CONSENT AND SECOND AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS CONSENT AND SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"Agreement") is entered into as of June 29, 1998, among UNIFRAX CORPORATION, a
Delaware corporation ("Borrower"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION (formerly known as Bank of America Illinois), an Illinois banking
corporation, as a Lender and as Agent for the Lenders, and National City Bank
("NCB"), as a Lender.
WHEREAS, Borrower has requested that Agent amend the Loan Agreement dated
October 30, 1996 (as amended from time to time, the "Loan Agreement") in various
respects, and Agent has agreed to do so subject to the terms contained herein;
and
WHEREAS, Borrower has requested that Agent consent to certain prepayments
of subordinated debt;
NOW THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Loan Agreement.
2. CONSENT. Subject to satisfaction of the conditions set forth in Section
5 below and notwithstanding the restrictions set forth in Section 5.12 of the
Loan Agreement or any restrictions set forth in the Subordination Agreement,
Lenders hereby consent to the prepayment by Borrower at any time prior to
December 31, 1998 of up to Ten Million Dollars ($10,000,000) in the aggregate of
the Seller Subordinated Debt and/or the indebtedness owing by Borrower pursuant
to the Senior Notes and the Senior Note Documents, provided, that such
prepayment shall only be permitted and such consent shall only be effective in
the event that (1) Revolving Loan Availability equals or exceeds Four Million
Dollars ($4,000,000) after giving effect to each such prepayment, (ii) after
giving effect to any such prepayment, on a pro forma basis Borrower remains in
compliance with all covenants set forth in the Loan Agreement (including those
covenants set forth in Sections 5.26, 5.27, 5.28, 5.29 and 5.30 of the Loan
Agreement), and (iii) no Unmatured Event of Default or Event of Default exists
or would be caused thereby.
3 . AMENDMENT TO LOAN AGREEMENT. Subject to satisfaction of the conditions
set forth in Section 5 below, the Loan Agreement is hereby amended as follows:
(a) Section 1.1 of the Loan Agreement is hereby amended to
delete the definition of "Applicable Margin" and to substitute therefor the
following definition:
""Applicable Margin" means, with respect to any portion of the
Revolving Loans constituting a LIBOR Rate Loan, a percentage equal to
one and one-half percent (1.50%), with respect to any portion of the
Term Loan constituting a LIBOR Rate Loan, a percentage equal to one
and three-quarters percent (1.75%), with respect to any portion of
Revolving Loans constituting a Floating Rate Loan, a percentage equal
to negative one-quarter of one percent ((0.25%)), and with respect to
any portion of the Term Loan constituting a Floating Rate Loan, a
percentage equal to zero percent (O%); provided, that the Applicable
Margin for Revolving Loans and the Term Loan will be adjusted on the
first day of each calendar quarter, commencing on July 1, 1998,
depending on the Leverage Ratio on the last day of the calendar
quarter immediately preceding such calendar quarter, as follows:
Applicable LIBOR Applicable LIBOR Applicable Floating Applicable Floating
Margin for the Margin for the Margin for the Margin for the
Leverage Ratio Revolving Loans Term Loan Revolving Loans Term Loan
-------------- ---------------- ---------------- ------------------- -------------------
Greater than or equal 1.50% 1.75% (0.25%) 0%
to 4.75: 1.00
Greater than or equal
to 3.50: 1.00, but less
than 4.75: 1.00 1.25% 1.50% (0.50%) (0.25%)
Less than 3.50: 1.00 1.00% 1.25% (0.75%) (0.50%)
The calculation of the Leverage Ratio as of the last day of a calendar
quarter shall be based on the financial statements received by
Agent pursuant to Section 5.1.1. Each adjustment to the Applicable Margin
shall be effective retroactively as of the first day of each calendar
quarter."
4. AGREEMENT. Pursuant to Section 2.1.2 of the Loan Agreement, the Lenders
made a Term Loan to Borrower in the original principal amount of Twenty Five
Million Dollars ($25,000,000), of which Thirteen Million Dollars ($13,000,000)
has been prepaid as of the date hereof. Borrower has requested that it be
permitted to make additional borrowings under the Term Loan. Subject to the
condition set forth in the last sentence of this Xxxxxxx 0, Xxxxx, Xxxxxxx and
Borrower hereby agree that at any time prior to December 31, 1998, Borrower
shall be permitted to borrow as part of the Term Loan, in increments of One
Million Dollars ($1,000,000), up to Seven Million Dollars ($7,000,000) in the
aggregate, which borrowings, to the extent borrowed, shall be repayable as
follows: (i) the first Seven Hundred Fifty Thousand Dollars ($750,000) borrowed
pursuant to this Section 4 shall be repayable on December 31, 2000, (ii) the
next Two Million Two Hundred Fifty Thousand Dollars ($2,250,000) borrowed
pursuant to this Section 4 shall be repayable on Xxxxx 00, 0000, (xxx) the next
Two Million Two Hundred Fifty Thousand Dollars ($2,250,000) borrowed pursuant to
this Section 4 shall be repayable on June 30, 2001, and (iv) the last One
Million Seven Hundred Fifty Thousand Dollars ($1,750,000) borrowed pursuant to
this Section 4 shall be repayable on September 28, 2001. Borrower agrees to
execute such documents, instruments and agreements to evidence such additional
borrowings as Agent shall request. The foregoing agreement shall only be
effective upon receipt by Agent of date down title endorsements, each in form
and substance acceptable to Agent, with respect to the Mortgages executed by
Borrower in favor of Agent in connection with Borrower's owned facilities
located in New Carlisle, Indiana and Niagara Falls, New York.
5. CONDITIONS. The consent, amendment and agreement set forth in this
Agreement shall each be effective only to the extent that (i) no Unmatured Event
of Default or Event of Default exists, and (ii) Borrower has delivered to Agent
an executed fee letter in form and substance acceptable to Agent.
6. OTHER AMENDMENTS. The amendment set forth in Section 3 of this Agreement
shall constitute an amendment to the Loan Agreement and all of the Related
Agreements as appropriate to express the agreements contained herein. In all
other respects, the Loan Agreement and the Related Agreements shall remain
unchanged and in full force and effect in accordance with their original terms.
7. MISCELLANEOUS.
(a) Warranties and Absence of Defaults. In order to induce Agent and
Lenders to enter into this Agreement, Borrower hereby warrants to Agent and
Lenders, as of the date hereof, that:
(1) The warranties of Borrower contained in the Loan Agreement are
true and correct as of the date hereof as if made on the date hereof.
(11) No Event of Default or event which, with giving of notice or the
passage of time, or both would become an Event of Default, exists as of
the date hereof.
(b) EXPENSES. Borrower agrees to pay on demand all costs and expenses of
Agent (including the reasonable fees and expenses of outside counsel for Agent)
in connection with the preparation, negotiation, execution, delivery and
administration of this Agreement and all other instruments or documents
provided for herein or delivered in connection herewith. In addition, Borrower
agrees to pay, and save Agent and Lenders harmless from all liability for, any
stamp or other taxes which may be payable in connection with the execution or
delivery of this Agreement or the Loan Agreement as amended hereby, and the
execution and delivery of any instruments or documents provided for herein or
delivered or to be delivered hereunder or in connection herewith. All
obligations provided in this Section 7(b) shall survive any termination of this
Agreement and the Loan Agreement as amended hereby.
(c) GOVERNING LAW. This Agreement shall be a contract made under and
governed by the internal laws of the State of Illinois.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when executed and delivered, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Agreement.
(e) REFERENCE TO LOAN AGREEMENT. On and after the effectiveness of the
amendment to the Loan Agreement accomplished hereby, each reference in the Loan
Agreement to "this Agreement" "hereunder," "hereof," "herein" or words of like
import, and each reference to the Loan Agreement in any Related Agreements, or
other agreements, documents or other instruments executed and delivered pursuant
to the Loan Agreement, shall mean and be a reference to the Loan Agreement, as
amended by this Agreement.
(f) SUCCESSORS. This Agreement shall be binding upon Borrower, Agent,
Lenders and their respective successors and assigns, and shall inure to the
benefit of Borrower, Agent, Lenders and the successors and assigns of Agent and
Lenders.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized and delivered at
Chicago, Illinois as of the date first above written.
UNIFRAX CORPORATION
By: /s/ Xxxx X. Xxxx
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Its Vice President and CFO
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: /s/ Xxxxxxxx X. Xxxx
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Its Agency Officer
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Lender
By: /s/Xxxxxx Xxxxxxx
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Its Vice President
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NATIONAL CITY BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
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Its Vice President
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