FORBEARANCE AGREEMENT
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This Forbearance Agreement, dated as of October 24, 2001 (this
"Forbearance 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"), Firstar Bank, as lender ("Firstar"), Comerica Bank, as lender
("Comerica"), Associated Bank, N.A., as lender ("Associated Bank", and
together with LaSalle, NCB, Firstar 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 Amendment 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 $75,000,000 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 March 8, 2001 and made by the Borrowers in favor
of the Lenders in the original principal amount of $45,000,000, and the
Notes evidencing the Term Loan dated as of April 23, 2001 and made by the
Borrowers in favor of the Lenders in the original principal amount of
$30,000,000.
3. For the Computation Period ended September 30, 2001, the Credit
Parties failed to comply with Section 10.6(E) of the Credit Agreement. On
such date, this violation constituted an Event of Default under the Credit
Agreement, and such Event of Default has been existing since September 30,
2001.
4. The Credit Parties have requested that the Lenders forbear until
November 19, 2001 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 Forbearance Agreement.
AGREEMENT:
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In consideration of the mutual agreements contained in this
Forbearance Agreement, and other good and valuable consideration the
receipt and sufficiency of which are acknowledged, the parties to this
Forbearance Agreement agree as follows:
SECTION 1. ACKNOWLEDGMENT OF THE BORROWER.
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1.1 Outstanding Balance. As of the date of this Forbearance Agreement,
the Credit Parties acknowledge and agree that the Borrowers owe the Lenders
an aggregate principal amount of $54,250,000 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
has occurred and is continuing 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 Computation
Period ending September 30, 2001 (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 Forbearance Agreement, (a)
"Forbearance Period" means the period commencing on the Effective Date (as
defined below) and ending on the earlier of (i) November 19, 2001 and (ii)
the date the Forbearance Period is terminated upon the occurrence of any of
the events described in Section 2.4 (the "Termination Date") and (b)
"Effective Date" means the date the Forbearance Period commences after
satisfaction by the Credit Parties of each of the conditions precedent set
forth in Section 5.
2.2 Limitation of Revolving Commitment Availability. Notwithstanding
the terms of the Credit Agreement, the Borrowers acknowledge and agree
that, during the Forbearance Period, the Revolving Commitment Availability
will be limited to $30,000,000.
2.3 Interest Period Limitations. Notwithstanding the terms of the
Credit Agreement, the Borrowers acknowledge and agree that, during the
Forbearance Period, the Borrowers may not convert or continue any Loan as a
Eurodollar Loan.
2.4 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 Forbearance 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 Forbearance Agreement or any agreement, instrument or other
document executed or delivered by the Credit Parties in connection
with this Forbearance Agreement is untrue or incorrect in any 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 respect on the
date as of which the facts set forth therein are stated or certified;
or
(C) the Parent fails to deliver to the Administrative Agent and
each Lender on or before October 24, 2001, a financial projection that
includes consolidated balance sheets of the Parent and its
Subsidiaries, together with consolidating and consolidated statements
of earnings and consolidated statements of cash flows, on a monthly
basis for the month-long periods ending October 31, 2001 through
December 31, 2002; and on a quarterly basis for the quarter-long
periods ending March 31, 2003 through March 31, 2006, certified by a
Responsible Officer of the Parent to represent management estimates
and projections that were made in good faith by the management of the
Parent, on the basis of assumptions believed by such management to be
reasonable at the point in time that the estimates and projections
were made, and otherwise in a manner reasonably satisfactory to the
Agents.
2.5 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 it may have
under the Credit Agreement, the other Loan Documents or applicable law.
2.6 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 2.6 AND
WOULD NOT HAVE ENTERED INTO THIS FORBEARANCE AGREEMENT BUT FOR THE CREDIT
PARTIES' ACKNOWLEDGMENT AND AGREEMENT IN THIS SECTION 2.6.
2.7 No Waiver. Nothing in this Forbearance 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 except as specifically set forth in Section
2.1.
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 Forbearance 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 Forbearance 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 of the Credit Parties of
this Forbearance Agreement and the other documents described in Section 5
of this Forbearance Agreement that each Credit Party is a party to
(collectively, the "Forbearance Documents") are within the corporate powers
of each Credit Party, have been duly authorized by all necessary corporate
actions, have received all necessary governmental, regulatory or other
approvals (if any are required) and do not and will not contravene or
conflict with any provision of (a) any law, (b) any judgment, decree or
order, or (c) any of the Credit Parties' articles or certificate of
incorporation or by-laws, 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 each Credit Party or upon any of its property. This
Forbearance Agreement and the Credit Agreement, as amended by this
Forbearance Agreement, are the legal, valid and binding obligations of each
Credit Party, enforceable against each Credit Party in accordance with
their 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 Forbearance
Agreement, the effectiveness of this Forbearance Agreement and the
obligation of the Lenders to institute the forbearance contemplated by this
Forbearance 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, as of the
Effective Date (or such other date as is satisfactory to the Agents) in
form and substance satisfactory to the Agents:
(A) Forbearance Agreement. This Forbearance Agreement;
(B) Consents. Certified copies of all documents evidencing any
necessary corporate consents and governmental approvals, if any, with
respect to this Forbearance Agreement and any other Forbearance
Documents;
(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 0.10 percent; and
(D) 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 Forbearance Agreement are true and
correct.
SECTION 6. MISCELLANEOUS.
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6.1 Captions. The recitals to this Forbearance Agreement (except for
definitions) and the section captions used in this Forbearance Agreement
are for convenience only and do not affect the construction of this
Forbearance Agreement.
6.2 Governing Law; Severability. THIS FORBEARANCE AGREEMENT IS A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS. Wherever possible, each provision of this Forbearance Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Forbearance 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 Forbearance
Agreement.
6.3 Counterparts. This Forbearance 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
Forbearance Agreement.
6.4 Successors and Assigns. This Forbearance 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 Forbearance
Agreement.
6.5 Continued Effectiveness. Notwithstanding anything contained in
this Forbearance Agreement, the terms of this Forbearance 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 Forbearance
Agreement expressly do not intend to extinguish the Credit Agreement or any
other Loan Document. Instead, the parties to this Forbearance 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
Forbearance Agreement or any agreement, instrument or other document
executed or delivered by the Credit Parties in connection with this
Forbearance 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 Default Interest Rate. From and after the Effective Date, each
Borrower will pay the default interest rate on its Obligations at the rate
equal to 2.00% per annum in excess of the rate applicable to the
Obligations, pursuant to Section 4.1(B) of the Credit Agreement.
6.9 References. From and after the Effective Date, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein"
or words of like import, and each reference in the other Loan Documents to
the Credit Agreement or to any term, condition or provision contained
"thereunder", "thereof", "therein" or words of like import, mean and are a
reference to the Credit Agreement (or such term, condition or provision, as
applicable) as amended, restated, supplemented or otherwise modified by
this Forbearance Agreement.
6.10 Costs, Expenses and Taxes. The Borrowers affirm and acknowledge
that Section 15.5 of the Credit Agreement applies to this Forbearance
Agreement and the transactions and agreements and documents contemplated
under this Forbearance Agreement.
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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. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President of 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
FIRSTAR BANK
By:
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Name:
Title:
COMERICA BANK
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Account Officer
ASSOCIATED BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Assistant Vice President
