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EXHIBIT 10.1
LIMITED FORBEARANCE AGREEMENT
THIS LIMITED FORBEARANCE AGREEMENT (this "Agreement") dated as of
February 14, 2001, is entered into by and among XXXXXXXX MANUFACTURING COMPANY,
INC., a Texas corporation (the "Borrower"), the financial institutions listed on
the signature pages hereof (collectively, the "Lenders") and BANK OF AMERICA,
N.A., as administrative agent (in such capacity, the "Administrative Agent") for
the Lenders.
WITNESSETH:
WHEREAS, the Borrower, the Lenders and the Administrative Agent are
parties to a Credit Agreement dated as of September 19, 1997 (as amended, the
"Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders forbear from
exercising certain rights available to them as a result of the existing defaults
by the Borrower, and the Lenders have agreed to do so on the terms set forth
herein.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement.
SECTION 2. LIMITED FORBEARANCE.
2.1 Forbearance and Temporary Amendments.
(a) The Borrower has requested that the Administrative Agent
and the Lenders forbear from exercising the rights and remedies
available to them with respect to the Borrower as a result of the
Subject Events (hereinafter defined) during the period from the date
hereof to and including June 30, 2001. The Administrative Agent and the
Lenders hereby agree to forbear from exercising the rights and remedies
available to them with respect to the Borrower as a result of the
Subject Events, other than Blockage Rights and Support Rights (as
hereinafter defined), from the date hereof to and including June 30,
2001, subject to the terms of this Agreement and subject to the
occurrence of no further Default. Upon the earlier of the occurrence of
any Default, other than as a result of the Subject Events, or June 30,
2001, the Administrative Agent's and the Lenders' agreement herein to
forbear from exercising the rights and remedies available to them with
respect to the Borrower as the result of the Subject Events (other than
Blockage Rights and Support Rights) shall immediately terminate, and
the Administrative Agent and the Lenders shall be entitled immediately
to exercise any and all rights and remedies available under the Credit
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Agreement and any other Loan Document, at law, in equity, or otherwise,
without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest, or other
formalities of any kind, all of which are hereby expressly waived by
the Borrower. The Borrower hereby acknowledges its noncompliance with
the Credit Agreement as a result of the Subject Events, acknowledges
the existence of an Event of Default, and acknowledges that this
Agreement constitutes notice thereof and waives any and all further
notices with respect thereto. The agreement of the Administrative Agent
and the Lenders herein shall not constitute a waiver of any Default
including without limitation the Subject Events. As used herein, the
"Subject Events" means the failure of the Borrower to comply with the
provisions of the Loan Documents described on Schedule 1 hereto for the
periods described on Schedule 1. The parties hereto expressly
acknowledge and agree that the agreements of the Administrative Agent
and the Lenders herein shall not in any manner restrict or impair any
rights or remedies available to them with respect to any Persons other
than the Borrower nor with respect to the Senior Subordinated Notes
(collectively, "Blockage Rights") or the Support Agreement
(collectively, "Support Rights") as a result of the Defaults which
result from the Subject Events.
(b) Effective as of the date hereof through and including the
earlier of (i) the occurrence of any Default, other than as a result of
the Subject Events, (ii) June 30, 2001, or (iii) the date on which
Westar Capital II LLC and/or Westar Capital fulfill their obligations
with respect to the Borrower's fiscal quarter ending on or about
December 31,2000 pursuant to that certain Support Agreement (herein so
called) dated as of June 30, 2000, among Westar Capital II LLC, Westar
Capital, the Borrower, and the Administrative Agent, which obligations
are comprised of the Payment Obligation (as defined therein), the
Administrative Agent and Lenders hereby agree to amend the Credit
Agreement on a temporary basis solely with respect to calculations for
the periods ending on or before January 31, 2001, as follows:
(i) the definition of Borrowing Base in the Credit
Agreement shall be the definition provided in subsection (a)
thereof notwithstanding the time periods referenced therein,
and
(ii) the definition of Maximum Borrowing Amount in
the Credit Agreement shall be the definition provided in
subsection (a) thereof notwithstanding the time periods
referenced therein.
Upon the earlier of the occurrence of any Default other than as the
result of the Subject Events, June 30, 2001, or payment of the Payment
Obligation (as defined in the Support Agreement), the temporary
amendments provided in this Section 2.1(b) shall immediately terminate
without notice, the definitions of the Borrowing Base and the Maximum
Borrowing Amount shall return to those calculations as in effect
immediately prior to the effectiveness of this Agreement, and any
prepayments required pursuant to Section 2.5(b) of the Credit Agreement
for periods during which this temporary amendment was otherwise
effective shall be immediately due and payable as if this Agreement
had never been in effect and without notice, demand, presentment,
notice of dishonor, notice of acceleration, notice
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of intent to accelerate, protest, or other formalities of any kind, all
of which are hereby expressly waived by the Borrower.
2.2 Other Agreements. To induce the Administrative Agent and
Determining Lenders to enter into this Agreement, the Borrower hereby agrees as
follows:
(a) Effective as of the date hereof, the Lenders shall have no
obligation to make Advances to the Borrower and the Issuing Bank shall
have no obligation to issue Letters of Credit for the account of the
Borrower.
(b) Effective as of the date hereof, accrued but unpaid
interest on the Advances outstanding from time to time and the fee
payable pursuant to Section 2.15(f)(i) with respect to outstanding
Letters of Credit shall be due and payable on the last day of each
calendar month and on the Revolving Commitment Maturity Date, the
Facility A Term Loan Maturity Date or the Facility B Term Loan Maturity
Date, as appropriate.
(c) Effective as of the date hereof, Section 7.5(c) is amended
to add the following phrase at the beginning thereof: "with respect to
asset sales which occurred on or prior to February 14, 2001 only,".
(d) The Borrower hereby irrevocably waives any rights it may
now or hereafter have under Section 8.3 of the Credit Agreements,
including without limitation, any rights to cure any defaults.
(e) The Borrower hereby acknowledges its agreement to promptly
pay all reasonable out-of-pocket costs, fees and expenses incurred by
the Administrative Agent and each Lender including without limitation
reasonable fees and expenses of counsel for the Administrative Agent,
each Lender, and the Financial Advisor (hereinafter defined).
(f) Effective as of the date hereof, the Borrower hereby
acknowledges and agrees that, upon the expiration of any Interest
Period applicable to any Advance outstanding on the date of this
Agreement, it shall not be permitted to continue any such Advance as,
or convert any such Advance to, a LIBOR Advance.
(g) The Borrower hereby acknowledges and agrees that the
Support Agreement and the obligations and agreements therein constitute
Collateral pursuant to the General Security Agreement.
(h) Effective as of the date hereof, all notices to be
provided to the Administrative Agent shall be provided as follows:
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Xxxx X. Xxxxxxx
Bank of America, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Winstead Xxxxxxxx & Xxxxxx P.C.
Attention: Xxx X. Xxxxxxx/Xxxxxxx X. Xxxxxxx
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax: (000)000-0000
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to the Lenders and the Administrative Agent that:
3.1 Authorization: No Conflict. The execution and delivery by the
Borrower of this Agreement and the performance by the Borrower of its
obligations under the Credit Agreement have been duly authorized by all
necessary corporate action, do not require any filing or registration with or
approval or consent of any governmental agency or authority, do not and will not
conflict with, result in any violation of, or constitute any default under any
provision of the certificate of incorporation or by-laws of the Borrower or any
material agreement or other document binding upon or applicable to the Borrower
(or any of its properties) or any law or governmental regulation or court decree
or order applicable to the Borrower, and will not result in or require the
creation or imposition of any Lien on any of the properties of the Borrower
pursuant to the provisions of any agreement binding upon or applicable to the
Borrower.
3.2 Due Execution: Enforceability. This Agreement has been duly
executed and delivered by the Borrower and, together with the Credit Agreement,
is a legal, valid and binding obligation of the Borrower, enforceable in
accordance with its terms subject, as to enforcement only, to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of the rights of creditors generally and to general principles of
equity (regardless of whether enforcement is sought in equity or at law).
3.3 Reaffirmation of Representations and Warranties. The
representations and warranties contained in the Credit Agreement and the other
Loan Documents (except for those contained in Sections 4.1(k) and 4.1(u) of the
Credit Agreement, Section 2.1(c) of the Deeds of Trust, and, solely as a result
of the Subject Events, Section 4.1(o) of the Credit Agreement) are true and
correct in all material respects on the date of this Agreement after giving
effect to the effectiveness hereof (other than any such representations and
warranties that by their terms refer to a specific date, in which case as of
such specific date).
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SECTION 4. CONDITIONS PRECEDENT. This Agreement shall become effective
as of February 14,2001, upon satisfaction of all of the following conditions
(such date is herein called the "Agreement Effective Date"):
4.1 Receipt of Agreement. The Administrative Agent shall have received
counterparts of this Agreement sufficient in number to provide one for each
Lender, duly executed by the Borrower, Determining Lenders, and the
Administrative Agent.
4.2 Default. No Default shall have occurred and be continuing other
than any Default which results solely from the Subject Events.
4.3 Payment of Interest and Fees. The Administrative Agent shall have
received confirmation that the Borrower has paid all reasonable expenses and
fees arising in connection with all matters undertaken or performed at the
request of the Administrative Agent or the Lenders, including but not limited
to, all expenses and fees owed to Xxxxxxx, Xxxxxxx & Xxxxxxx P.C., Xxxxxxxx
Xxxxxxxx & Xxxxxx P.C. and Xxxxxx Xxxxxxxx LLP ("Financial Advisor").
4.4 Cooperation. The Borrower shall have cooperated with Financial
Advisor and Xxxxxxxx Xxxxxxxx & Xxxxxx P.C. in all of their due diligence
inquiries.
4.5 Retainers. The Borrower shall have provided to Xxxxxxxx Xxxxxxxx &
Xxxxxx P.C. a retainer in the amount of $50,000 and to Financial Advisor a
retainer in the amount of $50,000.
4.6 Additional Information. The Administrative Agent shall have
received such additional documents, instruments and information as the
Administrative Agent or its legal counsel, Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., may
reasonably request.
4.7 Compliance Certificate. The Administrative Agent shall have
received the Compliance Certificate due pursuant to Section 6.4 of the Credit
Agreement for the fiscal quarter ended on or about December 31, 2000, and for
the month ended on or about January 27, 2001.
4.8 Notices. The Borrower shall have provided to the Administrative
Agent true and correct copies of all notices provided to Westar Capital II LLC,
Westar Capital, and any other Specified Investors with respect to defaults under
Section 7.11, 7.12, 7.13 or 7.21 of the Credit Agreement and any responsive or
related correspondence received from any Specified Investors.
SECTION 5. Miscellaneous.
5.1 Expenses. The Borrower agrees to pay on demand all reasonable costs
and expenses of the Administrative Agent (including fees, charges and expenses
of counsel for the Administrative Agent and the Financial Advisor) in connection
with the preparation, negotiation, execution, delivery and administration of
this Agreement and all other instruments or documents provided for herein or
delivered or to be delivered hereunder or in connection herewith. In addition,
the Borrower agrees to pay, and save the Administrative Agent and the Lenders
harmless from all liability for, any stamp or other taxes which may be payable
in connection with the execution or delivery of this Agreement,
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the borrowings under the Credit Agreement, and the execution and delivery of any
instruments or documents provided for herein or delivered or to be delivered
hereunder or in connection herewith. All obligations provided in this Section
5.1 shall survive any termination of this Agreement and the Credit Agreement.
5.2 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
5.3 Governing Law. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES. Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable laws,
but if any provision of this Agreement shall be prohibited by or invalid under
such laws, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
5.4 Counterparts. This Agreement may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when executed and delivered (including by facsimile),
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Agreement. Telecopies of signatures shall be
binding and effective as originals.
5.5 Reference to Loan Documents. The Credit Agreement and the other
Loan Documents shall remain in full force and effect and are hereby ratified in
all respects. The Borrower hereby additionally ratifies and confirms its
obligations pursuant to the Temporary Credit Facility and all documents and
instruments executed pursuant thereto or in connection therewith and further
agrees that its obligations thereunder are not subject to any claim, offset,
defense or counterclaim.
5.6 Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns, and shall inure to
the sole benefit of the parties hereto and the successors and assigns of the
Administrative Agent and the Lenders. Notwithstanding the foregoing, the
Borrower shall not assign its rights or duties hereunder without the consent of
the Administrative Agent and the Lenders.
5.7 RELEASE.
(a) The Borrower hereby unconditionally and irrevocably
remises, acquits, and fully and forever releases and discharges the
Administrative Agent and the Lenders and all respective affiliates and
subsidiaries of the Administrative Agent and the Lenders, their
respective officers, servants, employees, agents, attorneys,
principals, directors and shareholders, and their respective heirs,
legal representatives, successors and assigns (collectively, the
"Released Lender Parties") from any and all claims, demands, causes of
action, remedies, suits, damages and liabilities (collectively, the
"Borrower Claims") of any nature whatsoever, whether now known,
suspected or claimed, whether arising under common law, in equity or
under statute, which the Borrower ever had or now has against the
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Released Lender Parties which may have arisen at any time on or prior
to the date of this Agreement and which were in any manner related to
any of the Loan Documents or the enforcement or attempted enforcement
by the Administrative Agent or the Lenders of rights, remedies or
recourses related thereto.
(b) The Borrower covenants and agrees never to commence,
voluntarily aid in any way, prosecute or cause to be commenced or
prosecuted against any of the Released Lender Parties any action or
other proceeding based upon any of the Borrower Claims which may have
arisen at any time on or prior to the date of this Agreement and were
in any manner related to any of the Loan Documents.
(c) The agreements of the Borrower set forth in this Section
57 shall survive termination of this Agreement.
5.8 Acknowledgment of the Borrower. The Borrower acknowledges and
agrees that the Lenders and the Administrative Agent executing this Agreement
have done so in their sole discretion and without any obligation. The Borrower
further acknowledges and agrees that any action taken or not taken by the
Lenders or the Administrative Agent prior to, on or after the date hereof shall
not constitute a waiver or modification of any terms, covenant or provision of
any Loan Document other than as specified herein or prejudice any rights or
remedies other than as specified herein which the Administrative Agent or any
Lender now has or may have in the future under any Loan Document, applicable
law or otherwise, all of which rights and remedies are expressly reserved by the
Administrative Agent and the Lenders. The Borrower hereby ratifies and confirms
its obligations under the Loan Documents.
5.9 Loan Document. This Agreement is a Loan Document and is subject to
all provisions of the Credit Agreement applicable to Loan Documents, all of
which are incorporated in this Agreement by reference the same as if set forth
in this Agreement verbatim.
5.10 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
[Balance of this Page Intentionally Left Blank]
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Executed and delivered as of the day and year first above written.
BORROWER:
XXXXXXXX MANUFACTURING COMPANY, INC.
By /s/ XXXXX XXXXXXX
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Name: XXXXX XXXXXXX
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Title: VICE PRESIDENT & CHIEF FINANCIAL OFFICER
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SIGNATURE PAGE to Limited Forbearance Agreement dated as of February
14, 2001, among Xxxxxxxx Manufacturing Company, Inc., Bank of America, N.A., as
Administrative Agent, and the Lenders party thereto.
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as
Administrative Agent
By /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx III
Managing Director
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SIGNATURE PAGE to Limited Forbearance Agreement dated as of February
14, 2001, among Xxxxxxxx Manufacturing Company, Inc., Bank of America, N.A., as
Administrative Agent, and the Lenders party thereto.
LENDERS
BANK OF AMERICA, N.A.
By /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx III
Managing Director
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SIGNATURE PAGE to Limited Forbearance Agreement dated as of February
14, 2001, among Xxxxxxxx Manufacturing Company, Inc., Bank of America, N.A., as
Administrative Agent, and the Lenders party thereto.
COMERICA BANK
By /s/ XXXXX X. XXXX
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Name: XXXXX X. XXXX
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Title: Vice President
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SIGNATURE PAGE to Limited Forbearance Agreement dated as of February
14, 2001, among Xxxxxxxx Manufacturing Company, Inc., Bank of America, N.A., as
Administrative Agent, and the Lenders party thereto.
HSBC BANK USA
By /s/ D.C. ENGLISH
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Name: DESMOND ENGLISH
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Title: ASSOCIATE DIRECTOR
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SIGNATURE PAGE to Limited Forbearance Agreement dated as of February
14, 2001, among Xxxxxxxx Manufacturing Company, Inc., Bank of America, N.A., as
Administrative Agent, and the Lenders party thereto.
ARCHIMEDES FUNDING, LLC
BY: ING Capital Advisors LLC,
as Collateral Manager
BY: /s/ XXXXXXXX XXXXX
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Name: XXXXXXXX XXXXX
Title: VICE PRESIDENT
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SIGNATURE PAGE to Limited Forbearance Agreement dated as of February
14, 2001, among Xxxxxxxx Manufacturing Company, Inc., Bank of America, N.A., as
Administrative Agent, and the Lenders party thereto.
ML CLO XII PILGRIM AMERICA (CAYMAN) Ltd.
BY: ING Pilgrim Investments Inc.,
as its investment manager
BY: /s/ XXXXXXX X. XXXXXXX
--------------------------
Name: XXXXXXX X. XXXXXXX
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Title: SENIOR VICE PRESIDENT
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SIGNATURE PAGE to Limited Forbearance Agreement dated as of February
14, 2001, among Xxxxxxxx Manufacturing Company, Inc., Bank of America, N.A., as
Administrative Agent, and the Lenders party thereto.
XXXXXX XXXXXXX XXXX XXXXXX
PRIME INCOME TRUST
By /s/ XXXXX XXXXXXX
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Name XXXXX XXXXXXX
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Title VICE PRESIDENT
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SCHEDULE I
SUBJECT EVENTS
1. Existing Events of Default by reason of the Borrower's failure to
comply with Section 7.11 (Maximum Leverage Ratio), Section 7.12 (Minimum Fixed
Charge Coverage Ratio), Section 7.13 (Interest Coverage Ratio), and Section 7.21
(Senior Leverage Ratio) for the Borrower's fiscal quarter ending December 31,
2000, to the extent set forth in the Compliance Certificate delivered by
Borrower to the Administrative Agent on February 20, 2001.
2. Existing Events of Default by reason of the Borrower's failure to
comply with Section 2.2(k) of certain of the Deeds of Trust.
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Reference is made to that certain Limited Forbearance Agreement (the
"Agreement") dated as of February 14, 2001, among Xxxxxxxx Manufacturing
Company, Inc., Bank of America, N.A., as Administrative Agent, and the Lenders
party thereto. Reference is also hereby made to that certain Credit Agreement
dated as of August 12, 1999, among the Borrower, Bank of America, N.A. as
Administrative Agent, and the lenders party thereto. Bank of America, N.A., as
Administrative Agent and as the sole Lender thereunder hereby agrees to forbear
from exercising the rights and remedies available to them with respect to the
Borrower only (and not with respect to any other Obligor as defined therein or
with respect to the Subordinated Notes or the holders thereof) under such Credit
Agreement and the other Loan Documents as defined therein as a result of Events
of Default which exist thereunder solely as a result of the Subject Events for
the period and to the extent specified in this Agreement.
BANK OF AMERICA, N.A., as
Administrative Agent and as Lender
By /s/ XXXX X. XXXXXXX III
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Xxxx X. Xxxxxxx III
Managing Director
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