FORBEARANCE AGREEMENT
This Forbearance Agreement, dated as of April 25, 2002 (this
"Agreement"), is among XXXX INDUSTRIES, INC., a Delaware corporation (the
"Parent"), each of the Parent's domestic Subsidiaries, as borrowers
(together with the Parent, collectively the "Borrowers"), the Parent and
each of the Parent's domestic Subsidiaries, as guarantors (the "Guarantors"
and each a "Guarantor", and together with the Borrowers, collectively the
"Credit Parties" and each a "Credit Party"), LASALLE BANK NATIONAL
ASSOCIATION, as lender ("LaSalle"), NATIONAL CITY BANK, as lender ("NCB"),
U.S. Bank (successor by merger to Firstar Bank), as lender ("US Bank"),
Comerica Bank, as lender ("Comerica"), Associated Bank, N.A., as lender
("Associated Bank", and together with LaSalle, NCB, US Bank and Comerica,
collectively the "Lenders"), LaSalle, as administrative agent for the
Lenders (the "Administrative Agent"), and NCB, as syndication agent for the
Lenders (the "Syndication Agent", and together with the Administrative
Agent, the "Agents"). Capitalized terms used in this Agreement and not
otherwise defined have the meanings assigned to such terms in the Credit
Agreement (as defined below).
PRELIMINARY STATEMENTS:
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1. The Credit Parties and the Lenders are parties to the Credit
Agreement dated as of March 8, 2001 (as such agreement may be amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), under which the Lenders provided the Borrowers with, among
other things, a $65,000,000 credit facility.
2. The Lenders have extended credit to the Borrowers under the Credit
Agreement as evidenced by, among other things, the Notes evidencing the
Revolving Loan dated as of November 19, 2001 and made by the Borrowers in
favor of the Lenders in the principal amount of $35,000,000 and the Notes
evidencing the Term Loan dated as of January 8, 2002 and made by the
Borrowers in favor of the Lenders in the principal amount of $30,000,000.
3. For the four consecutive months ending April 30, 2002, the Credit
Parties will have failed to comply with Section 10.6(E) of the Credit
Agreement. On such date, this violation will constitute an Event of Default
under the Credit Agreement.
4. The Credit Parties have requested that the Lenders forbear until
May 31, 2002 from exercising their rights under the Credit Agreement and
the other Loan Documents with respect to such Event of Default and the
Lenders have agreed to such request subject to the terms and conditions of
this Agreement.
AGREEMENT:
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In consideration of the mutual agreements contained in this Agreement,
and other good and valuable consideration the receipt and sufficiency of
which are acknowledged, the parties to this Agreement agree as follows:
SECTION 1. ACKNOWLEDGMENT OF THE BORROWER.
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1.1 Outstanding Balance. On the date this Agreement becomes effective,
after satisfaction by the Credit Parties of all the conditions set forth in
Section 5 of this Agreement (the "Effective Date"), the Credit Parties
acknowledge and agree that the Borrowers owe the Lenders an aggregate
principal amount of $40,296,596.34 under the Credit Agreement and the other
Loan Documents, plus accrued and unpaid interest, fees and other expenses
(if any). The Borrowers have made all payments under the Credit Agreement
and the other Loan Documents required to be made as of the date hereof.
1.2 Default. The Credit Parties acknowledge that an Event of Default
will occur under Section 12.1(D) of the Credit Agreement due to the Credit
Parties' violation of the financial covenant set forth in Section 10.6(E)
of the Credit Agreement for the four consecutive months ending April 30,
2002 (the "Existing Default").
SECTION 2. FORBEARANCE.
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2.1 Forbearance. During the Forbearance Period (as defined below), the
Lenders will not exercise any of their rights or remedies under the Credit
Agreement, the Loan Documents or applicable law with respect to the
Existing Default. For purposes of this Agreement, "Forbearance Period"
means the period commencing on April 30, 2002 and ending on the earlier of
(a) May 31, 2002 and (b) the date the Forbearance Period is terminated upon
the occurrence of any of the events described in Section 2.3 (the
"Termination Date").
2.2 Interest Rates. Notwithstanding the terms of the Credit Agreement,
the Borrowers acknowledge and agree that, during the Forbearance Period,
the Borrowers shall pay interest on the unpaid principal amount of each
Loan (a) at all times while such Loan is a Base Rate Loan at a rate per
annum equal to the sum of the Base Rate from time to time in effect plus
1.75% and (b) at all times while such Loan is a Eurodollar Loan at a rate
per annum equal to the sum of the Eurodollar Rate (Reserve Adjusted) plus
4.00%.
2.3 Termination of Forbearance. Upon the occurrence of any Termination
Event (as defined below) and at any time after such occurrence during which
a Termination Event is continuing, the Agents are entitled to, without
prior notice to the Credit Parties, immediately terminate the Forbearance
Period, unless such Termination Event is an Event of Default described in
Section 12.1(C) of the Credit Agreement, in which case the Forbearance
Period automatically terminates without demand or notice of any kind. For
purposes of this Agreement, "Termination Event" means:
(A) the occurrence of an Event of Default under the Credit
Agreement (other than the Existing Default); or
(B) any representation or warranty made by the Credit Parties
under this Agreement or any agreement, instrument or other document
executed or delivered by the Credit Parties in connection with this
Agreement is untrue or incorrect in any material respect when made or
any schedule, certificate, statement, report, financial data, notice
or writing furnished at any time by the Credit Parties to the Agents
or any Lender is untrue or incorrect in any material respect on the
date as of which the facts set forth therein are stated or certified.
2.4 Effect at End of Forbearance Period. On the Termination Date, the
Existing Default will be deemed to exist and, without regard to any matters
transpiring during the Forbearance Period or the financial condition or
prospects of the Credit Parties as of such date, the Agent and each Lender
shall be fully entitled to exercise any rights and remedies they may have
under the Credit Agreement, the other Loan Documents or applicable law.
2.5 ACKNOWLEDGMENT. THE CREDIT PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE
THAT THE FORBEARANCE PROVISION SET FORTH IN SECTION 2.1 IS EFFECTIVE ONLY
DURING THE FORBEARANCE PERIOD AND THAT, AFTER THE TERMINATION DATE, THE
CREDIT AGREEMENT WILL BE IN MATERIAL DEFAULT AND THE LENDERS WILL BE FULLY
ENTITLED IMMEDIATELY TO EXERCISE THEIR RIGHTS AND REMEDIES UNDER THE CREDIT
AGREEMENT, THE LOAN DOCUMENTS OR APPLICABLE LAW WITHOUT REGARD TO ANY
MATTERS TRANSPIRING DURING THE FORBEARANCE PERIOD OR THE FINANCIAL
CONDITION OR PROSPECTS OF THE CREDIT PARTIES. THE CREDIT PARTIES UNDERSTAND
THAT THE LENDERS ARE EXPRESSLY RELYING ON THE TERMS OF THIS SECTION 2.5 AND
WOULD NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE CREDIT PARTIES'
ACKNOWLEDGMENT AND AGREEMENT IN THIS SECTION 2.5.
2.6 No Waiver. Except as specifically set forth in Section 2.1,
nothing in this Agreement shall in any way be deemed to be (a) a waiver of
any Event of Default including the Existing Default or (b) an agreement to
forbear from exercising any remedies with respect to any Event of Default.
SECTION 3. FURTHER ASSURANCES OF THE BORROWERS.
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The Credit Parties agree that at any time and from time to time, at
the cost and expense of the Credit Parties, the Credit Parties will (a)
execute and deliver all further instruments and documents, and take all
further action, that may be reasonably necessary to complete the
transactions contemplated by this Agreement and (b) cooperate fully with
the Agents' or any Lender's personnel and representatives with respect to
any reasonable request for information by such personnel and
representatives.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
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To induce the Lenders to enter into this Agreement, the Credit Parties
represent and warrant to the Lenders that:
4.1 Due Authorization; No Conflict; No Lien; Enforceable Obligation.
The execution, delivery and performance by each Credit Party of this
Agreement are within its corporate powers, have been duly authorized by all
necessary corporate action, have received all necessary governmental,
regulatory or other approvals (if any is required), do not and will not
contravene or conflict with any provision of (a) any law, (b) any judgment,
decree or order or (c) its articles or certificate of incorporation, bylaws
or trust documents and do not and will not contravene or conflict with, or
cause any lien to arise under, any provision of any agreement or instrument
binding upon any Credit Party or upon any of its property. This Agreement,
the Credit Agreement, as heretofore amended, and the Notes are the legal,
valid and binding obligations of each Credit Party, enforceable against it
in accordance with its respective terms.
4.2 Representations and Warranties; Default. As of the Effective Date,
except for those representations or warranties specifically made as of
another date or relating to the Existing Default, the representations and
warranties of the Credit Parties contained in the Credit Agreement are true
and correct. As of the Effective Date, except for the Existing Default, no
Default or Event of Default has occurred and is continuing.
SECTION 5. CONDITIONS PRECEDENT.
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Notwithstanding any other provision contained in this Agreement, the
effectiveness of this Agreement and the obligation of the Lenders to
institute the forbearance contemplated by this Agreement and the
commencement of the Forbearance Period are subject to the following:
5.1 Documents and Fees. The Administrative Agent has received all of
the following, each duly executed and dated, or received, by such date as
is satisfactory to the Agents in form and substance satisfactory to the
Agents:
(A) Forbearance Agreement. This Agreement;
(B) Consents. Certified copies of all documents evidencing any
necessary corporate consents and governmental approvals, if any, with
respect to this Agreement;
(C) Forbearance Fee. A forbearance fee paid to the Administrative
Agent for the account of each Lender party hereto equal to the product
of each such Lender's Commitment times 0.05 percent;
(D) Costs and Expenses. All reasonable out-of-pocket costs and
expenses to the Agents, including the reasonable fees and
out-of-pocket charges of counsel for the Agents; and
(E) Other. Such other documents as the Administrative Agent may
reasonably request.
5.2 Representations and Warranties. The representations and warranties
of the Credit Parties set forth in this Agreement are true and correct.
SECTION 6. MISCELLANEOUS.
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6.1 Captions. The recitals to this Agreement (except for definitions)
and the section captions used in this Agreement are for convenience only
and do not affect the construction of this Agreement.
6.2 Governing Law; Severability. THIS AGREEMENT IS A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. Wherever
possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law, but if any
provision of this Agreement is prohibited by or invalid under such law,
such provision will be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
6.3 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts and each
such counterpart will be deemed to be an original, but all such
counterparts together constitute but one and the same Agreement.
6.4 Successors and Assigns. This Agreement is binding upon the Credit
Parties, the Lenders and their respective successors and assigns, and
inures to the sole benefit of the Credit Parties, the Lenders and their
successors and assigns. The Credit Parties have no right to assign their
rights or delegate their duties under this Agreement.
6.5 Continued Effectiveness. Notwithstanding anything contained in
this Agreement, the terms of this Agreement are not intended to and do not
serve to effect a novation as to the Credit Agreement or any other Loan
Document. The parties to this Agreement expressly do not intend to
extinguish the Credit Agreement or any other Loan Document. Instead, the
parties to this Agreement expressly intend to reaffirm the indebtedness
created under the Credit Agreement and the other Loan Documents. The Credit
Agreement and the other Loan Documents remain in full force and effect and
the terms and provisions of the Credit Agreement and the other Loan
Documents are ratified and confirmed.
6.6 Tolling. Any and all statutes of limitations, repose or similar
legal constraints on the time by which a claim must be filed, a person
given notice thereof, or asserted, that expire, run or lapse during the
Forbearance Period on any claims that any Lender may have against the
Credit Parties or any other persons relating to any Credit Party
(collectively, the "Forbearance Period Statutes of Limitation") will be
tolled during the Forbearance Period. The Credit Parties waive any defense
they may have against the Lenders under the Forbearance Period Statutes of
Limitation, applicable law or otherwise solely as to the expiration,
running or lapsing of the Forbearance Period Statutes of Limitation during
the Forbearance Period.
6.7 Revival of Obligations. If all or any part of any payment under or
on account of the Credit Agreement, the other Loan Documents, this
Agreement or any agreement, instrument or other document executed or
delivered by the Credit Parties in connection with this Agreement is
invalidated, set aside, declared or found to be void or voidable or
required to be repaid to the issuer or to any trustee, custodian, receiver,
conservator, master, liquidator or any other person pursuant to any
bankruptcy law or pursuant to any common law or equitable cause then, to
the extent of such invalidation, set aside, voidness, voidability or
required repayment, such payment would be deemed to not have been paid, and
the obligations of the Credit Parties in respect thereof shall be
immediately and automatically revived without the necessity of any action
by the Lenders.
6.8 Costs, Expenses and Taxes. The Borrowers affirm and acknowledge
that Section 15.5 of the Credit Agreement applies to this Agreement and the
transactions and agreements and documents contemplated under this
Agreement.
6.9 Waiver of Jury Trial. Each of the Borrowers, the Agents and the
each Lender waives any right to a trial by jury in any action or proceeding
to enforce or defend any rights under this Agreement, and agrees that any
such action or proceeding shall be tried before a court and not before a
jury.
6.10 WAIVER OF CLAIMS. THE CREDIT PARTIES, IN EVERY CAPACITY,
INCLUDING, BUT NOT LIMITED TO, AS SHAREHOLDERS, PARTNERS, OFFICERS,
DIRECTORS, INVESTORS AND/OR CREDITORS OF ANY CREDIT PARTY, OR ANY ONE OR
MORE OF THEM, HEREBY WAIVE, DISCHARGE AND FOREVER RELEASE EACH AGENT AND
EACH LENDER AND THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS,
STOCKHOLDERS AND SUCCESSORS AND ASSIGNS, FROM AND OF ANY AND ALL KNOWN
CLAIMS, CAUSES OF ACTION, DEFENSES, COUNTERCLAIMS OR OFFSETS AND/OR
ALLEGATIONS CREDIT PARTIES MAY HAVE OR MAY HAVE MADE OR WHICH ARE BASED ON
FACTS OR CIRCUMSTANCES OF WHICH ANY CREDIT PARTY HAS KNOWLEDGE ARISING AT
ANY TIME UP THROUGH AND INCLUDING THE DATE OF THIS AGREEMENT AGAINST ANY OR
ALL OF ANY AGENT, ANY LENDER, OR ANY OF THEIR RESPECTIVE EMPLOYEES,
OFFICERS, DIRECTORS, ATTORNEYS, STOCKHOLDERS AND SUCCESSORS AND ASSIGNS.
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Delivered at Chicago, Illinois, as of the date and year first above
written.
CREDIT PARTIES:
XXXX INDUSTRIES, INC.
XXXX INSTALLATION SERVICES, INC.
XXXX ENCLOSURES, INC.
XXXX, INC.
XXXX PRODUCTS, INC.
XXXX CONSTRUCTION, INC.
FOLDING CARRIER CORP.
XXXX FOREIGN HOLDINGS, INC.
UNR REALTY, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: President and CEO
(for each of the foregoing entities)
LENDERS:
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Vice President
NATIONAL CITY BANK
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
U.S. BANK
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Vice President
COMERICA BANK
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Assistant Vice President
ASSOCIATED BANK, N.A.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Senior Vice President
