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EXHIBIT 10.66
SECOND FORBEARANCE EXTENSION AGREEMENT
SECOND FORBEARANCE EXTENSION AGREEMENT, dated as of September
30, 2000 (this "Forbearance Extension"), among
(i) DENALI INCORPORATED (the "Borrower");
(ii) each of the guarantors which are signatories hereto
(each a "Guarantor", collectively, the "Guarantors");
(iii) CANADIAN IMPERIAL BANK OF COMMERCE (in its capacity
as administrative agent for the Lenders referenced below, the
"Administrative Agent");
(iv) ING (U.S.) CAPITAL LLC (in its capacity as
documentation agent for the Lenders referenced below, the
"Documentation Agent"); and
(v) the lenders party to the Credit Agreement
referenced below (the "Lenders"),
in respect of the Credit Agreement referenced below.
WITNESSETH:
WHEREAS, the Borrower, the Lenders, the Administrative Agent
and the Documentation Agent have entered into that certain Credit Agreement,
dated as of January 12, 1999 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement");
WHEREAS, the Guarantors are party to that certain Guarantee,
dated as of January 12, 1999 (as amended, supplemented or otherwise modified
from time to time, the "Guarantee"), in favor of the Administrative Agent for
the benefit of the Lenders;
WHEREAS, the Borrower, the Guarantors, the Lenders, the
Administrative Agent and the Documentation Agent have entered into that certain
Forbearance Agreement, dated as of June 30, 2000 (the "Forbearance Agreement"),
as extended by that certain Forbearance Agreement Extension, dated as of July
31, 2000 (the "First Forbearance Extension"); and
WHEREAS, in addition to the Specified Events of Default (as
defined in the Forbearance Agreement), (i) an Event of Default (as defined in
the Credit Agreement) shall exist under Section 11(a) of the Credit Agreement
based upon the failure of the Borrower to pay installments of principal due as
of September 30, 2000 and (ii) Events of Default shall exist under Section
11(c) of the Credit Agreement relating to the failure of the Borrower to comply
with the financial covenants contained in Section 10.1 of the Credit Agreement
as of June 30, 2000 and September 30, 2000 (collectively (i) and (ii), the
"Additional Specified Events of Default");
WHEREAS, the Borrower and the Guarantors have requested that
the Lenders, the Administrative Agent and the Documentation Agent extend the
Forbearance Termination Date (as defined in the Forbearance Agreement) and to
provide for certain other amendments or modifications to the Credit Agreement
and the Forbearance Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants contained herein and for other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Borrower, the Guarantors,
the Administrative Agent, the Documentation Agent and the Lenders hereby agree
as follows:
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1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in the Credit
Agreement, the Forbearance Agreement or the First Forbearance Extension.
2. Forbearance Extension; Additional Forbearance;
Deferral of Principal; Other Modifications.
(a) The Forbearance Termination Date is hereby
amended to be the earliest to occur of (i) October 31, 2000, (ii) the
closing of the Xxxxx Transaction and (iii) the occurrence of a
Forbearance Event of Default.
(b) In addition to the forbearance set forth in
Section 3(a) of the Forbearance Agreement, subject to the terms and
conditions set forth herein, none of the Administrative Agent, the
Documentation Agent or any Lender shall exercise any of the remedies
set forth in the Credit Agreement or in any of the other Loan
Documents in respect of the Additional Specified Events of Default
during the Forbearance Period.
(c) In addition to the deferral of payments set
forth in Section 3(b) of the Forbearance Agreement, subject to the
terms and conditions set forth herein, the unpaid principal
installments of the Term Loans and the Acquisition Loans which were
due on September 30, 2000 shall be deferred until, and shall be due
on, the Forbearance Termination Date.
(d) Section 3(a) of the First Forbearance Extension
is hereby superceded by the following. Subject to the terms and
conditions set forth herein, interest shall accrue on all unpaid
Obligations during the Forbearance Period at an interest rate equal to
the highest non-default interest rate for the related Type of Loan set
forth in Section 6.1 of the Credit Agreement and shall be paid in
accordance with the Credit Agreement. Additional interest shall accrue
at a rate equal to the difference between the applicable default rate
for each Loan provided in the Credit Agreement and applicable interest
rate set forth in the preceding sentence, which additional interest
shall be due and payable on the Forbearance Termination Date. During
the Forbearance Period, no Eurodollar Loan shall be made or continued
with an Interest Period that ends later than October 31, 2000.
(e) Section 3(d) of the First Forbearance Extension
is hereby superceded by the following. Subject to the terms and
conditions set forth herein, the Lenders shall defer their rights to
exercise any warrants held by the Lenders relating to the Borrower
that are exercisable on July 31, 2000, on August 31, 2000 and on
September 30, 2000 until the Forbearance Termination Date. If the
Xxxxx Transaction is consummated on or prior to October 31, 2000, the
Lenders shall surrender such warrants to the Borrower for
cancellation.
(f) Section 3(f) of the First Forbearance Extension
is hereby superceded by the following. The Borrower shall deliver
notice to the Administrative Agent if it becomes reasonably likely
that the Xxxxx Transaction will not close on or prior to November 30,
2000 and shall describe the circumstances relating to the Xxxxx
Transaction at that time. The Borrower shall promptly give notice to
the Administrative Agent of all material developments relating to the
Xxxxx Transaction.
3. Termination. The forbearance and deferral of
principal payments set forth in Section 3 of the Forbearance Agreement, as
modified by Section 2 of the First Forbearance Extension and Section 2 of this
Forbearance Extension shall terminate on the Forbearance Termination Date. Upon
such termination, the Administrative Agent, the Documentation Agent and the
Lenders shall be entitled to exercise all rights and remedies granted to them
pursuant to the Credit Agreement and the other Loan Documents or under
applicable law.
4. Representations and Warranties. In order to induce
the Administrative Agent, the Documentation Agent and the Lenders to enter into
this Forbearance Extension, the Borrower and each Guarantor hereby represents
and warrants to the Administrative Agent, the Documentation Agent and to each
Lender that:
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(a) Other than as set forth in Section 4(b), each of
the representations and warranties made by the Borrower and each of
the Guarantors in each Loan Document to which it is a party is true
and correct in all material respects as of the date hereof.
(b) Other than the Specified Events of Default and
the Additional Specified Events of Default, no Default or Event of
Default has occurred and is continuing as of the date hereof.
5. Conditions Precedent to Effectiveness of Forbearance
Extension. This Forbearance Extension shall not become effective unless and
until:
(a) the Administrative Agent has received this
Forbearance Extension, executed and delivered by a duly authorized
officer of the Borrower, each Guarantor, the Required Lenders, the
Administrative Agent and the Documentation Agent;
(b) the Administrative Agent shall have received for
the account of each Lender payment of all accrued interest, including
any accrued default interest, through September 30, 2000;
(c) payments due to the holders of the Permanent
Subordinated Debt as of the date hereof shall have been deferred
pursuant to a waiver agreement, dated as of the date hereof, among the
Borrower and the holders of the Permanent Subordinated Debt and such
waiver agreement shall have been duly executed by the Borrower and
each such noteholder and shall be in form and substance satisfactory
to the Administrative Agent; and
(d) the Administrative Agent has received such other
documents and information as the Administrative Agent may reasonably
require, which documents and information shall be satisfactory to the
Administrative Agent in its sole discretion.
6. Forbearance Events of Default. The Forbearance Period
shall immediately terminate and the forbearance and deferral of principal
payments set forth in Section 3 of the Forbearance Agreement, as modified by
Section 2 of the First Forbearance Extension and Section 2 of this Forbearance
Extension shall be of no further force and effect upon the occurrence of any of
the following (each, a "Forbearance Event of Default"):
(a) the occurrence of one or more Defaults or Events
of Default under the Credit Agreement (other than a Specified Event of
Default or an Additional Specified Event of Default); or
(b) any representation or warranty made or deemed
made by the Borrower or any Guarantor herein, in the Forbearance
Agreement, the First Forbearance Extension or this Forbearance
Extension or which is contained in any certificate, document or
financial or other statement created and/or delivered at any time
under or in connection with the Forbearance Agreement, the First
Forbearance Extension or this Forbearance Extension or on or
subsequent to the date hereof under or in connection with any other
Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) the Borrower or any Subsidiary shall default in
the observance or performance of any agreement contained herein or in
the Forbearance Agreement, the First Forbearance Extension or this
Forbearance Extension (after giving effect to the provisions hereof);
or
(d) the Borrower shall make, or permit to be made by
any Guarantor, any payment to any Person in respect of the Permanent
Subordinated Debt so long as an Event of Default shall continue to
exist under the Credit Agreement and such payment shall be waived by
the holders of the Permanent Subordinated Debt or a payment blockage
notice shall remain in effect, in each case without the prior written
consent of the Administrative Agent, the Documentation Agent and the
Lenders; or
(e) the Administrative Agent shall determine in good
faith that the Xxxxx Transaction will not close on or prior to
November 30, 2000.
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7. Absence of Waiver. The parties hereto agree that the
agreements set forth herein shall not be deemed to:
(a) be a consent to cure, or waiver of, any Default
or Event of Default;
(b) except as expressly set forth herein, modify or
limit any other term or condition of the Credit Agreement, the
Forbearance Agreement, the First Forbearance Extension or any other
Loan Document;
(c) impose upon any Lender, the Administrative Agent
or the Documentation Agent any commitment or obligation, express or
implied, to consent to any amendment or further modification of the
Credit Agreement, the Forbearance Agreement, the First Forbearance
Extension or other Loan Documents;
(d) impose upon any Lender, the Administrative Agent
or any Documentation Agent any commitment or obligation, express or
implied, to grant or extend any financial accommodations to the
Borrower or the Guarantors (other than as expressly set forth herein)
or to modify or extend the Forbearance Agreement, the First
Forbearance Extension or this Forbearance Extension; or
(e) prejudice any right or remedy that the
Administrative Agent, the Documentation Agent or the Lenders may now
have or may in the future have under the Credit Agreement or under or
in connection with the other Loan Documents or any instrument or
agreement referred to therein including, without limitation, any right
or remedy resulting from any Default or Event of Default.
8. Release of Claims and Waiver. Each of the Borrower
and each Guarantor hereby releases, remises, acquits and forever discharges each
Lender, the Administrative Agent and the Documentation Agent and each of their
employees, agents, representative, consultants, attorneys, officers, directors,
partners, fiduciaries, predecessors, successors and assigns, subsidiary
corporations, parent corporations and related corporate divisions (collectively,
the "Released Parties"), from any and all actions, causes of action, judgments,
executions, suits, debts, claims, demands, liabilities, obligations, damages and
expenses of any and every character, known or unknown, direct or indirect, at
law or in equity, of whatever nature or kind, whether heretofore or hereafter
arising, for or because of any matter or things done, omitted or suffered to be
done by any of the Released Parties prior to and including the date of execution
hereof, and in any way directly or indirectly arising out of any or in any way
connected to this Agreement or the Loan Documents (collectively, the "Released
Matters"). Each of the Borrower and each Guarantor hereby acknowledges that the
agreements in this Section 8 are intended to be in full satisfaction of all or
any alleged injuries or damages arising in connection with the Released Matters.
Each of the Borrower and each Guarantor hereby represents and warrants to the
Administrative Agent, the Documentation Agent and each Lender that it has not
purported to transfer, assign or otherwise convey any right, title or interest
of the Borrower or any Guarantor in any Released Matter to any other Person and
that the foregoing constitutes a full and complete release of all Released
Matters.
9. Miscellaneous.
(a) Section headings used in this Forbearance
Extension are for convenience of reference only and shall not affect
the construction of this Forbearance Extension.
(b) This Forbearance Extension may be executed by
one or more of the parties hereto by facsimile or in any number of
separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
(c) This Forbearance Extension and the rights and
obligations of the parties under this Forbearance Extension shall be
governed by, and construed and interpreted in accordance with, the law
of the State of New York.
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(d) This Forbearance Extension shall be deemed a
"Loan Document" for purposes of the Credit Agreement and the other
Loan Documents.
(e) This Forbearance Extension constitutes the
entire agreement among the parties with respect to the subject matter
hereof and supersedes all prior and contemporaneous oral or written
agreements with respect to the subject matter hereof.
(f) Time is of the essence in this Forbearance
Extension.
(g) No amendment or modification of this Forbearance
Extension shall be effective unless made in writing and signed by all
parties. Each of the Borrower and each of the Guarantors acknowledges
and agrees that any and all future discussions with any Lender, the
Administrative Agent or the Documentation Agent shall be without
prejudice to any Lender, the Administrative Agent or the Documentation
Agent and shall not be deemed to modify, waive, or amend any term or
provision of this Forbearance Extension or the Loan Documents.
IN WITNESS WHEREOF, the parties hereto have caused this
Forbearance Extension to be duly executed and delivered as of the day and year
first above written.
DENALI INCORPORATED,
as Borrower
By /s/ XXXXXXX X. XXXX
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Name: Xxxxxxx X. Xxxx
Title: President, CEO & Chairman of the Board
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: /s/ XXXXXX XXXXXXX
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Name: XXXXXX XXXXXXX
Title: EXECUTIVE DIRECTOR
ING (U.S.) CAPITAL LLC,
as Documentation Agent and as a Lender
By /s/ XXXXXX X. XXXXXXX
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Name: XXXXXX X. XXXXXXX
Title: DIRECTOR
CIBC INC.,
as a Lender
By /s/ XXXXXX XXXXXXX
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Name: XXXXXX XXXXXXX
Title: EXECUTIVE DIRECTOR
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KEY CORPORATE CAPITAL INC.,
as a Lender
By /s/ XXXXXXX X. XXXXXXX
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Name: XXXXXXX X. XXXXXXX
Title: VICE PRESIDENT
BANK OF OKLAHOMA N.A.,
as a Lender
By /s/ XXXXXX X. BEEN
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Name: XXXXXX X. BEEN
Title: ASSISTANT VICE PRESIDENT
SOUTHWEST BANK OF TEXAS, N.A.,
as a Lender
By /s/ XX XXXXX
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Name: XX XXXXX
Title: SENIOR VICE PRESIDENT
THE GUARANTORS:
CONTAINMENT SOLUTIONS, INC.
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
CONTAINMENT SOLUTIONS SERVICES, INC.
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
INSTRUMENTATION SOLUTIONS, INC.
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
Title:
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DENALI MANAGEMENT, INC.
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
SPECIALTY SOLUTIONS, INC.
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
BELCO MANUFACTURING COMPANY, INC.
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
ERSHIGS, INC.
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
SEFCO, INC.
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
FIBERCAST COMPANY
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
PLASTI-FAB, INC.
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
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DENALI HOLDINGS MANAGEMENT L.L.C.
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
DENALI OPERATING MANAGEMENT, LTD
By /s/ XXXXXX X. XXXXXXXXX
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Name: XXXXXX X. XXXXXXXXX
Title: ASSISTANT SECRETARY
