Letter of Credit. Each such notice shall be accompanied by a Letter of Credit
Application, duly executed by the Company and in all respects satisfactory to
Continental, together with such other documentation as Continental may request
in support thereof, it being understood that each Letter of Credit Application
shall specify, among other things, the date on which the proposed Letter of
Credit is to be issued, the expiration date of such Letter of Credit (which
shall not extend beyond the earlier of (a) one year from the date of issuance of
the Letter of Credit or (b) the Revolving Termination Date) and whether such
Letter of Credit is to be transferable in whole or in part. Subject to the
satisfaction of the conditions precedent set forth in SECTION 11 with respect to
the issuance of such Letter of Credit, Continental shall issue such Letter of
Credit on the requested issuance date.
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SECTION 1.7 PARTICIPATION IN LETTERS OF CREDIT. Concurrently with the
issuance of each Letter of Credit, (it being expressly understood that all
letter of credit obligations of the Company and Subsidiaries existing before the
Effective Date shall be deemed issued as of the Effective Date solely for
purposes of this SECTION 1.7) Continental shall notify each Bank of such
issuance and shall be deemed to have sold and transferred to each other Bank,
and each other Bank shall be deemed irrevocably and unconditionally to have
purchased and received from Continental, without recourse or warranty, an
undivided interest and participation, to the extent of such other Bank's
Percentage, in such Letter of Credit and the Company's reimbursement obligations
with respect thereto. For the purpose of this Agreement, the unparticipated
portion of each Letter of Credit shall be deemed to be Continental's
"participation" therein. Continental hereby agrees, upon request of any Bank,
to deliver to such Bank a list of outstanding Letters of Credit, copies of such
Letters of Credit, Letter of Credit Applications and related documentation as
such other Bank may from time to time reasonably request.
SECTION 1.8 REIMBURSEMENT OBLIGATIONS. The Company hereby
unconditionally and irrevocably agrees to reimburse Continental for each payment
or disbursement made by Continental under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, on the date that such
payment or disbursement is made. Any amount not reimbursed on the date of such
payment or distribution shall bear interest from and including the date of such
payment or disbursement to but not including the date that Continental is
reimbursed by the Company therefor, payable monthly in arrears, at a rate per
annum equal to the Alternate Reference Rate from time to time in effect (but not
less than the Alternate Reference Rate in effect at the date of such payment or
disbursement by Continental) PLUS (x) 2% per annum. Continental shall notify
the Company whenever any demand for payment is made under any Letter of Credit
by the beneficiary thereunder; PROVIDED, however, that the failure of
Continental to so notify the Company shall not affect the rights of Continental
or the Banks in any manner whatsoever.
SECTION 1.9 LIMITATION ON CONTINENTAL'S OBLIGATIONS. In determining
whether to pay under any Letter of Credit, Continental shall have no obligation
to the Company or any Bank other than to confirm that any documents required to
be delivered under such Letter of Credit appear to have been delivered and that
they appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by Continental under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not impose upon Continental any
liability to
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the Company or any Bank and shall not reduce or impair the Company's
reimbursement obligations set forth in SECTION 1.8 or the funding obligations of
the Banks pursuant to SECTION 1.10.
SECTION 1.10 FUNDING BY BANKS TO CONTINENTAL. In the event that
Continental makes any payment or disbursement under any Letter of Credit and the
Company shall not have reimbursed Continental in full for such payment or
disbursement by 10:00 A.M., Chicago time, on the date of such payment or
disbursement, or in the event that any reimbursement received by Continental
from the Company is or must be returned or rescinded upon or during any
bankruptcy or reorganization or otherwise, each Bank shall be obligated to pay
to Continental, in full or partial payment of the purchase price of its
participation in such Letter of Credit, its pro rata share, according to its
Percentage, of such payment or disbursement (but such obligation of the Banks
shall not diminish the obligation of the Company under SECTION 1.8), and the
Agent shall promptly notify each other Bank thereof. Each other Bank
irrevocably and unconditionally agrees to so pay to the Agent in immediately
available funds for Continental's account the amount of such other Bank's
Percentage of such payment or disbursement. If and to the extent any Bank shall
not have made such amount available to the Agent by 2:00 P.M., Chicago time, on
the Business Day on which such Bank receives notice from the Agent of such
payment or disbursement (it being understood that any such notice received after
noon, Chicago time, on any Business Day shall be deemed to have been received on
the next following Business Day), such Bank agrees to pay interest on such
amount to the Agent for Continental's account forthwith on demand for each day
from and including the date such amount was to have been delivered to the Agent
to but not including the date such amount is paid, at a rate per annum equal to
the Federal Funds Rate. Any Bank's failure to make available to the Agent its
Percentage of any such payment or disbursement shall not relieve any other Bank
of its obligation hereunder to make available to the Agent such other Bank's
Percentage of such payment, but no Bank shall be responsible for the failure of
any other Bank to make available to the Agent such other Bank's Percentage of
any such payment or disbursement.
SECTION 1.11 CASH COLLATERAL. If any Letter of Credit remains
outstanding on the Revolving Termination Date, the Company shall deposit with
the Agent, as security for all outstanding Letters of Credit and pursuant to
documentation in form and substance satisfactory to the Banks, cash collateral
in an amount equal to the Stated Amount of all outstanding Letters of Credit,
which cash collateral may be placed in an interest bearing account acceptable to
the Banks and the Company.
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SECTION 1.12 WARRANTY. Each notice of borrowing and/or of Conversion
pursuant to SECTION 1.3 or 1.4 and the delivery of each Letter of Credit
Application pursuant to SECTION 1.6 shall automatically constitute a warranty by
the Company to the Agent and each Bank to the effect that on the date of such
requested borrowing or Conversion (other than any Conversion from a Eurodollar
Loan to a Floating Rate Loan required by SECTION 1.13 or 8.3) or the issuance of
the requested Letter of Credit, as the case may be, (a) the warranties of the
Company contained in SECTION 9 of this Agreement shall be true and correct as of
such requested date as though made on the date thereof and (b) no Event of
Default or Unmatured Event of Default shall have then occurred and be continuing
or will result therefrom.
SECTION 1.13 CONDITIONS. Notwithstanding any other provision of this
Agreement, no Bank shall be obligated to make any Revolving Loan or to Convert
into or permit the continuation at the end of the applicable Interest Period of
any Eurodollar Loan, and Continental shall not be obligated to issue any Letter
of Credit, if an Event of Default or Unmatured Event of Default exists or would
result therefrom.
SECTION 2 NOTES EVIDENCING LOANS.
SECTION 2.1 REVOLVING NOTES. The Revolving Loans of each Bank shall be
evidenced by a promissory note (herein individually called a "Revolving Note"
and collectively for all Banks called the "Revolving Notes") substantially in
the form set forth in EXHIBIT C, with appropriate insertions, dated the
Effective Date payable to the order of such Bank in the principal amount of the
Revolving Loan Commitment of such Bank (or, if less, in the aggregate unpaid
principal amount of such Bank's Revolving Loans). Each Bank shall record in its
records, or at its option on the schedule attached to its Revolving Note, the
date and amount of each Revolving Loan made by such Bank, each repayment or
Conversion thereof and, in the case of each Eurodollar Loan the dates on which
each Interest Period for such Revolving Loan shall begin and end and, in the
event that any Bank assigns or transfers its Revolving Note, such Bank shall
record on the schedule attached to its Revolving Note, the aggregate unpaid
principal amount of Revolving Loans of such Bank on the date of such assignment
or transfer. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on such
Revolving Note. The failure to so record any such amount or any error in so
recording any such amount shall not, however, limit or otherwise affect the
obligations of the Company hereunder or under any Revolving Note to repay the
principal amount of the Revolving Loans evidenced by such Revolving Note
together with all interest accruing thereon.
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SECTION 3. INTEREST.
SECTION 3.1 INTEREST RATES. The Company hereby promises to pay interest
on the unpaid principal amount of each Revolving Loan for the period commencing
on the date of such Revolving Loan until such Revolving Loan is paid in full, as
follows:
(a) At all times while such Revolving Loan is a Floating Rate Loan,
at a rate per annum equal to the Alternate Reference Rate from time to time
in effect;
(b) At all times while such Revolving Loan is a Eurodollar Loan, at a
rate per annum equal to the Eurodollar Rate (Reserve Adjusted) applicable
to each Interest Period for such loan plus the Margin; and
(c) Notwithstanding the provisions of the preceding CLAUSES (a) and
(b), in the event that any principal of any Revolving Loan is not paid when
due (whether by acceleration or otherwise), interest shall accrue after the
due date of such principal until such principal is paid, at a rate per
annum equal to the applicable interest rate from time to time in effect
(but not less than the applicable interest rate in effect for such
Revolving Loan as at such due date), plus 2% per annum.
SECTION 3.2 INTEREST PAYMENT DATES. Accrued interest on each Floating
Rate Loan shall be payable on the last day of each calendar quarter and at
maturity, commencing with the first of such dates to occur after the date
hereof. Accrued interest on each Eurodollar Loan shall be payable on the last
day of each Interest Period relating to such Loan and at maturity. After
maturity, accrued interest on all Revolving Loans shall be payable on demand.
SECTION 3.3 INTEREST PERIODS. Each Interest Period for a Eurodollar
Loan shall commence on the date such Eurodollar Loan is made or Converted from a
Floating Rate Loan, or on the expiration of the immediately preceding Interest
Period for such Eurodollar Loan, and shall end on the date which is 1, 2 or 3
months thereafter, as the Company may specify:
(a) in the case of an Interest Period which commences on the date a
Eurodollar Loan is made or Converted from a Floating Rate Loan, in the
related notice of borrowing or Conversion pursuant to SECTION 1.3 or 1.4,
or
(b) in the case of a succeeding Interest Period with respect to any
Eurodollar Loan, by notice to the Agent by
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11:00 A.M., Chicago time, at least two Business Days prior to the first day
of such succeeding Interest Period, it being understood that (i) each such
notice shall be effective upon receipt by the Agent and shall be in writing
(or by telephone to be promptly confirmed in writing) and (ii) if the
Company fails to give such notice, such Loan shall automatically become a
Floating Rate Loan at the end of its then-current Interest Period.
Each Interest Period for a Eurodollar Loan which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business Day
(unless such next succeeding Business Day is the first Business Day of a
calendar month, in which case such Interest Period shall end on the next
preceding Business Day). Notwithstanding any other provision of this Agreement,
the Company may not select any Interest Period that (i) extends beyond the
Revolving Termination Date or (ii) would result in the aggregate portion of the
Revolving Loans which have Interest Periods extending beyond December 31, 1994
to be in excess of the aggregate amount of such Revolving Commitments as
provided in SECTION 1.1.4.
SECTION 3.4 SETTING AND NOTICE OF EURODOLLAR RATES. The applicable
Eurodollar Rate for each Interest Period shall be determined by the Agent, and
notice thereof shall be given by the Agent promptly to the Company and each
Bank. Each determination of the applicable Eurodollar Rate by the Agent shall
be conclusive and binding upon the parties hereto, in the absence of
demonstrable error. The Agent shall, upon written request of the Company or any
Bank, deliver to the Company or such Bank a statement showing the computations
used by the Agent in determining any applicable Eurodollar Rate hereunder.
SECTION 3.5 COMPUTATION OF INTEREST. Interest shall be computed for the
actual number of days elapsed on the basis of a year of 360 days. The
applicable interest rate under CLAUSES (a) and (c) of SECTION 3.1 shall (to the
extent applicable in the case of CLAUSE (c)) change simultaneously with each
change in the Alternate Reference Rate.
SECTION 4 COLLATERAL.
SECTION 4.1 SECURITY INTERESTS.
SECTION 4.1.1 GRANT OF SECURITY INTEREST. As security for the payment of
all Revolving Loans now or hereafter made, and/or Letters of Credit issued, by
the Banks to, or for the account of, the Company hereunder, and as security for
the payment or other satisfaction of all indebtedness of the Company hereunder,
the Company hereby grants to Agent a first perfected security
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interest in and to the following property of the Company, whether now owned or
existing, or hereafter acquired or coming into existence, wherever now or
hereafter located (all such property is hereinafter referred to collectively as
the "Collateral"):
(a) Accounts Receivable;
(b) Inventory;
(c) All interest of the Company in any goods the sale or lease of
which shall have given or shall give rise to, and in all guaranties and
other property securing the payment of or performance under, any Accounts
Receivable;
(d) All replacements, substitutions, additions or accessions to or
for any of the foregoing;
(e) To the extent related to the property described in PARAGRAPHS (a)
through (d) above, all books, correspondence, credit files, records,
invoices and other papers and documents, including, without limitation, to
the extent so related, all tapes, cards, computer runs, computer programs
and other papers and documents in the possession or control of the Company
or any computer bureau from time to time acting for the Company, and, to
the extent so related, all rights in, to and under all policies of
insurance, including claims of rights to payments thereunder and proceeds
therefrom, including any credit insurance; and
(f) All products and proceeds (including but not limited to proceeds
arising from the sale or other disposition of any Collateral, any returns
of any Inventory sold by the Company, and the proceeds of any insurance
covering any of the Collateral) of any of the foregoing.
SECTION 4.1.2 NEGATIVE PLEDGE. The Company agrees that in the event the
Collateral is released pursuant to Section 4.5, the Company shall not, and shall
not permit the Subsidiaries to grant or allow any security interest in or
otherwise attach to the Collateral, except for the liens specified in SECTION
10.11.
SECTION 4.2 INVENTORY. The Company shall deliver to Agent such
schedules of purchases and/or sales of Inventory, together with such invoices
and other records relating to the purchase and/or sale of Inventory as Agent
shall from time to time reasonably request. Any material adverse change in the
value or condition of any material Inventory (other than such as occur in the
ordinary course of the Company's business) shall be reported to Agent
immediately. Any errors discovered in
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schedules delivered to Agent shall be reported to Agent immediately. The
Company agrees, represents and warrants to the Agent and Banks that as to each
schedule:
(a) The descriptions and quantities of all goods stated thereon, or
on any attachment thereto, are true and correct in all material respects;
(b) All of the goods stated thereon are fit and sufficient for their
ordinary use and application, except as noted on the financial statements
delivered or to be delivered to Agent;
(c) Inventory and products are located at only those offices or
places of business of the Company existing as of the date hereof or
subsequently advised to Agent and shall not be removed from such locations
except for goods leased or sold in the ordinary course of business, goods
returned to the suppliers thereof or to others in the normal course of
business, or goods stored at another location for display or demonstration
for brief periods of time which shall not jeopardize the Agent's security
interest therein; and
(b) All Inventory owned or possessed by the Company is subject to
Agent's Lien.
SECTION 4.3 COLLATERAL AUDITS. The Company shall permit, and cause each
Subsidiary to permit, the Agent or, if the Agent is unable, LaSalle or any
accounting firm selected by the Agent which is reasonably satisfactory to the
Company, on a semi-annual basis and any other time the Agent deems necessary, to
conduct, at the Company's expense, such inspections, audits and reviews of the
Collateral as the Agent shall request.
SECTION 4.4 OTHER DOCUMENTS. At the request of Agent, the Company shall
execute and/or deliver to the Agent such agreements, documents, financing
statements, warehouse receipts, bills of lading, notices of assignment, and
other written matter as shall be necessary in the reasonable determination of
Agent to perfect and maintain perfected Agent's Liens in respect of the
Collateral (all the above hereinafter referred to as "Supplemental
Documentation"), in form and substance reasonably acceptable to Agent, and pay
the costs of any recording or filing of the same. Upon the occurrence of an
Event of Default, the Company hereby irrevocably makes, constitutes and appoints
Agent (and all Persons designated by Agent for that purpose) as the Company's
true and lawful attorney (and agent-in-fact) to sign the name of the Company on
any of the Supplemental Documentation and to deliver any of the Supplemental
Documentation to such Persons as Agent in its sole discretion, may elect. The
Company
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agrees that a carbon, photographic, photostatic, or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement.
SECTION 4.5 RELEASE OF COLLATERAL. The security interest granted to
Agent in SECTION 4.1.1 shall be fully and finally released within fifteen (15)
business days following the reporting to the Agent by the Company of either:
(a) Consolidated Operating Income of the Company of at least
$14,500,000 for the nine (9) month period ending on September 30, 1994; or
(b) Consolidated Operating Income of the Company of at least
$16,000,000 during any four consecutive Fiscal Quarters first measured as
of December 31, 1994 and including only those fiscal quarters after
December 31, 1993.
SECTION 5 FEES.
SECTION 5.1 LETTER OF CREDIT FEES.
(a) The Company agrees to pay to the Agent for the account of the Banks
pro rata according to their respective Percentages a letter of credit fee for
each Letter of Credit in an amount equal to 1% per annum (computed for the
actual number of days elapsed on the basis of a year of 360 days) of the face
amount of such Letter of Credit, payable in arrears on the last day of each
calendar quarter and on the Revolving Termination Date for the period from and
including the date of the issuance of such Letter of Credit to and including
such date or the date upon which such Letter of Credit expired or was
terminated.
(b) In addition, with respect to each Letter of Credit, the Company agrees
to pay to Continental such fees and expenses as Continental shall customarily
require in connection with the issuance, negotiation, processing and/or
administration of letters of credit in similar situations, including, but not
limited to, an agency administration fee for each Letter of Credit in an amount
equal to 1/4% per annum (computed for the actual number of days elapsed on the
basis of a 360 day year) of the face amount of such Letter of Credit, payable in
arrears on the last day of each calendar quarter and on the Revolving
Termination Date for the period from and including the date of the issuance of
such Letter of Credit to and including such date or the date upon which such
Letter of Credit expired or was terminated; provided, however, that such agency
administration fee shall not be charged on any letter of credit obligations of
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the Company and the Subsidiaries existing as of December 31, 1993 and any
extensions or modifications relating thereto.
SECTION 5.2 NON-USE FEE. The Company agrees to pay to each Bank a non-
use fee for the period from and including the Effective Date to the Revolving
Termination Date of 3/8 of 1% per annum on the average daily unused amount of
the total Commitment (as may be reduced by SECTIONS 1.1.4 and 6.1). Such non-
use fee shall be payable in arrears on the last day of each Fiscal Quarter and
on the Revolving Termination Date for any period then ending for which such non-
use fee shall not have been theretofore paid. The non-use fee shall be computed
for the actual number of days elapsed on the basis of a year of 360 days.
SECTION 5.3 CLOSING FEE. The Company agrees to pay a closing fee of
$500,000 on the Effective Date, such fee to be divided among the Banks which are
parties hereto on the Effective Date pro rata according to their respective
Percentages.
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS; VOLUNTARY
PREPAYMENTS.
SECTION 6.1 REDUCTION OR TERMINATION OF THE COMMITMENTS. The Company
may from time to time prior to the Revolving Termination Date on at least five
Business Days' prior written notice received by the Agent (which shall promptly
advise each Bank thereof) permanently reduce the amount of the Revolving Loan
Commitments and/or the Letter of Credit Commitments (such reduction to be pro
rata among the Banks according to their respective Percentages) to an amount not
less than (i) the sum of the aggregate unpaid principal amount of the Revolving
Loans then outstanding in the case of a reduction in the Revolving Loan
Commitments, or (ii) the aggregate Stated Amount of all Letters of Credit then
outstanding, in the case of a reduction in the Letter of Credit Commitments.
Any such reduction shall be in an aggregate amount of at least $500,000 and an
integral multiple of $500,000. The Company may at any time on like notice
terminate the Revolving Loan Commitments and/or the Letter of Credit Commitments
upon payment in full of the Revolving Notes and all other obligations of the
Company hereunder in respect of the Revolving Loans or, in the case of
obligations arising with respect to the Letters of Credit, upon cash
collateralization thereof in full pursuant to documentation in form and
substance satisfactory to the Banks.
SECTION 6.2 VOLUNTARY PREPAYMENTS. The Company may from time to time
prepay the Revolving Loans in whole or in part, provided that (a) the Company
shall give the Agent (which shall promptly advise each Bank) not less than three
Business Day's prior notice thereof, specifying the Loans to be prepaid and the
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date and amount of prepayment, (b) any prepayment of a Eurodollar Loan prior to
the end of the Interest Period relating thereto shall be subject to SECTION 8.4,
(c) each partial prepayment shall be in a principal amount of at least $250,000
and an integral multiple of $250,000, and (d) any prepayment of any Eurodollar
Loan or of the entire principal amount of all Floating Rate Loans shall include
accrued interest to the date of prepayment.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF.
SECTION 7.1 MAKING OF PAYMENTS. All payments (including those made
pursuant to SECTION 6.2) of principal of, or interest on, the Revolving Notes
shall be made by the Company to the Agent in immediately available funds for the
account of the holders of the Revolving Notes pro rata according to the
respective unpaid principal amounts of the Revolving Notes held by them. All
payments of Letter of Credit fees pursuant to SECTIONS 5.1(a) and 5.2 shall be
made by the Company to the Agent for the account of the Banks. All payments of
Letter of Credit fees and expenses pursuant to SECTION 5.1(b) shall be made to
the Agent for the account of Continental. All such payments shall be made to
the Agent at its office in Chicago not later than noon, Chicago time, on the
date due; and funds received after that time shall be deemed to have been
received by the Agent on the next following Business Day. The Company hereby
authorizes the Agent to charge any demand deposit account maintained by the
Company with Continental for the amount of any such payment on the due date
therefor, but the Agent's failure to so charge such account shall in no way
affect the obligation of the Company to make any such payment. The Agent shall
notify the Company after any charge is so made by the Agent against any demand
deposit account maintained by the Company with Continental; PROVIDED that the
failure of the Agent to so notify the Company shall not affect the rights of the
Agent or the Banks in any manner whatsoever. The Agent shall promptly remit to
each Bank or other holder of a Revolving Note its share of all such payments
received in collected funds by the Agent for the account of such Bank or holder.
All payments under SECTIONS 8.1 and 8.4 shall be made by the Company
directly to the Bank or Banks entitled thereto.
SECTION 7.2 APPLICATION OF CERTAIN PAYMENTS. Each payment of principal
shall be applied to such Revolving Loans as the Company shall direct by notice
to be received by the Agent on or before the date of such payment, or in the
absence of such notice, as the Agent shall determine in its discretion.
Concurrently with each remittance to any Bank of its share of any
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such payment the Agent shall advise such Bank as to the application of such
payment.
SECTION 7.3 DUE DATE EXTENSION. If any payment of principal or interest
with respect to any of the Revolving Loans or the Notes falls due on a Saturday,
Sunday or other day which is not a Business Day, then such due date shall be
extended to the next following Business Day, and additional interest shall
accrue and be payable for the period of such extension.
SECTION 7.4 SETOFF. The Company agrees that the Agent and LaSalle, and
each remaining Bank and each remaining holder of a Revolving Note provided it
obtains the prior consent of the Agent (it being understood that LaSalle may
exercise the rights provided in this Section 7.4 without obtaining the prior
consent of the Agent), have all rights of setoff and bankers' lien provided by
applicable law, and in addition thereto, the Company agrees that at any time (i)
any payment or other amount owing by the Company under this Agreement is then
due to the Agent, LaSalle or any Bank or (ii) any Event of Default or event
which might mature into an Event of Default described in SECTION 12.1.4 exists,
the Agent, LaSalle, and each remaining Bank and each remaining holder of a
Revolving Note provided it obtains the prior consent of the Agent, may apply to
the payment of such payment or other amount (or, in the case of CLAUSE (ii)
above, any obligation of the Company hereunder, whether or not then due) any and
all balances, credits, deposits, accounts or moneys of the Company then or
thereafter with the Agent. The Agent, LaSalle and each remaining Bank shall
undertake to notify the Company following the exercise by the Agent, LaSalle and
each remaining Bank of any of the rights described in this SECTION 7.4; PROVIDED
that the failure by the Agent, LaSalle or each remaining Bank to so notify the
Company shall not affect the rights of the Agent, LaSalle, the Banks, or the
holder of any Revolving Note in any manner whatsoever.
SECTION 7.5 PRORATION OF PAYMENTS. If any Bank or other holder of a
Revolving Note shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of offset or otherwise) on account of principal of
or interest on any Revolving Note (or on account of its participation in any
Letter of Credit) in excess of its pro rata share of payments and other
recoveries obtained by all Banks or other holders of on account of principal of
and interest on the Revolving Notes (or such participation) then held by them,
such Bank or other holder shall purchase from the other Banks or holders such
participation in the Notes held by them (or sub-participation in such Letter of
Credit) as shall be necessary to cause such purchasing Bank or other holder to
share the excess payment or other recovery ratably with each of them; PROVIDED,
HOWEVER, that if all or any
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portion of the excess payment or other recovery is thereafter recovered from
such purchasing Bank or holder, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery.
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS.
SECTION 8.1 INCREASED COSTS.
(a) If (i) Regulation D of the Board of Governors of the Federal Reserve
System, or (ii) after the date hereof, the adoption of any applicable law, rule
or regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or any Eurodollar Office of such Bank) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency
(A) shall subject any Bank (or any Eurodollar Office of such Bank) to
any tax, duty or other charge with respect to its Eurodollar Loans, any of
its Revolving Notes or its obligation to make Eurodollar Loans, or shall
change the basis of taxation of payments to any Bank of the principal of or
interest on its Eurodollar Loans or any other amounts due under this
Agreement in respect of its Eurodollar Loans or its obligation to make
Eurodollar Loans (except for changes in the rate of tax on the overall net
income of such Bank or its Eurodollar Office imposed by the jurisdiction in
which such Bank's principal executive office or Eurodollar Office is
located); or
(B) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve included in the
determination of interest rates pursuant to SECTION 3), special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Bank (or any Eurodollar Office of such Bank); or
(C) shall impose on any Bank (or its Eurodollar Office) any other
condition affecting its Eurodollar Loans, any of its Revolving Notes or its
obligation to make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D referred to above, to impose a cost on) such Bank (or any
Eurodollar Office of such Bank) of
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<PAGE>
making or maintaining any Eurodollar Loan, or to reduce the amount of any sum
received or receivable by such Bank (or its Eurodollar Office) under this
Agreement or under any of its Revolving Notes with respect thereto, then within
10 days after demand by such Bank (which demand shall be accompanied by a
statement setting forth the basis of such demand), the Company shall pay
directly to such Bank such additional amount or amounts as will compensate such
Bank for such increased cost or such reduction.
(b) If any Bank shall reasonably determine that the adoption or phase-in
of any applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Eurodollar Office) or any Person controlling such Bank with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's or such controlling
Person's capital as a consequence of such Bank's obligations hereunder
(including, without limitation, such Bank's Revolving Loan Commitment or Letter
of Credit Commitment) to a level below that which such Bank or such controlling
Person could have achieved but for such adoption, change or compliance (taking
into consideration such Bank's or such controlling Person's policies with
respect to capital adequacy) by an amount deemed by such Bank or such
controlling Person to be material, then from time to time, within 10 days after
demand by such Bank (which demand shall be accompanied by a statement setting
forth the basis of such demand), the Company shall pay to such Bank such
additional amount or amounts as will compensate such Bank or such controlling
Person for such reduction.
(c) Each Bank will promptly notify the Company and the Agent of any event
of which it has knowledge which will entitle such Bank to compensation pursuant
to this SECTION 8.1.
SECTION 8.2 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR.
If with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being offered
to one or more Banks in the relevant market for such Interest Period, or the
Agent otherwise determines (which determination shall be binding and conclusive
on all parties) that by reason of circumstances affecting the interbank
eurodollar market adequate and reasonable means do not exist for ascertaining
the applicable Eurodollar Rate; or
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<PAGE>
(b) Banks having an aggregate Percentage of 20% or more advise the Agent
that the Eurodollar Rate (Reserve Adjusted) as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of maintaining or funding
Eurodollar Loans for such Interest Period, or that the making or funding of
Eurodollar Loans has become impracticable as a result of an event occurring
after the date of this Agreement which in the opinion of such Banks materially
affects such Loans, THEN the Agent shall promptly notify the other parties
thereof and, so long as such circumstances shall continue, (i) no Bank shall be
under any obligation to make or Convert into Eurodollar Loans and (ii) on the
last day of the current Interest Period for each Eurodollar Loan, such Loan
shall, unless then repaid in full, automatically Convert to a Floating Rate
Loan.
SECTION 8.3 CHANGES IN LAW RENDERING CERTAIN LOANS UNLAWFUL. In the
event that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Bank raise a substantial question as to whether it is) unlawful for any Bank (an
"Affected Bank") to make, maintain or fund Eurodollar Loans, then the Affected
Bank shall promptly notify each of the other parties hereto and, so long as such
circumstances shall continue, (a) the Affected Bank shall have no obligation to
make or Convert into Eurodollar Loans (but shall make Floating Rate Loans
concurrently with the making of or Conversion into Eurodollar Loans by the Banks
which are not Affected Banks, in each case in an amount equal to the Affected
Bank's Percentage of all Eurodollar Loans which would be made or Converted into
at such time in the absence of such circumstances) and (b) on the last day of
the current Interest Period for each Eurodollar Loan (or, in any event, if the
Affected Bank so requests, on such earlier date as may be required by the
relevant law, regulation or interpretation), such Eurodollar Loan shall, unless
then repaid in full, automatically Convert to a Floating Rate Loan. Each
Floating Rate Loan made by an Affected Bank which, but for the circumstances
described in the foregoing sentence, would be a Eurodollar Loan (an "Affected
Loan") shall, notwithstanding any other provision of this Agreement, remain
outstanding for the same period as the Group of Eurodollar Loans of which such
Affected Loan would be a part absent such circumstances.
SECTION 8.4 FUNDING LOSSES. The Company hereby agrees that upon demand
by any Bank (which demand shall be accompanied by a statement setting forth the
basis for the calculations of the amount being claimed) the Company will
indemnify such Bank against any net loss or expense which such Bank may sustain
or
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<PAGE>
incur (including, without limitation, any net loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Bank to fund or maintain Eurodollar Loans), as reasonably determined by such
Bank, as a result of (a) any payment or prepayment or Conversion of any
Eurodollar Loan of such Bank on a date other than the last day of an Interest
Period for such Loan (including, without limitation, any Conversion pursuant to
SECTION 8.3) or (b) any failure of the Company to borrow or Convert any Loans on
a date specified therefor in a notice of borrowing or Conversion pursuant to
this Agreement. For this purpose, all notices to the Agent pursuant to this
Agreement shall be deemed to be irrevocable.
SECTION 8.5 RIGHT OF BANKS TO FUND THROUGH OTHER OFFICES. Each Bank
may, if it so elects, fulfill its commitment as to any Eurodollar Loan by
causing a foreign branch or Affiliate of such Bank to make such Loan, PROVIDED
that in such event for the purposes of this Agreement such Loan shall be deemed
to have been made by such Bank and the obligation of the Company to repay such
Loan shall nevertheless be to such Bank and shall be deemed held by it, to the
extent of such Loan, for the account of such branch or Affiliate.
SECTION 8.6 DISCRETION OF BANKS AS TO MANNER OF FUNDING.
Notwithstanding any provision of this Agreement to the contrary, each Bank shall
be entitled to fund and maintain its funding of all or any part of its Revolving
Loans in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder shall be made as if such
Bank had actually funded and maintained each Eurodollar Loan during each
Interest Period for such Loan through the purchase of deposits having a maturity
corresponding to such Interest Period and bearing an interest rate equal to the
Eurodollar Rate for such Interest Period.
SECTION 8.7 CONCLUSIVENESS OF STATEMENTS; SURVIVAL OF PROVISIONS.
Determinations and statements of any Bank pursuant to SECTION 8.1, 8.2, 8.3 or
8.4 shall be conclusive absent demonstrable error. Banks may use reasonable
averaging and attribution methods in determining compensation under SECTIONS 8.1
and 8.4, and the provisions of such Sections shall survive termination of this
Agreement.
SECTION 9 WARRANTIES.
To induce the Agent and the Banks to enter into this Agreement and to make
Loans and issue or purchase participation in Letters of Credit hereunder, the
Company warrants to the Agent and the Banks that:
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SECTION 9.1 ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly existing and in good standing under the laws of the State of
Delaware; each Subsidiary is a corporation duly existing and in good standing
under laws of the state of its respective incorporation; and the Company and
each Subsidiary is duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction where, because of the nature of
its activities or properties, such qualification is required and the failure to
so qualify would materially and adversely affect the Company's financial
condition, operations, or business prospects. Schedule 9.1 lists the foreign
jurisdictions of the Company.
SECTION 9.2 AUTHORIZATION; NO CONFLICT AND VALIDITY OF OBLIGATIONS. The
Company has full right and authority to enter into this Agreement, to make the
borrowings herein provided for, to request that Letters of Credit be issued
hereunder, to issue its Revolving Notes and to perform all of its obligations
under the Loan Documents; each Loan Document delivered by the Company has been
duly authorized, executed and delivered by the Company and constitutes the valid
and binding obligations of the Company enforceable in accordance with their
terms; and the Loan Documents do not, nor does the performance or observance by
the Company of any of the matters or things therein provided for, contravene any
provision of law or the certificate of incorporation or bylaws of the Company or
any material covenant, indenture or agreement of or affecting the Company.
SECTION 9.3 SUBSIDIARIES. The Subsidiaries of the Company and their
respective states of incorporation and foreign jurisdictions are designated on
Schedule 9.3.
SECTION 9.4 FINANCIAL STATEMENTS. The Company's audited consolidated
financial statement as at December 31, 1992 and, except as disclosed on Schedule
9.4, its unaudited consolidated financial statement as at September 30, 1993,
copies of which have been furnished to the Banks, have been prepared in
conformity with GAAP applied on a basis consistent with that of the preceding
fiscal year, and accurately present the financial condition of the Company and
its Subsidiaries as at such dates and the results of their operations for the
periods then ended, and since such dates there has been no material adverse
change in their financial condition or operations or business prospects.
SECTION 9.5 NO MATERIAL ADVERSE CHANGE. Except as disclosed on Schedule
9.5, since September 30, 1993, there has been no material change in the
management of the Company and there has been no material adverse change in the
condition, financial or otherwise, or business prospects of the Company or the
Subsidiaries.
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<PAGE>
SECTION 9.6 LITIGATION AND CONTINGENT LIABILITIES. Except as disclosed
in Schedule 9.6, there is no litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental proceedings pending
or, to the best of the Company's knowledge, threatened against the Company or
any Subsidiary which if adversely determined would (i) result in any material
adverse change in the financial condition or continued operations of the Company
or its Subsidiaries or (ii) impair the validity or enforceability of, or
materially impair the ability of the Company to perform its obligations
hereunder or under any of the Loan Documents. Other than any liability incident
to such litigation or proceedings, neither the Company nor any Subsidiary has
any contingent liabilities singly or in the aggregate in excess of $500,000 not
provided for or disclosed in the financial statements referred to in SECTION
9.4.
SECTION 9.7 LIENS. None of the assets of the Company or any Subsidiary
is subject to any mortgage, pledge, title retention lien, or other lien,
encumbrance or security interest, EXCEPT liens permitted by SECTION 10.11.
SECTION 9.8 PENSION AND WELFARE PLANS. Each of the Company and
Subsidiaries is in compliance in all material respects with ERISA with respect
to all employee benefit plans maintained by the Company or Subsidiaries and has
received no notice to the contrary from the PBGC or any other governmental
entity or agency. During the twelve-consecutive-month period prior to the date
of the execution and delivery of this Agreement, no steps have been taken to
terminate any Pension Plan, and no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a lien under Section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could result in the incurrence by the Company
of any material liability, fine or penalty. Except as described in SCHEDULE
9.8, the Company has no contingent liability with respect to any post-retirement
benefits under a Welfare Plan, other than liability for continuation coverage
described in Part 6 of Title I to ERISA and described in applicable state
continuation coverage laws.
SECTION 9.9 INVESTMENT COMPANY ACT. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 9.10 REGULATION U. The Company is not engaged principally, or as
one of its important activities, in the business of extending credit, and will
not use the proceeds of any of the Revolving Loans, for the purpose of
purchasing or carrying Margin Stock and the Company will not use the proceeds
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<PAGE>
of the Revolving Loans in a manner that violates any provision of Regulations U,
G or X of the Board of Governors of the Federal Reserve System.
SECTION 9.ll APPROVALS. No authorization, consent, license, exemption or
filing or registration with any court or governmental department, agency or
instrumentality, or any approval or consent from any other Person is necessary
in connection with the valid execution, delivery or performance by the Company
of the Loan Documents.
SECTION 9.12 COMPANY'S MATERIAL AGREEMENTS. The Company is not in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is a party,
which default might have a material adverse affect on the business, properties
or assets, operations or conditions (financial or otherwise) of the Company or
(ii) any agreement or instrument evidencing or governing indebtedness.
SECTION 9.13 TAXES. Each of the Company and its Subsidiaries has filed
all tax returns which are required to have been filed and has paid, or made
adequate provision for the payment of, all of its taxes which are due and
payable, except such taxes, if any, as are being contested in good faith and by
appropriate proceedings and as to which such reserves or other appropriate
provisions as may be required by GAAP have been maintained. The Company is not
aware of any proposed assessment against the Company or any of its Subsidiaries
for additional taxes (or any basis for any such assessment) which might be
material to the Company.
SECTION 9.14 INSURANCE. Schedule 9.14 completely and accurately
summarizes the property and casualty insurance program carried by the Company
and its Subsidiaries and includes any self insurance program that is in effect.
SECTION 9.15 BUSINESS LOCATIONS. The office where the Company keeps its
books and records concerning the Collateral and other property of the Company
and the principal place of business of the Company is set forth on the signature
pages of this Agreement. Schedule 9.15 lists the address of any other place of
business of the Company and its Subsidiaries.
SECTION 9.16 CONTROL OF COLLATERAL; PERSONAL PROPERTY LEASE AGREEMENTS.
The Company is not now conducting, or permitting or suffering to be conducted,
any activities (other than in the ordinary course of its business) pursuant to
or in conjunction with which any of the Collateral is now, or will be (while any
obligations exist hereunder or this Agreement is in
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<PAGE>
effect) in the possession or control of, any Person other than the owner thereof
other than in the ordinary course of business.
SECTION 9.17 ENVIRONMENTAL MATTERS. Except as set forth on Schedule
9.17, to the best of the Company's knowledge, (a) the Company and the
Subsidiaries comply in all material respects with all applicable Environmental
Laws, (b) the Company and the Subsidiaries have obtained all Governmental
Approvals required for its operations, and its use and/or occupancy of any real
property by any applicable Environmental Law, (c) there are no pending or
threatened claims, notices, investigations or litigation involving the Company
or any Subsidiaries relating to any Release, threatened Release or disposal of
any Hazardous Material, and (d) the Company and the Subsidiaries have no pending
material liability for response or corrective action, natural resource damage,
or other harm pursuant to CERCLA, RCRA, or any comparable state law.
Section 9.18 TREATMENT AND STORAGE. Except in compliance with applicable
law in all material respects, or as otherwise described on Schedule 9.18, any
real property currently owned by or leased to the Company and any Subsidiaries
does not contain any of the following: (a) underground storage tanks, (b) any
landfills or dumps, or (c) hazardous waste management facilities as defined
pursuant to RCRA or comparable state law.
SECTION 9.19 COMPLIANCE WITH LAWS. To the best of the Company's
knowledge, the Company and the Subsidiaries are in compliance in all material
respects with all applicable statutes, laws, rules and regulations.
SECTION 9.20 INFORMATION. All information heretofore or
contemporaneously herewith furnished by the Company to any Bank for purposes of
or in connection with this Agreement and the transactions contemplated hereby
is, and all information hereafter furnished by or on behalf of the Company to
any Bank will be, true and accurate in every material respect on the date as of
which such information is dated or certified, and none of such information is or
will be incomplete by omitting to state any material fact necessary to make such
information not misleading.
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Company hereunder and under the Revolving Notes are paid
in full and all Letters of Credit have been terminated, the Company agrees that,
unless at any time the Banks shall otherwise expressly consent in writing, it
will:
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SECTION 10.1 REPORTS, CERTIFICATES AND OTHER INFORMATION. Furnish to
each Bank:
SECTION 10.1.1 AUDIT REPORT. Within 90 days after each fiscal year of the
Company, a copy of an annual audit report of the Company and its Subsidiaries
for such fiscal year then ended prepared on a consolidating and consolidated
basis and in conformity with GAAP (except for such consolidating statements)
applied on a basis consistent with the audited consolidated financial statement
of the Company and its Subsidiaries as at December 31, 1992, duly certified
(except for such consolidating statements) by Coopers & Lybrand, or other
independent certified public accountants of recognized standing selected by the
Company and reasonably acceptable to the Banks, certified without qualification
by such independent certified public accountants together with a certificate to
the effect that, in making the examination necessary for the signing of such
annual audit report by such independent certified public accountants, they have
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing, or if they have become aware of any such event,
stating the nature and status thereof.
SECTION 10.1.2 QUARTERLY REPORTS. Within 45 days after the end of each
Fiscal Quarter (except the fourth Fiscal Quarter), a copy of (a) the unaudited
consolidated and consolidating balance sheets of the Company and the
Subsidiaries as of the close of such Fiscal Quarter and the related consolidated
changes in financial position for that portion of the fiscal year and (b) the
unaudited consolidated and consolidating statements of income of the Company and
its Subsidiaries, in each case prepared in substantially the same manner as the
audit report referred to in SECTION 10.1.1 and signed by the Chief Financial
Officer of the Company.
SECTION 10.1.3 MONTHLY REPORTS. Within 30 days after the end of each month
of each fiscal year of the Company, the Directors' Statement which at a minimum
provides the unaudited financial statements of the Company and its Subsidiaries
prepared in substantially the same manner as Schedule 10.1.3, and is signed by
the Chief Financial Officer of the Company. In addition, within ten (10) days
after the end of each month of each fiscal year of the Company, the Company
shall deliver to Agent an updated Borrowing Base Report and a receivables aging
certificate in the form acceptable to the Agent.
SECTION 10.1.4 COMPLIANCE CERTIFICATES. Within 45 days after the end of
each Fiscal Quarter, a certificate signed by the President or the Chief
Financial Officer of the Company to the effect that no Event of Default or
Unmatured Event of Default has
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<PAGE>
occurred and is continuing, or, if there is any such event, describing it and
the steps, if any, being taken to cure it, and containing a computation of, and
showing compliance with, each of the financial ratios and restrictions contained
in this SECTION 10.
SECTION 10.1.5 REPORTS TO SEC AND TO SHAREHOLDERS. Copies of each filing
and report made by the Company or any Subsidiary with or to any securities
exchange or the Securities and Exchange Commission, and of each communication
from the Company or any Subsidiary to shareholders of the Company generally,
promptly upon the filing or making thereof.
SECTION 10.1.6 NOTICE OF DEFAULT, LITIGATION AND ERISA MATTERS. As soon as
possible, but in no event later than 30 days, after the Company learns of the
occurrence of any of the following, written notice thereof, describing the same
and the steps being taken by the Company or the Subsidiary affected with respect
thereto: (i) the occurrence of an Event of Default or an Unmatured Event of
Default, or (ii) the institution of, or any adverse determination in, any
litigation, arbitration proceeding or governmental proceeding which is
materially adverse to the Company and its Subsidiaries on a consolidated basis,
or (iii) the institution of any steps by the Company or any other Person to
terminate any Pension Plan, or the failure to make a required contribution to
any Pension Plan if such failure is sufficient to give rise to a lien under
Section 302(f) of ERISA, or the taking of any action with respect to a Pension
Plan which could result in the requirement that the Company furnish a bond or
other security to the PBGC or such Pension Plan, or the occurrence of any event
with respect to any Pension Plan which could result in the incurrence by the
Company of any material liability, fine or penalty, or any material increase in
the contingent liability of the Company with respect to any post-retirement
Welfare Plan benefit.
SECTION 10.1.7 SUBSIDIARIES. A written report of any changes in the list
of its Subsidiaries within thirty (30) days of such change.
SECTION 10.1.8 PROJECTIONS. Within 60 days after the end of each fiscal
year of the Company, a copy of the one-year projections (quarter by quarter) of
the Company and its Subsidiaries, including balance sheets and statements of
earnings and cash flow prepared on a consolidated and on a divisional basis.
SECTION 10.1.9 OTHER INFORMATION. From time to time such other information
concerning the Company and its Subsidiaries as the Agent or any Bank may
reasonably request.
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<PAGE>
SECTION 10.2 BOOKS, RECORDS AND INSPECTIONS. Maintain, and cause each
Subsidiary to maintain, complete and accurate books and records; permit, and
cause each Subsidiary to permit, access by the Agent and each Bank to the books
and records of the Company and of any Subsidiary; permit, and cause each
Subsidiary to permit, the Agent and each Bank to inspect the properties and
operations of the Company and of any Subsidiary; and, if the Agent and each Bank
are unable to conduct such review, permit, and cause each Subsidiary to permit,
any accounting firm selected by the Agent which is reasonably satisfactory to
the Company, on a semi-annual basis, to conduct, at the Company's expense, such
reviews of the books and records of the Company and of any Subsidiary as the
Agent shall reasonably request.
SECTION 10.3 INSURANCE. Maintain, and cause each Subsidiary to maintain,
such insurance as may be required by law and such other insurance, to such
extent and against such hazards and liabilities, as is customarily maintained by
companies similarly situated.
SECTION 10.4 TAXES AND LIABILITIES. Pay, and cause each Subsidiary to
pay, when due all taxes, assessments and other liabilities except as contested
in good faith and by appropriate proceedings.
SECTION 10.5 NET WORTH. Not permit the Company's Consolidated Net Worth
at any time to be less than (a) $50,000,000 from the Effective Date through
December 31, 1994, (b) $58,000,000 from January 1, 1995 through December 31,
1995 and (c) $67,000,000 from January 1, 1996 through December 31, 1996;
PROVIDED, HOWEVER, that these amounts shall be increased by the full amount of
any gains recorded in the sale of any of the Company's assets not in the
ordinary course of its business and by the amount of any proceeds from the sale
of any capital stock of the Company, except for up to $1,300,000 in the
aggregate of the amount of any gains recorded in the sale of certain assets
identified on Schedule 10.5.
SECTION 10.6 CONSOLIDATED OPERATING INCOME. Achieve Consolidated
Operating Income of the Company on a cumulative basis in the amounts and at the
applicable periods set forth below:
<TABLE>
<CAPTION>
Period Amount
---------------------------------------------------
<S> <C>
From January 1, 1994 through:
March 31, 1994 $ 3,750,000
June 30, 1994 $ 7,750,000
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
September 30, 1994 $10,250,000
December 31, 1994 and thereafter
as of the last day of any Fiscal
Quarter, for the period of four
consecutive Fiscal Quarters
ending on such last day $11,000,000
</TABLE>
SECTION 10.7 FUNDED DEBT RATIO. Not permit the ratio of (x) Consolidated
Total Funded Debt to (y) Consolidated Operating Income during any four
consecutive Fiscal Quarters first measured as of December 31, 1994, to exceed
the ratio of 3 to 1.
SECTION 10.8 INTEREST COVERAGE. Not permit the ratio of (a) Consolidated
Operating Income to (b) interest expense (before any deferral and capitalization
of such interest), in each case, of the Company and its Subsidiaries on a
consolidated basis as of the end of each Fiscal Quarter of the Company in 1994
and thereafter during any four (4) consecutive Fiscal Quarters to be less than
3.5 to 1.
SECTION 10.9.1 RESTRICTION ON CERTAIN PAYMENTS AND EXPENSES. Not permit
the aggregate rental expense under Capital Leases and Long Term Leases during
any fiscal year to exceed 10% of Consolidated Net Worth.
SECTION 10.9.2 PURCHASE OR REDEMPTION OF COMPANY'S SECURITIES; DIVIDEND
RESTRICTIONS. Not purchase or redeem any shares of the capital stock of the
Company, declare or pay any dividends thereon (other than stock dividends), make
any distribution to stockholders or set aside any funds for any such purpose,
and not prepay, purchase or redeem, and not permit any Subsidiary to purchase,
any subordinated indebtedness of the Company; PROVIDED, HOWEVER, that so long as
no Event of Default or Unmatured Event of Default exists or would result
therefrom, the Company may (i) make cash dividends to and repurchase the shares
from the holders of the Preferred Stock of the Company, in each case, in the
amounts specified in the Amended and Restated Certificate of Incorporation of
the Company as of the date hereof, and (ii) purchase the common stock of the
Company to be held by the Company as treasury shares for its own account or
otherwise considered treasury shares, up to $5,000,000 in the aggregate.
SECTION 10.9.3 CAPITAL EXPENDITURES. Except as otherwise permitted by
SECTION 10.13(b) and the exercise by the Company of its option to purchase
certain equipment in the CIT Sale/Leaseback, not, and not permit any Subsidiary
to, purchase or otherwise acquire, or commit to purchase or otherwise acquire,
any fixed assets in the aggregate in excess of $9,000,000 for
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each of the fiscal years of the Company ending on December 31, 1994 and December
31, 1995 and $11,500,000 for the fiscal year of the Company ending on December
31, 1996.
SECTION 10.9.4 SALES AND LEASEBACKS. Enter into or permit any Subsidiary
to enter into, any Sale and Leaseback in excess of $10,000,000 in the aggregate
during the term of this Agreement unless the related sale transaction is
otherwise permitted under this Agreement.
SECTION 10.10 INDEBTEDNESS. Not, and not permit any Subsidiary to, incur
or permit to exist any indebtedness or liability on account of deposits or
advances or for borrowed money or for the deferred purchase price of any
property or services, except (i) the obligations arising under the Commitments,
(ii) obligations under any Capital Lease permitted under Section 10.9.1, (iii)
indebtedness of any Subsidiaries to the Company or any other Subsidiaries, (iv)
indebtedness of the Company relating to any hedging agreements entered into by
the Company, (v) current liabilities of the Company arising in the ordinary
course of business, (vi) the obligations of the Company in connection with the
Letter of Credit Applications or the Letters of Credit, (vii) debt in respect of
taxes, assessments or governmental charges to the extent that payment thereof
shall not at the time be required to be made, (viii) indebtedness subordinated
to the obligations of this Agreement, with terms and conditions acceptable to
Agent, (ix) indebtedness assumed by the Company in connection with acquisitions
permitted by SECTION 10.13, (x) indebtedness described in Part B of Schedule
10.10, and (xi) other indebtedness of the Company not to exceed $1,000,000 in
the aggregate. Part A of Schedule 10.10 specifically describes the indebtedness
of the Company and Subsidiaries which shall be satisfied on or before the
Effective Date. Part B of Schedule 10.10 specifically describes the
indebtedness of the Company and Subsidiaries which will remain after the
Effective Date.
SECTION 10.11 LIENS. Not, and not permit any Subsidiary to, create or
permit to exist, any mortgage, pledge, title retention lien, or other lien,
encumbrance or security interest with respect to any assets now owned or
hereafter acquired, EXCEPT (i) for current taxes not delinquent or for taxes
being contested in good faith and by appropriate proceedings, (ii) liens arising
in the ordinary course of business for sums not due or sums being contested in
good faith and by appropriate proceedings and not involving any deposits or
advances or borrowed money or the deferred purchase price of property or
services, (iii) those granted by any Subsidiary to secure indebtedness of such
Subsidiary to the Company or any Subsidiary, (iv) liens in favor of the Agent
and the Banks in connection
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<PAGE>
herewith, (v) preexisting liens on or security interests affecting assets
acquired pursuant to SECTION 10.13, (vi) liens arising in the ordinary course of
business and consistent with past practices not to exceed $1,000,000 in the
aggregate, or (vii) liens listed in SCHEDULE 10.11.
SECTION 10.12 GUARANTIES, LOANS OR ADVANCES. Not, and not permit any
Subsidiary to, become or be a guarantor or surety of, or otherwise become or be
responsible in any manner (whether by agreement to purchase any obligations,
stock, assets, goods or services, or to supply or advance any funds, assets,
goods or services, or otherwise) with respect to, any undertaking of any
advances to any other person or entity, EXCEPT for (i) the endorsement, in the
ordinary course of collection, of instruments payable to it or to its order,
(ii) loans or advances by the Company to any Subsidiary, (iii) advances not to
exceed, in the aggregate for the Company and all Subsidiaries at any one time
outstanding, $150,000 to officers and employees and $100,000 to subcontractors
or suppliers other than Subsidiaries, (iv) customary and usual indemnities given
in connection with any Permitted Dispositions, (v) indemnities of the Bush Hog
and Verson Divisions given to certain of their customers and dealers in the
ordinary course of business and consistent with past practices, (vi) customary
and usual indemnities given by the Company in connection with past divestitures,
(vii) deposits not to exceed, in the aggregate for the Company and all
Subsidiaries at any one time outstanding, $1,000,000 to the sellers of fixed
assets in connection with the purchase by the Company of such fixed assets.
SECTION 10.13 MERGERS, CONSOLIDATIONS, SALES. Not, and not permit any
Subsidiary to, be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets, or any stock of any
class of, or any partnership or joint venture interest in, any other Person, or,
except in the ordinary course of its business, sell, transfer, convey or lease
all or any substantial part of its assets, or sell, transfer, lease or otherwise
dispose of any Collateral (as defined in the Security Agreement) in violation of
the Security Agreement, or sell or assign with or without recourse any
receivables, EXCEPT for:
(a) any such merger or consolidation, sale, transfer, conveyance,
lease or assignment of or by any wholly-owned Subsidiary into the Company or
into, with or to any other wholly-owned Subsidiary and any such purchase or
other acquisition by the Company or any wholly-owned Subsidiary of the assets or
stock of any wholly-owned Subsidiary;
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(b) a negotiated acquisition of any Person which, in the Agent's sole
discretion, is compatible with the business of the Company or Subsidiaries and
that the total consideration paid or given for such acquisitions during any four
consecutive calendar quarters shall not exceed $7,500,000; and
(c) the sale, lease, transfer or other disposition of any of the
assets generally described on Schedule 10.13; and
(d) other than as permitted in Section 10.13(c), the sale, transfer
or disposition of any fixed asset(s), as long as either: (i) the consideration
paid or given to the Company or Subsidiary is less than $250,000 singly and
$500,000 in the aggregate during any 12 month period or (ii) the Company uses
the proceeds of such transaction to finance the purchase of replacement fixed
asset(s), delivering to the Agent written evidence of the use of the proceeds
and such replacement fixed asset(s) is free and clear of all liens;
PROVIDED, HOWEVER, that as to all mergers, consolidations, acquisitions, sales
and transfers no Event of Default or Unmatured Event of Default shall have
occurred and be continuing or will result therefrom. For purposes of this
SECTION 10.13, for all such transactions, the term "consideration" shall include
the amount of any indebtedness for borrowed money assumed by the Company PLUS
the amount, if any, by which the difference of (a) the amount of the liabilities
of the acquired Person assumed by the Company LESS (b) the amount of the
indebtedness for borrowed money assumed by the Company exceeds the value of the
Tangible Assets of such acquired Person.
SECTION 10.14 INVESTMENTS. Not, and not permit any Subsidiary to, make or
permit any Investment in any Person, except for:
(a) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale of goods and services in the ordinary
course of business consistent with past practices;
(b) Investments and securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the United
States of America or any agency thereof;
(c) Investments and commercial paper maturing within 270 days or less
from the date of issuance rated in the highest grade by a nationally recognized
credit agency;
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(d) Investments and certificates of deposit maturing within one year
from the date of acquisition issued by a bank or trust company organized under
the laws of the United States or any State thereof having capital, surplus and
undivided profits aggregating at least $100,000,000;
(e) Investments of the Company outstanding on the date hereof to the
extent disclosed in the financial statements referred to in SECTION 9.4 or
disclosed on Schedule 10.14;
(f) Investments in overnight repurchase or reverse repurchase
transactions involving marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof and backed by
the full faith and credit of the United States, in each case maturing within one
year from the date of acquisition thereof, entered into with a counter party
with a net worth in excess of $100,000,000;
(g) Investments of the Company evidenced by promissory or demand
notes issued by purchasers of assets of the Company permitted by the terms of
this Agreement; and
(h) Investments permitted under Sections 10.9.1, 10.9.2, 10.9.3,
10.9.4, 10.10, 10.12 and 10.13.
SECTION 10.15 ENVIRONMENTAL COVENANTS.
SECTION 10.15.1 ENVIRONMENTAL RESPONSE OBLIGATION. (a) Comply, and
cause each Subsidiary to comply, in all material respects with all applicable
Environmental Laws, or judicial or administrative orders requiring the
performance at any real property owned, operated, or leased by the Company or
any Subsidiary of activities in response to the release or threatened release of
a Hazardous Material except for the period of time that the Company or such
Subsidiary is diligently in good faith contesting such order; (b) notify the
Bank within 30 days of the receipt of any written claim, demand, proceeding,
action, or notice of liability by any Person arising out of or relating to the
release or threatened release of a Hazardous Material; and (c) notify the Bank
promptly, but in no event later than thirty (30) days, after the occurrence of
any release, threat of release, or disposal of Hazardous Material reported to
any governmental regulatory authority at any real property owned, operated, or
leased by the Company or any Subsidiary.
SECTION 10.15.2 ENVIRONMENTAL LIABILITIES. Not violate in any material
respect any applicable Environmental Law and, without limiting the foregoing,
not commence disposal of any Hazardous Material into or onto any real property
owned, operated, or leased by the Company or any Subsidiary nor allow
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any lien imposed pursuant to any law, regulation or order relating to Hazardous
Materials or the disposal thereof to remain on such real property.
SECTION 10.16 UNCONDITIONAL PURCHASE OBLIGATIONS. Not, and not permit any
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services.
SECTION 10.17 EMPLOYEE BENEFIT PLANS. Maintain, and cause each Subsidiary
to maintain, each Pension Plan in compliance in all material respects with all
applicable requirements of the law and regulations.
SECTION 10.18 USE OF PROCEEDS. Not use or permit any proceeds of the
Revolving Loans to be used, either directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of "purchasing or carrying" any
Margin Stock.
SECTION 10.19 OTHER AGREEMENTS. Not enter into any agreement containing
any provision which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
SECTION 10.20 COMPLIANCE WITH LAWS. Comply, and cause each Subsidiary to
comply in all material respects with all applicable statutes, laws, rules and
regulations.
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING.
SECTION 11.1 EFFECTIVENESS. SECTIONS 1 through 7 of this Agreement shall
become effective on such date (herein called the "Effective Date") that (i) the
conditions specified in SECTION 11.2 have been satisfied, (ii) the Agent shall
have received the fees described in SECTIONS 5.1, 5.2 and 5.3 (to the extent
then due), and (iii) the Agent shall have received all the following, each duly
executed and dated the Effective Date (or such earlier date as shall be
satisfactory to the Agent), in form and substance satisfactory to the Agent, and
each (except for the Notes, of which only the originals shall be signed) in
sufficient number of signed counterparts to provide one for each Bank:
SECTION 11.1.1 REVOLVING NOTES. The Revolving Notes of the Company payable
to the order of each Bank.
SECTION 11.1.2 SECURITY AGREEMENT. A Security Agreement, substantially in
the form of EXHIBIT D (herein, as amended or
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otherwise modified from time to time, called the "Security Agreement").
SECTION 11.1.3 RESOLUTIONS. Certified copies of resolutions of the Board
of Directors of the Company authorizing the execution, delivery and performance
of this Agreement, the Notes, the Letter of Credit Applications, the Security
Agreement and the other documents to be executed by the Company pursuant to this
Agreement.
SECTION 11.1.4 CONSENTS AND APPROVALS. The required consents and
governmental approvals (if any) with respect to this Agreement, the Revolving
Notes, the Letter of Credit Applications, the Security Agreement, and the other
documents to be executed by the Company pursuant to this Agreement.
SECTION 11.1.5 INCUMBENCY AND SIGNATURES. A certificate of the Secretary
or an Assistant Secretary of the Company certifying the names of the officer or
officers of the Company authorized to sign this Agreement, the Notes, the Letter
of Credit Applications, the Security Agreement and the other documents provided
for in this Agreement, together with a sample of the true signature of each such
officer (it being understood that the Agent and the Banks may conclusively rely
on such certificate until formally advised by a like certificate of any changes
therein).
SECTION 11.1.6 OPINIONS OF COUNSEL FOR THE COMPANY. The opinions of
Gardner, Carton & Douglas, and David B. Corwine, Esq. as counsels for the
Company, substantially in the forms set forth in EXHIBIT E.
SECTION 11.1.7 FINANCING STATEMENTS, ETC. Evidence, in form and substance
satisfactory to the Agent, that duly executed Uniform Commercial Code financing
statements and similar documents have been filed in such offices as the Agent
may require to perfect and preserve the security interest in the collateral
under the Collateral Documents in favor of the Agent and the Banks.
SECTION 11.1.8 OTHER DOCUMENTS. Such other documents as the Agent or any
Bank may reasonably request.
SECTION 11.2 ALL LOANS AND LETTERS OF CREDIT. The occurrence of the
Effective Date and the obligation of each Bank to make any Revolving Loan and to
issue any Letter of Credit is subject to the conditions precedent that:
SECTION 11.2.1 NO DEFAULT. (a) No Event of Default, or Unmatured Event of
Default, has occurred and is continuing or
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will result from the making of such Revolving Loan or the issuance of such
Letter of Credit and (b) the warranties of the Company contained in Section 9
are true and correct as of the date of such requested Revolving Loan or the
issuance of such Letter of Credit, with the same effect as though made on such
date.
SECTION 11.2.2 CONFIRMATORY CERTIFICATE. At least three (3) business days
before any requested borrowing (either in the form of a Revolving Loan or
issuance of a Letter of Credit), the Agent shall have received (in sufficient
counterparts to provide one to each Bank) a Borrowing Base Report, together with
such other documents as the Agent may reasonably request in support thereof,
including, without limitation, in the case of each Revolving Loan other than the
initial Revolving Loan and each Letter of Credit, duly executed and updated
copies or other confirmations of the continuing effectiveness of any or all of
the documents provided for in SECTION 11.1.
SECTION 11.2.3 LITIGATION. No litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental proceedings not
disclosed in writing by the Company to the Banks prior to the date of the last
previous Revolving Loan hereunder (or, in the case of the initial Revolving Loan
prior to the date of execution and delivery of this Agreement) are pending or
known to be threatened against the Company or any Subsidiary, and no material
development not so disclosed has occurred in any litigation (including, without
limitation, derivative actions), arbitration proceedings or governmental
proceedings so disclosed, which in the opinion of the Banks is likely to
materially adversely affect the financial position or business of the Company or
any Subsidiary or impair the ability of the Company to perform its obligations
under this Agreement or any Instrument.
SECTION 11.2.4 CORPORATE REORGANIZATION. The Company shall have reorganized
its corporate structure consistent with the resolutions and agreements attached
as Exhibit E.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
SECTION 12.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default under this Agreement:
SECTION 12.1.1 NON-PAYMENT OF NOTES, ETC. Default in the payment when
due of (a) any principal of, or interest on, any Revolving Note or (b) any
reimbursement obligation with respect to any Letter of Credit or any fees
payable by the Company hereunder.
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SECTION 12.1.2 NON-PAYMENT OF OTHER INDEBTEDNESS FOR BORROWED MONEY.
Default in the payment when due (subject to any applicable grace period),
whether by acceleration or otherwise, of any other indebtedness for borrowed
money of, or guaranteed by, the Company or any Subsidiary in excess of $250,000
in the aggregate or default in the performance or observance of any obligation
or condition with respect to any such other indebtedness if the effect of such
default is to accelerate the maturity of any such indebtedness or to permit the
holder or holders thereof, or any trustee or agent for such holders, to cause
such indebtedness to become due and payable prior to its expressed maturity.
SECTION 12.1.3 OTHER MATERIAL OBLIGATIONS. Default in the payment when
due, or in the performance or observance of, any material obligation of, or
condition agreed to by the Company or any Subsidiary with respect to any
material purchase or lease of goods or services reasonably valued in excess of
$750,000 in the aggregate (and not constituting an Event of Default under any of
the other provisions of this SECTION 12) and except only to the extent that the
existence of any such default is being contested by the Company or such
Subsidiary in good faith and by appropriate proceedings.
SECTION 12.1.4 BANKRUPTCY, INSOLVENCY. The Company or any Subsidiary
becomes insolvent or generally fails to pay, or admits in writing its inability
or refusal to pay, debts as they become due; or the Company or any Subsidiary
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for the Company or such Subsidiary or any property
thereof, or makes a general assignment for the benefit of creditors; or in the
absence of such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for the Company or any Subsidiary or for a
substantial part of the property of any thereof and is not discharged within 30
days; or any bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding (except the voluntary dissolution, not under any
bankruptcy or insolvency law, of a Subsidiary), is commenced in respect of the
Company or any Subsidiary, and if such case or proceeding is not commenced by
the Company or such Subsidiary, it is consented to or acquiesced in by the
Company or such Subsidiary or remains for 30 days undismissed; or the Company or
any Subsidiary takes any corporate action to authorize, or in furtherance of,
any of the foregoing.
SECTION 12.1.5 NON-COMPLIANCE WITH THIS AGREEMENT. Failure by the Company
to comply with or to perform any provision of this Agreement (and not
constituting an Event of Default under any other provision of this SECTION 12)
and continuance of such
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failure for 15 days after notice thereof to the Company from the Agent, any
Bank, or the holder of any Revolving Note.
SECTION 12.1.6 WARRANTIES. Any warranty made by the Company herein or in
any Instrument is breached or is false or misleading in any material respect, or
any schedule, certificate, financial statement, report, notice, or other writing
furnished by the Company to the Agent or any Bank is false or misleading in any
material respect on the date as of which the facts therein set forth are stated
or certified.
SECTION 12.1.7 PENSION PLANS. (a) Institution of any steps by the Company
or any other Person to terminate a Pension Plan if as a result of such
termination the Company could be required to make a contribution to such Pension
Plan, or could incur a liability or obligation to such Pension Plan, in excess
of $100,000, or (b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a lien under section 302(f) of ERISA.
SECTION 12.1.8 COLLATERAL DOCUMENTS. Default in the performance of any of
the Company's or any third party's agreements set forth in any of the Collateral
Documents or any other security instrument or other agreement executed pursuant
hereto (and not constituting an Event of Default under any other provision of
this SECTION 12) and continuance of such default for 10 days after notice
thereto to the Company from the Agent, any Bank or holder of any Revolving Note.
SECTION 12.1.9 CONTINUING VALIDITY. Except as provided in SECTION 4.5, any
security interest in, assignment of, or lien on any of the Company's assets
granted to the Agent for the benefit of the Banks shall fail to remain in full
force or effect, or the Company or any party (including, without limitation, any
trustee in bankruptcy) through or on its behalf shall contest or question the
validity, binding nature or enforceability or any Collateral Document or any
security interest, assignment or lien granted to the Agent for the benefit of
the Banks.
SECTION 12.1.10 MATERIAL ADVERSE CHANGE. There is a material adverse
change in the financial or business conditions or prospects of the Company or
any of the Subsidiaries.
SECTION 12.1.11 CHANGE OF CONTROL. The acquisition, through purchase
or otherwise (including the agreement to act in concert without more), by any
Person or group of Persons acting in concert directly or indirectly, in one or
more transactions, of beneficial ownership or control of securities representing
more than fifty percent (50%) of the combined voting power of the Company's
voting stock. For purposes of this definition,
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"beneficial ownership" shall have the meaning set forth in Rule 13d-3 under the
Securities and Exchange Act of 1934. A merger or consolidation pursuant to
Section 10.13 with respect to which the voting stock of the surviving
corporation is not more than fifty percent (50%) owned by the Company shall
constitute a "Change of Control."
SECTION 12.2 EFFECT OF EVENT OF DEFAULT. If any Event of Default
described in SECTION 12.1.4 shall occur, the Commitments (if they have not
theretofore terminated) shall immediately terminate and the Revolving Notes and
all other obligations hereunder shall become immediately due and payable and the
Company shall become immediately obligated to deliver to the Agent cash
collateral in an amount equal to the outstanding face amount of all Letters of
Credit, all without presentment, demand, protest or notice of any kind; and, in
the case of any other Event of Default, the Agent may (and upon written request
of the Banks shall) declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Revolving Notes and all other
obligations hereunder to be due and payable and/or demand that the Company
immediately deliver to the Agent cash collateral in an amount equal to the
outstanding face amount of all Letters of Credit, whereupon the Commitments (if
they have not theretofore terminated) shall immediately terminate and/or all
Revolving Notes and all other obligations hereunder shall become immediately due
and payable and/or the Company shall immediately become obligated to deliver to
the Agent cash collateral in an amount equal to the face amount of all Letters
of Credit, all without presentment, demand, protest or notice of any kind. The
Agent shall promptly advise the Company of any such declaration, but failure to
do so shall not impair the effect of such declaration. Any cash collateral
delivered hereunder shall be held by the Agent (without liability for interest
thereon) and applied to obligations arising in connection with any drawing under
a Letter of Credit. After the expiration or termination of all Letters of
Credit, such cash collateral shall be applied by the Agent to any remaining
obligations hereunder and any excess shall be delivered to the Company or as a
court of competent jurisdiction may elect.
SECTION 13 CERTAIN DEFINITIONS. When used herein the following terms
shall have the following meaning (such definitions to be applicable to both the
singular and plural forms of such terms):
AFFILIATE shall mean, with respect to any Person, a Person: (a) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such Person; (b) which
beneficially owns or holds, directly or indirectly, five percent (5%) or more of
any class of
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the Voting Stock (or, in the case of a Person which is not a corporation, five
percent (5%) or more of the equity interest) of such Person; or (c) five percent
(5%) or more of the Voting Stock (or, in the case of a Person which is not a
corporation, five percent (5%) or more of the equity interest) of which is
beneficially owned or held, directly or indirectly, by such Person; PROVIDED,
HOWEVER, that no Bank shall in any event be deemed to be an Affiliate of the
Company or any Subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of Voting Stock or an equity
interest, by contract, or otherwise.
AGENT - see PREAMBLE.
AGREEMENT - see PREAMBLE.
ALTERNATE REFERENCE RATE shall mean, on any date and with respect to all
Floating Rate Loans, a fluctuating rate of interest per annum (rounded upward to
the next highest one-eighth (1/8) of one percent (1%) if not already an integral
multiple of one-eighth (1/8) of one percent (1%)) equal to the higher of (a) the
rate of interest most recently announced by the Agent at its Chicago office as
its Reference Rate; or (b) the Market Federal Funds Rate most recently
determined by the Agent plus one-half percent (.50%).
The Alternate Reference Rate is not necessarily intended to be the lowest
rate of interest determined by the Agent in connection with extensions of
credit. For purposes of this Agreement (i) any change in the Alternate
Reference Rate due to a change in the Reference Rate shall be effective on the
date such change in the Reference Rate is announced and (ii) any change in the
Alternate Reference Rate due to a change in the Market Federal Funds Rate shall
be effective on the effective date of such change in the Market Federal Funds
Rate. If for any reason the Agent shall have determined (which determination
shall be conclusive in the absence of manifest error) that it is unable to
ascertain the Market Federal Funds Rate for any reason, including, without
limitation, the inability or failure of the Agent to obtain sufficient bids or
publications in accordance with the terms hereof, the Alternate Reference Rate
shall be the Reference Rate until the circumstances giving rise to such
inability no longer exist. The Agent will give notice promptly to the Company
and the Banks of changes in the Alternate Reference Rate.
BANK - see PREAMBLE.
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BORROWING BASE shall mean at any date an amount equal to 100% of the sum of
the following: (A) 80% of the Net Bush Hog 0 - 90 days Eligible Receivables;
(B) 75% of the Net Bush Hog 91 - 180 Days Eligible Receivables; (C) 65% of the
Net Bush Hog 181 - 240 Days Eligible Receivables; (D) 50% of the Net Bush Hog
Over 240 Days Eligible Receivables; (E) 80% of the Net Coz Eligible Receivables;
(F) 85% of the Net Verson Eligible Receivables; (G) 45% of the Net Bush Hog
Eligible Raw Material Inventory; (H) 45% of the Net Bush Hog Purchased Parts
Inventory; (I) 55% of the Net Bush Hog Eligible Finished Goods Inventory; (J)
50% of the Net Coz Eligible Raw Material Inventory; (K) 50% of the Net Verson
Eligible Raw Material Inventory; and (L) 10% of the Net Verson Eligible Work-In-
Process Inventory. Measurement of the Receivables shall be as of the preceding
Friday unless the date of determination is a Monday, in which case the
measurement shall be as of the second preceding Friday, and measurement of the
Inventories shall be as of the close of the Company's business on the last day
of the preceding month unless the date of determination is prior to the 15th of
the month, in which case the measurement shall be as of the close of the
Company's business on the last day of the second preceding month.
BORROWING BASE REPORT shall mean the report, together with the supporting
calculations attached thereto, executed on behalf of the Company by its chief
financial officer or treasurer substantially in the form of EXHIBIT B.
BUSINESS DAY shall mean any day on which banks are open for commercial
banking business in Chicago, Illinois and, in the case of a Business Day which
relates to a Eurodollar Loan, on which dealings are carried on in the interbank
eurodollar market.
CAPITAL EXPENDITURES shall mean all payments for any fixed assets or
improvements or for replacements, substitutions or additions thereto, that have
a useful life of more than one year and which are required to be capitalized
under GAAP.
CAPITAL LEASE shall mean, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, either would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person or otherwise be
disclosed as such in a note to such balance sheet.
CAPITAL LEASE OBLIGATION shall mean, with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP,
would appear on a balance sheet of such lessee in respect of such Capital Lease
or otherwise be disclosed in a note to such balance sheet.
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CERCLA shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 USC 9601 ET SEQ., and any future amendments.
CIT SALE/LEASEBACK shall mean that certain Master Lease Agreement, dated as
of May 19, 1987, as amended, between the Company and the CIT Group/Equipment
Financing, Inc.
COLLATERAL shall mean the items of personal property described in SECTION
4.
COLLATERAL DOCUMENTS shall mean the Security Agreement and the Uniform
Commercial Code financing statements filed and/or recorded with the appropriate
Person in connection therewith.
COMMITMENTS shall mean the Revolving Loan Commitments and the Letter of
Credit Commitments.
COMPANY - see PREAMBLE.
CONSOLIDATED OPERATING INCOME shall mean (a) the sum of (i) consolidated
net income for such period, plus (ii) consolidated interest expense for such
period, plus (iii) the aggregate amount which was deducted by the Company in
respect of Federal, state and local income taxes by the Company and its
Subsidiaries in determining the Company's consolidated net income for such
period, LESS (b) the sum of (i) interest income for the period, plus (ii)
extraordinary gains for the period.
CONSOLIDATED NET WORTH shall mean, as of the date of any determination
thereof, the assets minus the sum of the liabilities and the Preferred Stock of
the Company and Subsidiaries on a consolidated basis. Assets and liabilities of
the Company and Subsidiaries shall have the meanings usually given to such terms
in accordance with GAAP.
CONSOLIDATED TOTAL FUNDED DEBT shall mean the total of all Funded Debt of
the Company and such Subsidiaries outstanding on such date determined in
accordance with GAAP applied on a consistent basis.
CONTINENTAL - see PREAMBLE.
CONVERT, CONVERSION, AND CONVERTED shall refer to a conversion of Loans
pursuant to SECTION 1.4, 3.3, 8.2 or 8.3.
DEFAULTED RECEIVABLE shall mean at any time, a Receivable:
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(a) on which any amount (i) to the Bush Hog Division remains unpaid sixty-
one days or more or (ii) to the Verson or Coz Division remains unpaid ninety-one
days or more, in each instance, after the scheduled maturity of such amount;
(b) as to which any of the Related Equipment has been repossessed or
returned, or the related Obligor is subject to any Insolvency Event;
(c) which should have been written off in accordance with the Company's
practice as of the Effective Date; or
(d) in respect of which payments have been extended or rewritten (i) for a
purpose other than enhancing the ultimate collectability thereof, or (ii) more
than once or for an additional period longer than thirty days, it being
understood that if payments are extended or rewritten by the Company, such new
terms shall govern for the purpose of subsection (a) above.
DIRECTORS' STATEMENT shall mean the report prepared by the Company in the
form of Schedule 10.1.3.
DOLLAR and the sign "$" shall mean lawful money of the United States of
America.
EFFECTIVE DATE - see SECTION 11.1.
ELIGIBLE PROGRESS BILLING RECEIVABLE shall mean a Progress Billing
Receivable which meets each of the requirements set forth in the definition of
"Eligible Receivable" other than the requirement that it not be a Progress
Billing Receivable.
Any Progress Billing Receivable which is at any time an Eligible Progress
Billing Receivable, but which subsequently fails to meet any of the foregoing
requirements, shall forthwith cease to be an Eligible Progress Billing
Receivable until such time as it once again meets all of the foregoing
requirements.
For purposes of determining the Borrowing Base, the "amount" of each
Eligible Progress Billing Receivable at any time shall be the book value thereof
at such time.
ELIGIBLE RAW MATERIAL INVENTORY shall mean any Inventory which meets each
of the following requirements;
(a) it consists of raw materials;
(b) it is in good condition;
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(c) it is owned by the Company and is not subject to any lien or
security interest whatsoever other than the security interest under the
Loan Documents; and
(d) the Agent has a first perfected security interest therein.
Any Inventory which is at any time Eligible Raw Material Inventory, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be Eligible Raw Material Inventory until such time as it once again
meets all of the foregoing requirements.
For purposes of determining the Borrowing Base, the "amount" of Eligible
Raw Material Inventory at any time shall be the book value thereof at such time.
ELIGIBLE RECEIVABLE shall mean each account receivable of the Company:
(a) which complies with all applicable legal requirements, including,
without limitation, to the extent applicable, all state and federal usury
laws;
(b) which (i) is not evidenced by and does not constitute an
instrument or chattel paper, (ii) if the perfection of the Agent's security
interest therein is governed by the laws of a jurisdiction where the
Uniform Commercial Code -- Secured Transactions is in force, constitutes an
account as defined in the Uniform Commercial Code as in effect in such
jurisdiction, and (iii) if the perfection of the Agent's security interest
therein is governed by the law of a jurisdiction where the Uniform
Commercial Code -- Secured Transactions is not in force, the Company has
furnished to the Agent such opinions of counsel and other evidence as has
been reasonably requested, establishing to the reasonable satisfaction of
the Agent, that the Agent's rights with respect thereto are not
significantly less protected and favorable than such rights under the
Uniform Commercial Code;
(c) which constitutes a legal, valid and binding payment obligation
(not (i) evidencing "consumer credit" within the meaning of 12 C.F.R.
226.2(p), as amended or replaced from time to time after the Effective Date
or (ii) secured by Related Equipment deemed by the Company to be "consumer
use equipment") of the related obligator, enforceable in accordance with
its terms;
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(d) with respect to which, if such Receivable arose from the sale of
goods, such goods were free of any liens or encumbrances at the time of
sale, and if such Receivable is secured by a security interest in the
Related Equipment, such equipment has been delivered to the related Obligor
and is located in one of the 50 States, the District of Columbia, Canada,
Mexico, or Russia; provided that with respect to a Receivable which arises
from an Obligor located in Mexico or Russia, the payment thereof is secured
by a letter of credit acceptable to Agent;
(e) which provides for payment by the related Obligor (other than an
Obligor obligated with regard to such Receivable solely on account of a
guaranty or a recourse obligation), which is a Person (which, if a
corporation, the principal place of business of which is) located in one of
the 50 States or the District of Columbia or Canada and is not the Company
or an Affiliate of the Company, in United States dollars with terms (of
payment or otherwise) which do not vary materially from industry practice
for similar receivables.
(f) which was originated in conformity with credit standards which
were not materially lower than the standards of the Company in effect on
the Effective Date;
(g) which is not a Defaulted Receivable, a Progress Billing
Receivable or an Unbilled Receivable;
(h) which is not subject to laws which would make the grant of a
security interest therein from the Company to the Agent under the Loan
Documents unlawful;
(i) with respect to which all valid and enforceable conditions to or
other restrictions on grant of a security interest set forth in the related
contract shall have been satisfied;
(j) which has not been owned by any entity as to which an Insolvency
Event has occurred; and
(k) in which the Agent has a first perfected security interest.
Notwithstanding the foregoing, if a standby or commercial letter of credit
has been issued in form and substance (including amount) satisfactory to the
Agent in its sole discretion to support an account receivable of the Company,
such account receivable shall be deemed to meet the requirements in clause (e)
above as to the location of the related Obligor.
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An account receivable which is at any time an Eligible Receivable, but
which subsequently fails to meet any of the foregoing requirements, shall
forthwith cease to be an Eligible Receivable until such time as it once again
meets all of the foregoing requirements.
For purposes of determining the Borrowing Base, the "amount" of each
Eligible Receivable at any time shall be the net amount of such Eligible
Receivable (reduced by the amount of any refund, rebate, allowance, discount, or
other concession to the Obligor in connection therewith) at such time.
ELIGIBLE UNBILLED RECEIVABLE shall mean an Unbilled Receivable which arises
in the ordinary course of business of the Company and which meets each of the
requirements set forth in the definition of "Eligible Receivable" other than the
requirement that it not be an Unbilled Receivable.
Any Unbilled Receivable which is at any time an Eligible Unbilled
Receivable, but which subsequently fails to meet any of the foregoing
requirements, shall forthwith cease to be an Eligible Unbilled Receivable until
such time as it once against meets all of the foregoing requirements.
For purposes of determining the Borrowing Base, the "amount" of each
Eligible Unbilled Receivable shall be the book value thereof at such time.
ELIGIBLE WORK-IN-PROCESS INVENTORY shall mean any Inventory which meets
each of the following requirements;
(a) it consists of work-in-process;
(b) it is in good condition;
(c) it is owned by the Company and is not subject to any lien or
security interest whatsoever other than the security interest under the
Loan Documents; and
(d) the Agent has a first perfected security interest therein.
Any Inventory which is at any time Eligible Work-In-Process Inventory, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be Eligible Work-In-Process Inventory until such time as it once again
meets all of the foregoing requirements.
For purposes of determining the Borrowing Base, the "amount" of Eligible
Work-In-Process Inventory at any time shall be the
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book value thereof at such time (after giving effect to related contra asset
accounts, including without limitation, such accounts for customer down
payments).
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
EUROCURRENCY RESERVE PERCENTAGE shall mean, with respect to each Interest
Period, a percentage (expressed as a decimal) equal to the daily average during
such Interest Period of the percentage in effect on each day of such Interest
Period, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor), for determining the aggregate maximum reserve requirements
applicable to "Eurocurrency Liabilities" pursuant to Regulation D or any other
then applicable regulation of the Board of Governors which prescribes reserve
requirements applicable to "Eurocurrency Liabilities" as presently defined in
Regulation D.
EURODOLLAR LOAN shall mean any Loan which bears interest at a rate
determined by reference to the Eurodollar Rate (Reserve Adjusted).
EURODOLLAR OFFICE shall mean with respect to any Bank the office or offices
of such Bank which shall be making or maintaining the Eurodollar Loans of such
Bank hereunder or such other office or offices through which such Bank
determines its Eurodollar Rate. A Eurodollar Office of any Bank may be, at the
option of such Bank, either a domestic or foreign office.
EURODOLLAR RATE shall mean, with respect to any Eurodollar Loan for any
Interest Period, the rate per annum equal to the rate at which Dollar deposits
in immediately available funds are offered to the Eurodollar Office of
Continental two Business Days prior to the beginning of such Interest Period by
major banks in the interbank eurodollar market as at or about the relevant local
time of such Eurodollar Office, for delivery on the first day of such Interest
Period, for the number of days comprised therein and in an amount equal or
comparable to the amount of the Eurodollar Loan of Continental for such Interest
Period. As used herein, "relevant local time" as to any Eurodollar Office shall
mean 11:00 A.M., London time, when such Eurodollar Office is located in Europe
or the Middle East, or 11:00 A.M., Chicago time, when such Eurodollar Office is
located in North America or the Caribbean.
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EURODOLLAR RATE (RESERVE ADJUSTED) shall mean, with respect to any
Eurodollar Loan for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:
Eurodollar Rate = EURODOLLAR RATE
(Reserve Adjusted) --------------------
1-Eurocurrency
Reserve Percentage
EVENT OF DEFAULT shall mean any of the events described in SECTION 12.1.
ENVIRONMENTAL LAW shall mean any current or future legal requirement
pertaining to (a) the protection of health, safety, and the indoor or outdoor
environment, (b) the conservation, management, or use of natural resources and
wildlife, (c) the protection or use of surface water and groundwater, (d) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, Release, threatened Release, abatement, removal,
remediation or handling of, or exposure to, any Hazardous Material or (e)
pollution (including any Release to air, land, surface water and groundwater),
and includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 USC 906 ET SEQ.; Solid Waste Disposal Act,
as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous
and Solid Waste Amendments of 1984, 42 USC 6901 ET SEQ.; Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 ET SEQ.;
Clean Air Act of 1966, as amended, 42 USC 7401 ET SEQ.; Toxic Substances Control
Act of 1976, 15 USC 2601 ET SEQ.; Hazardous Materials Transportation Act, 49 USC
App. 1801 ET SEQ.; Occupational Safety and Health Act of 1970, as amended, 29
USC 651 ET SEQ.; Oil Pollution Act of 1990, 33 USC 2701 ET SEQ.; Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 ET SEQ.; National
Environmental Policy Act of 1969, 42 USC 4321 ET SEQ.; Safe Drinking Water Act
of 1974, as amended, 42 USC 300(f) ET SEQ.; and any similar, implementing or
successor law, and any amendment, rule, regulation, order, or directive issued
thereunder.
FEDERAL FUNDS RATE shall mean, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Board of Governors of the Federal Reserve System
(including any such successor publication, "H.15(519)") for such day opposite
the caption "Federal Funds (Effective)". If on any relevant day such rate is
not yet published in H.15(519), the rate for such day will be the rate set forth
in the daily statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or
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any successor publication, published by the Federal Reserve Bank of New York
(including any such successor publication, the "Composite 3:30 p.m. Quotations")
for such day under the caption "Federal Funds Effective Rate". If on any
relevant day the appropriate rate for such day is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, that rate for such day will be
the arithmetic mean of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m., New York City time, on such day by each of
three leading brokers of Federal funds transactions in New York City, selected
by the Agent. The rate for any day which is not a Business Day shall be the
rate for the immediately preceding Business Day.
FISCAL QUARTER shall mean the period ending on either March 31, June 30,
September 30 or December 31 of each year.
FLOATING RATE LOAN shall mean any Loan which bears interest at or by
reference to the Alternate Reference Rate.
FUNDED DEBT shall mean all indebtedness of the Company and its Subsidiaries
which by the terms of the agreement governing or instrument evidencing such
indebtedness matures more than one year from, or is directly or indirectly
renewable or extendable at the option of the debtor under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of more than one year from the creation thereof, including current
maturities of long-term debt, revolving credit, short-term debt extendable
beyond one-year at the option of the debtor, the present value of all Capital
Lease Obligations and the Commitments.
GAAP shall mean generally accepted accounting principles in the United
States of American as in effect from time to time.
GOVERNMENTAL APPROVAL shall mean any permit, license, variance,
certificate, consent, letter, clearance, closure, exemption, decision or action
or approval of a governmental authority.
GROUP - see SECTION 1.2.
HAZARDOUS MATERIAL shall mean: (a) any "hazardous substance" as now
defined pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601(14) as amended by the Superfund
Amendments and Reauthorization Act, and including the judicial interpretation
thereof; (b) any "pollutant or contaminant" as defined in 42
U.S.C.A. Section 9601(33); (c) any material now defined as "hazardous waste"
pursuant to 40 C.F.R. Part 261; (d) any petroleum, including crude oil and any
fraction thereof; (e) natural gas,
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natural gas liquids, liquified natural gas, or synthetic gas usable for fuel;
(f) any "hazardous chemical" as defined pursuant to 29 C.F.R. Part 1910; (g) any
asbestos, polychlorinated biphenyl (PCB), or isomer or dioxin, and (h) any other
substance, regardless of physical form, that is regulated under any
environmentally related federal, state or local government statute, rule or
regulation.
INSOLVENCY EVENT shall mean, with respect to any Person, (i) the
application for, consent to, or acquiescence in, the appointment of a receiver,
trustee, custodian or liquidator of or for it or its business or of or for all
or a substantial part of its assets; (ii) the filing of a voluntary petition or
answer seeking reorganization or an arrangement with creditors or seeking to
take advantage, as a debtor, of any other law (whether federal, state or
foreign) relating to relief of debtors, or the admission (by answer, by default
or otherwise) of the material allegations of a petition filed against it in any
bankruptcy, reorganization, arrangement, insolvency or other proceeding whether
federal, state or foreign) relating to relief of debtors, or the admission in
writing of its inability to pay its debts generally as they become due; (iii)
the permitting to continue unstayed for ten (10) days any judgment, decree or
order which adjudges it a bankrupt or insolvent or approves as properly filed a
petition seeking its reorganization or arrangement or appoints a receiver,
trustee, custodian or liquidator of or for it or its business or of or for all
or a substantial part of its assets or decrees the winding up or liquidation of
its affairs; (iv) the filing against it, by Persons other than Banks prior to
the occurrence of a Default, of any bankruptcy, reorganization, arrangement,
insolvency or other proceeding (whether federal, state or foreign) relating to
the relief of debtors, which proceeding shall not be dismissed within thirty
(30) days after the commencement thereof; (v) the commencement by or against it
of a proceeding seeking its dissolution, liquidation or winding up, and, in the
case of a proceeding commenced against it, the consent to such proceeding by it
or its failure to cause such proceeding to be dismissed within thirty (30) days
after the commencement thereof; or (vi) the taking of any corporate action in
furtherance of any of the foregoing.
INTEREST PERIOD - see SECTION 3.3.
INVENTORY shall mean any and all now owned or hereafter acquired inventory,
goods, merchandise, and other tangible personal property intended for sale or
lease, in the custody or possession, actual or constructive, of the Company or
any of its Subsidiaries, or in transit to the Company or any of its
Subsidiaries, including such inventory as is on consignment to third parties,
leased to customers of the Company or any of its
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Subsidiaries, or otherwise temporarily out of the custody or possession of the
Company or any of its Subsidiaries.
INVESTMENT shall mean any investment, made in cash or by delivery of any
kind of property or asset, in any Person, whether by acquisitions of stock or
similar interest, or any other obligation or security, or by loan, advance or
capital contribution, or otherwise.
LASALLE shall mean LaSalle National Bank.
LETTER OF CREDIT - see SECTION 1.1.3.
LETTER OF CREDIT APPLICATION shall mean a letter of credit application in
the form then used by Continental for the type of letter of credit requested
(with appropriate adjustments to indicate that any letter of credit issued
thereunder is to be issued pursuant to, and subject to the terms and conditions
of, this Agreement).
LETTER OF CREDIT COMMITMENTS shall mean the commitment of Continental to
issue, and of each Bank to participate in, the Letters of Credit pursuant to
SECTION 1.1.3.
LOAN DOCUMENTS shall mean this Agreement, the Collateral Documents, the
Revolving Notes, the Letter of Credit Applications and all schedules,
certificates, exhibits and notices delivered pursuant to any of the foregoing.
LONG TERM LEASE shall mean any lease of any property (whether real,
personal or mixed) whose term (including renewals and extensions) is greater
than one (1) year.
MARGIN shall mean 225 basis points unless (a) as of December 31, 1994 or
(b) during any consecutive four Fiscal Quarters thereafter, the Company
maintains Consolidated Operating Income of at least $17,000,000, in which case
the Margin shall mean 200 basis points. If any certificate delivered by the
Company shall give rise to any adjustment in the Margin pursuant to the
foregoing sentence, such adjustment shall be effective for all Eurodollar Loans
(including any then-outstanding Eurodollar Loans) on the date which is 45 days
(90 days in the case of any certificate delivered in connection with the annual
audit report of the Company) after the date as of which such certificate is
prepared.
MARGIN STOCK shall mean any "margin stock" as defined in Regulation U of
the Board of Governors of the Federal Reserve System.
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MARKET FEDERAL FUNDS RATE means, for any period, a fluctuating interest
rate per annum equal for each day during such period to (a) the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York; or (b) if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
NET BUSH HOG ELIGIBLE FINISHED GOODS INVENTORY shall mean the finished
goods inventory carried on the books and records of the Bush Hog Division less:
(i) reserves for excess and/or obsolete inventory; (ii) component parts
manufactured by Bush Hog Division; (iii) inventory held by sales representatives
for demonstration purposes; and (iv) inventory not included on the perpetual
inventory records.
NET BUSH HOG ELIGIBLE PURCHASED PARTS INVENTORY shall mean the book value
of the purchased parts included in the Bush Hog Raw Material Inventory, less any
reserves for obsolete and/or excess purchased parts.
NET BUSH HOG ELIGIBLE RAW MATERIAL INVENTORY shall mean the book value of
the steel in the Bush Hog Raw Material Inventory.
NET BUSH HOG ELIGIBLE RECEIVABLES shall mean the Eligible Receivables of
the Bush Hog Division reduced by all of the following: (i) the Eligible
Receivables of any Obligors at least fifty percent (50%) of whose total
Receivables are more than sixty (60) days past due; (ii) Eligible Receivables
the Obligors of which are Bush Hog sales representatives or salesmen; (iii)
Eligible Receivables representing interest charges and/or chargebacks to
Obligors for disallowed deductions from payments; (iv) all reserves for foreign
exchange, service parts, warranties, and customer deposits, (v) all Obligor
prepayments not already deducted from Receivables; (vi) cash received by the
Bush Hog Division but not yet applied to the reduction of Receivables; (vii)
Eligible Receivables with respect to Kewanee Service Parts sales; and (viii)
Eligible Receivables with extended terms beyond original date.
NET BUSH HOG 0 - 90 DAYS ELIGIBLE RECEIVABLES shall means those Net Bush
Hog Eligible Receivables on which the number of days elapsed from the original
invoice date thereof to the date due is no more than ninety (90) days.
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NET BUSH HOG 91 - 180 DAYS ELIGIBLE RECEIVABLES shall mean those Net Bush
Hog Eligible Receivables on which the number of days elapsed from the original
invoice date thereof to the date due is between ninety-one (91) and one hundred
eighty-one (181) days.
NET BUSH HOG 181 - 240 DAYS ELIGIBLE RECEIVABLES shall mean those Net Bush
Hog Eligible Receivables on which the number of days elapsed from the original
invoice date thereof to the date due is between one hundred eighty-one (181) and
two hundred forty (240) days.
NET BUSH HOG OVER 240 DAYS ELIGIBLE RECEIVABLES shall mean those Net Bush
Hog Eligible Receivables on which the number of days elapsed from the original
invoice date thereof to the date due is more than two hundred forty (240) days.
NET COZ ELIGIBLE RAW MATERIAL INVENTORY shall mean the book value of the
virgin resin in the Eligible Raw Material Inventory of the Coz Division.
NET COZ ELIGIBLE RECIEVABLES shall mean the Eligible Receivables of the Coz
Division less any Eligible Receivable of any Obligor fifty percent (50%) of
whose total Receivables are more than ninety-one (91) days past due.
NET VERSON ELIGIBLE RAW MATERIAL INVENTORY shall mean the book value of the
Eligible Raw Material Inventory of the Verson Division, less the values of the
castings and forgings, reserves for excess raw material, other raw material
valuation reserves and customer rework.
NET VERSON ELIGIBLE RECEIVABLES shall mean the Eligible Receivables of the
Verson Division less any credit balances aged past ninety (90) days and less any
Eligible Receivables of any Obligor fifty percent (50%) or more of whose total
Receivables are more than ninety (90) days past due and less all contra advance
payments.
NET VERSON ELIGIBLE WORK-IN-PROGRESS INVENTORY shall mean the Eligible
Work-In-Progress Inventory of the Verson Division less any warranty reserves.
OLBIGOR shall mean any Person obligated in respect of any Receivable, and
"RELATED OBLIGOR", when used with reference to any Receivable, shall mean any
Obligor in respect thereof.
PBGC shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
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PENSION PLAN shall mean a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Company or any corporation, trade or business that is, along with the Company, a
member of a controlled group of corporations or a controlled group of trades or
businesses, as described in sections 414(b) and 414(c), respectively, of the
Internal Revenue Code of 1986, as amended or section 4001 of ERISA may have any
liability, including any liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under section 4069 of ERISA.
PERCENTAGE shall mean as to any Bank the percentage set forth opposite such
Bank's name under COLUMN IV of EXHIBIT A.
PERSON shall mean any natural person, corporation, partnership, trust,
association, governmental authority or unit, or any other entity, whether acting
in an individual, fiduciary or other capacity.
PERMITTED DISPOSITIONS shall mean the dispositions of the assets of the
Company set forth on Schedule 10.13.
PREFERRED STOCK shall mean the cumulative redeemable Series B and Series C
Preferred Stock of the Company containing the terms, limitations and preferences
as described in the notes to the financial statements of the Company.
PROGRESS BILLING RECEIVABLE shall mean a Receivable which arose from the
obligation of the related Obligor to make progress payments or similar payments.
RCRA shall mean the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 USC 6901 ET SEQ., and any future amendments.
RECEIVABLES shall mean and include all of the Company's present and future
rights to payment for goods, merchandise or Inventory sold or leased or for
services rendered (including, without limitation, those which are not evidenced
by instruments or chattel paper), whether or not they have been earned by
performance, and all accounts, proceeds of any letters of credit on which the
Company is named as beneficiary, contract rights, chattel paper, instruments,
documents, insurance proceeds (to the extent payable to the Agent as its
interest may appear), and all other such obligations whatsoever, owing to the
Company, together with all instruments and all documents of title representing
any
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of the foregoing, all rights in any goods, merchandise or Inventory which any of
the same may represent, all rights in any returned or repossessed goods,
merchandise and Inventory, and all rights, title, security and guaranties with
respect to each of the foregoing, including, without limitation, any right of
stoppage in transit.
REFERENCE RATE shall mean at any time the rate of interest then most
recently announced by Continental at Chicago, Illinois as its reference rate.
RELATED EQUIPMENT shall mean with respect to any Receivable the equipment,
the sale of which gave rise to such Receivable, and any other property which
secures such Receivable.
RELEASE shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the indoor or outdoor environment, including, without limitation, the
abandonment or discarding of barrels, drums, containers, tanks, and other
receptacles containing or previously containing any Hazardous Material.
REQUIRED BANKS shall mean (i) if Continental and LaSalle are the only
Banks, then both of the Banks, and (ii) if there are more than two (2) Banks,
then Banks holding at least 51% of the then aggregate outstanding principal
amount of the Revolving Notes then held by the Banks, or, if no such principal
amount is then outstanding, Banks having at least 51% of the Commitments.
REVOLVING LOAN - see SECTION 1.1.1.
REVOLVING LOAN COMMITMENT shall mean the commitment of each Bank to make
Revolving Loans pursuant to SECTION 1.1.1.
REVOLVING NOTE - see SECTION 2.1.
REVOLVING TERMINATION DATE shall mean March __, 1997.
SALE AND LEASEBACK shall mean any transaction or series of related
transactions in which the Company or any Subsidiary becomes or remains liable as
lessee or as guarantor or other surety with respect to any lease, whether an
operating lease or a Capital Lease, of any property (whether real or personal or
mixed), whether now owned or hereafter acquired, (i) which the Company or any
Subsidiary has sold or transferred or is to sell or transfer to any other
Person, or (ii) which the Company or any Subsidiary intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by the Company or any Subsidiary to any other Person in
connection with such lease.
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SECURITY AGREEMENT - see SECTION 11.1.2.
STATED AMOUNT shall mean with respect to any Letter of Credit at any date
of determination thereof, the maximum aggregate amount available thereunder at
any time during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
SUBSIDIARY shall mean, with respect to any Person, a corporation of which
such Person and/or its other Subsidiaries own, directly or indirectly, such
number of outstanding shares as have more than 50% of the ordinary voting power
for the election of directors. Unless the context otherwise requires, each
reference to Subsidiaries herein shall be a reference to Subsidiaries of the
Company.
TANGIBLE ASSETS shall mean with respect to any Person, the book value of
all of the assets of such Person less the book value of any intangible assets,
including without limitation, goodwill, franchises, licenses, patents,
trademarks, trade names, service marks and brand names.
TYPE OF LOAN OR BORROWING means either Floating Rate Loans or borrowings or
Eurodollar Loans or borrowings.
UNBILLED RECEIVABLE shall mean at any time any Receivable (i) with respect
to which an invoice shall not have theretofore been sent to the related Obligor
or (ii) whether or not an invoice shall have been sent, which is payable upon
delivery of the goods sold or services rendered.
UNMATURED EVENT OF DEFAULT shall mean any event which if it continues
uncured will, with lapse of time or notice or lapse of time and notice,
constitute an Event of Default.
VOTING STOCK shall mean securities of any class or classes of a
corporation, the holders of which are ordinarily, in the absence of
contingencies, or which are in fact, entitled to elect a majority of the
corporate directors (or Persons performing similar functions) of such
corporation.
WELFARE PLAN shall mean a "welfare plan", as such term is defined in
section 3(1) of ERISA.
SECTION 14 THE AGENT.
SECTION 14.1 AUTHORIZATION. Each Bank and the holder of each Note
authorizes the Agent to take such actions on behalf of such Bank or holder and
to exercise such powers hereunder or
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under any Collateral Document, any Letter of Credit Application or any other
document or instrument delivered hereunder or in connection herewith as are
granted to the Agent and/or the Banks pursuant to such documents and are
specifically delegated to the Agent herein and therein in connection with the
administration of and the enforcement of any rights or remedies with respect to
this Agreement, the Revolving Notes, the Collateral Documents, the Letter of
Credit Applications or any other document or instrument delivered hereunder or
in connection herewith. The general administration of the Revolving Loans shall
be with the Agent, subject to control by the Banks.
SECTION 14.2 INDEMNIFICATION. Each Bank and the holder of each Revolving
Note agrees to reimburse and indemnify the Agent for, and hold the Agent
harmless against, a share (determined in accordance with the percentage which
(x) the sum of (A) the participation in all outstanding Letters of Credit of
such Bank plus (B) the principal amount of the Revolving Loans of such Bank or
holder is of (y) the sum of (A) all outstanding Letters of Credit plus (B) the
aggregate principal amount of all Revolving Loans) of any loss, damages,
penalty, action, judgment, obligation, cost, disbursement, liability or expense
(including attorneys' fees) incurred without gross negligence or willful
misconduct on the part of the Agent arising out of or in connection with the
performance of its obligations or the exercise of its powers hereunder or under
any document or instrument delivered hereunder or in connection herewith, as
well as the costs and expenses of defending against any claim against the Agent
arising hereunder or thereunder.
SECTION 14.3 EXCULPATION. The Agent shall be entitled to rely upon
advice of counsel concerning legal matters, and upon this Agreement and any
Revolving Note, Letter of Credit Application, security agreement, mortgage,
schedule, certificate, statement, report, notice or other writing which it
believes to be genuine or to have been presented by a proper person. Neither
the Agent nor any of its directors, officers, employees or agents shall (i) be
responsible for any recitals, representations or warranties contained in, or for
the execution, validity, genuineness, effectiveness or enforceability of, this
Agreement, any Revolving Note, any Letter of Credit Application or any other
instrument or document delivered hereunder or in connection herewith, (ii) be
responsible for the validity, genuineness, perfection, effectiveness,
enforceability, existence, value or enforcement of any collateral security,
(iii) be under any duty to inquire into or pass upon any of the foregoing
matters, or to make any inquiry concerning the performance by the Company or any
other Obligor of its obligations, or (iv) in any event, be liable as such for
any action taken or omitted by it or them, except for its or their own gross
negligence or willful misconduct. The
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<PAGE>
agency hereby created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, Continental in its
individual capacity.
SECTION14.4 CREDIT INVESTIGATION. Each Bank acknowledges that it has
made such inquiries and taken such care on its own behalf as would have been the
case had such Bank's Commitments been granted, the Letters of Credit issued and
such Bank's Revolving Loans been made directly by such Bank to the Company
without the intervention of the Agent or any other Bank. Each Bank agrees and
acknowledges that the Agent makes no representations or warranties about the
credit worthiness of the Company or any other party to this Agreement or with
respect to the legality, validity, sufficiency or enforceability of this
Agreement, any Revolving Note, any Letter of Credit Application or the value of
any security therefor.
SECTION 14.5 AGENT AND AFFILIATES. The Agent shall have the same rights
and powers hereunder as any other Bank and may exercise or refrain from
exercising the same as though it were not the Agent, and the Agent and its
Affiliates may accept deposits from and generally engage in any kind of business
with the Company or any Subsidiary as if the Agent were not the Agent hereunder.
SECTION 14.6 RESIGNATION. The Agent may resign as such at any time upon
at least 30 days' prior notice to the Company and the Banks. In the event of
any such resignation, the Banks shall as promptly as practicable appoint a
successor Agent. If no successor shall have been so appointed, and shall have
accepted such appointment, within 30 days after the giving of notice of such
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank organized under the laws of
the United States of America having a combined capital, surplus and undivided
profits of at least $400,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from all further
duties and obligations under this Agreement. After any resignation pursuant to
this SECTION 14.6, the provisions of this SECTION 14 shall inure to the benefit
of the retiring Agent as to any actions taken or omitted to be taken by it while
it was Agent hereunder.
SECTION 15 GENERAL.
SECTION 15.1 WAIVER; AMENDMENTS. The provisions of this Agreement and of
each other Loan Document may from time to time be amended, modified or waived,
if such amendment, modification
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<PAGE>
or waiver is in writing and consented to by the Company and the Required Banks;
PROVIDED, HOWEVER, that no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action be
taken by all the Banks or by the Required Banks shall be effective unless
consented to by each Bank;
(b) modify this SECTION 15.1, change the definition of "Required
Banks", increase the Commitments or the Percentage of any Bank, reduce any
fees described in Section 5, or extend the Revolving Termination Date shall
be made without the consent of each Bank and each holder of a Revolving
Note;
(c) extend the due date for, or reduce the amount of, any scheduled
repayment or prepayment of principal or of interest on any Revolving Loan
(or reduce the principal amount of or rate of interest on any Revolving
Loan) shall be made without the consent of the holder of the Revolving Note
evidencing such Revolving Loan; or
(d) affect adversely the interests, rights or obligations of the
Agent QUA the Agent shall be made without consent of the Agent.
No failure or delay on the part of the Agent, any Bank or the holder of any
Revolving Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Company in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Agent, any Bank or
the holder of any Revolving Note under this Agreement or any other Loan Document
shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 15.2 CONFIRMATIONS. The Company and each holder of a Revolving
Note agree from time to time, upon written request received by it from the
other, to confirm to the other in writing (with a copy of each such confirmation
to the Agent) the aggregate unpaid principal amount of the Revolving Loans then
outstanding under the applicable Revolving Note.
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<PAGE>
SECTION 15.3 NOTICES. Except as otherwise provided in SECTIONS 1.3, 1.4
and 3.3, all notices hereunder shall be in writing (including, without
limitation, telex or facsimile transmission) and shall be sent to the applicable
party at its address shown below its signature hereto or at such other address
as such party may, by written notice received by the other parties hereto, have
designated as its address for such purpose. Notices sent by telex or facsimile
transmission shall be deemed to have been given when sent; notices sent by mail
shall be deemed to have been given three Business Days after the date when sent
by registered or certified mail, postage prepaid; and notices sent by hand
delivery shall be deemed to have been given when received.
SECTION 15.4 COMPUTATIONS. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP applied on a basis consistent with those in effect as at
the date of the Company's most recent financial statements referred to in
SECTION 10.1.1. If there should be any material change in GAAP after the date
hereof which materially affects the financial covenants in this Agreement, the
parties hereto agree to negotiate in good faith appropriate revisions of such
covenants.
SECTION 15.5 REGULATION U. Each Bank represents that it in good faith is
not relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
SECTION 15.6 COSTS, EXPENSES AND TAXES. The Company agrees to pay on
demand (a) all reasonable out-of-pocket costs and expenses of the Agent
(including the reasonable fees and out-of-pocket expenses of counsel for the
Agent) and (b) all reasonable out-of-pocket costs and expenses (including
reasonable attorneys' fees and legal expenses and allocated costs of staff
counsel) incurred by the Agent and each Bank in connection with the enforcement
of this Agreement, the Instruments or any such other documents. Each Bank
agrees to reimburse the Agent for such Bank's pro rata share (based on its
respective Percentage) of any such costs and expenses not paid by the Company.
In addition, the Company agrees to pay, and to save the Agent and the Banks
harmless from all liability for, any stamp or other taxes which may be payable
in connection with the execution and delivery of this Agreement, the Security
Agreement, the borrowings hereunder, the issuance of the Revolving Notes or the
execution and delivery of any other documents provided for herein
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<PAGE>
or delivered or to be delivered hereunder or in connection herewith. All
obligations provided for in this SECTION 15.6 shall survive repayment of the
Revolving Loans, cancellation of the Revolving Notes or any termination of this
Agreement.
SECTION 15.7 SUBSIDIARY REFERENCES. The provisions of this Agreement
relating to Subsidiaries shall apply only during such times as the Company has
one or more Subsidiaries.
SECTION 15.8 CAPTIONS. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
SECTION 15.9 INDEMNIFICATION.
a. The Company hereby agrees to indemnify, exonerate and hold each of the
Agent and each Bank and each of the officers, directors, employees and agents of
each of the Agent and each Bank (collectively herein called the "Bank Parties"
and individually each called a "Bank Party") free and harmless from and against
any and all actions, causes of action, suits, losses, liabilities, damages and
expenses, including, without limitation, reasonable attorneys' fees and
disbursements (collectively herein called the "Indemnified Liabilities"),
incurred by the Bank Parties or any of them as a result of, or arising out of,
or relating to this Agreement, the Revolving Notes, the Letter of Credit
Applications, the Collateral Documents, or any other agreements executed and
delivered in connection therewith, except for any such Indemnified Liabilities
arising on account of any such Bank Party's gross negligence or willful
misconduct. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
(b) The Company agrees to reimburse the Agent and each Bank and each of
their respective directors, officers, employees and agents (each an "Indemnified
Party") against any and all losses, claims, damages, penalties, judgments,
liabilities and expenses (including all reasonable attorneys' and consultant's
fees) which any Indemnified Party may pay, incur or become subject to arising
out of or relating to the use, handling, emission, discharge, transportation,
storage, treatment or disposal of any Hazardous Material at any real property
owned, operated or leased by the Company, except to the extent caused by the
acts or omissions of any Indemnified Party. All obligations provided for in
this SECTION 15.9 shall survive any termination of this Agreement.
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<PAGE>
SECTION 15.10 GOVERNING LAW. This Agreement and each Revolving Note shall
be a contract made under and governed by the internal laws of the State of
Illinois. Whenever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement. All obligations of the Company
and rights of the Agent, the Banks and any other holder of a Revolving Note
expressed herein or in any Revolving Note shall be in addition to and not in
limitation of those provided by applicable law.
SECTION 15.11 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
SECTION 15.12 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Company, the Banks and the Agent and their respective successors and
assigns, and shall inure to the benefit of the Company, the Banks and the Agent
and the successors and assigns of the Banks and the Agent.
SECTION 15.13 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND
EACH BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY REVOLVING NOTE, ANY
LETTER OF CREDIT APPLICATION, AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 15.14 SECURITIES LAWS. Each Bank represents that it is the
present intention of such Bank to acquire each Revolving Note drawn to its order
for its own account and not with a view to the distribution or sale thereof,
subject, nevertheless, to the necessity that such Bank remain in control at all
times of the disposition of property held by it for its own account; it being
understood that the foregoing representation shall not affect the character of
the Revolving Loans as commercial lending transactions.
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<PAGE>
Delivered at Chicago, Illinois, as of the day and year first above written.
ALLIED PRODUCTS CORPORATION
By: /s/ Patrick J. Riley
-------------------------------
Title: Patrick J. Riley, Vice
President and Treasurer
By: /s/ David B. Corwine
-------------------------------
Title: David B. Corwine,
Assistant Secretary
10 South Riverside Plaza
Chicago, Illinois 60606
Facsimile No.: (312)454-9608
Number for confirmation
of facsimiles: (312) 454-1020
Attention: David B. Corwine
CONTINENTAL BANK N.A.,
individually and as Agent
By: /s/ Barbara A. Hamel
-------------------------------
Barbara A. Hamel
Vice President
Address: 231 South LaSalle Street
Chicago, Illinois 60697
Facsimile No.: (312) 765-2193
Number for confirmation
of facsimiles: (312) 828-1926
Attention: Barbara A. Hamel
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<PAGE>
LASALLE NATIONAL BANK
By: /s/ Michael Foster
---------------------------
Michael Foster
First Vice President
Address: 120 South LaSalle
Chicago, IL 60603
Facsimile No.: (312) 781-8544
Number for confirmation
of facsimiles: (312) 781-8517
Attention: Michael Foster
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<PAGE>
Exhibit 10 (ii)
LIST OF DISCLOSURE SCHEDULES AND EXHIBITS
The following is a list of Schedules and Exhibits to the Credit Agreement
("Credit Agreement") dated as of March 17, 1994 by and between Allied Products
Corporation ("Allied") and Continental Bank N.A., as Agent ("Continental"):
1. SCHEDULE 9.1 - JURISDICTIONS WHERE COMPANY IS QUALIFIED TO DO
BUSINESS. Lists 40 states where Allied is qualified to do business.
2. SCHEDULE 9.3 - SUBSIDIARIES. Lists the names of all the subsidiaries
of Allied and the jurisdictions where they are incorporated and
qualified to do business.
3. SCHEDULE 9.4 - FINANCIAL DISCLOSURE. Lists any variances from GAAP in
the preparation of financial statements of Allied, of which there are
none.
4. SCHEDULE 9.5 - MATERIAL ADVERSE CHANGES. Lists any material changes
in the financial condition of Allied, of which there are none.
5. SCHEDULE 9.6 - LITIGATION. Describes certain litigation and claims
pending against Allied.
6. SCHEDULE 9.8 - RETIREE MEDICAL BENEFITS. Describes contingent
liabilities with respect to post-retirement benefits under Allied's
welfare plan.
7. SCHEDULE 9.14 - INSURANCE POLICIES. Describes the insurance policies
held by Allied.
8. SCHEDULE 9.15 - BUSINESS LOCATIONS. Lists the places of business of
the subsidiaries of Allied.
9. SCHEDULE 9.17 - DISCLOSURE OF ENVIRONMENTAL MATTERS. Describes
failures to comply with applicable environmental laws, areas which may
require government approval for operation, litigation or investigation
into the release of hazardous materials, and pending material
liabilities.
10. SCHEDULE 9.18 - DISCLOSURE OF ENVIRONMENTAL RISKS. Lists any
underground storage tanks, landfills or dumps, and hazardous waste
management facilities.
11. SCHEDULE 10.1.3 - DIRECTORS' STATEMENTS. Statement of the Chief
Accounting Officer of Allied attesting to attached unaudited November
1993 financial statements of Allied and subsidiaries.
<PAGE>
12. SCHEDULE 10.5 - BUDGETED GAINS ON SALES OF ASSETS. Describes budgeted
gains on anticipated sales of certain real property.
13. SCHEDULE 10.10 - ACTUAL AND ESTIMATED DEBT BALANCES. Describes
outstanding indebtedness of Allied and its subsidiaries.
14. SCHEDULE 10.11 - PERMITTED LIENS. Lists existing liens permitted
against Allied.
15. SCHEDULE 10.13 - PERMITTED DISPOSITIONS. Lists surplus properties
held for sale or lease.
16. SCHEDULE 10.14 - INVESTMENTS. Describes certain investments of
Allied.
17. EXHIBIT A - COMMITMENT LIMITS AND PERCENTAGES. Identifies the
commitment limits and percentages of each of the lenders under the
Credit Agreement.
18. EXHIBIT B - BORROWING BASE REPORT. Provides a form of Borrowing Base
Report.
19. EXHIBIT C - FORM OF REVOLVING NOTE. Provides a form of Revolving Note
under the Credit Agreement.
20. EXHIBIT D - SECURITY AGREEMENT. Provides a form of the Security
Agreement to be delivered under the Credit Agreement.
21. EXHIBIT E - COMPANY'S COUNSEL OPINION LETTER. Provides forms of
opinions of Gardner, Carton & Douglas (outside counsel to Allied) and
General Counsel of Allied.
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<PAGE>
PRPSECUR.AGR
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of March 17, 1994, is between ALLIED
PRODUCTS CORPORATION (herein called "Debtor") and CONTINENTAL BANK N.A., as
agent (herein in such capacity called the "Agent").
W I T N E S S E T H:
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WHEREAS, the Debtor has entered into a Credit Agreement (herein, as amended
or otherwise modified from time to time, called the "Agreement"), dated as of
the date hereof, among the Debtor, the Banks named in the Agreement (herein
called the "Banks") and the Agent; and
WHEREAS, the Agreement requires the execution and delivery
of this Security Agreement;
NOW, THEREFORE, in consideration of any loan heretofore or hereafter made
to the Debtor by the Banks and for other good and valuable consideration the
parties hereto agree as follows:
SECTION 1. DEFINITIONS. When used herein, (a) the terms ACCOUNT,
CERTIFICATED SECURITY, CHATTEL PAPER, DEPOSIT ACCOUNT, DOCUMENT, EQUIPMENT,
FIXTURE, GENERAL INTANGIBLES, GOODS, INVENTORY, INSTRUMENT, SECURITY, and
UNCERTIFICATED SECURITY shall have the respective meanings assigned to such
terms in the Uniform Commercial Code (as defined below) and (b) the following
terms shall have the following meanings:
ACCOUNT DEBTOR shall mean the party who is obligated on or under Account
Receivable or Contract Right of the Debtor or, if appropriate any General
Intangible of the Debtor.
ACCOUNT RECEIVABLE shall mean an Account.
AGENT - see PREAMBLE.
DEBTOR - see PREAMBLE.
COLLATERAL shall mean all property or rights in which a security interest
is granted pursuant to SECTION 2.
COMMITMENTS shall mean the Revolving Loan Commitments and the Letter of
Credit Commitments as they are defined in the Credit Agreement.
DEFAULT shall mean (i) the occurrence of an Unmatured Event of Default
under SECTION 12.1.4 of the Credit Agreement or (ii) an Event of Default under
the Credit Agreement.
<PAGE>
LIABILITIES shall mean (i) all obligations of the Debtor to the Banks and
the Agent, howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due,
which arise out of or in connection with the Credit Agreement, any Revolving
Note, any Letter of Credit Application or any other Loan Document or (ii) all
obligations of the Debtor to any Bank, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due, which arise out of or in connection with any interest
rate swap, interest rate card or any other interest rate hedging arrangement.
PERMITTED LIENS shall mean liens which are permitted by the provisions of
SECTION 10.11 of the Credit Agreement.
UNIFORM COMMERCIAL CODE shall mean the Uniform Commercial Code as in effect
in the State of Illinois on the date of this Agreement; provided, however, as
used in SECTION 9 hereof, "Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect from time to time in the applicable jurisdiction.
Terms used herein and not otherwise defined herein shall have the meanings
assigned to such in the Credit Agreement.
SECTION 2. GRANT OF SECURITY AND TRUST. As collateral security for the
performance and payment of all Liabilities, the Debtor hereby assigns to the
Agent, and grants to the Agent a continuing first perfected security interest in
the following, whether now or hereafter existing, owned, licensed, leased,
consigned, arising or acquired:
All of the Debtor's:
(a) Accounts Receivable;
(b) Inventory;
(c) All interest of the Debtor in any goods the sale or lease of
which shall have given or shall give rise to, and in all
guaranties and other property securing the payment of or
performance under, any Account Receivable;
(d) All replacements, substitutions, additions or accessions to or
for any of the foregoing;
(e) To the extent related to the property described in PARAGRAPHS (a)
through (d) above, all books, correspondence, credit files,
records, invoices
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<PAGE>
and other papers and documents, including, without limitation, to
the extent so related, all tapes, cards, computer runs, computer
programs and other papers and documents in the possession or
control of the Debtor or any computer bureau from time to time
acting for the Debtor, and, to the extent so related, all rights
in, to and under all policies of insurance, including claims of
rights to payments thereunder and proceeds therefrom, including
any credit insurance; and
(f) All products and proceeds (including but not limited to proceeds
arising from the sale or other disposition of any Collateral, any
returns of any Inventory sold by the Debtor, and the proceeds of
any insurance covering any of the Collateral) of any of the
foregoing.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Debtor represents and
warrants to the Agent that: (i) no Uniform Commercial Code financing statement
(other than any which may have been filed on behalf of the Agent or in
connection with Permitted Liens) covering any of the Collateral is on file in
any public office; (ii) the Debtor is and will be the lawful owner of all of the
Collateral, free of all liens and claims whatsoever, other than the security
interest hereunder and Permitted Liens, with full power and authority to execute
this Security Agreement and to perform the Debtor's obligations hereunder, and
to subject the Collateral to the security interest hereunder; (iii) all
information with respect to the Collateral and the Account Debtors set forth in
any schedule, certificate or other writing at any time heretofore or hereafter
furnished by the Debtor to the Agent or any Bank, and all other written
information heretofore or hereafter furnished by the Debtor to the Agent or any
Bank, is and will be true and correct in all material respects as of the date
furnished; (iv) none of the Collateral has, within the four (4) months preceding
the date of this Agreement, been located at any place other than the Debtor's
own premises at the address(es) shown on SCHEDULE I hereto; (v) the Debtor has
not been known by any legal name different from the one set forth on the
signature page of this Security Agreement, nor has the Debtor been the subject
of any merger or other corporate reorganization, except, in either case, as
disclosed to the Agent and the Banks in writing prior to the date hereof; (vi)
the Debtor is not a party to any Federal, state or local government contract;
(vii) the Debtor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware; (viii) the Debtor is a
corporation duly qualified and in good standing as a foreign corporation
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<PAGE>
authorized to do business in the States as indicated on Schedule II; (ix) the
execution and delivery of this Security Agreement and the performance by the
Debtor of its obligations hereunder are within the Debtor's corporate powers,
have been duly authorized by all necessary corporate action, have received all
necessary governmental approval (if any shall be required), and do not and will
not contravene or conflict with any provision of law or of the charter or
by-laws of the Debtor or of any agreement, instrument or order binding upon the
Debtor; (x) this Security Agreement is a legal, valid and binding obligation of
the Debtor, enforceable in accordance with its terms; and (xi) the Debtor is in
compliance in all material respects with the requirements of all applicable
laws, rules, regulations and orders of every governmental authority.
SECTION 4 PROCESSING, SALE, COLLECTIONS, ETC. Until such time as a
Default shall have occurred and remained continuing and the Agent shall have
notified the Debtor of the revocation of such power and authority, the Debtor
may, in the ordinary course of its business, at its own expense, sell, lease or
furnish under contracts of service any of the Inventory normally held by the
Debtor for such purpose, and use and consume, in the ordinary course of its
business, any raw materials, work in process or materials normally held by the
Debtor for such purpose.
Upon the request of the Agent at any time a Default has occurred and is
continuing, the Debtor will (except as the Agent may otherwise consent in
writing) forthwith, upon receipt, transmit and deliver to the Agent, in the form
received, all cash, checks, drafts, chattel paper and other instruments or
writings for the payment of money (properly endorsed, where required, so that
such items may be collected by the Agent) which may be received by the Debtor at
any time in full or partial payment or otherwise as proceeds of any of the
Collateral. Except as the Agent may otherwise consent in writing, any such
items which may received by the Debtor after such request by the Agent will not
be commingled with any of its funds or property, but will be held separately and
apart from its own funds or property and upon express trust for the Agent until
delivery is made to the Agent. The Debtor will comply with the terms and
conditions of any consent given by the Agent pursuant to the provisions of this
paragraph.
If and to the extent that a perfected security interest hereunder in any
Collateral shall cease to be perfected due to the sale of Inventory or release
of all or any balance of the Assignee Deposit Account or use or disposition by
the Debtor of any proceeds of Collateral, then such Collateral (referred to in
this paragraph "released Collateral") shall be deemed thereby released from the
security interest hereunder in exchange, as of
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<PAGE>
the time of such release, for any other Collateral of equivalent value in which
a first perfected security interest hereunder is being obtained
contemporaneously or has most recently obtained, but only to the extent such
other Collateral does not represent either (x) Collateral in exchange for which
any previously released Collateral shall have been deemed released or (y)
Collateral of equivalent value to any loan or advance (otherwise than by renewal
of extension) from any Bank to the Debtor in which Collateral a first perfected
security interest hereunder shall have been obtained contemporaneously with or
most recently prior to such loan or advance.
So long as any Default has occurred and is continuing, the Agent is
authorized to endorse, in the name of the Debtor, any item, howsoever received
by the Agent, representing any payment on or other proceeds on the Collateral.
SECTION 5. CERTIFICATES, SCHEDULES AND REPORTS. The Debtor will from time
to time, as the Agent may reasonably request, deliver to the Agent a schedule
identifying each Account Receivable (not previously so identified) subject to
the security interest hereunder, and such additional schedules and such
certificates and reports with respect to all or any of the Collateral at the
time subject to the security interest hereunder, and the items or amounts
received by the Debtor in full or partial payment or otherwise as proceeds of
any of the Collateral, all to such extent as the Agent may reasonably request.
Any such schedule, certificate or report shall be executed by a duly authorized
officer of the Debtor and shall be in such form and detail as the Agent may
reasonably specify. Any such schedule identifying any Account Receivable
subject to the security interest hereunder shall be accompanied (if the Agent so
requests) by a true and correct copy of the invoice evidencing such Account
Receivable and by evidence of shipment or performance. The Debtor shall
immediately notify the Agent of the occurrence of any event causing any loss or
depreciation in the value of the Inventory and such notice shall specify the
amount of such loss or depreciation.
SECTION 6. AGREEMENTS OF THE DEBTOR. The Debtor will (i) upon reasonable
request of the Agent, execute such Uniform Commercial Code financing statements
and other documents (including, without limitation, any assignment of claim form
under or pursuant to the federal assignment of claims statute, 31 U.S.C.
Section 3726, any successor or amended version thereof or any regulation promul-
gated under or pursuant to any version thereof), and pay the cost of filing or
recording the same or this Security Agreement in all public offices deemed
necessary or appropriate by the Agent and do such other acts and things
(including, without limitation, delivery to the Agent of any Instruments
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<PAGE>
which constitute Collateral), all as the Agent may from time to time reasonably
request to establish and maintain a valid, first perfected security interest in
the Collateral (free of all other liens, claims and rights of third parties
whatsoever other than Permitted Liens) to secure the performance and payment of
the Liabilities; (ii) keep all the Inventory, unless the Agent shall otherwise
consent in writing, at its own premises at address(es) shown on SCHEDULE I
hereto; (iii) furnish the Agent such information concerning the Debtor, the
Collateral and the Account Debtors as the Agent may from time to time reasonably
request; (iv) permit the Agent and its designees, from time to time during
normal business hours and upon reasonable notice, to inspect Debtor's Inventory,
and to inspect, audit and make copies of and extracts from all records and all
other papers in the possession of the Debtor, and will, upon request of the
Agent at any time when a Default has occurred and is continuing, deliver to the
Agent all of such records and papers which pertain to the Collateral and the
Account Debtors; (v) except for the sale or lease of Inventory in the ordinary
course of its business and the creation or existence of Permitted Liens, not
sell, lease, assign or create or permit to exist any lien on or security
interest in any Collateral to or in favor of anyone other than the Agent;
(vi) at all times keep all the Inventory insured under policies maintained with
reputable insurance companies against loss, damage, theft and other risks to
such extent as is customarily maintained by companies similarly situated (and,
in any event, as required by applicable law), and cause all such policies to
provide that loss thereunder shall be payable to the Agent as its interest may
appear (it being understood that (A) so long as no Default shall be existing,
the Agent shall deliver any proceeds of such insurance which may be received by
it to the Debtor and (B) whenever a Default shall be existing, the Agent may
apply any proceeds of such insurance which may be received by it toward payment
of the Liabilities, whether or not due, as set forth in SECTION 8) and such
policies or certificates thereof shall, if the Agent so requests, be deposited
with or furnished to the Agent; (vii) take such actions as are reasonably
necessary to keep its Inventory in good repair and condition; (viii) promptly
pay when due all license fees, registration fees, taxes, assessments and other
charges which may be levied upon or assessed against the ownership, operation,
possession, maintenance or use of the Inventory (as applicable); provided,
however, that the Debtor shall not be required to pay any such fee, tax,
assessment or other charge, the validity of which is being contested by the
Debtor in good faith by appropriate proceedings, so long as forfeiture of any
part of the Inventory will not result from the failure of the Debtor to pay any
such fee, tax, assessment or other charge, during the period of such contest;
(ix) furnish to the Agent, as soon as possible and in any event within thirty
(30) days prior to the occurrence from
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time to time of any change in the address of the Debtor's chief executive office
or in the name of the Debtor, notice in writing of such change; and (x)
reimburse the Agent for all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the Agent in seeking to collect or enforce any
rights under the Collateral and, in the case of Default, incurred by the Agent
in seeking to collect any of the Liabilities and to enforce its rights
hereunder. Any expenses incurred in protecting, preserving and maintaining any
of the Collateral shall be borne by the Debtor. The Agent shall have no
obligations or liabilities regarding the Collateral or any thereof by reason of,
or arising out of, this Agreement.
SECTION 7. DEFAULT. Whenever a Default shall be existing, the Agent may
exercise from time to time any rights and remedies available to it under
applicable law and under the Agreement. The Debtor agrees, in case of Default,
to assemble and made available, at its expense, all the Inventory at a
convenient place or places acceptable to the Agent. Any notification of
intended disposition of any of the Collateral required by law shall be deemed
reasonably and properly given if given at least ten (10) days before such
disposition. Any proceeds of any disposition by the Agent of any of the
Collateral shall be applied as set forth in Section 8.
SECTION 8. APPLICATION OF PROCEEDS. The proceeds of sale of Collateral
sold after the occurrence and during the continuation of a Default shall be
applied by the Agent as follows:
FIRST: to payment of all of the costs and expenses of the Agent,
including (i) the expenses of such sale, (ii) the out-of-pocket costs
and expenses of the Agent and the reasonable fees and out-of-pocket
costs and expenses of counsel employed by the Agent, (iii) the payment
of all advances made by the Agent or any Bank for the account of
Debtor hereunder, and (iv) the payment of all costs and expenses
incurred by the Agent or any Bank in connection with the
administration and enforcement of this Security Agreement, to the
extent that such advances, costs and expenses shall not have been
reimbursed to the Agent or any Bank;
SECOND: to the PRO RATA payment in full of the Commitments;
THIRD: to the payment in full of all other Liabilities to each Bank
PRO RATA in accordance with the ratio of the amount of Liabilities
owed to such Bank to the total amount of outstanding Liabilities; and
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FOURTH: the balance, if any, of such proceeds shall be paid to
Debtor, its successors and assigns, or as a court of competent
jurisdiction may direct.
SECTION 9. TERMINATION OF SECURITY AGREEMENT. This Security Agreement
shall terminate within fifteen (15) business days following the reporting to the
Agent by the Debtor of either (a) (i) Consolidated Operating Income of the
Debtor of at least $14,500,000 for the nine (9) month period ending on September
30, 1994, or (ii) Consolidated Operating Income of the Debtor of at least
$16,000,000 during any four (4) consecutive Fiscal Quarters first measured as of
December 31, 1994 and including only those fiscal quarters after December 31,
1993; or (b) payment in full of all obligations under the Agreement.
SECTION 10. MISCELLANEOUS PROVISIONS. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral in its possession if it takes such action for that purpose as the
Debtor requests in writing, but failure of the Agent to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care, and
no failure of the Agent to preserve or protect any rights with respect to such
Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by the Debtor, shall be deemed
a failure to exercise reasonable care in the custody or preservation of such
Collateral.
Any notice from the Agent to the Debtor, if mailed, shall be deemed given
four days after the date mailed by registered or certified mail, postage
prepaid, addressed to the Debtor either at the Debtor's address shown on the
signature page hereof or at such other address as the Debtor may, by written
notice received by the Agent, have designated as its address for notices.
No delay on the part of the Agent in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by the
Agent of any right or remedy shall preclude other or further exercise thereof or
the exercise of any other right or remedy.
No amendment to, modification or waiver of, or consent with respect to, any
provision of this Security Agreement shall be effective unless the same shall be
in writing and signed and delivered by the Agent with the prior written consent
of the Banks, and then such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
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Section captions used in this Security Agreement are for convenience of
reference only and shall not affect the construction of this Security Agreement.
This Security Agreement may be executed in any number of counterparts and
by the different parties on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Agreement.
This Security Agreement has been delivered at Chicago, Illinois, and shall
be construed in accordance with and governed by the internal laws of the State
of Illinois, subject, however, to the applicability of the Uniform Commercial
Code of any jurisdiction in which any of the Debtor's Accounts Receivables and
Inventory may be located at any given time. Whenever possible each provision of
this Security Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invali-
dating the remainder of such provision or the remaining provisions of this
Security Agreement.
This Security Agreement shall be binding upon the Debtor and the Agent and
their respective successors and assigns, and shall inure to the benefit of the
Debtor, the Banks and the Agent and the respective successors and assigns of the
Banks and the Agent.
At the option of the Agent, this Security Agreement, or a carbon,
photographic or other reproduction of this Security Agreement or of any Uniform
Commercial Code financing statement covering the Collateral or any portion
thereof shall be sufficient as a Uniform Commercial Code financing statement and
may be filed as such.
SECTION 11. WAIVER OF JURY TRIAL. THE DEBTOR HEREBY IRREVOCABLY AGREES
THAT ANY LEGAL ACTION OR PROCEEDING PERTAINING TO THIS SECURITY AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS, COUNTY OF COOK, OR OF THE UNITED
STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY ITS EXECUTION
AND DELIVERY OF A COUNTERPART HEREOF, THE DEBTOR IRREVOCABLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS. THE DEBTOR HEREBY IRREVOCABLY AGREES THAT SERVICE
OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE MADE BY MAILING, BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, A COPY OF THE SUMMONS AND
COMPLAINT, OR OTHER LEGAL PROCESS, IN SUCH ACTION OR PROCEEDING TO THE DEBTOR AT
ITS ADDRESS SHOWN ON THE SIGNATURE PAGE HEREOF (OR ANY OTHER ADDRESS OF THE
DEBTOR APPEARING ON THE RECORDS OF THE AGENT). SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING,
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EFFECTED AS AFORESAID, SHALL BE EFFECTIVE UPON RECEIPT BY THE DEBTOR AND SHALL
BE DEEMED PERSONAL SERVICE UPON THE DEBTOR AND SHALL BE LEGAL AND BINDING UPON
THE DEBTOR FOR ALL PURPOSES. THE DEBTOR HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE IN ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AS WELL AS ANY RIGHT IT
MAY NOW OR HEREAFTER HAVE TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE
COMMENCED, TO ANOTHER COURT ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE.
THE DEBTOR AND THE AGENT HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS SECURITY
AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
DEBTOR
ALLIED PRODUCTS CORPORATION
Address: 10 South Riverside Plaza
Chicago, Illinois 60606
Attention: Patrick J. Riley
Facsimile: (312) 454-9608
By: /s/ Patrick J. Riley
---------------------------
Patrick J. Riley, Vice
President and Treasurer
By: /s/ David B. Corwine
---------------------------
David B. Corwine,
Assistant Secretary
SECURED PARTY
CONTINENTAL BANK
as Agent
Address:
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Barbara A. Hamel
Facsimile: (312) 828-1974
By: /s/ Barbara A. Hamel
---------------------------
Barbara A. Hamel, Vice
President
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Exhibit 10(iv)
LIST OF SCHEDULES TO SECURITY AGREEMENT
1. SCHEDULE I - LOCATIONS OF COLLATERAL. Identifies the addresses where
collateral is located.
2. SCHEDULE II - JURISDICTIONS WHERE DEBTOR IS QUALIFIED TO DO BUSINESS.
Lists forty states where Allied Products Corporation is qualified to
do business.
