<PAGE>
U.S. $54,125,000
CREDIT AGREEMENT
dated as of November 19, 1999
and Amended and Restated as of May 31, 2000
among
ZOLTEK COMPANIES, INC.,
ZOLTEK CORPORATION,
ZOLTEK INTERMEDIATES CORPORATION,
ZOLTEK PROPERTIES, INC.,
CAPE COMPOSITES, INC., AND
ENGINEERING TECHNOLOGY CORPORATION,
as the Borrowers,
THE LENDERS
and any other lenders hereafter becoming
a party to this Agreement
and
FIRSTAR BANK MISSOURI, N. A.,
formerly known as Mercantile Bank National Association,
as Agent
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<TABLE>
TABLE OF CONTENTS
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<S> <C>
SECTION 1. TERM 1
SECTION 2. DEFINITIONS 1
SECTION 3. THE LOANS 22
3.1 Revolving Credit Commitment of Lenders 22
3.2 Swingline Facility 24
3.4 Term Loan Commitment of Lenders 25
3.5 Procedure for Borrowing 26
(a) Revolving Credit Loan Advances 26
(b) Swingline Loan Advances 28
(d) Disbursement of Term Loan 28
(e) Interest Rate Conversions 29
3.6 Minimum Draw-Down 30
3.7 Letters of Credit 31
3.8 Interest Rates and Payments. 34
3.9 Prepayment; Funding Losses 35
3.10 Basis for Determining Interest Rate Inadequate or Unfair 36
3.11 Illegality 36
3.12 Requirements of Law: Increased Costs 37
3.13 Prime Loans Substituted for Affected LIBOR Loans 38
3.14 Arrangement Fee; Agent's Fee 38
3.15 Commitment Fee 38
3.16 Place and Manner of Payment 39
3.17 Maturity 39
3.18 Prepayments 39
(a) Voluntary Prepayments 39
(b) Mandatory Prepayments 40
(c) Notice of Payment 41
3.19 Discretion of Lenders as to Manner of Funding 41
3.20 Reduction of Loan Commitments 41
3.22 Utilization of Commitments in Optional Currencies 42
(a) Periodic Computations of Dollar Equivalent Amounts of Loans and
Letters of Credit Outstanding 42
(b) Notices from Lenders That Optional Currencies Are Unavailable to
Fund New Loans 42
(c) Notices From Lenders That Optional Currencies Are Unavailable to
Fund Renewals of the LIBOR Loans 42
3.23 Currency Repayments 43
3.24 Optional Currency Amounts 43
3.25 European Monetary Union 43
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3.26 Judgment Currency 45
SECTION 4. PRECONDITIONS TO LOANS 46
4.1 Initial Loan 46
4.2 Subsequent Revolving Credit Loans 48
SECTION 5. COLLATERAL 48
5.1 Security Agreement 48
5.2 Additional Collateral 49
(a) Domestic Subsidiaries 49
(b) Foreign Subsidiaries 49
SECTION 6. REPRESENTATIONS AND WARRANTIES 49
6.1 Corporate Existence and Power 49
6.2 Corporate Authorization 49
6.3 Binding Effect 50
6.4 Financial Statements; Financial Condition 50
6.5 Litigation 50
6.6 Pension and Welfare Plans 51
6.7 Returns and Payment 51
6.8 Subsidiaries 51
6.9 Compliance With Other Instruments; None Burdensome 51
6.10 Other Loans and Guarantees 52
6.11 Labor Matters 52
6.12 Title to Property 52
6.13 Regulation U 52
6.14 Multi-Employer Pension Plan Amendments Act of 1980 52
6.15 Investment Company Act of 1940: Public Utility Holding Company Act of
1935 53
6.16 Patents, Licenses, Trademarks, Etc. 53
6.17 Environmental and Health and Safety Matters 53
6.18 Corporate or Fictitious Names 53
6.20 The Collateral Documents 53
SECTION 7. COVENANTS. 54
7.1 Affirmative Covenants of Borrowers 54
(a) Information 54
(b) Payment of Indebtedness 55
(c) Consultations and Inspections 56
(d) Payment of Taxes; Corporate Existence; Maintenance of Properties;
Insurance 56
(e) Accountants 57
(f) ERISA Compliance 58
(g) Maintenance of Books and Records 58
(h) Further Assurances 58
(i) Financial Covenants 58
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(j) Compliance with Law 60
(k) Notices 60
(l) Protection of Collateral 61
(m) Compliance with Environmental Laws 62
7.2 Negative Covenants of Borrowers 62
(a) Limitations on Liens 62
(b) Sale of Property 62
(c) Mergers and Consolidations 63
(d) Acquisitions 63
(e) Fiscal Year 63
(f) Stock Redemptions and Distributions 63
(g) Transactions with Related Parties 63
(h) Loans and Investments 63
(i) Dissolution or Liquidation 65
(j) Change in Nature of Business 65
(k) Pension Plans 65
(l) Limitation on Indebtedness 65
(m) Limitation on Stock Offerings 66
7.3 Use of Proceeds 66
SECTION 8. EVENTS OF DEFAULT 66
SECTION 9. THE AGENT 69
9.1 Appointment and Authorization 69
9.2 Agent and Affiliates 69
9.3 Action By Agent 70
9.4 Consultation with Experts 70
9.5 Liability of Agent 70
9.6 Indemnification 70
9.7 Credit Decision 70
9.8 Resignation of Agent 71
9.9 Removal of Agent 71
SECTION 10. GENERAL 71
10.1 No Waiver 71
10.2 Right of Setoff 72
10.3 Cost and Expenses 72
10.4 Environmental Indemnity 72
10.5 General Indemnity 73
10.6 Authority to Act 73
10.7 Capital Adequacy 74
10.8 Notices 74
10.9 Consent to Jurisdiction 74
10.10 Agent's and Lenders' Books and Records 75
10.11 Governing Law: Amendments 75
10.12 Participations and Assignments 75
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10.14 References: Headings for Convenience 77
10.15 Subsidiary Reference 77
10.16 No Oral Agreements: Entire Agreement 77
10.17 Severability 77
10.18 Counterparts 77
10.19 Resurrection of Obligations 77
10.20 U.S. Dollars 78
10.21 Subordination of Intercompany Indebtedness 78
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Swingline Note
Exhibit C Form of Term Note
Exhibit D Form of Borrowing Notice
Exhibit E Form of Borrowing Base Certificate
Exhibit F Form of Standby Letter Credit Application
Exhibit G Form of Commercial Letter of Credit Application
Exhibit H Form of Letter of Credit Participation Certificate
Exhibit I Form of Borrower's Counsel Opinion
Exhibit J Form of Officer's Certificate
Exhibit K Form of Assignment Agreement
Exhibit L Form of Joinder Agreement
Schedule 2.1 Existing Letters of Credit
Schedule 6.5 Litigation
Schedule 6.8 Subsidiaries of the Borrowers
Schedule 6.10 Other Loans and Guarantees
Schedule 6.11 Labor Matters
Schedule 6.12 Liens
Schedule 6.18 Corporate or Fictitious Names
</TABLE>
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CREDIT AGREEMENT
----------------
THIS CREDIT AGREEMENT (this "AGREEMENT") made and entered
into as of November 19, 1999, is amended and restated as of this 31st
day of May, 2000, by and among ZOLTEK COMPANIES, INC., a Missouri
corporation ("PARENT"), ZOLTEK CORPORATION, a Missouri corporation,
ZOLTEK INTERMEDIATES CORPORATION, a Missouri corporation, ZOLTEK
PROPERTIES, INC., a Missouri corporation, CAPE COMPOSITES, INC., a
California corporation, and ENGINEERING TECHNOLOGY CORPORATION, a
Missouri corporation (each, individually a "BORROWER" and, collectively,
the "BORROWERS"), the undersigned lenders and any other lenders
hereafter becoming a party to this Agreement (the "LENDERS"), and
FIRSTAR BANK MISSOURI, N.A., formerly known as Mercantile Bank National
Association, a national banking association, as agent on behalf of the
Lenders (in such capacity, the "AGENT").
WITNESSETH:
WHEREAS, the Borrowers, the Lenders and the Agent are party
to a Credit Agreement dated as of November 19, 1999 (as in effect
immediately prior to the Restatement Effective Date, the "EXISTING
CREDIT AGREEMENT");
WHEREAS, the parties hereto wish to amend and restate the
Existing Credit Agreement in the form of this Agreement;
NOW, THEREFORE, the parties hereto agree that the Existing
Credit Agreement shall be and hereby is amended and restated in its
entirety as follows:
SECTION 1. TERM.
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The "TERM" of this Agreement shall commence on the date
hereof and shall end on November 18, 2005, unless earlier terminated by
acceleration or otherwise upon the occurrence of an Event of Default
under this Agreement, in which event the Term hereof shall end on such
earlier date.
SECTION 2. DEFINITIONS.
------------------------
In addition to the terms defined elsewhere in this Agreement
or in any Exhibit or Schedule hereto, when used in this Agreement, the
following terms shall have the following meanings (such meanings shall
be equally applicable to the singular and plural forms of the terms
used, as the context requires):
Abilene Facility means the manufacturing facility of the
----------------
Borrowers in Abilene, Texas, including, without limitation, the real
estate, buildings, improvements, fixtures, machinery, equipment, and
other tangible and certain intangible personal property and all
accessories and parts relating thereto.
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Account Debtor shall mean any Person who is and/or may
--------------
become obligated to any Borrower or Structural Polymer (Holdings)
Limited or its Subsidiaries under or on account of an Account.
Accounts shall mean all trade accounts receivable of (x)
--------
any Borrower or (y) Structural Polymer (Holdings) Limited or its
Subsidiaries, which have been invoiced by such Borrower or Structural
Polymer (Holdings) Limited or its Subsidiaries, as the case maybe.
Acknowledgment Agreement shall mean any acknowledgment
------------------------
agreement required to be delivered by any of the Borrowers to Agent
pursuant to which any mortgagee other than Agent, lessor of property on
which Collateral is stored or otherwise located or any warehouseman,
filler, processor or packer of any Inventory acknowledges the liens and
security interests of Agent and, in the case of any real property leased
by any Borrower or subject to a mortgage executed by any Borrower other
than a mortgage executed by any Borrower in favor of Agent, provides
Agent access to such real property for a reasonable period of time to
assemble, complete and sell any Collateral located thereon.
Acquisition shall mean any transaction or series of
-----------
related transactions, consummated on or after the date of this
Agreement, by which any Borrower (a) acquires any ongoing business or
all or substantially all of the assets of any corporation, partnership
or other organization or entity, whether through purchase of assets,
merger or otherwise or (b) directly or indirectly acquires (in one
transaction or as of the most recent transaction in a series of
transactions) at least (i) a majority (in number of votes) of the stock
and/or other securities of a corporation having ordinary voting power
for the election of directors (other than stock and/or other securities
having such power only by reason of the happening of a contingency),
(ii) a majority (by percentage of voting power) of the outstanding
partnership interests of a partnership, (iii) a majority (by percentage
of voting power) of the outstanding membership interests of a limited
liability company, or (iv) a majority of the ownership interests in any
organization or entity other than a corporation, partnership or limited
liability company.
Agent shall have the meaning ascribed thereto in the
-----
preamble.
Agent's Fees shall have the meaning assigned to such term
------------
in Section 3.13(b).
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Amendment and Restatement Fee shall have the meaning
-----------------------------
ascribed thereto in Section 3.13(a).
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Applicable Margin shall mean (a) with respect to each type
-----------------
of Loan, the rate per annum listed in the applicable column below for
the type of Loan specified for each such column and (b) with respect to
the Commitment Fee, the rate per annum listed in the applicable column
below:
2
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<TABLE>
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<S> <C> <C> <C> <C> <C> <C> <C>
If the Leverage Ratio is: <1.50:1 > or = 1.50:1 > or = 2.00:1 > or = 2.50:1 > or = 3.00:1 > or = 3.5:1 >4.0:1
<2.00:1 <2.50:1 <3.00:1 <3.50:1 < or = 4.0:1
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LIBOR Loans
Denominated in Dollars 1.00% 1.25% 1.75% 2.00% 2.25% 2.75% 3.25%
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LIBOR Loans
Denominated in
Optional Currency 1.125% 1.375% 1.875% 2.125% 2.375% 2.875% 3.375%
--------------------------------------------------------------------------------------------------------------------------------
Prime Loans 0.00% 0.00% 0.00% 0.25% 0.50% 0.75% 1.25%
--------------------------------------------------------------------------------------------------------------------------------
Commitment Fee 0.35% 0.35% 0.40% 0.40% 0.50% 0.50% 0.50%
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</TABLE>
The determination of the Applicable Margin as of any date shall be based
on the Leverage Ratio as of the end of the most recently ended fiscal
quarter of Parent for which consolidated financial statements of Parent
and its Consolidated Subsidiaries have been delivered to the Lenders
pursuant to Section 7.1(a), and shall be effective for purposes of
--------------
determining the Applicable Margin from and after the first day of the
Parent's fiscal quarter immediately following the date on which such
delivery of financial statements is required until the first day of the
Parent's fiscal quarter immediately following the next such date on
which delivery of consolidated financial statements of Parent and its
Consolidated Subsidiaries is so required. For example, the Leverage
Ratio as of the end of the fiscal quarter of Parent ending June 30, 2000
would be determined from the consolidated financial statements of Parent
and its Consolidated Subsidiaries as of and for the Parent's fiscal
quarter ending June 30, 2000 (which are required to be delivered to
Agent on or before August 14, 2000), and would be used in determining
the Applicable Margin from and after October 1, 2000. Notwithstanding
the above, until such date as Parent has delivered to Agent consolidated
and consolidating balance sheets as of the end of the Parent's fiscal
quarter ending June 30, 2000 and the related consolidated and
consolidating statements of income, the Applicable Margin applicable to
each Loan shall be Three and One Quarter Percent (3.25%) per annum for
LIBOR Loans with Interest Periods commencing on or before such date One
and One Quarter Percent (1.25%) per annum for all Prime Loans
outstanding on or before such date and Three and Three Eighths Percent
(3.375%) per annum for Libor Loans denominated in an Optional Currency,
and in accordance with the terms of Section 3.15 of this Agreement,
------------
the Commitment Fee shall be calculated at the rate of One Half of One
Percent (0.5%) for all fiscal quarters or portions thereof ending on or
before such date. All such adjustments shall become effective as to
LIBOR Loans outstanding on the first day of any quarter upon the
expiration of the then current applicable Interest Period for such
Loans.
Asset Disposition shall mean any sale or other disposition
-----------------
(including by way of merger, consolidation or condemnation and whether
by operation of law or otherwise), or series of sales or other
dispositions made on or after the date hereof by the Parent or any
Subsidiary of the Parent to any Person (other than the Parent or any
Subsidiary of the Parent) of any asset or assets which yields Net Cash
Proceeds in excess of $500,000 in any period of twelve (12) consecutive
months, other than (i) sales of inventory in the ordinary course of
business or (ii) a sale or disposition of the assets of a foreign
(non-U.S.) business unit of the Parent or of a foreign (non-U.S.)
Subsidiary or foreign (non-U.S.) business unit of any Subsidiary of the
Parent, direct or indirect, which yields Net Cash Proceeds of less than
$5,000,000.
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Assignment Agreement has the meaning ascribed thereto in
--------------------
Section 10.12(b).
----------------
Attorneys' Fees shall mean: (a) the reasonable value of
---------------
the services (and reasonable costs, charges and expenses related
thereto) of the attorneys (and all paralegals, accountants and other
experts and professionals employed by such attorneys) employed by Agent
(including, without limitation, attorneys and paralegals who are
employees of Agent or any affiliate of Agent) in connection with the
negotiation, preparation, execution and delivery of this Agreement
and/or any of the other Transaction Documents; (b) the reasonable value
of the services (and reasonable costs, charges and expenses related
thereto) of the attorneys (and all paralegals, accountants and other
experts and professionals employed by such attorneys) employed by Agent
(including, without limitation, attorneys and paralegals who are
employees of Agent or of any direct or indirect parent corporation,
subsidiary or affiliate of Agent) from time to time (i) in connection
with the amendment, modification, extension and/or renewal of this
Agreement and/or any of the other Transaction Documents and/or (ii) in
connection with the preparation, negotiation or execution of any waiver
or consent with respect to this Agreement or any of the other
Transaction Documents; and (c) the reasonable value of the services (and
reasonable costs, charges and expenses related thereto) of the attorneys
(and all paralegals, accountants and other experts and professionals
employed by such attorneys) employed by Agent or any of the Lenders
(including, without limitation, attorneys and paralegals who are
employees of Agent or any of the Lenders or of any direct or indirect
parent corporation, subsidiary or affiliate of Agent or any of the
Lenders) from time to time (i) in connection with the enforcement of
this Agreement and/or any of the other Transaction Documents, (ii) to
represent Agent or any of the Lenders in any litigation, contest,
dispute, suit or proceeding, or to commence, defend or intervene in any
litigation, contest, dispute, suit or proceeding, or to file any
petition, complaint, answer, motion or other pleading or to take any
other action in or with respect to any litigation, contest, dispute,
suit or proceeding (whether instituted by Agent or any of the Lenders,
Borrower or any other Person and whether in bankruptcy or otherwise but
excluding any of the foregoing involving a dispute between the Agent and
any one or more of the Lenders or a dispute among the Lenders) in any
way or respect relating to this Agreement or any of the other
Transaction Documents, Borrowers or any Subsidiary of Borrowers, (iii)
to protect, collect, lease, sell, take possession of or liquidate any
collateral, (iv) to attempt to enforce any security interest in or other
Lien upon any collateral or to give any advice with respect to such
enforcement and (v) to enforce any of Agent's or any Lender's rights to
collect any of Obligations. The Agent or the applicable Lender, as the
case may be, shall provide Borrowers with reasonable detail for all such
Attorneys' Fees.
BBA means the British Bankers' Association.
---
Borrowers shall have the meaning ascribed thereto in the
---------
preamble and shall include any Subsidiary which shall become a party to
the Transaction Documents as a "Borrower" thereunder.
Borrowing Base shall have the meaning ascribed thereto in
--------------
Section 3.1(b).
--------------
Borrowing Base Certificate shall have the meaning ascribed
--------------------------
thereto in Section 3.1(c).
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Borrowing Notice shall have the meaning ascribed thereto
----------------
in Section 3.4(a).
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Business Day shall mean any day other than a Saturday or
------------
Sunday or a legal holiday on which commercial banks are closed for
business in St. Louis, Missouri, and (a) if the applicable Business Day
relates to any LIBOR Loan, such day must also be a day on which dealings
are carried on in the London interbank market, and (b) with respect to
advances or payments of Loans or any other matters relating to Loans
denominated in an Optional Currency, such day also shall be a day on
which (i) deposits in the relevant Optional Currency are carried on in
the applicable interbank market, and (ii) all applicable banks into
which Loan proceeds may be deposited are open for business and foreign
exchange markets are open for business in the principal financial center
of the country of such Optional Currency.
Capital Expenditure shall mean any expenditure which, in
-------------------
accordance with generally accepted accounting principles, is or should
be capitalized on the balance sheet of the Person making the same.
Capitalized Lease shall mean any lease which, in
-----------------
accordance with generally accepted accounting principles, is or should
be capitalized on the balance sheet of the lessee.
Capitalized Lease Obligations of any Person shall mean, as
-----------------------------
of the date of any determination thereof, the amount at which the
aggregate rental obligations due and to become due under all Capitalized
Leases under which such Person is a lessee would be reflected as a
liability on a balance sheet of such Person in accordance with generally
accepted accounting principles.
Change of Control shall mean (a) Parent shall at any time
-----------------
cease to own 100% of the capital stock of any Subsidiary, other than
Zoltek RT, (b) Parent shall at any time cease to own at least 98% of the
capital stock of Zoltek RT, (c) individuals who are members of the board
of directors of the Parent on the date of this Agreement or individuals
nominated by such individuals or by their successors so nominated shall
cease to constitute a majority of the directors of the Parent, (d) any
Person, entity or "group" as such term is defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, (other than Zsolt Rumy
(together with any trust or partnership or other entity over which he
has voting control)) is or becomes the beneficial owner of more than
Twenty Five Percent (25%) of the outstanding Voting Stock of Parent, or
(e) Zsolt Rumy (together with any trust or partnership or other entity
over which he has voting control) ceases to own in the aggregate Ten
Percent (10%) of the outstanding Voting Stock of Parent.
Code shall mean the Internal Revenue Code of 1986, 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 the Code shall be construed to also refer to
any successor sections.
Collateral means all "Collateral" referred to in the
----------
Collateral Documents and all other property and assets that are or are
intended under the terms of the Collateral Documents to secure the
payment on performance of any of the Obligations.
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Collateral Documents means, collectively, the Security
--------------------
Agreement, the Pledge Agreement, the Pledge Agreement (Securities
Account), the Deed of Trust and each other agreement that creates or
purports to create or perfect a Lien in favor of the Agent for the
benefit of the Lenders.
Commitment Fee has the meaning ascribed thereto in
--------------
Section 3.14.
------------
Computation Date shall have the meaning assigned to that
----------------
term in Section 3.20(a).
---------------
Consolidated Net Income shall mean the net income (or
-----------------------
loss) of Parent and its Consolidated Subsidiaries for the period in
question on a consolidated basis, after deducting all operating
expenses, provisions for all taxes and reserves (including reserves for
deferred income taxes) and all other proper deductions, all determined
in accordance with generally accepted accounting principles, after
eliminating all intercompany items, all determined in accordance with
generally accepted accounting principles.
Consolidated Net Worth shall mean, at any date, total
----------------------
stockholders' equity of Parent and its Consolidated Subsidiaries as
determined in accordance with generally accepted accounting principles.
Consolidated Subsidiary shall mean with respect to any
-----------------------
Person at any date, any Subsidiary or other entity the assets and
liabilities of which are or should be consolidated with those of such
Person in its consolidated financial statements as of such date in
accordance with generally accepted accounting principles.
Conversion Notice shall have the meaning ascribed thereto
-----------------
in Section 3.4(e).
--------------
Debt Offering means any issuance, sale or other offering
-------------
by the Parent or any Subsidiary of the Parent of debt instruments or
debt securities to any Person (other than the Parent or any Subsidiary
of the Parent), other than any purchase money debt and any issuance,
sale or other offering of debt instruments or debt securities by a
foreign (non-U.S.) Subsidiary of the Parent, direct or indirect, which
yields Net Cash Proceeds of less than $10,000,000 in any single
transaction or series of related transactions (including a Stock
Offering by a foreign (non-U.S.) Subsidiary of any Borrower).
Deed of Trust shall mean and include the Existing Deed of
-------------
Trust, as amended pursuant to the Deed of Trust Amendment, in each case
as the same may be further amended, restated, modified or supplemented
from time to time.
Deed of Trust Amendment shall mean an amendment to the
-----------------------
Existing Deed of Trust, in form and substance satisfactory to Agent.
Default shall mean an event or condition the occurrence of
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which would, with the lapse of time or the giving of notice or both,
become an Event of Default as defined in Section 8 hereof.
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Distribution in respect of any corporation shall mean:
------------
(a) dividends or other distributions on capital stock of
the corporation (other than stock dividends); and
(b) the redemption, repurchase or other acquisition of
such stock or of warrants, rights or other options to purchase
such stock (except when solely in exchange for such stock).
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean
----------------------------------------------
lawful money of the United States of America.
Dollar Equivalent shall mean, with respect to any amount
-----------------
of any currency, the Equivalent Amount of such currency expressed in
Dollars.
Dow Jones Markets Page 3750 shall mean the display
---------------------------
designated as "Page 3750" on the Dow Jones Markets Service (or such
other page as may replace Page 3750 on that service or such other
service as may be nominated by the BBA as the information vendor for the
purpose of displaying BBA's Interest Settlement Rates for deposits in
U.S. Dollars or Optional Currencies, as the case may be).
EBITDA shall mean with respect to the four consecutive
------
fiscal quarter period ending on the date of such calculation,
Consolidated Net Income, plus, without duplication and to the extent
----
deducted in determining such Consolidated Net Income, the sum of
(a) Interest Expense for such period, (b) income tax expense for such
period, (c) the aggregate amount attributable to depreciation and
amortization for such period, (d) the aggregate amount of extraordinary
losses during such period, (e) the aggregate amount of non-cash expenses
during such period, and (f) the aggregate amount of losses on the sale
or other disposition of assets other than in the ordinary course of
business during such period, and minus, without duplication and to the
-----
extent added in determining such Consolidated Net Income for such
period, (x) the aggregate amount of extraordinary gains during such
period and (y) the aggregate amount of gains on the sale or other
disposition of assets other than in the ordinary course of business
during such period, all determined in accordance with generally accepted
accounting principles. For the purposes of calculating EBITDA for the
Parent's fiscal quarters ending December 31, 1999, March 31, 2000, June
30, 2000 and September 30, 2000 in order to determine compliance with
Section 7.1(i)(i), EBITDA for such period shall be calculated after
-----------------
giving pro forma effect thereto as if the SPHL Acquisition occurred
--- -----
on the first day of such period. For the purposes of calculating EBITDA
for any period in connection with any determination of the Leverage
Ratio, (i) if at any time during such period the Parent or any of its
Consolidated Subsidiaries shall have made any Material Disposition, the
EBITDA for such period shall be reduced by an amount equal to the EBITDA
(if positive) attributable to the property that is the subject of such
Material Disposition for such period or increased by an amount equal to
the EBITDA (if negative) attributable thereto for such period and (ii)
if during such period the Parent or any of its Consolidated Subsidiaries
shall have made a Material Acquisition, EBITDA for such period shall be
calculated after giving pro forma effect thereto as if such Material
--- -----
Acquisition occurred on the first day of such period. As used in this
definition, "MATERIAL ACQUISITION" and "MATERIAL DISPOSITION" mean,
respectively, any acquisition or disposition of property or series of
related acquisitions
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or dispositions of property that comprise all or substantially all of an
operating unit of a business or constitutes all or substantially all of
the common stock of a Person.
EBITDAR shall mean with respect to the four quarter period
-------
ending on the date of such calculation, the sum of EBITDA plus Rent
Expense for the Parent and its Consolidated Subsidiaries, determined in
accordance with generally accepted accounting principles.
Eligible Accounts shall mean all Accounts other than:
-----------------
(a) Accounts which remain unpaid for more than ninety (90) days after
their original invoice dates or past due more than thirty (30) days
after their original due dates; (b) Accounts owing by a single Account
Debtor, including a currently scheduled Account, if twenty-five percent
(25%) or more of the balance owing by said Account Debtor upon said
Accounts is ineligible pursuant to clause (a) above; (c) Accounts with
respect to which the Account Debtor is a partner of any Borrower or a
Related Party of the Borrowers, (d) Accounts with respect to which
payment by the Account Debtor is or may be conditional and Accounts
commonly known as bill and hold accounts or Accounts of a similar or
like arrangement; (e) Accounts (other than Accounts of Structural
Polymer (Holdings) Limited or its Subsidiaries) with respect to which
the Account Debtor is not a resident or citizen of or otherwise located
in the United States of America, unless the Account is backed by a
commercial letter of credit in form and substance acceptable to Agent
and issued or confirmed by a domestic bank acceptable to Agent;
(f) Accounts with respect to which the Account Debtor is the United
States of America, any state of the United States or any other
governmental body or any department, agency or instrumentality of any of
the foregoing, unless such Accounts are duly assigned to Agent for the
benefit of each of the Lenders in accordance with all applicable
governmental and regulatory rules and regulations (including, without
limitation, the Federal Assignment of Claims Act of 1940, as amended, if
applicable) so that Agent is recognized by the Account Debtor to have
all of the rights of an assignee of such Accounts; (g) Accounts with
respect to which any Borrower is or may become liable to the Account
Debtor for goods sold or services rendered by such Account Debtor to any
Borrower, but only to the extent of the then aggregate liability of such
Borrower to such Account Debtor (i.e. the excess of the aggregate face
amount of Accounts of such Account Debtor to Borrower over the aggregate
liability of Borrower to such Account Debtor shall constitute an
Eligible Account), (h) Accounts with respect to which the goods giving
rise thereto have not been shipped and delivered to and accepted as
satisfactory by the Account Debtor thereof or with respect to which the
services performed giving rise thereto have not been completed and
accepted as satisfactory by the Account Debtor thereof; (i) Accounts
which are not invoiced (and dated as of such date) and sent to the
Account Debtor thereof concurrently with or not later than ten (10) days
after the shipment and delivery to and acceptance by said Account Debtor
of the goods giving rise thereto or the performance of the services
giving rise thereto; (j) Accounts with respect to which possession
and/or control of the goods sold giving rise thereto is held, maintained
or retained by any Borrower (or by any agent or custodian of any
Borrower) for the account of or subject to further and/or future
direction from the Account Debtor thereof; (k) Accounts arising from a
"sale on approval" or a "sale or return;" (l) Accounts as to which Agent
or the Required Lenders, at any time or times hereafter, reasonably
determine by written notice to the Borrowers, that the prospects of
payment or performance by the Account Debtor is or will be impaired in
any material respect; (m) Accounts of an Account Debtor to the extent,
but only to the extent, that the same exceed a credit limit reasonably
determined by Agent or Required Lenders, by
8
<PAGE>
<PAGE>
written notice to Borrowers, at any time or times hereafter;
(n) Accounts (other than Accounts of Structural Polymer (Holdings)
Limited or its Subsidiaries) which are not subject to a first priority
perfected security interest in favor of Agent for the benefit of each of
the Lenders; and (o) Accounts with respect to which the Account Debtor
has commenced a voluntary case under the federal bankruptcy laws, or
made an assignment for the benefit of creditors, or if a decree or order
for relief has been entered in respect to the Account Debtor in an
involuntary case under the federal bankruptcy laws. In addition to the
foregoing, Eligible Accounts shall include such Accounts for which
Borrowers shall request approval and that Agent approves in advance, in
writing, and in its reasonable discretion, which approval shall not
prevent Agent from time to time from revoking such approval in the
exercise of its reasonable discretion.
Eligible Inventory shall mean all Inventory of Borrowers
------------------
or Structural Polymer (Holdings) Limited which consists of raw materials
or finished goods (specifically excluding any Inventory of Borrowers or
Structural Polymer (Holdings) Limited which consists of modified raw
materials or work-in-process) other than: (a) any Inventory which is
damaged, obsolete or unsaleable; (b) any Inventory which Agent
reasonably determines to be ineligible due to age, type, category,
quality and/or quantity; (c) any Inventory which consists of packaging
and/or shipping supplies and/or materials; (d) any Inventory which
consists of consigned raw materials or consigned finished goods; (e) any
Inventory (other than Inventory of Structural Polymer (Holdings)
Limited) which is not located in the continental United States of
America; (f) any Inventory of a Borrower which is not located at the
chief executive office of such Borrower, one of the locations listed on
Exhibit A to the Security Agreement or another location with respect
---------
to which the applicable Borrower has complied with all of the
requirements of the Security Agreement; and (g) any Inventory (other
than Inventory owned by Structural Polymer (Holdings) Limited or its
Subsidiaries) which is not subject to a first priority perfected
security interest in favor of Agent.
Environmental Laws shall mean the Resource Conservation
------------------
and Recovery Act of 1987, the Comprehensive Environmental Response,
Compensation and Liability Act, any so-called "Superfund" or "Superlien"
law, the Toxic Substances Control Act and any other federal, state or
local statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to or imposing liability or standards of conduct
concerning any Hazardous Materials or any other hazardous, toxic or
dangerous waste, substance or constituent or other substance, whether
solid, liquid or gas, as now or at any time hereafter in effect.
Environmental Lien shall have the meaning ascribed thereto
------------------
in Section 7.1(k)(vii).
-------------------
Equivalent Amount shall mean, at any time, as determined
-----------------
by the Agent (which determination shall be conclusive absent manifest
error), with respect to an amount of any currency (the "REFERENCE
CURRENCY") which is to be computed as an equivalent amount of another
currency (the "EQUIVALENT CURRENCY"): (i) if the Reference Currency and
the Equivalent Currency are the same, the amount of such Reference
Currency, or (ii) if the Reference Currency and the Equivalent Currency
are not the same, the amount of such Equivalent Currency converted from
such Reference Currency at the Agent's spot selling rate (based on the
market rates then prevailing and available to the Agent) for the sale of
such Equivalent Currency for such Reference Currency at a time
determined by the Agent on the second Business Day immediately preceding
the event for which such calculation is made.
9
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<PAGE>
Equivalent Currency shall have the meaning assigned to
-------------------
that term in the definition of Equivalent Amount.
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 shall be construed to
also refer to any successor sections.
ERISA Affiliate shall mean any corporation, trade or
---------------
business that is, along with any Borrower, 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 Code or
Section 4001 of ERISA.
Event of Default shall have the meaning ascribed thereto
----------------
in Section 8.
---------
Existing Credit Agreement shall have the meaning ascribed
-------------------------
thereto in the recitals to this Agreement.
Existing Deed of Trust shall mean the Deed of Trust under,
----------------------
and as defined in, the Existing Credit Agreement.
Existing Lender shall mean each Person which was a Lender
---------------
under, and as defined in, the Existing Credit Agreement.
Existing Letters of Credit shall mean the letters of
--------------------------
credit listed on Schedule 2.1 and previously issued under the Existing
------------
Credit Agreement.
Existing Loans shall mean the Existing Revolving Credit
--------------
Loans, the Existing Swingline Loans and the Existing Term Loans.
Existing Mortgage Policy shall mean the mortgage insurance
------------------------
policy issued with respect to the Existing Deed of Trust under the
Existing Credit Agreement.
Existing Revolving Credit Loans shall mean the "Revolving
-------------------------------
Credit Loans" under, and as defined in, the Existing Credit Agreement.
Existing Swingline Loans shall mean the "Swingline Loans"
------------------------
under, and as defined in, the Existing Credit Agreement.
Existing Term Loans shall mean the "Term Loans" under, and
-------------------
as defined in, the Existing Credit Agreement.
Fee Letter means that certain letter agreement, dated as
----------
of May 12, 2000, among the Agent and the Borrowers, as amended,
modified, restated or supplemented from time to time.
Firstar means Firstar Bank Missouri, N.A., formerly known
-------
as Mercantile Bank National Association, or its successor, in its
individual capacity.
10
<PAGE>
<PAGE>
Fixed Charges shall mean for the period in question the
-------------
sum of (a) Interest Expense for the applicable period, (b) income tax
expense for the applicable period, (c) Rent Expense for the applicable
period, (d) scheduled principal installments on Indebtedness (as
adjusted for prepayments, and including payments under Capitalized
Leases but excluding principal payments on the Revolving Credit Loans)
due during the applicable period, (e) Capital Expenditures during the
applicable period, and (f) dividends or other distributions on capital
stock of the Parent, in each case of the Parent and its Consolidated
Subsidiaries during the applicable period, all as determined in
accordance with generally accepted accounting principles.
Funded Debt of any Person shall mean, as of the date of
-----------
determination thereof, the sum of (without duplication): (a) all
Indebtedness of such Person for borrowed money; plus (b) all Capitalized
Lease Obligations of such Person; plus (c) all Guarantees by such Person
of Funded Debt of others.
Funding Office shall mean, with respect to Loans
--------------
denominated in Dollars, the lending office of the Agent at its address
specified in or pursuant to Section 10.8 and, with respect to Loans
------------
denominated in Optional Currencies, such lending office, affiliate or
correspondent bank of the Agent as may be designated by the Agent with
respect to any Optional Currency.
Guarantee by any Person shall mean any obligation,
---------
contingent or otherwise, of such Person guaranteeing any Indebtedness of
any other Person or in any manner providing for the payment of any
Indebtedness of any other Person or otherwise protecting the holder of
such Indebtedness against loss (whether by agreement to keep-well, to
purchase assets, goods, securities or services, or to take-or-pay or
otherwise); provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb shall have a correlative
meaning.
Hardcore Composites shall mean Hardcore Composites
-------------------
Operations, L.L.C., a Delaware limited liability company, 45% of the
membership interests of which are owned by Parent.
Hardcore Composites Note shall have the meaning ascribed
------------------------
thereto in Section 7.2(h).
--------------
Hazardous Materials shall mean any hazardous substance or
-------------------
pollutant or contaminant defined as such in (or for the purposes of) any
Environmental Law and shall include, without limitation, petroleum,
including crude oil or any fraction thereof which is liquid at standard
conditions of temperature or pressure (60 degrees Fahrenheit and 14.7
pounds per square inch absolute), any radioactive material, including,
without limitation, any source, special nuclear or byproduct material as
defined in 42 U.S.C. Section 2011 et seq., as amended or hereafter
-- ----
amended, and asbestos in any form or condition.
Hedging Fee shall have the meaning ascribed thereto in
-----------
Section 3.7.
-----------
Indebtedness of any Person shall mean and include, without
------------
duplication, any and all indebtedness, liabilities and obligations of
such Person which in accordance with generally
11
<PAGE>
<PAGE>
accepted accounting principles are or should be classified upon a
balance sheet of such Person as liabilities of such Person, and in any
event shall include all (i) obligations of such Person for borrowed
money or obligations which have been incurred in connection with the
acquisition of Property, (ii) obligations secured by any Lien or other
charge upon any Property owned by such Person, provided that if such
Person has not assumed or become liable for the payment of such
obligations, such obligations shall still be included in Indebtedness
but the determination of the amount of Indebtedness evidenced by such
obligations shall be limited to the book value of such Property,
(iii) obligations created or arising under any conditional sale or other
title retention agreement with respect to any Property acquired by such
Person, provided that if the rights and remedies of the seller, lender
or lessor in the event of default under such agreement are limited to
repossession or sale of such Property such obligations shall still be
included in Indebtedness but the determination of the amount of
Indebtedness evidenced by such obligations shall be limited to the book
value of such Property, (iv) all Guarantees and other contingent
indebtedness, liabilities and obligations of such Person whether or not
reflected on the balance sheet of such Person (including, without
limitation, reimbursement obligations in respect of letters of credit)
and (v) all Capitalized Lease Obligations of such Person. For the
purpose of computing the "Indebtedness" of any Person, there shall be
excluded any particular Indebtedness to the extent that, upon or prior
to the maturity thereof, there shall have been deposited with the proper
depositary in trust the necessary funds (or evidences of such
Indebtedness) for the payment, redemption or satisfaction of such
Indebtedness; and thereafter such funds and evidences of Indebtedness so
deposited shall not be included in any computation of the assets of such
Person.
Indemnitees shall have the meaning ascribed thereto in
-----------
Section 10.5.
------------
Intercompany Indebtedness shall have the meaning ascribed
-------------------------
thereto in Section 10.21.
-------------
Interest Expense shall mean, on any date, for the period
----------------
for which such calculation is being made, total interest expense on any
Indebtedness of the Parent and/or its Consolidated Subsidiaries,
including, without limitation, the interest component on any Capitalized
Lease Obligations, all as determined on a consolidated basis in
accordance with generally accepted accounting principles.
Interest Period means with respect to each LIBOR Loan, the
---------------
period beginning on, as the case may be, the borrowing date or
conversion date of, or on the date of expiration of the then current
Interest Period with respect to, such LIBOR Loan and extending one, two,
three or six months thereafter (to the extent funds are available to the
Lenders for such period), as selected by the Borrowers, as the case may
be, in the notice of borrowing as provided in Section 3.4 or its
-----------
notice of conversion as provided in Section 3.4 or by irrevocable
-----------
notice to the Agent not less than three (3) Business Days prior to the
last day of the then current Interest Period with respect to such LIBOR
Loan if the Loan is to be continued as such; provided that:
--------
(a) subject to paragraph (b) below, if any Interest Period
would otherwise end on a day which is not a Business Day, that
Interest Period shall be extended to the next succeeding Business
Day unless such next succeeding Business Day is in a different
12
<PAGE>
<PAGE>
calendar month, in which case such Interest Period shall end on
the next preceding Business Day;
(b) any Interest Period that would otherwise extend beyond
November 18, 2005 shall end on November 18, 2005; and
(c) if the Borrowers shall fail to give notice as provided
above, the affected LIBOR Loan shall automatically be converted to
a Prime Loan at the end of the Interest Period therefor.
Inventory shall mean all inventory of the Borrowers and
---------
Structural Polymer (Holdings) Limited valued at the lower of cost or
market in accordance with generally accepted accounting principles.
Joinder Agreement means a Joinder Agreement substantially
-----------------
in the form of Exhibit L hereto, executed and delivered by a
---------
Subsidiary in accordance with the terms of Section 5.2.
-----------
Letter of Credit shall have the meaning ascribed thereto
----------------
in Section 3.6.
-----------
Letter of Credit Application shall have the meaning
----------------------------
ascribed thereto in Section 3.6.
-----------
Letter of Credit Commission Fee shall have the meaning
-------------------------------
ascribed thereto in Section 3.6.
-----------
Letter of Credit Issuance Fee shall have the meaning
-----------------------------
ascribed thereto in Section 3.6.
-----------
Letter of Credit Negotiation Fee shall have the meaning
--------------------------------
ascribed thereto in Section 3.6.
-----------
Leverage Ratio shall mean, on any date, the ratio of
--------------
(a) Total Funded Debt on such date less the then market value of the
preferred securities of MVBI Capital Trust then constituting Collateral
hereunder to (b) EBITDA on such date. For the purposes of calculating
the Leverage Ratio, the market value of such preferred securities shall
be the closing price for such preferred securities as of the date of
such calculation as quoted on the Nasdaq National Market.
LIBOR Base Rate shall mean, with respect to the applicable
---------------
Interest Period, (a) the LIBOR Index Rate for such Interest Period, if
such rate is available, or (b) if the LIBOR Index Rate is not available,
the arithmetic average (rounded upward, if necessary, to the next higher
1/100 of 1%) of the respective rates per annum of interest at which
deposits in U.S. Dollars or the Optional Currency, as the case may be,
in immediately available funds are offered to Agent in the London
interbank market by two (2) or more major banks selected by Agent in its
sole discretion, at such time on the date two (2) Business Days before
the first day of such Interest Period as Agent in its sole discretion
elects, for delivery on the first day of the applicable Interest Period
for a number of days comparable to the number of days in such Interest
Period and in an amount approximately equal to the principal amount of
the LIBOR Loan to which such Interest Period is to apply.
13
<PAGE>
<PAGE>
LIBOR Index Rate shall mean, with respect to the
----------------
applicable Interest Period, (a) with respect to LIBOR Loans denominated
in Dollars, the rate per annum (rounded upwards, if necessary, to the
next higher 1/100 of 1%) for deposits in Dollars for a period equal to
such Interest Period, quoted by the BBA which appears on the Dow Jones
Markets Page 3750 as of 9:00 a.m. (St. Louis time) on the day two (2)
Business Days before the commencement of such Interest Period, and
(b) with respect to LIBOR Loans denominated in an Optional Currency, the
rate per annum (rounded upwards, if necessary to the next higher 1/100
of 1%) for deposits in the relevant Optional Currency for a period equal
to such Interest Period, quoted by the BBA, which appears on the Dow
Jones Markets Page 3750 as of 9:00 a.m. (St. Louis time) on the day two
(2) Business Days before the commencement of such Interest Period.
LIBOR Loan shall mean a Loan bearing interest based on the
----------
LIBOR Rate.
LIBOR Rate shall mean (a) the quotient of the (i) LIBOR
----------
Base Rate divided by (ii) one minus the applicable Reserve Percentage.
The LIBOR Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Percentage.
Lien shall mean any interest in Property securing an
----
obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on common law, statute or
contract, including, without limitation, any security interest,
mortgage, deed of trust, pledge, hypothecation, judgment lien or other
lien or encumbrance of any kind or nature whatsoever, any conditional
sale or trust receipt and any lease, consignment or bailment for
security purposes. The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property.
Loan shall mean each Revolving Credit Loan, each Swingline
----
Loan and each Term Loan, in each case whether a Prime Loan or a LIBOR
Loan, and Loans shall mean any or all of the foregoing.
-----
Loan Commitments shall mean the total of the Revolving
----------------
Credit Commitments and the Term Loan Commitment of all of the Lenders.
Mandatory Prepayment means any prepayment required by
--------------------
Section 3.17(b)(i) or (ii).
------------------ ----
Material Adverse Change as used herein shall mean any
-----------------------
event which, if immediately taken into account on Parent's (or any of
its Subsidiaries', as the case may be) financial statements prepared in
accordance with generally accepted accounting principles, would have the
likely effect of causing Borrowers to be in default under any of the
financial covenants contained in Section 7.1(i).
--------------
Material Adverse Effect shall mean a material adverse
-----------------------
effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Parent and its
Subsidiaries, taken as a whole.
Maximum Swingline Amount means Five Million Dollars
------------------------
($5,000,000.00).
14
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<PAGE>
Multiemployer Plan shall mean a "multi-employer plan" as
------------------
defined in Section 4001(a)(3) of ERISA which is maintained for employees
of Parent, any ERISA Affiliate or any Subsidiary of Parent.
Net Cash Proceeds shall mean the proceeds of any Asset
-----------------
Disposition, Stock Offering, or Debt Offering net of (a) brokerage
commissions and other commissions, fees and expenses (including fees and
expenses of counsel, accountants and investment bankers) related to such
Asset Disposition, Stock Offering, or Debt Offering, and (b) a reserve
for taxes payable as a result of any such Asset Disposition and (c) in
the case of Asset Dispositions, (i) net of any Indebtedness secured by a
Permitted Lien on any of the assets being sold and which is paid off in
connection with such Asset Disposition and (ii) net of any amount
expended by Borrowers within 120 days after the applicable Asset
Disposition to replace any assets sold or otherwise disposed of in
connection with such Asset Disposition.
Notes shall mean the Revolving Credit Notes, the Swingline
-----
Note and the Term Notes, as the same may from time to time be amended,
restated, modified, extended or renewed.
Obligations shall mean any and all indebtedness
-----------
(principal, interest, fees and other amounts), liabilities and
obligations owing to Agent or any of the Lenders under the Notes, this
Agreement, the Security Agreement, the Pledge Agreement, the Pledge
Agreement (Securities Account), the Deed of Trust, the Letter of Credit
Applications (including any unreimbursed amounts with respect to the
Letters of Credit) or any of the other Transaction Documents and any
extensions, renewals, amendments or replacements thereof, in each case
whether absolute or contingent, joint and/or several, secured or
unsecured, direct or indirect, expressed or implied in law, contractual
or tortious, liquidated or unliquidated, at law or in equity, or
otherwise, and any and all costs of collection and/or Attorneys' Fees
incurred or to be incurred in connection therewith.
Occupational Safety and Health Laws shall mean the
-----------------------------------
Occupational Safety and Health Act of 1970, as amended, and any other
Federal, state or local statute, law, ordinance, code, rule, regulation,
order or decree regulating, relating to or imposing liability or
standards of conduct concerning employee health and/or safety, as now or
at any time hereafter in effect.
Optional Currency shall mean, subject to availability, any
-----------------
of the following currencies: British Pounds Sterling ("GBP"), Deutsche
Mark ("DEM"), and the European common currency ("EURO").
Original Currency shall have the meaning assigned to such
-----------------
term in Section 3.24.
------------
Other Currency shall have the meaning assigned to such
--------------
term in Section 3.24.
------------
PBGC shall mean the Pension Benefit Guaranty Corporation
----
and any entity succeeding to any or all of its functions under ERISA.
Pension Plan shall mean a "pension plan," as such term is
------------
defined in Section 3(2) of ERISA, which is subject to the provisions of
Title IV of ERISA and which is established or maintained by Parent, any
ERISA Affiliate or any Subsidiary of Parent, other than a Multiemployer
Plan.
15
<PAGE>
<PAGE>
Permitted Liens shall mean any of the following:
---------------
(a) Liens in favor of Agent or any of the Lenders arising
under any of the Collateral Documents.
(b) Liens existing as of the date of this Agreement and
listed on Schedule 6.12 attached hereto and any extensions,
-------------
renewals or replacements of any Lien listed on Schedule 6.12,
-------------
provided that no additional property shall be encumbered by such
--------
Liens and the unpaid principal amount of the Debt secured thereby
shall not be increased on or after the date of any such extension,
renewal or replacement;
(c) incipient Liens for property taxes and assessments or
governmental charges or levies not yet due and payable or Liens
for property taxes and assessments or governmental charges or
levies being contested in good faith and by appropriate
proceedings for which adequate reserves have been established in
accordance with generally accepted accounting principles;
(d) minor survey exceptions or minor encumbrances, easements
or reservations, or rights of others for rights-of-way, utilities
and other similar purposes, or zoning or other restrictions as to
the use of real properties, which are necessary for the conduct
of the activities of the Parent and its Subsidiaries or which
customarily exist on the properties of corporations engaged in
similar activities and similarly situated and which do not in any
event materially interfere with or impair the use of such real
properties in the operation of the business of the Parent and its
Subsidiaries;
(e) Liens to secure claims for labor, materials or
supplies in respect of obligations not overdue or being contested
in good faith by appropriate proceedings in connection with the
ownership of its property (including Liens in connection with
worker's compensation, unemployment insurance and other like laws,
warehousemen's and attorney's liens and statutory landlords'
liens) which are not incurred in connection with the incurrence of
Indebtedness and which do not in the aggregate materially
interfere with or impair the use of such property in the operation
of the business of the Parent and its Subsidiaries, taken as a
whole, or the value of such property for the purpose of such
business;
(f) Liens in respect of deposits or pledges made in the
ordinary course of business to secure performance in connection
with bids or contracts (other than for the payment of borrowed
money) or to secure surety, stay, appeal or customs bonds or other
similar Liens, pledges or deposits, provided that the aggregate
--------
amount of deposits or pledges at any time pursuant to this
subparagraph (f) shall not exceed $500,000;
(g) Liens of carriers, warehousemen, mechanics and
materialmen, and other like Liens incurred in the ordinary course
of business, in existence less than sixty (60) days (or in the
case of any Lien with respect to which the underlying claim shall
currently be contested by the Parent or the applicable Subsidiary
in good faith by appropriate proceedings, the period of time
during which such Lien is being contested) from the date of
16
<PAGE>
<PAGE>
creation thereof in respect of obligations not overdue or deposits
to obtain the release of such Liens, which Liens do not in the
aggregate materially detract from the value of the property or
assets or materially impair the use thereof in the operation of
the business of the Parent or such Subsidiary;
(h) Liens arising out of the existence of judgments or
awards not constituting an Event of Default under Section 8.9,
-----------
provided that no cash or property is deposited or delivered to
--------
secure the respective judgment or award (or any appeal bond in
respect thereof, except as permitted by preceding subparagraph
(e));
(i) Liens of commercial depository institutions, arising
in the ordinary course of business and not securing Funded Debt,
constituting a statutory or common law right of setoff against
amounts on deposit with such institution;
(j) purchase money Liens granted to a Person financing a
Capital Expenditure, and any extensions, renewals or replacements
thereof, so long as (i) the Lien granted is limited to the
specific fixed assets acquired and the proceeds thereof, (ii) the
Lien secures only the Indebtedness incurred to acquire such
asset(s), (iii) the aggregate principal amount of Indebtedness
secured by the Lien is not more than the acquisition cost of the
specific fixed assets on which the Lien is granted, (iv) the
aggregate outstanding principal amount of all Indebtedness secured
by Liens permitted by this subparagraph (j) does not exceed the
amount permitted by Section 7.2(l), and (v) the transaction does
--------------
not violate any other provision of this Agreement; and
(k) Capitalized Leases entered into by Parent or any
Subsidiary of Parent to the extent permitted by Section 7.2(l),
--------------
provided that (i) such Liens only serve to secure the payment of
--------
Indebtedness arising under such Capitalized Lease and (ii) the
Lien encumbering the asset subject to such Capitalized Lease does
not encumber any other asset of Parent or any Subsidiary of
Parent.
Person shall mean any individual, sole proprietorship,
------
partnership, joint venture, limited liability company, trust,
unincorporated organization, association, corporation, institution,
entity or government (whether national, Federal, state, county, city,
municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
Pledge Agreement shall mean the Amended and Restated
----------------
Pledge Agreement to be executed by the Parent and delivered to the Agent
for the benefit of each of the Lenders pledging (i) sixty-five percent
(65%) of its interests in the common stock or ownership interests of
Zoltek Rt., a Hungarian corporation and Structural Polymer (Holdings)
Limited, a United Kingdom private limited company, (ii) one hundred
percent (100%) of its interests in (x) that certain promissory note
payable to Parent by Hardcore Composites dated April 28, 2000 and in the
original principal amount of Eight Hundred Two Thousand Nine Hundred
Thirty-Eight and 95/100 Dollars ($802,938.95) and (y) that certain
promissory note payable to Parent by Hardcore Composites dated April 28,
2000 and in the original principal amount of up to One Million Dollars
($1,000,000.00), and (iii) one hundred percent (100%) of its interest in
the membership interests of Hardcore Composites, as the same may from
time to time be amended, restated or modified.
17
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<PAGE>
Pledge Agreement (Securities Account) shall mean the
-------------------------------------
Pledge Agreement (Securities Account) to be executed by the Parent and
delivered to the Agent for the benefit of each of the Lenders pledging
one hundred percent (100%) of its interests in a securities account
containing preferred securities of MVBI Capital Trust, a Delaware
business trust, as the same may from time to time be amended, restated
or modified.
Prime Loan shall mean a Loan bearing interest based on the
----------
Prime Rate.
Prime Rate shall mean the interest rate announced from
----------
time to time by Agent as its "prime rate" on commercial loans (which
rate shall fluctuate as and when said prime rate shall change).
Property shall mean any interest in any kind of property
--------
or asset, whether real, personal or mixed, or tangible or intangible.
Properties shall mean the plural of Property. For purposes of this
----------
Agreement, Parent and each Subsidiary of Parent shall be deemed to be
the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement
pursuant to which title to the Property has been retained by or vested
in some other Person for security purposes.
Pro Rata Share shall mean, with respect to each Lender,
--------------
such Lender's percentage of the aggregate amount of Loans (other than
Swingline Loans) then outstanding, determined by dividing the aggregate
principal amount of all Loans (other than Swingline Loans) of such
Lender then outstanding by the aggregate amount of all Loans (other than
Swingline Loans) of all Lenders then outstanding, or, if no Loans are
then outstanding, such Lender's percentage of the total Loan Commitments
of all of the Lenders, determined by dividing the sum of such Lender's
Revolving Credit Commitment and Term Loan Commitment by the aggregate
Loan Commitments.
Real Property shall mean any interest in and to land,
-------------
improvements and fixtures, including any interest arising out of a lease
or license of land, improvements and/or fixtures.
Reference Currency shall have the meaning assigned to that
------------------
term in the definition of Equivalent Amount.
Regulatory Change shall have the meaning ascribed thereto
-----------------
in Section 3.11.
------------
Related Party shall mean any Person (other than a
-------------
Consolidated Subsidiary) (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by or is under common
control with, Parent or any Subsidiary of Parent, (ii) which
beneficially owns or holds ten percent (10%) or more of the equity
interest of Parent or (iii) ten percent (10%) or more of the equity
interest of which is beneficially owned or held by Parent or a
Subsidiary of Parent. The term "control" shall mean the possession,
directly or indirectly, of the power to vote ten percent (10%) or more
of the capital stock of any Person or the power to direct or cause the
direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
Rent Expense shall mean all fixed rents payable by the
------------
Parent and its Consolidated Subsidiaries, as lessee or sublessee under a
lease of Property. Fixed rents under any so-called
18
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"percentage leases" shall be computed based on the actual amount of rent
paid, and not on the basis of the minimum rents, if any, required to be
paid by the lessee regardless of sales volume or gross revenues. The
term Rent Expense shall exclude any payments made in respect of any
Capitalized Lease.
Reportable Event shall have the meaning given to such term
----------------
in ERISA.
Required Lenders shall mean, at any time, Lenders having
----------------
at least 67% of the aggregate amount of the Loans (other than Swingline
Loans) then outstanding, or, if no Loans are then outstanding, at least
67% of the Loan Commitments.
Reserve Percentage shall mean for any day the percentage
------------------
(including any supplemental percentage applied on a marginal basis or
any other reserve requirement having a similar effect), expressed as a
decimal, which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements for Agent as a member bank of the
Federal Reserve System in St. Louis, Missouri, in respect to new
eurocurrency liabilities having a maturity comparable to the related
Interest Period. The LIBOR Rate shall be adjusted automatically on and
as of the effective date of any change in the Reserve Percentage.
Responsible Officer shall mean the chief executive
-------------------
officer, chief operating officer, chief financial officer, chief
accounting officer or any other officer of Borrowers at or above the
level of Vice President.
Restatement Effective Date shall have the meaning ascribed
--------------------------
thereto in Section 10.21.
-------------
Revolving Credit Commitment shall mean, subject to
---------------------------
reduction as set forth in Section 3.20, for each Lender the amount set
------------
forth as the Revolving Credit Commitment of such Lender next to its name
on the signature pages hereof or on the signature pages of any
subsequent Assignment Agreement to which such Lender is a party.
Revolving Credit Loan and Revolving Credit Loans shall
--------------------- ----------------------
have the meanings ascribed thereto in Section 3.1(a).
--------------
Revolving Credit Notes shall mean each of the Revolving
----------------------
Credit Notes of the Borrowers to be executed and delivered to each of
the Lenders pursuant to Section 3.1(a), as the same may from time to
--------------
time be amended, modified, extended or renewed.
Security Agreement shall mean the Amended and Restated
------------------
Security Agreement to be executed by each of the Borrowers and delivered
to Agent for the benefit of each of the Lenders pursuant to
Section 5.1, as the same may from time to time be amended, restated,
-----------
or modified.
SPHL Acquisition shall mean the acquisition by Parent of
----------------
100% of the capital stock or ownership interests of Structural Polymer
(Holdings) Limited.
19
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<PAGE>
Stated Amount of each Letter of Credit shall, at any time,
-------------
mean the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could
then be met).
Stock Offering means any issuance, sale or other offering
--------------
by the Parent or any Subsidiary of the Parent of any shares of stock or
other equity securities to any Person (other than the Parent or any
Subsidiary of the Parent), other than (a) any issuance, sale or other
offering of stock or other equity securities by a foreign (non-U.S.)
Subsidiary of the Parent, direct or indirect, which yields Net Cash
Proceeds of less than $10,000,000 in any single transaction or series of
related transactions (including a Debt Offering by a foreign (non-U.S.)
Subsidiary of any Borrower), and (b) any issuance of stock as the result
of the exercise of any stock option.
Subsidiary shall mean, with respect to any Person, any
----------
corporation, partnership, joint venture, or limited liability company of
which more than fifty percent (50%) of (i) the issued and outstanding
capital stock entitled to vote for the election of directors (other than
by reason of default in the payment of dividends) or (ii) the interest
in the capital profits of such partnership, joint venture, or limited
liability company is at the time owned or controlled, directly or
indirectly, by such Person.
Swingline Expiry Date shall mean the date which is two (2)
---------------------
Business Days prior to the expiration of the Term of this Agreement.
Swingline Loan and Swingline Loans shall have the
-------------- ---------------
meanings ascribed thereto in Section 3.2(a).
--------------
Swingline Note shall mean the Swingline Note to be
--------------
executed by Borrowers and delivered to Firstar pursuant to Section
-------
3.2(a), as the same may from time to time be amended, restated,
------
modified, extended or renewed.
Term shall have the meaning ascribed thereto in
----
Section 1.
---------
Term Loan Commitment shall mean, for each Lender the
--------------------
amount set forth as the Term Loan Commitment of such Lender next to its
name on the signature pages hereof or the signature pages of any
subsequent Assignment Agreement to which such Lender is a party.
Term Loan and Term Loans shall have the meanings
--------- ----------
ascribed thereto in Section 3.3.
-----------
Term Notes shall mean each of the Term Notes of the
----------
Borrowers to be executed and delivered to each of the Lenders pursuant
to Section 3.3, as the same may from time to time be amended,
-----------
restated, modified, extended or renewed.
Total Funded Debt shall mean as of any date, without
-----------------
duplication, the sum of (a) the outstanding principal amount of all
Revolving Credit Loans on such date (inclusive of any Revolving Credit
Loans deemed to be requested by Borrowers pursuant to Section 3.6(c)),
--------------
plus (b) the Stated Amount of all Letters of Credit issued for the
account of Borrowers or their Subsidiaries on such date (net of any
Revolving Credit Loans deemed to be requested by Borrowers
20
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<PAGE>
pursuant to Section 3.6(c)), plus (c) all other Funded Debt of the
--------------
Parent and its Consolidated Subsidiaries on such date.
Total Revolving Credit Usage shall mean at any time the
----------------------------
sum of (a) the aggregate Dollar Equivalent principal amount of all
outstanding Revolving Credit Loans (inclusive of any Revolving Credit
Loans deemed to be requested by Borrowers pursuant to Section 3.6(c)),
--------------
(b) the aggregate principal amount of all outstanding Swingline Loans,
and (c) the Stated Amount of all outstanding Letters of Credit (net of
any Revolving Credit Loans deemed to be requested by Borrowers pursuant
to Section 3.6(c)).
--------------
Transaction Documents shall mean this Agreement, the
---------------------
Notes, the Amended and Restated Security Agreement, the Amended and
Restated Pledge Agreement, the Deed of Trust, the Letter of Credit
Applications and all other agreements, documents and instruments
heretofore, now or hereafter delivered to Agent or any of the Lenders
with respect to or in connection herewith or therewith, any Loans made
hereunder, any Letters of Credit issued hereunder or any other of
Obligations, and executed by or on behalf of Borrowers, all as the same
may from time to time be amended, modified, extended or renewed.
Voting Stock shall mean, as to any Person, any class or
------------
classes of capital stock of a corporation and any and all equivalent
ownership interests in any Person (other than a corporation) pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors or
the like of such Person.
Except as otherwise specified in this Agreement, all
accounting terms used in this Agreement shall be interpreted, all
accounting determinations under this Agreement shall be made and all
financial statements required to be delivered under this Agreement shall
be prepared in accordance with generally accepted accounting principles
as in effect from time to time in the United States of America, applied
on a basis consistent (except for changes approved by Borrowers'
independent certified public accountants) with the most recent audited
financial statements of Borrowers delivered to the Lenders.
Notwithstanding the foregoing, Borrowers may from time to time change
their accounting methods, either at their option or in order to comply
with generally accepted accounting principles, provided that (a) any
such change(s) are in accordance with generally accepted accounting
principles and are approved by the independent certified public
accountants of Borrowers and (b) if Borrowers or the Required Lenders,
in good faith, determine that any such accounting change(s),
individually or in the aggregate, have any significant effect on any of
the financial covenants contained in this Agreement (i) with respect to
those financial covenant(s) upon which the effect of such accounting
change(s) can be determined with mathematical certainty, such financial
covenant(s) shall be amended to reflect the effect of such accounting
change(s) (and Borrowers, the Agent and each of the Lenders shall be
obligated to promptly execute an amendment to such effect) and (ii) with
respect to those financial covenant(s) upon which the effect of such
accounting change(s) cannot be determined with mathematical certainty,
Borrowers and the Lenders shall, in good faith, negotiate and use their
best efforts to agree upon new financial covenant(s) reasonably
acceptable to Borrowers and the Lenders to replace the affected
financial covenant(s) (which new financial covenant(s) shall, to the
extent reasonably possible, approximate the effect of such accounting
change(s) on the existing financial covenant(s)), and if Borrowers and
the Lenders cannot, in good faith, agree on said new financial
21
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<PAGE>
covenant(s), the existing financial covenant(s) shall remain in full
force and effect and shall be computed using the accounting methods in
effect prior to the applicable change in accounting methods. Each such
amendment shall be evidenced by an instrument in writing signed by
Borrowers, the Agent and each of the Lenders and until such amendment
has been fully executed the existing financial covenant(s) shall remain
in full force and effect and shall be computed using the accounting
methods in effect prior to the applicable change in accounting methods.
SECTION 3. THE LOANS.
----------------------
3.1 Revolving Credit Commitment of Lenders.
--------------------------------------
(a) Subject to the terms and conditions hereof, commencing
on the Restatement Effective Date and thereafter during the Term of this
Agreement, each Lender hereby severally agrees to make such loans in
either Dollars or one or more Optional Currencies (individually, a
"REVOLVING CREDIT LOAN" and collectively, the "REVOLVING CREDIT LOANS")
to Borrowers as Borrowers may from time to time request pursuant to
Section 3.4(a). The Total Revolving Credit Usage hereunder at any one
--------------
time shall not exceed the lesser of (i) the Borrowing Base; or
(ii) Twenty Million Dollars ($20,000,000.00), and the Dollar Equivalent
amount each Lender shall be required to have outstanding hereunder as
Revolving Credit Loans plus their undivided Pro Rata Share participation
interest in the Stated Amount of each Letter of Credit issued by Agent
under Section 3.6 shall not exceed, in the aggregate at any one time
-----------
outstanding, the lesser of (x) the amount of such Lender's Revolving
Credit Commitment or (y) such Lender's Pro Rata Share of the then
current Borrowing Base. Each Revolving Credit Loan under this
Section 3.1(a) shall be made from the several Lenders ratably in
--------------
proportion to their respective Revolving Credit Commitments. The
Revolving Credit Loans from Lenders to the Borrowers shall be evidenced
by Revolving Credit Notes of the Borrowers dated the Restatement
Effective Date and payable to the order of each of the Lenders in the
respective principal amounts of each such Lender's Revolving Credit
Commitment and in the form attached hereto as Exhibit A and
---------
incorporated herein by reference (as the same may from time to time be
amended, modified, extended or renewed, the "REVOLVING CREDIT NOTES").
Subject to the terms and conditions hereof, Borrowers may borrow, repay
and reborrow such sums from Lenders. Notwithstanding the foregoing, the
aggregate amount of Revolving Credit Loans outstanding under this
Agreement at any time which are denominated in an Optional Currency
shall not exceed Sixteen Million Dollars ($16,000,000.00).
(b) For purposes of computing the amount of Revolving
Credit Loans and Letters of Credit available under the Revolving Credit
Commitment, the "BORROWING BASE" shall mean the sum of (i) Eighty
percent (80%) of the then face amount of Eligible Accounts of the
Borrowers, plus (ii) the lesser of (A) Fifty percent (50%) of the then
----
Eligible Inventory or (B) Fifteen Million Dollars ($15,000,000.00).
(c) Parent shall deliver to Agent on the date of execution
hereof (with respect to the month ended April 30, 2000) and thereafter
within fifteen (15) days after the end of each month, a borrowing base
certificate in the form of Exhibit E attached hereto and incorporated
---------
herein by reference (a "BORROWING BASE CERTIFICATE") setting forth:
22
<PAGE>
<PAGE>
(i) the Borrowing Base and its components as of
the end of the immediately preceding month;
(ii) the calculation of the Total Revolving Credit
Usage then outstanding;
(iii) the difference, if any, between the Borrowing
Base and the Total Revolving Credit Usage.
The Borrowing Base shown in such Borrowing Base Certificate shall be and
remain the Borrowing Base hereunder until the next Borrowing Base
Certificate is delivered to Agent and each of the Lenders, at which time
the Borrowing Base shall be the amount shown in such subsequent
Borrowing Base Certificate. Each Borrowing Base Certificate shall be
certified (subject to normal year-end adjustments) as to truth and
accuracy by the President, the principal financial officer or the
principal accounting officer of the Parent.
(d) If as of any date the Total Revolving Credit Usage
should exceed the lesser of the then current Borrowing Base or the
aggregate Revolving Credit Commitments of all Lenders, whether by
reduction of the maximum aggregate Revolving Credit Commitments of all
Lenders available under Section 3.1(a) pursuant to Section 3.19,
-------------- ------------
reduction of the Borrowing Base, or otherwise, the Borrowers shall be
automatically required (without demand or notice of any kind by Agent or
any of the Lenders, all of which are hereby expressly waived by the
Borrowers) to immediately repay the Swingline Loans until they are
reduced to zero, and, if necessary, to repay the Revolving Credit Loans
in amounts sufficient to reduce such Total Revolving Credit Usage to an
amount equal to the lesser of the Borrowing Base or the aggregate
Revolving Credit Commitments of all Lenders. If the Stated Amount of
all Letters of Credit still exceeds the lesser of the then current
Borrowing Base or the aggregate Revolving Credit Commitments of all
Lenders after repayment in full of all Swingline Loans and Revolving
Credit Loans under the preceding sentence, Borrowers agree to provide
cash collateral in form and substance acceptable to Agent in an amount
sufficient to reduce the sum of (A) the Stated Amount of outstanding
Letters of Credit minus (B) the amount of such cash collateral, to an
amount which is not in excess of the lesser of the then current
Borrowing Base or the aggregate Revolving Credit Commitments in the
manner required under Section 3.6(f).
--------------
(e) Each Lender shall record in its books and records, and
prior to any transfer of its Revolving Credit Note shall endorse on the
schedules forming a part thereof, appropriate notations to evidence the
date and amount of each Revolving Credit Loan made by it during the Term
hereof, whether such Revolving Credit Loan is then a Prime Loan or a
LIBOR Loan, and the date and amount of each payment of principal and/or
interest made by Borrowers with respect thereto. Each Lender is hereby
irrevocably authorized by Borrowers to so endorse its Revolving Credit
Note and to attach to and make a part of any such Revolving Credit Note
a continuation of any such schedule as and when required; provided,
--------
however that the obligation of Borrowers to repay each Revolving
-------
Credit Loan made hereunder shall be absolute and unconditional,
notwithstanding any failure of any Lender to endorse or any mistake by
any Lender in connection with endorsement on the schedules attached to
their respective Revolving
23
<PAGE>
<PAGE>
Credit Notes. The books and records of each Lender (including, without
limitation, the schedules attached to the Revolving Credit Notes)
showing the account between such Lender and Borrowers shall be
admissible in evidence in any action or proceeding and shall constitute
prima facie proof of the items therein set forth absent manifest error.
3.2 Swingline Facility.
------------------
(a) Subject to the terms and conditions hereof, Firstar,
for itself alone, agrees from time to time on any Business Day,
commencing on the Restatement Effective Date and thereafter during the
Term of this Agreement but prior to the Swingline Expiry Date, to make
such loans (individually, a "SWINGLINE LOAN" and collectively, the
"SWINGLINE LOANS") to the Borrowers as the Borrowers may from time to
time request pursuant to Section 3.4(b). The aggregate principal
--------------
amount of Swingline Loans outstanding at any one time shall not exceed
the Maximum Swingline Amount and the Total Revolving Credit Usage shall
not at any one time exceed the lesser of (i) the Borrowing Base or (ii)
the Revolving Credit Commitment. The Swingline Loans from Firstar to
the Borrowers shall be evidenced by a single Swingline Note of the
Borrowers dated the Restatement Effective Date and payable to the order
of Firstar in the amount of the Maximum Swingline Amount and in the form
attached hereto as Exhibit B and incorporated herein by reference (as
---------
the same may from time to time be amended, modified, extended or
renewed, the "SWINGLINE NOTE"). Subject to the terms and conditions
hereof, the Borrowers may borrow, repay and reborrow such Swingline
Loans from Firstar.
(b) On any Business Day, Firstar may, in its sole
discretion, give notice to the Lenders that its outstanding Swingline
Loans shall be funded with a borrowing of Revolving Credit Loans
(provided that such notice shall be deemed to have been automatically
--------
given upon the occurrence of a Default or an Event of Default under
Sections 8.6 or 8.7, upon the termination of the obligations of the
------------ ---
Lenders to make Loans and for Agent to issue Letters of Credit after the
occurrence of an Event of Default, or upon the acceleration of all of
the Obligations after the occurrence of an Event of Default), in which
case a borrowing of Revolving Credit Loans constituting Prime Loans
(each such Borrowing, a "MANDATORY BORROWING") shall be made on the
immediately succeeding Business Day by all Lenders with a Revolving
Credit Commitment pro rata based on each Lender's Pro Rata Share and
--- ----
the proceeds thereof shall be paid directly to Firstar to repay Firstar
for such outstanding Swingline Loans. Each such Lender hereby
irrevocably agrees to make Revolving Credit Loans upon one Business
Day's notice pursuant to each Mandatory Borrowing in the amount and in
the manner specified in the preceding sentence and on the date specified
in writing by Firstar notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the minimum amount for
Borrowings otherwise required hereunder, (ii) whether any conditions
specified in Section 4 are then satisfied, (iii) whether a Default or
---------
an Event of Default then exists, (iv) the date of such Mandatory
Borrowing and (v) the amount of the aggregate Revolving Credit
Commitment at such time; provided that, in no event shall such Lender
--------
be required to make Revolving Credit Loans in excess of such Lender's
Revolving Credit Commitment. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to any of the
Borrowers), then each such Lender hereby agrees that it shall forthwith
purchase (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrowers on
or after such date and prior to such purchase) from Firstar such
participations in the outstanding
24
<PAGE>
<PAGE>
Swingline Loans as shall be necessary to cause such Lender to share in
such Swingline Loans ratably based upon its respective Pro Rata Share,
provided that (x) all interest payable on the Swingline Loans shall be
--------
for the account of Firstar until the date as of which the respective
participation is required to be purchased and, to the extent
attributable to the purchased participation, shall be payable to the
participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the
purchasing Lender shall be required to pay Firstar interest on the
principal amount of participation purchased for each day from and
including the day upon which the Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such
participation, at the effective rate charged to the Agent for overnight
federal funds transactions with members of the Federal Reserve System
for each day as determined by the Agent for the first three days and at
the rate otherwise applicable to Revolving Credit Loans maintained as
Prime Loans hereunder for each day thereafter.
3.3 Term Loan Commitment of Lenders.
-------------------------------
(a) Subject to the terms and conditions hereof, each
Lender hereby severally agrees to continue as a term loan hereunder the
term loan made by such Lender pursuant to the Existing Credit Agreement
and outstanding on the Restatement Effective Date (collectively, the
"TERM LOAN"). The aggregate principal amount of the Term Loan shall not
exceed Thirty Four Million One Hundred Twenty Five Thousand Dollars
($34,125,000.00) (the "TERM LOAN COMMITMENT"), and the amount of the
Term Loan which each Lender shall be required to make shall be the
amount of such Lender's Term Loan Commitment. The Term Loan from the
Lenders to the Borrowers shall be evidenced by Term Notes of the
Borrowers dated the Restatement Effective Date and payable to the order
of each of the Lenders in the then current respective outstanding
principal amounts of each such Lender's Term Loan Commitment and in the
form attached hereto as Exhibit C and incorporated herein by reference
---------
(as the same may from time to time be amended, modified, extended or
renewed, the "TERM NOTES"). The Term Notes shall mature on November
18, 2005, unless earlier terminated by acceleration or otherwise upon
the occurrence of an Event of Default under this Agreement. Subject to
any such earlier maturity by reason of acceleration or otherwise,
Borrowers shall, on the first day of each March, June, September and
December during the Term hereof, and on November 18, 2005, make a
scheduled repayment of the outstanding principal amount of the Term Loan
in the amount set forth opposite each such date:
AMOUNT OF REQUIRED
DATE PRINCIPAL PAYMENT
---- ------------------
June 1, 2000 $875,000
September 1, 2000 $875,000
December 1, 2000 $875,000
March 1, 2001 $1,250,000
June 1, 2001 $1,250,000
September 1, 2001 $1,250,000
December 1, 2001 $1,250,000
25
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<PAGE>
March 1, 2002 $1,500,000
June 1, 2002 $1,500,000
September 1, 2002 $1,500,000
December 1, 2002 $1,500,000
March 1, 2003 $1,625,000
June 1, 2003 $1,625,000
September 1, 2003 $1,625,000
December 1, 2003 $1,625,000
March 1, 2004 $1,750,000
June 1, 2004 $1,750,000
September 1, 2004 $1,750,000
December 1, 2004 $1,750,000
March 1, 2005 $1,750,000
June 1, 2005 $1,750,000
September 1, 2005 $1,750,000
November 18, 2005 $1,750,000
(b) Each Lender shall record in its books and records, and
prior to any transfer of its Term Note shall endorse on the schedules
forming a part thereof, appropriate notations to evidence the date and
amount of its Pro Rata Share of the Term Loan made by the Lenders,
whether the Term Loan is then a Prime Loan or a LIBOR Loan, and the date
and amount of each payment of principal and/or interest made by
Borrowers with respect thereto. Each Lender is irrevocably authorized
by Borrowers so to endorse its Term Note and to attach to and make a
part of any such Term Note a continuation of any such schedule as and
when required; provided, however, that the obligation of Borrowers
-------- -------
to repay the Term Loan made hereunder shall be absolute and
unconditional, notwithstanding any failure of any Lender to endorse or
any mistake by any Lender in connection with endorsement on the
schedules attached to their respective Term Notes. The books and
records of each Lender (including, without limitation, the schedules
attached to the Term Notes) showing the account between such Lender and
Borrowers shall be admissible in evidence in any action or proceeding
and shall constitute prima facie proof of the items therein set forth
absent manifest error.
3.4 Procedure for Borrowing.
-----------------------
(a) Revolving Credit Loan Advances.
------------------------------
(i) Subject to the terms and conditions hereof,
Lenders shall cause the Revolving Credit Loans to be made to
Borrowers at any time and from time to time during the Term of
this Agreement, upon timely prior oral or written notice
("BORROWING NOTICE") to Agent specifying: (A) the currency in
which such Revolving Credit Loan shall be funded by Agent to
Borrowers, (B) the desired amount of the new Revolving Credit
Loan, (C) the date on which the Revolving Credit Loan proceeds are
to be made available to Borrowers, which shall be a Business Day,
and (D) whether such Revolving Credit Loan is to be a
26
<PAGE>
<PAGE>
Prime Loan or a LIBOR Loan, and if a LIBOR Loan, the applicable
Interest Period therefor. Each Borrowing Notice, if in writing,
shall be in the form of the notice attached hereto as Exhibit D,
---------
and any oral request made by the Borrowers shall be confirmed by
the Borrowers by the delivery of a written Borrowing Notice in the
form of Exhibit D to Agent not later than the close of business
---------
on the next succeeding Business Day. Each Borrowing Notice for a
Prime Loan must be received by Agent not later than 11:00 a.m.
(St. Louis time) on the Business Day on which a Prime Loan is to
be made. Each Borrowing Notice for a LIBOR Loan in Dollars must
be received by Agent not later than 11:00 a.m. (St. Louis time)
three (3) Business Days in advance of the Business Day on which
such LIBOR Loan is to be made. Each Borrowing Notice for a LIBOR
Loan in an Optional Currency must be received by the Agent not
later than 11:00 a.m. (St. Louis time) four (4) Business Days in
advance of the Business Day on which such LIBOR Loan in an
Optional Currency is to be made.
(ii) Upon receipt of a Borrowing Notice, Agent
shall promptly notify each Lender on the date of receipt of such
Borrowing Notice by Agent specifying (A) the proposed date of
borrowing and the time and method of disbursement of such
Revolving Credit Loans, (B) the aggregate amount, type and
currency of such Revolving Credit Loan and the applicable Interest
Period (if any), (C) if the Revolving Credit Loan is to be
denominated in an Optional Currency, the designated Funding Office
for such Revolving Credit Loans, and (D) such Lender's Pro Rata
Share (in Dollars, as calculated by Agent) of the Revolving Credit
Loan. A Borrowing Notice shall not be revocable by Borrowers.
Subject to the provisions of Section 3.20(b), each Lender shall
---------------
make available its Pro Rata Share of such Revolving Credit Loan in
Dollars in immediately available funds to Agent at the designated
Funding Office not later than 1:30 p.m. (St. Louis time) on the
date of each new Revolving Credit Loan such that the Agent is able
to fund such Revolving Credit Loans (in the requested currency) to
Borrowers. Agent shall not be required to make any amount
available to Borrowers hereunder except to the extent it shall
have received such amount from the Lenders as set forth herein,
provided, however, that unless Agent shall have been notified
-------- -------
by a Lender prior to the time a Revolving Credit Loan is to be
made hereunder that such Lender does not intend to make its Pro
Rata Share of such Revolving Credit Loan available to Agent, Agent
may assume that such Lender has made such Pro Rata Share available
to Agent on such date, and Agent may, in reliance upon such
assumption, make available to the Borrowers a corresponding
amount. If such corresponding amount is not in fact made
available to Agent by such Lender and Agent has made such amount
available to the Borrowers, Agent shall be entitled to receive
such amount from such Lender forthwith upon its demand, together
with interest thereon in respect of each day during the period
commencing on the date such amount was made available to the
Borrowers and ending on but excluding the date Agent recovers such
amount from the Lender at a rate per annum equal to the effective
rate charged to Agent for overnight federal funds transactions
with members of the Federal Reserve System for each day as
determined by Agent (or in the case of a day which is not a
Business Day, then for the preceding day). Subject to the terms
and conditions hereof, provided that Agent has received a timely
Borrowing Notice, Agent shall (unless Agent determines that any
applicable conditions specified in Section 4 have not been
---------
satisfied) make the funds so received from the Lenders available
to Borrowers at the designated Funding Office not later
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<PAGE>
than 2:00 p.m. (local time with respect to such Funding Office) on
the Business Day specified in said Borrowing Notice in accordance
with any instructions for such disbursement received from the
Borrowers.
(iii) The Borrowers hereby authorize Agent and
Lenders to rely on telephonic, telegraphic, telecopy, telex or
written instructions of any Person identifying himself or herself
as Zsolt Rumy, Daniel Greenwell or James Burch (or any other
individual from time to time authorized to act on behalf of the
Borrowers pursuant to a resolution adopted by the Board of
Directors of the respective Borrowers and certified by the
Secretary of each such Borrower and delivered to Agent) with
respect to any request to make a Loan or a repayment hereunder,
and on any signature which Agent or any of the Lenders in good
faith believe to be genuine, and the Borrowers shall be bound
thereby in the same manner as if such Person were actually
authorized or such signature were genuine. Borrowers also hereby
agree, jointly and severally, to indemnify Agent and Lenders and
hold Agent and Lenders harmless from and against any and all
claims, demands, damages, liabilities, losses, costs and expenses
(including, without limitation, Attorneys' Fees) relating to or
arising out of or in connection with the acceptance of
instructions for making Revolving Credit Loans or making
repayments hereunder unless such acceptance results from the gross
negligence or willful misconduct of Agent or a Lender, as
determined by a court of competent jurisdiction.
(b) Swingline Loan Advances
-----------------------
(i) Whenever the Borrowers desire to make a
borrowing of Swingline Loans hereunder, the Borrowers shall
deliver to Firstar not later than 1:00 P.M. (St. Louis time) on
the date that a Swingline Loan is to be made, a Borrowing Notice
for each Swingline Loan to be made hereunder. Each such notice
shall be irrevocable and specify in each case (A) the date of
borrowing (which shall be a Business Day) and (B) the aggregate
principal amount of the Swingline Loan to be made pursuant to such
borrowing. In the event of a Swingline Borrowing, Firstar will
make funds in an amount equal to the applicable Swingline Loan
available to the Borrowers at Firstar's address.
(ii) Mandatory Borrowings shall be made upon the
notice specified in Section 3.2(b), with the Borrowers
--------------
irrevocably agreeing, by their incurrence of any Swingline Loan,
to the making of the Mandatory Borrowings as set forth in Section
-------
3.2(b).
------
(c) Disbursement of Term Loan. The Term Loan was
-------------------------
disbursed, in full, on November 19, 1999. The Borrowers hereby
authorize Agent and Lenders to rely on telephonic, telegraphic,
telecopy, telex or written instructions of any Person identifying
himself or herself as Zsolt Rumy, Daniel Greenwell or James Burch (or
any other individual from time to time authorized to act on behalf of
the Borrowers pursuant to a resolution adopted by the Board of Directors
of the respective Borrowers and certified by the Secretary of the
Borrowers and delivered to Agent) to make a repayment hereunder, and on
any signature which Agent or any of the Lenders in good faith believe to
be genuine, and the Borrowers shall be bound thereby in the same manner
as if such Person were actually authorized or such signature were
genuine. Borrowers also hereby agree, jointly and severally, to
indemnify Agent and the Lenders and hold Agent and the Lenders
28
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harmless from and against any and all claims, demands, damages,
liabilities, losses, costs and expenses (including, without limitation,
Attorneys' Fees) relating to or arising out of or in connection with the
acceptance of instructions for repayments or for converting the Term
Loan hereunder, unless such acceptance results from the gross negligence
or willful misconduct of Agent or a Lender, as determined by a court of
competent jurisdiction.
(d) Interest Rate Conversions.
-------------------------
(i) Subject to the terms and conditions hereof,
Lenders shall permit the Borrowers to convert all or any portion
of the outstanding Loans (other than Loans denominated in an
Optional Currency and Swingline Loans) from a Prime Loan to a
LIBOR Loan or from a LIBOR Loan to a Prime Loan, and Lenders shall
permit the Borrowers to request a new Interest Period for any
existing LIBOR Loan (including Loans denominated in an Optional
Currency) at the end of its then current Interest Period, upon
timely oral or written notice ("CONVERSION NOTICE") to Agent, in
writing signed by the authorized representative of the Borrowers
(including any such notice by facsimile transmission) specifying:
(A) the amount of the outstanding Loan being converted to a new
interest rate basis, or the amount of the LIBOR Loan being
continued as a LIBOR Loan for a new Interest Period, (B) the
applicable interest rate option being selected, (C) if a LIBOR
Loan is requested, the Interest Period, which in no event shall
extend beyond the last day of the Term hereof, and (D) the
effective date, which shall be a Business Day, and if pertaining
to an existing LIBOR Loan, shall also be the last day of the then
current Interest Period. Each Conversion Notice must be received
by Agent not later than 11:00 a.m. (St. Louis time) on the
Business Day on which a conversion to a Prime Loan is to be made,
and not later than 11:00 a.m. (St. Louis time) on the third (3rd)
Business Day prior the Business Day on which a conversion to a
LIBOR Loan denominated in Dollars is to be made. Each Conversion
Notice for extension of an existing LIBOR Loan denominated in
Dollars for a new Interest Period must be received by Agent not
later than 11:00 a.m. (St. Louis time) on the third (3rd) Business
Day prior to the last day of the then current Interest Period and
for an extension of an existing LIBOR Loan denominated in an
Optional Currency for a new Interest Period must be received by
the Agent not later than 11:00 a.m. (St. Louis time) on the fourth
(4th) Business Day prior to the last day of the then current
Interest Period. Any oral notice furnished by the Borrowers shall
be confirmed by the Borrowers by the delivery of a written
Conversion Notice to Agent (at its request) not later than the
close of business on the next succeeding Business Day. Upon
receipt of a Conversion Notice given to it, Agent shall notify
each Lender by 12:00 noon (St. Louis time) on the date of receipt
of such Conversion Notice by Agent of the contents thereof.
Unless the Borrowers shall have otherwise requested Agent to
notify the Lenders to continue an existing LIBOR Loan denominated
in Dollars for a new Interest Period in a timely Conversion
Notice, upon the expiration of the current Interest Period any
LIBOR Loan denominated in Dollars made in relation to such
Interest Period and then outstanding shall bear interest at the
Prime Rate plus the Applicable Margin from and after the
expiration of such Interest Period unless and until subsequently
converted in accordance with the terms of this Section 3.4(d).
--------------
Unless the Borrowers shall have otherwise requested Agent to
notify Lenders to continue an existing LIBOR Loan denominated in
an Optional Currency for a new interest period in a timely
Conversion Notice, upon expiration of the current Interest Period,
any LIBOR Loan
29
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<PAGE>
denominated in an Optional Currency made in relation to such
Interest Period and then outstanding shall be redenominated into a
Prime Loan in Dollars and shall bear interest at the Prime Rate
plus the Applicable Margin from and after the expiration of such
Interest Period. A Conversion Notice shall not be revocable by
the Borrowers.
(ii) Subject to Section 3.20(c) and to the other
---------------
terms and conditions hereof, provided that Agent has timely
received the Conversion Notice, Lenders shall (unless Agent
determines that any applicable condition specified in Section 4
---------
has not been satisfied) convert the interest rate on the portion
of the outstanding Loan (other than a Loan denominated in an
Optional Currency and a Swingline Loan) as directed by the
Borrowers in the Conversion Notice, or Lenders shall extend any
LIBOR Loan for a new Interest Period as directed by the Borrowers
in the Conversion Notice, at 2:00 p.m. (St. Louis time) on the
Business Day specified in said Conversion Notice; provided,
--------
however, that notwithstanding the foregoing, in addition to and
-------
without limiting the rights and remedies of Agent and the Lenders
under Section 8 hereof, so long as any Default or Event of
---------
Default under this Agreement has occurred and is continuing,
Borrowers shall not be permitted to renew any LIBOR Loan as a
LIBOR Loan or to convert any Prime Loan into a LIBOR Loan.
(iii) The Borrowers hereby authorize Agent and the
Lenders to rely on telephonic, telegraphic, telecopy, telex or
written instructions of Zsolt Rumy, Daniel Greenwell or James
Burch (or any other individual from time to time authorized to act
on behalf of the Borrowers pursuant to a resolution adopted by the
Board of Directors of the respective Borrowers and certified by
the Secretary of each such Borrower and delivered to Agent) to
request a conversion of a Loan (other than a Loan denominated in
an Optional Currency and a Swingline Loan), or to continue a LIBOR
Loan hereunder, and on any signature which Agent or any of the
Lenders in good faith believe to be genuine, and the Borrowers
shall be bound thereby in the same manner as if such Person were
actually authorized or such signature were genuine. The Borrowers
also hereby agree, jointly and severally, to indemnify Agent and
the Lenders and hold Agent and the Lenders harmless from and
against any and all claims, demands, damages, liabilities, losses,
costs and expenses (including, without limitation, Attorneys'
Fees) relating to or arising out of or in connection with the
acceptance of instructions for converting Loans to a new interest
rate basis or continuing LIBOR Loans hereunder unless such
acceptance results from the gross negligence or willful misconduct
of Agent or a Lender as determined by a court of competent
jurisdiction. A Conversion Notice shall not be required in
connection with a Prime Loan made pursuant to Sections 3.9,
------------
3.10 or 3.11.
---- ----
3.5 Minimum Draw-Down. Each LIBOR Loan denominated in
-----------------
Dollars shall be for an aggregate principal amount of not less than
$1,000,000.00 and shall be in multiples of $250,000.00, and each LIBOR
Loan denominated in an Optional Currency shall be in an amount of such
Optional Currency reasonably comparable to the minimum amount specified
for Revolving Credit Loans denominated in Dollars as shall be advised by
the Agent in light of the prevailing market conditions and conventions
at the time such Revolving Credit Loan proceeds are to be made available
to the Borrowers. Except for Swingline Loans, each Prime Loan shall be
for an aggregate principal amount of not less than $100,000.00 and shall
be in multiples of $50,000.00. Each
30
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<PAGE>
Swingline Loan shall be a Prime Loan, shall be for an aggregate
principal amount of not less than $50,000.00 and shall be in multiples
of $10,000.00 (except that any Swingline Loan may be in the aggregate
amount of the unused portion of the Maximum Swingline Amount).
3.6 Letters of Credit.
-----------------
(a) Subject to the terms and conditions of this Agreement,
during the Term of this Agreement, and so long as no Default or Event of
Default under this Agreement has occurred and is continuing (provided,
however, that Agent shall have no liability to any of the Lenders for
issuing a Letter of Credit after the occurrence of any Default or Event
of Default under this Agreement unless Agent has previously received
notice in writing to Agent by Borrowers or any of the Lenders of the
occurrence of such Default or Event of Default), Agent hereby agrees to
issue irrevocable standby and commercial letters of credit for the
account of Borrowers (individually, a "LETTER OF CREDIT" and
collectively, the "LETTERS OF CREDIT") in an amount and for the term
specifically requested by Borrowers by application in writing to Agent
in the form of Exhibit F in the case of a standby Letter of Credit or
---------
in the form of Exhibit G in the case of a commercial Letter of Credit,
---------
each as attached hereto and incorporated herein by reference (a "LETTER
OF CREDIT APPLICATION") at least three (3) Business Days prior to the
requested issuance thereof; provided, however, that:
-------- -------
(i) Borrowers shall have executed and delivered to
Agent a Letter of Credit Application with respect to such Letter
of Credit;
(ii) the term of any such Letter of Credit shall
not extend beyond the earlier of (A) the last day of the Term
hereof, or (B) the date one (1) year after the date of issuance
thereof, provided, however, that any such Letter of Credit may
-------- -------
be renewable on terms satisfactory to Agent; and
(iii) the aggregate Stated Amount of all outstanding
Letters of Credit shall not at any one time exceed Five Million
Dollars ($5,000,000.00) (or the Equivalent Amount in another
currency) and the amount of the Total Revolving Credit Usage shall
not at any one time exceed the lesser of (a) the Borrowing Base or
(b) the Revolving Credit Commitment; and
(iv) the text of any such Letter of Credit is
provided to Agent no less than three (3) Business Days prior to
the requested issuance date, which text must be acceptable to
Agent in its sole and absolute good faith discretion.
On the Restatement Effective Date, all Existing Letters of Credit shall
be deemed to have been issued under this Agreement and shall for all
purposes constitute "Letters of Credit" hereunder.
(b) The payment of drafts under each Letter of Credit
shall be made in accordance with the terms thereof and, in that
connection, Agent shall be entitled to honor any drafts and accept any
documents presented to it by the beneficiary of such Letter of Credit in
accordance with the terms of such Letter of Credit and believed in good
faith by Agent to be genuine. Agent shall not have any duty to inquire
as to the accuracy or authenticity of any draft or
31
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<PAGE>
other drawing document that may be presented to it other than the duties
contemplated by the applicable Letter of Credit Application. If Agent
shall have received documents that in its judgment constitute all of the
documents that are required to be presented before payment or acceptance
of a draft under a Letter of Credit, it shall be entitled to pay such
draft.
(c) In the event of any payment by Agent of a draft
presented or accepted under a Letter of Credit, Borrowers agree to pay
to Agent in immediately available funds at the time of such drawing an
amount equal to the sum of such drawing plus Agent's customary
----
processing and other fees related thereto. Borrowers hereby authorize
Agent to charge or cause to be charged to Borrowers' bank accounts at
Agent to the extent there are balances of immediately available funds
therein, in an amount equal to the sum of such drawing plus Agent's
----
customary processing and other fees related thereto, and Borrowers agree
to pay the amount of any such drawing (and/or Agent's negotiation,
processing and other fees related thereto) not so charged prior to the
close of business of Agent on the day of such drawing. In the event any
payment under a Letter of Credit is made by Agent prior to receipt of
payment from Borrowers, such payment by Agent shall constitute a request
by Borrowers for a Revolving Credit Loan as a Prime Loan under
Section 3.1(a) above.
--------------
(d) (i) Borrowers shall also pay to Agent, for its own
account, with respect to each Letter of Credit, a nonrefundable
issuance fee in the amount of Forty Dollars ($40.00) for each
commercial Letter of Credit and One Hundred Twenty Five Dollars
($125.00) for each standby Letter of Credit, (collectively, the
"LETTER OF CREDIT ISSUANCE FEE"), which Letter of Credit Issuance
Fee shall be due and payable on the date of issuance of each
Letter of Credit, and such other fees as Agent may from time to
time customarily charge in accordance with Agent's published
schedule of fees in effect from time to time, which fees shall be
due and payable on demand by Agent;
(ii) Borrowers shall pay to Agent for the ratable
account of the Lenders with respect to each standby Letter of
Credit, for the period during which such standby Letter of Credit
is outstanding, a nonrefundable Letter of Credit commission fee at
a rate per annum equal to the Applicable Margin for LIBOR Loans in
effect for each such fiscal quarter (calculated on an actual day,
360-day year basis) times the Stated Amount (taking into account
any scheduled increases or decreases therein during the fiscal
quarter in question) of each standby Letter of Credit issued
hereunder ("LETTER OF CREDIT COMMISSION FEE"), which Letter of
Credit Commission Fee shall be due and payable on the date of
issuance for each standby Letter of Credit issued hereunder, in
each case prorated for the remainder of the then current quarter,
and such Letter of Credit Commission Fee shall also be payable
thereafter for all outstanding standby Letters of Credit quarterly
in advance on each March 1, June 1, September 1 and December 1
during the Term hereof; and
(iii) Borrowers shall pay to Agent for the ratable
account of the Lenders with respect to each commercial Letter of
Credit a nonrefundable Letter of Credit negotiation fee in an
amount equal to Three Eighths of One Percent (0.375%) of each draw
on such commercial Letter of Credit ("LETTER OF CREDIT NEGOTIATION
FEE"), which fee shall not be less than Seventy Five Dollars
($75.00) per individual drawing under each commercial Letter of
Credit, and which Letter of Credit Negotiation Fee shall be due
and
32
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<PAGE>
payable upon the presentation of documents to the Agent by the
beneficiary of such commercial Letter of Credit (or its agent) in
connection with a request for payment under such commercial Letter
of Credit (whether or not such requested payment is made by the
Agent). Accrued Letter of Credit Negotiation Fees paid by
Borrowers shall be distributed to the Lenders on each March 1,
June 1, September 1 and December 1, beginning March 1, 2000.
(e) Upon the issuance of a Letter of Credit by Agent, an
undivided participation interest therein (including, without limitation,
an undivided participation interest in the reimbursement risk relating
to such Letter of Credit and in all payments and Revolving Credit Loans
made in connection with such Letter of Credit) shall automatically be
granted by Agent to and accepted by each of the Lenders in an amount
based on each Lender's Pro Rata Share of the face amount of such Letter
of Credit, which participation shall be evidenced by a single Letter of
Credit Participation Certificate executed by Agent in favor of such
Lender in the form attached hereto as Exhibit H and incorporated
---------
herein by reference. Agent agrees to provide each Lender with a copy of
each Letter of Credit issued hereunder. If Agent shall make payment on
any draft presented or accepted under a Letter of Credit, Agent shall
give notice of such payment to the Lenders, and each of the Lenders
hereby authorizes and requests Agent to advance for their respective
accounts, pursuant to the terms hereof, their respective shares of any
such payment based upon their respective Pro Rata Shares. If a Default
or Event of Default has occurred hereunder and if such drawing is not
paid by Borrowers in immediately available funds prior to the close of
business of Agent on the date of such drawing, Agent shall promptly so
notify the Lenders and each of the Lenders agrees to immediately
reimburse Agent in immediately available funds for its Pro Rata Share of
the amount of such drawing, plus interest calculated on its Pro Rata
Share of such amount at a rate per annum equal to the effective rate
charged to Agent for overnight federal funds transactions with member
banks of the Federal Reserve System calculated from the date of such
payment by Agent to but excluding the date of reimbursement by such
other Lender and on an actual-day, 360-day year basis. Each of the
Lenders will be entitled to its Pro Rata Share of any Letter of Credit
Commission Fees and Letter of Credit Negotiation Fees paid by Borrowers.
(f) Notwithstanding any provision contained in this
Agreement or any of the Letter of Credit Applications to the contrary:
(i) if any of the Letters of Credit remain outstanding on the last day
of the Term of this Agreement, Borrowers shall, on or before 12:00 noon
(St. Louis time) on the last day of the Term of this Agreement, (A)
surrender the originals of the applicable Letter(s) of Credit to Agent
for cancellation or (B) provide Agent with cash collateral (or other
collateral acceptable to the Required Lenders in their sole and absolute
discretion) in an amount at least equal to the aggregate Stated Amount
of all Letter(s) of Credit which remain outstanding at such time and
execute and deliver to Agent such agreements as the Required Lenders may
reasonably require to grant Agent a first priority perfected security
interest in such cash or other collateral; and (ii) upon the occurrence
of any Event of Default under this Agreement (including, without
limitation, Borrower's failure to comply with the requirements of clause
(i) above), at Agent's option and without demand or further notice to
Borrowers, an amount equal to the aggregate Stated Amount of all
Letter(s) of Credit then outstanding shall be deemed (as between Agent
and Borrowers) to have been paid or disbursed by Agent (notwithstanding
that such amounts may not in fact have been so paid or disbursed by
Agent), and a Revolving Credit Loan to Borrowers in such amount to have
been made and accepted by Borrowers, which Revolving Credit
33
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<PAGE>
Loan shall be immediately due and payable. In lieu of the foregoing, at
the election of Agent, Borrowers shall, upon Agent's demand, deliver to
Agent cash, or other collateral acceptable to the Required Lenders in
their sole and absolute discretion, having a value, as determined by the
Required Lenders, at least equal to the aggregate Stated Amount of all
outstanding Letters of Credit and execute and deliver to Agent such
agreements as the Required Lenders may reasonably require to grant Agent
a first priority perfected security interest in such cash or other
collateral. Any such collateral and/or any amounts received by Agent in
payment of the Revolving Credit Loan made pursuant to this Section
-------
3.6(f) shall be held by Agent in a separate account at Agent
------
appropriately designated as a cash collateral account in relation to
this Agreement and the Letters of Credit and retained by Agent as
collateral security for the payment of the Obligations. Cash amounts
delivered to Agent pursuant to the foregoing requirements of this
Section 3.6(f) shall be invested, at the request and for the account
--------------
of Borrowers, in investments of a type and nature and with a term
reasonably acceptable to the Required Lenders. Such amount, including
in the case of cash amounts invested in the manner set forth above, any
interest realized thereon may be applied to reimburse Agent for drawings
or payments under or pursuant to the Letters of Credit which Agent has
paid, or if no such reimbursement is required, to the payment of such
other of Obligations as Agent shall determine. Any amounts remaining in
any cash collateral account established pursuant to this Section
-------
3.6(f) after payment in full of all of the Obligations and the
------
expiration or cancellation of all of the Letters of Credit shall be
returned to Borrowers (after deduction of Agent's reasonable expenses,
if any).
(g) In the event of any inconsistency or conflict between
this Agreement and any of the Letter of Credit Applications, the terms
and provisions of this Agreement shall govern and control.
3.7 Interest Rates and Payments.
---------------------------
(a) Each Loan (other than a Loan to be made in an Optional
Currency or a Swingline Loan) shall bear interest prior to maturity at a
rate per annum equal to such of the following as the Borrowers, at their
option, shall select in accordance with Section 3.4: (i) the Prime
-----------
Rate plus the Applicable Margin, which rate shall fluctuate as and when
said Prime Rate or said Applicable Margin shall change, or (ii) the
LIBOR Rate plus the Applicable Margin, determined in the case of LIBOR
Loans as of the date of the commencement of the applicable Interest
Period. Each LIBOR Loan made in an Optional Currency shall bear
interest prior to maturity at a rate per annum equal to the LIBOR Rate
plus the Applicable Margin, determined as of the date of the
commencement of the applicable Interest Period. Each Swingline Loan
shall bear interest prior to maturity at a rate per annum equal to the
Prime Rate plus the Applicable Margin, which rate shall fluctuate as and
when said Prime Rate or Applicable Margin shall change. Accrued
interest on all Prime Loans shall be payable monthly in arrears on the
first day of each calendar month during the Term, commencing on the
first such date after such Loan is made. Accrued interest on all LIBOR
Loans shall be payable in arrears on the last day of the Interest Period
applicable to each such LIBOR Loan, and if any such Interest Period
exceeds three months, all accrued and unpaid interest shall be due and
payable on the date three months following the commencement of such
Interest Period as well. Interest on the principal amount of each Loan
made in an Optional Currency shall be paid by the Borrowers in such
Optional Currency. In addition, all
34
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<PAGE>
accrued interest on all Loans shall be payable on the last day of the
Term hereof, whether by reason of acceleration or otherwise.
(b) Upon the occurrence and during the continuance of an
Event of Default, the principal balance of and, to the extent permitted
by law, any overdue interest on any Prime Loan shall bear interest,
payable on demand, for each day until paid, at a rate per annum equal to
Two Percent (2.00%) over and above the Prime Rate, fluctuating as and
when said Prime Rate shall change. Upon the occurrence and during the
continuance of an Event of Default, the principal balance of and, to the
extent permitted by law, any overdue interest on any LIBOR Loan shall
bear interest, payable on demand, for each day during the applicable
Interest Period until paid, at a rate per annum equal to the sum of Two
Percent (2.00%) plus the LIBOR Rate plus the Applicable Margin for such
LIBOR Loan, and after the expiration of such Interest Period, such Loan
shall thereafter bear interest at the default rate applicable to Prime
Loans under the preceding sentence. From and after the maturity of the
Notes, whether by reason of acceleration or otherwise, the unpaid
principal balance of each Loan shall bear interest until paid, payable
on demand, at a rate per annum equal to Two Percent (2.00%) over and
above the Prime Rate, fluctuating as aforesaid.
(c) Interest shall be computed with respect to all Loans
on an actual day, 360-day year basis. The Borrowers shall be permitted
to have no more than six (6) LIBOR Loans outstanding at any one time.
(d) Agent (or Firstar, in the event of Swingline Loans)
shall determine each interest rate applicable to the Loans hereunder as
selected by Borrowers pursuant to Section 3.4. Agent shall give
-----------
prompt notice to Borrowers and the Lenders by telephone, telecopy,
telex or cable of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest
error. Agent shall, at the request of the Borrowers, deliver to the
Borrowers a statement showing the computations used by Agent in
determining the LIBOR Rate.
(e) A portion of the interest payable by the Borrowers in
respect of each LIBOR Loan denominated in an Optional Currency in an
amount equal to the amount of interest which would have accrued on such
Loan had such Loan been a LIBOR Loan denominated in Dollars shall be
deemed to be paid by the Borrowers to Agent for the account of each
Lender, to be distributed ratably to the Lenders on the date of such
interest payment. The balance of such interest payment (the "HEDGING
FEE") shall be retained by the Agent as compensation to the Agent for
the cost of such foreign currency hedging mechanisms it may elect to
utilize, if any, from time to time in connection with Loans denominated
in an Optional Currency.
3.8 Prepayment; Funding Losses. Borrowers shall be
--------------------------
privileged to prepay all at any time or any portion from time to time of
the unpaid principal balance of any Loan in accordance with the terms of
Section 3.17. If the Borrowers make any payment with respect to any
------------
LIBOR Loan on any day other than the last of the Interest Period
applicable thereto (whether by reason of acceleration, a voluntary
prepayment, a required prepayment under this Agreement or otherwise), or
if the Borrowers convert any LIBOR Loan or portion thereof to a Prime
Loan on any day other than the last day of the Interest Period
applicable thereto (whether by reason of Section 3.10, 3.11 or
------------ ----
otherwise), or if the Borrowers fail to borrow any LIBOR Loan after the
request of such a loan has been given to Agent pursuant hereto, the
Borrowers shall reimburse each of the Lenders on demand
35
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<PAGE>
for any resulting losses and expenses incurred by any such Lender,
including, without limitation any losses incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss
of margin for the period after such payment or conversion, provided
--------
that such Lender shall have delivered to the Borrowers a certificate,
with supporting calculations, as to the amount of such losses and
expenses, which certificate shall be conclusive in the absence of
manifest error.
3.9 Basis for Determining Interest Rate Inadequate or
-------------------------------------------------
Unfair. If with respect to any Interest Period:
------
(a) By reason of circumstances affecting the London
interbank eurocurrency market, adequate and fair means do not exist for
ascertaining the rate of interest payable pursuant to Section 3.7 in
-----------
respect of a LIBOR Loan for such Interest Period, or
(b) any Lender determines that deposits in the relevant
amount of Dollars or in the relevant amount of the Optional Currency (as
applicable) are not being offered to such Lender in the relevant London
interbank eurocurrency market for such Interest Period, or
(c) any Lender determines that the LIBOR Rate will not
adequately and fairly reflect the cost to such Lender of maintaining or
funding the LIBOR Loans for such Interest Period, or
(d) with respect to a LIBOR Loan denominated in an
Optional Currency, appropriate hedging instruments designed to protect
the Agent and the Lenders from foreign currency exchange risk are
unavailable to the Agent at a cost equal to or less than the Hedging Fee
with respect to such Loan,
Agent or such Lender shall forthwith give notice thereof to Borrowers,
whereupon until such Lender notifies Borrowers that the circumstances
giving rise to such unavailability or suspension no longer exist,
(a) the obligations of such Lender to make LIBOR Loans, to convert Prime
Loans to LIBOR Loans or to fund Loans denominated in an Optional
Currency (as applicable) shall be suspended, and (b) Borrowers shall
repay in full the then outstanding principal amount of each of its LIBOR
Loans, together with accrued interest thereon, on the last day of the
then current Interest Period applicable to such Loan. Concurrently with
repaying each such LIBOR Loan pursuant to this Section, Borrowers shall
borrow a Prime Loan in an equal principal amount from such Lender, and
such Lender shall make such a Prime Loan unless Borrowers notify such
Lender at least one Business Day before the date of such repayment that
it elects not to borrow any Prime Loans on such date. The parties
recognize that the introduction of the Euro at the start of the third
stage of European monetary union may result in (i) the disappearance of
certain published or displayed rates for deposits in a national currency
unit used to determine LIBOR or a base currency rate or (ii) changes in
the way those rates are quoted and published or displayed. In such an
event, all references to LIBOR Index Rate with respect to a Currency
shall be replaced with references to Euro BBA LIBOR as it appears on or
in any successor page or publication officially designated by the
sponsor of the dedicated page or publication.
3.10 Illegality. If, after the date of this Agreement,
----------
the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration
36
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thereof by any governmental or regulatory authority, the Board of
Governors of the Federal Reserve System or any comparable agency charged
with the interpretation or administration thereof, or compliance by any
Lender with any request or directive (whether or not having the force of
law) of any such governmental or regulatory authority, the Board of
Governors of the Federal Reserve System or comparable agency shall make
it unlawful or impossible for such Lender to make, maintain or fund its
LIBOR Loans to the Agent and the Borrowers, such Lender shall forthwith
give notice thereof to the Borrowers. Upon receipt of such notice, the
Borrowers shall convert all of their then outstanding LIBOR Loans from
such Lender on either (a) the last day of the then current Interest
Period applicable to such LIBOR Loans if such Lender may lawfully
continue to maintain and fund such LIBOR Loans to such day or (b)
immediately if such Lender may not lawfully continue to fund and
maintain such LIBOR Loan to such day, to a Prime Loan of the same type
if (i.e., as a Revolving Credit Loan or a Term Loan) in an equal
principal amount. Interest accrued on such LIBOR Loan prior to such
conversion shall be due and payable on the date of such conversion
together with such other amounts due under Section 3.8.
-----------
3.11 Requirements of Law: Increased Costs. If (a)
-------------------------------------
Regulation D of the Board of Governors of the Federal Reserve System, as
amended or (b) 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 or
regulatory authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender
with any request or directive (whether or not having the force of law)
of any such governmental or regulatory authority, central bank or
comparable agency (a "REGULATORY CHANGE"):
(i) shall subject any Lender to any tax, duty or
other charge with respect to its LIBOR Loans, its Notes or its
obligations to make LIBOR Loans, or shall change the basis of
taxation of payments to any Lender of the principal of or interest
on its LIBOR Loans or its obligations to make LIBOR Loans (except
for taxes on or changes in the rate of tax on the overall net
income of such Lender); or
(ii) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by the
Board of Governors of the Federal Reserve System), special
deposit, capital or similar requirement against assets of,
deposits with or for the account of, or credit extended or
committed to be extended by, any Lender or shall, with respect to
any Lender or the London interbank market, impose, modify or deem
applicable any other condition affecting its LIBOR Loans, its
Notes or its obligation to make LIBOR Loans;
and the result of any of the foregoing is to increase the cost to (or in
the case of Regulation D, and to impose a cost on or increase the cost
to) such Lender of making or maintaining any LIBOR Loan, or to reduce
the amount of any sum received or receivable by such Lender under this
Agreement or under its Notes with respect thereto, and if such Lender is
not otherwise fully compensated for such increase in cost or reduction
in amount received or receivable by virtue of the inclusion of the
reference to "RESERVE PERCENTAGE" in the calculation of the interest
rate applicable to LIBOR Loans, then upon notice by such Lender to
Borrowers together with a work sheet showing how the increase in cost or
reduction in the amount received or receivable was calculated and
details of the Regulatory Change (with a copy to Agent), Borrowers shall
pay for the account of such Lender as
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additional interest, such additional amount or amounts as will
compensate such Lender for such increased cost or reduction. The
determination by any Lender under this Section of the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amounts or amounts, the Lenders
may use any reasonable averaging and attribution methods. If the Lender
demands additional compensation under this Section, at the option of the
Borrowers and upon five (5) Business Days' prior telecopy notice (to be
confirmed promptly by letter) given by the Borrowers to such Lender, the
Commitment of such Lender to make LIBOR Loans shall forthwith be
canceled and all loans by such Lender then outstanding as LIBOR Loans,
if any, shall be converted automatically to Prime Loans. If any such
conversion of a LIBOR Loan is made on a day which is not the last day of
an Interest Period therefor, the Borrowers shall pay to such Lender upon
such Lender's request, such amount or amounts as may be necessary to
compensate such Lender for such increased cost in respect of such LIBOR
Loan or as a result of such conversion.
3.12 Prime Loans Substituted for Affected LIBOR Loans.
------------------------------------------------
If notice has been given by any Lender pursuant to Section 3.9 or
-----------
3.10 or by the Borrowers pursuant to Section 3.11 requiring LIBOR
---- ------------
Loans to be repaid or converted, then, unless and until such Lender
notifies the Borrowers that the circumstances giving rise to such
repayment or conversion no longer apply, all Loans which would otherwise
be made by such Lender to the Borrowers as LIBOR Loans shall be made
instead as Prime Loans. Any such Lender shall promptly notify the
Borrowers if and when the circumstances giving rise to such repayment no
longer apply. All indemnities and all provisions relating to
reimbursement to any Lender of amounts sufficient to protect the yield
to such Lender with respect to the Loans, including, without limitation,
Sections 3.8, 3.9, 3.10 and 3.11 hereof, shall survive the
------------ --- ---- ----
payment of the Notes and the termination of this Agreement.
3.13 Amendment and Restatement Fee; Agent's Fee.
------------------------------------------
(a) Amendment and Restatement Fee. The Borrowers shall
-----------------------------
pay to Agent a nonrefundable amendment and restatement fee (the
"AMENDMENT AND RESTATEMENT FEE") in Dollars in the amount and on the
date set forth in, and to the extent required pursuant to the terms set
forth in, the Fee Letter.
(b) Agent's Fee. The Borrowers agree to pay to the
-----------
Agent, for its own account, a nonrefundable Agent's fee (collectively,
the "AGENT'S FEE") in Dollars in the amount and on the dates set forth
in the Fee Letter.
3.14 Commitment Fee. From the date of this Agreement to
--------------
but excluding the last day of the Term of this Agreement, Borrowers
shall pay to Agent, in Dollars, for the account of each Lender in
accordance with its respective Pro Rata Share, a quarterly nonrefundable
commitment fee equal to (a) One-Half of One Percent (.50%) per annum for
all fiscal quarters ending on or before June 30, 2000, or (b) the
percentage per annum equal to the then current Applicable Margin for all
times after June 30, 2000, multiplied by the average daily unused
portion of the Loan Commitments (excluding the Term Loan Commitment).
The unused portion of the aggregate Revolving Credit Commitments shall
be calculated as (i) the sum of the amounts each day during any such
fiscal quarter equal to the aggregate Revolving Credit Commitments minus
(x) the outstanding principal balance of all Revolving Credit Loans,
(y) the outstanding principal
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balance of all Swingline Loans, and (z) the Stated Amount of all issued
and outstanding Letters of Credit on each such day, divided by (ii) 90,
or by such lesser number of days in any partial fiscal quarter for which
such Revolving Credit Commitment was available. Such commitment fee
shall be payable quarterly in arrears on each March 1, June 1, September
1 and December 1 during the Term of this Agreement commencing March 1,
2000, and on the last day of the Term of this Agreement, and shall be
calculated on an actual day, 360-day year basis.
3.15 Place and Manner of Payment. Both principal and
---------------------------
interest on the Loans and all fees due hereunder and under any of the
other Transaction Documents payable to any Lender shall be paid in
Dollars, in federal or other immediately available funds, at Agent's
banking office at One Firstar Plaza, 7th and Washington, St. Louis,
Missouri 63101, except that payments of principal and interest by
Borrowers to Agent on Loans made in Optional Currencies shall be made in
the applicable Optional Currency to the designated Funding Office and in
immediately available funds. Agent will promptly distribute to each
Lender in Dollars in immediately available funds its ratable share of
each such payment received by Agent pursuant to the terms of this
Agreement for the account of such Lenders. Whenever any payment of
principal of, or interest on, the Loans or of fees shall be due on a day
which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day, except as required by
clauses (a) or (b) of the definition of Interest Period. If the date
for any payment of principal is extended by operation of law or
otherwise, interest thereon, at the then applicable rate, shall be
payable for such extended time.
3.16 Maturity. All Loans not paid prior to the last day
--------
of the Term hereof, together with all accrued and unpaid interest
thereon, shall be due and payable on the last day of the Term hereof,
whether by reason of the expiration thereof, acceleration or otherwise.
3.17 Prepayments.
-----------
(a) Voluntary Prepayments.
---------------------
(i) Borrowers may, upon notice to Agent specifying
that the Borrowers are paying Prime Loans and specifying whether
the Borrowers are paying a portion of the Swingline Loans, Term
Loans and/or Revolving Credit Loans, pay Prime Loans in whole at
any time, or from time to time in part in amounts aggregating
$1,000,000.00 or any larger multiple of $500,000.00 (or
aggregating $50,000.00 or any larger multiple of $10,000.00 in the
case of Swingline Loans), by paying the principal amount to be
paid together with all accrued and unpaid interest thereon to and
including the date of payment. All such prepayments that are made
on the Term Loan will be applied by Lenders to reduce their Pro-
Rata Shares, and consequently the aggregate amounts, of the
repayment installments required under Section 3.3(a) in the
--------------
inverse order of their due dates.
(ii) Borrowers may, upon at least two (2) Business
Days notice to Agent specifying (A) that the Borrowers are paying
LIBOR Loans, (B) whether the Borrowers are paying a portion of its
Term Loans and/or its Revolving Credit Loans, and (C) the total
amount and currency of such prepayment, pay to the designated
Funding Office in the currency in which such Loan was made the
LIBOR Loans to which a given Interest Period
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applies, in whole, or in part in Dollar Equivalent amounts
aggregating $1,000,000.00 or any larger multiple of $500,000.00,
by paying the principal amount to be paid together with all
accrued and unpaid interest thereon to and including the date of
payment and all amounts owed under Section 3.8. All such
-----------
prepayments that are made on the Term Loan will be applied by
Lenders to reduce their Pro Rata Shares, and consequently the
aggregate amounts, of the repayment installments required under
Section 3.3(a) in the inverse order of their due dates.
--------------
(b) Mandatory Prepayments.
---------------------
(i) Currency Fluctuation. If on any Computation
--------------------
Date the Total Revolving Credit Usage is equal to or greater than
the lesser of (A) the aggregate Revolving Credit Commitment or (B)
the Borrowing Base, as a result of a change in exchange rates
between one (1) or more Optional Currencies and Dollars, then the
Agent shall notify the Borrowers of the same. The Borrowers shall
pay or prepay Loans within one (1) Business Day after receiving
such notice such that the Total Revolving Credit Usage shall not
exceed the lesser of (A) the aggregate Revolving Credit Commitment
or (B) the Borrowing Base after giving effect to such payments or
prepayments. All prepayments required pursuant to this Section
-------
3.17(b)(i) shall first be applied among the Prime Loans, then to
----------
LIBOR Loans denominated in Dollars, and then to LIBOR Loans
denominated in Optional Currencies. In accordance with Section
-------
3.8, the Borrowers shall indemnify the Lenders and any Funding
---
Office for any loss or expense, excluding loss of margin, incurred
with respect to any such prepayments applied against LIBOR Loans
on any day other than the last day of the applicable Interest
Period.
(ii) Asset Disposition. In the event of receipt
-----------------
by the Parent or any Subsidiary of the Parent of Net Cash Proceeds
from an Asset Disposition that are not used by the Parent or such
Subsidiary to purchase replacement assets within 120 days of such
Asset Disposition, the Parent shall or shall cause such Subsidiary
to prepay the Loans in an amount equal to all such proceeds not so
used, and such proceeds shall be applied to the Loans in
accordance with Section 3.17(b)(iv).
-------------------
(iii) Debt Offering; Stock Offering. Upon receipt
-----------------------------
by the Parent or any Subsidiary of the Parent of Net Cash Proceeds
from a Debt Offering, the Parent shall or shall cause such
Subsidiary to prepay the Loans in an amount equal to 100% of such
Net Cash Proceeds and such proceeds shall be applied to the Loans
in accordance with Section 3.17(b)(iv). Upon receipt by the
-------------------
Parent or any Subsidiary of the Parent of Net Cash Proceeds from a
Stock Offering, the Parent shall or shall cause such Subsidiary to
prepay the Loans in an amount equal to 50% of such Net Cash
Proceeds and such proceeds shall be applied to the Loans in
accordance with Section 3.17(b)(iv).
-------------------
(iv) Application of Payment. Any prepayment
----------------------
pursuant to Sections 3.17(b)(ii) or 3.17(b)(iii) shall first
-------------------- ------------
be applied to the then outstanding principal amount of all Term
Loans and to all accrued and unpaid interest thereon to and
including the date of payment and shall reduce the repayment
installments required under Section 3.3(a) in the inverse order
--------------
of the respective due dates. If the Term Loans shall have been
paid in full by
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application of the prepayment or otherwise, then the balance of
such prepayment shall be applied to the then outstanding principal
amount of all Swingline Loans and to all accrued and unpaid
interest thereon to and including the date of payment. If the
Swingline Loans shall have been paid in full by application of the
prepayment or otherwise, then the balance of such prepayment shall
be applied to the then outstanding principal amount of all
Revolving Credit Loans and to all accrued and unpaid interest
thereon to and including the date of payment.
(v) If on any Computation Date the aggregate
amount of Loans outstanding under this Agreement which are
denominated in an Optional Currency shall exceed Sixteen Million
Dollars ($16,000,000.00) as a result of a change in exchange rates
between one (1) or more Optional Currencies and Dollars, then the
Agent shall notify the Borrowers of the same. The Borrowers shall
pay or prepay Loans within one (1) Business Day after receiving
such notice such that the principal amount of such Loans shall not
exceed Sixteen Million Dollars ($16,000,000.00). All prepayments
shall be applied to LIBOR Loans denominated in Optional
Currencies. In accordance with Section 3.8, the Borrowers shall
-----------
indemnify the Lenders and any Funding Office for any loss or
expense, excluding loss of margin, incurred with respect to any
such prepayments applied against LIBOR Loans on any day other than
the last day of the applicable Interest Period.
(c) Notice of Payment. Upon receipt of a notice of
-----------------
payment pursuant to Section 3.17, Agent shall promptly notify each
------------
Lender of the contents thereof and of such Lender's Pro Rata Share of
such payment and such notice shall not thereafter be revocable by
Borrowers.
3.18 Discretion of Lenders as to Manner of Funding.
---------------------------------------------
Notwithstanding any provision contained in this Agreement to the
contrary, each of the Lenders shall be entitled to fund and maintain its
funding of all or any part of its LIBOR Loans in any manner it elects,
it being understood, however, that for purposes of this Agreement all
determinations hereunder (including, without limitation, the
determination of each Lender's funding losses and expenses under
Section 3.8) shall be made as if such Lender had actually funded and
-----------
maintained each LIBOR Loan through the purchase of deposits having a
maturity corresponding to the maturity of the applicable Interest Period
relating to the applicable LIBOR Loan and bearing an interest rate equal
to the applicable LIBOR Base Rate. Each Lender may, at its option,
elect to make, fund or maintain its Loans hereunder at the branches or
offices specified on the signature pages hereof or on any Assignment
Agreement executed and delivered pursuant to Section 10.12(b) hereof
----------------
or at such other of its branches or offices as such Lender may from time
to time elect, provided that the Borrowers shall not be required to
--------
reimburse any Lender under any of the provisions of this Agreement for
any cost which such Lender would not have incurred but for changing its
lending or funding branch unless Borrowers consent to such change.
3.19 Reduction of Loan Commitments. The Borrowers may,
-----------------------------
upon at least ten (10) Business Days prior written notice to Agent,
proportionately reduce among the Lenders, based on the Lenders'
respective Pro Rata Shares, the unused portions of the aggregate
Revolving Credit Commitments of the Lenders as specified by Borrowers in
such notice to Agent, by an aggregate amount of $1,000,000.00 or any
larger multiple of $500,000.00; provided, however, that at no time
-------- -------
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shall the aggregate Revolving Credit Commitments of the Lenders be
reduced to an amount less than the Total Revolving Credit Usage.
3.20 Utilization of Commitments in Optional Currencies.
-------------------------------------------------
(a) Periodic Computations of Dollar Equivalent Amounts of
-----------------------------------------------------
Loans and Letters of Credit Outstanding. The Agent will determine the
---------------------------------------
Dollar Equivalent amount of (i) proposed Revolving Credit Loans to be
denominated in an Optional Currency as of the requested date of
borrowing, (ii) outstanding Revolving Credit Loans denominated in an
Optional Currency as of the last Business Day of each month, and
(iii) outstanding Revolving Credit Loans denominated in an Optional
Currency as of the end of each Interest Period (each such date under
clauses (i) through (iii), a "COMPUTATION DATE").
(b) Notices from Lenders That Optional Currencies Are
-------------------------------------------------
Unavailable to Fund New Loans. The Lenders shall be under no
-----------------------------
obligation to make the Revolving Credit Loans requested by the Borrowers
which are denominated in an Optional Currency if the Agent determines in
its own good faith discretion by 5:00 p.m. (St. Louis time) four (4)
Business Days prior to the date of borrowing for such Revolving Credit
Loans that the Optional Currency requested by the Borrowers is not
available to fund such Revolving Credit Loans. In the event the Agent
makes such determination pursuant to the preceding sentence, the Agent
will notify the Borrowers no later than 10:00 a.m. (St. Louis time)
three (3) Business Days prior to the date of borrowing for such
Revolving Credit Loans that the Optional Currency is not then available
for such Revolving Credit Loans, and the Agent shall promptly thereafter
notify the Lenders of the same. If the Borrowers receive a notice
described in the preceding sentence, the Borrowers may, by notice to the
Agent not later than 5:00 p.m. (St. Louis time) three (3) Business Days
prior to the date of borrowing for such Revolving Credit Loans, withdraw
the Borrowing Notice for such Revolving Credit Loans. If the Borrowers
withdraw such Borrowing Notice, the Agent will promptly notify each
Lender of the same and the Lenders shall not make such Revolving Credit
Loans. If the Borrowers do not withdraw such Borrowing Notice before
such time, (i) the Borrowers shall be deemed to have requested that the
Revolving Credit Loans referred to in the Borrowing Notice shall be made
in Dollars in an amount equal to the Dollar Equivalent of such Revolving
Credit Loans and shall be Prime Loans, and (ii) the Agent shall promptly
deliver a notice to each Lender stating: (A) that such Revolving Credit
Loans shall be made in Dollars and shall be Prime Loans, (B) the
aggregate amount of such Revolving Credit Loans, and (C) such Lender's
Pro Rata Share of such Revolving Credit Loans.
(c) Notices From Lenders That Optional Currencies Are
-------------------------------------------------
Unavailable to Fund Renewals of the LIBOR Loans. If the Borrowers
-----------------------------------------------
deliver a Conversion Notice requesting that the Lenders renew LIBOR
Loans denominated in an Optional Currency, the Lenders shall be under no
obligation to renew such LIBOR Loans if the Agent determines in its own
good faith discretion by 5:00 p.m. (St. Louis time) four (4) Business
Days prior to effective date of such renewal that the Optional Currency
requested by the Borrowers is not available to fund Revolving Credit
Loans in such Optional Currency. In the event the Agent makes such
determination pursuant to the preceding sentence, the Agent will notify
the Borrowers no later than 10:00 a.m. (St. Louis time) three (3)
Business Days prior to the renewal date that the renewal of such
Revolving Credit Loans in such Optional Currency is not then available,
and the Agent shall promptly thereafter notify the
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Lenders of the same. If the Agent shall have so notified the Borrowers
that any such continuation of Optional Currency Loans is not then
available, any notice of renewal with respect thereto shall be deemed
withdrawn, and such Optional Currency Loans shall be redenominated into
Prime Loans in Dollars with effect from the last day of the Interest
Period with respect to any such Optional Currency Loans. The Agent will
promptly notify the Borrowers and the Lenders of such redenomination,
and in such notice, the Agent will state the aggregate Dollar Equivalent
amount of the redenominated Optional Currency Loans as of the
Computation Date with respect thereto and such Lender's Pro-Rata Share.
3.21 Currency Repayments. Notwithstanding anything
-------------------
contained herein to the contrary, the entire amount of principal of and
interest on any Loan made in an Optional Currency shall be repaid in the
same Optional Currency in which such Loan was made, provided, however,
that if it is impossible or illegal for the Borrowers to effect payment
of a Loan in the Optional Currency in which such Loan was made, or if
the Borrowers default on their obligation to do so, the Agent may at its
option permit such payment to be made (i) at and to a different
location, subsidiary, affiliate or correspondent of the Agent, or
(ii) in the Equivalent Amount of Dollars or (iii) in an Equivalent
Amount of such other currency (freely convertible into Dollars) as the
Agent may designate. Upon any events described in clauses (i) through
(iii) of the preceding sentence, the Borrowers shall make such payment
and the Borrowers agree to hold Agent and each Lender harmless from and
against any loss incurred by Agent or any Lender arising from the cost
to Agent or such Lender of any premium, any costs of exchange, the cost
of hedging and covering the Optional Currency in which such Loan was
originally made, and from any change in the value of Dollars, or such
other currency, in relation to the Optional Currency that was due and
owing. Such loss shall be calculated for the period commencing with the
first day of the Interest Period for such Loan and continuing through
the date of payment thereof. Without prejudice to the survival of any
other agreement of any Borrower hereunder, such Borrower's obligation
under this Section 3.21 shall survive termination of this Agreement.
------------
3.22 Optional Currency Amounts. Notwithstanding anything
-------------------------
contained herein to the contrary, the Agent may, with respect to notices
by the Borrowers for Loans in an Optional Currency or voluntary
prepayments of less than the full amount of an Optional Currency Loan,
engage in reasonable rounding of the Optional Currency amounts requested
to be loaned or repaid; and, in such event, Agent shall promptly notify
the Borrowers and the Lenders of such rounded amounts and the Borrowers'
request or notice shall thereby be deemed to reflect such rounded
amounts.
3.23 European Monetary Union
-----------------------
(a) If, as a result of the implementation of the European
monetary union, (i) any Optional Currency ceases to be lawful currency
of the nation issuing the same and is replaced by the Euro or (ii) any
Optional Currency and the Euro are at the same time recognized by any
governmental authority of the nation issuing such currency as lawful
currency of such nation and the Agent shall so request in a notice
delivered to the Borrowers, then any amount payable hereunder by any
party hereto in such Optional Currency shall instead be payable in the
Euro and the amount so payable shall be determined by translating the
amount payable in such Optional Currency to the Euro at the exchange
rate recognized on the date of such request by the European
43
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<PAGE>
Central Bank for the purpose of implementing European monetary union.
Prior to the occurrence of the event or events described in clauses (i)
or (ii) of the preceding sentence, each amount payable hereunder in any
Optional Currency will, except as otherwise provided in this Agreement,
continue to be payable only in that Optional Currency.
(b) The Borrowers agree, at the request of Agent or any
Lender, to compensate Agent or such Lender for any loss, cost, expense
or reduction in return that Agent or such Lender shall reasonably
determine shall be incurred or sustained by Agent or such Lender as a
result of the implementation of European monetary union and that would
not have been incurred or sustained but for the transactions provided
for herein. A certificate of Agent or any Lender setting forth Agent's
or such Lender's determination of the amount or amounts necessary to
compensate Agent or such Lender shall be delivered to the Borrowers and
shall be conclusive absent manifest error. The Borrowers shall pay
Agent or such Lender, as the case may be, the amount shown as due on any
such certificate within ten (10) days after receipt thereof.
(c) The parties hereto agree, at the time of or at any
time following the implementation of in European monetary union, to use
reasonable efforts to enter into an agreement amending this Agreement in
order to reflect the implementation of such monetary union, to place the
parties hereto in the position with respect to the settlement of
payments in the Euro as they would have been with respect to the
settlement of payments in the currencies it replaced.
(d) Each of the Borrowers, the Agent and the Lenders
confirm that the occurrence or non-occurrence of an event associated
with economic and monetary union in the European Community will not have
the effect of altering any term of, or discharging or excusing
performance under, this Agreement or any Transaction Document, give a
party the right unilaterally to alter or terminate this Agreement or any
Transaction Document or, in and of itself, give rise to an Event of
Default.
An event associated with the economic and monetary
union in the European Community includes, without limitation, each
(and any combination) of the following:
(i) the introduction of, changeover to, operation
of, or the ceasing of the operation of a single or unified
European currency;
(ii) the fixing of conversion rates between a
member state's currency and the new currency or between the
currencies of member states;
(iii) the introduction of that new currency as
lawful currency in a member state;
(iv) the withdrawal from legal tender of any
currency that, before the introduction of the new currency, was
lawful currency in one of the member states;
(v) the disappearance or replacement of a relevant
rate option or other price source for the Euro or the national
currency of any member state, or the failure of the agreed sponsor
(or successor sponsor) to publish or display a relevant rate,
index, price, page or screen; or
44
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<PAGE>
(vi) the failure of the monetary union and return
by a member state to its own separate currency or any other
currency recognized by such member state as lawful currency.
(e) If for any reason following the implementation of
European monetary union and the replacement of lawful currencies of
nations issuing the same, the Euro ceases to be recognized as lawful
currency, then any amount payable by Borrowers which would otherwise be
denominated in Euros shall be payable by Borrowers in accordance with
the provisions of Section 3.21.
------------
3.24 Judgment Currency. If for the purposes of obtaining
-----------------
a judgment in any court it is necessary to convert a sum due hereunder
in any currency (the "ORIGINAL CURRENCY") into another currency (the
"OTHER CURRENCY"), the parties hereby agree, to the fullest extent
permitted by law, that the rate of exchange used shall be that at which
in accordance with normal banking procedures each Lender could purchase
the Original Currency with the Other Currency after any premium and
costs of exchange on the Business Day preceding that on which final
judgment is given. The obligation of the Borrowers in respect of any
sum due from Borrowers to any Lender hereunder shall, notwithstanding
any judgment in an Other Currency, whether pursuant to a judgment or
otherwise, be discharged only to the extent that, on the Business Day
following receipt by any Agent or by any Lender of any sum adjudged to
be so due in such Other Currency, such Agent or Lender may in accordance
with normal banking procedures purchase the Original Currency with such
Other Currency. If the amount of the Original Currency so purchased is
less than the sum originally due to such Agent or Lender in the Original
Currency, the Borrowers agree, as a separate obligation and
notwithstanding any such judgment or payment, to indemnify such Agent or
Lender against such loss. If the amount of the Original Currency so
purchased is more than the sum originally due to such Agent or Lender in
the Original Currency, the Agent or such Lender, as the case may be,
agrees, as a separate obligation and notwithstanding any such judgment
or payment, to credit such excess for the account of Borrowers.
3.25 Substitution of Bank. If (a) the obligation of any
--------------------
Lender to make and/or convert LIBOR Loans has been suspended pursuant to
Sections 3.9, 3.10 and/or 3.20 or (b) any Lender has demanded
------------ ---- ----
compensation under Sections 3.11, 3.23 and/or 10.7 (in each case,
------------- ---- ----
an "AFFECTED LENDER"), Borrowers shall have the right, with the
assistance of the Agent, to seek a mutually satisfactory substitute
lender or lenders (which may be one or more of the Lenders) (the
"PURCHASING LENDER" or "PURCHASING LENDERS") to purchase the Notes and
assume the Loan Commitments of such Affected Lender. The Affected
Lender shall be obligated to sell its Notes and assign its Loan
Commitments to such Purchasing Lender or Purchasing Lenders within
fifteen (15) days after receiving notice from Borrowers requiring it to
do so, at an aggregate price equal to the outstanding principal amount
thereof plus unpaid interest accrued thereon up to but excluding the
date of sale. In connection with any such sale, and as a condition
thereof, Borrowers shall pay to the Affected Lender the sum of (a) all
fees accrued for its account under this Agreement to but excluding the
date of such sale, (b) the amount of any compensation which would be due
to the Affected Lender under Section 3.8 if Borrowers had prepaid the
-----------
outstanding LIBOR Loans of the Affected Lender on the date of such sale
and (c) any additional compensation accrued for its account under
Sections 3.11, 3.23 and/or 10.7 to but excluding said date. Upon
------------- ---- ----
such sale, (a) the Purchasing Lender or Purchasing Lenders shall assume
the Affected Lender's Loan Commitments
45
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and the Affected Lender shall be released from its obligations under
this Agreement to a corresponding extent and (b) the Affected Lender, as
assignor, such Purchasing Lender, as assignee, Borrowers and the Agent
shall enter into an Assignment Agreement in accordance with Section
-------
10.12, whereupon such Purchasing Lender shall be a Lender party to this
-----
Agreement, shall be deemed to be an Assignee under this Agreement and
shall have all the rights and obligations of a Lender with Loans
Commitments equal to its ratable share of the Loan Commitments of the
Affected Bank. Upon the consummation of any sale pursuant to this
Section 3.25, the Affected Lender, the Agent and the Borrowers shall
------------
make appropriate arrangements so that, if required, each Purchasing
Lender receives new Notes.
SECTION 4. PRECONDITIONS TO LOANS.
-----------------------------------
4.1 Initial Loan. Notwithstanding any provision
------------
contained herein to the contrary, Lenders shall have no obligation to
make any Loan hereunder and Agent shall have no obligation to issue any
Letter of Credit, unless on or prior to June 2, 2000, Agent shall have
first received, for itself and on behalf of the Lenders:
(a) this Agreement and the Notes, each executed by a duly
authorized officer of each Borrower;
(b) copies of resolutions of the Board of Directors of
each Borrower, duly adopted, which authorize the execution, delivery and
performance of each Transaction Document to which such Borrower is a
party, certified by the Secretary of such Borrower;
(c) copies of the certificate or articles of incorporation
of the Parent and each Subsidiary of Parent, including any amendments
thereto, certified by the Secretary of State (or other appropriate
government official) of their respective jurisdictions of incorporation;
(d) a copy of the bylaws of the Parent and each Subsidiary
of Parent, including any amendments thereto, certified by the Secretary
of the Parent or the respective Subsidiary;
(e) incumbency certificates, executed by the Secretary of
each Borrower, which shall identify by name and title and bear the
signatures of all of the officers of each Borrower;
(f) good standing certificates from the Secretary of State
(or other appropriate government official) of the respective
jurisdictions of incorporation of the Parent and each Subsidiary, and
each other jurisdiction in which the Parent or any Subsidiary is
qualified as a foreign corporation;
(g) an opinion of counsel of Thompson Coburn LLP, counsel
to the Borrowers, substantially in the form of Exhibit I attached
---------
hereto and incorporated herein by reference, and an opinion of Texas
local counsel to the Borrowers relating to the Deed of Trust in form and
substance, and from counsel, reasonably satisfactory to the Agent;
(h) the Borrowing Notices required by Sections 3.4(a),
---------------
3.5(b), and/or 3.5(c);
------ ------
46
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(i) payment by Borrowers of all costs and expenses
currently payable by Borrowers pursuant to Sections 7.1(c) and 10.3;
--------------- ----
(j) the initial Borrowing Base Certificate;
(k) the policies or certificates of insurance required by
Section 7.1(d) hereof;
--------------
(l) the Fee Letter;
(m) the Security Agreement, financing statements, and such
other documents as Agent shall require under Section 5.1, each
-----------
executed by a duly authorized officer of each Borrower;
(n) such Acknowledgment Agreements as may be required in
order for Borrowers to comply with the provisions of Section 2(d) of
------------
the Security Agreement with respect to the locations listed on
Exhibit A to the Security Agreement;
---------
(o) the Pledge Agreement executed by a duly authorized
officer of Parent and share certificates and duly executed instruments
of transfer for the stock pledged by the Parent pursuant to the Pledge
Agreement;
(p) the Pledge Agreement (Securities Account) executed by
a duly authorized officer of Parent;
(q) the Deed of Trust Amendment, fully executed and
notarized;
(r) an endorsement reasonably satisfactory to Agent to the
Existing Mortgage Policy assuring Agent that the Existing Deed of Trust
is a valid and enforceable first priority mortgage lien on the Abilene
Facility, free and clear of all defects and encumbrances except
Permitted Liens; and
(s) such other agreements, documents, instruments and
certificates as Agent may reasonably request.
In the event the foregoing conditions precedent shall not
have been satisfied on or prior to May 31, 2000, Lenders shall have no
obligation to make any Loan hereunder and Agent shall have no obligation
to issue any Letter of Credit.
On the Restatement Effective Date, (i) unless otherwise
agreed by Agent and Borrowers, each Existing Lender shall have
surrendered to Agent for cancellation the promissory notes issued to it
pursuant to the Existing Credit Agreement in respect of its Existing
Term Loans, Existing Revolving Credit Loans and Existing Swingline
Loans, (ii) all Existing Term Loans, Existing Revolving Credit Loans and
Existing Swingline Loans shall be deemed for all purposes to constitute
"Loans" hereunder and the interest rates applicable thereto shall be
determined in accordance with Section 3.7, and (iii) Agent shall have
-----------
received evidence in form, scope and substance satisfactory to it that
the matters set forth in this grammatical paragraph have been satisfied
on such date.
47
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<PAGE>
4.2 Subsequent Revolving Credit Loans. Notwithstanding
---------------------------------
any provision contained herein to the contrary, Lenders shall have no
obligation to make any subsequent Revolving Credit Loan hereunder, and
Agent shall have no obligation to issue any subsequent Letter of Credit
under any Letter of Credit Application, unless:
(a) Agent and each of the Lenders shall have received a
current Borrowing Base Certificate as required by Section 3.1(c);
--------------
(b) Agent shall have received a Borrowing Notice or
Conversion Notice for such Loan as required by Section 3.4(e), or the
--------------
Letter of Credit Application as required by Section 3.6;
-----------
(c) On the date of and immediately after such Loan, Loan
conversion or Letter of Credit issuance, no Default or Event of Default
under this Agreement shall have occurred and be continuing;
(d) On the date of and immediately after such Loan, Loan
conversion or Letter of Credit issuance, no Material Adverse Change
shall have occurred since the date of this Agreement and be continuing;
and
(e) All of the representations and warranties of the
Borrowers contained in this Agreement shall be true and correct in all
material respects on and as of the date of such Loan, Loan conversion or
Letter of Credit issuance as if made on the date of such Loan, the date
of such Loan conversion or the issuance date of such Letter of Credit,
as the case may be, except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall
remain true and correct in all material respects on and as of such
earlier date (and for purposes of this Section 4.2(e), the
--------------
representations and warranties made by Borrowers in Section 6.4 shall
-----------
be deemed to refer to the most recent financial statements of Parent
delivered to the Lenders pursuant to Section 7.1(a)).
--------------
Each request for a Loan, for conversion of a Loan or
application for a Letter of Credit by the Borrowers hereunder shall be
deemed to be a representation and warranty by the Borrowers on the date
of such Loan, Loan conversion or Letter of Credit issuance as to the
facts specified in clauses (c), (d) and (e) of this Section 4.2.
-----------
SECTION 5. COLLATERAL.
----------------------
5.1 Security Agreement. In order to secure the payment
------------------
when due of the Obligations, the Borrowers shall convey to Agent for the
benefit of each of the Lenders a security interest in, among other
things, all Collateral, which security interest shall be a first and
prior interest in all such items except for Permitted Liens. Said
security interest shall be evidenced by the Collateral Documents. The
Borrowers further covenant and agree to execute and deliver to Agent for
the benefit of each of the Lenders any and all financing statements,
continuation statements and such other documentation as may be requested
by Agent from time to time in order to create, perfect and continue said
security interests. Upon demand, the Borrowers shall pay all Attorneys
Fees and all filing fees and expenses incurred by Agent in the
preparation of the foregoing
48
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<PAGE>
documents and perfection of the security interests contemplated thereby.
Lenders shall have no obligation to make any Loan or convert the
interest rate on any Loan hereunder unless and until the Borrowers have
fully satisfied these requirements.
5.2 Additional Collateral.
---------------------
(a) Domestic Subsidiaries. With respect to any new
---------------------
Subsidiary created or acquired after the date hereof by the Borrowers
(other than a foreign (non-U.S.) Subsidiary), Borrowers will promptly
cause such new Subsidiary (i) to become a party to this Agreement and
the Security Agreement by executing a Joinder Agreement, (ii) to take
such actions as the Agent deems reasonably necessary or advisable to
grant to the Agent for the benefit of the Lenders a perfected first
priority security interest in the Collateral with respect to such new
Subsidiary, including the filing of all financing statements in such
jurisdictions as may be required by the Security Agreement or by law or
as may be reasonably requested by the Agent, and (iii) if requested by
the Agent, deliver to the Agent customary legal opinions relating to the
matters described above, which opinions shall be in form and substance,
and from counsel, reasonably satisfactory to the Agent.
(b) Foreign Subsidiaries. With respect to any new
--------------------
foreign (non-U.S.) Subsidiary created or acquired after the date hereof
by the Borrowers, Borrowers (i) will promptly cause sixty-five percent
(65%) of the common stock or other ownership interests of such foreign
(non-U.S.) Subsidiary to be pledged to the Agent, as pledgee, for the
benefit of the Lenders, pursuant to a pledge agreement in substantially
the same form as the Pledge Agreement and otherwise in substance
reasonably acceptable to the Agent and the Lenders, and (ii) will take
all other steps necessary to perfect the Agent's interests therein
pursuant to the laws of such Subsidiary's jurisdiction of organization.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
-------------------------------------------
Each of the Borrowers represents and warrants to Agent and
the Lenders that:
6.1 Corporate Existence and Power. Each of the
-----------------------------
Borrowers and each of their respective Subsidiaries: (a) is duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation; (b) has all requisite corporate
powers required to carry on its business as now conducted; (c) has all
requisite governmental and regulatory licenses, authorizations, consents
and approvals required to carry on its business as now conducted, except
such licenses, authorizations, consents and approvals the failure to
obtain would not have a Material Adverse Effect; and (d) is duly
qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where
failure to so qualify would have a Material Adverse Effect.
6.2 Corporate Authorization. Each Borrower has the
-----------------------
corporate power and authority, and the legal right, to execute, deliver
and perform the Transaction Documents to which it is a party. Each
Borrower has taken all necessary corporate action to authorize the
execution, delivery and performance of the Transaction Documents to
which it is a party.
49
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<PAGE>
6.3 Binding Effect. Each of the Transaction Documents
--------------
executed contemporaneously with the execution of this Agreement to which
any of the Borrowers is a party has been duly executed and delivered by
each such Borrower and constitutes the legal, valid and binding
obligations of each such Borrower enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights generally
and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
the Transaction Documents not executed contemporaneously with the
execution of this Agreement, when executed and delivered in accordance
with this Agreement, will constitute legal, valid and binding
obligations of each Borrower which is a party thereto enforceable in
accordance with their respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, or other similar laws
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
6.4 Financial Statements; Financial Condition.
-----------------------------------------
The Borrowers have furnished Agent and the Lenders with the
following financial statements, identified by the chief financial
officer of Parent: (a) a balance sheet and income statement of Parent
and its Consolidated Subsidiaries for each of the five fiscal years
ended September 30, 1995, 1996, 1997, 1998, and 1999, all certified by
Parent's independent certified public accountants, which financial
statements have been prepared in accordance with generally accepted
accounting principles; and (b) an unaudited balance sheet and income
statement of Parent and its Consolidated Subsidiaries as of March 31,
2000 certified (subject to normal adjustments and the absence of
footnotes and other disclosures) as to fairness of presentation,
generally accepted accounting principles by the principal financial
officer of Parent. The Borrowers further represent that: (a) said
balance sheets and their accompanying notes fairly present in all
material respects the condition of Parent and its Consolidated
Subsidiaries as of the dates thereof; (b) there has been no Material
Adverse Change since March 31, 2000; and (c) neither Parent nor any of
its Consolidated Subsidiaries has any direct or contingent liabilities
which are not disclosed on said financial statements (to the extent
disclosure thereof would be required under generally accepted accounting
principles); (d) on and as of the date hereof, after giving effect to
the incurrence of the initial Loans by the Borrowers hereunder, (i) the
sum of the assets, at a fair valuation, of the Parent and its
Consolidated Subsidiaries will exceed their debts; (ii) the Borrowers
have not incurred and do not intend to incur, and do not believe they
will incur, debts beyond their ability to pay such debts as such debts
mature, (iii) the Borrowers will have sufficient capital with which to
conduct their businesses, and (iv) the Borrowers are is in pro forma
---------
compliance with the financial covenants set forth in Section 7.1(i) of
--------------
this Agreement.
6.5 Litigation. Except as disclosed on Schedule 6.5
---------- ------------
attached hereto, there is no action or proceeding pending or, to the
knowledge of the Borrowers, threatened against or affecting any Borrower
or any Subsidiary of a Borrower before any court, arbitrator or any
governmental, regulatory or administrative body, agency or official
which could reasonably be expected to have a Material Adverse Effect,
and neither any Borrower nor any Subsidiary of a Borrower is in default
with respect to any order, writ, injunction, decision or decree of any
court, arbitrator or any governmental, regulatory or administrative
body, agency or official, a default under which would have a Material
Adverse Effect.
50
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<PAGE>
6.6 Pension and Welfare Plans. Each Pension Plan
-------------------------
substantially complies with all applicable statutes and governmental
rules and regulations; no Reportable Event has occurred and is
continuing with respect to any Pension Plan; neither any Borrower nor
any ERISA Affiliate nor any Subsidiary of a Borrower has withdrawn from
any Multiemployer Plan in a "complete withdrawal" or a "partial
withdrawal" as defined in Sections 4203 or 4205 of ERISA, respectively;
no steps have been instituted by any Borrower, any ERISA Affiliate or
any Subsidiary of a Borrower to terminate any Pension Plan; no condition
exists or event or transaction has occurred in connection with any
Pension Plan or Multiemployer Plan which could result in the incurrence
by any Borrower, any ERISA Affiliate or any Subsidiary of a Borrower of
any material liability, fine or penalty; and neither any Borrower nor
any ERISA Affiliate nor any Subsidiary of a Borrower is a "contributing
sponsor" as defined in Section 4001(a)(13) of ERISA of a
"single-employer plan" as defined in Section 4001(a)(15) of ERISA which
has two or more contributing sponsors at least two of whom are not under
common control. Neither any Borrower nor any Subsidiary of a Borrower
has any contingent liability with respect to any "employee welfare
benefit plan" as such term is defined in Section 3(a) of ERISA, which
covers retired employees and their beneficiaries.
6.7 Returns and Payment. Each of the Borrowers and each
-------------------
of their respective Subsidiaries has (a) filed or caused to be filed all
tax reports and returns that are required to have been filed by it with
any governmental authority, except for state (other than State of
Missouri), local and foreign tax returns which the failure to file could
not reasonably be expected to have a Material Adverse Effect, and (b)
paid all taxes shown to be due and payable on such returns and all other
taxes levied upon it or its properties, assets, income or franchises, to
the extent such taxes have become due and payable and before they have
become delinquent, except for any taxes (i) the amount of which is not
individually or in the aggregate material or (ii) the amount,
applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which the
applicable Borrower or the applicable Subsidiary, as the case may be,
has established adequate reserves in accordance with generally accepted
accounting principles on its books. The charges, accruals and reserves
on the books of the Borrowers and each of their respective Subsidiaries
in respect of any taxes or other governmental charges are, in the
reasonable opinion of Borrowers, adequate.
6.8 Subsidiaries. As of the date of this Agreement, the
------------
Borrowers have no Subsidiaries other than as set forth on Schedule 6.8
------------
attached hereto. Parent owns 100% of the Voting Stock of each of the
other Borrowers.
6.9 Compliance With Other Instruments; None Burdensome.
--------------------------------------------------
Neither any Borrower nor any Subsidiary of a Borrower is a party to any
contract or agreement or subject to any charter or other corporate
restriction which could reasonably be expected to have a Material
Adverse Effect and which is not disclosed on Parent's consolidated
financial statements heretofore submitted to Agent or the Lenders; none
of the execution and delivery by any Borrower of any Transaction
Documents, the consummation of the transactions therein contemplated or
the compliance with the provisions thereof will violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding
on any Borrower, or any of the provisions of such Borrower's certificate
or articles of incorporation or bylaws or any of the provisions of any
indenture or other material agreement, document, instrument or
undertaking to which such Borrower is a party or subject, or by which it
or its Property is bound, or conflict with or constitute a default
thereunder or
51
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<PAGE>
result in the creation or imposition of any Lien pursuant to the terms
of any such indenture, agreement, document, instrument or undertaking
(other than Liens in favor of Agent under the Collateral Documents). No
order, consent, approval, license, authorization or validation of, or
filing, recording or registration with, or exemption by, any
governmental, regulatory, administrative or public body or authority, or
any subdivision thereof, is required to authorize, or is required in
connection with, the execution, delivery or performance of, or the
legality, validity, binding effect or enforceability of, any of the
Transaction Documents (other than filings and recordings necessary to
perfect the Liens granted under the Collateral Documents).
6.10 Other Loans and Guarantees. Except as disclosed on
--------------------------
Schedule 6.10 attached hereto, neither any Borrower nor any Subsidiary
-------------
of a Borrower is a party to any loan transaction or Guarantee as of the
date of this Agreement.
6.11 Labor Matters. Except as disclosed on
-------------
Schedule 6.11 attached hereto, (a) no labor contract to which a
-------------
Borrower or any Subsidiary of a Borrower is subject is scheduled to
expire during the Term of this Agreement and (b) on the date of this
Agreement, (i) neither any Borrower nor any Subsidiary of a Borrower is
a party to any labor dispute and (ii) there are no strikes or walkouts
relating to any labor contract to which a Borrower or any Subsidiary of
a Borrower is subject.
6.12 Title to Property. Each of the Borrowers and each
-----------------
Subsidiary of a Borrower is the sole and absolute owner of, or has the
legal right to use and occupy, all Property (including, without
limitation, all Accounts and Inventory) it claims to own or which is
necessary for such Borrower or such Subsidiary to conduct its business.
Neither any Borrower nor any Subsidiary of a Borrower has signed any
financing statements, security agreements or chattel mortgages with
respect to any of its Property, has granted or permitted any Liens
with respect to any of its Property or has any knowledge of any
Liens with respect to any of its Property, except as created pursuant
to the Transaction Documents or as disclosed on Schedule 6.12 attached
-------------
hereto and except for Permitted Liens.
6.13 Regulation U. None of the Borrowers are engaged
------------
principally, or as one of their important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U of The Board of Governors of the
Federal Reserve System, as amended). The proceeds of the Loans are to
be used solely for the purposes set forth in and permitted by Section
-------
7.3. No part of the proceeds of any Loan will be used, whether
---
directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose which entails a violation of, or which is
inconsistent with, the provisions of any of the Regulations of The Board
of Governors of the Federal Reserve System, including, without
limitation, Regulations U, T or X thereof, as amended. If requested by
Agent, Borrowers shall furnish to Agent and the Lenders statements in
conformity with the requirements of Federal Reserve Form U-1 referred to
in Regulation U.
6.14 Multi-Employer Pension Plan Amendments Act of 1980.
--------------------------------------------------
Each of the Borrowers and each Subsidiary of a Borrower is in compliance
with the Multi-Employer Pension Plan Amendments Act of 1980, as amended
("MEPP"), and has no liability for pension contributions pursuant to
MEPP.
52
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6.15 Investment Company Act of 1940: Public Utility
----------------------------------------------
Holding Company Act of 1935. None of the Borrowers nor any of their
---------------------------
respective Subsidiaries is an "investment company" or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended. None of the Borrowers nor
any of their respective Subsidiaries is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
6.16 Patents, Licenses, Trademarks, Etc. Each of the
----------------------------------
Borrowers and each of their respective Subsidiaries possesses all
necessary patents, licenses, trademarks, trademark rights, trade names,
trade name rights and copyrights to conduct its business without any
present conflict with any patent, license, trademark, trade name or
copyright of any other Person.
6.17 Environmental and Health and Safety Matters. Except
-------------------------------------------
for matters which could not reasonably be expected to have a Material
Adverse Effect, (i) the operations of any Borrower and each of its
Subsidiaries comply with (A) all applicable Environmental Laws and
(B) all applicable Occupational Safety and Health Laws; (ii) none of the
operations of any Borrower or any of its Subsidiaries are subject to any
judicial, governmental, regulatory or administrative proceeding alleging
the violation of any Environmental Law or Occupational Safety and Health
Law; (iii) none of the operations of any Borrower or any of its
Subsidiaries is the subject of any federal or state investigation
evaluating whether any remedial action is needed to respond to (A) any
spillage, disposal or release into the environment of any Hazardous
Material or any other hazardous, toxic or dangerous waste, substance or
constituent or other substance, or (B) any unsafe or unhealthful
condition at any premises of any Borrower or such Subsidiary;
(iv) neither any Borrower nor any of its Subsidiaries has filed any
notice under any Environmental Law or Occupational Safety and Health Law
indicating or reporting (A) any past or present spillage, disposal or
release into the environment of, or treatment, storage or disposal of,
any Hazardous Material or any other hazardous, toxic or dangerous waste,
substance or constituent or other substance or (B) any unsafe or
unhealthful condition at any premises of any Borrower or such
Subsidiary; and (v) neither any Borrower nor any of its Subsidiaries has
any known contingent liability in connection with (A) any spillage,
disposal or release into the environment of, or otherwise with respect
to, any Hazardous Material or any other hazardous, toxic or dangerous
waste, substance or constituent or other substance or (B) any unsafe or
unhealthful condition at any premises of any Borrower or such
Subsidiary.
6.18 Corporate or Fictitious Names. The Parent and each
-----------------------------
of its Subsidiaries have not, during the five (5) year period preceding
the date of this Agreement, been known by or used any corporate or
fictitious name other than the names listed on Schedule 6.18 attached
-------------
hereto.
6.19 The Collateral Documents. (a) The provisions of the
------------------------
Security Agreement are effective to create in favor of the Agent for the
benefit of the Lenders a legal, valid and enforceable security interest
in all right, title and interest of the Borrowers in the Collateral
described therein, and the Security Agreement, upon the filing of Form
UCC-1 financing statements, creates a fully perfected security interest
in, all right, title and interest in all of the Collateral described
therein, to the extent that a security interest may be perfected therein
by filing a financing statement under the Uniform Commercial Code,
subject to no other Liens other than
53
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Permitted Liens. Each of the Borrowers has good and valid title to all
Collateral owned by such Borrower described therein, free and clear of
all Liens except those described above in this clause (a).
(b) The security interests created in favor of the Agent,
as Pledgee, for the benefit of the Lenders under the Pledge Agreement
constitute first priority perfected security interests in the common
stock or ownership interests described in the Pledge Agreement, subject
to no security interests of any other Person. No filings or recordings
in the United States are required in order to perfect (or maintain the
perfection or priority of) the security interests created in the common
stock or ownership interests and the proceeds thereof under the Pledge
Agreement.
SECTION 7. COVENANTS.
----------------------
7.1 Affirmative Covenants of Borrowers. Each of the
----------------------------------
Borrowers covenants and agrees that, so long as Lenders have any
obligation to make any Loan hereunder or any of Obligations remain
unpaid or any Letter of Credit remains outstanding:
(a) Information. Borrowers will deliver to Agent with
-----------
sufficient copies for each of the Lenders:
(i) As soon as available and in any event within
ninety (90) days after the end of each fiscal year of Parent,
consolidated and consolidating balance sheets of Parent and its
Consolidated Subsidiaries as of the end of such fiscal year and
the related consolidated and consolidating statements of income,
retained earnings and cash flows for such fiscal year, setting
forth in each case, in comparative form, the figures for the
previous fiscal year, all such financial statements to be prepared
in accordance with generally accepted accounting principles and
reported on by and accompanied by the unqualified opinion of
independent certified public accountants of recognized standing
selected by Parent and reasonably acceptable to Agent;
(ii) As soon as available and in any event within
thirty (30) days after the end of each fiscal month of each fiscal
year of Parent, consolidated balance sheets of Parent and its
Consolidated Subsidiaries for the month ending as of the end of
such fiscal month and the related consolidated statements of
income, retained earnings and cash flows for the month ending as
of the end of such fiscal month and for the portion of Parent's
fiscal year ended at the end of such fiscal month, setting forth
in each case in comparative form, the figures for the
corresponding month and the corresponding portion of Parent's
previous fiscal year, all certified (subject to normal year-end
adjustments and the absence of footnotes and other disclosures) as
to fairness of presentation, generally accepted accounting
principles and consistency by the principal financial officer of
Parent;
(iii) Simultaneously with the delivery of each set
of financial statements referred to in clauses (i) and (ii) above
with respect to the end of a fiscal year or fiscal quarter of
Parent, a certificate of the principal financial officer of
Parent, in the form attached hereto as Exhibit J and
---------
incorporated herein by reference, accompanied by supporting
financial work sheets where appropriate;
54
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<PAGE>
(iv) Promptly upon receipt thereof, any reports
submitted to Parent or any Consolidated Subsidiary of Parent
(other than reports previously delivered pursuant to
Sections 7.1(a)(i) and (ii) above) by independent accountants
------------------ ----
in connection with any annual, interim or special audit made by
them of the books of Parent or any Consolidated Subsidiary of
Parent;
(v) Promptly upon any filing thereof, and in any
event within ten (10) days after the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other
reports which any Borrower shall file with the Securities and
Exchange Commission;
(vi) Promptly upon the mailing thereof to the
shareholders of any Borrower generally, and in any event within
ten (10) days after such mailing, copies of all financial
statements, reports, proxy statements and other material
information so mailed; and
(vii) As soon as available and in any event within
ninety (90) days after the start of each fiscal year of Parent, an
operating and financial budget for Parent and its Consolidated
Subsidiaries which shall be in form and substance reasonably
satisfactory to the Agent and the Lenders; and
(viii) With reasonable promptness, such further
information regarding the business, affairs and financial position
of a Borrower or any Subsidiary of a Borrower as Agent or any of
the Lenders may from time to time reasonably request.
Agent and each of the Lenders are hereby authorized to
deliver a copy of any financial statement or other information made
available by any Borrower to any regulatory authority having
jurisdiction over Agent or such Lender, pursuant to any request
therefor.
(b) Payment of Indebtedness. Each of the Borrowers and
-----------------------
each of its respective Subsidiaries will (i) pay any and all
Indebtedness payable or Guaranteed by such Borrower or such Subsidiary,
as the case may be, and any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) in accordance with the agreement or instrument
relating to such Indebtedness or Guarantee and (ii) faithfully perform,
observe and discharge all covenants, conditions and obligations which
are imposed upon such Borrower or such Subsidiary, as the case may be,
by any and all agreements, documents, instruments and indentures
evidencing, securing or otherwise relating to such Indebtedness or
Guarantee; provided, however, that neither any Borrower nor any
-------- -------
Subsidiary of a Borrower shall be required to pay any such Indebtedness
arising out of trade payables or other Indebtedness not constituting
Funded Debt incurred by such Borrower or any such Subsidiary in the
ordinary course of business or perform, observe or discharge any related
covenant, condition or obligation the payment, performance, observance
or discharge of which is being contested in good faith and by
appropriate proceedings being diligently conducted and for which
adequate reserves in accordance with generally accepted accounting
principles have been provided, except that such Borrower or such
Subsidiary, as the case may be, shall pay or cause to be paid all such
Indebtedness forthwith
55
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<PAGE>
upon the commencement of proceedings to foreclose any Lien which is
attached as security therefor, unless such foreclosure is stayed by the
filing of an appropriate bond.
(c) Consultations and Inspections. Borrowers will
-----------------------------
permit and will cause each Subsidiary of a Borrower to permit, upon
reasonable prior notice, Agent and Lenders (and any Person appointed by
Agent or any of the Lenders) to discuss the affairs, finances and
accounts of Borrowers and each Subsidiary of a Borrower with the
officers of the Borrowers and each Subsidiary of a Borrower and their
independent public accountants all at such reasonable times and as often
as Agent or any of the Lenders may reasonably request. Each of the
Borrowers will also permit and will cause each of its Subsidiaries to
permit, upon reasonable prior notice (provided, however, that no such
notice shall be required if any Event of Default has occurred and is
continuing), inspection of its Properties, books and records and the
Collateral by Agent and Lenders during normal business hours or at other
reasonable times. Each of the Borrowers will also permit, and will
cause each of its Subsidiaries to permit, upon reasonable prior notice
(provided however that no such notice shall be required if any Event of
Default has occurred and is continuing), Agent and Lenders to conduct
field inspections with respect to the Collateral at such reasonable
times as Agent or any of the Lenders elects. Borrowers shall pay all
reasonable costs and expenses incurred by Agent and the Lenders for any
such inspection conducted while any Event of Default has occurred and is
continuing. Borrowers and their respective Subsidiaries irrevocably
authorize Agent and Lenders to communicate directly with their
independent public accountants and irrevocably authorize and direct such
accountants to disclose to Agent or any Lender any and all information
with respect to the business and financial condition of Borrowers and
their respective Subsidiaries as Agent or a Lender may from time to time
reasonably request in writing.
(d) Payment of Taxes; Corporate Existence; Maintenance of
-----------------------------------------------------
Properties; Insurance. Each of the Borrowers and each of its
----------------------
Subsidiaries will:
(i) Duly file all Federal, state and local income
tax returns and all other tax returns and reports of such Person
which are required to be filed and duly pay and discharge promptly
all taxes, assessments and other governmental charges imposed upon
it or any of its Property; provided, however, that no Borrower
-------- -------
nor any Subsidiary of a Borrower shall be required to pay any such
tax, assessment or other governmental charge the payment of which
is being contested in good faith and by appropriate proceedings
diligently conducted and for which adequate reserves in accordance
with generally accepted accounting principles have been provided,
except that such Borrower and each such Subsidiary shall pay or
cause to be paid all such taxes, assessments and governmental
charges forthwith upon the commencement of proceedings to
foreclose any Lien which is attached as security therefor, unless
such foreclosure is stayed by the filing of an appropriate bond;
(ii) Do all things necessary to preserve and keep
in full force and effect its corporate existence, rights and
franchise and to be duly qualified to do business in all
jurisdictions where the nature of its business requires such
qualification, except for those jurisdictions in which the failure
to be so qualified or remain in good standing could not reasonably
be expected to have a Material Adverse Effect;
56
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(iii) Maintain and keep its Properties as a whole
in good repair, working order and condition;
(iv) Keep all of the Collateral in good and
merchantable condition, and will, as applicable, shelter, store,
secure, refrigerate, process and otherwise deal with the
Collateral in accordance with the standards and practices adhered
to generally by owners, bailees or processors, as applicable, of
like properties; and
(v) Insure with financially sound and reputable insurers
reasonably acceptable to Lenders all Property of the Borrowers and
their respective Subsidiaries of the character usually insured by
Persons engaged in the same or similar businesses similarly
situated, against loss or damage of the kind customarily insured
against by such Persons, unless higher limits or coverage are
reasonably required in writing by Agent, and carry adequate
liability insurance and other insurance of a kind and in an amount
generally carried by Persons engaged in the same or similar
businesses similarly situated, unless higher limits or coverage
are reasonably required in writing by Agent. All such insurance
may be subject to reasonable deductible amounts. Promptly upon
Agent's request therefor, Borrowers shall provide Agent with
evidence that Borrowers maintain, and that each Subsidiary of the
Borrowers maintains, the insurance required under this
Section 7.1(d)(v), and evidence of the payment of all premiums
-----------------
therefor. UNLESS BORROWERS PROVIDE EVIDENCE OF THE INSURANCE
COVERAGE REQUIRED UNDER THIS AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS, AGENT MAY PURCHASE INSURANCE AT BORROWERS' EXPENSE TO
PROTECT AGENT'S AND LENDERS' INTEREST IN THE COLLATERAL. THIS
INSURANCE MAY, BUT NEED NOT, PROTECT BORROWERS' INTERESTS. THE
COVERAGE THAT AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT BORROWERS
MAY MAKE OR ANY CLAIM THAT IS MADE AGAINST BORROWERS IN CONNECTION
WITH THE COLLATERAL. BORROWERS MAY LATER CANCEL ANY INSURANCE
PURCHASED BY AGENT, BUT ONLY AFTER PROVIDING EVIDENCE THAT
BORROWERS HAVE OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT
AND THE OTHER TRANSACTION DOCUMENTS. IF AGENT PURCHASES INSURANCE
FOR THE COLLATERAL, BORROWERS WILL BE RESPONSIBLE FOR THE COSTS OF
THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY
OTHER CHARGES AGENT MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF
INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR
EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE
ADDED TO THE OBLIGATIONS. THE COSTS OF THE INSURANCE MAY BE MORE
THAN THE COST OF INSURANCE BORROWER MAY BE ABLE TO OBTAIN ON ITS
OWN.
(e) Accountants. Borrowers shall give Agent prompt
-----------
notice of any change of Borrowers' independent certified public
accountants and a statement of the reasons for such change. Borrowers
shall at all times utilize independent certified public accountants of
recognized standing reasonably acceptable to Agent.
57
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<PAGE>
(f) ERISA Compliance. If a Borrower or any Subsidiary
----------------
of a Borrower shall have any Pension Plan, such Borrower and such
Subsidiary or Subsidiaries shall promptly comply with all requirements
of ERISA relating to such plan. Without limiting the generality of the
foregoing, neither any Borrower nor any Subsidiary of a Borrower will:
(i) permit any Pension Plan maintained by it to
engage in any nonexempt "prohibited transaction," as such term is
defined in Section 4975 of the Internal Revenue Code of 1986, as
amended;
(ii) permit any Pension Plan or Pension Plans
maintained by it to incur any "accumulated funding deficiency", as
such term is defined in Section 302 of ERISA, 29 U.S.C. Section
1082 which in the aggregate exceeds $500,000.00, whether or not
waived;
(iii) terminate any such Pension Plan in a manner
which could result in the imposition of a Lien on any Property of
a Borrower or any Subsidiary of a Borrower pursuant to
Section 4068 of ERISA, 29 U.S.C. Section 11368; or
(iv) take any action which would constitute a
complete or withdrawal from a Multiemployer Plan within the
meaning of Sections 4203 and 4205 of Title IV of ERISA.
Borrowers shall have the affirmative obligation hereunder to
report to Agent any of those acts identified in subparagraphs (i)
through (iv) hereof, regardless of whether said act does or is likely to
cause a Material Adverse Change and failure by Borrowers to report such
act promptly upon a Borrower becoming aware of the existence thereof
shall constitute an Event of Default hereunder.
(g) Maintenance of Books and Records. Each of the
--------------------------------
Borrowers and each of its Subsidiaries will maintain its books and
records in a manner sufficient to permit the preparation of financial
statements in accordance with generally accepted accounting principles
and in which true, correct and complete entries will be made of all of
its dealings and transactions.
(h) Further Assurances. Each Borrower will execute any
------------------
and all further agreements, documents and instruments, and take any and
all further actions which may be required under applicable law, or which
Agent or any of the Lenders may from time to time reasonably request, in
order to effectuate the transactions contemplated by this Agreement, the
Notes and the other Transaction Documents.
(i) Financial Covenants.
-------------------
(i) Minimum EBITDA. Parent will not permit
--------------
EBITDA (as calculated on a consolidated basis for Parent and its
Consolidated Subsidiaries) to be less than the amount set forth
opposite such period below.
Fiscal Quarters Ending Amount
---------------------- ------
June 30, 2000 $10,000,000.00
September 30, 2000 $13,000,000.00
December 31, 2000 and thereafter $17,000,000.00
58
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<PAGE>
(ii) Maximum Leverage Ratio. Parent will not
----------------------
permit the Leverage Ratio as of the last day of any fiscal quarter
set forth below to exceed the ratio set forth opposite such
quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
June 30, 2000 5.25 to 1.0
September 30, 2000 4.25 to 1.0
December 31, 2000 3.25 to 1.0
March 31, 2001 and thereafter 3.00 to 1.0
(iii) Minimum Net Worth. Parent will not permit
-----------------
its Consolidated Net Worth exclusive of any cumulative translation
adjustments as of the end of each fiscal quarter during the term
hereof to be less than the sum of (A) $153,750,000, plus (B) 100%
of Consolidated Net Income for each fiscal quarter in which net
income was earned (with no deduction for a net loss) during the
period from October 1, 1999 through the last day of the fiscal
quarter immediately preceding the date of determination, plus
(C) 100% of the net cash proceeds to Borrowers or any Subsidiary
of the Borrowers of any public or private issuance of equity
securities subsequent to November 19, 1999.
(iv) Minimum Fixed Charge Coverage Ratio.
-----------------------------------
Parent will not permit the ratio of EBITDAR to Fixed Charges (as
calculated on a consolidated basis for Parent and its Consolidated
Subsidiaries) as of the last day of any fiscal quarter set forth
below to be less than the ratio set forth opposite such quarter:
Fiscal Quarter Ended Ratio
-------------------- -----
December 31, 2000 1.05 to 1.0
March 31, 2001 - June 30, 2001 1.10 to 1.0
September 30, 2001 and thereafter 1.20 to 1.0
(v) Capital Expenditures. During the period
--------------------
commencing April 1, 2000 and ending on September 30, 2000,
Borrowers will not make any Capital Expenditure or enter into any
Capitalized Lease if the sum of (i) the aggregate amount of all
Capital Expenditures (including the Capital Expenditure in
question) made by Borrowers during such period plus (ii) the
----
aggregate amount of all rental and other payments in respect of
Capitalized Leases (including the Capitalized Lease in question)
made or required to be made by Borrowers during such period would
exceed Two Million Four Hundred Thousand Dollars ($2,400,000.00).
(vi) Compliance Certificate. Parent will
----------------------
deliver a certificate of the principal financial officer of Parent
containing the financial ratio calculations required in
clauses (i) through (v) above simultaneously with the financial
statements referred to in
59
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<PAGE>
Section 7.1(a)(i) and with the financial statements referred to
-----------------
in Section 7.1(a)(ii) which cover a period of three (3), six (6)
------------------
or nine (9) fiscal months.
(j) Compliance with Law. Borrowers will, and will cause
-------------------
each Subsidiary of Borrowers to, comply with any and all laws,
ordinances and governmental and regulatory rules and regulations to
which it is subject and obtain any and all licenses, permits, franchises
and other governmental and regulatory authorizations necessary to the
ownership of their Properties or to the conduct of its business, which
violation or failure to obtain could reasonably be expected to have a
Material Adverse Effect.
(k) Notices. Borrowers will notify Agent and the
-------
Lenders in writing of any of the following within three (3) Business
Days after a Responsible Officer learns of the occurrence thereof,
describing the same and, if applicable, the steps being taken by the
Person(s) affected with respect thereto:
(i) Default. The occurrence of any Default or
-------
Event of Default under this Agreement or any default or event of
default by any Borrower or any Subsidiary of a Borrower under any
note, indenture, loan agreement, mortgage, deed of trust, security
agreement, or any lease or other similar agreement, document or
instrument to which a Borrower or any Subsidiary of a Borrower is
a party or by which it is bound or to which it is subject;
(ii) Litigation. The institution of any
----------
litigation, arbitration proceeding or governmental or regulatory
proceeding affecting a Borrower, any Subsidiary of a Borrower, or
any Collateral, (A) in which the amount involved is estimated to
be $1,000,000 or more and whether or not considered to be covered
by insurance; (B) or in which injunctive or similar relief is
sought and which, if granted, would have a Material Adverse
Effect;
(iii) Judgment. The entry of any judgment or
--------
decree against a Borrower or any Subsidiary of a Borrower;
(iv) Pension Plans. The occurrence of a
-------------
Reportable Event with respect to any Pension Plan; the institution
of proceedings to terminate a Pension Plan by the PBGC or any
other Person; the withdrawal in a "complete withdrawal" or a
"partial withdrawal" as defined in Sections 4203 and 4205,
respectively, of ERISA by a Borrower, any ERISA Affiliate or any
Subsidiary of a Borrower from any Multiemployer Plan; or the
incurrence of any increase in an aggregate amount in excess of
$250,000 (for all such plans) in the contingent liability of a
Borrower or any Subsidiary of a Borrower with respect to any
"employee welfare benefit plan" as defined in Section 3(1) of
ERISA which covers retired employees and their beneficiaries;
(v) Change of Name. Any change in the name of
--------------
a Borrower or any Subsidiary of a Borrower;
(vi) Change in Place(s) of Business. Any
------------------------------
proposed opening, closing or other change of any place of business
of a Borrower or any Subsidiary of a Borrower;
60
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<PAGE>
(vii) Environmental Matters. Receipt of any
---------------------
notice that the operations of a Borrower or any Subsidiary of a
Borrower are not in full compliance with any of the requirements
of any applicable Environmental Law or Occupational Safety and
Health Law; receipt of notice that a Borrower or any Subsidiary of
a Borrower is subject to any federal, state or local investigation
evaluating whether any remedial action is needed to respond to the
release of any Hazardous Materials or any other hazardous or toxic
waste, substance or constituent or other substance into the
environment; or receipt of notice that any of the Properties or
assets of a Borrower or any Subsidiary of a Borrower are subject
to an Environmental Lien. For purposes of this Section 7.10(vii),
-----------------
"ENVIRONMENTAL LIEN" shall mean a Lien in favor of any governmental
or regulatory agency, entity, authority or official for (1) any
liability under Environmental Laws or (2) damages arising from or
costs incurred by any such governmental or regulatory agency, entity,
authority or official in response to a release of any Hazardous
Materials or any other hazardous or toxic waste, substance or
constituent or other substance into the environment;
(viii) Material Adverse Change; Material Adverse
-----------------------------------------
Effect. The occurrence of any Material Adverse Change, or the
------
occurrence of any event which could reasonably be expected to have
a Material Adverse Effect;
(ix) Change in Management or Line(s) of
----------------------------------
Business. Any material change in the senior management of a
--------
Borrower or any Subsidiary of a Borrower or any change in a
Borrower's or any Subsidiary of a Borrower's line(s) of business;
and
(x) Other Notices. Any notices required to be
-------------
provided pursuant to other provisions of this Agreement and notice
of the occurrence of such other events as Agent may from time to
time reasonably specify.
(l) Protection of Collateral. During the term of this
------------------------
Agreement, the Borrowers will:
(i) do all things necessary to keep unimpaired
the rights of the Borrowers in and to the Collateral;
(ii) pay or cause to be paid, promptly as and when
due and payable, all expenses incurred in or arriving from the
maintenance, storage and care of the Collateral; provided,
--------
however, that Borrowers shall not be required to pay any such
-------
expense the payment of which is being contested in good faith and
by appropriate proceedings diligently conducted and for which
adequate reserves in accordance with generally accepted accounting
principles have been provided, except that Borrowers shall pay or
cause to be paid all such expenses forthwith upon the commencement
of proceedings to foreclose any Lien which is attached as security
therefor, unless such foreclosure is stayed by the filing of an
appropriate bond; and
(iii) cause the Inventory and other Collateral to
be properly maintained and protected in accordance with prudent
operating practices, giving consideration to and complying with
applicable federal, state and local laws, rules and regulations.
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(m) Compliance with Environmental Laws. Each Borrower will:
----------------------------------
(i) Comply, and will cause each of its Subsidiaries
to comply, with all Environmental Laws applicable to the ownership
or use of its Real Property now or hereafter owned or operated by
such Borrower or any of its Subsidiaries, the noncompliance with
which could reasonably be expected to have a Material Adverse
Effect, will pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or
cause to be kept all such Real Property free and clear of any
Liens on such Real Property imposed pursuant to such Environmental
Laws. None of such Borrower nor any of its Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of
Hazardous Materials on any Real Property now or hereafter owned
or operated by such Borrower or any of its Subsidiaries, or
transport or permit the transportation of Hazardous Materials
to or from any such Real Property except for Hazardous Materials
used or stored at any such Real Property in compliance with
all applicable Environmental Laws and reasonably required in
connection with the operation, use and maintenance of any such
Real Property.
(ii) In the event that Agent or the Required
Lenders reasonably believe, at any time or from time to time, that
Hazardous Materials are present at any of such Real Property other
than in compliance with the foregoing clause (i) of this
subparagraph (m), or such Real Property is otherwise not in
material compliance with all applicable Environmental Laws, at the
written request of Agent or the Required Lenders, provide an
environmental site assessment report concerning any Real Property
now or hereafter owned or operated by such Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm
approved by Agent, indicating the presence or absence of Hazardous
Materials on such Real Property. If such Borrower fails to
provide the same within thirty (30) days after such request was
made, Agent may order the same, and Borrowers shall grant and
hereby grants to Agent and the Lenders and their agents access to
such Real Property and specifically grants Agent and the Lenders
an irrevocable non-exclusive license, to undertake such an
assessment, all at the Borrowers' expense.
7.2 Negative Covenants of Borrowers. Each of the
-------------------------------
Borrowers covenants and agrees that, so long as Lenders have any
obligation to make any Loan hereunder or any of Obligations remain
unpaid or any Letter of Credit remains outstanding, unless the prior
written consent of the Required Lenders is obtained:
(a) Limitations on Liens. Borrowers will not create,
--------------------
incur, assume or suffer to exist, and will not cause or permit any
Subsidiary of Borrower to create, incur, assume or suffer to exist, any
Lien on any of its Property, assets or revenues other than Permitted
Liens.
(b) Sale of Property. Neither any Borrower nor any of
----------------
its Subsidiaries will sell, lease, transfer or otherwise dispose of any
Property or assets of such Person, except (i) sales, leases, transfers
and/or other dispositions of any Property or assets to the Parent or any
Subsidiary; (ii) sales of inventory in the ordinary course of business;
(iii) the sale or disposition in the ordinary course of business of
property and assets of such Borrower or any of its Subsidiaries no
longer useful in the conduct of their respective businesses provided
--------
that the net proceeds thereof (subject
62
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<PAGE>
to payment of any related purchase money Indebtedness and to the use of
such proceeds to purchase replacement Property or assets) are used by
such Person for the benefit of the business of such Person, in the
ordinary course of business, provided further, that the aggregate net
--------
proceeds of all assets subject to sales or other dispositions pursuant
to clause (iv) shall not exceed $500,000 in any period of twelve (12)
consecutive months; (v) a sale or disposition of the assets of a foreign
(non-U.S.) business unit or Subsidiary of any Borrower which yields net
proceeds of less than $5,000,000; or (vi) an Asset Disposition so long
as the Net Cash Proceeds are used by the applicable Borrower or any of
its Subsidiaries to purchase replacement assets within 120 days of such
Asset Disposition or are applied to prepay the Loans hereunder pursuant
to Section 3.17(b)(ii).
-------------------
(c) Mergers and Consolidations. Neither any Borrower
--------------------------
nor any of its Subsidiaries will merge or consolidate with any other
Person or sell, transfer or convey all or a substantial part of its
Property or assets to any Person, except for acquisitions permitted
under Section 7.2(d) and provided that Subsidiaries of the Borrowers
--------------
may merge with each other or into a Borrower.
(d) Acquisitions. Neither any Borrower nor any of its
------------
Subsidiaries will make any Acquisition of any Person without the consent
of the Required Lenders.
(e) Fiscal Year. Neither any Borrower nor any of its
-----------
Subsidiaries will change their respective fiscal years without the
consent of Agent, which consent shall not be unreasonably withheld.
(f) Stock Redemptions and Distributions. Parent will
-----------------------------------
not, directly or indirectly, make or declare or incur any liability to
make any Distribution in respect of the capital stock of Parent, either
in cash or property.
(g) Transactions with Related Parties. Neither any
---------------------------------
Borrower nor any of its Subsidiaries will, directly or indirectly,
engage in any material transaction, in the ordinary course of business
or otherwise, with any Related Party except as otherwise expressly
permitted in this Agreement, unless such transaction is upon fair market
terms, is not disadvantageous in any material respect to Agent or the
Lenders and has been approved by a majority of the disinterested
directors of such Borrower or such Subsidiary, as the case may be (or,
if none of such directors are disinterested, by a majority of the
directors), as being in the best interests of such Borrower or such
Subsidiary, as the case may be. In addition, neither such Borrower nor
any of its Subsidiaries shall (i) transfer any Property or assets to any
Related Party or (ii) purchase or sign any agreement to purchase any
stock or other securities of any Related Party (whether debt, equity or
otherwise), underwrite or Guarantee the same, or otherwise become
obligated with respect thereto.
(h) Loans and Investments. Neither any Borrower nor any
---------------------
of its Subsidiaries will make any loans or advances or extensions of
credit to (other than extensions of credit in the ordinary course of
business), purchase any stocks, bonds, notes, debentures or other
securities of, make any expenditures on behalf of, or in any manner
assume liability (direct, contingent or otherwise) for the Indebtedness
of any Person, except that a Borrower and the Subsidiaries of a Borrower
may:
63
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<PAGE>
(i) Make or permit to remain outstanding loans or
advances to any Borrower and/or any Subsidiary of a Borrower;
(ii) Acquire and own stock, obligations or
securities received in settlement of debts (created in the
ordinary course of business) owing to such Borrower or any
Subsidiary of such Borrower;
(iii) Own, purchase or acquire (A) prime commercial
paper and certificates of deposit in United States commercial
banks (having capital resources in excess of $100,000,000.00), in
each case due within one (1) year from the date of purchase and
payable in the United States in United States dollars,
(B) obligations of the United States government or any agency
thereof, (C) obligations guaranteed directly by the United States
government, (D) repurchase agreements of United States commercial
banks (having capital resources in excess of $100,000,000.00) for
terms of less than one (1) year, (E) shares in the Arch Fund or
other mutual funds; or (F) cumulative trust preferred securities
issued by MVBI Capital Trust, having an aggregate liquidation
amount not in excess of $1,000,000.00;
(iv) Make or permit to remain outstanding travel
and other like advances to directors, officers and employees of a
Borrower or any Subsidiary of a Borrower in the ordinary course of
business in an aggregate amount outstanding at any one time not to
exceed $250,000;
(v) Make an investment of up to Four Hundred
Fifty Thousand Dollars ($450,000) in membership interests of
Hardcore Composites;
(vi) Make loans to Hardcore Composites in the
maximum aggregate principal amount of One Million Eight Hundred
Two Thousand Nine Hundred Thirty Eight and 95/100 Dollars
($1,802,938.95), which loans are represented by two notes, one of
which is in the principal amount of Eight Hundred Two Thousand
Nine Hundred Thirty Eight and 95/100 Dollars ($802,938.95) and
shall bear interest at a rate not less than 8% per annum and shall
be due and payable on or before September 30, 2002, and the second
of which is in the original principal amount of up to One Million
Dollars ($1,000,000.00) and bears no interest;
(vii) Guarantee the obligations of Hardcore Composites
to Master Builders Inc. and SKW-MBT Operations, Inc. in respect
of a certain unsecured promissory note in the original principal
amount of One Million Dollars ($1,000,000.00), which note bears
interest at the Prime Rate and is due and payable on April 28, 2001
(the "HARDCORE COMPOSITES NOTE"); and
(viii) Guarantee the obligations of Hardcore Composites
to SKW-MBT Operations, Inc., in respect of that certain Sublease
dated as of April 27, 2000, and Parent covenants and agrees that
it shall not permit such lease to be amended in any manner which
would result in an increase in the potential liability under such
guarantee in respect of such lease.
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(i) Dissolution or Liquidation. Neither any Borrower
--------------------------
nor any of its Subsidiaries will seek or permit the dissolution or
liquidation of a Borrower or any Subsidiary of a Borrower in whole or in
part.
(j) Change in Nature of Business. Neither any Borrower
----------------------------
nor any of its Subsidiaries will make any material change in the nature
of its business.
(k) Pension Plans. Neither any Borrower nor any of its
-------------
Subsidiaries shall (i) permit any condition to exist in connection with
any Pension Plan which might constitute grounds for the PBGC to
institute proceedings to have such Pension Plan terminated or a trustee
appointed to administer such Pension Plan or (ii) engage in, or permit
to exist or occur, any other condition, event or transaction with
respect to any Pension Plan which could result in the incurrence by a
Borrower or any Subsidiary of a Borrower of any material liability, fine
or penalty. Neither any Borrower nor any Subsidiary of a Borrower shall
become obligated to contribute to any Pension Plan or Multiemployer Plan
other than any such plan or plans in existence on the date hereof,
unless such new Pension Plan or Multi-Employer Plan is in compliance
with ERISA and all other laws covering such plans and is in compliance
with all of the representations, warranties and covenants contained
herein.
(l) Limitation on Indebtedness. Neither any Borrower
--------------------------
nor any Subsidiary of a Borrower will incur or be obligated on any
Indebtedness, either directly or indirectly, by way of Guarantee,
suretyship or otherwise, other than:
(i) The Obligations;
(ii) Unsecured trade accounts payable and normal
accruals incurred in the ordinary course of business;
(iii) Indebtedness existing as of the date of this
Agreement and listed on Schedule 6.10 attached hereto (and any
-------------
extensions, renewals, refinancings and replacements thereof in a
principal amount not in excess of the amount of such Indebtedness
outstanding immediately prior to the effectiveness of such
extension, renewal, refinancing or replacement and otherwise on
terms no less favorable than the terms of such Indebtedness as of
the date of this Agreement;
(iv) Capitalized Lease Obligations and Purchase
money Indebtedness secured by Liens permitted under Section
-------
7.2(a) pursuant to subparagraph (j) of the definition of
-----
Permitted Liens, provided that in no event shall the aggregate
--------
outstanding principal amount of Indebtedness permitted by this
clause (iv) exceed, at any one time or from time to time,
$5,000,000.00;
(v) Loans or advances by Parent or any Subsidiary
of Parent to any Subsidiary of Parent;
(vi) Loans or advances by any Subsidiary of Parent
to Parent or any other Subsidiary of Parent;
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(vii) Guarantees of Indebtedness of Parent or any
Subsidiary of Parent by Parent or any Subsidiary of Parent;
(viii) Indebtedness incurred pursuant to a Debt
Offering by Parent or any Subsidiary of Parent so long as the Net
Cash Proceeds are applied by the Parent or such Subsidiary of
Parent to prepay the Loans hereunder in accordance with the
provisions of Section 3.17(b)(iii);
--------------------
(ix) Unsecured Indebtedness of Zoltek Rt. to RZB
Bank in an aggregate outstanding principal amount not exceeding,
at any one time or from time to time, $4,000,000; and
(x) Guarantees of Indebtedness of Hardcore
Composites as permitted pursuant to Section 7.2(h).
--------------
(m) Limitation on Stock Offerings. Neither the Parent
-----------------------------
nor the Subsidiary of Parent shall make a Stock Offering, unless the Net
Cash Proceeds are applied in accordance with the provisions of Section
-------
3.17(b)(iii).
------------
7.3 Use of Proceeds. Borrowers agree that the proceeds
---------------
of the Loans will be used solely (a) for working capital requirements
and other corporate needs and purposes of Borrowers in the ordinary
course of Borrowers' businesses and (b) to refinance existing
Indebtedness of the Borrowers. The Borrowers shall not use any portion
of the proceeds of the Loans, directly or indirectly (i) to purchase or
carry margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock, or to refund or repay indebtedness
originally incurred for such purpose or (ii) for any purpose which
entails a violation of, or which is inconsistent with, the provisions of
Regulations U, T and X of The Board of Governors of the Federal Reserve
System, as amended.
SECTION 8. EVENTS OF DEFAULT.
------------------
If any of the following (each of the following herein
sometimes called an "EVENT OF DEFAULT") shall occur and be continuing:
8.1 Any Borrower shall fail to pay any of the Obligations
constituting principal as and when the same shall become due and
payable, whether by reason of demand, acceleration, maturity or
otherwise; or any Borrower shall fail to pay any of the Obligations
(other than any Obligations constituting principal) within five (5) days
after the date the same shall first become due and payable, whether by
reason of demand, acceleration, maturity or otherwise;
8.2 Any representation or warranty of a Borrower made in
this Agreement, in any other Transaction Document, or in any
certificate, agreement, instrument or statement furnished or made or
delivered pursuant hereto or thereto or in connection herewith or
therewith, shall prove to have been untrue or incorrect in any material
respect when made or effected;
8.3 Any Borrower shall fail to perform or observe any
term, covenant or provision contained in Sections 7.1(i) or (k),
--------------- ---
Section 7.2 or Section 7.3;
----------- -----------
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8.4 Any Borrower shall fail to perform or observe any
other term, covenant or provision contained in this Agreement and any
such failure remains unremedied for thirty (30) days after written
notice thereof shall have been given to Borrowers by Agent or any of the
Lenders;
8.5 This Agreement or any of the other Transaction
Documents shall at any time for any reason cease to be in full force and
effect or shall be declared to be null and void by a court of competent
jurisdiction, or if the validity or enforceability thereof shall be
contested or denied by any Borrower, or if the transactions completed
hereunder or thereunder shall be contested by any Borrower or if any
Borrower shall deny that it has any or further liability or obligation
hereunder or thereunder;
8.6 Any Borrower or any Subsidiary of a Borrower shall
(i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code or any other Federal,
state or foreign bankruptcy, insolvency, receivership, liquidation or
similar law, (ii) consent to the institution of, or fail to contravene
in a timely and appropriate manner, any such proceeding or the filing of
any such petition, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar official of
itself, himself or herself or of a substantial part of its, his or her
Property or assets, (iv) file an answer admitting the material
allegations of a petition filed against itself, himself or herself in
any such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its, his or her
inability or fail generally to pay its, his or her debts as they become
due or (vii) take any corporate or other action for the purpose of
effecting any of the foregoing;
8.7 An involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of any Borrower or any Subsidiary of a
Borrower, or of a substantial part of the Property or assets of any
Borrower or any Subsidiary of a Borrower, under Title 11 of the United
States Code or any other Federal, state or foreign bankruptcy,
insolvency, receivership, liquidation or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator or similar
official of a Borrower or any Subsidiary of a Borrower or of a
substantial part of the Property or assets of a Borrower or any
Subsidiary of a Borrower or (iii) the winding-up or liquidation of a
Borrower or any Subsidiary of a Borrower; and such proceeding or
petition shall continue undismissed for sixty (60) consecutive days or
an order or decree approving or ordering any of the foregoing shall
continue unstayed and in effect for sixty (60) consecutive days;
8.8 (i) Any Borrower or any Subsidiary of a Borrower shall
be in default in the payment of any principal of or interest on any
Funded Debt having an aggregate outstanding principal balance equal to
or in excess of $100,000 beyond any applicable period of grace provided
with respect thereto; (ii) any Borrower or any Subsidiary of a Borrower
shall be in default in the performance of or compliance with any term,
provision, condition or covenant contained in any agreement, document or
instrument evidencing, securing, guaranteeing the payment of or
otherwise relating to any Funded Debt having an aggregate outstanding
principal balance equal to or in excess of $100,000, and as a
consequence of such default such Funded Debt has become, or has been
declared, due and payable before its stated maturity or before its
regularly scheduled dates of payment; or (iii) Hardcore Composites shall
be in default in the payment of any principal of or
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interest on the Hardcore Composites Note beyond any applicable period of
grace provided with respect thereto;
8.9 A Borrower or any Subsidiary of a Borrower shall have
a judgment in an amount in excess of $100,000 entered against it, him or
her by a court having jurisdiction in the premises and such judgment
shall not be appealed in good faith or satisfied by such Borrower or
such Subsidiary of such Borrower, as the case may be, within the time
period permitted by applicable law for the appeal of such judgment;
8.10 The occurrence of a Reportable Event with respect to
any Pension Plan; the institution of proceedings to terminate a Pension
Plan by the PBGC or any other Person; the withdrawal in a "complete
withdrawal" or a "partial withdrawal" as defined in Sections 4203 and
4205, respectively, of ERISA by a Borrower, any ERISA Affiliate or any
Subsidiary of a Borrower from any Multiemployer Plan; or the incurrence
of any increase in an aggregate amount in excess of $100,000 (for all
such plans) in the contingent liability of a Borrower or any Subsidiary
of a Borrower with respect to any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA which covers retired employees and
their beneficiaries;
8.11 The institution by a Borrower, any ERISA Affiliate or
any Subsidiary of a Borrower of steps to terminate any Pension Plan if,
in order to effectuate such termination, such Borrower, such ERISA
Affiliate or such Subsidiary of a Borrower, as the case may be, would be
required to make a contribution to such Pension Plan in excess of
$100,000, or would incur a liability or obligation to such Pension Plan
in excess of $100,000; or
8.12 A Change of Control shall occur;
THEN, and in each such event (other than an event described
in Sections 8.6 or 8.7), Agent may, or if requested in writing by
------------ ---
the Required Lenders shall, declare that the obligations of Lenders to
make Loans and of Agent to issue Letters of Credit under this Agreement
have terminated, whereupon such obligations of Agent and Lenders shall
be immediately and forthwith terminated, and Agent may further, or if
requested in writing by the Required Lenders shall further, declare on
behalf of each of the Lenders that the entire outstanding principal
balance of and all accrued and unpaid interest on the Notes and all of
the other Obligations to be due and payable, whereupon all of the unpaid
principal balance of and all accrued and unpaid interest on the Notes
and all such other Obligations shall become and be immediately due and
payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrowers, and
Agent and the Lenders may exercise any and all other rights and remedies
which any of them may have under any of the Transaction Documents or
under applicable law; provided, however, that upon the occurrence of
-------- -------
any event described in Sections 8.6 or 8.7, Lenders' obligations to
------------ ---
make Loans and Agent's obligation to issue Letters of Credit under this
Agreement shall automatically terminate and the entire outstanding
principal balance of and all accrued and unpaid interest on the Notes
issued under this Agreement and all other Obligations shall
automatically become immediately due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrowers, and Agent and the Lenders may
exercise any and all other rights and remedies which any of them may
have under any of the Transaction Documents or under applicable law.
Following acceleration of the
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Obligations hereunder as set forth above, Agent may, or if requested in
writing by the Required Lenders and provided with the indemnity required
under Section 9.6 shall, proceed to enforce any remedy then available
-----------
to Agent or any of the Lenders under any applicable law, including,
without limitation, all rights granted to Agent hereunder, the Security
Agreement or under any Letter of Credit Application, and the rights and
remedies available to a secured party under the Uniform Commercial Code
as in effect in the State of Missouri.
Upon the occurrence and during the continuance of any Event
of Default, Agent will have the right, in addition to all other rights
and remedies available to Agent and the Lenders under this Agreement or
under the other Transaction Documents, after oral or written notice is
sent to the Borrowers, to take possession of, preserve and care for the
Collateral, to execute and/or endorse as the Borrowers' agent any bills
of sale or documents, instruments or chattel paper in or pertaining to
the Collateral, to notify Account Debtors and obligors on documents,
Accounts and instruments included in the Collateral to make payment
directly to Agent, to take control of the Borrowers' cash, to collect
and receive funds generated by the Collateral, including proceeds or
refunds from insurance, or as a result of claims for the damage, loss,
or destruction of the Collateral, and use the same to reduce any part of
the Obligations.
Agent shall give notice of a Default to Borrowers promptly
upon being requested to do so by any Lender and shall thereupon notify
all of the Lenders thereof.
Following any Default or Event of Default and so long as any
such Default or Event of Default is continuing, all payments and other
amounts received by Agent and/or any of the Lenders, whether voluntary
or involuntary, including but not limited to any proceeds of any
Collateral, any right of offset or otherwise, shall be shared among the
Lenders in accordance with their Pro Rata Shares of the outstanding
principal indebtedness under all of the Loans and Letter of Credit
obligations then outstanding of Borrowers. Such application shall be
made first, to any costs or expenses of Agent or any of the Lenders
incurred in connection with the collection of such proceeds, second, to
any accrued and unpaid fees due hereunder or under any of the other
Transaction Documents, third, to any and all accrued and unpaid interest
on any of the Loans, fourth, to collateralize any outstanding Letters of
Credit pursuant to Section 3.6 hereof, and fifth, to the unpaid
-----------
principal amounts of any of the Loans outstanding hereunder and under
the other Transaction Documents.
SECTION 9. THE AGENT
---------
9.1 Appointment and Authorization. Each Lender
-----------------------------
irrevocably appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement,
the Notes and other Transaction Documents as are delegated to the Agent
by the terms hereof or thereof, together with all such powers as may be
reasonably incidental thereto.
9.2 Agent and Affiliates. The Agent shall have the same
--------------------
rights and powers under this Agreement as any other Lender 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, lend
money to and generally engage in any kind of business with Borrowers or
any of their Subsidiaries or Affiliates as if it were not the Agent
hereunder.
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9.3 Action By Agent. The obligations of the Agent
---------------
hereunder are only those expressly set forth herein. Without limiting
the generality of the foregoing, the Agent shall not be required to take
any action with respect to any Default or Event of Default, except as
expressly provided in Section 8.
---------
9.4 Consultation with Experts. The Agent may consult
-------------------------
with legal counsel, independent certified public accountants and other
experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of
such counsel, accountants or other experts.
9.5 Liability of Agent. Neither the Agent nor any of
------------------
its directors, officers, employees, agents or advisors shall be liable
to any of the Lenders for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the
requisite percentage in interest of the Lenders set forth herein or (ii)
in the absence of its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction. Neither the Agent nor
any of its directors, officers, employees, agents or advisors shall be
responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made in connection with
this Agreement or any Loan hereunder; (ii) the performance or observance
of any of the covenants or agreements of Borrowers; (iii) the
satisfaction of any condition specified in Section 4, except receipt
---------
of items required to be delivered to the Agent; or (iv) the validity,
effectiveness or genuineness of this Agreement, the Notes or any of the
other Transaction Documents. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement or
other writing (which may be a bank wire, telex, telecopy or similar
writing) believed by it to be genuine or to be signed by the proper
party or parties.
9.6 Indemnification. Notwithstanding any other
---------------
provision contained in this Agreement to the contrary, to the extent
Borrowers fail to reimburse the Agent pursuant to Section 10.3,
------------
Section 10.4 or Section 10.5, or if any Default or Event of Default
------------ ------------
shall occur under this Agreement, the Lenders shall ratably in
accordance with their respective Pro Rata Shares, indemnify the Agent
and hold it harmless from and against any and all liabilities, losses,
costs and/or expenses, including, without limitation, any liabilities,
losses, costs and/or expenses arising from the failure of any Lender to
perform its obligations hereunder or in respect of this Agreement, and
also including, without limitation, reasonable attorneys' fees and
expenses, which the Agent may incur, directly or indirectly, in
connection with this Agreement, the Notes or any of the other
Transaction Documents, or any action or transaction related hereto or
thereto; provided only that the Agent shall not be entitled to such
--------
indemnification for any losses, liabilities, costs and/or expenses
directly and solely resulting from its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction. This
indemnity shall be a continuing indemnity, contemplates all liabilities,
losses costs and expenses related to the execution, delivery and
performance of this Agreement, the Notes and the other Transaction
Documents, and shall survive the satisfaction and payment of the Loans
and the termination of this Agreement.
9.7 Credit Decision. Each Lender acknowledges that it
---------------
has, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will,
independently and without reliance
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upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking any action under this
Agreement.
9.8 Resignation of Agent. The Agent may resign at any
--------------------
time by giving written notice thereof to the Lenders and Borrowers,
which resignation shall become effective upon the appointment of a
successor Agent. Upon any such resignation, Lenders shall have the
right to appoint a successor Agent, which successor Agent shall be
reasonably acceptable to Borrowers and shall be a commercial bank
organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least
$500,000,000.00. If no successor Agent shall have been so appointed by
Lenders, and shall have accepted such appointment, within thirty (30)
days after the retiring Agent's giving of notice of resignation, then
the Agent shall, on behalf of all of the Lenders, appoint a successor
Agent with the prior consent of Borrowers, which consent shall not be
unreasonably withheld, and which successor Agent shall be a commercial
bank organized under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of a least
$500,000,000.00. 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 the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged
from all of its duties and obligations under this Agreement. After any
retiring Agent's resignation as Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or
---------
omitted to be taken by it while it was Agent under this Agreement.
9.9 Removal of Agent. The Agent may be removed at any
----------------
time, for or without cause, by an instrument or instruments in writing
executed by all of the Lenders and delivered to the Agent with a copy to
Borrowers, specifying the removal and the date when it shall take effect
(which shall be the date of the appointment of a successor Agent). Upon
any such removal, Lenders shall have the right to appoint a successor
Agent, which successor Agent shall be reasonably acceptable to Borrowers
and shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital
and surplus of at least $300,000,000.00. If no successor Agent shall
have been so appointed by Lenders, and shall have accepted such
appointment, within thirty (30) days after the date of the removal of
the Agent, then the Required Lenders shall, on behalf of all of the
Lenders, appoint a successor Agent, which successor Agent shall be
reasonably acceptable to Borrowers and shall be a commercial bank
organized under the laws of the United States of America or of any state
thereof and having a combined capital and surplus of at least
$300,000,000.00. 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 the rights, powers, privileges and
duties of the removed Agent, and the removed Agent shall be discharged
from all of its duties and obligations under this Agreement. After any
such removal, the provisions of this Section 9 shall inure to such
---------
former Agent's benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement.
SECTION 10. GENERAL.
--------
10.1 No Waiver. No failure or delay by Agent or any of
---------
the Lenders in exercising any right, remedy, power or privilege
hereunder or under any other Transaction Document shall
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operate as a waiver thereof; nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The remedies provided
herein and in the other Transaction Documents are cumulative and not
exclusive of any remedies provided by law. Nothing herein contained
shall in any way affect the right of Agent or any of the Lenders to
exercise any statutory or common law right of banker's lien or setoff.
10.2 Right of Setoff. Upon the occurrence and during the
---------------
continuance of any Event of Default, each of the Lenders is hereby
authorized at any time and from time to time, without notice to
Borrowers (any such notice being expressly waived by Borrowers) and to
the fullest extent permitted by law, to setoff and apply any and all
deposits (general or special, time or demand, provisional or final) at
any time held by any such Lender and any and all other indebtedness at
any time owing by any such Lender to or for the credit or account of
Borrowers against any and all of the Obligations irrespective of whether
or not such Lender shall have made any demand hereunder or under any of
the other Transaction Documents and although such obligations may be
contingent or unmatured. Such Lender agrees to promptly notify
Borrowers after any such setoff end application made by such Lender,
provided, however, that the failure to give such notice shall not
-------- -------
affect the validity of such setoff and application. The rights of
Lenders under this Section 10.2 are in addition to any other rights
------------
and remedies (including, without limitation, other rights of setoff)
which Lenders may have. Nothing contained in this Agreement or any
other Transaction Document shall impair the right of each of the Lenders
to exercise any right of setoff or counterclaim it may have against
Borrowers and to apply the amount subject to such exercise to the
payment of indebtedness of Borrowers unrelated to this Agreement or the
other Transaction Documents.
10.3 Cost and Expenses. Borrowers agree, whether or not
-----------------
any Loan is made hereunder, to pay Agent upon demand (a) all reasonable
out-of-pocket costs and expenses and all Attorneys' Fees of Agent in
connection with the preparation, negotiation and execution of this
Agreement, the Notes and the other Transaction Documents, (b) all
recording and filing fees incurred in connection with this Agreement and
the other Transaction Documents, (c) all reasonable out-of-pocket costs
and expenses and all Attorneys' Fees of Agent in connection with the
preparation of any waiver or consent hereunder or any amendment hereof,
(d) all out-of-pocket costs and expenses and all Attorneys' Fees of
Agent and each of the Lenders in connection with or any Event of Default
hereunder, (e) if an Event of Default occurs, all out-of-pocket costs
and expenses and all Attorneys' Fees incurred by Agent and each of the
Lenders in connection with such Event of Default and collection and
other enforcement proceedings resulting therefrom and (f) all other
Attorneys' Fees incurred by Agent and each of the Lenders relating to or
arising out of or in connection with this Agreement or any of the other
Transaction Documents. The Borrowers further agree to pay or reimburse
Agent and each of the Lenders for any stamp or other taxes which may be
payable with respect to the execution, delivery, recording and/or filing
of this Agreement, the Notes, the Security Agreement or any of the other
Transaction Documents. All of the obligations of Borrowers under this
Section 10.3 shall survive the satisfaction and payment of Obligations
------------
and the termination of this Agreement.
10.4 Environmental Indemnity. Borrowers hereby agree to
-----------------------
indemnify the Indemnitees and hold the Indemnitees harmless from and
against any and all losses, liabilities, damages, injuries, costs,
expenses and claims of any and every kind whatsoever (including, without
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limitation, court costs and Attorneys' Fees) which at any time or from
time to time may be paid, incurred or suffered by, or asserted against
the Indemnitees with respect to or as a direct or indirect result of the
violation by Parent or any Subsidiary of Parent of any Environmental
Laws; or with respect to, or as a direct or indirect result of the
presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission or release from, properties utilized by Parent
and/or any Subsidiary of Parent in the conduct of their receptive
businesses into or upon any land, the atmosphere or any watercourse,
body of water or wetland, of any Hazardous Materials or any other
hazardous or toxic waste, substance or constituent or other substance
(including, without limitation, any losses, liabilities, damages,
injures, costs, expenses or claims asserted or arising under the
Environmental Laws); and the provisions of and undertakings and
indemnification set out in this Section 10.4 shall survive the
------------
satisfaction and payment of Obligations and the termination of this
Agreement.
10.5 General Indemnity. In addition to the payment of
-----------------
expenses pursuant to Section 10.3, whether or not the transactions
------------
contemplated hereby shall be consummated, Borrowers hereby agree to
indemnify, pay and hold Agent, each of the Lenders and any other
holder(s) of the Notes, and the officers, directors, employees, agents
and affiliates of any of them (collectively, the "INDEMNITEES") harmless
from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnities in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such
Indemnities shall be designated a party thereto), that may be imposed
on, incurred by or asserted against the Indemnities, in any manner
relating to or arising out of this Agreement, any of the other
Transaction Documents or any other agreement, document or instrument
executed and delivered by Borrowers in connection herewith or therewith,
the statements contained in any commitment letters delivered by Agent or
any of the Lenders, the Lender's agreements to make the Loans hereunder
the Agent's agreement to issue Letters of Credit, or the use or intended
use of the proceeds of any Loan or Letter of Credit hereunder;
provided that Borrowers shall have no obligation to an Indemnitee
--------
hereunder with respect to indemnified liabilities (a) arising from the
gross negligence or willful misconduct of that Indemnitee as determined
by a court of competent jurisdiction or (b) arising out of dispute
between the Agent and one or more of the Lenders and/or a dispute among
one or more of the Lenders (collectively, the "indemnified
liabilities"). To the extent that the undertaking to indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, Borrowers shall
contribute the maximum portion that they are permitted to pay and
satisfy under applicable law to the payment and satisfaction of all
indemnified liabilities incurred by the Indemnities or any of them. The
provisions of the undertakings and indemnification set out in this
Section 10.5 shall survive satisfaction and payment of the Obligations
------------
and the termination of this Agreement.
10.6 Authority to Act. Agent and the Lenders shall each
----------------
be entitled to act on any notices and instructions (telephonic or
written) believed by Agent or any such Lender to have been delivered by
Zsolt Rumy, Daniel Greenwell or James Burch (or any other person from
time to time authorized to act on behalf of Borrowers pursuant to a
resolution adopted by the respective Boards of Directors of the
Borrowers and certified by the Secretary of each such Borrower and
delivered to Agent), regardless of whether such notice or instruction
was in fact delivered by such person, and
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Borrowers hereby agree to indemnify Agent and each of the Lenders and
hold Agent and each of the Lenders harmless from and against any and all
losses and expenses, if any, ensuing from any such action.
10.7 Capital Adequacy. If, after the date of this
----------------
Agreement, Agent or any of the Lenders shall have determined that the
adoption of any applicable law, rule, regulation or guideline regarding
capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental or
regulatory authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent or any
of the Lenders 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 will have the effect of reducing the
rate of return on Agent's or such Lender's capital as a consequence of
its obligations hereunder to a level below that which Agent or such
Lender could have achieved but for such adoption, change or compliance
(taking into consideration Agent's or such Lender's policies with
respect to capital adequacy), then from time to time Borrowers shall pay
to Agent or such Lender upon demand such additional amount or amounts as
will compensate Agent or such Lender for such reduction. All
determinations made by Agent or such Lender of the additional amount or
amounts required to compensate Agent or such Lender in respect of the
foregoing shall be conclusive in the absence of demonstrable error. In
determining such amount or amounts, Agent or such Lender may use any
reasonable averaging and attribution methods.
10.8 Notices. Any notice, request, demand, consent,
-------
confirmation or other communication hereunder shall be in writing and
delivered in person or sent by telegram, telex, telecopy or registered
or certified mail, return receipt requested and postage prepaid, if to
Borrowers at the each Borrower's address specified opposite its
signature below, or if to Agent at One Firstar Plaza, 7th and
Washington, St. Louis, Missouri 63101, Attention: Thomas S. Sherman,
Telecopy No. (314) 418-8074, or if to Lenders, at their respective
addresses or telecopy numbers set forth on the signature pages of this
Agreement, or at such other address as any party may designate as its
address for communications hereunder by notice so given. Such notices
shall be deemed effective on the day on which delivered or sent if
delivered in person or sent by telegram, telex or telecopy, or on the
third (3rd) Business Day after the day on which mailed, if sent by
registered or certified mail.
10.9 Consent to Jurisdiction. BORROWERS IRREVOCABLY
-----------------------
SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF ANY MISSOURI STATE COURT OR
ANY UNITED STATES OF AMERICA COURT SITTING IN THE EASTERN DISTRICT OF
MISSOURI, AS AGENT MAY ELECT, IN ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.
BORROWERS HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT TO SUCH
SUIT, ACTION OR PROCEEDING MAY BE HELD AND DETERMINED IN ANY OF SUCH
COURTS. BORROWERS IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH BORROWERS MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT 1N ANY
SUCH COURT, AND BORROWERS FURTHER IRREVOCABLY WAIVE ANY CLAIM THAT SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
74
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<PAGE>
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. BORROWERS HEREBY
EXPRESSLY WAIVE ALL RIGHTS OF ANY OTHER JURISDICTION WHICH BORROWERS MAY
NOW OR HEREAFTER HAVE BY REASON OF THEIR PRESENT OR SUBSEQUENT
DOMICILES. BORROWERS AUTHORIZE THE SERVICE OF PROCESS UPON BORROWERS BY
REGISTERED MAIL SENT TO BORROWERS AT THEIR RESPECTIVE ADDRESSES IN
ACCORDANCE WITH SECTION 10.8.
------------
10.10 Agent's and Lenders' Books and Records. Agent's
--------------------------------------
and each Lender's books and records showing the account between
Borrowers and Agent or any of the Lenders shall be admissible in
evidence in any action or proceeding and shall constitute prima facie
proof thereof in the absence of manifest error.
10.11 Governing Law: Amendments. This Agreement shall
-------------------------
be governed by and construed in accordance with the internal laws of the
State of Missouri. Any provision of this Agreement, the Notes, the
Security Agreement or any of the other Transaction Documents may be
amended or waived if, but only if, such amendment or waiver is in
writing and is signed by Borrowers and the Required Lenders (and if the
rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by all
--------
of the Lenders, (i) increase the Revolving Credit Commitment or Term
Loan Commitment of any Lender, (ii) reduce the principal amount of or
rate of interest on any Loan or any fees hereunder, (iii) postpone the
date fixed for any payment of principal of or interest on any Loan or
any fees hereunder, (iv) release any collateral security or any guaranty
for any Loan hereunder, (v) amend or waive any Event of Default,
(vii) change the percentage in the definition of Required Lenders, or
(viii) amend this Section 10.11.
-------------
10.12 Participations and Assignments.
------------------------------
(a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that Borrowers may not assign or
otherwise transfer any of its rights or delegate any of its obligations
under this Agreement. Any of the Lenders may sell participations in its
Notes and its rights under this Agreement, the other Transaction
Documents, and in the Collateral, in whole or in part, in minimum
amounts equal to the lesser of (i) $2,500,000 or (ii) such Lender's Pro
Rata Share of the Loan Commitments to any commercial bank organized
under the laws of the United States or any state thereof; provided,
--------
that the sale of any participation shall require the consent of the
Agent. Each agreement pursuant to which any such participation is
granted shall provide that no such participant shall have any rights
under this Agreement or any other Transaction Document (the
participants' rights against the Lender granting its participation to be
those set forth in the Participation Agreement between the participant
and such Lender), and such selling Lender shall retain the sole right to
approve or disapprove any amendment, modification or waiver of any
provision of this Agreement or any of the other Transaction Documents.
Each such participant shall be entitled to the benefits of the yield
protection provisions hereof to the extent the Lender granting such
participation would have been so entitled had not such participation
been sold.
75
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<PAGE>
(i) Any Lender which, in accordance with
Section 10.12(a), grants a participation in any of its rights
----------------
under this Agreement or its Notes shall give prompt notice
describing the details thereof to the Agent and Borrowers.
(ii) Unless otherwise agreed to by Borrowers in
writing, no Lender shall, as between Borrowers and that Lender, be
relieved of any of its obligations under this Agreement as a
result of such Lender's granting of a participation in all or any
part of such Lender's Notes or all or any part of such Lender's
rights under this Agreement.
(b) Each Lender may, upon prior notice to and consent of
Borrowers and Agent, which consent shall not be unreasonably withheld,
from time to time sell or assign to other banking institutions having a
Thomson BankWatch Global Issuer Rating of "B" or better all or a pro
rata part of all of the indebtedness evidenced by the Notes then owed by
it together with an equivalent proportion of its obligation to make
Loans hereunder and the credit risk incidental to the Letters of Credit
pursuant to an Assignment Agreement substantially in the form of
Exhibit K attached hereto, executed by the assignor, the assignee and
---------
the Borrowers, which agreements shall specify in each instance the
portion of the indebtedness evidenced by the Notes which is to be
assigned to each such assignor and the portion of the Loan Commitments
of the assignor and the credit risk incidental to the Letters of Credit
(which portions shall be equivalent) to be assumed by it (the
"ASSIGNMENT AGREEMENTS"), provided that nothing herein contained shall
--------
restrict, or be deemed to require any consent as a condition to, or
require payment of any fee in connection with, any sale, discount or
pledge by any Lender of any Note or other obligation hereunder to a
Federal Reserve Bank. Any such portion of the indebtedness assigned by
any Lender pursuant to this Section 10.12(b) shall not be less than
----------------
$5,000,000. Upon the execution of each Assignment Agreement by the
assignor, the assignee and the Borrowers and consent thereto by the
Agent (i) such assignee shall thereupon become a "Lender" for all
purposes of this Agreement with Loan Commitments in the amount set forth
in such Assignment Agreement and with all the rights, powers and
obligations afforded a Lender hereunder, (ii) the assignor shall have no
further liability for funding the portion of its Loan Commitments
assumed by such other Lender and (iii) the address for notices to such
Lender shall be as specified in the Assignment Agreement, and the
Borrowers shall, in exchange for the cancellation of the Notes held by
the assignor Lender, execute and deliver Notes to the assignee Lender in
the amount of its Loan Commitments and new Notes to the assignor Lender
in the amount of the Loan Commitments after giving effect to the
reduction occasioned by such assignment, all such Notes to constitute
"Notes" for all purposes of this Agreement, and there shall be paid to
the Agent, as a condition to such assignment, an administration fee of
$2,500 plus any out-of-pocket costs and expenses incurred by it in
effecting such assignment, such fee to be paid by the assignor or the
assignee as they may mutually agree, but under no circumstances shall
any portion of such fee be payable by or charged by the Borrowers.
(c) The Lender may, in connection with any assignment or
proposed assignment or grant or proposed grant of a participation,
disclose to the proposed assignee or participant any information
relating to the Borrowers furnished to the Lender by or on behalf of the
Borrowers, provided that Lender shall give the Agent and Borrowers
written notice of any proposed assignee or participant prior to the
making of any such disclosure.
76
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<PAGE>
10.13 References: Headings for Convenience. Unless
-------------------------------------
otherwise specified herein, all references herein to Section numbers
refer to Section numbers of this Agreement, and all references herein to
Exhibits A, B, C, E, F, G, H, I, J, K and L refer to annexed
-------------------------------------------
Exhibits A, B, C, E, F, G, H, I, J, K, and L which are hereby
--------------------------------------------
incorporated herein by reference and all references herein to
Schedules 2.1, 6.5, 6.8, 6.10, 6.11, 6.12, 6.18 referred to annexed
Schedules 2.1, 6.5, 6.8, 6.10, 6.11, 6.12, 6.18 which are hereby
incorporated herein by reference. The Section headings are furnished
for the convenience of the parties and are not to be considered in the
construction or interpretation of this Agreement.
10.14 Subsidiary Reference. Any reference herein to a
--------------------
Subsidiary or Consolidated Subsidiary of Parent, and any financial
definition, ratio, restriction or other provision of this Agreement
which is stated to be applicable to Parent and its Subsidiaries or
Consolidated Subsidiaries or which is to be determined on a
"consolidated" or "consolidating" basis, shall apply only to the extent
Parent has any Subsidiaries or Consolidated Subsidiaries and, where
applicable, to the extent any such Subsidiaries are consolidated with
Parent for financial reporting purposes.
10.15 No Oral Agreements: Entire Agreement. ORAL
------------------------------------
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW
SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWERS) AND US (AGENT
AND LENDERS) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE
REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS, WHICH ARE THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN
WRITING TO MODIFY IT. THIS AGREEMENT AND THE NOTE EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND SUPERSEDE ALL
PRIOR AGREEMENT AND UNDERSTANDINGS (ORAL OR WRITTEN) RELATING TO THE
SUBJECT MATTER HEREOF, PROVIDED THAT, WHERE NOT INCONSISTENT WITH THE
TERMS OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, THE TERMS
OF THE COMMITMENT LETTER DATED NOVEMBER 12, 1999 SHALL SURVIVE AND
REMAIN BINDING UPON BORROWERS.
10.16 Severability. In case any one or more of the
------------
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be
affected or impaired thereby.
10.17 Counterparts. This Agreement may be executed in
------------
any number of counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
10.18 Resurrection of Obligations. To the extent that
---------------------------
Agent or any of the Lenders receives any payment on account of any of
Obligations, and any such payment(s) or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside, subordinated and/or required to be repaid to a trustee, receiver
or any other Person under any bankruptcy act, state or Federal law,
common law or equitable cause, then, to the extent of such payment(s)
received, Obligations or part thereof intended to be satisfied and any
and all Liens upon or pertaining to any Property or assets of Borrowers
and theretofore created and/or existing in favor of Agent for the
benefit of the Lenders as security for the payment of Obligations shall
be revived and
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<PAGE>
continue in full force and effect, as if such payment(s) had not been
received by Agent or any such Lender and applied on account of
Obligations.
10.19 U.S. Dollars. Except as otherwise expressly set
------------
forth in this Agreement, all currency references set forth herein, in
any other Transaction Documents and in any transactions referenced
herein or therein shall be denominated in Dollars of the United States
of America.
10.20 Subordination of Intercompany Indebtedness. Each
------------------------------------------
of the Borrowers agrees that any and all claims of such Borrower against
any other Borrower, any endorser, obligor or any other guarantor of all
or any part of the Obligations, or against any of its properties shall
be subordinate and subject in right of payment to the prior payment, in
full and in cash, of all Obligations. Notwithstanding any right of any
Borrower to ask, demand, sue for, take or receive any payment from any
other Borrower, all rights, liens and security interests of any
Borrower, whether now or hereafter arising and howsoever existing, in
any assets of any other Borrower (whether constituting part of
Collateral given to the Agent for the benefit of the Lenders to secure
payment of all or any part of the Obligations or otherwise) shall be and
are subordinated to the rights of the Agent and the Lenders in those
assets. No Borrower shall have any right to possession of any such
asset or to foreclose upon any such asset, whether by judicial action or
otherwise, unless and until all of the Obligations (other than
contingent indemnity obligations) shall have been fully paid and
satisfied and all financing arrangements among the Borrowers and the
Lenders have been terminated. So long as any Default shall have
occurred and be continuing, if all or any part of the assets of any
Borrower, or the proceeds thereof, are subject to any distribution,
division or application to the creditors of such Borrower, whether
partial or complete, voluntary or involuntary, and whether by reason of
liquidation, bankruptcy, arrangement, receivership, assignment for the
benefit of creditors or any other action or proceeding, or if the
business of any Borrower is dissolved or if substantially all of the
assets of any Borrower are sold, then, and in any such event, any
payment or distribution of any kind or character, either in cash,
securities or other property, which shall be payable or deliverable upon
or with respect to any indebtedness of any such Borrower to any other
Borrower ("INTERCOMPANY INDEBTEDNESS") shall be paid or delivered
directly to the Agent for application on any of the Obligations, due or
to become due, until such Obligations (other than contingent indemnity
obligations) shall have first been fully paid and satisfied. The
Borrowers irrevocably authorize and empower the Agent to demand, sue
for, collect and receive every such payment or distribution and give
acquittance therefor and to make and present for and on behalf of the
applicable Borrower such proofs of claim and take such other action, in
the Agent's own name or in the name of the applicable Borrower or
otherwise, as the Agent may deem necessary or advisable for the
enforcement of this Section 10.20; provided, that the Agent agrees
------------- --------
not to exercise such powers unless an Event of Default shall have
occurred and be continuing. The Agent may vote such proofs of claim in
any such proceeding, receive and collect any and all dividends or other
payments or disbursements made thereon in whatever form the same may be
paid or issued and apply the same on account of any of the Obligations.
Should any payment, distribution, security or instrument or proceeds
thereof be received by any Borrower upon or with respect to the
Intercompany Indebtedness at any time a Default shall have occurred and
be continuing and prior to the satisfaction of all of the Obligations
and the termination of all financing arrangements among the Borrowers
and the Lenders, the applicable Borrower shall receive and hold the same
in trust, as trustee, for the benefit of the Lenders and shall so long
as any Default shall have occurred and be continuing promptly deliver
the same to the Agent, for the benefit of the
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<PAGE>
Lenders, in precisely the form received (except for the endorsement or
assignment of the Borrower where necessary), for application to any of
the Obligations, due or not due, and, until so delivered, the same shall
be held in trust by the Borrower as the property of the Lenders. If any
Borrower fails to make any such endorsement or assignment to the Agent,
the Agent or any of its officers or employees are irrevocably authorized
to make the same. So long as any Default shall have occurred and be
continuing, the Borrowers agree that until the Obligations have been
paid in full (in cash) and satisfied and all financing arrangements
among the Borrowers and the Lenders have been terminated, the Borrowers
will not assign or transfer to any Person (other than the Agent) any
claim such Borrower has or may have against any other Borrower.
10.21 Effectiveness.
-------------
This Agreement shall become effective on the date (the
"RESTATEMENT EFFECTIVE DATE") on which (i) each Borrower, each Lender
and Agent shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered (including by way of
facsimile device) the same to the Agent and (ii) the conditions
contained in Sections 4.1 are met to the satisfaction of the Agent and
------------
the Required Banks (determined immediately after the occurrence of the
Restatement Effective Date). Unless the Agent has received actual
notice from any Lender that the conditions contained in Section 4.1
-----------
have not been met to its satisfaction, upon the satisfaction of the
condition described in clause (i) of the immediately preceding sentence
and upon the Agent's good faith determination that the conditions
described in clause (ii) of the immediately preceding sentence have been
met, then the Restatement Effective Date shall have been deemed to have
occurred, regardless of any subsequent determination that one or more of
the conditions thereto have not been met (although the occurrence of the
Restatement Effective Date shall not release the Borrowers from any
liability for failure to satisfy one or more of the applicable
conditions contained in Section 4.1).
-----------
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Credit
Agreement as of this 31st day of May, 2000.
Address:
-------
ZOLTEK COMPANIES, INC.
3101 McKelvey Road
St. Louis, Missouri 63044 By: /s/ Zsolt Rumy
Telecopy: (314) 291-9082 Name: Zsolt Rumy
Attention: Zsolt Rumy Title: CEO
c/o Zoltek Companies, Inc. ZOLTEK CORPORATION
3101 McKelvey Road
St. Louis, Missouri 63044 By: /s/ Zsolt Rumy
Telecopy: (314) 291-9082 Name: Zsolt Rumy
Attention: Zsolt Rumy Title: CEO
c/o Zoltek Companies, Inc. ZOLTEK INTERMEDIATES CORPORATION
3101 McKelvey Road
St. Louis, Missouri 63044 By: /s/ Zsolt Rumy
Telecopy: (314) 291-9082 Name: Zsolt Rumy
Attention: Zsolt Rumy Title: CEO
c/o Zoltek Companies, Inc. ZOLTEK PROPERTIES, INC.
3101 McKelvey Road
St. Louis, Missouri 63044 By: /s/ Zsolt Rumy
Telecopy: (314) 291-9082 Name: Zsolt Rumy
Attention: Zsolt Rumy Title: CEO
c/o Zoltek Companies, Inc. CAPE COMPOSITES, INC.
3101 McKelvey Road
St. Louis, Missouri 63044 By: /s/ Zsolt Rumy
Telecopy: (314) 291-9082 Name: Zsolt Rumy
Attention: Zsolt Rumy Title: CEO
80
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<PAGE>
c/o Zoltek Companies, Inc. ENGINEERING TECHNOLOGY CORPORATION
3101 McKelvey Road
St. Louis, Missouri 63044 By: /s/ Zsolt Rumy
Telecopy: (314) 291-9082 Name: Zsolt Rumy
Attention: Zsolt Rumy Title: CEO
81
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<PAGE>
Revolving Credit Commitment FIRSTAR BANK MISSOURI, N.A.,
$20,000,000.00 formerly known as Mercantile Bank
National Association, as Agent, as
Swingline Lender and as a Lender
Term Loan Commitment
$34,125,000.00
By: /s/ Thomas S. Sherman
Name: Thomas S. Sherman
Title: Vice President
Address: One Firstar Plaza
7th and Washington
St. Louis, Missouri 63101
Attention: Thomas S. Sherman
Telecopy No.: (314) 418-8090
82
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<PAGE>
SCHEDULE 2.1
------------
EXISTING LETTERS OF CREDIT
--------------------------
83
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<PAGE>
SCHEDULE 6.5
------------
LITIGATION
----------
None, except as described below. Zoltek Intermediates ("Intermediates")
initiated a lawsuit against Dan Tingley and Wood Science Technologies
Ltd. (collectively, "Tingley"), parties to that certain license
agreement under which Tingley licensed to Intermediates certain patent
rights and other technologies used in manufacturing carbon fiber
reinforced wood panels. Intermediates claimed, among other things, that
the inventory and processing equipment purchased from Tingley pursuant
to the license agreement was defective and that Tingley made certain
misrepresentations to induce Intermediates to enter into the license
agreement. Pursuant to the license agreement, the matter was referred to
arbitration. In the arbitration, Tingley has asserted a claim that
Intermediates breached the license agreement and interfered with
Tingley's efforts to commercialize the technology. Intermediates is
vigorously prosecuting and defending the arbitration and expects to
prevail on the merits of its claims against Tingley. Intermediates does
not expect the outcome of the arbitration will be materially adverse to
Zoltek Companies, Inc. and its subsidiaries take as a whole.
<PAGE>
<PAGE>
SCHEDULE 6.8
------------
SUBSIDIARIES OF THE BORROWER
----------------------------
Zoltek Corporation
Zoltek Properties, Inc.
Zoltek Intermediates Corporation
Engineering Technology Corporation
Cape Composites, Inc.
Zoltek Rt.
Viscotrade Rt.
Mavipol Rt.
Structural Polymer (Holdings) Ltd.
Structural Polymer Systems Limited
SP Systems (Australia) Pty. Ltd.
SP Systems (New Zealand) Ltd.
<PAGE>
<PAGE>
SCHEDULE 6.10
-------------
OTHER LOANS AND GUARANTEES
--------------------------
Zoltek Properties, Inc.
-----------------------
Loan from GE Capital $1,403,623.98
Loan from City of Abilene $2,254,490.39
Zoltek Corporation
------------------
Loan from Southwest Bank:
Building Loan $2,073,707.46
Acquisition Loan $1,500,000.00
Loan from Sovereign Finance (Capitalized Lease): 1,050,000.00 pounds
<PAGE>
<PAGE>
SCHEDULE 6.11
-------------
LABOR MATTERS
-------------
Zoltek Rt. labor agreement covering approximately 1,200 employees is
scheduled to expire during the term of this agreement.
<PAGE>
<PAGE>
SCHEDULE 6.12
-------------
LIENS
-----
Leasehold Deed of Trust executed by Zoltek Properties, Inc. for the
benefit of GE Capital.
Deed of Trust dated September 29, 1998, executed by Zoltek Properties,
Inc. for the benefit of Development Corporation of Abilene, Inc.
Deed of Trust encumbering property at 3101 McKelvey Road, St. Louis,
Missouri 63044, executed by Zoltek Corporation for the benefit of
Southwest Bank.
<PAGE>
<PAGE>
SCHEDULE 6.18
-------------
OTHER CORPORATE OR FICTITIOUS NAMES
-----------------------------------
Zoltek Rt. formerly known as Zoltek Magyar Viscosa Rt. formerly known as
Magyar Viscosa Rt.
Zoltek Intermediates Corporation formerly known as Composite
Intermediates Corporation
Cape Composites, Inc. formerly known as Waters Technology, Inc.
<PAGE>
<PAGE>
EXHIBIT A
---------
FORM OF REVOLVING CREDIT NOTE
------------------------------
REVOLVING CREDIT NOTE
$ St. Louis, Missouri
-------------
,
------------- ----
FOR VALUE RECEIVED, on November 18, 2005, the undersigned, ZOLTEK
COMPANIES, INC., a Missouri corporation; ZOLTEK CORPORATION, a Missouri
corporation; ZOLTEK INTERMEDIATES CORPORATION, a Missouri corporation;
ZOLTEK PROPERTIES, INC., a Missouri corporation; CAPE COMPOSITES, INC.,
a California, corporation; and ENGINEERING TECHNOLOGY CORPORATION, a
Missouri corporation (each, individually, a "BORROWER" and,
collectively, the "BORROWERS"), hereby promise, jointly and severally,
to pay to the order of , a ("LENDER"),
------------------- -----------
the principal sum of ($ ), or such lesser sum
---------------- ----------
as may then constitute the aggregate unpaid principal amount of all
Revolving Credit Loans made by Lender to the Borrowers pursuant to the
Credit Agreement referred to below. The aggregate principal amount of
Revolving Credit Loans which Lender shall be committed to have
outstanding under this Note at any one time shall not exceed
Dollars ($ ), which amount may be
------------------- -----------
borrowed, paid, reborrowed and repaid, in whole or in part, subject to
the terms and conditions hereof and of the Credit Agreement referred to
below.
The Borrowers further promise, jointly and severally, to pay
interest on the principal amount from time to time outstanding hereunder
prior to maturity from the date disbursed until paid at the rates, at
the time or times and in the manner which shall be determined in
accordance with the Credit Agreement. All payments hereunder shall be
applied first to the payment of all accrued and unpaid interest, with
the balance, if any, to be applied to the payment of principal.
Interest shall be computed on an actual day, 360-day year basis.
All payments of principal and interest under this Note shall be
made in lawful currency of the United States (or in such Optional
Currency as the terms of the Credit Agreement may require) in
immediately available funds at the office of Firstar Bank Missouri, N.A.
("AGENT") situated at One Firstar Plaza, St. Louis, Missouri 63101, or
at such other place as the Agent may from time to time designate in
writing.
Lender shall record the date and amount of all loans and all
payments of principal and interest hereunder in the records it maintains
with respect thereto, and may, if Lender so elects in connection with
any transfer or enforcement of this Note, endorse on the schedules
forming a part of this Note appropriate notations to evidence the
foregoing information with respect to each such Revolving Credit Loan
then outstanding; provided, however, that the joint and several
obligation of the Borrowers to repay each Revolving Credit Loan made to
the Borrowers hereunder shall be absolute and unconditional,
notwithstanding any failure of Lender to make any such recordation or
endorsement or any mistake by Lender in connection with any such
recordation or endorsement.
<PAGE>
<PAGE>
Lender is hereby irrevocably authorized by the Borrowers to so endorse
this Note and to attach to and make a part of this Note a continuation
of any such schedule as and when required. The books and records of
Lender (including, without limitation, the schedules attached to this
Note) showing the account between Lender and the Borrowers shall be
admissible in evidence in any action or proceeding and shall constitute
prima facie proof of the items therein set forth in the absence of
manifest error.
Subject to the terms of the Credit Agreement referred to below,
the Borrowers shall have the right to prepay all at any time or any
portion from time to time of the unpaid principal amount of this Note
prior to maturity, without premium or penalty.
This Note is one of the Revolving Credit Notes referred to in that
certain Credit Agreement dated as of November 19, 1999, as amended and
restated as of May 31, 2000, by and among the Borrowers, the Agent and
the lenders party thereto (as the same may from time to time be amended,
modified, extended or renewed, the "CREDIT AGREEMENT"). The Credit
Agreement, among other things, contains provisions for acceleration of
the maturity of this Note upon the occurrence of certain stated events
and also for prepayments on account of the principal of this Note and
interest on this Note prior to the maturity of this Note upon the terms
and conditions specified therein. All capitalized terms used and not
otherwise defined in this Note shall have the respective meanings
ascribed to them in the Credit Agreement.
If any Event of Default shall occur under or within the meaning of
the Credit Agreement, then Lender's obligation to make additional
Revolving Credit Loans under this Note may be terminated in the manner
and with the effect as provided in the Credit Agreement and the entire
outstanding principal balance of this Note and all accrued and unpaid
interest thereon may be declared to be immediately due and payable in
the manner and with the effect as provided in the Credit Agreement.
In the event that any payment of any principal of or interest on
this Note is not paid when due, whether by reason of maturity,
acceleration or otherwise, and this Note is placed in the hands of an
attorney or attorneys for collection or if this Note is placed in the
hands of an attorney or attorneys for representation of Agent and/or
Lender in connection with bankruptcy or insolvency proceedings relating
hereto, the Borrowers promise, jointly and severally, to pay to the
order of Agent or such Lender, as the case may be, in addition to all
other amounts otherwise due hereon, the costs and expenses of such
collection and representation, including, without limitation, reasonable
attorneys' fees and expenses (whether or not litigation shall be
commenced in aid thereof). All parties hereto severally waive
presentment for payment, demand for payment, protest, notice of protest
and notice of dishonor.
<PAGE>
<PAGE>
This Note shall be governed by and construed in accordance with the laws
of the State of Missouri (without reference to conflict of law
principles).
ZOLTEK COMPANIES, INC. ZOLTEK CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
ZOLTEK INTERMEDIATES ZOLTEK PROPERTIES, INC.
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
CAPE COMPOSITES, INC. ENGINEERING TECHNOLOGY
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
<PAGE>
<PAGE>
<TABLE>
SCHEDULE FOR ENDORSEMENT OF ADVANCES AND (PRE)PAYMENTS
TO
REVOLVING CREDIT NOTE DATED ,
------------- -----
<CAPTION>
Amount Amount Balance
of of Remaining Notation
Date Advance (Pre)Payment Unpaid Made By
---- ------- ------------ ------ -------
<S> <C> <C> <C> <C>
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
</TABLE>
<PAGE>
<PAGE>
EXHIBIT B
---------
FORM OF SWINGLINE NOTE
----------------------
St. Louis, Missouri
$5,000,000 ,
---------- -------
For value received on November 18, 2005, the undersigned,
ZOLTEK COMPANIES, INC., a Missouri corporation; ZOLTEK CORPORATION, a
Missouri corporation; ZOLTEK INTERMEDIATES CORPORATION, a Missouri
corporation; ZOLTEK PROPERTIES, INC., a Missouri corporation; CAPE
COMPOSITES, INC., a California corporation; and ENGINEERING TECHNOLOGY
CORPORATION, a Missouri corporation (each, individually, a "BORROWER"
and, collectively, the "BORROWERS") promise, jointly and severally, to
pay to the order of FIRSTAR BANK MISSOURI, N.A., formerly known as
Mercantile Bank National Association (the "SWINGLINE LENDER"), the
lesser of (i) the principal sum of Five Million Dollars ($5,000,000), or
(ii) the aggregate unpaid principal amount of each Swingline Loan made
by the Swingline Lender to the Borrowers pursuant to the terms of the
Credit Agreement referred to below. The Borrowers promise, jointly and
severally, to pay interest on the unpaid principal amount of each such
Swingline Loan on the dates and at the rate or rates provided for in the
Credit Agreement. All such payments of principal and interest shall be
made in Federal or other immediately available funds at the office of
the Swingline Lender, One Firstar Plaza, St. Louis, Missouri 63101.
The Swingline Lender shall record the date and amount of all loans
and all payments of principal and interest hereunder in the records it
maintains with respect thereto, and may, if the Swingline Lender so
elects in connection with any transfer or enforcement of this Note,
endorse on the schedules forming a part of this Note appropriate
notations to evidence the foregoing information with respect to each
such Swingline Loan then outstanding; provided, however, that the joint
and several obligation of the Borrowers to repay each Swingline Loan
made to the Borrowers hereunder shall be absolute and unconditional,
notwithstanding any failure of the Swingline Lender to make any such
recordation or endorsement or any mistake by the Swingline Lender in
connection with any such recordation or endorsement. The Swingline
Lender is hereby irrevocably authorized by the Borrowers to so endorse
this Note and to attach to and make a part of this Note a continuation
of any such schedule as and when required. The books and records of the
Swingline Lender (including, without limitation, the schedules attached
to this Note) showing the account between the Swingline Lender and the
Borrowers shall be admissible in evidence in any action or proceeding
and shall constitute prima facie proof of the items therein set forth in
the absence of manifest error.
Subject to the terms of the Credit Agreement referred to below,
the Borrowers shall have the right to prepay all at any time or any
portion from time to time of the unpaid principal amount of this Note
prior to maturity, without premium or penalty.
This Note is the Swingline Note referred to in that certain Credit
Agreement dated as of November 19, 1999, as amended and restated as of
May 31, 2000, by and among the Borrowers, Firstar Bank Missouri, N.A.,
formerly known as Mercantile Bank National Association, as Agent, and
the lenders party thereto (as the same may from time to time be amended,
modified, extended or renewed, the "CREDIT AGREEMENT"). The Credit
Agreement, among other things, contains
<PAGE>
<PAGE>
provisions for acceleration of the maturity of this Note upon the
occurrence of certain stated events and also for prepayments on account
of the principal of this Note and interest on this Note prior to the
maturity of this Note upon the terms and conditions specified therein.
All capitalized terms used and not otherwise defined in this Note shall
have the respective meanings ascribed to them in the Credit Agreement.
If any Event of Default shall occur under or within the meaning of
the Credit Agreement, then the Swingline Lender's obligation to make
additional Swingline Loans under this Note may be terminated in the
manner and with the effect as provided in the Credit Agreement and the
entire outstanding principal balance of this Note and all accrued and
unpaid interest thereon may be declared to be immediately due and
payable in the manner and with the effect as provided in the Credit
Agreement.
In the event that any payment of any principal of or interest on
this Note is not paid when due, whether by reason of maturity,
acceleration or otherwise, and this Note is placed in the hands of an
attorney or attorneys for collection or if this Note is placed in the
hands of an attorney or attorneys for representation of Agent and/or the
Swingline Lender in connection with bankruptcy or insolvency proceedings
relating hereto, the Borrowers promise, jointly and severally, to pay to
the order of Agent or the Swingline Lender, as the case may be, in
addition to all other amounts otherwise due hereon, the costs and
expenses of such collection and representation, including, without
limitation, reasonable attorneys' fees and expenses (whether or not
litigation shall be commenced in aid thereof). All parties hereto
severally waive presentment for payment, demand for payment, protest,
notice of protest and notice of dishonor.
This Note shall be governed by and construed in accordance with
the laws of the State of Missouri (without reference to conflict of law
principles).
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE>
ZOLTEK COMPANIES, INC. ZOLTEK CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
ZOLTEK INTERMEDIATES ZOLTEK PROPERTIES, INC.
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
CAPE COMPOSITES, INC. ENGINEERING TECHNOLOGY
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
<PAGE>
<PAGE>
<TABLE>
SCHEDULE FOR ENDORSEMENT OF ADVANCES AND (PRE)PAYMENTS
TO
SWINGLINE NOTE DATED ,
--------- -----
<CAPTION>
Amount Amount Balance
of of Remaining Notation
Date Advance (Pre)Payment Unpaid Made By
---- ------- ------------ ------ -------
<S> <C> <C> <C> <C>
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
</TABLE>
<PAGE>
<PAGE>
EXHIBIT C
---------
FORM OF TERM NOTE
-----------------
$ St. Louis, Missouri
------------
,
----------- ------
FOR VALUE RECEIVED, the undersigned, ZOLTEK COMPANIES, INC.,
a Missouri corporation; ZOLTEK CORPORATION, a Missouri corporation;
ZOLTEK INTERMEDIATES CORPORATION, a Missouri corporation; ZOLTEK
PROPERTIES, INC., a Missouri corporation; CAPE COMPOSITES, INC., a
California corporation; and ENGINEERING TECHNOLOGY CORPORATION, a
Missouri corporation (each, individually, a "BORROWER" and,
collectively, the "BORROWERS"), hereby promise, jointly and severally,
to pay to the order of , a
----------------------------- --------------
("LENDER"), the principal sum of ($ )
--------------------- ------------
in the amounts and on the dates set forth in the Credit Agreement
referred to below.
The Borrowers further promise, jointly and severally, to pay
interest on the principal amount from time to time outstanding hereunder
prior to maturity from the date disbursed until paid at the rates, at
the time or times and in the manner which shall be determined in
accordance with the provisions of the Credit Agreement. All payments
hereunder shall be applied first to the payment of all accrued and
unpaid interest, with the balance, if any, to be applied to the payment
of principal. Interest shall be computed on an actual day, 360-day
basis.
All payments of principal and interest hereunder shall be
made in lawful currency of the United States in federal or other
immediately available funds at the office of the Agent located at One
Firstar Plaza, St. Louis, Missouri 63101, or at such other place as the
Agent may from time to time designate in writing.
Lender shall record the date and amount of all loans and all
payments of principal and interest hereunder in the records it maintains
with respect thereto, and may, if Lender so elects in connection with
any transfer or enforcement of this Note, endorse on the schedules
forming a part of this Note appropriate notations to evidence the
foregoing information with respect to the Term Loan then outstanding;
provided, however, that the joint and several obligation of the
Borrowers to repay the Term Loan made to the Borrowers hereunder shall
be absolute and unconditional, notwithstanding any failure of Lender to
make any such recordation or endorsement or any mistake by Lender in
connection with any such recordation or endorsement. Lender is hereby
irrevocably authorized by the Borrowers to so endorse this Note and to
attach to and make a part of this Note a continuation of any such
schedule as and when required. The books and records of Lender
(including, without limitation, the schedules attached to this Note)
showing the account between Lender and the Borrowers shall be admissible
in evidence in any action or proceeding and shall constitute prima facie
proof of the items therein set forth in the absence of manifest error.
Subject to the terms of the Credit Agreement referred to
below, the Borrowers shall have the right to prepay all at any time or
any portion from time to time of the unpaid principal amount of this
Note prior to maturity, without premium or penalty.
<PAGE>
<PAGE>
This Note is one of the Term Notes referred to in that
certain Credit Agreement dated as of November 19, 1999, as amended and
restated as of May 31, 2000, by and among the Borrowers, Firstar Bank
Missouri, N.A., formerly known as Mercantile Bank National Association,
as Agent, and the lenders party thereto (as the same may from time to
time be amended, modified, extended or renewed, the "CREDIT AGREEMENT").
The Credit Agreement, among other things, contains provisions for
acceleration of the maturity of this Note upon the occurrence of certain
stated events and also for prepayments on account of the principal of
this Note and interest on this Note prior to the maturity of this Note
upon the terms and conditions specified therein. All capitalized terms
used and not otherwise defined in this Note shall have the respective
meanings ascribed to them in the Credit Agreement.
If any Event of Default shall occur under or within the
meaning of the Credit Agreement, the entire outstanding principal
balance of this Note and all accrued and unpaid interest thereon may be
declared to be immediately due and payable in the manner and with the
effect as provided in the Credit Agreement.
In the event that any payment of any principal of or
interest on this Note is not paid when due, whether by reason of
maturity, acceleration or otherwise, and this Note is placed in the
hands of an attorney or attorneys for collection or if this Note is
placed in the hands of an attorney or attorneys for representation of
Agent and/or Lender in connection with bankruptcy or insolvency
proceedings relating hereto, the Borrowers promise, jointly and
severally, to pay to the order of Agent or such Lender, as the case may
be, in addition to all other amounts otherwise due hereon, the costs and
expenses of such collection and representation, including, without
limitation, reasonable attorneys' fees and expenses (whether or not
litigation shall be commenced in aid thereof). All parties hereto
severally waive presentment for payment, demand for payment, protest,
notice of protest and notice of dishonor.
<PAGE>
<PAGE>
This Note shall be governed by and construed in accordance
with the laws of the State of Missouri (without reference to conflict of
law principles).
ZOLTEK COMPANIES, INC. ZOLTEK CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
ZOLTEK INTERMEDIATES ZOLTEK PROPERTIES, INC.
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
CAPE COMPOSITES, INC. ENGINEERING TECHNOLOGY
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
<PAGE>
<PAGE>
<TABLE>
SCHEDULE FOR ENDORSEMENT OF ADVANCES AND (PRE)PAYMENTS
TO
TERM NOTE DATED ,
-------- -----
<CAPTION>
Amount Amount Balance
of of Remaining Notation
Date Advance (Pre)Payment Unpaid Made By
---- ------- ------------ ------ -------
<S> <C> <C> <C> <C>
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
_________ _________ _________ _________ _________
</TABLE>
<PAGE>
<PAGE>
EXHIBIT D
---------
[BORROWER'S LETTERHEAD]
NOTICE OF BORROWING
[DATE]
Firstar Bank Missouri, N.A., as Agent
One Firstar Plaza
St. Louis, Missouri 63101
Attention:
-------------------
Re: Credit Agreement dated as of November 19, 1999, as
amended and restated as of May 31, 2000 (as amended,
restated, replaced or otherwise modified, the
"CREDIT AGREEMENT").
Gentlemen:
The undersigned desires to borrow on , ,
--------------- ----
a(n) [Revolving Credit Loan, Swingline Loan] (as defined in the Credit
Agreement) in an aggregate principal amount of pursuant to
--------------
the Credit Agreement. Such Loan shall be (check one):
Prime Loan
------
LIBOR Loan
------
if a Revolving Credit Loan, shall be borrowed and repaid in [US Dollars,
Pounds Sterling, Deutsche Marks, Euros]; and if a LIBOR Loan, shall be
for an Interest Period of (one, two, three or six) months.
-----------
Accordingly, the undersigned requests that you make available to the
undersigned said amount on said date.
The undersigned hereby represents and warrants to you that
as of the date hereof all of the representations and warranties of the
undersigned contained in the Credit Agreement are true and correct in
all material respects on and as of the date hereof as if made on the
date hereof except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall remain true
and correct in all material respects on and as of such earlier date and
for purposes of this Notice, the representations and warranties made by
Borrowers in Section 6.4 of the Credit Agreement shall be deemed to
-----------
refer to the most recent financial statements of Parent delivered to the
Lenders pursuant to Section 7.1(a) of the Credit Agreement, and no
--------------
Default or Event of Default (as defined in the Credit Agreement) has
occurred and is continuing, and that no such Default or Event of Default
will result from the loan requested hereby.
<PAGE>
<PAGE>
Very truly yours,
ZOLTEK COMPANIES, INC. ZOLTEK CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
ZOLTEK INTERMEDIATES ZOLTEK PROPERTIES, INC.
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
CAPE COMPOSITES, INC. ENGINEERING TECHNOLOGY
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
<PAGE>
<PAGE>
EXHIBIT E
---------
FORM OF BORROWING BASE CERTIFICATE
----------------------------------
This Borrowing Base Certificate is delivered pursuant to
Section 3.1(c) of that certain Credit Agreement dated as of November
--------------
19, 1999, as amended and restated as of May 31, 2000 (as the same may
from time to time be amended, modified, extended or renewed, the "CREDIT
AGREEMENT"), by and among Zoltek Companies, Inc., a Missouri
corporation, Zoltek Corporation, a Missouri corporation, Zoltek
Intermediates Corporation, a Missouri corporation, Zoltek Properties,
Inc., a Missouri corporation, Cape Composites, Inc., a California
corporation, and Engineering Technology Corporation, a Missouri
corporation (collectively, the "BORROWERS"), Firstar Bank Missouri,
N.A., formerly known as Mercantile Bank National Association, as agent
(the "AGENT"), and the lenders party thereto. Each capitalized term
used herein without definition shall have the meaning ascribed to such
term in the Credit Agreement.
The Borrowers hereby jointly and severally represent and warrant
to the Agent and the Lenders that the following information is true,
correct and complete in all material respects as of ,
------------------
:
------
1. 80% of face amount of Eligible Accounts $
-----------------
2. 50% of Eligible Inventory (not to exceed $15,000,000) $
-----------------
3. Borrowing Base (Sum of Items 1 and 2 above) $
-----------------
4. Total Revolving Credit Commitments $
-----------------
5. Borrower's Maximum Revolving Credit Availability
(Lesser of Item 3 or Item 4) $
-----------------
6. Total Revolving Credit Usage $
-----------------
7. Unused Revolving Credit Availability (Item 5 minus
-----
Item 6) (Negative amount requires mandatory repayment) $
-----------------
If Item 7 above is negative, this Certificate is accompanied by
the mandatory repayment required by Section 3.1(d) of the Credit
--------------
Agreement.
<PAGE>
<PAGE>
This Borrowing Base Certificate is dated the day of
-------
, .
--------- ------
ZOLTEK COMPANIES, INC. ZOLTEK CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
ZOLTEK INTERMEDIATES ZOLTEK PROPERTIES, INC.
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
CAPE COMPOSITES, INC. ENGINEERING TECHNOLOGY
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
<PAGE>
<PAGE>
EXHIBIT F
---------
FORM OF STANDBY LETTER OF CREDIT APPLICATION
--------------------------------------------
<PAGE>
<PAGE>
EXHIBIT G
---------
FORM OF COMMERCIAL LETTER OF CREDIT APPLICATION
-----------------------------------------------
<PAGE>
<PAGE>
EXHIBIT H
---------
FORM OF LETTER OF CREDIT
PARTICIPATION CERTIFICATE
This Letter of Credit Participation Certificate is issued
pursuant to Section 3.7 of that certain Credit Agreement dated as of
-----------
November 19, 1999, as amended and restated as of May 31, 2000, by and
among ZOLTEK COMPANIES, INC., a Missouri corporation; ZOLTEK
CORPORATION, a Missouri corporation; ZOLTEK INTERMEDIATES CORPORATION, a
Missouri corporation; ZOLTEK PROPERTIES, INC., a Missouri corporation;
CAPE COMPOSITES, INC., a California corporation; and ENGINEERING
TECHNOLOGY CORPORATION, a Missouri corporation (each, individually a
"BORROWER" and, collectively, the "BORROWERS"), the Agent and the
lenders party thereto, as the same may from time to time be amended,
modified, extended or renewed (the "CREDIT AGREEMENT"). All capitalized
terms used and not otherwise defined herein shall have the respective
meanings ascribed to them in the Credit Agreement.
Subject to the terms, provisions and conditions contained in
the Credit Agreement, Agent hereby issues to a
----------------------
Percent ( %) undivided participation interest in all
----------- -----
Letters of Credit issued by the Agent from time to time under the Credit
Agreement (including, without limitation, an undivided participation
interest in the reimbursement risk relating to such Letters of Credit
and in all payments and Revolving Credit Loans made in connection with
such Letters of Credit).
This Certificate may be signed in any number of
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were on the same instrument.
Executed this day of , .
------ ------------- ------
FIRSTAR BANK MISSOURI, N.A., formerly
known as Mercantile Bank National
Association, as Agent
By:
----------------------------------
Title:
-------------------------------
The foregoing Letter of Credit Participation Certificate is
hereby accepted this day of , .
------ -------------- -----
By:
----------------------------------
Title:
-------------------------------
<PAGE>
<PAGE>
EXHIBIT I
---------
FORM OF BORROWERS' COUNSEL OPINION
----------------------------------
<PAGE>
<PAGE>
EXHIBIT J
----------
FORM OF OFFICER'S CERTIFICATE
,
-------- ----
Firstar Bank Missouri, N.A., as Agent
One Firstar Plaza
St. Louis, Missouri 63101
Attention:
------------------
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated
November 19, 1999, as amended and restated as of May 31, 2000, by and
among you, the lenders party thereto and the undersigned, as the same
may from time to time be amended, modified, extended or renewed (the
"CREDIT AGREEMENT"). All capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to them in
the Credit Agreement.
The Borrowers hereby certify to Agent and the Lenders that as of
the date hereof:
(a) all of the representations and warranties of the Borrowers
contained in the Credit Agreement and in the other Transaction Documents
are true and correct in all material respects as if made on and as of
the date hereof, except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall
remain true and correct in all material respects on and as of such
earlier date, and for purposes of this Certificate, the representations
and warranties made by Borrowers in Section 6.4 of the Credit
-----------
Agreement shall be deemed to refer to the most recent financial
statements of Parent delivered to the Lenders pursuant to Section
-------
7.1(a);
------
(b) no violation or breach of any of the affirmative covenants
of the Borrowers contained in the Credit Agreement has occurred and is
continuing;
(c) no violation or breach of any of the negative covenants of
the Borrowers contained in the Credit Agreement has occurred and is
continuing;
(d) no Default or Event of Default under or within the meaning
of the Credit Agreement has occurred and is continuing;
(e) the financial statements of the Parent delivered to you with
this letter are true, correct and complete and have been prepared in
accordance with generally accepted accounting principles consistently
applied; and
(f) the financial covenant information set forth in Schedule 1
----------
to this letter is true and correct.
<PAGE>
<PAGE>
ZOLTEK COMPANIES, INC. ZOLTEK CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
ZOLTEK INTERMEDIATES ZOLTEK PROPERTIES, INC.
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
CAPE COMPOSITES, INC. ENGINEERING TECHNOLOGY
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
<PAGE>
<PAGE>
SCHEDULE 1
FINANCIAL COVENANT INFORMATION
as of , 200
------------------- --------- ---
Financial Covenant Actual Required
------------------ ---------------
<PAGE>
<PAGE>
EXHIBIT K
---------
FORM OF ASSIGNMENT AGREEMENT
DATE: ,
------------ -----
Reference is made to the Credit Agreement described in Item
2 of Annex I annexed hereto (as such Credit Agreement may hereafter be
amended, modified or supplemented from time to time, the "CREDIT
AGREEMENT"). Unless defined in Annex I attached hereto, terms defined
in the Credit Agreement are used herein as therein defined.
(the "ASSIGNOR") and (the
---------------------- -----------------
"ASSIGNEE") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee
without recourse and without representation or warranty (other than as
expressly provided herein), and the Assignee hereby purchases and
assumes from the Assignor, that interest in and to all of the Assignor's
rights and obligations under the Credit Agreement as of the date hereof
which represents the percentage interest specified in Item 4 of Annex I
(the "ASSIGNED SHARE") of all of the outstanding rights and obligations
under the Credit Agreement relating to the facilities listed in Item 4
of Annex I, including, without limitation, all rights and obligations
with respect to the Assigned Share of the Term Loans, Revolving Credit
Loans and Letters of Credit.
2. The Assignor (i) represents and warrants that it is
the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any liens or
security interests; (ii) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or
the other Transaction Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Transaction Documents or any other instrument or
document furnished pursuant thereto; and (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrowers or the performance or observance by the
Borrowers of any of their respective obligations under the Credit
Agreement or the other Transaction Documents or any other instrument or
document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy
of the Credit Agreement and the other Transaction Documents, together
with copies of the financial statements referred to therein and such
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment
Agreement; (ii) agrees that it will, independently and without reliance
upon Agent, the Assignor or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Credit Agreement; (iii) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the
Credit Agreement and the other Transaction Documents as are delegated to
the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; [and] (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender [;
and (v) attaches the forms prescribed by the Internal Revenue Service of
the United States certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with respect
to all payments to be made to the Assignee under the Credit Agreement or
such other documents as are
<PAGE>
<PAGE>
necessary to indicate that all such payments are subject to such rates
at a rate reduced by an applicable tax treaty].<F1>
4. Following the execution of this Assignment Agreement
by the Assignor and the Assignee, an executed original hereof (together
with all attachments) will be delivered to the Agent. The effective
date of this Assignment Agreement shall be the date of execution hereof
by the Assignor and the Assignee, the receipt of the consent of the
Agent and the Borrowers, receipt by the Agent of the assignment fee
referred to in Section 10.12 of the Credit Agreement, and the
-------------
recordation by the Agent of the assignment effected hereby in its
records, unless otherwise specified in Item 5 of Annex I (the
"SETTLEMENT DATE").
5. Upon the delivery of a fully executed original hereof
to the Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this
Assignment Agreement, have the rights and obligations of a Lender
thereunder and under the other Transaction Documents and (ii) the
Assignor shall, to the extent provided in this Assignment Agreement,
relinquish its rights and be released from its obligations under the
Credit Agreement and the other Transaction Documents.
6. It is agreed that upon the effectiveness hereof, the
Agent shall make all payments in respect of the Assigned Share
(including payments of principal, interest, fees and other amounts) to
the Assignee whether such amounts have accrued prior to the Settlement
Date or accrued subsequent to the Settlement Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments under the
Credit Agreement for periods prior to the Settlement Date directly
between themselves.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MISSOURI (WITHOUT
REFERENCE TO CONFLICT OF LAW PRINCIPLES).
[FN]
------------------------------
<F1> If the Assignee is organized under the laws of a jurisdiction
outside the United States.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written, such
execution also being made on Annex I hereto.
[NAME OF ASSIGNOR],
as Assignor
By
---------------------------------
Title:
[NAME OF ASSIGNEE],
as Assignee
By
---------------------------------
Title:
Acknowledged and Agreed:
FIRSTAR BANK MISSOURI, N.A.,
formerly known as Mercantile
Bank National Association,
as Agent
By:
------------------------------
Title:
ZOLTEK COMPANIES, INC. ZOLTEK CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
ZOLTEK INTERMEDIATES ZOLTEK PROPERTIES, INC.
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
CAPE COMPOSITES, INC. ENGINEERING TECHNOLOGY
CORPORATION
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------ ---------------------------
<PAGE>
<PAGE>
ANNEX FOR ASSIGNMENT AGREEMENT
ANNEX I
1. The Borrower: Zoltek Companies, Inc.
Zoltek Corporation
Zoltek Intermediates Corporation
Zoltek Properties, Inc.
Cape Composites, Inc.
Engineering Technology Corporation
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of November 19, 1999, as amended and
restated as of May 31, 2000, among the Borrowers, the Agent and
the Lenders.
3. Date of Assignment Agreement:
------------------------
4. Amounts (as of date of item #3 above):
Revolving
Credit
Term Loan Commitment
--------- ----------
a. Aggregate Amount for all Lenders $ $
----------- ---------
b. Assigned Share $ %
----------- ---------
c. Amount of Assigned Share $ $
----------- ---------
5. Settlement Date:
-----------------------
Payment Instructions:
ASSIGNEE:
------------------
------------------
------------------
Attention:
Reference:
<PAGE>
<PAGE>
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: By:
--------------------------------- ------------------------------
--------------------------------- ------------------------------
(Print Name and Title) (Print Name and Title)
<PAGE>
<PAGE>
EXHIBIT L
---------
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "AGREEMENT"), dated as of
, , is by and between , a
------------- ------ ---------------------
(the "SUBSIDIARY"), and FIRSTAR BANK MISSOURI, N.A.,
--------------------
in its capacity as Agent under that certain Credit Agreement (as it may
be amended, modified, restated or supplemented from time to time, the
"CREDIT AGREEMENT"), dated as of November 19, 1999, as amended and
restated as of May 31, 2000, by and among the Borrowers party thereto
(the "BORROWERS"), the lenders party thereto, and Firstar Bank Missouri,
N.A., formerly known as Mercantile Bank National Association, as Agent.
All of the defined terms in the Credit Agreement are incorporated herein
by reference.
The Borrowers are required by Section 5.2 of the Credit Agreement
to cause the Subsidiary to become a "BORROWER".
Accordingly, the Subsidiary hereby agrees as follows with the
Agent, for the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Subsidiary will be deemed
to be a party to the Credit Agreement and a "Borrower" for all purposes
of the Credit Agreement, and shall have all of the obligations of a
Borrower thereunder as if it had executed the Credit Agreement. The
Subsidiary hereby ratifies, as of the date hereof, and agrees to be
bound by, all of the terms, provisions and conditions applicable to the
Borrowers contained in the Credit Agreement. Without limiting the
generality of the foregoing terms of this paragraph 1, the Subsidiary
hereby jointly and severally agrees with the other Borrowers to pay to
each Lender and the Agent, or otherwise perform as provided in the
Credit Agreement, the Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise)
strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Subsidiary will be deemed
to be a party to the Security Agreement, and shall have all the
obligations of an obligor and grantor under the Security Agreement as if
it had executed the Security Agreement. The Subsidiary hereby ratifies,
as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Security Agreement. Without
limiting the generality of the foregoing, the Subsidiary hereby grants
to the Agent, for the benefit of the Lenders, a continuing security
interest in, and a right of set off against any and all right, title and
interest of the Subsidiary in and to the Collateral (as such term is
defined in the Security Agreement) of the Subsidiary. The Subsidiary
hereby represents and warrants to the Agent that:
(i) The Subsidiary's chief executive office and chief
place of business are (and for the prior four months have been)
located at the locations set forth on Schedule 1 attached hereto
----------
and the Subsidiary keeps its books and records at such locations.
(ii) The type of Collateral owned by the Subsidiary and
the location of all Collateral owned by the Subsidiary is as shown
on Schedule 2 attached hereto.
----------
<PAGE>
<PAGE>
(iii) The Subsidiary's legal name is as shown in this
Agreement and the Subsidiary has not in the past four months
changed its name, been party to a merger, consolidation or other
change in structure or used any tradename except as set forth in
Schedule 3 attached hereto.
----------
3. The address of the Subsidiary for purposes of all notices
and other communications is , ,
------------------- ----------------------
Attention of (Facsimile No. ).
---------------- ---------
4. The Subsidiary hereby waives acceptance by the Agent and the
Lenders of the undertakings by the Subsidiary under the Credit Agreement
upon the execution of this Agreement by the Subsidiary.
5. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original but all of which when taken
together shall constitute one and the same contract.
6. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Missouri.
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder
Agreement to be duly executed by its authorized officers, and the Agent,
for the benefit of the Lenders, has caused the same to be accepted by
its authorized officer, as of the day and year first above written.
[SUBSIDIARY]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Acknowledged and accepted:
FIRSTAR BANK MISSOURI, N.A., formerly
known as Mercantile Bank National
Association, as Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
<PAGE>
<PAGE>
SCHEDULE 1
----------
TO FORM OF JOINDER AGREEMENT
----------------------------
[Chief Executive Office and
Chief Place of Business of Subsidiary]
<PAGE>
<PAGE>
SCHEDULE 2
----------
TO FORM OF JOINDER AGREEMENT
----------------------------
[Types and Locations of Collateral]
<PAGE>
<PAGE>
SCHEDULE 3
----------
TO FORM OF JOINDER AGREEMENT
----------------------------
[Tradenames]
