Exhibit 10.8
CREDIT AGREEMENT
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CREDIT AGREEMENT
by and among
GIANT CEMENT HOLDING, INC.
GIANT CEMENT COMPANY,
KEYSTONE CEMENT COMPANY,
GIANT RESOURCE RECOVERY COMPANY, INC.,
GCHI INVESTMENTS, INC.
and
GIANT CEMENT NC, INC.
as Borrowers
and
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
as Agent and as Lender
December 20, 1996
___________________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Terms
1.1 Definitions 2
1.2 Accounting Terms 16
1.3 UCC Terms 16
ARTICLE II
The Revolving Credit Facility
2.1 Revolving Loans 17
2.2 Payment of Interest 19
2.3 Payment of Principal 20
2.4 Revolving Credit Notes 20
2.5 Pro Rata Payments 21
2.6 Reductions 21
2.7 Conversions 21
2.8 Fee. 22
2.9 Deficiency Advances 22
2.10 Use of Proceeds 22
2.11 Extension of Revolving Credit Termination Date 22
2.12 Appointment of Giant Holding and Authorized
Representatives as Agents for the Borrowers. 23
ARTICLE IIA
The Letter of Credit Facility
2A.1 Letters of Credit 23
2A.2 Reimbursement 23
2A.3 Letter of Credit Fee 26
2A.4 Administrative Fees 27
ARTICLE III
Yield Protection and Illegality
i
3.1 Additional Costs 27
3.2 Suspension of Loans 28
3.3 Illegality 29
3.4 Compensation 29
3.5 Alternate Loan and Lender 29
3.6 Taxes 30
ARTICLE IV
Conditions Precedent
4.1 Conditions of Initial Advance and Issuance
of Letters of Credit 31
4.2 Conditions of Revolving Loans and Issuance
of Letters of Credit 34
ARTICLE V
Representations and Warranties
5.1 Organization and Authority 35
5.2 Loan Documents 35
5.3 Solvency 36
5.4 Subsidiaries and Stockholders 36
5.5 Ownership Interests 36
5.6 Financial Condition 36
5.7 Title to Properties 36
5.8 Taxes 37
5.9 Other Agreements 37
5.10 Litigation 37
5.11 Margin Stock 37
5.12 Investment Company 37
5.13 Patents, Etc. 38
5.14 No Untrue Statement 38
5.15 No Consents, Etc. 38
5.16 Employee Benefit Plans 38
5.17 No Default 39
5.18 Hazardous Materials 39
5.19 RICO 39
5.20 Employment Matters 40
ARTICLE VI
Affirmative Covenants
6.1 Financial Reports, Etc. 40
ii
6.2 Maintain Properties 41
6.3 Existence, Qualification, Etc. 41
6.4 Regulations and Taxes 42
6.5 Insurance 42
6.6 True Books 42
6.7 Pay Indebtedness to Lenders and
Perform Other Covenants 42
6.8 Payment of Other Indebtedness 42
6.9 Right of Inspection 42
6.10 Observe all Laws 43
6.11 Officer's Knowledge of Default 43
6.12 Suits or Other Proceedings 43
6.13 Environmental Compliance 43
6.14 Indemnification 43
6.15 Further Assurances 43
6.16 Employee Benefit Plans 43
6.17 Termination Events 44
6.18 ERISA Notices 44
6.19 Continued Operations 44
6.20 Use of Proceeds 44
6.21 New Subsidiaries 44
6.22 Substitution Letters of Credit 45
ARTICLE VII
Negative Covenants
7.1 Consolidated Indebtedness for Money
Borrowed to Consolidated
Tangible Net Worth Ratio 45
7.2 Consolidated Fixed Charge Ratio 46
7.3 Current Ratio 46
7.4 Capital Expenditures 46
7.5 Consolidated Tangible Net Worth 46
7.6 Liens 46
7.7 Consolidated Indebtedness 47
7.8 Transfer of Assets 48
7.9 Investments; Acquisitions. 48
7.10 Merger or Consolidation 49
7.11 Change in Control 49
7.12 Transactions with Affiliates 50
7.13 Compliance with ERISA 50
7.14 Fiscal Year 51
7.15 Limitations on Sales and Leasebacks 51
7.16 Negative Pledge Clauses 51
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ARTICLE VIII
Events of Default and Acceleration
8.1 Events of Default 51
8.2 Agent to Act 54
8.3 Cumulative Rights 54
8.4 No Waiver 54
8.5 Allocation of Proceeds 55
ARTICLE IX
The Agent
9.1 Appointment 55
9.2 Attorneys-in-fact 55
9.3 Limitation on Liability 56
9.4 Reliance 56
9.5 No Representations 56
9.6 Indemnification 57
9.7 Lender 57
9.8 Resignation 57
9.9 Sharing of Payments, etc 58
9.10 Fees 58
ARTICLE X
Miscellaneous
10.1 Confidentiality. 58
10.2 Assignments and Participations 59
10.3 Notices 61
10.4 Setoff 62
10.5 Survival 62
10.6 Expenses 63
10.7 Amendments 63
10.8 Counterparts 64
10.9 Termination 64
10.10 Governing Law 64
10.11 Indemnification 66
10.12 Headings and References 66
10.13 Severability. 66
10.14 Entire Agreement 66
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10.15 Agreement Controls 66
10.16 Usury Savings Clause 66
10.17 Joint and Several Obligations 67
EXHIBIT A Applicable Commitment Percentages A-1
EXHIBIT B Form of Assignment and Acceptance B-1
EXHIBIT C Notice of Appointment (or Revocation) of
AuthorizedRepresentative C-1
EXHIBIT D Giant Cement Holding, Inc.Request For Advance/Interest
Rate Election D-1
EXHIBIT E Form of Revolving Note E-1
EXHIBIT F Form of Security Agreement F-1
EXHIBIT G Form of Opinion of Borrowers' Counsel G-1
EXHIBIT H Compliance Certificate H-1
Schedule 5.5 Ownership Interests
Schedule 5.6 Indebtedness
Schedule 5.7 Liens
Schedule 5.16 Employee Benefit Plans
Schedule 5.18 Hazardous Materials
Schedule 7.9 Investments
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Credit Agreement
THIS CREDIT AGREEMENT, dated as of December 20, 1996 (the
"Agreement"), is made by and among GIANT CEMENT HOLDING, INC., a Delaware
corporation ("Giant Holding"), GIANT CEMENT COMPANY, a Delaware corporation
and wholly owned subsidiary of Giant Holding ("Giant Cement"), KEYSTONE
CEMENT COMPANY, a Pennsylvania corporation and wholly owned subsidiary of
Giant Holding ("Keystone"), GIANT RESOURCE RECOVERY COMPANY, INC., a
Delaware corporation and wholly owned subsidiary of Giant Holding ("Giant
Resource"), GCHI INVESTMENTS, INC., a Delaware corporation and wholly owned
subsidiary of Giant Holding ("GCHI"), and GIANT CEMENT NC, INC., a South
Carolina corporation and wholly owned subsidiary of Giant Holding ("Giant
NC") (Giant Holding, Giant Cement, Keystone, Giant Resource, GCHI and Giant
NC are also referred to individually herein as a "Borrower" and
collectively as the "Borrowers"), SOUTHTRUST BANK OF ALABAMA, NATIONAL
ASSOCIATION, a national banking association organized under the laws of the
United States, in its capacity as a Lender, and each other lender executing
and delivering a signature page hereto and each other lender which may
hereafter execute and deliver an instrument of assignment with respect to
this Agreement pursuant to Section 10.1 hereof (hereinafter such lenders
may be referred to individually as a "Lender" or collectively as the
"Lenders"), and SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws of the
United States of America ("SouthTrust"), in its capacity as agent for the
Lenders (in such capacity, and any successor appointed in accordance with
the terms of Section 9.8 hereof, the "Agent");
W I T N E S S E T H:
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WHEREAS, the Borrowers have requested that the Lenders make available
to the Borrowers credit facilities consisting of a revolving credit
facility in the maximum aggregate principal amount at any time outstanding
of $30,000,000 and a letter of credit facility of up to $2,000,000, the
proceeds of such credit facilities to be used to refinance certain existing
long term indebtedness and outstanding letters of credit and for general
working capital needs; and
WHEREAS, the Lenders are willing to make the credit facilities
available to the Borrowers upon the terms and conditions set forth herein;
NOW, THEREFORE, each of the Borrowers, the Lenders and the Agent
hereby agree as follows:
ARTICLE I
Definitions and Terms
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I.1 Definitions. For the purposes of this Agreement, in addition to
the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Accounts" means all Accounts of the Borrowers as defined in the
Security Agreement;
"Account Debtor" means any Person who is or who may become
obligated to any Borrower under or on account of an Account;
"Acquisition" means the acquisition of (i) a controlling equity
interest in another Person (including the purchase of an option,
warrant or convertible or similar type security to acquire such a
controlling interest at the time it becomes exercisable by the holder
thereof), whether by purchase of such equity interest or upon exercise
of an option or warrant for, or conversion of securities into, such
equity interest, or (ii) assets of another Person for which the Cost
of Acquisition equals or exceeds $1,000,000;
"Advance" means any borrowing under the Revolving Credit Facility
consisting of a Base Rate Loan or a Eurodollar Rate Loan;
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or
is under common control with, any Borrower; (ii) which beneficially
owns or holds 10% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 10% or more of
the equity interest) of any Borrower; or (iii) 10% or more of any
class of the outstanding voting stock (or in the case of a Person
which is not a corporation, 10% or more of the equity interest) of
which is beneficially owned or held by any Borrower. The term
"control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting stock, by contract or
otherwise;
"Applicable Commitment Percentage" means, with respect to each
Lender at any time, a fraction, the numerator of which shall be the
sum of such Lender's Revolving Credit Commitment and Letter of Credit
Commitment at such time and the denominator of which shall be the sum
of the Total Revolving Credit Commitment and the Total Letter of
Credit Commitment at such time, which Applicable Commitment Percentage
for each Lender as of the Closing Date is as set forth in Exhibit A
attached hereto and incorporated herein by reference; provided that
the Applicable Commitment Percentage of each Lender shall be increased
or decreased to reflect any assignments to or by such Lender effected
in accordance with Section 10.1 hereof;
2
"Applications for Letters of Credit" means, collectively, the
applications for letters of credit in the form provided by the Issuing
Bank and executed by the Borrowers from time to time and delivered to
Issuing Bank to support the issuance of Letters of Credit;
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Agent in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 10.1
hereof;
"Authorized Representative" means the President or Vice President
of Giant Holding or, with respect to financial matters, the chief
financial officer or treasurer of Giant Holding or any other person
expressly designated by the Board of Directors (or the appropriate
committee thereof) of each Borrower as an Authorized Representative of
all Borrowers, as set forth from time to time in a certificate in the
form attached hereto as Exhibit C;
"Base Rate" means the per annum rate of interest established from
time to time by SouthTrust at its principal office as its Base Rate.
Any change in the Base Rate shall become effective as of 12:01 A.M. of
the Business Day on which each change in the Base Rate is announced by
SouthTrust. The Base Rate is a reference rate used by SouthTrust in
determining interest rates on certain loans and is not intended to be
the lowest rate of interest charged on any extension of credit to any
debtor;
"Base Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Base Rate;
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body);
"Borrowers' Account" means a demand deposit account number
00000000 with SouthTrust Bank of South Carolina, N.A., or any
successor account with the Agent or an affiliate, which may be
maintained at one or more offices of the Agent or an agent of the
Agent;
"Business Day" means, (i) with respect to any Base Rate Loan, any
day which is not a Saturday, Sunday or a day on which banks in the
State of Alabama are authorized or obligated by law, executive order
or governmental decree to be closed and, (ii) with respect to any
Eurodollar Rate Loan, any day which is a Business Day, as described
above, and on which the relevant international financial markets are
open for the transaction of business contemplated by this Agreement in
London, England, New York, New York and Birmingham, Alabama;
"Capital Expenditures" means, with respect to the Borrowers, for
any period, expenditures or costs in connection with Capital Leases
and costs for fixed or capital assets or improvements made by any
Borrower during such period which in accordance with GAAP applied on a
Consistent Basis are characterized as capital expenditures;
3
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof;
"Closing Date" means the date as of which this Agreement is
executed by each of the Borrowers, the Lenders and the Agent and on
which the conditions set forth in Section 4.1 hereof have been
satisfied;
"Code" means the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder;
"Collateral" has, collectively, the meaning given to such term in
each Security Instrument in which it may appear;
"Consistent Basis" in reference to the application of GAAP means
the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the
preparation of the audited consolidated financial statements of the
Borrowers referred to in Section 5.6(a) hereof;
"Consolidated Current Assets" means all items that would be
classified as current assets on a consolidated balance sheet of the
Borrowers in accordance with GAAP applied on a Consistent Basis;
"Consolidated Current Liabilities" means all items that would be
classified as current liabilities on a consolidated balance sheet of
the Borrowers, including all current maturities of long term
Consolidated Indebtedness for Money Borrowed, in accordance with GAAP
applied on a Consistent Basis;
"Consolidated EBITDA" means, with respect to the Borrowers for
any period of computation thereof, the sum of, without duplication,
(i) Consolidated Net Income during such period, plus (ii) Consolidated
Interest Expense accrued during such period, plus (iii) taxes on
income accrued during such period, plus (iv) amortization during such
period, plus (v) Depreciation during such period, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis;
"Consolidated Fixed Charge Ratio" means, with respect to the
Borrowers for the period of computation thereof, the ratio of (i)
Consolidated EBITDA for such period plus Consolidated Lease Expense
for such period, to (ii) Consolidated Fixed Charges for such period;
"Consolidated Fixed Charges" means, with respect to the Borrowers
for any period of computation thereof, the sum of, without
duplication, (i) Consolidated Interest Expense during such period,
plus (ii) Consolidated Lease Expense during such period, plus
(iii) current maturities of Consolidated Indebtedness for Money
Borrowed actually paid during such period, all determined in
accordance with GAAP applied on a Consistent Basis;
4
"Consolidated Indebtedness" means, as of any date on which the
amount thereof is to be determined, all Indebtedness of the Borrowers
as determined on a consolidated basis;
"Consolidated Indebtedness for Money Borrowed" means, as of any
date on which the amount thereof is to be determined, all Indebtedness
for Money Borrowed of the Borrowers, exclusing for purposes of Section
7.1 the undrawn amount of letters of credit, as determined on a
consolidated basis;
"Consolidated Interest Expense" means, for any period of
computation thereof, the gross interest expense of the Borrowers,
including without limitation (i) the current amortized portion of debt
discounts to the extent included in gross interest expense, (ii) the
current amortized portion of all fees (including, without limitation,
fees payable in respect of a Swap Agreement) payable in connection
with the incurrence of Consolidated Indebtedness to the extent
included in gross interest expense and (iii) the portion of any
payments made in connection with Capital Leases allocable to interest
expense, all determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis;
"Consolidated Lease Expense" means, for any period of computation
thereof, all amounts paid or accrued by the Borrowers during such
period under operating leases (whether or not constituting rental
expense), as determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis;
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Borrowers
(including payments received by the Borrowers of interest income and
dividends and distributions from investments not related to an
extraordinary event) less all operating and non-operating expenses of
the Borrowers all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis; but excluding as income for
all purposes other than the computations required under Section
7.5(ii)(B) the aggregate amount of all of the following in excess of
$500,000: (i) net gains on the sale, conversion or other disposition
of capital assets, (ii) net gains on the acquisition, retirement, sale
or other disposition of capital stock and other securities of any
Borrower, (iii) net gains on the collection of proceeds of life
insurance policies, (iv) any write-up of any asset, and (v) any other
net gain or credit of an extraordinary nature, all determined in
accordance with GAAP applied on a Consistent Basis;
"Consolidated Shareholders' Equity" means, as of any date on
which the amount thereof is to be determined, the sum of the following
in respect of the Borrowers (excluding any upward adjustment after the
Closing Date due to revaluation of assets): (i) the amount of issued
and outstanding share capital, plus (ii) the amount of additional paid-
in capital and retained earnings (or, in the case of a deficit, minus
the amount of such deficit), plus (iii) the amount of any foreign
currency translation adjustment (if positive, or, if negative, minus
the amount of such translation adjustment), minus (iv) the amount of
any treasury stock, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis;
"Consolidated Tangible Net Worth" means, with respect to the
Borrowers as of any date on which the amount thereof is to be
determined, Consolidated Shareholders' Equity minus the net book value
of all assets of the Borrowers which would be treated as intangible
assets determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis;
5
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring
thereof, would be required) to be included in the financial statements
(including footnotes) of such Person in accordance with GAAP applied
on a Consistent Basis, including Statement No. 5 of the Financial
Accounting Standards Board, and any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend or
other obligation of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including obligations of such
Person however incurred:
(1) to purchase such Indebtedness or other obligation or
any property or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for the
purchase or payment of such Indebtedness or other obligation, or
(ii) to maintain a minimum working capital, net worth or other
balance sheet condition or any income statement condition of the
primary obligor;
(3) to grant or convey any lien, security interest, pledge,
charge or other encumbrance on any property or assets of such
Person to secure payment of such Indebtedness or other
obligation;
(4) to lease property or to purchase securities or other
property or services primarily for the purpose of assuring the
owner or holder of such Indebtedness or obligation of the ability
of the primary obligor to make payment of such Indebtedness or
other obligation; or
(5) otherwise to assure the owner of the Indebtedness or
such obligation of the primary obligor against loss in respect
thereof;
"Cost of Acquisition" means, with respect to any Acquisition, as
at the date of entering into any agreement therefor, the sum of the
following (without duplication): (i) the value of the capital stock,
warrants or options to acquire capital stock of any Borrower to be
transferred in connection therewith, (ii) any cash or other property
(excluding property described in clause (i)) and the unpaid principal
amount of any debt instrument given as consideration, (iii) any
Indebtedness assumed by any Borrower in connection with such
Acquisition, and (iv) out of pocket transaction costs for the services
and expenses of attorneys, accountants and other consultants incurred
in effecting such a transaction, and other similar transaction costs
so incurred. For purposes of determining the Cost of Acquisition for
any transaction, (A) the capital stock of Giant Holding shall be
valued (I) at its market value as reported on the Nasdaq National
Market System with respect to shares that are freely tradeable, and
(II) with respect to shares that are not freely tradeable, as
determined by the Board of Directors of Giant Holding and, if
requested by the Agent, determined to be a reasonable valuation by an
6
independent firm selected by the Agent, (B) the capital stock of any
Borrower other than Giant Holding shall be valued as determined by the
Board of Directors of such Borrower and, if requested by the Agent,
determined to be a reasonable valuation by an independent firm
selected by the Agent, and (C) with respect to any Acquisition
accomplished pursuant to the exercise of options or warrants or the
conversion of securities, the Cost of Acquisition shall include both
the cost of acquiring such option, warrant or convertible security as
well as the cost of exercise or conversion;
"Default" means any event or condition which, with the giving or
receipt of notice or lapse of time or both, would constitute an Event
of Default hereunder;
"Depreciation" means, with respect to the Borrowers for any
period of computation thereof, the aggregate amount of depreciation
accrued during such period as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis;
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United
States of America;
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Agent:
(i) direct obligations of, or obligations the timely
payment of principal and interest on which are fully and
unconditionally guaranteed by, the United States of America;
(ii) obligations of any corporation organized under the laws
of any state of the United States or under the laws of any other
nation, payable in the United States, expressed to mature not
later than 90 days following the date of issuance thereof and
rated in an investment grade rating category by Standard & Poor's
Corporation and Xxxxx'x Investors Service, Inc.; and
(iii) interest bearing demand or time deposits issued by any
Lender or certificates of deposit, bankers acceptances and other
"money market instruments" maturing within one hundred eighty
(180) days from the date of issuance thereof and issued by a bank
or trust company organized under the laws of the United States or
of any state thereof having capital surplus and undivided profits
aggregating at least $1,000,000;
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (a) is maintained for
employees of any Borrower or is assumed by any Borrower in connection
with any acquisition or any of its ERISA Affiliates or (b) has at any
time been maintained for the employees of any Borrower or any current
or former ERISA Affiliate;
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments
7
and Reauthorization Act of 1986, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, as amended, the Clean
Air Act, as amended, the Clean Water Act, as amended, any other
"Superfund" or "Superlien" law or any other federal, or applicable
state or local statute, law, ordinance, code, rule, regulation, order
or decree regulating, relating to, or imposing liability or standards
of conduct concerning, any Hazardous Material;
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder;
"ERISA Affiliate", as applied to any Borrower, means any Person
or trade or business which is a member of a group which is under
common control with such Borrower, who together with such Borrower, is
treated as a single employer within the meaning of Section 414(b) and
(c) of the Code;
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate;
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + 1.75%
Rate --------------------------------
1- Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time or any successor regulation, as the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to Eurocurrency
liabilities as that term is defined in Regulation D (or against any
other category of liabilities that includes deposits by reference to
which the interest rate of Eurodollar Rate Loans is determined),
whether or not the Agent has any Eurocurrency liabilities subject to
such requirements without benefits of credits or proration, exceptions
or offsets that may be available from time to time to Agent. The
Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage;
"Event of Default" means any of the occurrences set forth as such
in Section 8.1 hereof;
"Facilities" means the Revolving Credit Facility and the Letter
of Credit Facility;
"Fiscal Year" means the fiscal year of the Borrowers ending on
each December 31;
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
8
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan;
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrowers, taken together as one accounting
period;
"GAAP" means Generally Accepted Accounting Principles, being
those principles of accounting set forth in pronouncements of the
Financial Accounting Standards Board, the American Institute of
Certified Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of
the date of a report, as such principles are from time to time
supplemented and amended;
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, agency or instrumentality or political subdivision
thereof or any entity or officer exercising executive, legislative or
judicial, regulatory or administrative functions of or pertaining to
any government or any court, in each case whether a state of the
United States, the United States or foreign;
"Hazardous Material" means and includes any hazardous, toxic or
dangerous waste, substance or material, the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law;
"Indebtedness" means with respect to any Person, (i) all
Indebtedness for Money Borrowed, (ii) the undrawn face amount of, and
unpaid Reimbursement Obligations in respect of, all letters of credit
issued for the account of such Person; (iii) all indebtedness of such
Person for the acquisition of property, (iv) all indebtedness secured
by any Lien on the property of such Person whether or not such
indebtedness is assumed, (v) all liability of such Person by way of
endorsements (other than for collection or deposit in the ordinary
course of business), (vi) all Contingent Obligations, (vii) all Rate
Hedging Obligations and (viii) that portion of obligations with
respect to Capital Leases and each other item which in accordance with
GAAP is classified as a liability on a balance sheet; provided that in
no event shall the term Indebtedness include surplus and retained
earnings, lease obligations (other than pursuant to Capital Leases),
reserves for deferred income taxes and investment credits, other
deferred credits and reserves, trade payables, accrued expenses and
deferred compensation obligations and trade payables and accrued
expenses incurred in the ordinary course of business;
"Indebtedness for Money Borrowed" means with respect to any
Person determined on a consolidated basis, all Indebtedness in respect
of money borrowed, including without limitation all Capital Leases and
the deferred purchase price of any property or asset, evidenced by a
promissory note, bond, debenture or similar written obligation for the
payment of money, other than trade payables and accrued expenses
incurred in the ordinary course of business;
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"Interbank Offered Rate" means, with respect to any Eurodollar
Rate Loan for the Interest Period applicable thereto, the average
(rounded upward to the nearest one-sixteenth (1/16) of one percent)
per annum rate of interest determined by the office of the Agent then
determining such rate (each such determination to be conclusive and
binding) as of three Business Days prior to the first day of such
Interest Period, as the effective rate at which deposits in
immediately available funds in Dollars are being, have been, or would
be offered or quoted by Agent to major banks in the applicable
interbank market for Eurodollar deposits at any time during the
Business Day which is the second Business Day immediately preceding
the first day of such Interest Period, for a term comparable to such
Interest Period and in the amount of the Eurodollar Rate Loan;
"Interest Period" for each Eurodollar Rate Loan means a period
commencing on the date such Eurodollar Rate Loan is made or converted
and each subsequent period commencing on the last day of the
immediately preceding Interest Period for such Eurodollar Rate Loan,
and ending on the date 30, 60 or 90 days thereafter either as notified
to the Agent by the Authorized Representative three (3) Business Days
prior to the beginning of such Interest Period by delivery of a
Request for Advance/Interest Rate Election or as otherwise determined
in accordance with Section 2.1(d)(iii) hereof; provided, that,
(i) if an Interest Period for a Eurodollar Rate Loan
would end on a day which is not a Business Day such Interest
Period shall be extended to the next Business Day; and
(ii) there shall not be more than five (5) Interest Periods
in effect on any day;
"Inventory" means all Inventory of the Borrowers as defined in
the Security Agreement;
"Issuing Bank" means South Trust Bank of Alabama, National
Association, or any successor or replacement bank, as issuer of
Letters of Credit in accordance with Article IIA hereof;
"Lending Office" means, as to each Lender, the Lending Office of
such Lender designated on the signature pages hereof or in an
Assignment and Acceptance or such other office of such Lender (or of
an affiliate of such Lender) as such Lender may from time to time
specify to the Authorized Representative and the Agent as the office
by which its Loans are to be made and maintained;
"Letter of Credit" means any Standby Letter of Credit issued by
Issuing Bank for the account of the Borrowers as described in Article
IIA hereof;
"Letter of Credit Commitment" means with respect to each Lender,
the obligation of such Lender to acquire Participations up to an
aggregate stated amount at any one time outstanding equal to such
Lender's Applicable Commitment Percentage of the Total Letter of
10
Credit Commitment as the same may be increased or decreased from time
to time pursuant to this Agreement;
"Letter of Credit Facility" means the facilities described in
Article IIA hereof providing for the issuance by Issuing Bank for the
account of the Borrowers of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding the Total Letter of
Credit Commitment;
"Letter of Credit Outstandings" means all undrawn amounts of
Letters of Credit plus Reimbursement Obligations;
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For purposes of this definition, any Borrower shall be
deemed to be the owner of any property which it has acquired or holds
subject to a conditional sale agreement, financing lease, or other
arrangement pursuant to which title to the property has been retained
by or vested in some other Person for security purposes;
"Loan" or "Loans" means any of the Revolving Loans;
"Loan Documents" means this Agreement, the Notes, the
Subordination Agreement, the Security Instruments and all other
instruments and documents heretofore or hereafter executed or
delivered to or in favor of any Lender or the Agent in connection with
the Loans made and transactions contemplated under this Agreement, as
the same may be amended, supplemented or replaced from the time to
time;
"Material Adverse Effect" means a material adverse effect (a) on
the business, properties, operations or condition, financial or
otherwise, of the Borrowers on a consolidated basis or (b) on the
ability of the Borrowers on a consolidated basis to perform, or of the
Agent to enforce, or of the Lenders to realize the benefits to be
afforded by any remedy after default of, the obligations of the
Borrowers under the Loan Documents;
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrowers or any ERISA
Affiliate are making, or are accruing an obligation to make,
contributions or have made, or been obligated to make, contributions
within the preceding six (6) years;
"Net Proceeds" (a) from any public or private offering of equity
or debt securities means cash payments received by a Borrower
therefrom as and when received, net of all legal, accounting, banking
and underwriting fees and expenses, commissions, discounts and other
issuance expenses incurred in connection therewith and all taxes
required to be paid or accrued as a consequence of such issuance; and
(b) from any disposition of assets means cash payments received by a
11
Borrower therefrom (including any cash payments received pursuant to
any note or other debt security received in connection with any asset
disposition) as and when received, net of (i) all legal fees and
expenses and other fees and expenses paid to third parties and
incurred in connection therewith, (ii) all taxes required to be paid
or accrued as a consequence of such sale and (iii) amounts applied to
repayment of Consolidated Indebtedness (other than the Obligations)
secured by a Lien on the asset or property disposed;
"Notes" means, collectively, the Revolving Notes;
"Obligations" means the obligations, liabilities and Indebtedness
of the Borrowers with respect to (i) the principal and interest on the
Loans, (ii) the Reimbursement Obligations; (iii) all liabilities of
any Borrower to any Lender which arise under a Swap Agreement,
and (iv) the payment and performance of all other obligations,
liabilities and Indebtedness of the Borrowers to the Lenders or the
Agent hereunder or, under any one or more of the other Loan Documents;
"Participation" means, with respect to any Lender (other than
Issuing Bank), the extension of credit represented by the
Participation of such Lender hereunder in the liability of Issuing
Bank in respect of a Letter of Credit issued by Issuing Bank in
accordance with the terms hereof;
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto;
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of
ERISA or Section 412 of the Code and which is or was maintained for
employees of the Borrowers or any ERISA Affiliate;
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof;
"Principal Office" means the office of the Agent at 000 Xxxxx
00xx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000, or such other office and
address as the Agent may from time to time designate and deliver
notice of such designation in accordance with Section 10.2 hereof;
"Rate Hedging Obligations" means any and all obligations of the
Borrowers, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor),
under (i) any and all agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations of
interest rates, exchange rates or forward rates applicable to such
party's assets, liabilities or exchange transactions, including, but
not limited to, Dollar-denominated or cross-currency interest rate
exchange agreements, forward currency exchange agreements, interest
rate cap or collar protection agreements, forward rate currency or
interest rate options, puts, warrants and those commonly known as
12
interest rate "swap" agreements; and (ii) any and all cancellations,
buybacks, reversals, terminations or assignments of any of the
foregoing;
"Regulation D" means Regulation D of the Board as the same may be
amended or supplemented from time to time;
"Regulatory Change" means any change effective after the Closing
Date in United States federal or state laws or regulations (including
Regulation D and capital adequacy regulations) or foreign laws or
regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes any of the Lenders, under any United States federal or
state or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof or compliance by any
Lender with any request or directive regarding capital adequacy,
including with respect to "highly leveraged transactions," whether or
not having the force of law, whether or not failure to comply
therewith would be unlawful and whether or not published or proposed
prior to the date hereof;
"Reimbursement Obligation" shall mean at any time, the obligation
of the Borrowers with respect to any Letter of Credit to reimburse
Issuing Bank and the Lenders to the extent of their respective
Participations (including by the receipt by Issuing Bank of proceeds
of Loans pursuant to Section 2A.2 hereof) for amounts theretofore paid
by Issuing Bank pursuant to a drawing under such Letter of Credit;
"Request For Advance/Interest Rate Election" means a Request For
Advance/Interest Rate Election in the form of Exhibit D hereto to be
delivered by the Borrowers in connection with any Advance or interest
rate election with respect to any of the Loans;
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) of at least (i) if there
shall be fewer than three (3) Lenders, 100% of the aggregate Credit
Exposures of all Lenders on such date, and (ii) if there shall be
three (3) or more Lenders, 66-2/3% of the aggregate Credit Exposures
of all the Lenders on such date. For purposes of the preceding
sentence, the amount of the "Credit Exposure" of each Lender shall be
equal at all times (a) other than following the occurrence and during
the continuance of an Event of Default, to the sum of the amounts of
its Revolving Credit Commitment and Letter of Credit Commitment, and
(b) following the occurrence and during the continuance of an Event of
Default, to the sum of (i) the aggregate principal amount of such
Lender's Applicable Commitment Percentage of Revolving Credit
Outstandings plus (ii) the aggregate unutilized amount of such
Lender's Revolving Credit Commitment plus (iii) the amount of such
Lender's Applicable Commitment Percentage of Letter of Credit
Outstandings; provided that, for the purpose of this definition only,
(x) if any Lender shall have failed to fund its Applicable Commitment
Percentage of any Advance of such Lender shall be deemed reduced by
the amount it so failed to fund for so long as such failure shall
continue and such Lender's Credit Exposure attributable to such
failure shall be deemed held by any Lender making more than its
Applicable Commitment Percentage of such Advance to the extent it
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covers such failure, and (y) if any Lender shall have failed to pay to
the Issuing Bank upon demand its Applicable Commitment Percentage of
any drawing under any Letter of Credit resulting in an outstanding
Reimbursement Obligation, such Lender's Credit Exposure attributable
to such Letter of Credit Outstandings shall be deemed to be held by
Issuing Bank;
"Reserve Requirement" means, for any Eurodollar Rate Loan with
respect thereto, the maximum aggregate rate at which reserves
(including, without limitation, any marginal, supplemental or
emergency reserves) are required to be maintained with respect thereto
under Regulation D by the member banks of the Federal Reserve System
with respect to Dollar funding in the London interbank market.
Without limiting the effect of the foregoing, the Reserve Requirement
shall reflect any other reserves required to be maintained by such
member banks by reason of any Regulatory Change against (i) any
category of liabilities which includes deposits by reference to which
the Base Rate is to be determined or (ii) any category of extensions
of credit or other assets which include Eurodollar Rate Loans;
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of stock of Giant Holding now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the
holders of that class; (b) any redemption, conversion, exchange,
retirement or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of capital stock
of Giant Holding now or hereafter outstanding (other than an exchange
of shares of one class of capital stock of Giant Holding for shares of
another class of capital stock of Giant Holding); and (c) any payment
made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of
stock of Giant Holding now or hereafter outstanding;
"Revolving Credit Commitment" means, with respect to each Lender,
the obligation of such Lender to make Revolving Loans to the Borrowers
up to an aggregate principal amount at any one time outstanding as set
forth on Exhibit A hereto as the same may be increased or decreased
from time to time pursuant to this Agreement;
"Revolving Credit Facility" means the facility described in
Article II hereof providing for Loans to the Borrowers by the Lenders
in the aggregate principal amount of the Total Revolving Credit
Commitment;
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding;
"Revolving Credit Termination Date" means (i) December 20, 1999
or (ii) such earlier date of termination of Lenders' obligations
pursuant to Section 8.1 upon the occurrence of an Event of Default, or
(iii) such date as the Borrowers may voluntarily and permanently
terminate the Revolving Credit Facility by payment in full of all
Obligations (including the discharge of all Obligations of Issuing
Bank and the Lenders with respect to Letters of Credit and
14
Participations) or (iv) such later date as the Borrowers and the
Lender shall agree in writing pursuant to Section 2.11 hereof;
"Revolving Loan" means any borrowing pursuant to an Advance under
the Revolving Credit Facility in accordance with Article II hereof;
"Revolving Notes" means, collectively, the promissory notes of
the Borrowers evidencing Revolving Loans executed and delivered to the
Lenders as provided in Section 2.4 hereof substantially in the form
attached hereto as Exhibit E, with appropriate insertions as to
amounts, dates and names of Lenders;
"Security Agreement" means that certain Security Agreement dated
as of the date hereof between the Borrowers and the Agent for the
benefit of the Lenders and substantially in the form of Exhibit F
hereto, as hereafter amended, supplemented or replaced from time to
time;
"Security Instruments" means, collectively, the Security
Agreement, and all other agreements, instruments and other documents,
whether now existing or hereafter in effect, pursuant to which the
Borrowers shall grant or convey to the Agent or the Lenders a Lien in
property as security for the Obligations, as any of them may be
amended, supplemented or replaced from time to time;
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrowers are an
"employer" as described in Section 4001(b) of ERISA and which is not a
Multi-employer Plan;
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(ii) the fair value of its assets (both at fair valuation
and at present fair saleable value on an orderly basis) is in
excess of the total amount of its liabilities, including, without
limitation, Contingent Obligations; and
(iii) it is then able and expects to be able to pay its
debts as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted;
"Standby Letter of Credit" means an irrevocable Standby Letter of
Credit issued hereunder for the account of the Borrowers or any of its
Subsidiaries, provided that the expiry date of a Standby Letter of
Credit shall not be later than the latest of (i) twelve (12) months
subsequent to the date of issuance thereof with such automatic renewal
terms thereof as the Issuing Bank shall reasonably approve provided
15
such renewal does not extend the expiry date beyond the time in clause
(ii) following; and (ii) the fifth Business Day preceding the
Revolving Credit Termination Date;
"Subordination Agreement" means that certain Subordination
Agreement dated as of the date hereof between the Borrowers and the
Agent for the benefit of the Lenders, as hereafter amended,
supplemented or replaced from time to time;
"Subsidiary" means any corporation or other entity in which more
than 50% of its outstanding voting stock or more than 50% of all
equity interests is owned directly or indirectly by any of the
Borrowers and/or by one or more of any Borrower's Subsidiaries;
"Swap Agreement" means one or more agreements between any
Borrower and any Person with respect to Indebtedness evidenced by the
Notes, on terms mutually acceptable to such Borrower and such Person
and approved by each of the Lenders, which agreements create Rate
Hedging Obligations; provided, however, that no such approval of the
Lenders shall be required to the extent such agreements are entered
into between such Borrower and any Lender;
"Termination Event" means: (a) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(b) the withdrawal of the Borrowers or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4068(f) of ERISA; or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (d) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (e) any other event or
condition which would constitute grounds under Section 4042(a) of
ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or (f) the partial or complete
withdrawal of the Borrowers or any ERISA Affiliate from a
Multiemployer Plan; or (g) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA; or (h) any event or
condition which results in the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or Section 4245 of ERISA,
respectively; or (i) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or
the institution by the PBGC of proceedings to terminate a
Multiemployer Plan under Section 4042 of ERISA;
"Total Letter of Credit Commitment" means an aggregate stated
amount equal to $2,000,000;
"Total Revolving Credit Commitment" means a principal amount
equal to $30,000,000, as reduced from time to time in accordance with
Section 2.6 hereof;
1.2 Accounting Terms. All accounting terms not specifically defined
herein shall have the meanings assigned to such terms and shall be
interpreted in accordance with GAAP applied on a Consistent Basis.
16
1.3 UCC Terms. Each term defined in Article 1 or 9 of the South
Carolina Uniform Commercial Code shall have the meaning given therein
unless otherwise defined herein, except to the extent that the Uniform
Commercial Code of another jurisdiction is controlling, in which case such
terms shall have the meaning given in the Uniform Commercial Code of the
applicable jurisdiction.
ARTICLE II
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The Revolving Credit Facility
-----------------------------
II.1 Revolving Loans.
(a) Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances to the
Borrowers under the Revolving Credit Facility from time to time from
the Closing Date until the Revolving Credit Termination Date on a pro
rata basis as to the total borrowing requested by the Borrowers on any
day determined by such Lender's Applicable Commitment Percentage up to
but not exceeding the Revolving Credit Commitment of such Lender,
provided, however, that the Lenders will not be required and shall
have no obligation to make any such Advance (i) so long as a Default
or an Event of Default has occurred and is continuing or (ii) if the
Agent has accelerated the maturity of any of the Notes as a result of
an Event of Default. Within such limits, the Borrowers may borrow,
repay and reborrow under the Revolving Credit Facility on any Business
Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit Termination Date;
provided, however, that (x) no Revolving Loan that is a Eurodollar
Rate Loan shall be made which has an Interest Period that extends
beyond the Revolving Credit Termination Date and (y) each Revolving
Loan that is a Eurodollar Rate Loan may, subject to the provisions of
Section 2.3 hereof, be repaid only on the last day of the Interest
Period with respect thereto.
(b) Amounts. Except as otherwise permitted by the Lenders from
time to time, the aggregate unpaid principal amount of the Revolving
Credit Outstandings shall not exceed at any time the Total Revolving
Credit Commitment. Each Revolving Loan hereunder and each conversion
under Section 2.7 hereof shall be in an amount of at least $10,000,
and, if greater than $10,000, an integral multiple of $10,000.
(c) Mandatory Paydown. The aggregate Revolving Credit
Outstandings shall be reduced to not more than $20,000,000 for a
period of 30 consecutive days during each twelve month period
following the initial Advance under the Revolving Credit Facility.
(d) Advances.
(i) An Authorized Representative shall give the Agent (1)
at least three (3) Business Days' irrevocable written notice of
each Eurodollar Rate Loan (whether representing an additional
borrowing hereunder or the conversion of borrowing hereunder from
Base Rate Loans to Eurodollar Rate Loans) prior to 10:30 A.M.,
Birmingham, Alabama time and (2) irrevocable written notice of
each Base Rate Loan (whether representing an additional borrowing
17
hereunder or the conversion of borrowing hereunder from
Eurodollar Rate Loans to Base Rate Loans) prior to 10:30 A.M.
Birmingham, Alabama time on the day of such proposed Revolving
Loan. Each such written notice, which shall be effective upon
receipt by the Agent, may be delivered by telefacsimile and shall
be in the form of the Request For Advance/Interest Rate Election
and shall specify the amount of the borrowing, the type of
Revolving Loan (Base Rate or Eurodollar Rate), the date of
borrowing and, if a Eurodollar Rate Loan, the Interest Period to
be used in the computation of interest. Notice of receipt of
such Request For Advance/Interest Rate Election shall be provided
by the Agent to each Lender by telefacsimile with reasonable
promptness, but not later than 1:00 P.M., Birmingham, Alabama
time on the same day as Agent's receipt of such notice.
(ii) Not later than 1:00 P.M., Birmingham, Alabama time on
the date specified for each Advance under this Section 2.1, each
Lender shall, pursuant to the terms and subject to the conditions
of this Agreement, initiate a wire transfer to the Agent in the
amount of its pro rata share, determined according to such
Lender's Applicable Commitment Percentage, of the Revolving Loan
or Revolving Loans to be made on such day. Such wire transfer
shall be directed to the Agent at the Principal Office and shall
be in the form of immediately available funds. The amount so
received by the Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Borrowers by delivery
of the proceeds thereof to the Borrowers' Account or otherwise as
shall be directed in the applicable Borrowing Notice by the
Authorized Representative.
(iii) The duration of the initial Interest Period for
each Revolving Loan that is a Eurodollar Rate Loan shall be as
specified in the initial Request For Advance/Interest Rate
Election delivered in accordance with clause (i) above. The
Borrowers shall have the option to convert the Eurodollar Rate
Loans in accordance with Section 2.7 hereof. In the event the
Agent fails to receive a properly completed Request for
Advance/Interest Rate Selection by such time as required by
Section 2.7 hereof to convert a Eurodollar Rate Loan, the
duration of each subsequent Interest Period for such Eurodollar
Rate Loan after the initial Interest Period therefor shall be
determined automatically by the Agent on the date three (3)
Business Days' prior to the end of such preceding Interest Period
and shall be that available Interest Period on such date (30, 60
or 90 days) which has the lowest corresponding Eurodollar Rate
and, if more than one available Interest Period has the same
lowest Eurodollar Rate, the shortest such Interest Period shall
be the applicable subsequent Interest Period for such Eurodollar
Rate Loan.
(iv) Notwithstanding the foregoing, if a drawing is made
under any Letter of Credit prior to the Revolving Credit
Termination Date, notice of such drawing and resulting
Reimbursement Obligation shall be provided promptly by Issuing
Bank to the Agent and the Agent shall provide notice to each
Lender and the Borrowers by telephone. If such notice to the
Lenders of a drawing under any Letter of Credit is given by the
Agent at or before 1:00 p.m. on any Business Day, the Borrowers
18
shall be deemed to have requested, and each Lender shall,
pursuant to the conditions of this Agreement, make an Advance as
a Base Rate Loan under the Revolving Credit Facility in the
amount of such Lender's Applicable Commitment Percentage of such
Reimbursement Obligation and shall pay such amount to the Agent
for the account of Issuing Bank at the Principal Office in
Dollars and in immediately available funds before 2:30 P.M. on
the same Business Day. If notice to the Lenders is given by the
Agent after 1:00 P.M. on any Business Day, the Borrowers shall be
deemed to have requested, and each Lender shall, pursuant to the
terms and subject to the conditions of this Agreement, make an
Advance as a Base Rate Loan under the Revolving Credit Facility
in the amount of such Lender's Applicable Commitment Percentage
of such Reimbursement Obligation and shall pay such amount to the
Agent for the account of Issuing Bank at the Principal Office in
Dollars and in immediately available funds before 12:00 noon on
the next following Business Day. Such Base Rate Loan shall
continue unless and until the Borrowers convert such Base Rate
Loan in accordance with the terms of Section 2.7 hereof.
II.2 Payment of Interest.
(a) The Borrowers shall pay interest to the Agent for the
account of each Lender on the outstanding and unpaid principal amount
of each Revolving Loan made by such Lender for the period commencing
on the date of such Revolving Loan until such Revolving Loan shall be
due at the Base Rate applicable for each Business Day during such
period minus one percent (1%) for Base Rate Loans or the applicable
Eurodollar Rate for Eurodollar Rate Loans. The applicable Eurodollar
Rate for any Eurodollar Rate Loan shall be that Eurodollar Rate
available for the entire Interest Period for such Eurodollar Rate
Loan, which Interest Period has either been designated by the
Authorized Representative in the Request for Advance/Interest Rate
Election and delivered to the Agent pursuant to Sections 2.1 or 2.7
hereof or, in the absence of such designation and delivery, has been
determined for the corresponding Interest Period determined in
accordance with Section 2.1(d)(iii) hereof. If any amount shall not
be paid when due (at maturity, by acceleration or otherwise), all
amounts outstanding hereunder shall bear interest commencing on the
date when due until, but excluding, the date thereafter when such
amounts past due are paid in full (i) in the case of a Eurodollar
Rate Loan, until the end of the Interest Period with respect to any
Eurodollar Rate Loan at a rate of two percent (2%) above the
applicable Eurodollar Rate for such Eurodollar Rate Loan and
thereafter at a rate per annum which shall be two percent (2%) plus
the Base Rate, (ii) with respect to Base Rate Loans, at a rate of
interest per annum which shall be two percent (2%) above the Base
Rate, or (iii) in any case, the maximum rate permitted by applicable
law, if lower.
(b) Interest on each Revolving Loan shall be computed on the
basis of a year of 360 days and calculated in each case for the actual
number of days elapsed. Interest on each Revolving Loan shall be paid
(i) monthly in arrears on the last Business Day of each month
commencing December 31, 1996 for each Base Rate Loan, (ii) on the last
day of the applicable Interest Period for each Eurodollar Rate Loan
and (iii) upon payment in full of the principal amount of such
Revolving Loan.
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II.3 Payment of Principal.
(a) The principal amount of each Revolving Loan shall be due and
payable to the Agent for the benefit of each Lender in full on the
Revolving Credit Termination Date, or earlier as specifically provided
herein. The principal amount of any Base Rate Loan may be prepaid in
whole or in part at any time. The principal amount of any Eurodollar
Rate Loan may be prepaid only at the end of the applicable Interest
Period unless the Borrowers shall pay to the Agent for the account of
the Lenders the amount, if any, required under Section 3.4 hereof. If
at any time the amount of Revolving Credit Outstandings exceeds the
Total Revolving Credit Commitment, a principal amount of the
outstanding Revolving Loans equal to such excess shall be due and
payable immediately. All prepayments made by the Borrowers shall be
in the amount of $100,000 or such greater amount which is an integral
multiple of $100,000, or such other amount as necessary to comply with
this Section 2.3 or with Section 2.1(c) and 2.6 hereof.
(b) Each payment of principal (including any prepayment) and
payment of interest and fees, and any other amount required to be paid
to the Lenders with respect to the Revolving Loans, shall be made to
the Agent at the Principal Office, for the account of each Lender, in
Dollars and in immediately available funds before 3:00 P.M.
Birmingham, Alabama time on the date such payment is due. The Agent
may, but shall not be obligated to, debit the amount of any such
payment which is not made by such time to any ordinary deposit
account, if any, of any one or more Borrowers with the Agent.
(c) The Agent shall deem any payment by or on behalf of the
Borrowers hereunder that is not made both in Dollars and in
immediately available funds and prior to 3:00 P.M. Birmingham, Alabama
time to be a non-conforming payment. Any such payment shall not be
deemed to be received by the Agent until the later of (i) the time
such funds become available funds and (ii) the next Business Day. Any
non-conforming payment may constitute or become a Default or Event of
Default pursuant to Section 8.1(b) hereof. Interest shall continue to
accrue on any principal as to which a non-conforming payment is made
until the later of (x) the date such funds become available funds or
(y) the next Business Day at the respective rates of interest per
annum specified in the proviso to Section 2.2 hereof regarding
interest on late payments, from the date such amount was due and
payable.
(d) In the event that any payment hereunder or under the Notes
becomes due and payable on a day other than a Business Day, then such
due date shall be extended to the next succeeding Business Day unless
provided otherwise under clause (ii) of the definition of "Interest
Period"; provided that interest shall continue to accrue during the
period of any such extension and provided further, that in no event
shall any such due date be extended beyond the Revolving Credit
Termination Date.
II.4 Revolving Credit Notes. Revolving Credit Loans made by each
Lender shall be evidenced by the Revolving Credit Note payable to the order
of such Lender in the respective amounts of its Revolving Credit
Commitment, which Revolving Credit Notes shall be dated the Closing Date or
20
such later date pursuant to an Assignment and Acceptance and shall be duly
completed, executed and delivered by the Borrowers.
II.5 Pro Rata Payments. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Revolving Loans
and the fees described in Section 2.8 hereof shall be made to the Agent for
the account of the Lenders pro rata based on their Applicable Commitment
Percentages, (b) all payments to be made by the Borrowers for the account
of each of the Lenders on account of principal, interest and fees, shall be
made without set-off or counterclaim, and (c) the Agent will distribute
payments received from the Borrowers to the Lenders on the same day such
payments are received in accordance with the terms of this Agreement.
II.6 Reductions. The Borrowers shall, by notice from an Authorized
Representative, have the right from time to time, upon not less than two
(2) Business Days written notice to the Agent, to reduce the Total
Revolving Credit Commitment. Each such reduction shall be in the aggregate
amount of $1,000,000 or such greater amount which is in an integral
multiple of $100,000, and shall permanently reduce the Total Revolving
Credit Commitment. No such reduction shall result in the payment of any
Eurodollar Rate Loan other than on the last day of the Interest Period of
such Eurodollar Rate Loan unless such prepayment is accompanied by amounts
due, if any, under Section 3.4 hereof. Each reduction of the Total
Revolving Credit Commitment shall be accompanied by payment of the Loans to
the extent that the amount of Revolving Credit Outstandings exceeds the
Total Revolving Credit Commitment after giving effect to such reduction,
together with accrued and unpaid interest on the amounts prepaid.
II.7 Conversions. Provided that no Default or Event of Default shall
have occurred and be continuing and subject to the limitations set forth
below and in Article III hereof, the Borrowers may:
(a) upon delivery of a properly completed Request For
Advance/Interest Rate Election to the Agent on or before 10:30 A.M.
Birmingham, Alabama time on any Business Day, convert all or a part of
Eurodollar Rate Loans to Base Rate Loans on the last day of the
Interest Period for such Eurodollar Rate Loans; and
(b) upon delivery of a properly completed Request For
Advance/Interest Rate Election to the Agent on or before 10:30 A.M.
Birmingham, Alabama time three (3) Business Days' prior to the date of
such election or conversion, convert Base Rate Loans to Eurodollar
Rate Loans on any date.
Each conversion pursuant to this Section 2.7 shall be subject to the
limitations on Eurodollar Rate Loans set forth in the definition of
"Interest Period" herein and in Sections 2.1, 2.3 and Article III hereof.
The Agent shall give written notice to each Lender of such notice of
election or conversion prior to 3:00 P.M. Birmingham, Alabama time on the
day such notice of conversion is received. All such conversions of Loans
shall be effected pro rata based on the Applicable Commitment Percentages
of the Lenders.
21
II.8 Fee. For the period beginning on the Closing Date and ending on
the Revolving Credit Termination Date, the Borrowers agree to pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an unused fee equal to .15% per annum multiplied by
the sum of (i) the daily amount by which the Total Revolving Credit
Commitment exceeds Revolving Credit Outstandings plus (ii) the daily amount
by which the Total Letter of Credit Commitment exceeds Letter of Credit
Outstandings. Such payments of fees provided for in this Section 2.8 shall
be due in arrears on the last Business Day of each December, March, June
and September beginning December 31, 1996 to and on the Revolving Credit
Termination Date. Notwithstanding the foregoing, so long as any Lender
fails to make available any portion of its Revolving Credit Commitment or
Letter of Credit Commitment when requested, such Lender shall not be
entitled to receive payment of its pro rata share of such fee until such
Lender shall make available such portion, as applicable. Such fee shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed.
II.9 Deficiency Advances. No Lender shall be responsible for any
default of any other Lender in respect to such other Lender's obligation to
make any Loan hereunder nor shall the Revolving Credit Commitment of any
Lender hereunder be increased as a result of such default of any other
Lender. Without limiting the generality of the foregoing, in the event any
Lender shall fail to advance funds to the Borrowers as herein provided, the
Agent may in its discretion, but shall not be obligated to, advance under
the Revolving Note in its favor as a Lender all or any portion of such
amount or amounts (each, a "deficiency advance") and shall thereafter be
entitled to payments of principal of and interest on such deficiency
advance in the same manner and at the same interest rate or rates to which
such other Lender would have been entitled had it made such advance under
its Revolving Note; provided that, upon payment to the Agent from such
other Lender of the entire outstanding amount of each such deficiency
advance, together with accrued and unpaid interest thereon, from the most
recent date or dates interest was paid to the Agent by the Borrowers on
each Revolving Loan comprising the deficiency advance at the interest rate
per annum for overnight borrowing by the Agent from the Federal Reserve
Bank, then such payment shall be credited against the applicable Revolving
Note of the Agent in full payment of such deficiency advance and the
Borrowers shall be deemed to have borrowed the amount of such deficiency
advance from such other Lender as of the most recent date or dates, as the
case may be, upon which any payments of interest were made by the Borrowers
thereon.
II.10 Use of Proceeds. The proceeds of the Loans made pursuant to
the Revolving Credit Facility hereunder shall be used by the Borrowers to
refinance certain existing long term indebtedness and for general working
capital needs.
II.11 Extension of Revolving Credit Termination Date. At the
request of the Borrowers the Lenders may, in their sole discretion, elect
to extend the Revolving Credit Termination Date then in effect for
additional periods of one year each and thereby restore the Revolving
Credit Facility to a three year maturity. The Borrowers shall notify the
Agent of their request for such an extension by delivering to the Agent
notice of such request signed by an Authorized Representative not more than
ninety (90) days nor less than sixty (60) days prior to an anniversary of
the Closing Date. The Agent shall as promptly as practicable, and in any
event within five (5) days, deliver a copy of such notice to each Lender.
If each Lender shall elect to so extend and has notified the Agent in
22
writing of its election within fifty (50) days of its receipt of such
notice, the Agent shall notify the Borrowers in writing within sixty (60)
days of its receipt of such request for extension of the decision of any
Lender to extend the Revolving Credit Termination Date. Failure by any
Lender to give such notice shall constitute refusal by the Lender to extend
the Revolving Credit Termination Date. In no event shall the Revolving
Credit Termination Date be extended if a prior request for such extension
was refused by the Lenders.
II.12 Appointment of Giant Holding and Authorized Representatives
as Agents for the Borrowers. Each Borrower hereby irrevocably appoints
Giant Holding and each Authorized Representative as its agent and attorney-
in-fact for the purpose of all transactions contemplated by this Agreement
or any other Loan Document. Each Borrower grants to Giant Holding and each
Authorized Representative (whether acting jointly or separately) an
irrevocable power of attorney to act on behalf of such Borrower and to take
any and all actions contemplated by any Loan Document on behalf of each
Borrower, including without limitation the delivery of any Request for
Advance/Interest Rate Election or other notice, request or directive, the
receipt or disbursement of any Loans, the execution of any documents, and
the grant or conveyance of any Lien or title.
ARTICLE IIA
-----------
The Letter of Credit Facility
-----------------------------
2A.1 Letters of Credit. Issuing Bank agrees, subject to the terms
and conditions of this Agreement, upon request and for the account of
Borrowers, to issue from time to time up to and including the Revolving
Credit Termination Date Letters of Credit upon delivery to Issuing Bank of
an Application for Letter of Credit in form and content acceptable to
Issuing Bank; provided, that the Letter of Credit Outstandings shall not
exceed the Total Letter of Credit Commitment. No Letter of Credit shall be
issued by Issuing Bank with an expiry date (including any automatic renewal
thereof in accordance with the terms of such Letter of Credit) or payment
date occurring subsequent to the fifth Business Day preceding the Revolving
Credit Termination Date.
2A.2 Reimbursement.
(a) The Borrowers hereby unconditionally agree immediately to
pay to Issuing Bank on demand at the Principal Office in immediately
available funds all amounts required to pay all drafts drawn and
honored under Letters of Credit and all reasonable expenses incurred
by Issuing Bank in connection with Letters of Credit and in any event
and without demand to place in possession of Issuing Bank sufficient
funds to pay all debts and liabilities arising under any Letter of
Credit; provided that to the extent permitted by Section 2.1(d)(iv)
hereof, such amounts shall be paid pursuant to Advances. The
Borrowers' obligation to pay Issuing Bank under this Section 2A.2, and
Issuing Bank's right to receive such payment, shall be absolute and
unconditional and shall not be affected by any circumstance
whatsoever, including without limitation the unavailability of any
Advance. Issuing Bank shall give the Borrowers prompt written notice
of any request for a draw under a Letter of Credit. In the event an
Advance is not available, Issuing Bank may charge any account the
Borrowers may have with it for any and all amounts Issuing Bank pays
under a Letter of Credit, plus charges and reasonable expenses as from
23
time to time agreed to by Issuing Bank and the Borrowers. The
Borrowers agree to pay Issuing Bank interest on any amounts paid by
the Issuing Bank in connection with drafts drawn and honored under
Letters of Credit when due hereunder, and which is not paid pursuant
to Advances as herein contemplated or otherwise paid by the Borrowers
in immediately available funds not later than the first Business Day
after the date of such drawing, at the Default Rate from the first
Business Day after the date of such drawing to the date such amount is
paid in full.
(b) In accordance with the provisions of Section 2.1(d)(iv)
hereof, Issuing Bank shall notify the Agent and the Borrowers of any
drawing under any Letter of Credit as promptly as practicable
following the receipt by Issuing Bank of such drawing.
(c) Each Lender (other than Issuing Bank) shall automatically
acquire on the date of issuance thereof a Participation in the
liability of Issuing Bank in respect of each Letter of Credit in an
amount equal to such Lender's Applicable Commitment Percentage of such
liability, and to the extent that the Borrowers are obligated to pay
Issuing Bank under Section 2A.2(a) hereof, each Lender (other than
Issuing Bank) thereby shall, as hereinafter described, absolutely,
unconditionally and irrevocably assume, and shall be unconditionally
obligated to pay to Issuing Bank, its Applicable Commitment Percentage
of the liability of Issuing Bank under such Letter of Credit.
(i) Prior to the Revolving Credit Termination Date, each
Lender (other than Issuing Bank) shall, subject to the terms and
conditions of Article II, make a Revolving Loan bearing interest
at the Base Rate to the Borrowers by paying to the Agent for the
account of Issuing Bank at the Principal Office in Dollars and in
immediately available funds an amount equal to its Applicable
Commitment Percentage of any Reimbursement Obligation, all as
described in and pursuant to Section 2.1(d).
(ii) With respect to drawings under any Letter of Credit for
which a Revolving Loan is not made as set forth in clause (i)
above, each Lender (other than Issuing Bank) upon receipt from
the Agent of notice of a drawing in the manner described in
Section 2.1(d)(iv), shall promptly pay to the Agent for the
account of Issuing Bank, prior to the applicable time set forth
in Section 2.1(d)(iv), its Applicable Commitment Percentage of
such drawing. Simultaneously with the making of each such
payment by a Lender to the Agent for the account of Issuing Bank,
such Lender shall, automatically and without any further action
on the part of Issuing Bank or such Lender, acquire a
Participation in an amount equal to such payment (excluding the
portion thereof constituting interest) in the related
Reimbursement Obligation of the Borrowers.
(iii) Each Lender's obligation to make payment to the
Agent for the account of Issuing Bank pursuant to this Section
2A.2(c), and the right of Issuing Bank to receive the same, shall
be made without any offset, abatement, withholding or reduction
whatsoever. If any Lender is obligated to pay but does not pay
24
amounts to the Agent for the account of the Issuing Bank in full
upon such request as required by this Section 2A.2(c), such
Lender shall, on demand, pay to the Agent for the account of
Issuing Bank interest on the unpaid amount for each day during
the period commencing on the date of notice given to such Lender
pursuant to Section 2A.2(c) hereof until such Lender pays such
amount to the Agent for the account of Issuing Bank in full at
the interest rate per annum for overnight borrowings by Issuing
Bank from the Federal Reserve Bank.
(iv) In the event the Lenders have purchased Participations
in any Reimbursement Obligation as set forth in clause (ii)
above, then at any time payment of such Reimbursement Obligation,
in whole or in part, is received by Issuing Bank from the
Borrowers, Issuing Bank shall pay to each Lender an amount equal
to its Applicable Commitment Percentage of such payment from the
Borrowers.
(d) Promptly following the end of each calendar month, Issuing
Bank shall deliver to the Agent, and the Agent shall deliver to each
Lender, a notice describing the aggregate undrawn amount of all
Letters of Credit at the end of such month. Upon the request of any
Lender from time to time, Issuing Bank shall deliver to the Agent, and
the Agent shall deliver to such Lender, any other information
reasonably requested by such Lender with respect to Letter of Credit
Outstandings.
(e) The issuance by Issuing Bank of each Letter of Credit shall,
in addition to the conditions precedent set forth in Section 4.1
hereof, be subject to the conditions that such Letter of Credit be in
such form and contain such terms as shall be reasonably satisfactory
to Issuing Bank consistent with the then current practices and
procedures of Issuing Bank with respect to similar letters of credit,
and the Borrowers shall have executed and delivered such other
instruments and agreements relating to such Letters of Credit as
Issuing Bank shall have reasonably requested consistent with such
practices and procedures. All Letters of Credit shall be issued
pursuant to and subject to the Uniform Customs and Practice for
Documentary Credits, 1993 revision, International Chamber of Commerce
Publication No. 500 and all subsequent amendments and revisions
thereto.
(f) The Borrowers agree that Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter
of Credit, any drafts or other documents otherwise in order which may
be signed or issued by an administrator, executor, trustee in
bankruptcy, debtor in possession, assignee for the benefit of
creditors, liquidator, receiver, attorney in fact or other legal
representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(g) Without duplication of Section 9.6 hereof, the Borrowers
hereby agree to defend, indemnify and hold harmless Issuing Bank, each
other Lender and the Agent from and against any and all claims and
damages, losses, liabilities, reasonable costs and expenses which
Issuing Bank, such other Lender or the Agent may incur (or which may
be claimed against Issuing Bank, such other Lender or the Agent) by
any Person by reason of or in connection with the issuance or transfer
of or payment or failure to pay under any Letter of Credit; provided
25
that the Borrowers shall not be required to indemnify Issuing Bank,
any other Lender or the Agent for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent,
caused by the willful misconduct or gross negligence of the party to
be indemnified. The provisions of this Section 2A.2(g) shall survive
repayment of the Obligations, the occurrence of the Revolving Credit
Termination Date and expiration or termination of this Agreement.
(h) Without limiting Borrowers' rights as set forth in Section
2A.2(g) above, the obligation of the Borrowers to immediately
reimburse the Agent for drawings made under Letters of Credit shall be
absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement and such
Letters of Credit and the related Applications for Letters of Credit,
notwithstanding the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, the obligation supported by the Letter of Credit or any
other agreement or instrument relating thereto (collectively, the
"Related Documents");
(ii) any amendment or waiver of or any consent to or
departure from all or any of the Related Documents;
(iii) the existence of any claim, setoff, defense or
other rights which the Borrowers may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may
be acting), Agent, Lenders or any other Person, whether in
connection with the Loan Documents, the Related Documents or any
unrelated transaction;
(iv) any breach of contract or other dispute between the
Borrowers and any beneficiary or any transferee of a Letter of
Credit (or any persons or entities for whom such beneficiary or
any such transferee may be acting), Agent, Lenders or any other
Person;
(v) any draft, statement or any other document presented
under the Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever; or
(vi) any delay, extension of time, renewal, compromise or
other indulgence or modification granted or agreed to by Agent,
with or without notice to or approval by the Borrowers in respect
of any of Borrowers' Obligations under this Agreement.
2A.3 Letter of Credit Fee. The Borrowers agree to pay to the Agent,
for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, quarterly in arrears on the last Business Day of
each March, June, September and December, beginning March 1997, a fee for
each Standby Letter of Credit, equal to the product of the average daily
amount available to be drawn on such Letter of Credit during such three
month period multiplied by one percent (1.00%). Such fee shall be
26
calculated on the basis of a year of 360 days for the actual number of days
during which Letters of Credit are outstanding.
2A.4 Administrative Fees. The Borrowers shall pay to Issuing Bank
such administrative fee and other fees, if any, in connection with the
Letters of Credit in such amounts and at such times as Issuing Bank and the
Borrowers shall agree from time to time.
ARTICLE III
-----------
Yield Protection and Illegality
-------------------------------
III.1 Additional Costs.
(a) The Borrowers shall promptly pay to the Agent for the
account of a Lender from time to time, without duplication, such
amounts as such Lender may reasonably determine to be necessary to
compensate it for any costs incurred by such Lender which it
determines are attributable to its making or maintaining any Loan or
its obligation to make any Loans, or the issuance or maintenance by
Issuing Bank of or any other Lender's Participation in any Letter of
Credit issued hereunder, or any reduction in any amount receivable by
such Lender under this Agreement or the Notes in respect of any of
such Loans, including reductions in the rate of return on a Lender's
capital (such increases in costs and reductions in amounts receivable
and returns being herein called "Additional Costs"), resulting from
any Regulatory Change which: (i) changes the basis of taxation of any
amounts payable to such Lender under this Agreement or the Notes in
respect of any of such Loans (other than taxes imposed on or measured
by the income, revenues or assets); or (ii) imposes or modifies any
reserve, special deposit, or similar requirements relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender (other than any such reserve, deposit or
requirement reflected in the Base Rate or the Eurodollar Rate, in each
case computed in accordance with the respective definitions of such
terms set forth in Section 1.1 hereof); or (iii) has or would have the
effect of reducing the rate of return on capital of any such Lender to
a level below that which the Lender could have achieved but for such
Regulatory Change (taking into consideration such Lender's policies
with respect to capital adequacy). Each Lender will notify the
Authorized Representative and the Agent of any event occurring after
the Closing Date which would entitle it to compensation pursuant to
this Section 3.1(a) as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation.
(b) Without limiting the effect of the foregoing provisions of
this Section 3.1, in the event that, by reason of any Regulatory
Change, any Lender either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a
category of deposits or other liabilities of the Lender which includes
deposits by reference to which the interest rate on Eurodollar Rate
Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of any Lender which includes
Eurodollar Rate Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets which it may hold,
27
then, if the Lender so elects by notice to the other Lenders, the
obligation hereunder of such Lender to make, and to convert Base Rate
Loans into, Eurodollar Rate Loans that are the subject of such
restrictions shall be suspended until the date such Regulatory Change
ceases to be in effect and the Borrowers shall, on the last day(s) of
the then current Interest Period(s) for outstanding Eurodollar Rate
Loans convert such Eurodollar Rate Loans into Base Rate Loans;
provided, however, that the suspension of such obligation and the
conversion of any Eurodollar Rate Loans into Base Rate Loans shall
apply only to any Lender who is affected by such restrictions and who
has provided such notice to the other Lenders, and the obligation of
the other Lenders to make, and to convert Base Rate Loans into,
Eurodollar Rate Loans shall not be affected by such restrictions.
(c) Determinations by any Lender for purposes of this Section
3.1 of the effect of any Regulatory Change on its costs of making or
maintaining, or being committed to make Loans, or by Issuing Bank as
issuer of any Letter of Credit of the effect of any Regulatory Change
on its costs in connection with the issuance or maintenance of, or any
other Lender's Participation in, any Letter of Credit issued
hereunder, or on amounts receivable by any Lender in respect of Loans
or Letters of Credit, and of the additional amounts required to
compensate the Lender in respect of any Additional Costs, shall be
conclusive absent manifest error. The Lender requesting such compensa
tion shall furnish to the Authorized Representative and the Agent
within sixty (60) days of the incurrence of any Additional Costs for
which compensation is sought an explanation of the Regulatory Change
and calculations, in reasonable detail, setting forth such Lender's
determination of any such Additional Costs.
III.2 Suspension of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any interest rate
for any Eurodollar Rate Loan for any Interest Period, the Agent determines
(which determination made on a reasonable basis shall be conclusive absent
manifest error) that:
(a) quotations of interest rates for the relevant deposits
referred to in the definition of "Interbank Offered Rate" in Section
1.1 hereof are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest
for such Eurodollar Rate Loan as provided in this Agreement; or
(b) the relevant rates of interest referred to in the definition
of "Interbank Offered Rate" in Section 1.1 hereof upon the basis of
which the Eurodollar Rate for such Interest Period is to be determined
do not adequately reflect the cost to the Lenders of making or
maintaining such Eurodollar Rate Loan for such Interest Period or such
Eurodollar Rate Loan (which determination shall be made on a
reasonable basis by the Agent, and the Person making such
determination shall furnish the Authorized Representative evidence of
the facts leading to such determination);
then the Agent shall give the Authorized Representative prompt notice
thereof, and so long as such condition remains in effect, the Lenders shall
be under no obligation to make Eurodollar Rate Loans that are subject to
such condition, or to convert Loans into Eurodollar Rate Loans, and the
Borrowers shall on the last day(s) of the then current Interest Period(s)
for outstanding Eurodollar Rate Loans, as applicable, convert such
28
Eurodollar Rate Loans into Base Rate Loans. The Agent shall give the
Authorized Representative notice describing in reasonable detail any event
or condition described in this Section 3.2 promptly following the
determination by the Agent that the availability of Eurodollar Rate Loans
is, or is to be, suspended as a result thereof.
III.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender to honor
its obligation to make or maintain Eurodollar Rate Loans hereunder, then
such Lender shall promptly notify the Borrowers thereof (with a copy to the
Agent) and such Lender's obligation to make or continue Eurodollar Rate
Loans, or convert Base Rate Loans into Eurodollar Rate Loans, shall be
suspended until such time as such Lender may again make and maintain
Eurodollar Rate Loans, and such Lender's outstanding Eurodollar Rate Loans
shall be converted into Base Rate Loans in accordance with Section 2.7
hereof.
III.4 Compensation. The Borrowers shall promptly pay to each
Lender, upon the request of such Lender, such amount or amounts as shall be
sufficient (in the reasonable determination of Lender) to compensate it for
any loss, cost or expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a Eurodollar Rate
Loan on a date other than the last day of the Interest Period for such
Eurodollar Rate Loan, including without limitation any conversion
required pursuant to Section 3.3 hereof; or
(b) any failure by the Borrowers to borrow a Eurodollar Rate
Loan on the date for such borrowing specified in the relevant Request
for Advance/Interest Rate Election under Article II hereof;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on
the principal amount so paid, prepaid or converted or not borrowed for the
period from the date of such payment, prepayment or conversion or failure
to borrow or convert to the last day of the then current Interest Period
for such Loan (or, in the case of a failure to borrow or convert, the
Interest Period for such Loan which would have commenced on the date
scheduled for such borrowing or conversion) at the applicable rate of
interest for such Eurodollar Rate Loan provided for herein over (ii) the
Interbank Offered Rate (as reasonably determined by the Agent) for Dollar
deposits of amounts comparable to such principal amount and maturities
comparable to such period. A determination of a Lender as to the amounts
payable pursuant to this Section 3.4 shall be conclusive absent manifest
error. The Lender requesting compensation under this Section 3.4 shall
promptly furnish to the Authorized Representative and the Agent
calculations in reasonable detail setting forth such Lender's determination
of the amount of such compensation.
III.5 Alternate Loan and Lender. In the event any Lender suspends
the making of any Eurodollar Rate Loan pursuant to this Article III (herein
a "Restricted Lender"), the Restricted Lender's Applicable Commitment
Percentage of any Eurodollar Rate Loan shall bear interest at the Base Rate
until the Restricted Lender once again makes available the applicable
Eurodollar Rate Loan. Notwithstanding the provisions of Section 2.2(b)
hereof, interest shall be payable to the Restricted Lender at the time and
29
manner as paid to those Lenders making available Eurodollar Rate Loans.
III.6 Taxes.
(a) All payments by the Borrowers of principal of, and interest
on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future
excise, stamp or other taxes, fees, duties, levies, imposts, charges,
deductions, withholdings or other charges of any nature whatsoever
imposed by any taxing authority, but excluding (i) franchise taxes,
(ii) any taxes (other than withholding taxes) that would not be
imposed but for a connection between a Lender or the Agent and the
jurisdiction imposing such taxes (other than a connection arising
solely by virtue of the activities of such Lender or the Agent
pursuant to or in respect of this Agreement or any other Loan
Document), (iii) any withholding taxes payable with respect to
payments hereunder or under any other Loan Document under laws
(including, without limitation, any statute, treaty, ruling,
determination or regulation) in effect on the Closing Date, (iv) any
taxes imposed on or measured by any Lender's assets, net income,
receipts or branch profits and (v) any taxes arising after the Closing
Date solely as a result of or attributable to Lender changing its
designated lending office after the date such Lender becomes a party
hereto (such non-excluded items being collectively called "Taxes").
In the event that any withholding or deduction from any payment to be
made by the Borrowers hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then the Borrowers
will
(i) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(ii) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such
payment to such authority; and
(iii) pay to the Agent for the account of each Lender
such additional amount or amounts as is necessary to ensure that
the net amount actually received by each Lender will equal the
full amount such Lender would have received had no such
withholding or deduction been required.
(b) Prior to the date that any Lender organized under the laws
of a jurisdiction outside the United States becomes a party hereto,
such Person shall deliver to the Borrowers and the Agent such
certificates, documents or other evidence, as required by the Code or
Treasury Regulations issued pursuant thereto, properly completed,
currently effective and duly executed by such Lender or participant
establishing that such payment is (i) not subject to United States
Federal backup withholding tax and (ii) not subject to United States
Federal withholding tax under the Code because such payment is either
effectively connected with the conduct by such Lender or participant
of a trade or business in the United States or totally exempt from
United States Federal withholding tax by reason of the application of
30
the provisions of a treaty to which the United States is a party or
such Lender is otherwise exempt.
(c) If any Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Agent, for the
account of the respective Lender, the required receipts or other
required documentary evidence, all the Borrowers shall jointly and
severally indemnify the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 3.6, a distribution
hereunder by the Agent or any Lender to or for the account of the
Borrowers shall be deemed a payment on behalf of the Borrowers.
ARTICLE IV
----------
Conditions Precedent
--------------------
IV.1 Conditions of Initial Advance and Issuance of Letters of Credit.
The obligation of the Lenders to make the initial Advance is subject to the
following conditions precedent:
(a) The Agent shall have received on the Closing Date, in form
and substance satisfactory to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement, the
Notes, the Security Agreement and the other Loan Documents,
together with all schedules and exhibits thereto;
(ii) written opinions of special counsel to the Borrowers,
including special counsel in each of South Carolina and
Pennsylvania with respect to Collateral located in such
jurisdictions, dated the Closing Date, addressed to the Agent and
the Lenders in the form of Exhibit G attached hereto or with such
changes to such form as are satisfactory to the Agent;
(iii) resolutions of the boards of directors or other
appropriate governing body (or of the appropriate committee
thereof) of each Borrower certified by its secretary or assistant
secretary as of the Closing Date, appointing the initial
Authorized Representative and approving and adopting the Loan
Documents to be executed by such Person, and authorizing the
execution and delivery thereof;
(iv) specimen signatures of officers of each Borrower
executing the Loan Documents on behalf of each Borrower,
certified by the secretary or assistant secretary of each
Borrower;
(v) the charter documents of each Borrower certified as of
a recent date by the Secretary of State of its state of
incorporation;
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(vi) the bylaws of each Borrower certified as of the Closing
Date as true and correct by its secretary or assistant secretary;
(vii) certificates issued as of a recent date by the
Secretary of State of each of Delaware, Pennsylvania and South
Carolina as to the due existence and good standing of each
Borrower;
(viii) appropriate certificates of qualification to do
business, good standing and, where appropriate, authority to
conduct business under assumed name, issued in respect of each
Borrower as of a recent date by the Secretary of State or
comparable official of each jurisdiction in which the failure to
be qualified to do business or authorized so to conduct business
could have a Material Adverse Effect;
(ix) notice of appointment of the initial Authorized
Representatives;
(x) certificate of an Authorized Representative dated the
Closing Date demonstrating compliance with the financial
covenants contained in Sections 7.1 through 7.5 as of the Closing
Date, substantially in the form of Exhibit H attached hereto;
(xi) evidence of all policies of casualty insurance required
by the Loan Documents together with endorsements naming Agent for
the benefit of the Lenders as an additional insured, mortgagee or
loss payee, as applicable;
(xii) executed Uniform Commercial Code financing
statements in such form and number as requested by the Agent;
(xiii) an initial Request for Advance/Interest Rate
Election;
(xiv) an initial Application for Letters of Credit;
(xv) all fees payable by the Borrowers on the Closing Date
to the Agent, Issuing Bank and the Lenders;
(xvi) UCC search results showing only those liens and
security interests as are acceptable to the Lenders;
(xvii) Intercreditor Agreement between The CIT
Group/Equipment Financing ("CIT") and the Agent;
(xviii) Termination and Release Agreement between CIT and
the Agent regarding existing term loan;
(xix) Termination and Release Agreement between General
Electric Capital Corporation ("GECC") and the Agent regarding
existing revolving credit facility;
32
(xx) Termination and Release Agreement between Meridian Bank
("Meridian") and the Agent regarding existing term loan and
revolving credit facility;
(xxi) UCC-3 Partial Release Statements by CIT;
(xxii) UCC-3 Termination Statements by GECC;
(xxiii) UCC-3 Termination Statements by Meridian;
(xxiv) copy of Tax-Sharing and Indemnity Agreement with
Giant Group, Ltd. certified by the Secretary or an Assistant
Secretary of Giant Holding;
(xxv) such other documents, instruments, certificates
and opinions as the Agent or any Lender may reasonably request on
or prior to the Closing Date in connection with the consummation
of the transactions contemplated hereby.
(b) Each of the following shall have occurred or be true:
(i) there shall not be any action, suit, investigation or
proceeding pending or threatened in any court or before any
arbitrator or governmental authority that purports to affect (A)
any Borrower that could have a Material Adverse Effect, or (B)
any transaction contemplated hereby; and
(ii) no Borrower shall be in default with respect to any
existing financial obligations.
(c) In the good faith judgment of the Agent and the Lenders:
(i) there shall not have occurred any Material Adverse
Effect since December 31, 1995;
(ii) there shall not have occurred any disruption or adverse
change in the financial or capital markets generally which the
Agent, in its sole reasonable discretion, deems material in
connection with the Revolving Credit Facility; and
(iii) the Agent shall have received and reviewed, with
results satisfactory to the Agent and its counsel, all
information it may reasonably request regarding the Borrowers.
IV.2 Conditions of Revolving Loans and Issuance of Letters of Credit.
The obligations of the Lenders to make any Revolving Loans hereunder on or
subsequent to the Closing Date are subject to the satisfaction of the
following conditions:
33
(a) the Agent shall have received a Request for Advance/Interest
Rate Election if required by Article II hereof;
(b) the representations and warranties of the Borrowers set
forth in Article V hereof and in each of the other Loan Documents
shall be true and correct in all material respects on and as of the
date of such Advance, with the same effect as though such represen
tations and warranties had been made on and as of such date, except to
the extent that such representations and warranties expressly relate
to an earlier date and except that the financial statements referred
to in Section 5.6(a) hereof shall be deemed to be those financial
statements most recently delivered to the Agent and the Lenders
pursuant to Section 6.1 hereof;
(c) in the case of the issuance of a Letter of Credit, Borrowers
shall have executed and delivered to Issuing Bank an Application for
Letter of Credit in form and content acceptable to Issuing Bank
together with such other instruments and documents as it shall
reasonably request;
(d) at the time of each Advance, conversion, continuation or
issuance of each Letter of Credit, as the case may be, no Default or
Event of Default specified in Article VIII hereof, shall have occurred
and be continuing;
(e) immediately after issuing any Letter of Credit, the
aggregate Letter of Credit Outstandings shall not exceed the Total
Letter of Credit Commitment;
(f) the Borrowers have maintained, on a consolidated basis, to
the reasonable satisfaction of the Agent and the Lenders a financial
condition in which they, considered as a whole, may repay the
obligations, including each Advance to be made at such time, from
Consolidated EBITDA derived from operations; and
(g) immediately after giving effect to a Revolving Loan, the
aggregate principal balance of all outstanding Revolving Loans for
each Lender and in the aggregate shall not exceed, respectively,
(i) such Lender's Revolving Credit Commitment or (ii) the Total
Revolving Credit Commitment.
ARTICLE V
---------
Representations and Warranties
------------------------------
Each Borrower represents and warrants that:
V.1 Organization and Authority.
(a) Each Borrower is a corporation duly organized and validly
existing under the laws of the jurisdiction of its incorporation;
34
(b) Each Borrower (x) has the requisite power and authority to
own its properties and assets and to carry on its business as now
being conducted and as contemplated in the Loan Documents, and (y) is
qualified to do business in every jurisdiction in which failure so to
qualify would have a Material Adverse Effect;
(c) Each Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party; and
(d) when executed and delivered, each of the Loan Documents to
which each Borrower is a party is the legal, valid and binding
obligation or agreement, as the case may be, of such Borrower, enforce
able against such Borrower in accordance with its terms, subject to
the effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general principles of
equity which may limit the availability of equitable remedies (whether
in a proceeding at law or in equity).
V.2 Loan Documents. The execution, delivery and performance by each
Borrower of each of the Loan Documents to which it is a party:
(a) have been duly authorized by all requisite corporate action
(including any required shareholder approval) of such Borrower
required for the lawful execution, delivery and performance thereof;
(b) do not violate any provisions of (i) applicable law, rule or
regulation, (ii) any order of any court or other agency of government
binding on such Borrower, or its properties, or (iii) the charter
documents or bylaws of such Borrower, except to the extent such
violation would not or would not be reasonably likely to have a
Material Adverse Effect;
(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time, or both, would constitute an event of
default, under any material indenture, agreement or other instrument
to which such Borrower is a party, or by which the properties or
assets of such Borrower are bound;
(d) does not and will not result in the creation or imposition
of any Lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of Borrower except any liens in favor of
the Agent and the Lenders created by the Security Documents.
V.3 Solvency. Each Borrower is Solvent after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents.
V.4 Subsidiaries and Stockholders. None of the Borrowers has any
Subsidiary which is not a Borrower.
35
V.5 Ownership Interests. None of the Borrowers owns any interest in
any Person other than the Persons listed in Schedule 5.5 hereto.
V.6 Financial Condition.
(a) Giant Cement has furnished to the Agent (i) the audited
consolidated balance sheet of the Borrowers as of December 31, 1995
and the notes thereto and the related consolidated statements of
operations, cash flows, and shareholders' equity for the Fiscal Year
then ended as examined and certified by Coopers & Xxxxxxx as the
independent certified public accountants of the Borrowers, (ii) the
unaudited interim consolidated financial statements of Borrowers
consisting of a consolidated balance sheet and related consolidated
statements of operations, cash flows and notes thereto, for and as of
the nine-month period ended September 30, 1996. Except as set forth
therein, such financial statements (including the notes thereto),
present fairly the consolidated financial position of the Borrowers,
as of the end of such Fiscal Year and such nine-month period, all in
conformity with GAAP applied on a Consistent Basis (subject, in the
case of the interim statements, to year-end adjustments and the
absence or reduced scope of footnote disclosures);
(b) since December 31, 1995, there has not occurred any event,
including but not limited to fire, explosion or other accident,
earthquake, flood, drought, storm or other act of God, strike,
lockout, combination of workers or other labor matter, or embargo or
act of a public enemy which has had or could reasonably be expected to
have a Material Adverse Effect;
(c) since December 31, 1995, except as set forth in Schedule
5.6 hereto, no Borrower has incurred any material Consolidated
Indebtedness that remains outstanding or unsatisfied. Schedule 5.6
hereto sets forth all Consolidated Indebtedness of the Borrower and
its Subsidiaries.
V.7 Title to Properties. The Borrowers have good and marketable
title to all their real and personal properties, subject to no transfer
restrictions or Liens of any kind, except for (a) the transfer restrictions
and Liens described in Schedule 5.7 attached hereto and incorporated herein
by reference, and (b) Liens permitted under Section 7.7 hereof. Keystone
has fee simple title to its manufacturing facility located in Bath,
Pennsylvania; Giant Cement has fee simple title to its manufacturing
facility located in Harleyville, South Carolina; and no Borrower leases any
facility except as so indicated on Schedule 2 to the Security Agreement.
V.8 Taxes. The Borrowers have filed or caused to be filed or
obtained extensions of the time to file all federal, state and local tax
returns which are required to be filed by it and, except for taxes and
assessments being contested in good faith and against which reserves have
been established which are satisfactory to the Borrowers' independent
certified public accountants as determined in the normal course of their
annual audit of the Borrowers and evidenced by their most recent opinion
delivered pursuant to and satisfying the standards in Section 6.1(a)
hereof, have paid or caused to be paid all taxes as shown on said returns
or on any assessment received by it, to the extent that such taxes have
become due.
36
V.9 Other Agreements. None of the Borrowers is
(a) a party to any judgment, order, decree or any agreement or
instrument or subject to restrictions which could reasonably be likely
to have a Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any
agreement or instrument to which any Borrower is a party, which
default has, or if not remedied within any applicable grace period
could reasonably be likely to have, a Material Adverse Effect.
V.10 Litigation. There is no action, suit or proceeding at law or in
equity or by or before any governmental instrumentality or agency or
arbitral body pending, or, to the knowledge of the Borrowers, threatened by
or against any Borrower or affecting any Borrower or any properties or
rights of any Borrower, which could reasonably be likely to have a Material
Adverse Effect.
V.11 Margin Stock. None of the Borrowers owns any "margin stock" as
such term is defined in Regulation U, as amended (12 C.F.R. Part 221), of
the Board. The proceeds of the borrowings made pursuant to Article II
hereof will be used by the Borrowers only for the purposes set forth in
Section 2.10 hereof. None of such proceeds will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin stock or
for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry margin stock or for any other
purpose which might constitute any of the Loans under this Agreement a
"purpose credit" within the meaning of said Regulation U or Regulation X
(12 C.F.R. Part 224) of the Board. Neither the Borrowers nor any agent
acting in their behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant
hereto to violate any regulation of the Board or to violate the Securities
Exchange Act of 1934, as amended, or the Securities Act of 1933, as
amended, or any state securities laws, in each case as in effect on the
date hereof.
V.12 Investment Company. None of the Borrowers is an "investment
company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (15 U.S.C. 80a-1, et seq.).
The application of the proceeds of the Loans and repayment thereof by the
Borrowers and the performance by the Borrowers of the transactions
contemplated by this Agreement will not violate any provision of said Act,
or any rule, regulation or order issued by the Securities and Exchange
Commission thereunder, in each case as in effect on the date hereof.
V.13 Patents, Etc. Each of the Borrowers owns or has the right to
use, under valid license agreements or otherwise, all material patents,
licenses, franchises, trademarks, trademark rights, trade names, trade name
rights, trade secrets and copyrights necessary to the conduct of its
businesses as now conducted, without known conflict with any patent,
license, franchise, trademark, trade secrets and confidential commercial or
proprietary information, trade name, copyright, rights to trade secrets or
other proprietary rights of any other Person.
37
V.14 No Untrue Statement. Neither this Agreement nor any other Loan
Document or certificate or document executed and delivered by or on behalf
of the Borrowers in accordance with or pursuant to any Loan Document
contains any misrepresentation or untrue statement of material fact or
omits to state a material fact necessary, in light of the circumstance
under which it was made, in order to make any such representation or
statement contained therein not misleading.
V.15 No Consents, Etc. Neither the respective businesses or
properties of any Borrower, nor any relationship between any Borrower and
any other Person, nor any circumstance in connection with the execution,
delivery and performance of the Loan Documents and the transactions
contemplated hereby, is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
governmental or other authority or any other Person on the part of any
Borrower as a condition to the execution, delivery and performance of, or
consummation of the transactions contemplated by, this Agreement or the
other Loan Documents which, if not obtained or effected, could reasonably
be likely to have a Material Adverse Effect or if so, such consent,
approval, authorization, filing, registration or qualification has been
obtained or effected, as the case may be.
V.16 Employee Benefit Plans.
(a) Neither any Borrower nor any ERISA Affiliate maintains or
contributes to, or has any obligation under, any Employee Benefit
Plans other than those identified on Schedule 5.16 attached hereto;
(b) Each Borrower and each ERISA Affiliate is in compliance with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder and in compliance with all Foreign Benefit
Laws with respect to all Employee Benefit Plans except where failure
to comply would not result in a Material Adverse Effect and except for
any required amendments for which the remedial amendment period as
defined in Section 401(b) of the Code has not yet expired. Each
Employee Benefit Plan that is intended to be qualified under Section
401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified, and each trust related to such plan has been
determined to be exempt under Section 501(a) of the Code. No material
liability has been incurred by the Borrowers or any ERISA Affiliate
which remains unsatisfied for any taxes or penalties with respect to
any Employee Benefit Plan or any Multiemployer Plan;
(c) No Pension Plan has been terminated within the six year
period prior to the execution of this Agreement, nor has any
accumulated funding deficiency (as defined in Section 412 of the Code)
been incurred (without regard to any waiver granted under Section 412
of the Code), nor has any funding waiver from the IRS been received or
requested with respect to any Pension Plan, nor have the Borrowers or
any ERISA Affiliate failed to make any contributions or to pay any
amounts due and owing as required by Section 412 of the Code, Section
302 of ERISA or the terms of any Pension Plan prior to the due dates
of such contributions under Section 412 of the Code or Section 302 of
ERISA, nor has there been any event requiring any disclosure under
Section 4041(c)(3)(C), 4063(a) or 4068(f) of ERISA with respect to any
Pension Plan;
38
(d) Neither any Borrower nor any ERISA Affiliate has: (i)
engaged in a nonexempt prohibited transaction described in Section 406
of ERISA or Section 4975 of the Code, (ii) incurred any liability to
the PBGC which remains outstanding other than the payment of premiums
and there are no premium payments which are due and unpaid,
(iii) failed to make a required contribution or payment to a
Multiemployer Plan or (iv) failed to make a required installment or
other required payment under Section 412 of the Code;
(e) No Termination Event has occurred or is reasonably expected
to occur with respect to any Pension Plan or Multiemployer Plan;
(f) No material proceeding, claim, lawsuit and/or investigation
exists or, to the best knowledge of each Borrower after due inquiry,
is threatened concerning or involving any Employee Benefit Plan.
V.17 No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder.
V.18 Hazardous Materials. Each Borrower is in compliance with all
applicable Environmental Laws in all material respects, including without
limitation its operations and properties in South Carolina and
Pennsylvania. No Borrower has been notified of any action, suit,
proceeding or investigation which calls into question compliance by such
Borrower with any Environmental Laws that could reasonably be expected to
have a Material Adverse Effect, or which seeks to suspend, revoke or
terminate any license, permit or approval necessary for the generation,
handling, storage, treatment or disposal of any Hazardous Material that
could reasonably be expected to have a Material Adverse Effect. Except as
disclosed in the permits set forth on Schedule 5.18, each real property
occupied, leased or operated by any Borrower is free from all Hazardous
Material that could reasonably be expected to have a Material Adverse
Effect.
V.19 RICO. None of the Borrowers is engaged in or have not engaged in
any course of conduct that could subject any of their respective properties
to any Lien, seizure or other forfeiture under any criminal law, racketeer
influenced and corrupt organizations law, civil or criminal, or other
similar laws.
V.20 Employment Matters. (a) None of any employees of any Borrower
is subject to any collective bargaining agreement and, except as disclosed
on Schedule 5.20, there are no strikes, work stoppages, election or
decertification petitions or proceedings, unfair labor charges, equal
opportunity proceedings, or other material labor/employee related
controversies or proceedings pending or, to the best knowledge of each
Borrower, threatened against any Borrower or between any Borrower and any
of its employees, other than employee grievances arising in the ordinary
course of business which would not in the aggregate have a Material Adverse
Effect.
(b) Each Borrower is in compliance in all material respects with
all applicable laws, rules and regulations pertaining to labor or
employment matters, including without limitation those pertaining to wages,
hours, occupational safety and taxation and there is neither pending or
39
threatened any material litigation, administrative proceeding nor, to the
knowledge of each Borrower, any investigation, in respect of such matters
which, if decided adversely, could reasonably be likely to have a Material
Adverse Effect.
ARTICLE VI
----------
Affirmative Covenants
---------------------
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless
the Required Lenders shall otherwise consent in writing, each of the
Borrowers will:
VI.1 Financial Reports, Etc.
(a) As soon as practical and in any event within 90 days after
the end of each Fiscal Year, deliver or cause to be delivered to the
Agent and each Lender (i) consolidated and consolidating balance
sheets of the Borrowers, and the notes thereto, the related statements
of operations, stockholders' equity and cash flows, and the respective
notes thereto, for such Fiscal Year, setting forth in the case of the
statements comparative financial statements for the preceding Fiscal
Year, all prepared in accordance with GAAP applied on a Consistent
Basis and containing, with respect to the consolidated financial
reports, opinions of Coopers & Xxxxxxx, or other such independent
certified public accountants selected by Giant Holding and approved by
the Agent, which are unqualified as to the scope of the audit
performed and as to the "going concern" status of the Borrowers and
are without exception not acceptable to the Required Lenders, and (ii)
a certificate of an Authorized Representative demonstrating compliance
with Sections 7.1, 7.2, 7.3, 7.4 and 7.5 hereof, which certificate
shall be in the form attached hereto as Exhibit H hereof;
(b) as soon as practical and in any event within 45 days after
the end of each quarterly period (except the last reporting period of
the Fiscal Year), deliver to the Agent and each Lender (i)
consolidated balance sheets of the Borrowers as of the end of such
reporting period, the related statements of operations, stockholders'
equity and cash flows for such reporting period and for the period
from the beginning of the Fiscal Year through the end of such
reporting period, accompanied by a certificate of an Authorized
Representative to the effect that such financial statements present
fairly the financial position of the Borrowers as of the end of such
reporting period and the results of their operations and the changes
in their financial position for such reporting period, in conformity
with the standards set forth in Section 5.6(a)(ii) hereof with respect
to interim financials, and (ii) a certificate of an Authorized
Representative containing computations for such quarter comparable to
that required pursuant to Section 6.1(a)(ii) hereof;
(c) together with each delivery of the financial statements
required by Section 6.1(a)(i) hereof, deliver to the Agent and each
Lender a letter from the Borrowers' accountants specified or otherwise
determined as set forth in Section 6.1(a)(i) hereof stating that in
40
performing the audit necessary to render an opinion on the financial
statements delivered under Section 6.1(a)(i) hereof, they obtained no
knowledge of any Default or Event of Default by the Borrowers in the
fulfillment of the terms and provisions of this Agreement insofar as
they relate to financial matters (which at the date of such statement
remains uncured); and if the accountants have obtained knowledge of
such Default or Event of Default, a statement specifying the nature
and period of existence thereof;
(d) promptly upon their becoming available to the Borrowers, the
Borrowers shall deliver to the Agent and each Lender a copy of (i) all
regular or special reports or effective registration statements which
any of the Borrowers shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange,
including without limitation each Annual Report on Form 10-K, each
Quarterly Report on Form 10-Q and each Current Report on Form 8-K,
(ii) any proxy statement distributed by any of the Borrowers to their
shareholders, bondholders or the financial community in general, and
(iii) any management letter or other report submitted to the Board of
Directors of Giant Holding by independent accountants in connection
with any annual, interim or special audit of the Borrowers;
(e) promptly, from time to time, deliver or cause to be
delivered to the Agent and each Lender such other information
regarding Borrowers' operations, business affairs and financial
condition as the Agent or such Lender may reasonably request. The
Agent and the Lenders are hereby authorized to deliver a copy of any
such financial information delivered hereunder to the Lenders (or any
affiliate of any Lender) or to the Agent, to any regulatory authority
having jurisdiction over any of the Lenders pursuant to any written
request therefor, or to any other Person who shall acquire or consider
the assignment of or Participation in any Loan or Letter of Credit
permitted by this Agreement.
VI.2 Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition, ordinary wear and tear
excepted, and make all needed repairs, replacements and renewals as are
reasonably necessary to conduct its business in accordance with customary
business practices.
VI.3 Existence, Qualification, Etc. Do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and
all material rights and franchises, trade names, trademarks and permits and
maintain its license or qualification to do business as a foreign
corporation and good standing in each jurisdiction in which its ownership
or lease of property or the nature of its business makes such license or
qualification necessary except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect.
VI.4 Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent
and any other obligation which, if unpaid, would become a Lien against any
of its properties except liabilities being contested in good faith by
appropriate proceedings diligently conducted and against which adequate
reserves have been established which are satisfactory to the independent
public accountants of the Borrowers as determined in the normal course of
their annual audit of the Borrowers and evidenced by their most recent
41
opinion delivered pursuant to and satisfying the standards in Section
6.1(a) hereof.
VI.5 Insurance. Keep all of its insurable properties adequately
insured at all times and maintain general public liability insurance at all
times with responsible insurance carriers against loss or damage by fire
and other hazards as are customarily insured against by similar businesses
owning such properties similarly situated. Maintain insurance under all
applicable workers' compensation laws. Each of the casualty policies
insuring Collateral shall provide that the insurer shall give the Agent not
less than thirty (30) days' prior written notice before any such policy
shall be terminated, lapse or be altered in any manner and shall name the
Agent as an additional insured or secured party, as applicable.
VI.6 True Books. Maintain proper books of record and account in which
full, true and correct entries will be made of all of its dealings and
transactions as may be required by GAAP, and set up on its books such
reserves as may be required by GAAP with respect to doubtful accounts and
all taxes, assessments, charges, levies and claims and with respect to its
business in general, and include such reserves in all material respects in
interim as well as year-end financial statements.
VI.7 Pay Indebtedness to Lenders and Perform Other Covenants. (a)
Make full and timely payment of the principal of and interest on the Notes
and all other Obligations whether now existing or hereafter arising; and
(b) duly comply with and perform all the terms and covenants contained in
all Loan Documents.
VI.8 Payment of Other Indebtedness. Pay when due (or within
applicable grace periods) all Indebtedness due third Persons, except when
the amount thereof is being contested in good faith by appropriate
proceedings diligently conducted and with reserves in form and amount
reasonably acceptable to the Agent therefor being set aside on the books of
the Borrowers.
VI.9 Right of Inspection. Permit any representative designated by any
Lender or the Agent to visit and inspect any of the properties, corporate
books and financial reports of the Borrowers and to discuss its affairs,
finances and accounts with its principal officers and independent certified
public accountants, all at reasonable times, at reasonable intervals and
with reasonable prior notice.
VI.10 Observe all Laws. Conform to and duly observe in all
material respects all laws, rules and regulations and all other valid
requirements of any regulatory authority with respect to the conduct of its
business.
VI.11 Officer's Knowledge of Default. Upon any senior officer of
any Borrower obtaining knowledge of any Default or Event of Default
hereunder or under any other obligation of the Borrowers to any Lender,
cause such officer or an Authorized Representative promptly to notify the
Agent of the nature thereof, the period of existence thereof, and what
action the Borrowers propose to take with respect thereto.
VI.12 Suits or Other Proceedings. Upon any senior officer of any
Borrower obtaining knowledge of any litigation or other proceedings being
instituted against any of the Borrowers, or any attachment, levy, execution
42
or other process being instituted against any assets of any of the
Borrowers, making a claim or claims in an aggregate amount greater than, or
reasonably expected to be greater than, $1,000,000 not reasonably expected
to be covered by insurance, promptly deliver to the Agent written notice
thereof stating the nature and status of such litigation, dispute,
proceeding, levy, execution or other process.
VI.13 Environmental Compliance. If any of the Borrowers shall
receive notice from any Governmental Authority that any of the Borrowers
have violated any applicable Environmental Laws which could reasonably be
likely to have a Material Adverse Effect, promptly deliver a copy of such
notice to the Agent and use its best efforts to remove or remedy such
violation within the time period prescribed in such notice or, if none,
within a reasonable time.
VI.14 Indemnification. Each of the Borrowers hereby jointly and
severally agrees to defend, indemnify and hold the Agent and the Lenders
harmless from and against any and all claims, losses, liabilities, damages
and expenses (including, without limitation, cleanup costs and reasonable
attorneys' fees) arising directly or indirectly from, out of or by reason
of the handling, storage, treatment, emission or disposal of any Hazardous
Material by any of the Borrowers or property owned or leased or operated by
any of the Borrowers. The provisions of this Section 6.14 shall survive
repayment of the Obligations, occurrence of the Revolving Credit
Termination Date and expiration or termination of this Agreement for so
long as any applicable statute of limitations period.
VI.15 Further Assurances. At the Borrowers' cost and expense,
upon request of the Agent or any Lender, duly execute and deliver or cause
to be duly executed and delivered, to the Agent for the benefit of the
Lenders such further instruments, documents, certificates, financing and
continuation statements, and do and cause to be done such further acts that
may be reasonably necessary or advisable in the reasonable opinion of the
Agent to carry out more effectively the provisions and purposes of this
Agreement and the other Loan Documents.
VI.16 Employee Benefit Plans. With reasonable promptness, and in
any event within thirty (30) days thereof, give notice of and/or deliver to
Agent copies of (a) the establishment of any new Employee Benefit Plan, (b)
the commencement of contributions to any plan to which any of the Borrowers
or any of their ERISA Affiliates were not previously contributing, (c) any
material increase in the benefits of any existing Employee Benefit Plan,
(d) each funding waiver request filed with respect to any Employee Benefit
Plan and all communications received or sent by any of the Borrowers or
any ERISA Affiliate with respect to such request and (e) the failure of any
of the Borrowers or any ERISA Affiliate to make a required installment or
payment under Section 302 of ERISA or Section 412 of the Code by the due
date.
VI.17 Termination Events. Promptly and in any event within
fifteen (15) days of becoming aware of the occurrence of or forthcoming
occurrence of any (a) Termination Event or (b) "prohibited transaction," as
such term is defined in Section 406 of ERISA or Section 4975 of the Code,
in connection with any Pension Plan or any trust created thereunder,
deliver to the Agent a notice specifying the nature thereof, what action
the Borrowers have taken, are taking or propose to take with respect
43
thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto.
VI.18 ERISA Notices. With reasonable promptness but in any event
within fifteen (15) days for purposes of clauses (a), (b) and (c), deliver
to the Agent copies of (a) any unfavorable determination letter from the
Internal Revenue Service regarding the qualification of an Employee Benefit
Plan under Section 401(a) of the Code, (b) all notices received by the
Borrowers or any ERISA Affiliate of the PBGC's intent to terminate any
Pension Plan or to have a trustee appointed to administer any Pension Plan,
(c) each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by the Borrowers or any ERISA Affiliate with the Internal
Revenue Service with respect to each Pension Plan and (d) all notices
received by any of the Borrowers or any ERISA Affiliate from a
Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA. The Borrowers will
notify the Agent in writing within five (5) Business Days of any Borrower
obtaining knowledge or reason to know that any Borrower or any ERISA
Affiliate has filed or intends to file a notice of intent to terminate any
Pension Plan under a distress termination within the meaning of Section
4041(c) of ERISA.
VI.19 Continued Operations. Continue at all times to conduct its
business and engage principally in the same line or lines of business
substantially as heretofore conducted and to preserve, protect and maintain
free from Liens, other than Liens permitted under Section 7.6 hereof, its
material patents, copyrights, licenses, trademarks, trademark rights, trade
names, trade name rights, trade secrets and know-how necessary or useful in
the conduct of its operations.
VI.20 Use of Proceeds. Use the proceeds of the Loans solely for
the purposes specified in Section 2.10 hereof.
VI.21 New Subsidiaries. Simultaneously with the acquisition or
creation of any Subsidiary, or upon any previously existing Persons
becoming a Subsidiary, cause to be delivered to the Agent for the benefit
of the Lenders each of the following:
(i) an amendment to this Agreement executed by such
Subsidiary whereby such Subsidiary becomes a Borrower in form and
substance acceptable to the Agent;
(ii) an amendment to the Security Instruments executed by
such Subsidiary whereby such Subsidiary grants to the Agent for
the benefit of the Lenders a Lien on all its Collateral and such
related Uniform Commercial Code financing statements and other
instruments as required by the Agent;
(iii) an amendment to the Subordination Agreement
executed by such Subsidiary whereby such Subsidiary becomes a
party thereto and agrees to subordinate its debt or obligations
to any Borrower to the Obligations contemplated under any of the
Loan Documents;
(iv) an opinion of counsel to such Subsidiary dated as of
the date of delivery of the amendments provided in the foregoing
clauses (i) and (ii) and addressed to the Agent and the Lenders,
44
in form and substance reasonably acceptable to the Agent and
substantially similar to the opinions of counsel to the Borrowers
delivered on the Closing Date to the Lenders pursuant to Section
4.1 hereof; and
(v) current copies of the charter or other organizational
documents and bylaws of such Subsidiary, minutes of duly called
and conducted meetings (or duly effected consent actions) of the
Board of Directors, or appropriate committees thereof (and, if
required by such charter or other organizational documents,
bylaws or by applicable laws, of the shareholders) of such
Subsidiary authorizing the actions and the execution and delivery
of documents described in clauses (i) and (ii) of this Section
6.21 and evidence satisfactory to the Agent (confirmation of the
receipt of which will be provided by the Agent to the Lenders)
that such Subsidiary is Solvent as of such date and after giving
effect to the amendments to this Agreement and the Security
Agreement.
VI.22 Substitution Letters of Credit. On or before September 15,
1997 cause all letters of credit outstanding on the date hereof and issued
by ABN AMRO Bank N.V., New York Branch, under the existing credit facility
made available to certain of the Borrowers by General Electric Capital
Corporation for the benefit of the Bureau of Solid & Hazardous Waste
Management, South Carolina Department of Health & Environmental Control;
the Pennsylvania Department of Environmental Resources, Bureau of Waste
Management; the Commonwealth of Pennsylvania, Bureau of Solid Waste
Management; and the Pennsylvania Department of Environmental Resources,
Bureau of Solid Waste Management, respectively to be returned for
cancellation and cause to be issued in lieu thereof Letters of Credit
hereunder.
ARTICLE VII
-----------
Negative Covenants
------------------
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless
the Required Lenders shall otherwise consent in writing, none of the
Borrowers will:
VII.1 Consolidated Indebtedness for Money Borrowed to Consolidated
Tangible Net Worth Ratio. Permit the ratio of Consolidated Indebtedness
for Money Borrowed to Consolidated Tangible Net Worth to be greater than
1.50 to 1.00 at any time.
VII.2 Consolidated Fixed Charge Ratio. Permit as of the last day
of any calendar quarter the Consolidated Fixed Charge Ratio to be less than
1.50 to 1.00.
VII.3 Current Ratio. Permit as of the last day of any calendar
quarter the ratio of Consolidated Current Assets to Consolidated Current
Liabilities to be less than 1.25 to 1.00.
45
VII.4 Capital Expenditures. Permit the aggregate amount of all
Capital Expenditures of the Borrowers during any Fiscal Year commencing in
the Fiscal Year ending December 31, 1997 to exceed twice the amount of all
Depreciation for such Fiscal Year; provided that to the extent not expended
in any Fiscal Year ("Excess Capital Expenditures"), such Excess Capital
Expenditures may not be carried over and expended in any following Fiscal
Year.
VII.5 Consolidated Tangible Net Worth. Permit Consolidated
Tangible Net Worth to be less than (i) $60,000,000 at and from the Closing
Date to but not including the last day of the Fiscal Year of the Borrowers
in which the Closing Date occurs, and (ii) at all times thereafter,
adjusted as of the last day of each Fiscal Year (the "Adjustment Date"),
the sum of (A) the amount of Consolidated Tangible Net Worth required to be
maintained pursuant to this Section 7.5 during the Fiscal Year of the
Borrowers ending on such Adjustment Date, plus (B) 50% of Consolidated Net
Income for the Fiscal Year ending on such Adjustment Date (including within
"Consolidated Net Income" all items otherwise excluded, as provided for in
the definition of "Consolidated Net Income"), plus (C) 100% of the
aggregate Net Proceeds of all equity issuances consummated during the
Fiscal Year ending on such Adjustment Date.
VII.6 Liens. Incur, create or permit to exist any pledge, Lien,
charge or other encumbrance of any nature whatsoever with respect to any
real or personal property now owned or hereafter acquired by any Borrower,
other than
(a) Liens existing as of the date hereof and as set forth in
Schedule 5.7 attached hereto;
(b) any Lien created under the Loan Documents;
(c) Liens imposed by law for taxes, assessments or charges of
any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP;
(d) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, repairmen and other Liens
imposed by law or created in the ordinary course of business and in
existence less than 90 days from the date of creation thereof for
amounts not yet due or which are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which
adequate reserves or other appropriate provisions are being maintained
in accordance with GAAP;
(e) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal
bonds) in connection with workers' compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under
government contracts;
46
(f) purchase money Liens to secure Indebtedness incurred to
purchase fixed assets or Equipment, provided the Indebtedness
represents not less than 75% nor more than 100% of the purchase price
of such assets as of the date of purchase thereof and no property
other than the assets so purchased secures such Indebtedness;
(g) Liens to secure Indebtedness permitted under Section 7.7(d)
hereof, provided such Liens attach only to assets of such newly
acquired Borrower and do not attach to the assets of any other
Borrower;
(h) any Lien existing on any property or asset prior to the
acquisition thereof by any Borrower;
(i) zoning restrictions, easements, rights-of-way, restrictions
on use of real property and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not
substantial in amount and do not materially detract from the value of
the property subject thereto or interfere with the ordinary conduct of
the business of any Borrower; and
(j) any Lien represented by the interest of a lessor in property
the subject of a capital lease permitted by this Agreement.
VII.7 Consolidated Indebtedness. Incur, create, assume or permit
to exist any Consolidated Indebtedness, howsoever evidenced, except:
(a) Consolidated Indebtedness existing as of the date hereof and
as set forth in Schedule 5.6 attached hereto and incorporated herein
by reference and any extension, renewal or refinancing thereof that
does not increase the principal amount thereof or interest rate
payable thereon from that existing immediately prior to such
extension, renewal or refinancing; provided, none of the instruments
and agreements evidencing or governing such Indebtedness shall be
amended, modified or supplemented after the Closing Date to change any
terms of subordination, repayment or rights of conversion, put,
exchange or other rights from such terms and rights as in effect on
the Closing Date;
(b) Consolidated Indebtedness owing to the Agent or any Lender
in connection with this Agreement, any Note or other Loan Document;
(c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(d) Consolidated Indebtedness of Borrowers acquired after the
Closing Date, provided that (i) such Consolidated Indebtedness (A) is
recorded in the financial books and records of such Borrower prior to
such acquisition, (B) was not incurred by such Borrower in
anticipation of such acquisition, and (C) is incurred upon terms
determined by Giant Holding in its good faith business judgment to be
more economically advantageous to the Borrowers than the terms of an
Advance hereunder, (ii) immediately after such acquisition and the
47
incurrence of such Consolidated Indebtedness, no Default or Event of
Default has occurred or is continuing and (iii) the aggregate
principal amount of such Consolidated Indebtedness does not exceed
$7,500,000;
(e) (i) purchase money Consolidated Indebtedness and (ii)
Consolidated Indebtedness incurred with respect to financing of
Capital Expenditures, collectively under both clause (i) and (ii) not
to exceed an aggregate outstanding amount at any time of $10,000,000;
(f) other Consolidated Indebtedness not otherwise covered by
clauses (a) through (e) above, provided that the aggregate outstanding
principal amount of all such other Consolidated Indebtedness permitted
under this clause (f) shall in no event exceed $3,000,000 at any time.
VII.8 Transfer of Assets. Sell, lease, transfer or otherwise
dispose of any assets of any of the Borrowers other than (a) dispositions
of Inventory in the ordinary course of business; (b) dispositions of
equipment that is substantially worn, damaged, obsolete or, in the judgment
of the Borrowers, no longer best used or useful in its business which, in
the aggregate during any fiscal year, has a fair market value or book
value, whichever is less, of $500,000 or less and is not replaced by
equipment having at least equivalent value; (c) dispositions of equipment
provided that (i) such Equipment is replaced by Equipment of like kind or
function and equal or greater value, (ii) the replacement Equipment shall
be acquired prior to or substantially contemporaneously with any
disposition of the Equipment that is to be replaced, and (iii) the
replacement Equipment shall be free and clear of Liens other than the Liens
permitted by Section 7.6(e) hereof; and (d) other dispositions of assets
not exceeding $250,000 in aggregate sales price in any Fiscal Year.
VII.9 Investments; Acquisitions. Make any acquisition or
otherwise purchase, own, invest in or otherwise acquire, directly or
indirectly, any stock or other securities, or make or permit to exist any
interest whatsoever in any other Person or permit to exist any loans or
advances to any Person, except that Borrowers may maintain investments or
invest in:
(a) Eligible Securities;
(b) investments existing as of the date hereof and as set forth
in Schedule 7.9 attached hereto;
(c) accounts receivable arising and trade credit granted in the
ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(d) investments in, and loans and other extensions of credit to,
another Borrower provided, however, each loan or extension of credit
is subordinated to the Obligations on terms satisfactory to the
Lenders;
48
(e) loans to employees in the ordinary course of business in an
aggregate principal amount outstanding at any time of $500,000; and
(f) other loans, advances and investments in an aggregate
principal amount at any time outstanding not to exceed $500,000.
Notwithstanding the foregoing, the Borrowers may make Acquisitions so long
as: (i) immediately prior to and immediately after the consummation of
such Acquisition, no Default or Event of Default has occurred and is
continuing, (ii) substantially all of the sales and operating profits
generated by such Person (or assets) so acquired or invested are derived
from the same line or lines of business as then conducted by the Borrowers,
(iii) pro forma historical financial statements as of the end of the most
recently completed Fiscal Year giving effect to such Acquisition are
delivered to the Agent not less than five (5) Business Days prior to the
consummation of such Acquisition, together with a certificate of an
Authorized Representative demonstrating compliance with Sections 7.1, 7.2,
7.3, 7.4 and 7.5 hereof on a pro forma basis after giving effect to such
Acquisition, (iv) the aggregate amount of all Costs of Acquisition shall
not exceed $10,000,000 during any Fiscal Year, and (v) in the event the
Person so acquired is not a Subsidiary, the Borrowers' strategic plan
includes additional investment in such Person sufficient for it to become a
Subsidiary. All expenditures for or acquisitions of fixed or capital
assets not constituting an Acquisition within the meaning of this Agreement
shall be deemed to be Capital Expenditures and therefore subject to the
provisions of Section 7.7 hereof.
VII.10 Merger or Consolidation. (a) Consolidate with or merge into
any other Person, or (b) liquidate, wind-up or dissolve; provided that any
Borrower may merge into another Borrower and any Borrower may effect by
merger any acquisition complying with Section 7.9 hereof.
VII.11 Change in Control.
(a) Cause, suffer or permit (i) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended), to own or control, directly or indirectly,
more than 40% of the outstanding securities of Giant Holding having
voting rights in the election of directors, in each case to be
determined on a fully diluted basis and taking into account any
outstanding securities or contract rights exercisable, exchangeable or
convertible into equity interests or (ii) individuals who at the
Closing Date constituted the Board of Directors of Giant Holding
(together with any new directors whose election by the Board of
Directors or whose nomination for election by the stockholders of
Giant Holding was approved by a vote of a majority of the directors of
Giant Holding then still in office who were either directors of Giant
Holding at the Closing Date or whose election or nomination for
election was previously so approved) to cease for any reason to
constitute at least two-thirds (2/3) of the Board of Directors of
Giant Holding then in office.
(b) Cause, suffer or permit any Person or group of Persons other
than any Borrower as of the Closing Date to own or control, directly
or indirectly, any capital stock of any Borrower other than Giant
Holding having voting rights in the election of directors, or any
other equity security or a security convertible into or exchangeable
or redeemable for any equity security, other than the ownership or
49
control of all the issued and outstanding capital stock of any
Borrower in the event the provisions of Section 7.8 hereof would not
be violated if all assets of such Borrower were sold, leased,
transferred or otherwise disposed.
VII.12 Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale, leasing or exchange of
property, real or personal, or the rendering of any service, with any
Affiliate (other than another Borrower) of any Borrower, except (a) that an
Affiliate may render services to such Borrower for compensation at the same
rates generally paid by Persons engaged in the same or similar businesses
for the same or similar services and (b) in the ordinary course of and
pursuant to the reasonable requirements of such Borrower's business
consistent with past practice of such Borrower, other than any transactions
with Affiliates of any Borrower which in the aggregate do not exceed
$500,000.
VII.13 Compliance with ERISA. With respect to any Pension Plan,
Employee Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which would
result in a liability to the Borrowers or any ERISA Affiliate in
excess of $1,000,000;
(b) permit the present value of all benefit liabilities under
all Pension Plans to exceed the current value of the assets of such
Pension Plans allocable to such benefit liabilities by more than
$15,000,000 and in any Fiscal Year make contributions in an amount
less than is required by actuarial calculations;
(c) permit any accumulated funding deficiency in excess of
$250,000 (as defined in Section 302 of ERISA and Section 412 of the
Code) with respect to any Pension Plan, whether or not waived;
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrowers or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto which results in or is likely to
result in a liability in excess of $250,000; or
(e) engage, or permit any Borrower or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to
Section 502(i) of ERISA or a tax pursuant to Section 4975 of the Code
in excess of $250,000 may be imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrowers or any ERISA Affiliate or increase the
obligation of the Borrowers or any ERISA Affiliate to a Multiemployer
Plan which liability or increase, individually or together with all
similar liabilities and increases, is in excess of $1,000,000; or
50
(g) fail, or permit the Borrowers or any ERISA Affiliate to
fail, to establish, maintain and operate each Employee Benefit Plan in
compliance with the provisions of ERISA, the Code, all applicable
Foreign Benefit Laws and all other applicable laws and the regulations
and official published interpretations thereof in the event such
noncompliance could reasonably be expected to result in a Material
Adverse Effect.
VII.14 Fiscal Year. Change its Fiscal Year.
VII.15 Limitations on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by any Borrower of
real or personal property which has been or is to be sold or transferred by
any Borrower to such Person or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such property or
rental obligations of the Borrowers.
VII.16 Negative Pledge Clauses. Enter into any agreement with any
Person other than the Agent and the Lenders pursuant to this Agreement and
the other Loan Documents which prohibits or limits the ability of any of
the Borrowers to create, incur, assume or suffer to exist any Lien, upon
any of its property, assets or revenues, whether now owned or hereafter
acquired.
ARTICLE VIII
------------
Events of Default and Acceleration
----------------------------------
VIII.1 Events of Default. If any one or more of the following
events (herein called "Events of Default") shall occur for any reason
whatsoever (and whether such occurrence shall be voluntary or involuntary
or come about or be effected by operation of law or pursuant to or in
compliance with any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body), that is to
say:
(a) if default shall be made in the due and punctual payment of
the principal of any Loan, Reimbursement Obligation or Obligation,
when and as the same shall be due and payable whether pursuant to any
provision of Article II or Article III hereof, at maturity, by
acceleration or otherwise; or
(b) if default shall be made in the due and punctual payment of
any amount of interest on any Loan or of any fees or other amounts
payable to any of the Lenders or the Agent under the Loan Documents on
the date on which the same shall be due and payable and such default
shall continue unremedied for more than two (2) Business Days; or
(c) if default shall be made in the performance or observance of
any covenant set forth in Sections 6.7(a), 6.9, 6.11, 6.12, 6.19, 6.20
or Article VII hereof;
(d) if a default shall be made in the performance or observance
of, or shall occur under, any covenant, agreement or provision
contained in this Agreement or the Notes (other than as described in
51
clauses (a), (b) or (c) above) or any other agreement between any of
the Borrowers and any Lender creating or relating to any Consolidated
Indebtedness owing by any of the Borrowers to any Lender and such
default shall continue for 30 or more days after the earlier of
receipt of notice of such default by the Authorized Representative
from the Agent or a senior officer of any of the Borrowers becomes
aware of such default, or if a default shall be made in the
performance or observance of, or shall occur under, any covenant,
agreement or provision contained in any of the other Loan Documents
(beyond any applicable grace period, if any, contained therein) or in
any instrument or document evidencing or creating any obligation,
guaranty, or Lien in favor of the Agent or any of the Lenders or
delivered to the Agent or any of the Lenders in connection with or
pursuant to this Agreement or any of the Obligations, or if any Loan
Document ceases to be in full force and effect (other than by reason
of any action by the Agent), or if without the written consent of the
Agent and the Lenders, this Agreement or any other Loan Document
shall be disaffirmed or shall terminate, be terminable or be
terminated or become void or unenforceable for any reason whatsoever
(other than in accordance with its terms in the absence of default or
by reason of any action by the Lenders or the Agent); or
(e) if a default shall occur, which is not waived, (i) in the
payment of any principal, interest, premium or other amounts with
respect to any Consolidated Indebtedness (other than the Loans and the
Consolidated Indebtedness owing to any Lender) of any of the Borrowers
in an amount not less than $500,000 in the aggregate outstanding, or
(ii) in the performance, observance or fulfillment of any term or
covenant contained in any agreement or instrument under or pursuant to
which any such Consolidated Indebtedness may have been issued,
created, assumed, guaranteed or secured by any of the Borrowers, and
such default shall continue for more than the period of grace, if any,
therein specified, and if such default shall permit the holder of any
such Indebtedness to accelerate the maturity thereof; or
(f) if any material representation, warranty or other statement
of fact contained herein or any other Loan Document or in any writing,
certificate, report or statement at any time furnished to the Agent or
any Lender by or on behalf of the Borrowers pursuant to or in
connection with this Agreement or the other Loan Documents, or
otherwise, shall be false or misleading in any material respect when
given; or
(g) if any of the Borrowers shall be unable to pay its debts
generally as they become due; file a petition to take advantage of any
insolvency statute; make an assignment for the benefit of its
creditors; commence a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or any
substantial part of its property; file a petition or answer seeking
reorganization or arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of any of the Borrowers or of the whole or
any substantial part of its properties and such order, judgment or
decree continues unstayed and in effect for a period of sixty (60)
days, or approve a petition filed against any of the Borrowers
seeking reorganization or arrangement or similar relief under the
52
federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which petition is not dismissed
within sixty (60) days; or if, under the provisions of any other law
for the relief or aid of debtors, a court of competent jurisdiction
shall assume custody or control of any of the Borrowers or of the
whole or any substantial part of its properties, which control is not
relinquished within sixty (60) days; or if there is commenced against
any of the Borrowers any proceeding or petition seeking reorganiza
tion, arrangement or similar relief under the federal bankruptcy laws
or any other applicable law or statute of the United States of America
or any state which proceeding or petition remains undismissed for a
period of sixty (60) days; or if any of the Borrowers takes any
action to indicate its consent to or approval of any such proceeding
or petition; or
(i) if (i) any judgment where the amount not reasonably expected
to be covered by insurance (or the amount as to which the insurer
denies liability) is in excess of $250,000 is rendered against any of
the Borrowers and remains unpaid, unstayed, undischarged, unbonded or
undismissed for a period of sixty (60) days, or (ii) there is any
attachment, injunction or execution against any of the Borrowers'
properties for any amount in excess of $250,000, and such attachment,
injunction or execution remains unpaid, unstayed, undischarged,
unbonded or undismissed for a period of sixty (60) days or (iii) any
fine or fines for violation or alleged violation of Environmental Laws
in excess of $2,000,000 in any Fiscal Year is rendered against any of
the Borrowers; or
(j) if any of the Borrowers shall, other than in the ordinary
course of business (as determined by past practices), suspend all or
any part of its operations material to the conduct of the business of
such Borrower for a period of more than 120 days; or
(k) if any of the Borrowers shall breach any of the material
terms or conditions of any Swap Agreement among the Lenders and such
breach shall continue beyond any grace period, if any, relating
thereto pursuant to its terms;
then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,
(a) either or both of the following actions may be taken:
(i) the Agent, with the consent of the Required Lenders,
may, and at the direction of the Required Lenders shall,
declare any obligation of the Lenders to make further
Revolving Loans terminated, whereupon the obligation of each
Lender to make further Revolving Loans and of Issuing Bank
to issue Letters of Credit, hereunder shall terminate
immediately, and (ii) the Agent shall at the direction of
the Required Lenders, at their option, declare by notice to
an Authorized Representative any or all of the Obligations
to be immediately due and payable, and the same, including
all interest accrued thereon and all other obligations of
the Borrowers to the Agent and the Lenders, shall forthwith
become immediately due and payable without presentment,
demand, protest, notice or other formality of any kind, all
of which are hereby expressly waived, anything contained
herein or in any instrument evidencing the Obligations to
53
the contrary notwithstanding; provided, however, that
notwithstanding the above, if there shall occur an Event of
Default under clause (g) or (h) above, then the obligation
of the Lenders to make Revolving Loans hereunder shall
automatically terminate and any and all of the Obligations
shall be immediately due and payable without the necessity
of any action by the Agent or the Required Lenders or notice
to the Agent or the Lenders;
(b) The Borrowers shall, upon demand of the Agent or the
Required Lenders, deposit cash with the Agent in an amount
equal to the amount of any Letter of Credit Outstandings, as
collateral security for the repayment of any future drawings
or payments under such Letters of Credit, and such amounts
shall be held by the Agent pursuant to the terms of the
applicable Application for Letter of Credit; and
(c) the Agent and each of the Lenders shall have all of the
rights and remedies available under the Loan Documents or
under any applicable law.
VIII.2 Agent to Act. In case any one or more Events of Default
shall occur and not have been waived, the Agent may, and at the direction
of the Required Lenders shall, proceed to protect and enforce their rights
or remedies either by suit in equity or by action at law, or both, whether
for the specific performance of any covenant, agreement or other provision
contained herein or in any other Loan Document, or to enforce the payment
of the Obligations or any other legal or equitable right or remedy.
VIII.3 Cumulative Rights. No right or remedy herein conferred upon
the Lenders or the Agent is intended to be exclusive of any other rights or
remedies contained herein or in any other Loan Document, and every such
right or remedy shall be cumulative and shall be in addition to every other
such right or remedy contained herein and therein or now or hereafter
existing at law or in equity or by statute, or otherwise.
VIII.4 No Waiver. No course of dealing between any of the
Borrowers and any Lender or the Agent or any failure or delay on the part
of any Lender or the Agent in exercising any rights or remedies under any
Loan Document or otherwise available to it shall operate as a waiver of any
rights or remedies and no single or partial exercise of any rights or
remedies shall operate as a waiver or preclude the exercise of any other
rights or remedies hereunder or of the same right or remedy on a future
occasion.
VIII.5 Allocation of Proceeds. If an Event of Default has occurred
and not been waived, and the maturity of the Notes has been accelerated
pursuant to Article IX hereof, all payments received by the Agent
hereunder, in respect of any principal of or interest on the Obligations or
any other amounts payable by the Borrowers hereunder shall be applied by
the Agent in the following order:
54
(a) amounts due to Issuing Bank and the Lenders pursuant to
Sections 2.8, 2A.3, 2A.4 and 10.6 hereof;
(b) amounts due to the Agent pursuant to Section 9.10 hereof;
(c) payments of interest on Loans and Reimbursement Obligations;
(d) payments of principal on Loans and Reimbursement
Obligations;
(e) payment of cash amounts to the Agent in respect of Letters
of Credit Outstandings pursuant to Section 8.1(B) hereof;
(f) amounts due to the Lenders pursuant to Sections 6.14 and
10.10 hereof;
(g) payments of all other amounts due under this Agreement, if
any, to be applied for the ratable benefit of the Lenders; and
(h) any surplus remaining after application as provided for
herein, to the Borrowers or otherwise as may be required by applicable
law.
ARTICLE IX
----------
The Agent
---------
IX.1 Appointment. Each Lender hereby irrevocably designates and
appoints SouthTrust as the Agent of the Lenders under this Agreement, and
each of the Lenders hereby irrevocably authorizes SouthTrust as the Agent
for such Lender, to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers as
are expressly delegated to the Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Agent shall not have any duties or responsibilities, except those expressly
set forth herein, or any fiduciary relationship with any of the Lenders,
and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or otherwise exist against
the Agent.
IX.2 Attorneys-in-fact. The Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence of any
agents or attorneys-in-fact selected by it with reasonable care.
IX.3 Limitation on Liability. Neither the Agent nor any of its
officers, directors, employees, agents or attorneys-in-fact shall be liable
to the Lenders for any action lawfully taken or omitted to be taken by it
or them under or in connection with this Agreement except for its or their
own gross negligence or willful misconduct. Neither the Agent nor any of
its affiliates shall be responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any of the
55
Borrowers or any officer or representative thereof contained in this
Agreement or in any of the other Loan Documents, or in any certificate,
report, statement or other document referred to or provided for in or
received by the Agent under or in connection with this Agreement, or for
the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any of the other Loan Documents, or for
any failure of any of the Borrowers to perform its obligations thereunder,
or for any recitals, statements, representations or warranties made, or for
the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any collateral. The Agent shall not be under any obligation
to any of the Lenders to ascertain or to inquire as to the observance or
performance of any of the terms, covenants or conditions of this Agreement
or any of the other Loan Documents on the part of any of the Borrowers or
to inspect the properties, books or records of any of the Borrowers.
IX.4 Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice,
consent certificate, affidavit, letter, cablegram, telegram, telecopy or
telex message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Borrowers),
independent accountants and other experts selected by the Agent. The Agent
may deem and treat the payee of any Note as the owner thereof for all
purposes unless an Assignment shall have been filed with and accepted by
the Agent. The Agent shall be fully justified in failing or refusing to
take any action under this Agreement unless it shall first receive advice
or concurrence of the Lenders or the Required Lenders as provided in this
Agreement or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all present and future
holders of the Notes.
IX.5 No Representations. Each Lender expressly acknowledges that
neither the Agent nor any of its affiliates has made any representations or
warranties to it and that no act by the Agent hereafter taken, including
any review of the affairs of the Borrowers, shall be deemed to constitute
any representation or warranty by the Agent to any Lender. Each Lender
represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the financial condition, creditworthiness, affairs,
status and nature of the Borrowers and made its own decision to enter into
this Agreement. Each Lender also represents that it will, independently
and without reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and to make such
investigation as it deems necessary to inform itself as to the status and
affairs, financial or otherwise, of each of the Borrowers. Except for
notices, reports and other documents expressly required to be furnished to
the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of each of the
Borrowers which may come into the possession of the Agent or any of its
affiliates.
56
IX.6 Indemnification. Each of the Lenders agrees to indemnify the
Agent in its capacity as such (to the extent not reimbursed by the
Borrowers and without limiting any obligations of the Borrowers so to do),
ratably according to the respective principal amount of the Notes and
Participations held by them (or, if no Notes or Participations are
outstanding, ratably in accordance with their respective Applicable
Commitment Percentages as then in effect) from and against any and all
liabilities, obligations, losses (excluding any losses suffered by the
Agent as a result of Borrowers' failure to pay any fee owing to the Agent),
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may at any time
(including without limitation at any time following the payment of the
Notes) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement, the other Loan Documents or
any other document contemplated by or referred to herein or the trans
actions contemplated hereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; provided that no Lender
shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence,
fraud, intentional tortious conduct or willful misconduct. The agreements
in this subsection shall survive the payment of the Obligations and the
termination of this Agreement.
IX.7 Lender. The Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with each of the
Borrowers as though it were not the Agent hereunder. With respect to its
Loans made or renewed by it and any Note issued to it, the Agent shall have
the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not the Agent, and the terms "Lender"
and "Lenders" shall, unless the context otherwise indicates, include the
Agent in its individual capacity.
IX.8 Resignation. If the Agent shall resign as Agent under this
Agreement, then the Required Lenders may appoint, with the consent, so long
as there shall not have occurred and be continuing a Default or Event of
Default, of the Borrowers, which consent shall not be unreasonably
withheld, a successor Agent for the Lenders, which successor Agent shall be
a commercial bank organized under the laws of the United States or any
state thereof, having a combined surplus and capital of not less than
$500,000,000, whereupon such successor Agent shall succeed to the rights,
powers and duties of the former Agent and the obligations of the former
Agent shall be terminated and canceled, without any other or further act or
deed on the part of such former Agent or any of the parties to this
Agreement; provided, however, that the former Agent's resignation shall not
become effective until such successor Agent has been appointed and has
succeeded of record to all right, title and interest in any collateral held
by the Agent; provided, further, that if the Required Lenders and, if
applicable, the Borrowers cannot agree as to a successor Agent within
ninety (90) days after such resignation, the Agent shall appoint a
successor Agent which satisfies the criteria set forth above in this
Section 9.8 for a successor Agent and the parties hereto agree to execute
whatever documents are necessary to effect such action under this Agreement
or any other document executed pursuant to this Agreement; provided,
however that in such event all provisions of this Agreement and the Loan
Documents, shall remain in full force and effect. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article IX
shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement.
57
IX.9 Sharing of Payments, etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to its Obligations (other than
pursuant to Article III) which results in its receiving more than its pro
rata share of the aggregate payments with respect to all of the Obligations
(other than any payment pursuant to Article III), then (a) such Lender
shall be deemed to have simultaneously purchased from the other Lenders a
share in their Obligations so that the amount of the Obligations held by
each of the Lenders shall be pro rata and (b) such other adjustments shall
be made from time to time as shall be equitable to insure that the Lenders
share such payments ratably; provided, however, that for purposes of this
Section 9.9 the term "pro rata" shall be determined with respect to the
Revolving Credit Commitment of each Lender and to the Total Revolving
Credit Commitments after subtraction in each case of amounts, if any, by
which any such Lender has not funded its share of the outstanding Loans,
Participations and Obligations. If all or any portion of any such excess
payment is thereafter recovered from the Lender which received the same,
the purchase provided in this Section 9.9 shall be rescinded to the extent
of such recovery, without interest. The Borrowers expressly consent to the
foregoing arrangements and agree that each Lender so purchasing a portion
of the other Lenders' Obligations may exercise all rights of payment
(including, without limitation, all rights of set-off, banker's lien or
counterclaim) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
IX.10 Fees. The Borrowers agree to pay to the Agent, for its
individual account, an annual Agent's fee as from time to time agreed to by
the Borrowers and Agent in writing.
ARTICLE X
---------
Miscellaneous
-------------
X.1 Confidentiality. Each Lender agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care
to maintain the confidentiality of all information identified as
"confidential" or "secret" by the Borrowers and provided to it by any
Borrower or by the Agent on the Borrowers' behalf under this Agreement or
any other Loan Document, and neither such Lender nor any of its Affiliates
shall use any such information other than in connection with or in
enforcement of this Agreement and the other Loan Documents or in connection
with other business now or hereafter existing or contemplated with any
Borrower; except to the extent such information (i) was or becomes
generally available to the public other than as a result of disclosure by
such Lender, or (ii) was or becomes available on a non-confidential basis
from a source other than a Borrower, provided that such source is not bound
by a confidentiality agreement with any Borrower known to such Lender;
provided, however, that any Lender may disclose such information (A) at the
request or pursuant to any requirement of any Governmental Authority to
which such Lender is subject or in connection with an examination of such
Lender by any such authority; (B) pursuant to subpoena or other court
process; (C) when required to do so in accordance with the provisions of
any applicable requirement of law; (D) to the extent reasonably required in
connection with any litigation or proceeding to which the Agent or any
Lender or any of their respective Affiliates may be party; (E) to the
extent reasonably required in connection with the exercise of any remedy
58
hereunder or under any other Loan Document; (F) to such Lender's
independent auditors and other professional advisors; (G) to any
participant or assignee of any Lender, actual or potential, provided that
such Person agrees in writing to keep such information confidential to the
same extent required of the Lenders hereunder ; (H) as to any Lender or its
Affiliate, as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which any Borrower is party or is
deemed party with such Lender or such Affiliate; and (I) to its Affiliates.
X.2 Assignments and Participations.
(a) At any time after the Closing Date each Lender may, with the
prior consent of the Agent and the Borrowers, which consents shall not
be unreasonably withheld, assign to one or more banks or financial
institutions all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of the Note
payable to its order); provided, that (i) each such assignment shall
be of a constant and not a varying percentage of all of the assigning
Lender's rights and obligations (including the Revolving Loans and
Participations) under this Agreement, (ii) for each assignment
involving the issuance and transfer of a Note, the assigning Lender
shall execute an Assignment and Acceptance and the Borrowers hereby
consent to execute a replacement Note to give effect to the
assignment, (iii) the minimum Revolving Credit Commitment which shall
be assigned is $5,000,000 (together with which the assigning Lender's
applicable portion of Participations and the Letter of Credit
Commitment shall also be assigned), (iv) such assignee shall have an
office located in the United States, (v) an assignment (other than an
assignment of 100% of its Interest) by Issuing Bank shall not include
any portion of the obligation to issue Letters of Credit, and (vi) no
consent of the Borrowers or the Agent shall be required in connection
with any assignment by a Lender to another Lender or to such Lender's
affiliate. Upon such execution, delivery, approval and acceptance,
from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and,
to the extent that rights and obligations hereunder or under such Note
have been assigned or negotiated to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and
a holder of such Note and (y) the assignor thereunder shall, to the
extent that rights and obligations hereunder or under such Note have
been assigned or negotiated by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
under this Agreement. Any Lender who makes an assignment (other than
an assignment pursuant to clause (v) above) shall pay to the Agent a
one-time administrative fee of $5,000.00 which fee shall not be
reimbursed by the Borrowers.
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i)
the assignment made under such Assignment and Acceptance is made under
such Assignment and Acceptance without recourse; (ii) such assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any of the
Borrowers or the performance or observance by any of the Borrowers of
any of its obligations under any Loan Document or any other instrument
or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of
the financial statements delivered pursuant to Section 5.6(a) or
59
Section 6.1, as the case may be, and such other Loan Documents and
other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement, the Notes and the other
Loan Documents as are delegated to the Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental
thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender and a
holder of such Notes.
(c) The Agent shall maintain at its address referred to herein a
copy of each Assignment and Acceptance delivered to and accepted by
it.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender, the Agent shall give prompt notice thereof to the
Authorized Representative.
(e) Nothing herein shall prohibit any Lender from pledging or
assigning, without notice or consent, any Note to any Federal Reserve
Bank in accordance with applicable law.
(f) Each Lender may sell participations at its expense to one or
more banks or other entities as to all or a portion of its rights and
obligations under this Agreement; provided, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain
the holder of any Note issued to it for the purpose of this Agreement,
(iv) such participations shall be in a minimum amount of $1,000,000
and shall include an allocable portion of such Lender's Participation,
and (v) each of the Borrowers, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and
with regard to any and all payments to be made under this Agreement;
provided, that the participation agreement between a Lender and its
participants may provide that such Lender will obtain the approval of
such participant prior to such Lender's agreeing to any amendment or
waiver of any provisions of this Agreement which would (A) extend the
maturity of any Note, (B) reduce the interest rate hereunder or (C)
increase the Revolving Credit Commitment of the Lender granting the
participation, and (vi) the sale of any such participations which
require any of the Borrowers to file a registration statement with the
United States Securities and Exchange Commission or under the
securities regulations or laws of any state shall not be permitted.
(g) None of the Borrowers may assign any rights, powers, duties
or obligations under this Agreement or the other Loan Documents
without the prior written consent of all the Lenders.
60
X.3 Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered
to such party (against receipt therefor) at the address set forth below or
such other address as such party shall specify to the other parties in
writing (or, in the case of notice by telecopy, telegram or telex (where
the receipt of such message is verified by return) expressly provided for
hereunder, when received at such telecopy or telex number as may from time
to time be specified in written notice to the other parties hereto or
otherwise received), or if sent prepaid by certified or registered mail
return receipt requested on the fifth Business Day after the day on which
mailed, addressed to such party at said address:
(a) if to any of the Borrowers:
Giant Cement Holding, Inc.
000-X Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Vice President and Chief Financial Officer
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
and a copy to:
Keystone Cement Company
Xxxx Xxxxxx Xxx X
Xxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxxx
President and CEO
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(b) if to the Agent:
SouthTrust Bank of Alabama, National Association
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
SouthTrust Bank of Alabama, National Association
000 0xx Xxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
61
(c) if to the Lenders:
At the addresses set forth on the signature pages hereof and
on the signature page of each Assignment and Acceptance.
X.4 Setoff. Each of the Borrowers agrees that the Agent and each
Lender shall have a lien for all the Obligations of the Borrowers upon all
deposits or deposit accounts, of any kind, or any interest in any deposits
or deposit accounts thereof, now or hereafter pledged, mortgaged,
transferred or assigned to the Agent or such Lender or otherwise in the
possession or control of the Agent or such Lender (other than for
safekeeping) for any purpose for the account or benefit of such Borrower
and including any balance of any deposit account or of any credit of such
Borrower with the Agent or such Lender, whether now existing or hereafter
established, hereby authorizing the Agent and each Lender at any time or
times with or without prior notice to apply such balances or any part
thereof to such of the Obligations of the Borrowers to the Lenders then
past due and in such amounts as they may elect, and whether or not the
collateral or the responsibility of other Persons primarily, secondarily or
otherwise liable may be deemed adequate. For the purposes of this
paragraph, all remittances and property shall be deemed to be in the
possession of the Agent or such Lender as soon as the same may be put in
transit to it by mail or carrier or by other bailee.
X.5 Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans
and the execution and delivery to the Lenders of this Agreement and the
Notes and shall continue in full force and effect so long as any of
Obligations remain outstanding or any Lender has any commitment hereunder
or the Borrowers have continuing obligations hereunder unless otherwise
provided herein. Whenever in this Agreement, any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and
agreements by or on behalf of the Borrowers which are contained in this
Agreement, the Notes and the other Loan Documents shall inure to the
benefit of the successors and permitted assigns of the Lenders or any of
them.
X.6 Expenses. Each of the Borrowers jointly and severally agrees
(a) to pay or reimburse the Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the preparation, negotiation
and execution of, and any amendment, supplement or modification to, this
Agreement or any of the other Loan Documents (including travel expenses
relating to closing), and the consummation of the transactions contemplated
hereby and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agents, (b) to pay or reimburse the Agent
62
and each of the Lenders for all their costs and expenses incurred in
connection with the enforcement (only from and after the occurrence of a
Default or Event of Default) or preservation of any rights under this
Agreement and the other Loan Documents, including without limitation, the
reasonable fees and disbursements of their counsel and any payments in
indemnification or otherwise payable by the Lenders to the Agent pursuant
to the Loan Documents and (c) to pay, indemnify and hold the Agent and each
of the Lenders harmless from any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any failure to pay
or delay in paying, documentary, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with
the execution and delivery of this Agreement or any other Loan Documents,
or consummation of any amendment, supplement or modification of, or any
waiver or consent under or in respect of, this Agreement or any other Loan
Documents.
X.7 Amendments. No amendment, modification or waiver of any
provision of this Agreement or any of the Loan Documents and no consent by
the Lenders to any departure therefrom by any of the Borrowers shall be
effective unless such amendment, modification or waiver shall be in writing
and signed by the Agent, shall have been approved by the Required Lenders
through their written consent, and the same shall then be effective only
for the period and on the conditions and for the specific instances and
purposes specified in such writing; provided, however, that, no such
amendment, modification or waiver
(i) which changes, extends or waives any provision of
Section 9.9 or this Section 10.6, the amount of or the due date
of any scheduled installment of or the rate of interest payable
on any Obligation, which changes the definition of Required
Lenders, which permits an assignment by any of the Borrowers of
its Obligations hereunder, which reduces the required consent of
Lenders provided hereunder, which increases, decreases or extends
the Revolving Credit Commitment or the Letter of Credit
Commitment of any Lender, which waives any Default or Event of
Default under Section 8.1(g) or (h) hereof or which waives any
condition to the making of any Loan shall be effective unless in
writing and signed by each of the Lenders; or
(ii) which affects the rights, privileges, immunities or
indemnities of the Agent shall be effective unless in writing and
signed by the Agent.
Notwithstanding any provision of the other Loan Documents to the contrary,
as between the Agent and the Lenders, execution by the Agent shall not be
deemed conclusive evidence that the Agent has obtained the written consent
of the Required Lenders. No notice to or demand on any of the Borrowers
in any case shall entitle any of the Borrowers to any other or further
notice or demand in similar or other circumstances, except as otherwise
expressly provided herein. No delay or omission on any Lender's or the
Agent's part in exercising any right, remedy or option shall operate as a
waiver of such or any other right, remedy or option or of any Default or
Event of Default.
X.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed
an original, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such fully-executed
counterpart.
63
X.9 Termination. The termination of this Agreement shall not affect
any rights of any of the Borrowers, the Lenders or the Agent or any
obligation of any of the Borrowers, the Lenders or the Agent, arising
prior to the effective date of such termination, and the provisions hereof
shall continue to be fully operative until all transactions entered into or
rights created or obligations incurred prior to such termination have been
fully disposed of, concluded or liquidated and the Obligations arising
prior to or after such termination have been irrevocably paid in full. The
rights granted to the Agent for the benefit of the Lenders hereunder and
under the other Loan Documents shall continue in full force and effect,
notwithstanding the termination of this Agreement, until all of the
Obligations have been paid in full after the termination hereof (other than
Obligations in the nature of continuing indemnities or expense
reimbursement obligations not yet due and payable) or the Borrowers have
furnished the Lenders and the Agent with an indemnification satisfactory to
the Agent and each Lender with respect thereto. All representations,
warranties, covenants, waivers and agreements contained herein shall
survive termination hereof until payment in full of the Obligations unless
otherwise provided herein. Notwithstanding the foregoing, if after receipt
of any payment of all or any part of the Obligations, any Lender is for any
reason compelled to surrender such payment to any Person because such
payment is determined to be void or voidable as a preference, impermissible
setoff, a diversion of trust funds or for any other reason, this Agreement
shall continue in full force and each of the Borrowers shall be liable to,
and shall indemnify and hold such Lender harmless for, the amount of such
payment surrendered until such Lender shall have been finally and
irrevocably paid in full. The provisions of the foregoing sentence shall
be and remain effective notwithstanding any contrary action which may have
been taken by the Lenders in reliance upon such payment, and any such
contrary action so taken shall be without prejudice to the Lenders' rights
under this Agreement and shall be deemed to have been conditioned upon such
payment having become final and irrevocable.
X.10 Governing Law.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF SOUTH CAROLINA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
(b) EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY
OF MECKLENBURG OF NORTH CAROLINA, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH BORROWER EXPRESSLY
WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING
OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING.
64
(c) EACH BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH BORROWER
PROVIDED IN SECTION 10.2 HEREOF, OR BY ANY OTHER METHOD OF SERVICE
PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NORTH
CAROLINA.
(d) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
PRECLUDE A LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS IN
THE COURTS OF ANY PLACE WHERE ANY BORROWER OR ANY OF THE BORROWERS'
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED
BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR HEREAFTER,
BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE, MAY BE
AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH BORROWER HEREBY
AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY AND EACH BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
X.11 Indemnification. In consideration of the execution and delivery
of this Agreement by the Agent and each Lender and the extension of the
Revolving Credit Commitments and the Letter of Credit Commitments, each of
the Borrowers hereby jointly and severally indemnifies, exonerates and
holds the Agent and each Lender and each of their respective officers,
directors, employees and agents (collectively, the "Indemnified Parties")
free and harmless from and against any and all actions, causes of action,
suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is
a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of
them as a result of, or arising out of, or relating to the execution,
delivery, enforcement performance or administration of this Agreement and
65
the other Loan Documents, or any transaction financed or to be financed in
whole or in part, directly or indirectly, or supported by any Letter of
Credit, except for any such Indemnified Liabilities arising for the account
of a particular Indemnified Party by reason of the gross negligence or
willful misconduct of and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, each of the Borrowers
hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. The provisions of this Section 10.10 shall survive
repayment of the Obligations, occurrence of the Revolving Credit
Termination Date and expiration or termination of this Agreement.
X.12 Headings and References. The headings of the Articles and
Sections of this Agreement are inserted for convenience of reference only
and are not intended to be a part of, or to affect the meaning or
interpretation of this Agreement. Words such as "hereof", "hereunder",
"herein" and words of similar import shall refer to this Agreement in its
entirety and not to any particular Section or provisions hereof, unless so
expressly specified. As used herein, the singular shall include the
plural, and the masculine shall include the feminine or a neutral gender,
and vice versa, whenever the context requires.
X.13 Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or
more of the parties hereto, then such provision shall remain in effect with
respect to all parties, if any, as to whom such provision is neither
illegal nor invalid, and in any event all other provisions hereof shall
remain effective and binding on the parties hereto.
X.14 Entire Agreement. This Agreement, together with the other Loan
Documents, constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all previous proposals,
negotiations, representations, commitments and other communications between
or among the parties, both oral and written, with respect thereto.
X.15 Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
X.16 Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes,
including all charges or fees in connection therewith deemed in the nature
of interest under North Carolina law shall not exceed the Highest Lawful
Rate (as such term is defined below). If the rate of interest (determined
without regard to the preceding sentence) under this Agreement at any time
exceeds the Highest Lawful Rate (as defined below), the outstanding amount
of the Loans made hereunder shall bear interest at the Highest Lawful Rate
until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total
interest due hereunder (taking into account the increase provided for
above) is less than the total amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had
at all times been in effect, then to the extent permitted by law, the
Borrowers shall pay to the Agent an amount equal to the difference between
66
the amount of interest paid and the amount of interest which would have
been paid if the Highest Lawful Rate had at all times been in effect.
Notwithstanding the foregoing, it is the intention of the Lenders and the
Borrowers to conform strictly to any applicable usury laws. Accordingly,
if any Lender contracts for, charges, or receives any consideration which
constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be canceled automatically and, if previously paid, shall at
such Lender's option be applied to the outstanding amount of the Loans made
hereunder or be refunded to the Borrowers. As used in this paragraph, the
term "Highest Lawful Rate" means the maximum lawful interest rate, if any,
that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to such Lender which are presently in
effect or, to the extent allowed by law, under such applicable laws which
may hereafter be in effect and which allow a higher maximum nonusurious
interest rate than applicable laws now allow.
X.17 Joint and Several Obligations. All obligations and liabilities
incurred by the Borrowers hereunder and under any other Loan Document,
including without limitation payment of any Obligation, shall be joint and
several among the Borrowers.
[Signature pages follow.]
67
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the
day and year first above written.
GIANT CEMENT HOLDING, INC.
ATTEST: By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial
Officer
Assistant Secretary
[CORPORATE SEAL]
GIANT CEMENT COMPANY
ATTEST: By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial
Officer
Assistant Secretary
[CORPORATE SEAL]
KEYSTONE CEMENT COMPANY
ATTEST: By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President
Assistant Secretary
[CORPORATE SEAL]
Signature page 1 of 3
GIANT RESOURCE RECOVERY COMPANY, INC.
ATTEST: By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial
Officer
Assistant Secretary
[CORPORATE SEAL]
GCHI INVESTMENTS, INC.
ATTEST: By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial
Officer
Assistant Secretary
[CORPORATE SEAL]
GIANT CEMENT NC, INC.
ATTEST: By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial
Officer
Assistant Secretary
[CORPORATE SEAL]
Signature page 2 of 3
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, as
Lender
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
Lending Office:
SouthTrust Bank of Alabama,
National Association
000 X. 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Wire Transfer Instructions:
SouthTrust Bank of Alabama, National Association
Birmingham, Alabama
ABA# 000000000
Account No.: 131009
Reference: Giant Cement
Attention: Southeastern Corporate Banking
Signature page 3 of 3
EXHIBIT A
Applicable Commitment Percentages
Revolving Letter of Applicable
Credit Credit Commitment
Lender Commitment Commitment Percentage
------ ---------- ---------- ----------
SouthTrust Bank
of Alabama,
National $30,000,000 $2,000,000 100%
Association
A-1
EXHIBIT B
Form of Assignment and Acceptance
DATED __________________,_______
Reference is made to the Credit Agreement dated as of December, 1996
(the "Agreement") among Giant Cement Holding, Inc., a Delaware corporation,
Giant Cement Company, a Delaware corporation and wholly owned subsidiary of
Giant Holding, Keystone Cement Company, a Pennsylvania corporation and
wholly owned subsidiary of Giant Holding, Giant Resource Recovery Company,
Inc., a Delaware corporation and wholly owned subsidiary of Giant Holding,
GCHI Investments, Inc., a Delaware corporation and wholly owned subsidiary
of Giant Holding, and Giant Cement NC, Inc., a South Carolina corporation
and wholly owned subsidiary of Giant Holding (each a "Borrower" and
collectively, the "Borrowers"), the Lenders (as defined in the Agreement),
and SouthTrust Bank of Alabama, National Association, as Agent for the
Lenders ("Agent"). Unless otherwise defined herein, terms defined in the
Agreement are used herein with the same meanings.
________________ (the "Assignor") and ________________ (the "Assignee")
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE,
a _______% (1) interest in and to all of the Assignor's rights and
obligations under the Agreement as of the Effective Date (as defined
below), including, without limitation, such percentage interest in the
Loans owing to and Participations held by the Assignor on the Effective
Date, and the Revolving Note held by the Assignor.
2. The Assignor (i) represents and warrants that, as of the date
hereof, the aggregate principal amount of Revolving Loans owing to it
(without giving effect to the assignments thereof which have not yet become
effective) are as follows: (A) $__________ under a Revolving Note dated
____________, 19__ in the aggregate principal amount of $_________, (B) the
aggregate principal amount of Letters of Credit in which it is deemed to
have a Participation under the Credit Agreement is $_____________; (ii)
represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and
clear of any adverse claim; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement or any of the
Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement or any of the Loan
Documents or any other instrument or document furnished pursuant thereto;
(iv) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrowers or the performance or
observance by the Borrowers of any of its obligations under the Agreement
or any of the Loan Documents or any other instrument or document furnished
pursuant thereto and (v) attaches hereto the Revolving Note referred to in
paragraph 1 above and requests that the Agent exchange such Note for Notes
as follows: a Revolving Note dated _____________, 19__ in the principal
amount of $________________, payable to the order of the Assignor, and a
Revolving Note, dated ____________________________ 19__, in the principal
amount of $_________________ payable to the order of the Assignee.
----------------------
(1) Specify percentage in no more than 4 decimal places.
B-1
3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.1 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor, or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement; (iii) appoints and
authorizes the Agent to take such actions on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental
thereto; (iv) will perform all of the obligations which by the terms of the
Agreement are required to be performed by the Lender; and (v) specifies as
its address for notices the office set forth beneath its name on the
signature pages hereof.
4. The effective date for this Assignment and Acceptance shall be
_____________________________ (the "Effective Date"). Following the
execution of this Assignment and Acceptance, it will be delivered to the
Agent for acceptance and recording by the Agent.
5. Upon such acceptance and recording, as of the Effective Date, (i)
the Assignee shall be a party to the Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and under the Loan Documents and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Agreement.
6. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments under the Agreement and Notes in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest, commitment fees and Letter of Credit fees
with respect thereto) to the Assignee. The Assignor and Assignee shall
make all appropriate adjustments in payments under the Agreement and the
Notes for periods prior to the Effective Date directly between themselves.
B-2
7. This Assignment and Acceptance shall be governed by and construed
in accordance with, the laws of the State of North Carolina.
[NAME OF ASSIGNOR]
By: _________________________________
Name:
Title:
Notice Address:
_________________________________
_________________________________
_________________________________
After the Effective Date:
Outstanding Revolving Loans:$_______________
Outstanding Participations in Letter of
Credit Outstandings $_______________________
[NAME OF ASSIGNEE]
By: _________________________________
Name:
Title:
Notice Address/Lending Office
_________________________________
_________________________________
_________________________________
Wire transfer Instructions:
_________________________________
_________________________________
_________________________________
After the Effective Date:
Outstanding Revolving Loans:$_________________
Outstanding Participations in Letter of
Credit Outstandings $_________________________
B-3
Accepted this ____ day of _______, 19___
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
as Agent
By: ________________________________________
Name:
Title:
Consented to:
Giant Cement Holding, Inc.
By: _______________________
Name:
Title:
X-0
XXXXXXX X
Xxxxxx xx Xxxxxxxxxxx (or Revocation) of Authorized
Representative
Reference is made to the Credit Agreement dated as of December 20,
1996 (the "Agreement") among Giant Cement Holding, Inc., a Delaware
corporation, Giant Cement Company, a Delaware corporation and wholly owned
subsidiary of Giant Holding, Keystone Cement Company, a Pennsylvania
corporation and wholly owned subsidiary of Giant Holding, Giant Resource
Recovery Company, Inc., a Delaware corporation and wholly owned subsidiary
of Giant Holding, GCHI Investments, Inc., a Delaware corporation and wholly
owned subsidiary of Giant Holding, and Giant Cement NC, Inc., a South
Carolina corporation and wholly owned subsidiary of Giant Holding (each a
"Borrower" and collectively, the "Borrowers"), the Lenders (as defined in
the Agreement), and SouthTrust Bank of Alabama, National Association, as
Agent for the Lenders ("Agent"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the
Agreement.
Each of the Borrowers hereby nominates, constitutes and appoints each
individual named below as an Authorized Representative under the Loan
Documents, and hereby represents and warrants that (i) set forth opposite
each such individual's name is a true and correct statement of such
individual's office (to which such individual has been duly elected or
appointed), a genuine specimen signature of such individual and an address
for the giving of notice, and (ii) each such individual has been duly
authorized by such Borrower to act as Authorized Representative under the
Loan Documents:
Name and Address Office Specimen Signature
Xxxxx X. Xxxxxx Vice President ____________________
Giant Cement Holding, Inc.
000-X Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxxx Xxxxxxxxx Assistant Secretary ____________________
Giant Cement Holding, Inc.
000-X Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Borrowers hereby revoke (effective upon receipt hereof by the Agent) the
prior appointment of ________________ as an Authorized Representative.
C-1
This the ___ day of __________________, 19__.
Giant Cement Holding, Inc.
By: ________________________________
Name: ______________________________
Title: _____________________________
Giant Cement Company
By: ________________________________
Name: ______________________________
Title: _____________________________
Keystone Cement Company
By: ________________________________
Name: ______________________________
Title: _____________________________
Giant Resource Recovery Company, Inc.
By: ________________________________
Name: ______________________________
Title: _____________________________
GCHI Investments, Inc.
By: ________________________________
Name: ______________________________
Title: _____________________________
Giant Cement NC, Inc.
By: ________________________________
Name: ______________________________
Title: _____________________________
C-2
EXHIBIT D
Giant Cement Holding, Inc.
Request For Advance/Interest Rate Election
SouthTrust Bank of Alabama, National Association,
as Agent for the Lenders
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Southeastern Corporate Banking
Reference is made to the Credit Agreement dated as of December 20,
1996 (the "Agreement") among Giant Cement Holding, Inc., a Delaware
corporation, Giant Cement Company, a Delaware corporation and wholly owned
subsidiary of Giant Holding, Keystone Cement Company, a Pennsylvania
corporation and wholly owned subsidiary of Giant Holding, Giant Resource
Recovery Company, Inc., a Delaware corporation and wholly owned subsidiary
of Giant Holding, GCHI Investments, Inc., a Delaware corporation and wholly
owned subsidiary of Giant Holding, and Giant Cement NC, Inc., a South
Carolina corporation and wholly owned subsidiary of Giant Holding (each a
"Borrower" and collectively, the "Borrowers"), the Lenders (as defined in
the Agreement), and SouthTrust Bank of Alabama, National Association, as
Agent for the Lenders ("Agent").
Revolving Credit Advance Confirmation
Pursuant to the Agreement, the undersigned hereby requests as of this
__________, 19__ that:
An Advance consisting of a Revolving Loan in the amount of
$_________________ be made on __________________, 19__. The undersigned
requests that $_________________ of such Advance be credited to the account
of the undersigned with the Agent, Account No. _________________. The
amount of the requested Advance when added to the outstanding Revolving
Loans existing at the time of the request for the Advance, does not exceed
the Total Revolving Credit Commitment.
Interest Rate Election for Revolving Credit Advance
Pursuant to Section 2.7 of the Loan Agreement, the Borrowers hereby
request an Advance as follows:
(a) Amount of Advance: $__________.
(b) Date as of which the Advance is to be made: __________.
D-1
(c) The following interest rate information is provided by
respect to the Advance:
(i) the interest rate shall be:
___ Base Rate
___ Eurodollar Rate
(ii) Interest Period for the Eurodollar Rate Segment
shall be (if applicable):
___ 30 days ___ 60 days ___ 90 days
The undersigned certifies that (i) the representations and warranties
contained in the Agreement are true, correct and complete in all material
respects on and as of the date hereof to the same extent as though made on
and as of the date hereof, except such representations and warranties that
relate solely to an earlier date; and (ii) no Event of Default or Default
has occurred and is continuing under the Agreement or will result from the
proposed borrowing.
All capitalized terms used herein and not otherwise defined herein
shall have the same meaning as defined in the Agreement.
Dated __________.
Giant Cement Holding, Inc.
Giant Cement Company
Keystone Cement Company
Giant Resource Recovery Company, Inc.
GCHI Investments, Inc.
Giant Cement NC, Inc.
By: __________________________________
Its _____________________________
D-2
EXHIBIT E
Form of Revolving Note
Promissory Note
(Revolving Loan)
$30,000,000 _______________________
December 20, 1996
FOR VALUE RECEIVED, Giant Cement Holding, Inc., a Delaware
corporation, Giant Cement Company, a Delaware corporation and wholly owned
subsidiary of Giant Holding, Keystone Cement Company, a Pennsylvania
corporation and wholly owned subsidiary of Giant Holding, Giant Resource
Recovery Company, Inc., a Delaware corporation and wholly owned subsidiary
of Giant Holding, GCHI Investments, Inc., a Delaware corporation and wholly
owned subsidiary of Giant Holding, and Giant Cement NC, Inc., a South
Carolina corporation and wholly owned subsidiary of Giant Holding (each a
"Borrower" and collectively, the "Borrowers"), hereby jointly and severally
promise to pay to the order of _____________________ (the "Lender"), in its
individual capacity, at the office of SOUTHTRUST BANK OF ALABAMA, NATIONAL
ASSOCIATION, as agent for the Lenders (the "Agent"), located at 000 Xxxxx
00xx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000 (or at such other place or places as
the Agent may designate in writing) at the times set forth in the Credit
Agreement dated as of December 20, 1996 among the Borrowers, the other
financial institutions party thereto (collectively, the "Lenders") and the
Agent (the "Agreement" -- all capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Agreement), in
lawful money of the United States of America, in immediately available
funds, the principal amount of THIRTY MILLION DOLLARS ($30,000,000) or, if
less than such principal amount, the aggregate unpaid principal amount of
all Revolving Loans made by the Lender to the Borrowers pursuant to the
Agreement on the Revolving Credit Termination Date or such earlier date as
may be required pursuant to the terms of the Agreement, and to pay interest
from the date hereof on the unpaid principal amount hereof, in like money,
at said office, on the dates and at the rates provided in Article II of the
Agreement. All or any portion of the principal amount of Loans may be
prepaid as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and
accrued but unpaid interest shall bear interest which shall be payable on
demand at the rates per annum set forth in Section 2.2 of the Agreement.
Further, in the event of such acceleration, this Revolving Note shall
become immediately due and payable, without presentation, demand, protest
or notice of any kind, all of which are hereby waived by the Borrowers.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrowers jointly and severally agree to pay, in
addition to the principal and interest, all costs of collection, including
E-1
reasonable attorneys' fees, and interest due hereunder thereon at the rates
set forth above.
Interest hereunder shall be computed as provided in the Credit
Agreement.
This Revolving Note is one of the Revolving Notes in the aggregate
principal amount of $30,000,000 referred to in the Agreement and is issued
pursuant to and entitled to the benefits and security of the Agreement to
which reference is hereby made for a more complete statement of the terms
and conditions upon which the Revolving Loans evidenced hereby were or are
made and are to be repaid. This Revolving Note is subject to certain
restrictions on transfer or assignment as provided in the Agreement.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby
waive to the full extent permitted by law the benefits of all provisions of
law for stay or delay of execution or sale of property or other
satisfaction of judgment against any of them on account of liability hereon
until judgment be obtained and execution issues against any other of them
and returned satisfied or until it can be shown that the maker or any other
party hereto had no property available for the satisfaction of the debt
evidenced by this instrument, or until any other proceedings can be had
against any of them, also their right, if any, to require the holder hereof
to hold as security for this Revolving Note any collateral deposited by any
of said Persons as security. Protest, notice of protest, notice of
dishonor, diligence or any other formality are hereby waived by all parties
bound hereon.
E-2
IN WITNESS WHEREOF, each of the Borrowers have caused this Revolving
Note to be made, executed and delivered by its duly authorized
representative as of the date and year first above written, all pursuant to
authority duly granted.
Giant Cement Holding, Inc.
ATTEST: By: ____________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial Officer
Assistant Secretary
[CORPORATE SEAL]
Giant Cement Company
ATTEST: By: ____________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial Officer
Assistant Secretary
[CORPORATE SEAL]
Keystone Cement Company
ATTEST: By: ____________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial Officer
Assistant Secretary
[CORPORATE SEAL]
E-3
Giant Resource Recovery Company, Inc.
ATTEST: By: ____________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial Officer
Assistant Secretary
[CORPORATE SEAL]
GCHI Investments, Inc.
ATTEST: By: ____________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial Officer
Assistant Secretary
[CORPORATE SEAL]
Giant Cement NC, Inc.
ATTEST: By: ____________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial Officer
Assistant Secretary
[CORPORATE SEAL]
E-4
EXHIBIT F
Form of Security Agreement
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Security Agreement"), dated as of
December 20, 1996, by and among GIANT CEMENT HOLDING, INC., a Delaware
corporation ("Giant Holding"), GIANT CEMENT COMPANY, a Delaware
corporation, KEYSTONE CEMENT COMPANY, a Pennsylvania corporation,
("Keystone"), GIANT RESOURCE RECOVERY COMPANY, INC., a Delaware corporation
("Giant Resource"), GCHI INVESTMENTS, INC., a Delaware corporation
("GCHI"), GIANT CEMENT NC, INC., a South Carolina corporation ("Giant
Cement NC") (referred to individually herein as a "Borrower" and
collectively as the "Borrowers") and SOUTHTRUST BANK OF ALABAMA, NATIONAL
ASSOCIATION, as Agent for each Lender from time to time party to the Credit
Agreement referenced below (the "Secured Party").
W I T N E S S E T H:
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WHEREAS, each Borrower, the Lenders and the Secured Party
simultaneously with the entering into of this Security Agreement have
entered into a Credit Agreement dated as of the date hereof (as at any time
hereafter amended, supplemented or replaced, the "Credit Agreement";
capitalized terms not otherwise defined in this Agreement shall have the
meaning given to such terms in the Credit Agreement); and
WHEREAS, as a condition to entering into the Credit Agreement, the
Lenders and the Secured Party have required that each Borrower secure the
Obligations under the Credit Agreement pursuant to the terms of this
Security Agreement;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Secured Party to enter into the Credit Agreement, each Borrower
hereby agrees with the Secured Party for the benefit of the Lenders as
follows:
1. Grant of Security Interest. As collateral security for payment
and satisfaction of the Obligations, each Borrower hereby grants to the
Secured Party for the benefit of the Lenders a continuing security interest
in and to all of the following property of such Borrower, whether now owned
or existing or hereafter acquired or arising:
(A) All accounts, accounts receivable, contract rights, notes,
bills, acceptances, choses in action, chattel paper, instruments,
documents, all present and future patents, trademarks, copyrights and
all applications therefor, other general intangibles, all licenses (to
the extent not prohibited by the relevant licenses or applicable law),
and other forms of obligations at any time owing to such Borrower, the
proceeds thereof and all of such Borrower's rights with respect to any
goods represented thereby, whether or not delivered, goods returned by
customers and all rights as an unpaid vendor or lienor, including
rights of stoppage in transit and of recovering possession by
proceedings including replevin and reclamation, together with all
customer lists, books and records, ledgers and account cards, computer
tapes, software, disks, printouts and records, whether now in
existence or hereafter created, relating to any of the foregoing
(collectively, the "Accounts");
(B) All goods, merchandise and other personal property,
including, without limitation, goods in transit, wheresoever located
and whether now owned or hereafter acquired by such Borrower which is
or may at any time be held for sale or lease, furnished under any
contract of service or held as raw materials, work-in-process, or
supplies or materials used or consumed in such Borrower's business,
including, without limitation, all such property the sale or
disposition of which has given rise to Accounts and which has been
returned to or repossessed or stopped in transit by such Borrower
(collectively, the "Inventory");
(C) All books and records (including without limitation,
customer data, credit files, computer programs, printouts, and other
computer materials and records) of such Borrower pertaining to any of
the foregoing; and
(D) All accessions to, substitutions for and all replacements,
products and proceeds of the foregoing, including, without limitation,
proceeds of insurance policies insuring the foregoing.
All of the property and interests in property described in subsections
(A) through (D) and all other property and interests in personal property
which shall, from time to time, secure the Obligations are herein
collectively referred to as the "Collateral."
2. Financing Statements. At or prior to the time of execution of
this Security Agreement, each Borrower shall have furnished the Secured
Party with properly executed financing statements as prescribed by the
Uniform Commercial Code as presently in effect in each of the states where
the Collateral owned by such Borrower is located (the "Financing
Statements"), the Financing Statements shall be approved by the Secured
Party and in form and number sufficient for filing wherever required with
respect to the Collateral, in order that the Secured Party for the benefit
of the Lenders shall have a duly perfected security interest of record in
the Collateral following the filing of such Financing Statements with the
appropriate governmental authorities, subject only to those liens permitted
by Section 7.6 of the Credit Agreement, and such Borrower shall execute, as
reasonably required by the Secured Party, any additional financing
statements or other documents to effect the same, together with any
necessary continuation statements so long as this Security Agreement
remains in effect.
3. Maintenance of Security Interest. Each Borrower will, from time
to time, upon the reasonable request of the Secured Party, deliver evidence
of ownership of the Collateral (copies of originals documents being
sufficient evidence) and specific collateral assignments of Collateral,
together with such other instruments and documents, financing statements,
amendments thereto, assignments or other writings as the Secured Party may
reasonably request, to carry out the terms of this Security Agreement or to
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protect or enforce the security interest in the Collateral granted pursuant
to this Security Agreement.
With respect to any and all Collateral to be secured and conveyed
under this Security Agreement, each Borrower agrees to do and cause to be
done all things necessary under the laws, rules and regulations of the
applicable jurisdiction to perfect and keep in full force the security
interest granted herein, including, but not limited to, the prompt payment
of all fees and expenses reasonably incurred in connection with any filings
made to perfect a security interest in the Collateral in favor of the
Secured Party for the benefit of the Lenders.
Each Borrower agrees to make appropriate entries upon its financial
statements and books and records disclosing the Secured Party's security
interest in the Collateral for the benefit of the Lenders.
4. Collections; Secured Party's Right to Notify Account Borrowers
and to Endorse Each Borrower's Name. Upon the occurrence and during the
continuation of an Event of Default, each Borrower hereby authorizes the
Secured Party to (i) open its mail and collect any and all amounts due to
it from persons obligated on any Accounts ("Account Debtors"); (ii) take
over its post office boxes or make other arrangements as the Secured Party
deems necessary to receive its mail, including notifying the post office
authorities to change the address for delivery of its mail to such address
as the Secured Party may designate; and (iii) notify any or all Account
Debtors that the Accounts have been assigned to the Secured Party for the
benefit of the Lenders and that the Secured Party has a security interest
therein for the benefit of the Lenders and to send requests for
verification of Accounts to Account Debtors and to request from Account
Debtors in such Borrower's name or Secured Party's name or that of Secured
Party's designee, any information concerning the Accounts and the amounts
owing thereon. The Secured Party shall promptly, but in no event more than
two Business Days, furnish such Borrower with a copy of any such notice
sent and such Borrower hereby agrees that any such notice, in the Secured
Party's sole discretion, may be sent on the stationery of such Borrower, in
which event such Borrower shall co-sign such notice with the Secured Party.
5. Covenants. Each Borrower covenants that:
(A) Inspection. The Secured Party (by any of its officers,
employees and agents) shall have the right, at any time or times
during each Borrower's usual business hours upon reasonable prior
notice at reasonable intervals, to inspect the Collateral belonging to
such Borrower, all records related thereto (and to make extracts or
copies from such records), and the premises upon which any of the
Collateral is located, to discuss each Borrower's affairs and finances
with any officer of such Borrower and to verify the amount, quality,
quantity, value and condition of, or any other matter relating to, the
Collateral. Upon or after the occurrence and during the continuation
of an Event of Default (as defined in Section 10 hereof) (whether or
not any or all the Obligations are accelerated in consequence
thereof), the Secured Party may at any time and from time to time
employ and maintain on any of any Borrower's premises a custodian
selected by the Secured Party who shall have full authority to do all
acts reasonably necessary to protect the interest of the Secured Party
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and the Lenders. All expenses incurred by the Secured Party by reason
of the employment of such custodian shall be paid by the Borrowers,
added to the Obligations and secured by the Collateral.
(B) Assignments, Records and Schedules of Accounts. Each
Borrower shall keep accurate and complete records of its Accounts
("Account Records") in accordance with GAAP and from time to time at
intervals reasonably designated by the Secured Party, it shall provide
the Secured Party with a Schedule of Accounts in form and substance
acceptable to the Secured Party describing all Accounts created or
acquired by it ("Schedule of Accounts"); provided, however, that any
Borrower's failure to execute and deliver any such Schedule of
Accounts shall not affect or limit the Secured Party's security
interest or other rights in and to any Accounts. Upon request, each
Borrower shall furnish the Secured Party with copies of proof of
shipment and delivery and copies of all documents, including, without
limitation, copies of invoices, repayment histories and present status
reports, relating to the Accounts so scheduled (collectively,
"Accounts Documents") and such other matters and information relating
to the status of then existing Accounts as the Secured Party shall
reasonably request. No Borrower shall remove any Accounts Records or
Accounts Documents from the locations set forth on Schedule 1 hereto.
(C) Notice Regarding Disputed Accounts. In the event of a
dispute involving an amount due and owing in excess of $500,000
between any Account Debtor and any Borrower (which shall include,
without limitation, any dispute in which an offset claim or
counterclaim may result), such Borrower shall promptly, but in no
event later than ten (10) Business Days, provide the Secured Party
with written notice thereof explaining in detail the reason for the
dispute, all claims related thereto and the amount in controversy.
(D) Verification of Accounts. Whether or not an Event of
Default has occurred, any of the Secured Party's officers, employees,
or agents shall have the right, at any time or times hereafter, to
verify the validity, amount or any other matter relating to any
Accounts by mail, telephone, telegraph or otherwise; provided,
however, that prior to an Event of Default (a) the applicable Borrower
shall be furnished the form of any verification request prior to the
use thereof and (b) the number of verifications requested shall not
exceed the number necessary for a reasonable sampling consistent with
prudent audit procedures.
(E) Sale of Inventory. So long as no Event of Default has
occurred and is continuing, each Borrower may sell its Inventory in
the ordinary course of business.
(F) Safekeeping of Inventory. Each Borrower shall be
responsible for the safekeeping of its Inventory, and in no event
shall the Secured Party have any responsibility for:
(i) Any loss or damage to Inventory or destruction thereof
occurring or arising in any manner or fashion from any cause
(except if the Secured Party has taken possession of or otherwise
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has control of Inventory and then such loss or damage is a result
of Secured Party's gross negligence or willful misconduct);
(ii) Any diminution in the value of Inventory; or
(iii) Any act or default of any carrier, warehouseman,
bailee or forwarding agency thereof or other Person in any way
dealing with or handling Inventory.
(G) Records and Schedules of Inventory. Each Borrower shall
keep correct and accurate records, itemizing and describing the kind,
type, location, quality and quantity of Inventory owned by it from
time to time, and such Borrower's cost therefor and selling price
thereof, and shall furnish to the Secured Party upon request from time
to time at reasonable intervals designated by the Secured Party a
current Schedule of Inventory ("Schedule of Inventory") based upon its
most recent physical inventory and records. Each Borrower shall
promptly advise the Secured Party in sufficient detail of any material
adverse change relating to the type, quality or quantity of the
Inventory. Each Borrower shall conduct a physical inventory, of which
the Secured Party shall be given prior written notice and shall have
the right to be present, no less frequently than required by the
Borrowers' outside auditors, and upon the occurrence and during the
continuation of an Event of Default more often if requested by the
Secured Party, and shall furnish to the Secured Party such other
documents and reports as the Secured Party shall request with respect
to the Inventory, including, without limitation, invoices relating to
such Borrower's purchase of Inventory. No Borrower shall move any of
the Inventory from, or keep any Inventory at any locations other than,
the locations thereof set forth on Schedule 2 or Schedule 3 hereto,
except that (i) such Borrower may move any amount of Inventory to,
and keep any amount of Inventory at, the Harleyville, South Carolina
location set forth on Schedule 2 hereto (the "Principal Location") and
Keystone may keep any amount of Inventory at the Bath, Pennsylvania
location set forth on Schedule 2 hereto; (ii) except as provided in
(i) above with respect to Keystone, the Borrowers collectively may
move Inventory to or keep Inventory at, any location other than the
Principal Location (each such other location a "Remote Location")
provided that (x) after giving effect thereto, Inventory at any Remote
Location does not exceed $250,000 in aggregate cost therefor and
Inventory at all Remote Locations does not exceed $500,000 in
aggregate cost therefor, and (y) if any such Remote Location is not
set forth on Schedule 2 or Schedule 3 hereto, prior to moving
Inventory to any such Remote Location, the Borrowers shall have
provided prior written notice thereof to the Secured Party and shall
have furnished the Secured Party with executed Financing Statements
acceptable in form and content to the Agent with respect to such
Inventory; and (iii) such Borrower may move Inventory upon receipt of
the written consent of the Agent.
(H) Payment of Taxes and Assessments. Each Borrower will
promptly pay, when due, all taxes or assessments levied against any of
the Collateral; provided, however, such Borrower shall not be required
to pay or cause to be paid any such tax or assessment, so long as the
validity thereof shall be actively contested in good faith by proper
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proceedings diligently conducted, any Lien (other than statutory liens
having priority as a matter of law) arising in connection therewith
shall be and remain in all respects inferior to the liens in favor of
the Secured Party for the benefit of the Lenders, and adequate
reserves with respect thereto shall be established and maintained; but
provided further that any such tax or assessment shall be paid
forthwith upon the commencement of proceedings to foreclose any lien
securing the same.
6. General Warranties Regarding Collateral. Each Borrower hereby
warrants and represents to the Secured Party that it is and will continue
to be the owner of the Collateral located on the locations identified
beneath its name on Schedules 1, 2 and 3 hereto, free and clear of all
Liens other than the security interest granted hereunder in favor of the
Secured Party for the benefit of the Lenders and the Liens permitted by
Section 7.6 of the Credit Agreement, and that it will defend the Collateral
and any products and proceeds thereof against all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to
the Secured Party and the Lenders. Except as so designated on Schedule 2
hereto, none of the Collateral is located on leased property.
7. Accounts Warranties and Representations. Each Borrower warrants
and represents to the Secured Party that it may rely on all written
statements or representations made by such Borrower on or with respect to
the Accounts or any Schedule of Accounts prepared and delivered by such
Borrower and, unless otherwise indicated in writing by such Borrower, that:
(A) All Account Records and Account Documents are located and
shall be kept only at such Borrower's principal place of business and
chief executive office as set forth in Schedule 1 attached hereto and
incorporated herein by reference;
(B) The Accounts are genuine, are in all respects what they
purport to be, are not evidenced by a judgment, instrument or document
(other than an invoice or purchase order) or, if evidenced by such
instrument or document, are only evidenced by one original instrument
or document, which has been delivered to the Secured Party;
(C) The Accounts cover bona fide sales and deliveries of
Inventory usually dealt in by such Borrower, or the rendition by such
Borrower of services, to an Account Debtor in the ordinary course of
business;
(D) The amounts of the face value of the Accounts shown on any
Schedule of Accounts provided to the Secured Party, and all invoices
and statements delivered to the Secured Party with respect to any
Accounts, are actually and absolutely owing to such Borrower and are
not contingent for any reason except for claims arising as a result of
warranties made by Borrower in its ordinary course of business which
do not in the aggregate materially affect such Borrower's business,
profits or condition, financial and otherwise;
(E) There are no material setoffs, discounts, allowances,
claims, counterclaims or disputes of any kind existing or asserted
with respect to the Accounts, other than customary discounts and
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allowances granted in the ordinary course of such Borrower's business,
and such Borrower has not made any agreement with any Account Debtor
thereunder for any deduction therefrom;
(F) To the best of such Borrower's actual knowledge, (i) the
Accounts represent valid and legally enforceable indebtedness
according to their terms and (ii) there are no facts, events, or
occurrences which in any way materially impair the validity or
enforcement thereof or tend to reduce the amount payable thereunder
from the amount of the invoice face value shown on any Schedule of
Accounts, and on all contracts, invoices and statements delivered to
the Secured Party with respect thereto;
(G) To the best of such Borrower's actual knowledge, all Account
Debtors (i) had the capacity to contract at the time any contract or
other document giving rise to the Accounts was executed and (ii) were
reasonably expected to be able to pay at the time any contract was
executed all Accounts under such contract.
(H) The goods or services giving rise thereto are not, and were
not at the time of the sale or performance thereof, subject to any
Lien, except Liens permitted by Section 7.6 of the Credit Agreement,
those granted to the Secured Party hereunder and those removed or
terminated prior to the date hereof;
(I) The Accounts have not been pledged to any Person other than
to the Secured Party, and will be owned by the Borrower free and clear
of any Liens, except those in favor of the Secured Party or as
permitted by Section 7.6 of the Credit Agreement;
(J) The Secured Party's security interest in the Accounts, will
not be subject to any offset, deduction, counterclaim, lien or other
adverse condition;
(K) None of the Accounts shall represent a delivery of goods
upon "consignment," "guaranteed sale," "sale or return transactions,"
"payment on reorder" or similar terms and will not be subject to any
prohibition or limitation upon assignment.
8. Inventory Warranties and Representations. With respect to
Inventory, each Borrower warrants and represents to the Secured Party that
it may rely on all written statements or representations made by such
Borrower on or with respect to any Inventory and, unless otherwise
indicated in writing by such Borrower, that:
(A) All Inventory of such Borrower is located only at the
locations listed beneath its name on Schedules 2 and 3 attached hereto
and incorporated herein by reference (each an "Inventory Location"),
or is Inventory in transit;
(B) No Inventory of such Borrower is or will be subject to any
Lien whatsoever, except for the security interest granted to the
Secured Party hereunder and Liens permitted by Section 7.6 of the
Credit Agreement, and notwithstanding such exception all statutory
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liens of warehousemen, bailees, lessors or similar parties at either
Principal Location shall be waived or subordinated in form and
substance acceptable to the Secured Party to the security interest
granted to the Secured Party hereunder;
(C) No Inventory of an aggregate cost in excess of $250,000 is
now either located on Leased Premises, or stored with a bailee,
warehouseman, or similar party; all present locations of Inventory at
leased premises are set forth on Schedule 2 hereto and all preset
locations of Inventory so stored with a bailee, warehousemen or
similar party are set forth on Schedule 3 hereto; and
(D) No Inventory of such Borrower is under consignment to any
Person.
9. Casualty and Liability Insurance Required.
(A) Each Borrower will keep the Collateral continuously insured
against such risks as are customarily insured against by businesses of
like size and type engaged in the same or similar operations
including, without limiting the generality of any other covenant
herein contained:
(i) casualty insurance on the Inventory in an amount not
less than the full insurable value thereof, against loss or
damage by theft, fire and lightning and other hazards ordinarily
included under uniform broad form standard extended coverage
policies, limited only as may be provided in the standard broad
form of extended coverage endorsement at the time in use in the
states in which the Collateral is located;
(ii) comprehensive general liability insurance against
claims for bodily injury, death or property damage occurring with
or about such Collateral (such coverage to include provisions
waiving subrogation against the Secured Party and the Lenders) in
amounts as shall be reasonably satisfactory to Agent;
(iii) liability insurance with respect to the operation
of its facilities under the workers' compensation laws of the
states in which such Collateral is located; and
(iv) business interruption insurance.
(B) Each insurance policy obtained in satisfaction of the
requirements of Section 9(A) hereof:
(i) may be provided by blanket policies now or hereafter
maintained by each Borrower or its parent companies;
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(ii) shall be issued by such insurer (or insurers) as shall
be financially responsible and of recognized standing;
(iii) shall be in such form and have such provisions
(including without limitation the loss payable clause, the waiver
of subrogation clause, the deductible amount, if any, and the
standard mortgagee endorsement clause), as are generally
considered standard provisions for the type of insurance involved
and are reasonably acceptable in all respects to the Agent;
(iv) shall prohibit cancellation or substantial
modification, termination or lapse in coverage by the insurer
without at least 30 days' prior written notice to the Agent,
except for non-payment of premium, in which case such policies
shall provide ten (10) days' prior written notice;
(v) without limiting the generality of the foregoing, all
insurance policies where applicable under Section 9(A)(i) carried
on the Collateral shall name the Agent, for the benefit of the
Lenders, as loss payee and a party insured thereunder in respect
of any claim for payment in excess of $250,000.
(C) Prior to expiration of any such policy, such Borrower shall
furnish the Agent with evidence satisfactory to the Agent that the
policy or certificate has been renewed or replaced or is no longer
required by this Agreement.
(D) Each Borrower hereby irrevocably makes, constitutes and
appoints the Agent (and all officers, employees or agents designated
by the Agent), for the benefit of the Lenders, effective upon the
occurrence and during the continuance of an Event of Default, as such
Borrower's true and lawful attorney (and agent-in-fact) for the
purpose of making, settling and adjusting claims under such policies
of insurance, endorsing the name of such Borrower on any check, draft,
instrument or other item or payment for the proceeds of such policies
of insurance and for making all determinations and decisions with
respect to such policies of insurance.
(E) In the event such Borrower shall fail to maintain, or fail
to cause to be maintained, the full insurance coverage required
hereunder or shall fail to keep any of its Collateral in good repair
and good operating condition, the Agent may (but shall be under no
obligation to), without waiving or releasing any Obligation or Event
of Default by such Borrower hereunder, contract for the required
policies of insurance and pay the premiums on the same or make any
required repairs, renewals and replacements; and all sums so disbursed
by Agent, including reasonable attorneys' fees, court costs, expenses
and other charges related thereto, shall be payable on demand by such
Borrower to the Agent and shall be additional Obligations secured by
the Collateral.
(F) Each Borrower agrees that to the extent that it shall not
carry insurance required by Section 9(A) hereof, it shall in the event
of any loss or casualty pay promptly to the Agent, for the benefit of
the Lenders, for application in accordance with the provisions of
Section 9(H) hereof, such amount as would have been received as Net
Proceeds (as hereinafter defined) by the Agent, for the benefit of the
Lenders, under the provisions of Section 9(H) hereof had such
insurance been carried to the extent required.
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(G) The Net Proceeds of the insurance carried pursuant to the
provisions of Sections 9(A)(ii) and 9(A)(iii) hereof shall be applied
by such Borrower toward extinguishment of the defect or claim or
satisfaction of the liability with respect to which such insurance
proceeds may be paid.
(H) The Net Proceeds of the insurance carried with respect to
the Collateral pursuant to the provisions of Section 9(A)(i) hereof
shall be paid to such Borrower and held by such Borrower in a separate
account and applied as follows: (i) as long as no Event of Default
shall have occurred and be continuing, after any loss under any such
insurance and payment of the proceeds of such insurance, each Borrower
shall have a period of 180 days after payment of the insurance
proceeds with respect to such loss to elect to either (x) repair or
replace the Collateral so damaged, (y) deliver such Net Proceeds to
the Agent, for the benefit of the Lenders, as additional Collateral or
(z) apply such Net Proceeds to the acquisition of tangible assets used
or useful in the conduct of the business of such Borrower, subject to
the provisions of this Agreement. If such Borrower elects to repair
or replace the Collateral so damaged, such Borrower agrees the
Collateral shall be repaired to a condition substantially similar to
its condition prior to damage or replaced with Collateral in a
condition substantially similar to the condition of the Collateral so
replaced prior to damage; and (ii) at all times during which an Event
of Default shall have occurred and be continuing, after any loss under
such insurance and payment of the proceeds of such insurance, such
Borrower shall immediately deliver such Net Proceeds to such Agent,
for the benefit of the Lenders, as additional Collateral.
(I) "Net Proceeds" when used with respect to any insurance
proceeds shall mean the gross proceeds from such proceeds, award or
other amount, less all taxes, fees and expenses (including attorneys'
fees) incurred in the realization thereof.
(J) In case of any material damage to or destruction of all or
any material part of the Collateral pledged hereunder by a Borrower,
such Borrower shall give prompt notice thereof to the Agent. Each
such notice shall describe generally the nature and extent of such
damage, destruction, taking, loss, proceeding or negotiations. Each
Borrower is hereby authorized and empowered to adjust or compromise
any loss under any such insurance.
10. Events of Default. The following shall constitute Events of
Default ("Events of Default") under this Security Agreement:
(A) The occurrence of an Event of Default under the Credit
Agreement; or
(B) Failure by any Borrower to perform, observe or comply with
any term, covenant, condition or provision contained in this Security
Agreement and in each event other than such failure to perform,
observe and comply with the last sentence of Section 5(G) hereof, such
failure shall continue for 30 or more days after the earlier of
receipt of notice of such failure by the Secured Party or any senior
officer of such Borrower becomes aware of such failure; or
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(C) Any material warranty, representation or other written
statement made by any Borrower herein or in any instrument furnished
by such Borrower to the Secured Party pursuant to this Security
Agreement shall be false or misleading in any material respect on the
date as of which it is made.
11. Rights and Remedies Upon Event of Default. During the occurrence
and continuation of an Event of Default, the Secured Party shall have the
following rights and remedies:
(A) All of the rights and remedies of a secured party under the
Uniform Commercial Code of the state where such rights and remedies
are asserted, or under other applicable law, all of which rights and
remedies shall be cumulative, and none of which shall be exclusive, to
the extent permitted by law, in addition to any other rights and
remedies contained in this Security Agreement, the Credit Agreement or
any other Loan Documents;
(B) The right, to the extent permitted by law, to enter upon the
premises of any Borrower through self-help and without judicial
process, without first obtaining a final judgment or giving any
Borrower notice and opportunity for a hearing on the validity of the
Secured Party's claim and without any obligation to pay rent to any
Borrower, or any other place or places where any Collateral is located
and kept, and remove the Collateral therefrom to the premises of the
Secured Party or any agent of the Secured Party, for such time as the
Secured Party may desire, in order effectively to collect or to
liquidate the Collateral;
(C) The right to (i) demand payment of the Accounts; (ii)
enforce payment of the Accounts, by legal proceedings or as otherwise
provided herein; (iii) exercise all of the Borrowers' rights and
remedies with respect to the collection of the Accounts; (iv) settle,
adjust, compromise, extend or renew the Accounts; (v) settle, adjust
or compromise any legal proceedings brought to collect the Accounts;
(vi) if permitted by applicable law, sell or assign the Accounts upon
such terms, for such amounts and at such time or times as the Secured
Party deems advisable; (vii) discharge and release the Account Debtors
or extend the time of payment of any and all Accounts or to make
allowances or adjustments relating thereto; (viii) if any Borrower
fails to promptly do so, prepare, file and sign such Borrower's name
on a Proof of Claim in bankruptcy or similar document against any
Account Debtor; (ix) prepare, file and sign any Borrower's names on
any notice of lien, notice of assignment, financing statements,
assignment or satisfaction of lien or similar document in connection
with the Accounts; (x) endorse the name of any Borrower upon any
chattel paper, document, instrument, invoice, freight xxxx, xxxx of
lading or similar document or notices to Account Debtors or agreement
relating to the Accounts or Inventory; (xi) use any Borrower's
stationery for verifications of the Accounts and notices thereof to
Account Debtors; (xii) use the information recorded on or contained in
any data processing equipment and computer hardware and software
relating to the Accounts and Inventory to which any Borrower has
access; (xiii) open any Borrower's mail and collect any and all
amounts due to it from persons obligated and any Accounts; (xiv) take
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over any Borrower's post office boxes or make other arrangements as
the Secured Party deems necessary to receive its mail including
notifying the post office authorities to change the address for
delivery of its mail to such address as the Secured Party may
designate; and (xv) do all acts and things and execute all documents
necessary, in the Secured Party's discretion, to collect the Accounts;
(D) Upon ten (10) days notice to the Authorized Representative,
the right to sell (or to direct any Borrower to sell as agent of the
Secured Party), assign, lease or otherwise to dispose of all or any
Collateral in its then condition, or after any repairs or refurbishing
shall have been made, at public or private sale or sales, with such
notice as may be required by law, in lots or in bulk, for cash or on
credit, with or without representations and warranties, at any time or
place, in one or more sales all as the Secured Party, in its sole
discretion, may deem advisable. The Secured Party shall have the
right to conduct such sales on any Borrower's premises or elsewhere
and shall have the right to use any Borrower's premises without charge
for such sales for such time or times as the Secured Party may see
fit. The Secured Party may, if it deems it reasonable, postpone or
adjourn any sale of the Collateral from time to time by an
announcement at the time and place of such postponed or adjourned
sale, without being required to give a new notice of sale. Each
Borrower agrees that the Secured Party has no obligation to preserve
rights to the Collateral against prior parties or to xxxxxxxx any
Collateral for the benefit of any Person. If any of the Collateral
shall require repairs, maintenance, preparation or the like, the
Secured Party shall have the right, but shall not be obligated, to
perform such repairs, maintenance, preparation or other processing for
the purpose of putting the same in such saleable form as the Secured
Party shall deem appropriate, but the Secured Party shall have the
right to sell or dispose of the Collateral without such processing.
Each Borrower agrees that in the event notice is necessary under
applicable law, written notice mailed to an Authorized Representative
in the manner specified in Section 17 hereof ten (10) days prior to
the date of public sale of any of the Collateral or prior to the date
after which any private sale or other intended disposition of the
Collateral will be made shall constitute commercially reasonable
notice to such Borrower of such sale or other disposition. All notice
is hereby waived with respect to any of the Collateral which the
Secured Party has reason to believe will decline speedily in value.
The Secured Party may purchase all or any part of the Collateral at
public or, if permitted by law, private sale, free from any right of
redemption which is hereby expressly waived by each Borrower and, in
lieu of actual payment of such purchase price, may set off the amount
of such price against the Obligations. The net cash proceeds
resulting from the collection, liquidation, sale, lease or other
disposition of the Collateral shall be applied in accordance with
Section 14 hereof. Each Borrower shall be liable to the Secured Party
and shall pay to the Secured Party on demand any deficiency with
respect to the Obligations which may remain after such sale,
disposition, collection or liquidation of the Collateral. The Secured
Party shall remit to Giant Holding or the Person entitled thereto any
surplus of such cash proceeds remaining after all Obligations have
been paid in full.
12. Anti-Marshalling Provisions. The right is hereby given by each
Borrower to the Secured Party to make releases (whether in whole or in
part) of all or any part of the Collateral agreeable to the Secured Party
12
without notice to, or the consent, approval or agreement of other parties
and interests, including junior lienors, which releases shall not impair in
any manner the validity of or priority of the liens and security interest
in the remaining Collateral conferred under such documents, nor release any
Borrower from liability for the Obligations hereby secured.
Notwithstanding the existence of any other security interest in the
Collateral held, the Secured Party shall have the right to determine the
order in which any or all of the Collateral shall be subjected to the
remedies provided in this Security Agreement. Each Borrower hereby waives
any and all right to require the marshalling of assets in connection with
the exercise of any of the remedies permitted by applicable law or provided
herein.
13. Appointment of the Secured Party as Borrowers' Lawful Attorney.
During the continuance of an Event of Default, each Borrower irrevocably
designates, makes, constitutes and appoints the Secured Party (and all
Persons designated by the Secured Party) as its true and lawful attorney
(and agent-in-fact) for the purposes specified herein. All acts of the
Secured Party or its designee taken pursuant to Section 11 are hereby
ratified and confirmed and the Secured Party or its designee shall not be
liable for any acts of omission or commission nor for any error of judgment
or mistake of fact or law except to the extent that the Secured Party or
its designee engages in gross negligence, wilful misconduct or a wilful
default or wilful breach under this Agreement or any other Loan Document.
This power, being coupled with an interest, is irrevocable by the Borrowers
until all Obligations are paid in full.
14. Application of Proceeds. All monies collected by the Secured
Party upon any sale or other disposition of the Collateral, together with
all other monies received by the Secured Party hereunder in respect of the
Collateral, shall be applied as provided in Section 8.5 of the Credit
Agreement.
15. Expenses; Indemnity. The Borrowers will upon demand jointly and
severally pay the Secured Party the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel and of
any experts and agents, which it may reasonably incur in connection with
(a) the execution of the terms of this Security Agreement, (b) the custody
or preservation of, or the sale of, collection from, or other realization
upon any of the Collateral hereunder or (c) the failure by any Borrower to
perform or to observe any of the provisions hereof. Each Borrower agrees
jointly and severally to indemnify and hold harmless the Secured Party and
each Lender from and against any and all claims and demands, losses,
judgments and liabilities (including liabilities for penalties) of whatever
kind or nature, growing out of or arising from this Security Agreement or
the exercise by the Secured Party of any right or remedy granted to it
hereunder or under the Credit Agreement or any other Loan Document, other
than any such claim, demand, loss, judgment or liability resulting from the
gross negligence or wilful misconduct of the Secured Party. If and to the
extent that the obligations of the Borrowers under this Section 15 are
unenforceable for any reason, each Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
16. Security Interest Absolute. All rights of the Secured Party
hereunder, and all obligations of each Borrower hereunder, shall be
absolute and unconditional irrespective of:
13
(A) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document or any other agreement or
instrument relating to any of the Obligations;
(B) any change in the term, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or
instrument relating to any of the Obligations;
(C) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Obligations; or
(D) any other circumstances (other than circumstances resulting
from the gross negligence or wilful misconduct of the Secured Party)
which might otherwise constitute a defense available to, or a
discharge of, any Borrower in respect of the Obligations or of this
Security Agreement.
17. Amendments, Waivers and Consents. No amendment or waiver of any
provision of this Security Agreement or consent to any departure of any
Borrower herefrom shall in any event be effective unless the same shall be
in writing and signed by each Borrower and the Secured Party with the
consent of the Required Lenders and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of the Secured Party to
exercise, and no delay in exercising, any rights, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right, power or remedy by the Secured Party preclude any other
or further exercise thereof or the exercise of any other right, power or
remedy.
18. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered
to such party (against receipt therefor) at the address set forth below or
such other address as such party shall specify to the other parties in
writing (or, in the case of notice by telecopy, telegram or telex (where
the receipt of such message is verified by return) expressly provided for
hereunder, when received at such telecopy or telex number as may from time
to time be specified in written notice to the other parties hereto or
otherwise received), or if sent prepaid by certified or registered mail
return receipt requested on the fifth Business Day after the day on which
mailed, addressed to such party at said address:
14
(A) if to any of the Borrowers:
Giant Cement Holding, Inc.
000-X Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Vice President and
Chief Financial Officer
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
Keystone Cement Company
Xxxx Xxxxxx Xxx X
Xxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxx
President and CEO
Telephone: (000)000-0000
Telefacsimile: (000) 000-0000
(B) if to the Secured Party:
SouthTrust Bank of Alabama, National Association
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000)000-0000
Telefacsimile: (000)000-0000
with a copy to:
SouthTrust Bank of Alabama
000 0xx Xxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
19. Termination. This Security Agreement shall terminate when all
the Obligations have been fully paid, satisfied and performed, or otherwise
satisfied or provided for to the satisfaction of the Secured Party, and the
Credit Agreement shall have been terminated at which time the Secured Party
15
shall promptly release all of the Collateral from the security interest
granted hereunder and take all action reasonably necessary to effectuate
the same. Notwithstanding the foregoing provisions of this Section 19, in
the event that any payment made or deemed made to the Secured Party in
payment of any Obligation shall be rescinded or declared to be or become
void, voidable or otherwise recoverable from the Secured Party for any
reason whatsoever, the Lien in favor of the Secured Party created hereunder
shall be and become reinstituted in respect of such Obligations until the
same shall be thereafter fully and finally paid, satisfied and discharged.
20. Interpretation; Partial Invalidity. Whenever possible each
provision of this Security Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of
this Security Agreement shall be prohibited by or invalid under such law,
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 Security Agreement.
21. Miscellaneous; Remedies Cumulative. Unless the context of this
Security Agreement otherwise clearly requires, references to the plural
includes the singular, the singular the plural and the part the whole and
"or" has the inclusive meaning represented by the phrase "and/or". The
section headings used herein are for convenience of reference only and
shall not define, limit or extend the provisions of this Security
Agreement. All remedies hereunder are cumulative and are not exclusive of
any other rights and remedies of the Secured Party provided by law or under
the Credit Agreement, the Loan Documents, or other applicable agreements or
instruments. The making of the Loans to the Borrowers pursuant to the
Credit Agreement shall be conclusively presumed to have been made or
extended, respectively, in reliance upon the obligations of the Borrower
incurred pursuant to this Security Agreement.
22. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Secured Party and each Borrower, and the
right, remedies, powers, and privileges of the Secured Party hereunder
shall inure to the benefit of the successors and assigns of the Secured
Party; provided, however, that (i) no Borrower shall make any assignment
hereof without the prior written consent of the Secured Party and (ii) the
Secured Party may make assignments in compliance with Section 10.1 of the
Credit Agreement.
23. Counterparts. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
24. Governing Law.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF SOUTH CAROLINA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
16
(B) EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY
OF MECKLENBURG OF NORTH CAROLINA, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH BORROWER EXPRESSLY
WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING
OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING.
(C) EACH BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH BORROWER
PROVIDED IN THE CREDIT AGREEMENT, OR BY ANY OTHER METHOD OF SERVICE
PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NORTH
CAROLINA.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
PRECLUDE THE SECURED PARTY FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY BORROWER OR ANY OF
SUCH BORROWER'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE
EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH BORROWER HEREBY
AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
17
JURY AND EACH BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[Signature pages follow]
18
IN WITNESS WHEREOF, the Borrower and the Secured Party have caused
this Security Agreement to be duly executed by delivered by its respective
officer thereunto duly authorized as of the date first above written.
GIANT CEMENT HOLDING, INC.
ATTEST: By: _______________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial
Officer
Assistant Secretary
[CORPORATE SEAL]
GIANT CEMENT COMPANY
ATTEST: By: _______________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial
Officer
Assistant Secretary
[CORPORATE SEAL]
KEYSTONE CEMENT COMPANY
ATTEST: By: _______________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President
Assistant Secretary
[CORPORATE SEAL]
SIGNATURE PAGE 1 OF 3
GIANT RESOURCE RECOVERY COMPANY, INC.
ATTEST: By: _______________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial
Officer
Assistant Secretary
[CORPORATE SEAL]
GCHI INVESTMENTS, INC.
ATTEST: By: _______________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial
Officer
Assistant Secretary
[CORPORATE SEAL]
GIANT CEMENT NC, INC.
ATTEST: By: _______________________________________
Name: Xxxxx X. Xxxxxx
______________________ Title: Vice President and Chief Financial
Officer
Assistant Secretary
[CORPORATE SEAL]
SIGNATURE PAGE 2 OF 3
SOUTHTRUST BANK OF ALABAMA, NATIONAL
ASSOCIATION, as Agent for the Lenders
By: _______________________________________
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
as Lender
By: _______________________________________
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
SIGNATURE PAGE 3 OF 3
SCHEDULE 1 TO
SECURITY AGREEMENT
Principal place of business, chief executive office and
location of all Account Records and Account Documents:
1. Giant Cement Holding, Inc.
a. Principal Office: 000X Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, XX 00000
b. Principal place of 000X Xxxxxxx Xxxxxxx
business: Xxxxxxxxxxx, XX 00000
c. Locations of Account 000X Xxxxxxx Xxxxxxx
Records and Account Xxxxxxxxxxx, XX 00000
Documents:
2. Giant Cement Company
a. Principal Office: 000X Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, XX 00000
b. Principal place of P. O. Box 218
business: 000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
c. Locations of Account 000X Xxxxxxx Xxxxxxx
Records and Account Xxxxxxxxxxx, XX 00000
Documents:
3. Keystone Cement Company
a. Principal Office: 0000 Xxxxxxx Xxxx
X. X. Xxx X
Xxxx, XX 00000-0000
b. Principal place of Route 329, Box A
business: Xxxx, XX 00000-0000
c. Locations of Account 0000 Xxxxxxx Xxxx
Records and Account X.X. Xxx X
Xxxxxxxxx: Xxxx, XX 00000-0000
4. Giant Resource Recovery Company, Inc.
a. Principal Office: 000X Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, XX 00000
b. Principal place of P. O. Box 352
business: 000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
c. Locations of Account 000X Xxxxxxx Xxxxxxx
Records and Account Xxxxxxxxxxx, XX 00000
Documents:
5. GCHI Investments, Inc.
a. Principal Office: Organizational Services
P. O. Xxx 0000
Xxxxxxxxxx, XX 00000
b. Principal place of 000X Xxxxxxx Xxxxxxx
business: Xxxxxxxxxxx, XX 00000
c. Location of Account Organizational Services
Records and Account X.X. Xxx 0000
Xxxxxxxxx: Xxxxxxxxxx, XX 00000
6. Giant Cement NC, Inc.
a. Principal Office: 000X Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, XX 00000
b. Principal place of Durham Terminal
business: P. O. Xxx 00000
Xxxxx Xxxx, Xxxxxx, XX 00000
c. Location of Account 000X Xxxxxxx Xxxxxxx
Records and Account Xxxxxxxxxxx, XX 00000
Documents:
SCHEDULE 2 TO
SECURITY AGREEMENT
Locations of Inventory
(Leased locations noted as such)
1. Giant Cement Holding, Inc.
None
2. Giant Cement Company
000 Xxxxx Xxxxxx, X. X. Xxx 000
Xxxxxxxxxxx, XX 00000
Atlanta Terminal
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
[Leased Location]
3. Keystone Cement Company
Xxxxx 000, X. X. Xxx X
Xxxx, XX 00000-0000
4. Giant Resource Recovery Company, Inc.
None
5. GCHI Investments, Inc.
None
6. Giant Cement NC, Inc.
Charlotte Terminal
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
[Leased Location]
Xxxxxx Xxxxxxxx
X. X. Xxx 00000, 000 Xxxxx Xxxx
Xxxxxx, XX 00000
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
[Leased Location]
SCHEDULE 3 TO
SECURITY AGREEMENT
Inventory stored with bailee, warehouseman, or similar party
1. Giant Cement Holding, Inc.
None
2. Giant Cement Company
Southern Color and Chemical Company
Seven Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
3. Keystone Cement Company
None
4. Giant Resource Recovery Company, Inc.
None
5. GCHI Investments, Inc.
None
6. Giant Cement NC, Inc.
None
EXHIBIT G
Form of Opinion of Borrowers' Counsel
December 20, 1996
SouthTrust Bank of Alabama, National Association,
as Agent, and each of the Lenders
party to the Credit Agreement
referenced below
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
Re: $30,000,000 Revolving Credit Facility and $2,000,000 Letter of Credit
Facility for Giant Cement Holding, Inc., Giant Cement Company,
Keystone Cement Company, Giant Resource Recovery Company, Inc., GCHI
Investments, Inc. and Giant Cement NC, Inc. (collectively, the
"Borrowers" and individually, a "Borrower")
Gentlemen:
We have acted as special counsel to each Borrower in connection with
the revolving credit facility in the maximum aggregate principal amount at
any time outstanding of $30,000,000 and the letter of credit facility in
the amount of $2,000,000 being made available by you to the Borrowers on
this date pursuant to the Credit Agreement of even date herewith among the
Borrowers, each lender party thereto and SouthTrust Bank of Alabama,
National Associates, as Agent for the Lenders (the "Credit Agreement") and
the transactions contemplated by the Credit Agreement.
This opinion is being delivered in accordance with the condition set
forth in Section 4.1 (a) (ii) of the Credit Agreement. All capitalized
terms not otherwise defined herein shall have the meanings provided
therefor in the Credit Agreement.
As such counsel, we have reviewed the following documents:
1. the Credit Agreement;
2. each Revolving Note;
3. the Security Agreement; and
4. the Financing Statements (as hereinafter defined).
G-1
All the foregoing documents are collectively referred to hereinafter as the
"Loan Documents".
For purposes of the opinions expressed below, we have assumed that all
natural persons executing the Loan Documents have legal capacity to do so;
all signatures on all documents submitted to us are genuine; all documents
submitted to us as originals are authentic; and all documents submitted to
us as certified copies or photocopies conform to the original documents,
which themselves are authentic.
In addition, for purposes of giving this opinion, we have examined
corporate records of each Borrower, certificates of public officials,
certificates of appropriate officials of each Borrower and such other
documents or made such inquiries as we have deemed appropriate.
Based upon and subject to the foregoing, it is our opinion that:
1. Each Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the state in which it
is organized and is duly qualified to transact business as a foreign
corporation and is in good standing in all of jurisdictions in which
the nature of its business requires such qualification. Each Borrower
has full corporate power and authority to own its assets and conduct
the businesses in which it is now engaged, and each Borrower has full
corporate power and authority to enter into each of the Loan Documents
to which it is a party and to perform its obligations thereunder.
2. Each of the Loan Documents has been duly authorized by the
Board of Directors of each Borrower, has been executed and delivered
by each Borrower, and constitutes the legal, valid and binding
obligation of the Borrower, enforceable against in accordance with its
respective terms, except (i) as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization and other
similar laws relating to or affecting creditors' rights generally and
(ii) as the enforceability of the remedial provisions thereof may be
limited by general equitable principles; provided, however, the
application of such equitable principles or limitations of law does
not, in our opinion, materially interfere with the practical
realization of the benefits and security intended to be conferred
under the Loan Documents.
3. Neither the execution or delivery of, nor performance by
each Borrower of its respective obligations under, the Loan Documents,
(a) does or will conflict with, violate or constitute a breach of (i)
the charter or bylaws of such Borrower, (ii) any laws, rules or
regulations applicable to such Borrower or (iii) any contract,
agreement, indenture, lease, instrument, other document, judgment,
writ, determination, order, decree or arbitral award to which such
Borrower is a party or by which such Borrower or any of its properties
is bound, or (b) requires the prior consent of, notice to or filing
with any Governmental Authority, or (c) does or will result in the
creation or imposition of any Lien of any nature upon or with respect
to any of the properties of any Borrower, except for the Liens in
favor of you expressly created pursuant to the Security Agreement.
G-2
4. There is no pending or, to the best of our knowledge,
threatened, action, suit, investigation or proceeding (including
without limitation any action, suit, investigation or proceeding under
any environmental or labor law), nor is there any basis therefor,
before or by any court, or governmental department, commission, board,
bureau, instrumentality, agency or arbitral authority, (i) which calls
into question the validity or enforceability of the Loan Documents, or
the titles to their respective offices or authority of any officers of
any Borrower or (ii) an adverse result in which would have a Material
Adverse Effect.
5. No Borrower is subject to any charter, bylaw or other
corporate restrictions nor, to the best of our knowledge, is any
Borrower party to or bound by any contract or agreement which (i)
materially and adversely affects its business, properties or condition
(financial or otherwise), or (ii) restricts, limits, or prohibits
payment of the Loans and Obligations or performance of its obligations
pursuant to the terms of the Loan Documents.
6. None of the transactions contemplated by the Credit
Agreement, including, without limitation, the use of the proceeds of
the Loans made available to the Borrowers, will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as
amended, any regulations issued pursuant thereto, or regulations G, T,
U or X of the Board of Governors of the Federal Reserve System, and to
the best of our knowledge the Borrowers do not own or intend to
purchase or carry any "margin securities" as defined in said
regulations.
7. The Security Agreement is effective to create a valid
security interest in favor of the Agent for the benefit of the Lenders
in the Collateral described therein. The Uniform Commercial Code
Financing Statements on Form UCC-1 described on Schedule A attached
hereto (collectively, the "Financing Statements") have been duly
executed and delivered to the Agent and are in form, number and
content sufficient (together with the tender of necessary filing fees)
for filing with the respective filing offices described on Schedule A
with the effect that, upon such filing, the Agent shall have a duly
perfected security interest for the benefit of the Lenders in the
Collateral described in the Security Agreement to the extent that a
security interest in such Collateral can be perfected by the filing of
financing statements under the Uniform Commercial Code as in effect in
the appropriate jurisdictions and the proceeds thereof and no further
filings or recordations are necessary to perfect the security
interests created by the Security Agreement. Such security interest
will have priority over any other consensual security interests in the
same property that are perfected by the filing of a financing
statement subsequent to the date of such filings on your behalf,
except for purchase money security interests.
We are not expressing any opinion as to any matter relating to any
jurisdiction other than the laws of the State of __________________ and the
United States of America and we assume no responsibility as to the
applicability of the laws of any other jurisdiction as to the subject
transaction or the effect of such laws thereon.
Our opinions contained herein are rendered only as of the date hereof
and we undertake no obligation to update our opinions after the date
hereof.
G-3
Our opinions contained herein are rendered solely for your information
in connection with the Loan Documents and may not be relied upon in any
manner by any other person, entity or agency, or by you for any other
purpose. Without our prior written consent our opinions herein shall not
be quoted or otherwise included, summarized or referred to in any
publication or document, in whole or in part, for any purposes whatsoever,
or furnished to any other person, entity or agency, except as may be
required by you by applicable law or regulation or in accordance with any
auditing or oversight function or request of regulatory agencies to which
you are subject.
In rendering the foregoing opinion in paragraph 7 above, we have
relied upon the opinion of _____________________ of even date herewith, a
copy of which is attached hereto, as to matters involving the application
of the laws of the State of ______________; such opinion is acceptable to
us in form and substance and in our opinion you may reasonably rely
thereon.
Very truly yours,
G-4
EXHIBIT H
Compliance Certificate
SouthTrust Bank of Alabama, National Association,
as Agent for the Lenders
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Southeastern Corporate Banking
Reference is made to the Credit Agreement dated as of December 20,
1996 (the "Agreement") among Giant Cement Holding, Inc., a Delaware
corporation, Giant Cement Company, a Delaware corporation and wholly owned
subsidiary of Giant Holding, Keystone Cement Company, a Pennsylvania
corporation and wholly owned subsidiary of Giant Holding, Giant Resource
Recovery Company, Inc., a Delaware corporation and wholly owned subsidiary
of Giant Holding, GCHI Investments, Inc., a Delaware corporation and wholly
owned subsidiary of Giant Holding, and Giant Cement NC, Inc., a South
Carolina corporation and wholly owned subsidiary of Giant Holding (each a
"Borrower" and collectively, the "Borrowers"), the Lenders (as defined in
the Agreement), and SouthTrust Bank of Alabama, National Association, as
Agent for the Lenders ("Agent"). Capitalized terms used but not otherwise
defined herein shall have the respective meanings therefor set forth in the
Agreement. The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of September 30, 1996 (the
"Determination Date") as follows:
1. Calculations:
A. Compliance with Section 7.1: Consolidated Indebtedness for
Money Borrowed to Consolidated Tangible Net Worth
1. Consolidated Indebtedness for Money Borrowed
$__________
2. Consolidated Tangible Net Worth $__________
a. Consolidated Shareholders Equity $__________
b. Reserves $__________
c. Net book value of intangible assets$__________
d. Difference of a. - b. - c. $__________
3. Ratio of A.1. to A.2. _____ to 1.00
Required: Line A.3. must not be greater
than 1.50 to 1.00.
H-1
B. Compliance with Section 7.2: Consolidated Fixed Charge Ratio
1. Consolidated EBITDA $__________
a. Consolidated Net Income $__________
b. Consolidated Interest Expense $__________
c. Income Taxes $__________
d. Amortization $__________
e. Depreciation $__________
f. Sum of a+b+c+d+e $__________
2. Consolidated Lease Expense $__________
3. B.1.f. + B.2 $__________
4. Consolidated Fixed Charges $__________
a. Consolidated Interest Expense $__________
b. Consolidated Lease Expense $__________
c. Current Maturities of Consolidated
Indebtedness for Money Borrowed $__________
d. Sum of a+b+c+d $__________
5. Ratio of B.3. to B.4.d. _____ to 1.00
Required: Line B.5. must not be less
than 1.50 to 1.00.
C. Compliance with Section 7.3: Consolidated Current Ratio
1. Consolidated Current Assets $__________
2. Consolidated Current Liabilities $__________
3. Ratio of C.1. to C.2. _____ to 1.00
Required: Line C.3. must not be less
than 1.25 to 1.00.
D. Compliance with Section 7.4: Capital Expenditures
1. Capital Expenditures as of
most recent Fiscal Year end $__________
2. Depreciation as of most
recent Fiscal Year end $__________
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3. D.2. x 2 $__________
Required: Line D.1. must not exceed
line D.3.
E. Compliance with Section 7.5: Consolidated Tangible Net Worth
1. Consolidated Tangible Net Worth $__________
Required: Line E.1 must not be less than line E.6 as
calculated below:
2. $60,000,000 or Consolidated Tangible Net Worth
required as of the end of all Fiscal Years after
December 31, 1996 $__________
3. Consolidated Net Income $__________
4. E.3 x .50 $__________
5. Net Proceeds of equity issues $__________
6. E.2 + E.4 + E.5 $__________
2. No Default
A. Since __________ (the date of the last similar
certification), (a) the Borrowers have not defaulted in the
keeping, observance, performance or fulfillment of its
obligations pursuant to any of the Loan Documents; and (b) no
Default or Event of Default specified in Article VIII of the
Agreement has occurred and is continuing.
B. If a Default or Event of Default has occurred since
__________ (the date of the last similar certification), the
Borrowers propose to take the following action with respect to
such Default or Event of Default: _______________________________
_________________________________________________________________
_____________________________________.
(Note, if no Default or Event of Default has
occurred, insert "Not Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 6.1 of the
Agreement.
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IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
Giant Cement Holding, Inc.
Giant Cement Company
Keystone Cement Company
Giant Resource Recovery Company, Inc.
GCHI Investments, Inc.
Giant Cement NC, Inc.
By: ______________________________________
Authorized Representative
Name:_____________________________________
H-4
Schedule 5.5
------------
Ownership Interests
(NONE)
Schedule 5.6
------------
Indebtedness
Giant Cement Company
--------------------
1. Schedule 5.16 ERISA Liabilities
2. Revolving Loan Agreement between Giant Cement Company and General
Electric Capital Corporation, dated November 23, 1993, as amended
September 29, 1994, as amended January 17, 1995, as amended February
5, 1995, and as further amended April 30, 1995 *
3. Term Loan Agreement between Giant Cement Company and The CIT
Group/Equipment Financing, Inc., dated November 23, 1993, as amended
October 6, 1994, and as further amended August 31, 1995. Original
principal balance $12,500,000 **
4. General Electric Capital Corporation (ABN AMRO Bank NV) Letter of
Credit number S930360, dated November 26, 1993, in favor of S C Dept.
of Health and Environmental Control (SC DHEC), in the amount of
$800,000
5. Schedule 5.7 Liens
6. Various Leases, equipment financing, etc.
NationsBanc Original balance $176,192
NationsBanc Original balance $387,746
CIT Original balance $349,000
Safeco Credit Original balance $348,812
SouthTrust Original balance $696,899
Keystone Cement Company
-----------------------
1. Schedule 5.16 ERISA Liabilities
2. Schedule 5.7 Liens
3. Revolving Loan Agreement between Keystone Cement Company and General
Electric Capital Corporation, dated November 23, 1993, as amended
September 29, 1994, as amended January 17, 1995, as amended February
5, 1995, and as further amended April 30, 1995 *
4. General Electric Capital Corporation (ABN AMRO Bank N V) Letters of
Credit numbers S930353, S9303354 and S930355, each dated November 26,
1993, in favor of Pennsylvania Dept. of Environmental Control, in the
amounts of $383,164, $10,000, and $357,240, respectively
5. Term Loan Agreement between Keystone Cement Company, Giant Cement
Holding, Inc., Giant Cement Company, Giant Resource Recovery Company,
Inc. and Meridian Bank dated December 29, 1995. original principal
balance $5,000,000 *
6. Various Leases, equipment financing, etc.
Caterpillar Original balance $335,100
Original balance $264,000
Original balance $241,448
Original balance $180,872
Meridian Bank Original balance $ 38,883
Original balance $ 12,809
Park Corp Original balance $665,000
* Obligations under this agreement are being terminated concurrently
with the consummation of the transactions contemplated under the
Credit Agreement
** Certain obligations and security interests relating to accounts
receivable and inventory are being terminated concurrently with the
consummation of the transactions contemplated under the Credit
Agreement
2
SCHEDULE 5.7
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LIENS
-----
1. By Pneu-Xxxx Systems Manufacturing, Inc., as secured party, against
Giant Resource, as debtor, with respect to specific equipment.
2. By Signet Leasing and Financial Corporation, as secured party, against
Giant Cement, as debtor, with respect to specific equipment.
3. By General Electric Capital Corporation ("GECC"), as secured party,
against Giant Cement, as debtor, with respect to specific equipment
(assigned by Signet Leasing and Financial Corporation to GECC; and
assigned by ITT Commercial Finance Corp. to Signet Leasing and
Financial Corporation).
4. By GECC, as secured party, pursuant to the Credit Agreement dated
November 23, 1993 among Giant Cement Company, Keystone Cement Company
and GECC. Such Liens will be terminated immediately following the
consummation of the transactions contemplated by the Credit Agreement.
5. By Meridian Bank (now by merger known as "CoreStates Bank"), as
secured party, pursuant to the Loan Agreement dated December 29, 1995
among Giant Cement Holding, Inc., Giant Cement Company, Keystone
Cement Company, Giant Resource Recovery Company, Inc., and Meridian
Bank. Such Liens will be terminated immediately following the
consummation of the transactions contemplated by the Credit Agreement.
6. By The CIT Group/Equipment Financing, Inc. ("CIT"), as secured party,
pursuant to the Secured Promissory Note dated November 23, 1993 made
by Giant Cement Company in favor of CIT and pursuant to the Loan and
Security Agreement dated November 23, 1993 between Giant Cement
Company and CIT, as amended. Such Liens relating to accounts
receivable and inventory will be terminated immediately following the
consummation of the transactions contemplated by the Credit Agreement.
7. By CIT, as secured party, pursuant to the South Carolina Mortgage,
Security Agreement and Assignment of Leases and Rents dated November
23, 1993 between CIT and Giant Cement.
8. By CIT, as secured party, pursuant to the North Carolina Deed of
Trust, Security Agreement and Assignment of Rents dated November 23,
1993 among Giant Cement, as grantor, Xxxxxxx Xxxxxxx, as trustee and
CIT, as beneficiary.
Schedule 5.16
-------------
Employee Benefit Plans
None, except.
Giant Cement Holding, Inc.
- Giant Cement Holding, Inc. Flexible Benefits Plan
Giant Cement Company, GRR and Giant-NC
Pension Plans:
- Giant Cement Company 401(k) Profit Sharing Plan
- Retirement Plan for the Hourly Employees of Giant Cement Company
(Projected Benefit Obligation in excess of Plan assets was $2,104,306
at 10/01/95)
- Retirement Plan for Salaried Employees of Giant Cement Company
(Projected Benefit Obligation in excess of Plan assets was $2,302,756
at 10/01/95)
- Giant Cement Company Hourly Employee 401(k) Plan
Welfare Plans:
- Group Insurance Plan for Giant Cement Company
- Giant Cement Company Supplemental Unemployment Benefit Plan
- Group Accidental Death & Dismemberment Plan for Giant Cement Company
Keystone Cement Company
Pension Plans:
- Keystone Cement Company 401(k) Profit Sharing Plan
- Retirement Plan for Salaried Employees of Keystone Cement Company
(Projected Benefit Obligation in excess of Plan assets was $1,177,456 at
10/01/95)
- Retirement Plan for the Hourly Employees of Keystone Cement Company
(Projected Benefit Obligation in excess of Plan assets was $3,512,211 at
10/01/95)
- Keystone Cement Company Hourly Employee 401(k) Plan
Welfare Plans:
- Keystone Cement Company Group Insurance Plan
- Keystone Cement Company Accidental Death & Dismemberment Plan
- Keystone Cement Company Supplemental Unemployment Benefit Plan
Schedule 5.18
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Hazardous Materials
Hazardous materials include all materials the Companies are permitted to
store or use in the following permits:
Giant Cement Company
--------------------
Air Quality Permit No. 0900-0002
--------------------------------
Solvent Burning Permit No. 0900-0002-CF, issued 10/27/87
Issued by the Bureau of Air Quality Control at SCDHEC
Issued May 31, 1986
Expired May 31, 1991
Renewal in process, operate under conditions of existing permit
EPA and State RCRA Part B Permit (SCD 003 351 699)
--------------------------------------------------
effective October 30, 1992 (5 Year Permits)
EPA BIF Interim Status Permit (SCD 003 351 699)
-----------------------------------------------
granted on October 11, 1991
Hazardous Waste Permit Application Part A
-----------------------------------------
last filed with EPA and SCDHEC on 6/24/93
Industrial Waste Permit - IWP-244
---------------------------------
issued by Bureau of Solid and Hazardous Waste Management of SCDHEC
January 9, 1993
SC Radioactive material License No. 055
---------------------------------------
issued June 23, 1993, by the Bureau of Radiological Health of SCDHEC
Expires June 30, 1998
US DOT Hazardous Materials Certificate of Registration No. 062194 010 013C
--------------------------------------------------------------------------
issued annually in June of each year (6/23/95)
Keystone Cement Company
-----------------------
Permit for Hazardous Waste Treatment, Storage and/or Disposal Facility
----------------------------------------------------------------------
#PAD002389559, issued on December 27, 1991
expires 12/26/01
Permit for Storage Tanks - 1A, 1B, 2A, 2B, 33,000 Gallon
--------------------------------------------------------
#00-000-000, issued on August 4, 1986
expired 6/30/92, submitted renewal on 5/12/92
Permit for Solvent Storage Tanks
--------------------------------
#48-312-001A, issued December 27, 1991
expired 4/30/94, submitted renewal on 5/6/94
Permit for Residual Landfill
----------------------------
#301085, issued December 30, 1986, no expiration
Permit for Residual Waste Facility
----------------------------------
#300985, issued February 13, 1986, no expiration
Permit for Residual Fuel Storage
--------------------------------
#48-309-079, issued January 1, 1995
expires 6/30/97
Permit for Fuel Storage Bin
---------------------------
#48-309-079A, issued December 27, 1991
expired 4/30/94, submitted renewal on 5/6/94
Schedule 7.9
------------
Investments
None.
