TWELFTH AMENDMENT TO AMENDED AND RESTATED
REVOLVING LOAN AND SECURITY AGREEMENT
THIS TWELFTH AMENDMENT TO AMENDED AND RESTATED REVOLVING LOAN AND
SECURITY AGREEMENT (the "Twelfth Amendment") is dated as of March 15, 2002, by
and between KEYSTONE CONSOLIDATED INDUSTRIES, INC., a Delaware corporation
("Borrower"), and CONGRESS FINANCIAL CORPORATION (CENTRAL), an Illinois
corporation ("Lender"). Except for terms which are expressly defined herein, all
capitalized terms used herein shall have the meaning subscribed to them in the
Loan Agreement (as defined below).
RECITALS
WHEREAS, Borrower and Lender are parties to that certain Amended and
Restated Revolving Loan and Security Agreement dated as of December 29, 1995 (as
amended, supplemented or otherwise modified from time to time, the "Loan
Agreement").
WHEREAS, Borrower desires to amend the terms of the Loan Agreement.
WHEREAS, Lender is willing to amend the Loan Agreement on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
I. Amendments to the Loan Agreement.
A. Definitions.
1. The definition of "Accounts" in Section 1 of the Loan
Agreement is hereby amended and restated in its entirety to
read as follows:
"Accounts" shall mean all present and future rights of
Borrower to payment of a monetary obligation, whether or
not earned by performance, which is not evidenced by
chattel paper or an instrument, (a) for property that
has been or is to be sold, leased, licensed, assigned,
or otherwise disposed of, (b) for services rendered or
to be rendered, (c) for a secondary obligation incurred
or to be incurred, or (d) arising out of the use of a
credit or charge card or information contained on or for
use with the card.
2. The following new definition of "Amendment No. 12
Effective Date" is hereby added to Section 1 of the Loan
Agreement in proper alphabetical order:
"Amendment No. 12 Effective Date" shall mean March 15,
2002.
3. The following new definition of "Capital Expenditures" is
hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Capital Expenditures" means, with respect to any
Person, all expenditures (by the expenditure of cash or
the incurrence of Indebtedness) by such Person during
any measuring period for any fixed assets or
improvements or for replacements, substitutions or
additions thereto, that have a useful life of more than
one year and that are required to be capitalized under
GAAP. "Capital Expenditures" shall not include
expenditures by EWP and Garden Zone.
4. The following new definition of "Capital Stock" is hereby
added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Capital Stock" shall mean, with respect to any Person,
any and all shares, interests, participations or other
equivalents (however designated) of such Person's
capital stock or partnership, limited liability company
or other equity interests at any time outstanding, and
any and all rights, warrants or options exchangeable for
or convertible into such capital stock or other
interests (but excluding any debt security that is
exchangeable for or convertible into such capital
stock).
5. The following new definition of "Collateral Access
Agreement" is hereby added to Section 1 of the Loan
Agreement in proper alphabetical order:
"Collateral Access Agreement" shall mean an agreement in
writing, in form and substance satisfactory to Lender,
from any lessor of premises to Borrower, or any other
person to whom any Collateral (including Inventory,
Equipment, bills of lading or other documents of title)
is consigned or who has custody, control or possession
of any such Collateral or is otherwise the owner or
operator of any premises on which any of such Collateral
is located, pursuant to which such lessor, consignee or
other person, inter alia, acknowledges the first
priority security interest of Lender in such Collateral,
agrees to waive any and all claims such lessor,
consignee or other person may, at any time, have against
such Collateral, whether for processing, storage or
otherwise, and agrees to permit Lender access to, and
the right to remain on, the premises of such lessor,
consignee or other person so as to exercise Lender's
rights and remedies and otherwise deal with such
Collateral and, in the case of any consignee or other
person who at any time has custody, control or
possession of any Collateral, acknowledges that it holds
and will hold possession of the Collateral for the
benefit of Lender and agrees to follow all instructions
of Lender with respect thereto.
6. The following new definition of "Deposit Account Control
Agreement" is hereby added to Section 1 of the Loan
Agreement in proper alphabetical order:
"Deposit Account Control Agreement" shall mean an
agreement in writing, in form and substance satisfactory
to Lender, by and among Lender, Borrower and any bank at
which any deposit account of Borrower is at any time
maintained which provides that such bank will comply
with instructions originated by Lender directing
disposition of the funds in the deposit account without
further consent by Borrower and such other terms and
conditions as Lender may require, including as to any
such agreement with respect to any Blocked Account,
providing that all items received or deposited in the
Blocked Accounts are the property of Lender, that the
bank has no lien upon, or right to setoff against, the
Blocked Accounts, the items received for deposit
therein, or the funds from time to time on deposit
therein and that the bank will wire, or otherwise
transfer, in immediately available funds, on a daily
basis to the Lender Payment Account all funds received
or deposited into the Blocked Accounts.
7. The following new definition of "EBITDA" is hereby added
to Section 1 of the Loan Agreement in proper alphabetical
order:
"EBITDA" means with respect to any Person for any fiscal
period, without duplication, an amount equal to (a)
consolidated net income of such Person for such period
determined in accordance with GAAP, minus (b) the sum of
(i) income tax credits, (ii) interest income, (iii) gain
from extraordinary items for such period, (iv) any
aggregate net gain (but not any aggregate net loss)
during such period arising from the sale, exchange or
other disposition of capital assets by such Person
(including any fixed assets, whether tangible or
intangible, all Inventory sold in conjunction with the
disposition of fixed assets and all securities), (v) any
other non-cash gains that have been added in determining
consolidated net income, and (vi) non-cash defined
benefit pension income, in each case to the extent
included in the calculation of consolidated net income
of such Person for such period in accordance with GAAP,
but without duplication, plus (c) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii)
loss from extraordinary items for such period, (iv)
depreciation and amortization for such period, (v)
amortized debt discount for such period, (vi) the amount
of any deduction to consolidated net income as the
result of any grant to any members of the management of
such Person of any Capital Stock, (vii) non-cash defined
benefit pension expense and (viii) without duplication,
non-cash post-retirement benefit expenses constituting
retired employees' medical and life insurance benefit
expenses, in each case to the extent included in the
calculation of consolidated net income of such Person
for such period in accordance with GAAP, but without
duplication. For purposes of this definition, the
following items shall be excluded in determining
consolidated net income of a Person: (1) the income (or
deficit) of any other Person accrued prior to the date
it became a Subsidiary of, or was merged or consolidated
into, such Person or any of such Person's Subsidiaries;
(2) the income (or deficit) of any other Person (other
than a Subsidiary) in which such Person has an ownership
interest, except to the extent any such income has
actually been received by such Person in the form of
cash dividends or distributions; (3) the undistributed
earnings of any Subsidiary of such Person to the extent
that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or
requirement of law applicable to such Subsidiary; (4)
any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was
made out of accrued income during such period; (5) any
write-up of any asset; (6) any net gain from the
collection of the proceeds of life insurance policies;
(7) any net gain arising from the acquisition of any
securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person; (8) in the case of a
successor to such Person by consolidation or merger or
as a transferee of its assets, any earnings of such
successor prior to such consolidation, merger or
transfer of assets; (9) any deferred credit representing
the excess of equity in any Subsidiary of such Person at
the date of acquisition of such Subsidiary over the cost
to such Person of the investment in such Subsidiary.
8. The following new definition of "ERISA" is hereby added
to Section 1 of the Loan Agreement in proper alphabetical
order:
"ERISA" shall mean the United States Employee Retirement
Income Security Act of 1974, together with all rules,
regulations and interpretations thereunder or related
thereto.
9. The following new definition of "ERISA Affiliate" is
hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"ERISA Affiliate" shall mean any person required to be
aggregated with Borrower or any of its Subsidiaries
under Sections 414(b), 414(c), 414(m) or 414(o) of the
Code.
10. The following new definition of "EWP" is hereby added to
Section 1 of the Loan Agreement in proper alphabetical
order:
"EWP" means Engineered Wire Products, Inc., an Ohio
corporation.
11. The following new definition of "Fiscal Quarter" is
hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Fiscal Quarter" means any of the quarterly accounting
periods of Borrower, ending consistent with Borrower's
Securities and Exchange Commission reporting periods.
12. The following new definition of "Fixed Charges" is
hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Fixed Charges" means, with respect to any Person for
any fiscal period, (a) the aggregate of all Interest
Expense paid or accrued (except with respect to the
deferred interest expense of (i) the 6% Notes and (ii)
the 8% Notes) during such period, plus (b) scheduled
payments of principal with respect to Indebtedness
during such period, plus (c) Capital Expenditures during
such period, plus (d) corporate income taxes paid in
cash during such period.
13. The following new definition of "Fixed Charge Coverage
Ratio" is hereby added to Section 1 of the Loan Agreement in
proper alphabetical order:
"Fixed Charge Coverage Ratio" means, with respect to any
Person for any fiscal period, the ratio of EBITDA to
Fixed Charges.
14. The following new definition of "Governmental Authority"
is hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Governmental Authority" shall mean any nation or
government, any state, province, or other political
subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to
government, and any corporation or other entity owned or
controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
15. The following new definition of "Indebtedness" is hereby
added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Indebtedness" shall mean, with respect to any Person,
any liability, whether or not contingent, (a) in respect
of borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or
only to a portion thereof) or evidenced by bonds, notes,
debentures or similar instruments; (b) representing the
balance deferred and unpaid of the purchase price of any
property or services (except any such balance that
constitutes an account payable to a trade creditor
(whether or not an Affiliate) created, incurred, assumed
or guaranteed by such Person in the ordinary course of
business of such Person in connection with obtaining
goods, materials or services that is not overdue by more
than ninety (90) days, unless the trade payable is being
contested in good faith); (c) all obligations as lessee
under leases which have been, or should be, in
accordance with GAAP recorded as capital leases; (d) any
contractual obligation, contingent or otherwise, of such
Person to pay or be liable for the payment of any
indebtedness of another Person, including, without
limitation, any such indebtedness, directly or
indirectly guaranteed, or any agreement to purchase,
repurchase, or otherwise acquire such indebtedness,
obligation or liability or any security therefor, or to
provide funds for the payment or discharge thereof, or
to maintain solvency, assets, level of income, or other
financial condition; (e) all obligations with respect to
mandatory redeemable stock and mandatory redemption or
repurchase obligations under any Capital Stock or other
equity securities issued by such Person; (f) all
reimbursement obligations and other liabilities of such
Person with respect to surety bonds (whether bid,
performance or otherwise), letters of credit, banker's
acceptances, drafts or similar documents or instruments
issued for such Person's account; (g) all indebtedness
of such Person in respect of indebtedness of another
Person for borrowed money or indebtedness of another
Person otherwise described in this definition which is
secured by any consensual lien, security interest,
collateral assignment, conditional sale, mortgage, deed
of trust, or other encumbrance on any asset of such
Person, whether or not such obligations, liabilities or
indebtedness are assumed by or are a personal liability
of such Person, all as of such time; (h) all
obligations, liabilities and indebtedness of such Person
(marked to market) arising under swap agreements, cap
agreements and collar agreements and other agreements or
arrangements designed to protect such person against
fluctuations in interest rates or currency or commodity
values and (i) all obligations owed by such Person under
license agreements with respect to non-refundable,
advance or minimum guarantee royalty payments.
16. The following new definition of "Intellectual Property"
is hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Intellectual Property" shall mean Borrower's now owned
and hereafter arising or acquired: patents, patent
rights, patent applications, copyrights, works which are
the subject matter of copyrights, copyright
registrations, trademarks, trade names, trade styles,
trademark and service xxxx applications, and licenses
and rights to use any of the foregoing; all extensions,
renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing; all
rights to xxx for past, present and future infringement
of any of the foregoing; inventions, trade secrets,
formulae, processes, compounds, drawings, designs,
blueprints, surveys, reports, manuals, and operating
standards; goodwill (including any goodwill associated
with any trademark or the license of any trademark);
customer and other lists in whatever form maintained;
and trade secret rights, copyright rights, rights in
works of authorship, domain names and domain name
registrations; software and contract rights relating to
software, in whatever form created or maintained.
17. The following new definition of "Interest Expense" is
hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Interest Expense" means, with respect to any Person for
any fiscal period, cash and non-cash interest expense of
such Person determined in accordance with GAAP for the
relevant period ended on such date, including interest
expense with respect to any Indebtedness of such Person
and interest expense for the relevant period that has
been capitalized on the balance sheet of such Person.
18. The following new definition of "Lender Payment Account"
is hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Lender Payment Account" shall mean account no.
322-020557 of Lender at Chase Manhattan Bank or such
other account of Lender as Lender may from time to time
designate to Borrower as the Lender Payment Account for
purposes of this Agreement.
19. The following new definition of "Loans" is hereby added
to Section 1 of the Loan Agreement in proper alphabetical
order:
"Loans" shall mean the Revolving Loans and the Term
Loan.
20. The definition of "Maximum Credit" in Section 1 of the
Loan Agreement is hereby amended and restated in its
entirety to read as follows:
"Maximum Credit" shall mean the amount of $50,000,000.
21. The following new definition of "Mortgages" is hereby
added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Mortgages" shall mean, individually and collectively,
each of the following: (a) the Mortgage, Security
Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing, dated of even date
herewith, by Borrower in favor of Lender with respect to
the Real Property and related assets of Borrower located
in Peoria County, Illinois, (b) the Deed of Trust,
Assignment, Security Agreement and Financing Statement,
dated of even date herewith, by Xxxxxxx Wire Company
f/k/a DeSoto, Inc. ("Sherman") in favor of Lender with
respect to the Real Property and related assets of
Sherman located in Xxxxxxx County, Texas, (c) the Deed
of Trust, Assignment, Security Agreement and Financing
Statement, dated of even date herewith, by Sherman Wire
of Xxxxxxxx, Inc. ("Xxxxxxx Xxxxxxxx") in favor of
Lender with respect to the Real Property and related
assets of Xxxxxxx Xxxxxxxx located in Xxxxxxxx County,
Texas, and (d) the Mortgage, Security Agreement,
Assignment of Leases and Rents, Financing Statement and
Fixture Filing, dated of even date herewith, by Borrower
in favor of Lender with respect to the Real Property and
related assets of Borrower located in Washington County,
Arkansas.
22. The following new definition of "Multiemployer Plan" is
hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Multiemployer Plan" shall mean a "multi-employer plan"
as defined in Section 4001(a)(3) of ERISA which is or
was at any time during the current year or the
immediately preceding six (6) years contributed to by
Borrower or any ERISA Affiliate.
23. The definition of "Obligations" in Section 1 of the Loan
Agreement is hereby amended to add the phrase "the Term
Loan," after the phrase "Revolving Loans," in the first line
thereof.
24. The following new definition of "Plan" is hereby added
to Section 1 of the Loan Agreement in proper alphabetical
order:
"Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) which Borrower sponsors,
maintains, or to which it makes, is making, or is
obligated to make contributions, or in the case of a
Multiemployer Plan has made contributions at any time
during the immediately preceding six (6) plan years.
25. The following new definition of "Real Property" is
hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Real Property" shall mean all now owned and hereafter
acquired real property of Borrower, including leasehold
interests, together with all buildings, structures, and
other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever
located, including the real property and related assets
more particularly described in the Mortgages.
26. The following new definition of "Receivables" is hereby
added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Receivables" shall mean all of the following now owned
or hereafter arising or acquired property of Borrower:
(a) all Accounts; (b) all interest, fees, late charges,
penalties, collection fees and other amounts due or to
become due or otherwise payable in connection with any
Account; (c) all payment intangibles of Borrower and
other contract rights, chattel paper, instruments,
notes, and other forms of obligations owing to Borrower,
whether from the sale and lease of goods or other
property, licensing of any property (including
Intellectual Property or other general intangibles),
rendition of services or from loans or advances by
Borrower or to or for the benefit of any third person
(including loans or advances to any affiliates or
Subsidiaries of Borrower) or otherwise associated with
any Accounts, Inventory or general intangibles of
Borrower (including, without limitation, choses in
action, causes of action, tax refunds, tax refund
claims, any funds which may become payable to Borrower
in connection with the termination of any Plan or other
employee benefit plan and any other amounts payable to
Borrower from any Plan or other employee benefit plan,
rights and claims against carriers and shippers, rights
to indemnification, business interruption insurance and
proceeds thereof, casualty or any similar types of
insurance and any proceeds thereof and proceeds of
insurance covering the lives of employees on which
Borrower is a beneficiary).
27. The following new definition of "Revolving Loan Limit"
is hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Revolving Loan Limit" shall mean $45,000,000.
28. The following new definition of "Subordinated
Indebtedness" is hereby added to Section 1 of the Loan
Agreement in proper alphabetical order:
"Subordinated Indebtedness" shall mean (i) Borrower's
obligations under that certain Loan Agreement dated as
of March 13, 2002, by and between Borrower and the
County of Peoria, Illinois, (ii) Borrower's obligations
under that certain $19,800,000 Indenture dated as of
March 15, 2002, between the Borrower, as issuer, and
U.S. Bank National Association, a national banking
association, as trustee, and those certain 8%
Subordinated Secured Notes due 2009 (the "8%
Notes")executed in connection therewith, and (iii) those
certain 6% Subordinated Unsecured Notes due 2011 (the
"6% Notes"); in each case together with all collateral
documents and all other agreements executed in
connection therewith.
29. The following new definition of "Subsidiaries" is hereby
added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Subsidiary" or "subsidiary" shall mean, with respect to
any Person, any corporation, limited liability company,
limited liability partnership or other limited or
general partnership, trust, association or other
business entity of which an aggregate of at least a
majority of the outstanding Capital Stock or other
interests entitled to vote in the election of the board
of directors of such corporation (irrespective of
whether, at the time, Capital Stock of any other class
or classes of such corporation shall have or might have
voting power by reason of the happening of any
contingency), managers, trustees or other controlling
persons, or an equivalent controlling interest therein,
of such Person is, at the time, directly or indirectly,
owned by such Person and/or one or more Subsidiaries of
such Person.
30. The following new definition of "Term Loan" is hereby
added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Term Loan" shall mean the term loan made by Lender to
Borrower as provided for in Section 2.4 hereof.
31. The following new definition of "UCC" is hereby added to
Section 1 of the Loan Agreement in proper alphabetical
order:
"UCC" shall mean the Uniform Commercial Code as in
effect in the State of Illinois, and any successor
statute, as in effect from time to time (except that
terms used herein which are defined in the Uniform
Commercial Code as in effect in the State of Illinois on
the date of the Twelfth Amendment shall continue to have
the same meaning notwithstanding any replacement or
amendment of such statute except as Lender may otherwise
determine).
32. The following new definition of "Vendor Settlements" is
hereby added to Section 1 of the Loan Agreement in proper
alphabetical order:
"Vendor Settlements" shall mean Borrower's obligations
under (i) that certain Account Reconciliation Agreement
dated as of March 12, 2002, by and between Borrower and
Central Illinois Light Company, an Illinois corporation,
and (ii) that certain Account Reconciliation Agreement
dated as of March 11, 2002, by and between Borrower and
PSC Metals, Inc., an Ohio corporation.
B. Subsection (c) of Section 2.1 of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
Except in Lender's discretion, (i) the aggregate amount
of Revolving Loans outstanding at any time shall not
exceed the Revolving Loan Limit and (ii) the aggregate
amount of the Loans and the Letter of Credit
Accommodations outstanding at any time shall not exceed
the Maximum Credit. In the event that the outstanding
amount of any component of the Loans, or the aggregate
amount of the outstanding Loans and Letter of Credit
Accommodations, exceed the amounts available under the
lending formulas, the Revolving Loan Limit, the
sublimits for the Letter of Credit Accommodations set
forth in Section 2.2(c) or the Maximum Credit, as
applicable, such event shall not limit, waive or
otherwise affect any rights of Lender in that
circumstance or on any future occasions and Borrower
shall, upon demand by Lender, which may be made at any
time or from time to time, immediately repay to Lender
the entire amount of any such excess(es) for which
payment is demanded.
C. The following new Section 2.4 is hereby added to the Loan Agreement
in proper numerical order:
2.4 Term Loan.
(a) Lender is making a Term Loan to Borrower in the
original principal amount of $5,000,000. The Term Loan
is (a) evidenced by a Term Loan promissory note in such
original principal amount to be duly executed and
delivered by Borrower to Lender on the date of such
borrowing; (b) to be repaid, together with interest and
other amounts, in accordance with this Agreement, the
Term Loan promissory note, and the other Financing
Agreements and (c) secured by all of the Collateral. The
principal amount of the Term Loan shall be repaid in
thirty-six (36) consecutive monthly installments (or
earlier as provided herein) payable on the first day of
each month commencing May 1, 2002, of which the first
thirty-five (35) installments shall each be in the
amount of $104,167 and the last installment shall be in
the amount of the entire unpaid balance of the Term Loan
and shall be payable on the Renewal Date.
(b) Notwithstanding subsection 2.4(a) above, the
aggregate outstanding principal balance of the Term Loan
shall be due and payable in full in immediately
available funds upon the Renewal Date or other
termination of or prepayment in full of the Revolving
Loans. No payment with respect to the Term Loan may be
reborrowed.
D. Section 3.1(a) of the Loan Agreement is hereby amended by replacing
each reference to the phrase "Revolving Loans" with the word "Loans".
E. Clause (vi) of Subsection 3.1(b) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
(vi) the maximum amount of the Eurodollar Rate Loans at
any time requested by Borrower shall not exceed the
amount equal to (A) the principal amount of the Term
Loan which it is anticipated will be outstanding as of
the last day of the applicable Interest Period plus (B)
eighty (80%) percent of the lowest principal amount of
the Revolving Loans which it is anticipated will be
outstanding during the applicable Interest Period, in
each case as determined by Lender (but with no
obligation of Lender to make such Loans),
F. Section 4.2 of the Loan Agreement is hereby amended by replacing
the phrase "Revolving Loans" with the word "Loans" wherever it appears
therein.
G. Section 5 of the Loan Agreement is hereby amended and restated in
its entirety to read as follows:
Section 5. GRANT OF SECURITY INTEREST
5.1 Grant of Security Interest. To secure payment and
performance of all Obligations, Borrower hereby grants to
Lender a continuing security interest in, a lien upon, and a
right of set off against, and hereby assigns to Lender as
security, all personal and real property and fixtures and
interests in property and fixtures of Borrower, whether now
owned or hereafter acquired or existing, and wherever
located (together with all other collateral security for the
Obligations at any time granted to or held by or acquired by
Lender, collectively, the Collateral"), including:
(a) all Accounts;
(b) all general intangibles, including, without limitation,
all Intellectual Property;
(c) all goods, including, without limitation, Inventory and
Equipment;
(d) all Real Property and fixtures;
(e) all chattel paper (including all tangible and electronic
chattel paper);
(f) all instruments (including all promissory notes);
(g) all documents;
(h) all deposit accounts;
(i) all letters of credit, banker's acceptances and similar
instruments and including all letter-of-credit rights;
(j) all supporting obligations and all present and future
liens, security interests, rights, remedies, title and
interest in, to and in respect of Receivables and other
Collateral, including (i) rights and remedies under or
relating to guaranties, contracts of suretyship, letters of
credit and credit and other insurance related to the
Collateral, (ii) rights of stoppage in transit, replevin,
repossession, reclamation and other rights and remedies of
an unpaid vendor, lienor or secured party, (iii) goods
described in invoices, documents, contracts or instruments
with respect to, or otherwise representing or evidencing,
Receivables or other Collateral, including returned,
repossessed and reclaimed goods, and (iv) deposits by and
property of account debtors or other persons securing the
obligations of account debtors;
(k) all (i) investment property (including securities,
whether certificated or uncertificated, securities accounts,
security entitlements, commodity contracts or commodity
accounts), excluding Borrower's investments in EWP and
Garden Zone, and (ii) monies, credit balances, deposits and
other property of Borrower now or hereafter held or received
by or in transit to Lender or its affiliates or at any other
depository or other institution from or for the account of
Borrower, whether for safekeeping, pledge, custody,
transmission, collection or otherwise, excluding funds held
in trust with respect to environmental liabilities and other
property deposited with the Indenture Trustee pursuant to
Section 3.5 or Article VIII of the Indenture or delivered to
or received by the Indenture Trustee for application in
accordance with Section 6.11 of the Indenture;
(l) all commercial tort claims, including, without
limitation, those identified in the Information Certificate;
(m) to the extent not otherwise described above, all
Receivables;
(n) all Records; and
(o) all products and proceeds of the foregoing, in any form,
including insurance proceeds and all claims against third
parties for loss or damage to or destruction of or other
involuntary conversion of any kind or nature of any or all
of the other Collateral.
Lender acknowledges that the definition of Collateral shall
not include the assets of Garden Zone and EWP.
5.2 Perfection of Security Interests.
(a) Borrower irrevocably and unconditionally authorizes
Lender (or its agent) to file at any time and from time to
time such financing statements with respect to the
Collateral naming Lender or its designee as the secured
party and Borrower as debtor, as Lender may require, and
including any other information with respect to Borrower or
otherwise required by part 5 of Article 9 of the Uniform
Commercial Code of such jurisdiction as Lender may
determine, together with any amendment and continuations
with respect thereto, which authorization shall apply to all
financing statements filed on, prior to or after the date
hereof. Borrower hereby ratifies and approves all financing
statements naming Lender or its designee as secured party
and Borrower as debtor with respect to the Collateral (and
any amendments with respect to such financing statements)
filed by or on behalf of Lender prior to the date hereof and
ratifies and confirms the authorization of Lender to file
such financing statements (and amendments, if any). Borrower
hereby authorizes Lender to adopt on behalf of Borrower any
symbol required for authenticating any electronic filing. In
the event that the description of the collateral in any
financing statement naming Lender or its designee as the
secured party and Borrower as debtor includes assets and
properties of Borrower that do not at any time constitute
Collateral, whether hereunder, under any of the other
Financing Agreements or otherwise, the filing of such
financing statement shall nonetheless be deemed authorized
by Borrower to the extent of the Collateral included in such
description and it shall not render the financing statement
ineffective as to any of the Collateral or otherwise affect
the financing statement as it applies to any of the
Collateral. In no event shall Borrower at any time file, or
permit or cause to be filed, any correction statement or
termination statement with respect to any financing
statement (or amendment or continuation with respect
thereto) naming Lender or its designee as secured party and
Borrower as debtor.
(b) Borrower does not have any chattel paper (whether
tangible or electronic) or instruments as of the date
hereof, except as set forth in the Information Certificate.
In the event that Borrower shall be entitled to or shall
receive any chattel paper or instrument after the date
hereof, Borrower shall promptly notify Lender thereof in
writing. Promptly upon the receipt thereof by or on behalf
of Borrower (including by any agent or representative),
Borrower shall deliver, or cause to be delivered to Lender,
all tangible chattel paper and instruments that Borrower has
or may at any time acquire, accompanied by such instruments
of transfer or assignment duly executed in blank as Lender
may from time to time specify, in each case except as Lender
may otherwise agree. At Lender's option, Borrower shall, or
Lender may at any time on behalf of Borrower, cause the
original of any such instrument or chattel paper to be
conspicuously marked in a form and manner acceptable to
Lender with the following legend referring to chattel paper
or instruments as applicable: "This [chattel
paper][instrument] is subject to the security interest of
Congress Financial Corporation (Central) and any sale,
transfer, assignment or encumbrance of this [chattel
paper][instrument] violates the rights of such secured
party."
(c) In the event that Borrower shall at any time hold or
acquire an interest in any electronic chattel paper or any
"transferable record" (as such term is defined in Section
201 of the Federal Electronic Signatures in Global and
National Commerce Act or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant
jurisdiction), Borrower shall promptly notify Lender thereof
in writing. Promptly upon Lender's request, Borrower shall
take, or cause to be taken, such actions as Lender may
reasonably request to give Lender control of such electronic
chattel paper under Section 9-105 of the UCC and control of
such transferable record under Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act
or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as in effect in such jurisdiction.
(d) Borrower does not have any lockbox or other deposit
accounts (where payments on Receivables or other proceeds of
Inventory or other Collateral are deposited) as of the date
hereof, except as set forth in the Information Certificate.
Borrower shall not, directly or indirectly, after the date
hereof open, establish or maintain any lockbox or other
deposit account (where payments on Receivables or other
proceeds of Inventory or other Collateral are deposited)
unless each of the following conditions is satisfied: (i)
Lender shall have received not less than five (5) Business
Days prior written notice of the intention of Borrower to
open or establish such account which notice shall specify in
reasonable detail and specificity acceptable to Lender the
name of the account, the owner of the account, the name and
address of the bank at which such account is to be opened or
established, the individual at such bank with whom Borrower
is dealing and the purpose of the account, (ii) the bank
where such account is opened or maintained shall be
acceptable to Lender, and (iii) on or before the opening of
such deposit account, Borrower shall as Lender may specify
either (A) deliver to Lender a Deposit Account Control
Agreement with respect to such deposit account duly
authorized, executed and delivered by Borrower and the bank
at which such deposit account is opened and maintained or
(B) arrange for Lender to become the customer of the bank
with respect to the deposit account on terms and conditions
acceptable to Lender. The terms of this subsection (d) shall
not apply to deposit accounts specifically and exclusively
used for payroll, payroll taxes and other employee wage and
benefit payments to or for the benefit of Borrower's
salaried or hourly wage employees.
(e) Borrower does not own or hold, directly or indirectly,
beneficially or as record owner or both, any investment
property, as of the date hereof, or have any investment
account, securities account, commodity account or other
similar account with any bank or other financial institution
or other securities intermediary or commodity intermediary
as of the date hereof, in each case except as set forth in
the Information Certificate.
(i) In the event that Borrower shall be entitled to or shall
at any time after the date hereof hold or acquire any
certificated securities, Borrower shall promptly endorse,
assign and deliver the same to Lender, accompanied by such
instruments of transfer or assignment duly executed in blank
as Lender may from time to time specify. If any securities,
now or hereafter acquired by Borrower are uncertificated and
are issued to Borrower or its nominee directly by the issuer
thereof, Borrower shall immediately notify Lender thereof
and shall as Lender may specify, either (A) cause the issuer
to agree to comply with instructions from Lender as to such
securities, without further consent of Borrower or such
nominee, or (B) arrange for Lender to become the registered
owner of the securities.
(ii) Borrower shall not, directly or indirectly, after the
date hereof open, establish or maintain any investment
account, securities account, commodity account or any other
similar account (other than a deposit account) with any
securities intermediary or commodity intermediary unless
each of the following conditions is satisfied: (A) Lender
shall have received not less than five (5) Business Days
prior written notice of the intention of Borrower to open or
establish such account which notice shall specify in
reasonable detail and specificity acceptable to Lender the
name of the account, the owner of the account, the name and
address of the securities intermediary or commodity
intermediary at which such account is to be opened or
established, the individual at such intermediary with whom
Borrower is dealing and the purpose of the account, (B) the
securities intermediary or commodity intermediary (as the
case may be) where such account is opened or maintained
shall be acceptable to Lender, and (C) on or before the
opening of such investment account, securities account or
other similar account with a securities intermediary or
commodity intermediary, Borrower shall as Lender may specify
either (1) execute and deliver, and cause to be executed and
delivered to Lender, an Investment Property Control
Agreement with respect thereto duly authorized, executed and
delivered by Borrower and such securities intermediary or
commodity intermediary or (2) arrange for Lender to become
the entitlement holder with respect to such investment
property on terms and conditions acceptable to Lender.
(f) Borrower is not the beneficiary or otherwise entitled to
any right to payment under any letter of credit, banker's
acceptance or similar instrument as of the date hereof,
except as set forth in the Information Certificate. In the
event that Borrower shall be entitled to or shall receive
any right to payment under any letter of credit, banker's
acceptance or any similar instrument, whether as beneficiary
thereof or otherwise after the date hereof, Borrower shall
promptly notify Lender thereof in writing. Borrower shall
immediately, as Lender may specify, either (i) deliver, or
cause to be delivered to Lender, with respect to any such
letter of credit, banker's acceptance or similar instrument,
the written agreement of the issuer and any other nominated
person obligated to make any payment in respect thereof
(including any confirming or negotiating bank), in form and
substance satisfactory to Lender, consenting to the
assignment of the proceeds of the letter of credit to Lender
by Borrower and agreeing to make all payments thereon
directly to Lender or as Lender may otherwise direct or (ii)
cause Lender to become, at Borrower's expense, the
transferee beneficiary of the letter of credit, banker's
acceptance or similar instrument (as the case may be).
(g) Borrower has no commercial tort claims as of the date
hereof, except as set forth in the Information Certificate.
In the event that Borrower shall at any time after the date
hereof have any commercial tort claims, Borrower shall
promptly notify Lender thereof in writing, which notice
shall (i) set forth in reasonable detail the basis for and
nature of such commercial tort claim and (ii) include the
express grant by Borrower to Lender of a security interest
in such commercial tort claim (and the proceeds thereof). In
the event that such notice does not include such grant of a
security interest, the sending thereof by Borrower to Lender
shall be deemed to constitute such grant to Lender. Upon the
sending of such notice, any commercial tort claim described
therein shall constitute part of the Collateral and shall be
deemed included therein. Without limiting the authorization
of Lender provided in Section 5.2(a) hereof or otherwise
arising by the execution by Borrower of this Agreement or
any of the other Financing Agreements, Lender is hereby
irrevocably authorized from time to time and at any time to
file such financing statements naming Lender or its designee
as secured party and Borrower as debtor, or any amendments
to any financing statements, covering any such commercial
tort claim as Collateral. In addition, Borrower shall
promptly upon Lender's request, execute and deliver, or
cause to be executed and delivered, to Lender such other
agreements, documents and instruments as Lender may require
in connection with such commercial tort claim.
(h) Borrower does not have any goods, documents of title or
other Collateral in the custody, control or possession of a
third party as of the date hereof, except as set forth in
the Information Certificate and except for goods located in
the United States in transit to a location of Borrower
permitted herein in the ordinary course of business of
Borrower in the possession of the carrier transporting such
goods. In the event that any goods, documents of the title
or other Collateral are at any time after the date hereof in
the custody, control or possession of any other person not
referred to in the Information Certificate or such carriers,
Borrower shall promptly notify Lender thereof in writing.
Promptly upon Lender's request with respect to any material
amount of Collateral located in the custody, control or
possession of any third party, Borrower shall deliver to
Lender a Collateral Access Agreement duly authorized,
executed and delivered by such person and Borrower.
(i) Borrower shall take any other actions reasonably
requested by Lender from time to time to cause the
attachment, perfection and first priority of, and the
ability of Lender to enforce, the security interest of
Lender in any and all of the Collateral, including, without
limitation, (i) executing, delivering and, where
appropriate, filing financing statements and amendments
relating thereto under the UCC or other applicable law, to
the extent, if any, that Borrower's signature thereon is
required therefor, (ii) causing Lender's name to be noted as
secured party on any certificate of title for a titled good
if such notation is a condition to attachment, perfection or
priority of, or ability of Lender to enforce, the security
interest of Lender in such Collateral, (iii) complying with
any provision of any statute, regulation or treaty of the
United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or
priority of, or ability of Lender to enforce, the security
interest of Lender in such Collateral, (iv) obtaining the
consents and approvals of any Governmental Authority or
third party, including, without limitation, any consent of
any licensor, lessor or other person obligated on
Collateral, and taking all actions required by any earlier
versions of the UCC or by other law, as applicable in any
relevant jurisdiction.
H. Section 6.1 of the Loan Agreement is hereby amended by replacing
the phrase "Revolving Loans" with the word "Loans" wherever it appears
therein.
I. Subsections 6.3(a) and (b) of the Loan Agreement are hereby amended
and restated in their entirety to read as follows:
(a) Borrower shall establish and maintain, at its expense,
blocked accounts or lockboxes and related blocked accounts
(in either case, "Blocked Accounts"), as Lender may specify,
with such banks as are acceptable to Lender into which
Borrower shall promptly deposit and direct its account
debtors to directly remit all payments on Receivables and
all payments constituting proceeds of Inventory or other
Collateral in the identical form in which such payments are
made, whether by cash, check or other manner. Borrower shall
deliver, or cause to be delivered to Lender, a Depository
Account Control Agreement duly authorized, executed and
delivered by each bank where a Blocked Account is maintained
as provided in Section 5.2 hereof or at any time and from
time to time Lender may become bank's customer with respect
to the Blocked Accounts and promptly upon Lender's request,
Borrower shall execute and deliver such agreements or
documents as Lender may require in connection therewith.
Borrower agrees that all payments made to such Blocked
Accounts or other funds received and collected by Lender,
whether in respect of the Receivables, as proceeds of
Inventory or other Collateral or otherwise shall be treated
as payments to Lender in respect of the Obligations and
therefore shall constitute the property of Lender to the
extent of the then outstanding Obligations.
(b) For purposes of calculating the amount of the Loans
available to Borrower, such payments will be applied
(conditional upon final collection) to the Obligations on
the Business Day of receipt by Lender of immediately
available funds in the Lender Payment Account provided such
payments and notice thereof are received in accordance with
Lender's usual and customary practices as in effect from
time to time and within sufficient time to credit Borrower's
loan account on such day, and if not, then on the next
Business Day. For the purposes of calculating interest on
the Obligations, such payments or other funds received will
be applied (conditional upon final collection) to the
Obligations one (1) Business Day following the date of
receipt of immediately available funds by Lender in the
Lender Payment Account provided such payments or other funds
and notice thereof are received in accordance with Lender's
usual and customary practices as in effect from time to time
and within sufficient time to credit Borrower's loan account
on such day, and if not, then on the next Business Day.
J. Section 6.5 of the Loan Agreement is hereby amended by replacing
the phrase "Revolving Loans" with the word "Loans" wherever it appears
therein.
K. Section 6.6 of the Loan Agreement is hereby amended by replacing
the phrase "Revolving Loans" with the word "Loans" wherever it appears
therein.
L. Section 7.1 of the Loan Agreement is hereby amended to insert the
phrase "and Equipment" after the word "Inventory" in clause (c)(iii)
thereof.
M. Section 7.4 of the Loan Agreement is hereby amended and restated in
its entirety to read as follows:
7.4 Equipment and Real Property Covenants. With respect to
the Equipment and Real Property: (a) upon Lender's request,
Borrower shall, at its expense, on or after an Event of
Default, deliver or cause to be delivered to Lender written
appraisals as to the Equipment and/or the Real Property in
form, scope and methodology acceptable to Lender and by an
appraiser acceptable to Lender, addressed to Lender and upon
which Lender is expressly permitted to rely; (b) Borrower
shall keep the Equipment in good order, repair, running and
marketable condition (ordinary wear and tear excepted); (c)
Borrower shall use the Equipment and Real Property with all
reasonable care and caution and in accordance with
applicable standards of any insurance and in conformity with
all applicable laws; (d) the Equipment is and shall be used
in Borrower's business and not for personal, family,
household or farming use; (e) Borrower shall not remove any
Equipment from the locations set forth or permitted herein,
except in connection with the sale of obsolete Equipment or
to the extent necessary to have any Equipment repaired or
maintained in the ordinary course of the business of
Borrower or to move Equipment directly from one location set
forth or permitted herein to another such location and
except for the movement of motor vehicles used by or for the
benefit of Borrower in the ordinary course of business; (f)
the Equipment is now and shall remain personal property and
Borrower shall not permit any of the Equipment to be or
become a part of or affixed to real property; and (g)
Borrower assumes all responsibility and liability arising
from the use of the Equipment and Real Property.
N. Section 8.1 of the Loan Agreement is hereby amended and restated in
its entirety to read as follows:
8.1 Corporate Existence. Power and Authority; Subsidiaries.
(a) Borrower is a corporation duly organized and in good
standing under the laws its state of incorporation and is
duly qualified as a foreign corporation and in good standing
in all states and jurisdictions where the nature and extent
of the business transacted by it or the ownership of assets
makes such qualification necessary. The execution, delivery
and performance of this Agreement, the other Financing
Agreements and the transactions contemplated hereunder and
thereunder are all within Borrower's corporate powers, have
been duly authorized and are not in contravention of law or
the terms of Borrower's certificate of incorporation,
by-laws, or other organizational documentation, or any
indenture, agreement or undertaking to which Borrower is a
party or by which Borrower or its property are bound. The
performance of Borrower's obligations do not, as of the
execution hereof, require any governmental consent,
registration or approval, do not contravene any contractual
or governmental restriction binding upon Borrowers and will
not, except as contemplated herein, result in the imposition
of any lien, charge, security interest or encumbrance upon
any property of the Borrower under any existing indenture,
mortgage, deed of trust, loan or credit agreement or other
material agreement or instrument to which the Borrower is a
party or by which it or any of its property may be bound or
affected. The execution and delivery by Borrower of the
Agreement and all other documents and instruments executed
and delivered in connection herewith and the performance of
Borrower's obligations hereunder and thereunder are not in
contravention of any law or laws. This Agreement and the
other Financing Agreements constitute legal, valid and
binding obligations of Borrower enforceable in accordance
with their respective terms. Borrower does not have any
Subsidiaries except as set forth on the Information
Certificate. Except as disclosed on the Information
Certificate, Borrower has not used and has no current plans
to use, any corporate or fictitious name other than the
corporate name shown on the Borrower's Articles of
Incorporation.
(b) Borrower does not have any direct or indirect
Subsidiaries or Affiliates and is not engaged in any joint
venture or partnership except as set forth in Schedule 8.1
to the Information Certificate.
(c) Borrower is the record and beneficial owner of all of
the issued and outstanding shares of Capital Stock of each
of the Subsidiaries listed on Schedule 8.1 to the
Information Certificate as being owned by Borrower and there
are no proxies, irrevocable or otherwise, with respect to
such shares and no equity securities of any of the
Subsidiaries are or may become required to be issued by
reason of any options, warrants, rights to subscribe to,
calls or commitments of any kind or nature and there are no
contracts, commitments, understandings or arrangements by
which any Subsidiary is or may become bound to issue
additional shares of it Capital Stock or securities
convertible into or exchangeable for such shares.
O. Section 8.3 of the Loan Agreement is hereby amended and restated in
its entirety to read as follows:
8.3 Name; State of Organization; Chief Executive Office;
Collateral Locations.
(a) The exact legal name of Borrower is as set forth on the
signature page of this Agreement and in the Information
Certificate. Borrower has not, during the past five years,
been known by or used any other corporate or fictitious name
or been a party to any merger or consolidation, or acquired
all or substantially all of the assets of any Person, or
acquired any of its property or assets out of the ordinary
course of business, except as set forth in the Information
Certificate.
(b) Borrower is an organization of the type and organized in
the jurisdiction set forth in the Information Certificate.
The Information Certificate accurately sets forth the
organizational identification number of Borrower or
accurately states that Borrower has none and accurately sets
forth the federal employer identification number of
Borrower.
(c) The chief executive office and mailing address of
Borrower and Borrower's Records concerning Accounts are
located only at the address set forth below and its only
other places of business and the only other locations of
Collateral, if any, are the addresses set forth in the
Information Certificate, subject to the right of Borrower to
establish new locations in accordance with Section 9.2
below. The Information Certificate correctly identifies any
of such locations which are not owned by Borrower and sets
forth the owners and/or operators thereof and, to the best
of Borrower's knowledge, the holders of any mortgages on
such locations.
P. The following new Section 8.14 is hereby added to the Loan
Agreement in proper numerical order:
8.14 Bank Accounts. All of the deposit accounts, investment
accounts or other accounts in the name of or used by
Borrower maintained at any bank or other financial
institution are set forth in Schedule 8.14 to the
Information Certificate, subject to the right of Borrower to
establish new accounts in accordance with Section 5.2
hereof.
Q. Section 9.4 of the Loan Agreement is hereby amended by replacing
the phrase "Revolving Loans" with the word "Loans" wherever it appears
therein.
R. Section 9.6 of the Loan Agreement is hereby amended by adding the
following new subsection (e) at the end thereof:
(e) Borrower shall, within sixty (60) days after the end of
each of its first three Fiscal Quarters and within 90 days
after its last Fiscal Quarter of each year, furnish or cause
to be furnished to Lender a compliance certificate in the
form of Exhibit B hereto, along with a schedule in form
reasonably satisfactory to Lender of the calculations used
in determining, as of the end of the immediately preceding
Fiscal Quarter, whether Borrower was in compliance with the
covenants set forth in Sections 9.21 and 9.22 of this
Agreement for such Fiscal Quarter.
S. Subsections 9.8(f) and (g) of the Loan Agreement are hereby amended
and restated in their entirety, and new subsections 9.8(i) and (j) are
added, to read as follows:
(f) subordinate liens on the Real Property and fixtures at
Borrower's Peoria, Illinois facility that are granted to the
County of Peoria, Illinois to secure a $10,000,000 loan to
the Borrower, provided that such secured party shall be
subject to a subordination agreement in form and substance
acceptable to Lender in its sole discretion; (g) subordinate
liens on the Borrower's property that are granted to the
holders of the 8% Subordinated Secured Notes due 2009,
provided such Notes shall be subordinate to the Loans, in
form and substance acceptable to Lender in its sole
discretion;
(i) the pledge of stock of EWP to EWP Financial, LLC to
secure a $6,000,000 revolving credit facility to Keystone
(the "EWP Financial Loan"); and (j) purchase money liens
(including capital leases) on equipment of Borrower in an
amount not to exceed $375,000; and (k) liens permitted under
other Financing Agreements.
T. Section 9.9 is amended to insert the following subsection (g) at
the end thereof:
and (g) the Subordinated Indebtedness, EWP Financial Loan
and the Vendor Settlements, in each case as in effect on the
date hereof.
U. Section 9.11 is amended and restated in its entirety to read
"Intentionally Deleted."
V. The following new Section 9.21 is hereby added to the Loan
Agreement in proper numerical order:
9.21 Minimum Fixed Charge Coverage Ratio. Borrower and its
Subsidiaries shall have on a consolidated basis at the end
of each Fiscal Quarter set forth below, a Fixed Charge
Coverage Ratio for the 12-month period then ended of not
less than the following:
For the Fiscal Quarter ending Minimum Fixed Charge Ratio
June 30, 2002 0.5 to 1.00
September 30, 2002 0.5 to 1.00
December 31, 2002 0.56 to 1.00
March 31, 2003 0.62 to 1.00
June 30, 2003 0.68 to 1.00
September 30, 2003 0.74 to 1.00
December 31, 2003 0.80 to 1.00
March 31, 2004 0.86 to 1.00
June 30, 2004 0.92 to 1.00
September 30, 2004 0.98 to 1.00
December 31, 2004 and for each Fiscal Quarter
end thereafter 1.01 to 1.00
W. The following new Section 9.22 is hereby added to the Loan
Agreement in proper numerical order:
9.22 Minimum EBITDA. Borrower and its Subsidiaries on
a consolidated basis shall have, at the end of each
Fiscal Quarter set forth below, EBITDA for the
12-month period then ended of not less than the
following:
Period EBITDA
June 30, 2002 $7,500,000
September 30, 2002 $6,000,000
December 31, 2002 $5,000,000
March 31, 2003 $5,250,000
June 30, 2003 $5,500,000
September 30, 2003 $5,750,000
December 31, 2003 $6,000,000
March 31, 2004 $6,250,000
June 30, 2004 $6,500,000
September 30, 2004 $6,750,000
December 31, 2004 $7,000,000
X. The following new Section 9.23 is hereby added to the Loan
Agreement in proper numerical order:
9.23 Restricted Payments. The Borrower shall not, and shall
not suffer or permit any of its Subsidiaries to, (i) declare
or make any dividend payment or other distribution of
assets, properties, cash, rights, obligations or securities
on account of any shares of any class of its Capital Stock,
(ii) purchase, redeem or otherwise acquire for value any
shares of its Capital Stock or any warrants, rights or
options to acquire such shares, interests or securities now
or hereafter outstanding or (iii) make any payment or
prepayment of principal of, premium, if any, interest,
redemption, exchange, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, the Senior
Notes or the Subordinated Indebtedness; provided that:
(a) the Borrower may make regularly scheduled interest
payments on the Senior Notes and the Subordinated
Indebtedness provided that no Event of Default or an event
which with notice or passage of time or both would
constitute an Event of Default is occurring or would result
from such payment;
(b) Borrower may declare and make dividend payments and
other distributions payable solely in its common stock;
(c) Borrower may make dividends in respect of Borrower's
Series A 10% Cumulative Convertible Pay-In-Kind Preferred
Stock provided that (x) no Event of Default or an event
which with notice or passage of time or both would
constitute an Event of Default is occurring or would result
from such payment and (y) after giving effect to (A) such
payment, (B) the Revolving Loan Limit and (C) the
availability of Borrower to obtain a Revolving Loan after
giving effect to the lending formulas set forth in Section
2.1(a) hereof, Borrower would be permitted to borrow
Revolving Loans in an amount not less than $1,250,000;
(d) the Borrower may redeem the Senior Notes in an aggregate
amount not to exceed $6,150,000.
Y. The following new Section 9.24 is hereby added to the Loan
Agreement in proper numerical order:
9.24 Vendor Settlements. Borrower shall not, and shall cause
its Subsidiaries not to, make any payment under the Vendor
Settlements unless (i) no Event of Default or an event which
with notice or passage of time or both would constitute an
Event of Default is occurring or would result from such
payment and (ii) after giving effect to (a) such payment,
(b) the Revolving Loan Limit and (c) the availability of
Borrower to obtain a Revolving Loan after giving effect to
the lending formulas set forth in Section 2.1(a) hereof,
Borrower would be permitted to borrow Revolving Loans in an
amount not less than $1,250,000.
Z. Section 10.1 is hereby amended to add the following new subsections
10.1(q) and (r) at the end thereof:
(q) there shall occur an "Asset Sale" as defined in the
Certificate of Designations, Rights and Preferences of the
Series A Cumulative Convertible Pay-in-Kind Preferred Stock;
and
(r) the Pension Benefit Guaranty Corporation shall place a
lien on any assets of the Borrower, or any of Borrower's
Subsidiaries, or on any assets of Garden Zone.
AA. Section 10.2.
1. The following new subsections 10.2(e) and (f) are hereby
added at the end of Section 10.2:
(e) Lender may, at any time or times that an Event of
Default exists or has occurred and is continuing, enforce
Borrower's rights against any account debtor, secondary
obligor or other obligor in respect of any of the Accounts
or other Receivables. Without limiting the generality of the
foregoing, Lender may at such time or times (i) notify any
or all account debtors, secondary obligors or other obligors
in respect thereof that the Receivables have been assigned
to Lender and that Lender has a security interest therein
and Lender may direct any or all accounts debtors, secondary
obligors and other obligors to make payment of Receivables
directly to Lender, (ii) extend the time of payment of,
compromise, settle or adjust for cash, credit, return of
merchandise or otherwise, and upon any terms or conditions,
any and all Receivables or other obligations included in the
Collateral and thereby discharge or release the account
debtor or any secondary obligors or other obligors in
respect thereof without affecting any of the Obligations,
(iii) demand, collect or enforce payment of any Receivables
or such other obligations, but without any duty to do so,
and Lender shall not be liable for its failure to collect or
enforce the payment thereof nor for the negligence of its
agents or attorneys with respect thereto and (iv) take
whatever other action Lender may deem necessary or desirable
for the protection of its interests. At any time that an
Event of Default exists or has occurred and is continuing,
at Lender's request, all invoices and statements sent to any
account debtor shall state that the Accounts and such other
obligations have been assigned to Lender and are payable
directly and only to Lender and Borrower shall deliver to
Lender such originals of documents evidencing the sale and
delivery of goods or the performance of services giving rise
to any Accounts as Lender may require. In the event any
account debtor returns Inventory when an Event of Default
exists or has occurred and is continuing, Borrower shall,
upon Lender's request, hold the returned Inventory in trust
for Lender, segregate all returned Inventory from all of its
other property, dispose of the returned Inventory solely
according to Lender's instructions, and not issue any
credits, discounts or allowances with respect thereto
without Lender's prior written consent.
(f) For the purpose of enabling Lender to exercise the
rights and remedies hereunder, Borrower hereby grants to
Lender, to the extent assignable, an irrevocable,
non-exclusive license (exercisable without payment of
royalty or other compensation to Borrower) to use, assign,
license or sublicense any of the trademarks, service-marks,
trade names, business names, trade styles, designs, logos
and other source of business identifiers and other
Intellectual Property and general intangibles now owned or
hereafter acquired by Borrower, wherever the same may be
located, including in such license reasonable access to all
media in which any of the licensed items may be recorded or
stored and to all computer programs used for the compilation
or printout thereof.
BB. Section 12.1.
1. Section 12.1(a) of the Loan Agreement is hereby amended
and restated in its entirety to read as follows:
This Agreement and the other Financing Agreements shall
continue in full force and effect for a term ending on the
date March 31, 2005 (the "Renewal Date"). Upon the Renewal
Date or earlier termination of the Financing Agreements,
Borrower shall pay to Lender, in full, all outstanding and
unpaid Obligations and shall furnish cash collateral to
Lender in such amounts as Lender determines are reasonably
necessary to secure Lender from loss, cost, damage or
expense, including attorneys' fees and legal expenses, in
connection with any contingent Obligations, including issued
and outstanding Letter of Credit Accommodations and checks
or other payments provisionally credited to the Obligations
and/or as to which Lender has not yet received final and
indefeasible payment. Such cash collateral shall be remitted
by wire transfer in Federal funds to such bank account of
Lender, as Lender may, in its discretion, designate in
writing to Borrower for such purpose. Interest shall be due
until and including the next business day, if the amounts so
paid by Borrower to the bank account designated by Lender
are received in such bank account later than 12:00 noon,
Chicago time.
2. Section 12.1(c) of the Loan Agreement is hereby amended
and restated in its entirety to read as follows:
If for any reason this Agreement is terminated prior to the
end of the then current term or renewal term of this
Agreement, in view of the impracticality and extreme
difficulty of ascertaining actual damages and by mutual
agreement of the parties as to a reasonable calculation of
Lender's lost profits as a result thereof, Borrower agrees
to pay to Lender, upon the effective date of such
termination, an early termination fee equal to one percent
(1%) of the Maximum Credit; provided that if such
termination occurs after the second anniversary following
the Amendment No. 12 Effective Date, such termination fee
shall be reduced to one-half of one percent (1/2%) of the
Maximum Credit. Such early termination fee shall be presumed
to be the amount of damages sustained by Lender as a result
of such early termination and Borrower agrees that it is
reasonable under the circumstances currently existing. In
addition, Lender shall be entitled to such early termination
fee upon the occurrence of any Event of Default described in
Sections 10.1(g) and 10.1(h) hereof, even if Lender does not
exercise its right to terminate this Agreement, but elects,
at its option, to provide financing to Borrower or permit
the use of cash collateral under the United States
Bankruptcy Code. The early termination fee provided for in
this Section 12.1 shall be deemed included in the
Obligations.
CC. A new Exhibit B is hereby added to the Loan Agreement in the form
of Exhibit A attached hereto.
II. Renewal Fee. The Borrower shall pay to Lender a $500,000
renewal fee ("Renewal Fee"), which is due on the Amendment
No. 12 Effective Date and payable in three (3) installments
of $166,667 on each of April 8, 2002 and March 15, 2003 and
$166,666 on March 15, 2004; provided that at such time (if
at all) that the Revolving Loan Limit is to be increased,
the entire unpaid Renewal Fee shall be immediately payable
to Lender.
III. Conditions to Effectiveness of Twelfth Amendment. This
Twelfth Amendment shall become effective on the date when
Borrower shall satisfy all of the following conditions:
A. Twelfth Amendment. Borrower and Lender shall
have duly executed and delivered this Twelfth
Amendment.
B. The County of Peoria, Illinois Subordination
and Intercreditor Agreement. Lender shall have
received a duly executed copy of that certain
Subordination and Intercreditor Agreement, dated
as of March 15, 2002, by and among Borrower,
Lender and The County of Peoria, Illinois.
C. Legal Opinion. Lender shall have received a
legal opinion of Xxxx Xxxxxxxxxxxxx, the
Borrower's in-house counsel, addressed to Lender
and in form and substance satisfactory to Lender.
D. Renewal Fee. The Borrower shall have paid to
the Lender $166,667 which constitutes the first
installment of the $500,000 renewal fee.
E. Subordinated Indebtedness. Lender shall have
received satisfactory evidence that the
documentation evidencing the Subordinated
Indebtedness has been fully executed and delivered
and the Subordinated Indebtedness has been issued,
including, without limitation, evidence that the
Borrower has received $10,000,000 from the County
of Peoria, Illinois and that the 8% Notes and the
6% Notes have been issued.
F. Vendor Settlements. Lender shall have received
satisfactory evidence that the documentation
evidencing the Vendor Settlements have been
executed and delivered to Borrower.
G. Additional Matters. Lender shall have received
such other certificates, opinions, UCC financing
statements, documents and instruments relating to
the obligations or the transactions contemplated
hereby as may have been reasonably requested by
Lender, and all corporate and other proceedings
and all other documents and all legal matters in
connection with the transactions contemplated
hereby shall be reasonably satisfactory in form
and substance to Lender.
IV. Representations and Warranties. In order to induce
Lender to enter into this Twelfth Amendment, Borrower
represents and warrants to Lender, upon the effectiveness of
this Twelfth Amendment, which representations and warranties
shall survive the execution and delivery of this Twelfth
Amendment, that:
A. Borrower is a corporation duly organized,
validly existing and in good standing under the
laws of the state of its incorporation;
B. the execution, delivery and performance of this
Twelfth Amendment by Borrower are within its
corporate powers and have been duly authorized by
all necessary corporate action; and
C. this Twelfth Amendment constitutes a legal,
valid and binding obligation of Borrower,
enforceable against Borrower in accordance with
its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of
creditors' rights generally, and by general
principles of equity.
V. Information Certificate. Borrower shall deliver to
Lender, within thirty (30) days following the date hereof,
an Information Certificate and updates of applicable
Schedules. Such Information Certificate shall be in form and
substance satisfactory to Lender in its sole discretion.
Failure to satisfy this Article IV hereof shall constitute
an immediate Event of Default under the Loan Agreement.
VI. Miscellaneous.
A. Effect; Ratification. The amendments set forth
herein are effective solely for the purpose set
forth herein and shall be limited precisely as
written, and shall not be deemed to (i) be a
consent to any amendment, waiver or modification
of any other term or condition of the Loan
Agreement or of any other Financing Agreements or
(ii) prejudice any right or rights that Lender may
now have or may have in the future under or in
connection with the Loan Agreement or any other
Financing Agreements. Each reference in the Loan
Agreement to "this Agreement", "herein", "hereof"
and words of like import and each reference in the
other Financing Agreements to the Loan Agreement
shall mean the Loan Agreement as amended hereby.
This Twelfth Amendment shall be construed in
connection with and as part of the Loan Agreement
and all terms, conditions, representations,
warranties, covenants and agreements set forth in
the Loan Agreement and each other Financing
Agreement, except as herein amended or waived, are
hereby ratified and confirmed and shall remain in
full force and effect.
B. Costs and Expenses. Borrower shall pay to
Lender on demand all reasonable out-of-pocket
costs, expenses, title fees, filing fees and taxes
paid or payable in connection with the
preparation, negotiation, execution, delivery,
recording, administration, collection,
liquidation, enforcement and defense of the
Obligations, Lender's rights in the Collateral,
this Twelfth Amendment, the Loan Agreement, the
other Financing Agreements and all other documents
related hereto or thereto, including any
amendments, supplements or consents which may
hereafter be contemplated (whether or not
executed) or entered into in respect hereof and
thereof, including, but not limited to: (a) all
costs and expenses of filing or recording
(including Uniform Commercial Code financing
statement filing taxes and fees, documentary
taxes, intangibles taxes and mortgage recording
and title insurance taxes and fees, if
applicable); (b) costs and expenses and fees for
title insurance and other insurance premiums,
environmental audits, surveys, assessments,
engineering reports and inspections, appraisal
fees and search fees; (c) costs and expenses of
remitting loan proceeds, collecting checks and
other items of payment; (d) charges, fees or
expenses charged by any bank or issuer in
connection with the Letter of Credit
Accommodations; (e) costs and expenses of
preserving and protecting the Collateral; (f)
costs and expenses paid or incurred in connection
with obtaining payment of the Obligations,
enforcing the security interests and liens of
Lender, selling or otherwise realizing upon the
Collateral, and otherwise enforcing the provisions
of this Twelfth Amendment, the Loan Agreement and
the other Financing Agreements or defending any
claims made or threatened against Lender arising
out of the transactions contemplated hereby and
thereby (including, without limitation,
preparations for and consultations concerning any
such matters); and (g) the fees and disbursements
of counsel (including legal assistants) to Lender
in connection with the foregoing.
C. Certain Waivers; Release. Although Borrower
does not believe that it has any claims against
Lender, it is willing to provide Lender with a
general and total release of all such claims in
consideration of the benefits which Borrower will
receive pursuant to this Twelfth Amendment.
Accordingly, Borrower for itself and any successor
of Borrower hereby knowingly, voluntarily,
intentionally and irrevocably releases and
discharges Lender and its respective officers,
directors, agents and counsel (each a "Released
Party") from any and all actions, causes of
action, suits, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments,
extents, executions, losses, liabilities, costs,
expenses, debts, dues, demands, obligations or
other claims of any kind whatsoever, in law,
admiralty or equity, which Borrower ever had, now
has or hereafter can, shall or may have against
any Released Party for, upon or by reason of any
matter, cause or thing whatsoever from the
beginning of the world to the date of this Twelfth
Amendment.
D. Counterparts. This Twelfth Amendment may be
executed in any number of counterparts, each such
counterpart constituting an original but all
together constituting one and the same instrument.
E. Severability. Any provision contained in this
Twelfth Amendment that is held to be inoperative,
unenforceable or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative,
unenforceable or invalid without affecting the
remaining provisions of this Twelfth Amendment in
that jurisdiction or the operation, enforceability
or validity of that provision in any other
jurisdiction.
F. GOVERNING LAW. THIS TWELFTH AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
[remainder of page intentionally left blank]
[Signature Page to Twelfth Amendment To Amended And Restated
Revolving Loan And Security Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Twelfth
Amendment as of the date first above written.
CONGRESS FINANCIAL CORPORATION (CENTRAL)
By:
-------------------------------------------------
Name:
-------------------------------------------------
Title:
-------------------------------------------------
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
By:
-------------------------------------------------
Name:
-------------------------------------------------
Title:
-------------------------------------------------
CONSENT
By Guarantee dated September 27, 1996 (as amended, the "Guarantee"),
the undersigned (the "Guarantor") guaranteed to Lender (as defined therein),
subject to the terms, conditions and obligations set forth therein, the prompt
payment and performance of all of the Guaranteed Obligations (as defined
therein). The Guarantor consents to Borrower's execution of the foregoing
Twelfth Amendment to Loan Agreement (the "Amendment;" capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in the
Amendment) and acknowledges the continued validity, enforceability and
effectiveness of the Guarantee with respect to all loans, advances and
extensions of credit to Borrower, whether heretofore or hereafter made, together
with all interests thereon and all expenses in connection therewith.
XXXXXXX WIRE COMPANY
By:
-------------------------------------------------
Name:
-------------------------------------------------
Title:
-------------------------------------------------
CONSENT
By Confirmation Agreement dated September 27, 1996, relating to that
Amendment, Ratification and Confirmation of Secured Guaranty Agreement dated
December 29, 1995, relating to, among other things the Secured Guaranty
Agreement dated October 16, 1987 (collectively, the "Guarantee"), the
undersigned (the "Guarantor") guaranteed to Lender (as defined therein), subject
to the terms, conditions and obligations set forth therein, the prompt payment
and performance of all of the Obligations (as defined therein). The Guarantor
consents to Borrower's execution of the foregoing Twelfth Amendment to Loan
Agreement (the "Amendment;" capitalized terms not otherwise defined herein shall
have the meaning ascribed to them in the Amendment) and acknowledges the
continued validity, enforceability and effectiveness of the Guarantee with
respect to all loans, advances and extensions of credit to Borrower, whether
heretofore or hereafter made, together with all interests thereon and all
expenses in connection therewith.
XXXXXXX WIRE OF XXXXXXXX, INC.
By:
----------------------------------------------
Name:
----------------------------------------------
Title:
----------------------------------------------
CONSENT
By Confirmation Agreement dated September 27, 1996, relating to that
Guarantee and Waiver and Rider No. 1 to Guarantee and Waiver, each dated
December 30, 1993 (as amended, collectively, the "Guarantee"), the undersigned
(the "Guarantor") guaranteed to Lender (as defined therein), subject to the
terms, conditions and obligations set forth therein, the prompt payment and
performance of all of the Obligations (as defined therein). The Guarantor
consents to Borrower's execution of the foregoing Twelfth Amendment to Loan
Agreement (the "Amendment;" capitalized terms not otherwise defined herein shall
have the meaning ascribed to them in the Amendment) and acknowledges the
continued validity, enforceability and effectiveness of the Guarantee with
respect to all loans, advances and extensions of credit to Borrower, whether
heretofore or hereafter made, together with all interests thereon and all
expenses in connection therewith. FV Steel & Wire Company acknowledges and
agrees that (i) all references in the Finance Agreements to the name "Fox Valley
Steel & Wire Company" or to "Fox Valley Steel and Wire Company" shall be deemed
to be references to "FV Steel & Wire Company" (including, without limitation,
all signature blocks executed by "Fox Valley Steel & Wire Company" or "Fox
Valley Steel and Wire Company"), (ii) notwithstanding the fact that FV Steel &
Wire Company has executed all Finance Agreements as Fox Valley Steel & Wire
Company or Fox Valley Steel and Wire Company after such entity has changed its
name, any such executed Finance Agreement shall be valid and binding on FV Steel
& Wire Company and (iii) FV Steel & Wire Company, as of the date of execution by
Fox Valley Steel & Wire Company or Fox Valley Steel and Wire Company of any
Finance Agreements, is bound by the terms of any such Finance Agreements.
FV STEEL & WIRE COMPANY
By:
--------------------------------------------------
Name:
--------------------------------------------------
Title:
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EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
Date: ____________, 200__
This certificate is given by Keystone Consolidated Industries, Inc., a
Delaware corporation ("Borrower"), pursuant to subsection 9.6(e) of that certain
Amended and Restated Revolving Loan Agreement dated as of December 29, 1995,
between Borrower and Congress Financial Corporation (Central), an Illinois
corporation ("Lender"), as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time, including, without
limitation, all refinancings and refundings (the "Loan Agreement"). Capitalized
terms used herein without definition shall have the meanings set forth in the
Loan Agreement.
The officer executing this certificate is duly authorized to execute
and deliver this certificate on behalf of Borrower. By executing this
certificate such officer hereby certifies to Lender that Exhibit A attached
hereto is a correct calculation of each of the financial covenants contained in
Sections 9.21 and 9.22 of the Loan Agreement.
IN WITNESS WHEREOF, Borrower has caused this Certificate to be
executed by one of its officers this _____ day of _______________, _____.
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
By ___________________________________
Its ____________________________________
EXHIBIT A TO EXHIBIT 4.2(b)
COMPLIANCE CERTIFICATE
Covenant 6.3 Fixed Charge Coverage
EXHIBIT A
TO
COMPLIANCE CERTIFICATE
Covenant 9.21 FIXED CHARGE COVERAGE RATIO
Fixed Charge Coverage is defined as follows1:
EBITDA $____________
Fixed Charges:
Interest Expense paid or accrued (except with respect to
the deferred interest expense of the 6% Notes and the 8% Notes) $____________
Plus: Scheduled principal payments of Indebtedness during such
period $___________
Corporate income taxes paid in cash during such period $___________
Capital Expenditures during such period $___________
Fixed Charges $___________
Fixed Charge Coverage (EBITDA divided by Fixed Charges) ____________
Required Fixed Charge Coverage ____________
In Compliance Yes/No
EXHIBIT A TO EXHIBIT 4.2(b)
COMPLIANCE CERTIFICATE
Covenant 6.2 Leverage Ratio
EXHIBIT A
TO
COMPLIANCE CERTIFICATE
Covenant 9.22 MINIMUM EBITDA
EBITDA is defined as follows:
Net income (or loss) for the applicable period of measurement of
Borrower and its Subsidiaries on a consolidated basis determined
in accordance with GAAP, but excluding: (i) income tax credits,
(ii) interest income, (iii) gain from extraordinary items for
such period, (iv) any aggregate net gain (but not any aggregate
net loss) during such period arising from the sale, exchange or
other disposition of capital assets by such Person (including any
fixed assets, whether tangible or intangible, all Inventory sold
in conjunction with the disposition of fixed assets and all
securities), (v) any other non-cash gains that have been added in
determining consolidated net income and (vi) non-cash defined
benefit pension income, in each case to the extent included in
the calculation of consolidated net income of such Person for
such period in accordance with GAAP, but without duplication $___________
Plus: $____________
Any provision for income taxes
Interest Expense $____________
Loss from extraordinary items for such period $____________
Depreciation and amortization for such period $____________
Amortized debt discount for such period $____________
The amount of any deduction to consolidated
net income as the result of any grant to any
members of the management of such Person of
any Capital Stock, in each case to the extent
included in the calculation of consolidated
net income of such Person for such period in
accordance with GAAP, but without duplication $____________
Non-cash defined benefit pension expense $____________
without duplication, non-cash post-retirement
benefits constituting retired employees'medical$____________
and life insurance benefits
EBITDA for the applicable period of measurement $____________
Applicable Minimum Amount $____________
In Compliance Yes/No
1 The Fixed Charge Coverage shall be calculated on a rolling twelve (12) month
basis.
