CREDIT AGREEMENT
THIS CREDIT AGREEMENT (such agreement, as amended or otherwise
modified from time to time, being hereinafter referred to as this "Agreement"),
dated as of January 3, 2005, is between EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation, GROS-ITE, INDUSTRIES, INC., a Connecticut corporation,
and APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation (individually and
collectively referred to herein as "Borrower"), each with its principal office
at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and BANKNORTH, N.A., a
national bank having a mailing address at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Lender").
Background
Lender is willing, subject to the terms and conditions set forth in
this Agreement, to make available to Borrower (i) a Term Loan in the amount of
$5,000,000 to fund the refinancing of certain financing facilities currently
held by Borrower, (ii) a Revolving Credit Loan in an amount not to exceed
$5,000,000, to finance Borrower's general working capital needs, and (iii) an
interim Equipment Loan in the amount of $1,500,000 (initially in the form of a
line of credit and then converting into a term loan), to finance the acquisition
of certain Eligible Equipment. The credit facilities to be made available by
Lender to Borrower will be evidenced by the Loan Documents and secured by the
Security Documents. The funding of the Term Loan and the commencement of funding
the Revolving Credit Loan and the Equipment Loan shall occur on January 3, 2005
(the "Effective Date").
NOW, THEREFORE, in consideration of the terms and conditions set
forth herein, and of any loans, advances, guarantees, or extensions of credit
heretofore, now or hereafter made to or for the benefit of Borrower by Lender,
and intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE CREDIT FACILITY
SECTION 1.1 Revolving Credit and Term Loans.
1.1.1 Revolving Credit Loans.
(a) Subject to the terms and conditions hereof and in reliance
on the representations and warranties contained in this Agreement, Lender agrees
to make Revolving Credit Loans to Borrower commencing on the Effective Date and
continuing at any time or from time to time on or prior to the Revolving Credit
Loan Maturity Date in an aggregate principal amount at any one time outstanding
not exceeding the Revolving Credit Commitment. Subject to these limitations,
Borrower may borrow, repay and re-borrow funds from Lender pursuant to the
provisions of this Section and Section 1.1.5(b).
(b) Borrower's obligation to repay the Revolving Credit Loans
with interest in accordance with the terms of this Agreement shall be evidenced
by a single Revolving Credit Note substantially in the form of Exhibit A
attached hereto. The Revolving Credit Note
shall be dated as of the date of this Agreement, shall mature and become due and
payable in accordance with the terms of this Agreement and shall bear interest
as set forth in Section 1.1.4. All Revolving Credit Loans made to Borrower by
Lender shall be recorded by Lender, and all payments made on account of the
Revolving Credit Loans shall be similarly recorded. Any failure of Lender to
record a transaction in a timely fashion, or any error in recording shall not
affect or impair the validity of any Obligation.
1.1.2 Term Loan.
(a) Subject to the terms and conditions hereof and in reliance
on the representations and warranties contained in this Agreement, Lender agrees
to make the Term Loan to Borrower on the Effective Date in an aggregate
principal amount equal to $5,000,000. The outstanding principal amount of the
Term Loan shall be paid in equal monthly installments of $97,559.81 allocate
between principal and interest as set forth on Schedule I attached hereto.
(b) Borrower's obligation to repay the Term Loan with interest
in accordance with the terms of this Agreement shall be evidenced by a single
Term Loan Note substantially in the form of Exhibit B attached hereto. The Term
Loan Note shall be dated as of the date of this Agreement, shall mature and
become due and payable in accordance with the terms of this Agreement and shall
bear interest as set forth in Section 1.1.4.
1.1.3 Equipment Loan.
(a) Subject to the terms and conditions hereof and in reliance
on the representations and warranties contained in this Agreement, Lender agrees
to make Equipment Loans to Borrower to fund the purchase of Eligible Equipment
commencing on the Effective Date and continuing over a period of time extending
until the Conversion Date, in an aggregate principal amount not to exceed
$1,500,000. The outstanding principal amount of the Equipment Loans shall be
advanced from time to time at Borrower's request in accordance with the
procedures specified in Section 1.1.5(b). On the Conversion Date the Equipment
Loan will be converted to a term loan, and no further advances of principal
shall thereafter be made from Lender to Borrower on account thereof. Beginning
on the first day of the month following the Conversion Date, and on the first
day of each month thereafter, Borrower shall make monthly payments of principal
and interest in an amount sufficient to amortize in full the then existing
principal balance in sixty (60) substantially equal monthly installments at the
Equipment Loan Fixed Rate put into effect hereunder on the Conversion Date.
(b) Borrower's obligation to repay the Equipment Loan with
interest in accordance with the terms of this Agreement shall be evidenced by a
single Equipment Loan Note substantially in the form of Exhibit C attached
hereto. The Equipment Loan Note shall be dated the date of this Agreement, shall
mature and become due and payable in accordance with the terms of this Agreement
and shall bear interest as set forth in Section 1.1.4.
1.1.4 Payment of Interest and Principal on Loans.
(a) Interest Rates. Each of the Loans shall bear interest at
applicable rate specified below:
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(i) Term Loan - A fixed rate equal to 6.30 % per annum;
(ii) Revolving Credit Loan - A variable rate equal to the Prime Rate
plus one percent (1%) adjusted daily.
(iii) Equipment Loan - Prior to Conversion, a variable rate equal to
the Prime Rate plus one percent (1%) adjusted daily, and upon and after
Conversion, the Equipment Loan Fixed Rate.
(b) Interest Payment Dates. Interest shall be payable in
arrears on the first day of each month. If not sooner paid, the entire
outstanding principal balance of each of the Loans shall be due and payable on
the Term Loan Maturity Date, the Revolving Credit Loan Maturity Date or the
Equipment Loan Maturity Date, as applicable.
(c) Continuation of Interest Rate. Interest on each Loan shall
continue at the rate specified above until the imposition of the Default rate
under Section 1.5.1 or until the applicable Loan, and all other Obligations
related thereto, are paid in full, whichever is applicable.
(d) Application of Payments. Each installment received by
Lender shall be applied first to the payment of late charges, then to accrued
and unpaid interest and the balance on account of the unpaid principal of the
applicable Loan.
1.1.5 Making the Loans.
(a) Term Loan - Borrower confirms that it has given Lender a
Borrowing Notice for the Term Loan. Subject to satisfaction of the terms and
conditions hereof, Lender shall make the Term Loan to Borrower by crediting the
amount thereof to Borrower's deposit account at Lender. The Term Loan will be
funded on Effective Date.
(b) Prime Rate Loans - Borrower shall give Lender notice no
later than 11:00 a.m. (Eastern time) on the day of the proposed Borrowing for
any Revolving Credit Loan and/or Equipment Loans (prior to Conversion). Each
such notice shall be given in writing by delivery by Borrower to Lender of a
duly completed Borrowing Notice in the form attached hereto as Exhibit D and a
Borrowing Base Certificate in the form attached hereto as Exhibit E. Each
request for a Revolving Credit Loan and/or Equipment Loan hereunder shall
constitute a representation and warranty by Borrower that all the conditions in
Section 2.1 or 2.2, as the case may be, have been satisfied. Subject to the
satisfaction of the terms and conditions hereof, Lender shall make the requested
Revolving Credit Loan and/or Equipment Loan available to Borrower by crediting
such amount to Borrower's deposit account with Lender not later than 3:00 p.m.
(Eastern time) on the day Borrower submits the Borrowing Notice (or the
following Business Day if the Borrowing Notice is not received by Lender on or
before 11:00 a.m.).
(c) Special Equipment Loans Funding Requirements - Lender will
not advance any Equipment Loans in excess of 100% of the invoiced purchase price
of the related Eligible Equipment.
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(d) Special Revolving Credit Funding Requirements - Revolving
Credit Loans made with respect to Eligible Inventory will be limited to raw
materials and finished goods only and shall specifically exclude any work in
process. Eligible Inventory available to support Revolving Credit Loans shall be
capped at $2,000,000 so that the maximum amount of the outstanding Revolving
Credit Loans related to Eligible Inventory shall not exceed $1,000,000 (i.e.
$2,000,000 maximum X 50% advance rate).
(e) Irrevocable Request. - Each request for a Loan pursuant to
this Section 1.1.5 shall be irrevocable and binding on Borrower. Borrower shall
indemnify Lender against any loss, cost or expense incurred by Lender as result
of any failure to fulfill on or before the date specified in the request for
such Loan, the applicable conditions set forth in Article II, including, without
limitation, any loss, cost or expense which Lender determines in its reasonable
judgment that it has incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by Lender to fund the requested Loan when such
advance, as a result of such failure, is not made on such date. Any demand by
Lender for payment pursuant to this Section 1.1.5(e) shall be accompanied by a
schedule in reasonable detail setting forth its computation of any such loss,
cost or expense, such schedule to be conclusive and binding on Borrower absent
manifest error.
1.1.6 Prepayment of Prime Rate Loans.
(a) Borrower may repay at any time any Prime Rate Loan, in
whole or in part, by paying to Lender the amount to be repaid by 2:00 p.m.
(Eastern time) on any Business Day; provided, however, that any such prepayment
shall be subject to a prepayment fee of three percent (3%) of the amount of
principal being prepaid if such prepayment is made within twelve (12) months
after the Closing Date and funded in whole or in part by the proceeds of a
refinancing with another lender.
(b) Any such repayment of any Prime Rate Loan shall be in a
principal amount of not less than $50,000.00 or such greater amount which is a
multiple of $50,000.00 or the total principal amount of Revolving Credit Loans
outstanding hereunder.
1.1.7 Prepayment of FHLBB Amortizing Loans.
(a) Borrower may prepay any FHLBB Amortizing Loan (in
whole or in part) only on the first day of a calendar month, provided, however,
that any such prepayment shall be subject to the payment of the prepayment fees
specified in Subsections (b) and (c) below, as applicable.
(b) Any prepayment of the principal balance of an FHLBB
Amortizing Loan made within twelve (12) months after the Closing Date and funded
in whole or in part by the proceeds of a refinancing with another lender, shall
be accompanied by a prepayment fee equal to the Yield Maintenance Fee plus three
percent (3%) of the amount of principal being prepaid.
(c) Any prepayment of the principal balance of an FHLBB
Amortizing Loan made more than twelve (12) months after the Closing Date, or
made within twelve (12) months after the Closing Date but not funded in whole or
in part by the proceeds of a
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refinancing with another lender, shall be accompanied by a prepayment fee equal
to the greater of 1% of the principal balance being prepaid or the Yield
Maintenance Fee.
(d) If any FHLBB Amortizing Loan is required by the
terms of this Agreement to be made other than on the first day of the month for
any reason, including, without limitation, acceleration pursuant to Article V
hereof, Borrower shall pay Lender on demand such amount as shall be sufficient
in the reasonable opinion of Lender to compensate Lender for any loss (including
loss of earnings and anticipated profits) cost or expense (including, without
limitation, costs or losses associated with prepaying or redeploying deposits,
whether or not Lender shall have actually funded a FHLBB Amortizing Loan with
corresponding deposits) incurred as a result of such repayment being made on
such other date.
(e) Any demand by Lender for payment pursuant to this
Section 1.1.7 shall be accompanied by a schedule in reasonable detail setting
forth its computation of any such loss, cost or expense, such schedule to be
conclusive and binding on Borrower absent manifest error.
(f) Any repayment of an FHLBB Amortizing Loan shall be
in a principal amount of not less than a single monthly principal payment
thereof. All such payments made shall be applied to the scheduled monthly
principal payments of the FHLBB Amortizing Loan in the inverse order of their
maturities.
1.1.8 Mandatory Prepayments. Borrower shall make mandatory
prepayments of the Loans in amounts equal to the amount of any insurance
proceeds received in the event of an actual or constructive material loss or
seizure or requisition of any Collateral except amounts permitted to be retained
by Borrower or any of Borrower's Subsidiaries pursuant to the provisions of
Section 10.2 of the Security Agreement and Sections 1.2B. and 1.4 of each
Mortgage (such Mortgage provisions to be subordinate and subject to any contrary
provision of the first mortgages on the Real Property), which proceeds shall be
used in accordance with such provisions. Such mandatory prepayments shall be
made within five (5) days following receipt of the applicable proceeds, shall be
accompanied by an Authorized Officer's certificate setting out the calculations
used to determine such amount and certifying it as correct, and shall not be
subject to any prepayment fee.
1.1.9 Application of Prepayments. If no prepayment fees (as
opposed to Yield Maintenance Fess) are payable pursuant to Section 1.17,
Borrower shall be responsible, in addition to the applicable Yield Maintenance
Fee, for the payment of any administrative costs incurred by Lender in
connection with such prepayment. All prepayments shall be applied first to the
payment of late charges, then to accrued and unpaid interest and the balance on
account of the principal payments required under the applicable Loan in the
inverse order of maturity. Any partial prepayments shall not affect Borrower's
obligation to make the regular monthly installments required with respect to the
applicable Loan until such Loan is fully paid.
1.1.10 Prepayment Fee Upon Acceleration. If any Loan shall be
accelerated for any reason whatsoever, the applicable prepayment fee in effect
as of the date of such acceleration shall be paid and such prepayment fee shall
also be added to the Obligations in determining the debt for the purposes of any
judgment of foreclosure or deficiency judgment.
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1.1.11 Termination or Reduction of Loan Commitments. Borrower
may, upon ten (10) Business Days notice to Lender, (a) permanently terminate the
Revolving Credit Commitment in whole or in part, and (b) prior to Conversion,
permanently terminate the Equipment Loan Commitment in whole or in part;
provided that any partial reduction shall be in the minimum amount of $50,000 or
any integral multiple thereof. Upon any permanent termination or reduction of
the Revolving Credit Commitment or the Equipment Loan Commitment, as applicable,
Borrower shall simultaneously repay that portion of the applicable Loans that
exceeds the applicable commitment as so reduced. Any repayment required by this
Section 1.1.9 shall be subject to the provisions of Sections 1.1.6 and 1.1.7.
SECTION 1.2 Fees. Borrower shall pay a facility fee equal to (i) $50,000
(1%) for the Term Loan, (ii) $29,166.67 (1% pro-rated for 7-months) for the
Revolving Credit Loan, and (iii) $15,000 (1%) for the Equipment Loan, the unpaid
portion of which is due and payable on the Closing Date.
SECTION 1.3 Computation of Interest and Fees; Payment Procedures.
1.3.1 Computation. All interest and fees payable hereunder and
under the Notes shall be computed on the basis of a 360-day year for the actual
number of days elapsed.
1.3.2 Payment. Any principal, interest, fees or other
Obligations payable by Borrower hereunder shall be paid to Lender in immediately
available funds before 2:00 p.m. (Eastern Time) on the date due at the principal
office of Lender set forth in the preamble of this Agreement. All such payments
may be charged by Lender against Borrower's accounts with Lender.
1.3.3 Administration of Payment. Any check, draft or money
order remitted in settlement of this Note may be handled for collection in
accordance with the practice of the collecting bank or banks, and shall not be
deemed payment until and unless good funds are actually received by or credited
to Lender.
SECTION 1.4 Capital Adequacy. If (a) the introduction of, or any change
in, or in the interpretation of, any United States or foreign law, rule or
regulation, in each case after the date hereof, or (b) compliance with any
directive, guidelines or request from any central bank or other United States or
foreign governmental authority (whether or not having the force of law)
promulgated or made after the date hereof affects the amount of capital required
or expected to be maintained by Lender or any corporation directly or indirectly
owning or controlling Lender and Lender shall have determined that such
introduction, change or compliance has or would have the effect of reducing the
rate of return on its capital or on the capital of such owning or controlling
corporation as a consequence of its obligations hereunder to a level below that
which Lender or such owning or controlling corporation could have achieved but
for such introduction, change or compliance (after taking into account Lender's
policies or the policies of such owning or controlling corporation, as the case
may be, regarding capital adequacy) by an amount deemed by Lender (in its sole
discretion) to be material, then, from time to time, Borrower shall, to the
extent Lender is not otherwise compensated hereunder for such change, pay to
Lender within thirty (30) Business Days after receipt of notice from Lender of
any change described in this
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Section, such amount as shall compensate Lender for any such change. Such notice
shall set forth in reasonable detail Lender's computation of the amount
necessary to compensate it and such computation shall be conclusive in the
absence of manifest error. Alternatively, in lieu of making such payment,
Borrower shall have the right, within such thirty (30) Business Day period to
notify Lender that Borrower intends to pay off the Loans in full, in which event
Borrower shall have the right to make such payment in full within a period
ending one hundred and eighty (180) days after the receipt of the original
notice from Lender, without the payment of any prepayment fee and/or Yield
Maintenance Fee.
SECTION 1.5 Default Interest; Late Payment Fee.
1.5.1 Default Interest. Upon the occurrence and during the
continuance of an Event of Default, Borrower shall on demand from time to time
pay interest, to the extent permitted by law, on each Loan (and other related
overdue amounts outstanding) up to the date of actual payment (after as well as
before judgment) at a Default rate that is five percent (5%) above the interest
rate otherwise due on such Loan. The Default rate shall be a variable rate,
adjustable daily, with respect to any Prime Rate Loan, and a fixed rate with
respect to any FHLBB Amortizing Loan.
1.5.2 Late Fee. If any payment is not received within fifteen
(15) days after the same is due to Lender, Borrower agrees to pay to Lender a
late charge equal to the greater of (a) five percent 5% of the overdue amount,
or (b) twenty five dollars ($25.00). Lender and Borrower acknowledge that such
late payments shall cause additional administrative expenses to Lender, which
cannot be ascertained at the time of such late payment and that such late
payment fee and default rate are agreed to amounts to defray such expenses. Such
late charge shall be made for each payment period for which any payment is
delinquent.
SECTION 1.6 Maximum Rate. Nothing contained in this Agreement or the Notes
shall require Borrower to pay interest at a rate prohibited by applicable
statute. If interest payable to Lender on any date would be in a prohibited
amount, it shall be automatically reduced to an amount which is not prohibited
and any amounts paid in excess of the prohibited amount shall be applied to the
reduction of the principal of the Notes.
ARTICLE II
CONDITIONS OF LENDING
SECTION 2.1 Conditions Precedent to Initial Loans. The obligation of
Lender to make the Loans hereunder shall be subject to the fulfillment of each
of the following conditions precedent:
2.1.1 Fees. Borrower shall have paid, or made arrangements
satisfactory to Lender for the payment of, all fees, costs, expenses, taxes and
indemnities then payable by Borrower pursuant to Sections 1.2, 8.4 and 8.5
hereof.
2.1.2 Representations. The representations and warranties
contained in Article III of this Agreement and in each other Loan Document and
certificate or other writing delivered to Lender pursuant hereto on or prior to
the Closing Date shall be true and correct on and as of the Closing Date, the
Effective Date, and each subsequent date upon which a
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Borrowing occurs as though made on and as of such date; and no Default or Event
of Default shall have occurred and be continuing or would result from the making
of the Loan on the Effective Date.
2.1.3 No Violations. The making of the Loan shall not
contravene any law, rule or regulation applicable to Lender.
2.1.4 Deliveries to Lender. Lender shall have received the
following, each in form and substance satisfactory to Lender:
(a) the Revolving Credit Note duly executed by Borrower;
(b) the Term Loan Note duly executed by Borrower;
(c) the Equipment Loan Note duly executed by Borrower;
(d)) the Security Agreement covering Borrower's and its
Subsidiaries personal property duly executed by Borrower and its Subsidiaries;
(e) intentionally omitted;
(f) the Perfection Certificates duly executed by
Borrower and its Subsidiaries;
(g) the Mortgages duly executed by Borrower in proper
form for recording in each jurisdiction where the Real Property is located;
(h) intentionally omitted;
(i) intentionally omitted;
(j) appropriate financing statements on Form UCC-1, in
proper form for filing in such offices (or notations on motor vehicle title
certificates) as may be necessary or, in the opinion of Lender or its counsel,
desirable to perfect the security interests purported to be created by the
Security Documents to which Borrower and its Subsidiaries are parties;
(k) searches of appropriate state and local records
listing all effective financing statements which name as debtor, Borrower or any
of its Subsidiaries or any predecessor of Borrower or any of its Subsidiaries
(or the owner of the assets of Borrower or any of its Subsidiaries or any
predecessor of Borrower or any of its Subsidiaries) which are filed in the
governmental offices, together with copies of such financing statements, none of
which, except as otherwise agreed to in writing by Lender, shall cover any of
the Collateral;
(l) evidence of the insurance coverage required by the
terms of this Agreement, the Security Agreement or the Mortgages, in each case
where appropriate, with endorsements (i) naming Lender as additional insured or
loss payee thereunder as specified by Lender, and (ii) providing that such
policy may be terminated, modified or cancelled only upon
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thirty (30) days' prior written notice to Lender, together with evidence of the
payment of all premiums due in respect thereof for such period as Lender may
reasonably request;
(m) a copy of the resolutions adopted by the board of
directors of Borrower and each Subsidiary of Borrower certified as of the
Closing Date by an Authorized Officer thereof, authorizing (i) the transactions
contemplated by the Loan Documents (ii) the execution, delivery and performance
of the Loan Documents and the other documents to be delivered by Borrower in
connection herewith;
(n) a certificate executed by an Authorized Officer of
Borrower and each of its Subsidiaries dated the Closing Date and certifying the
names and true signatures of the officers of Borrower and each of its
Subsidiaries authorized, on behalf of Borrower and each of its Subsidiaries to
sign each Loan Document and the other documents to be executed and delivered by
Borrower and each of its Subsidiaries in connection herewith, together with
evidence of the incumbency of such Authorized Officer;
(o) a copy of the certificate or articles of
incorporation and all amendments thereto of Borrower and each of its
Subsidiaries, certified as of a date not more than ten (10) Business Days prior
to the Closing Date by the appropriate official of the state of incorporation
thereof and as of the Closing Date by an Authorized Officer thereof;
(p) a copy of the by-laws of Borrower and each of its
Subsidiaries, certified as of the Closing Date by an Authorized Officer thereof;
(q) a certificate, dated as of a date not more than five
(5) Business Days prior to the Closing Date of the appropriate official(s) of
the state of incorporation and each state of foreign qualification of Borrower
and each of its Subsidiaries, certifying as to the subsistence in good standing
of, Borrower and each of its Subsidiaries in such states;
(r) a certificate of an Authorized Officer of Borrower,
certifying as of the Closing Date as to the matters set forth in Section 2.1.2.;
(s) a certificate of an Authorized Officer of Borrower,
dated the Closing Date, certifying, on behalf of Borrower, that since October 2,
2004 no material adverse change in the operations or financial condition of
Borrower has occurred, and as to such other matters as Lender may reasonably
request;
(t) favorable written opinion of Rogin, Nassau, counsel
to Borrower, dated the Closing Date, in form and substance satisfactory to
Lender and its counsel and as to such matters as Lender may reasonably request;
(u) executed originals of all promissory notes and other
instruments, if any, evidencing or constituting any of the Collateral endorsed
to the order of Lender, and executed counterparts of all chattel paper, if any,
evidencing or constituting any of the Collateral;
(v) such estoppel certificates, waivers, consents or
other approvals from any Person or Persons, and evidence of completion of other
actions as may, in
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the opinion of Lender, be necessary or desirable to establish the priority of or
otherwise protect the liens and security interests purported to be created by
the Loan Documents and any supplement thereto, including without limitation a
landlord's waiver from any landlord of Borrower or any of its Subsidiaries which
leases to Borrower or any of its Subsidiaries a property where a substantial
amount of Collateral is located;
(w) a letter of direction from Borrower addressed to
Lender with respect to the disbursement of the proceeds of the funding of the
Loans on the Effective Date;
(x) intentionally omitted;
(y) intentionally omitted;
(z) date down endorsements of owner's title policies
demonstrating that Lender's Mortgages securing the Loans will constitute (i) a
second lien on certain Real Property owned by Borrower and located at ▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ (subsequent to a first mortgage in favor of Lender
in the original principal amount of $1,659,000), and (ii) a second lien
(subsequent to a first mortgage in favor of Farmington Savings Bank in the
original principal amount of $2,000,000.00) on certain Real Property owned by
Borrower and located at 1790, 1798, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇;
(aa) intentionally omitted;
(bb) completion of a satisfactory pre-closing audit by
Lender;
(cc) such other approvals, opinions or documents as
Lender may reasonably request.
2.1.5 Validity of Liens. The Security Documents shall be
effective to create in favor of Lender a legal, valid and enforceable first
(except as otherwise permitted herein) security interest in and lien upon the
Collateral as of the Closing Date. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the opinion of Lender to
protect and preserve such security interests shall have been duly effected or
provided for.
2.1.6 No Material Adverse Change. There shall not have
occurred any material adverse change in the business, financial condition or
results of operations or prospects of Borrower since October 2, 2004.
2.1.7 Satisfactory Proceedings. All proceedings in connection
with the execution of the Loan Documents and the Security Documents on the
Closing Date and the making of any Loan on the Effective Date, and the other
transactions contemplated by this Agreement, and all documents incidental
thereto, shall be satisfactory to Lender and its counsel, and Lender and such
counsel shall have received all such information and documents as Lender, or
such counsel, may reasonably request.
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SECTION 2.2 Conditions Precedent to Additional Loans. The obligation of
Lender to make any Loan other than on the Effective Date is subject to
fulfillment of each of the following conditions precedent and Borrower shall be
deemed to have certified to Lender by a request for a Loan that each of such
conditions precedent have been fulfilled:
2.2.1 Fees. Borrower shall have paid, or made arrangements
satisfactory to Lender for the payment of, all fees, costs, expenses, taxes and
indemnities then payable by Borrower pursuant to Sections 8.4 and 8.5 hereof.
2.2.2 Representations. The representations and warranties
contained in Article III of this Agreement and in each other Loan Document and
certificate or other writing delivered to Lender pursuant hereto shall be true
and correct in all material respects on and as of the Closing Date, the
Effective Date and each date of a subsequent Borrowing as though made on and as
of such date; and no Default or Event of Default shall have occurred and be
continuing or would result from the making of the Loan on such date.
2.2.3 No Violations. The making of such Loan shall not
contravene any law, rule or regulation enacted after the date hereof applicable
to Lender.
2.2.4 Notice. Lender shall have received a Borrowing Notice
for such Borrowing pursuant to Section 1.1.5 hereof with respect to the
Borrowing to be made on the Effective Date and each subsequent date upon which a
Borrowing occurs.
2.2.5 The information contained in the most recently delivered
Borrowing Notice and Borrowing Base Certificate is complete and correct and the
amounts shown therein as "Eligible Receivables" and "Eligible Inventory" have
been determined as provided in the Loan Documents, in each case, as of the date
thereof.
2.2.5 No Material Adverse Change. Except for the Debt incurred
hereunder, there shall not have occurred any material adverse change in the
business, operations or condition, financial or otherwise, of Borrower since the
date of the Closing Financial Statements referred to in Section 3.9.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants as follows:
SECTION 3.1 Existence. Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State of Wisconsin.
SECTION 3.2 Subsidiaries, etc. The only Subsidiaries of Borrower,
and the only partnerships or joint ventures in which Borrower or any Subsidiary
of Borrower has an interest, are those listed on Schedule 3.2. Borrower or a
Subsidiary of Borrower, as the case may be, owns the percentage of the issued
and outstanding capital stock or other evidences of the ownership of each
Subsidiary, partnership or joint venture listed on Schedule 3.2 as set forth on
such Schedule. No such Subsidiary, partnership or joint venture has issued any
securities convertible into shares of its capital stock (or other evidence of
ownership) or securities
11
convertible into such capital stock (or other evidence of ownership), and the
outstanding capital stock (or other evidence of ownership) of such Subsidiaries,
partnerships or joint ventures are owned by Borrower and its Subsidiaries free
and clear of all Liens, warrants, options or rights of others of any kind
whatsoever except for Permitted Liens permitted by Section 4.13. All of the
divisions of Borrower and its Subsidiaries are listed on Schedule 3.2.
SECTION 3.3 Corporate Authorizations. Borrower and each of its
Subsidiaries (a) has all requisite corporate power and authority to conduct its
business as now conducted and as presently contemplated to be conducted, and, to
make the borrowings hereunder (in the case of Borrower) and to consummate the
transactions contemplated hereby, and by the other Loan Documents; and (b) is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary except where
failure to be so qualified will not have a Material Adverse Effect.
SECTION 3.4 No Violation. The execution, delivery or performance by
Borrower and its Subsidiaries of each of the Loan Documents to which it is a
party will not cause it to be in violation of (a) its certificate or articles of
incorporation or its by-laws, (b) any law, governmental regulation, order or
judgment applicable to Borrower or any of its Subsidiaries or any of their
respective properties or assets, and, except as set forth in Schedule 3.4.,
neither Borrower nor any of its Subsidiaries is in violation of any thereof in
any material respect, or (c) any material term of any agreement or instrument
binding on or affecting Borrower or any of its Subsidiaries. The execution,
delivery and performance by Borrower and each of its Subsidiaries of each Loan
Document to which it is a party do not and will not result in or require the
creation of any lien, security interest or other charge or encumbrance upon or
with respect to any of its properties, whether now owned or hereafter acquired,
except for Permitted Liens.
SECTION 3.5 Authorizations and Approvals. No authorization or
approval or other action by, and no notice to or filing (except filings to
perfect the security interests under the Security Documents) with, any
governmental authority or other regulatory body or any other Person is required
for the due execution, delivery and performance by Borrower and each of its
Subsidiaries of each Loan Document to which it is a party.
SECTION 3.6 Validity. This Agreement is, and each other Loan
Document when delivered hereunder, will be, duly authorized and executed and
constitute a legal, valid and binding obligation of Borrower and each of its
Subsidiaries which is a party thereto, enforceable against it in accordance with
its terms, except as limited by bankruptcy, insolvency, moratorium and other
laws affecting the enforcement of creditors' rights generally and by the
application of equitable principles.
SECTION 3.7 Indebtedness. Except as described on Schedule 3.7,
Borrower and its Subsidiaries have no presently outstanding Indebtedness nor is
Borrower or any Subsidiary of Borrower in default with respect to its existing
Indebtedness.
SECTION 3.8 Pending Litigation. Except as set forth on Schedule 3.8,
there is no action, suit or proceeding pending or, to Borrower's knowledge,
threatened against or otherwise affecting Borrower or any Subsidiary of
Borrower, or any of the property of Borrower
12
or any Subsidiary of Borrower before any court, arbitrator or governmental
department, commission, board, bureau, agency or instrumentality, which if
adversely determined would (a) materially adversely affect the operations or
condition, financial or otherwise, of Borrower and its subsidiaries on a
consolidated basis, (b) adversely affect the ability of Borrower or any
Subsidiary of Borrower to perform their respective obligations under any Loan
Document or (c) have any material adverse affect on the Collateral (a "Material
Adverse Effect").
SECTION 3.9 Financial Statements. The financial statements of
Borrower constituting the 10-Q filing with the Securities and Exchange
Commission dated July 3, 2004 (the "Closing Financial Statements") fairly
present the financial consolidated financial condition and operations of
Borrower and its Subsidiaries for the fiscal periods ended on the dates thereof
(all in accordance with GAAP). There has been no material adverse change in the
business, operations, assets, prospects, properties or financial condition of
Borrower since the date of such audited Financial Statements. The Pro Forma
Financial Statements of Borrower delivered to Lender present fairly the
consolidated financial condition of Borrower and its Subsidiaries as of the date
hereof and are materially accurate and complete. The projections (including,
without limitation, financial projections included in the pro formas of the
financial condition of Borrower and its Subsidiaries provided to Lender have
been prepared in good faith based upon assumptions disclosed therein, are
consistent with the Pro Forma Financial Statements and are reasonable as of the
date hereof.
SECTION 3.10 Solvency. Borrower (both before and after giving effect
to the transactions contemplated hereby) (a) is solvent, having assets, at
present valuation, in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and matured, and (b)
has, and will have, access to adequate capital for the conduct of its business
and the ability to pay its debts from time to time incurred in connection
therewith as such debts mature. It is understood that the valuations of assets
pursuant to the immediately preceding sentence have been made at going concern
values which Borrower believes to be justified under the circumstances.
SECTION 3.11 Margin Securities. Borrower is not and will not be
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any Loan will be
used to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
SECTION 3.12 Taxes. All tax returns, reports and statements required
by law, whether federal, state or local or otherwise, to be filed by Borrower
and its Subsidiaries have been filed with the appropriate governmental agencies
in all jurisdictions in which such returns, reports and statements are required
to be filed, and all taxes, assessments and other governmental charges shown
thereon to be due and payable, or otherwise levied on Borrower or any Subsidiary
have been timely paid prior to the date on which any fine, penalty, interest,
late charge or loss may be added thereto for nonpayment thereof, except (a)
insofar as extensions have been obtained and are currently in effect and (b) to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or lien resulting from the nonpayment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof and (c) to the extent that the failure to file any state or local tax
returns or
13
reports would not have a Material Adverse Effect. Neither Borrower nor any
Subsidiary of Borrower has given or been requested to give a waiver of any
statute of limitations relating to the payment of federal, state or local taxes.
Proper and accurate amounts have been withheld by Borrower and each of its
Subsidiaries from its employees for all periods in full and complete compliance
with the tax, social security and unemployment withholding provisions of
applicable federal and state law. All payments of sales and use taxes required
by applicable state law have been made by Borrower and each of its Subsidiaries.
Proper and accurate federal and state returns have been filed by Borrower and
its Subsidiaries for all periods for which returns were due with respect to
employee income tax withholding, social security and unemployment taxes, and the
amounts shown thereon as due and payable have been paid in full or adequate
provision therefor is included on the books of Borrower and its Subsidiaries.
SECTION 3.13 Nature of Business. Borrower is engaged solely in the
business of providing manufacturing and design services to a broad range of
industries and the manufacture and repair of industrial spindles.
SECTION 3.14 Title to Property; Liens. Borrower and each of its
Subsidiaries owns all its respective material assets (other than assets held by
Borrower or any such Subsidiary as lessee under leases) reflected in the Pro
Forma Financial Statements (except assets sold or otherwise disposed of in the
ordinary course of business) and such assets are free and clear of all liens,
security interests and other charges and encumbrances and other types of
preferential arrangements except for Permitted Liens.
SECTION 3.15 Restrictions on Borrower and its Subsidiaries. Neither
Borrower nor any Subsidiary is party to any contract or agreement, or subject to
any charter or other corporate restriction, which would have a Material Adverse
Effect. Neither Borrower nor any Subsidiary has agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any of
its property, whether now owned or hereafter acquired, to be subject to a lien
other than a Permitted Lien.
SECTION 3.16 Chief Executive Offices. The chief executive offices of
Borrower and each of its Subsidiaries and the offices where all of the records
and books of account of Borrower and each of its Subsidiaries are kept, are
located on the date hereof as set forth on Schedule 3.16 or such other location
designated by Borrower in compliance with the provisions of Section 4.29 hereof.
SECTION 3.17 Investment Company Act. Borrower is not an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, and is not controlled by such a Person.
SECTION 3.18 Intellectual Property; Accreditation. Except as set
forth in the Schedule 3.18, Borrower and each Subsidiary of Borrower owns or
possesses the right to use all the patents, trademarks, copyrights and other
intellectual property used or useful in, or necessary for, the present and
planned future conduct of its business. Except as set forth in Schedule 3.18, to
the best of Borrower's knowledge, the ownership and/or use of the aforementioned
intellectual property by Borrower and each Subsidiary of Borrower does not
infringe on the intellectual property rights of any other Person, and no claim
has been made,
14
notice given or dispute arisen concerning such infringement. All registrations,
patents and licenses issued with respect to Borrower's and each of its
Subsidiaries intellectual property are valid and in full force and are not
subject to any proceeding or claim challenging their extent or validity.
Borrower is fully accredited as required by its agreements with the Seller and
has complied with all requirements of the Seller to remain accredited and has
not received any notice from the Seller of any breach of any requirement to
remain fully accredited. All intellectual property licenses and other rights
necessary for Borrower to conduct its business, and Borrower has fully complied
with any and all agreements relating thereto and has received no notice of any
violation thereof.
SECTION 3.19 The Security Documents.
3.19.1 The provisions of the Security Documents are effective to
create in favor of Lender, a legal, valid and enforceable security interest in
all right, title and interest of Borrower and each of the Subsidiaries in the
Collateral; when the financing statements have been filed in the offices in the
jurisdictions listed in Schedule 3.19 hereto, the Security Documents shall
constitute a fully perfected first lien on, and security interest in all right,
title and interest of Borrower and each of its Subsidiaries in the Collateral
described therein to the extent the filing of financing statements under the UCC
is a permissible method of perfection of security interests in the Collateral
described therein in each such jurisdiction, subject to no prior liens, except
for Permitted Liens.
3.19.2 Intentionally Omitted.
3.19.3 Each Mortgage is effective to grant to Lender, a legal, valid
and enforceable mortgage lien on all of the right, title and interest of
Borrower in the mortgaged property described therein; which lien secures all the
Loans and constitutes a second lien with respect to the Real Property located at
▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ and a second lien with respect to the
Real Property located at 1790, 1798, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇. When each Mortgage is duly recorded in the appropriate recording
office in the county in which the subject Real Property is located and the
mortgage recording fees and taxes in respect thereof are paid and compliance is
otherwise had with the formal requirements of state law applicable to the
recording of real estate mortgages generally, such Mortgage shall constitute a
fully perfected lien on, and security interest in, such mortgaged property,
subject, with respect to the Real Property, only to the encumbrances and
exceptions to title noted in the owner's title policy and date down endorsement
as marked and delivered to Lender pursuant to subsection 2.1.4(z); and when
financing statements have been filed in the governmental office for the state
and county in which the Real Property is located, each Mortgage shall also
create a legal, valid, enforceable and perfected second lien on, and security
interest in, all right, title and interest of Borrower thereto in all real and
personal property which is the subject of such Mortgage, subject only to the
encumbrances and exceptions to title noted in the owner's title date down
endorsement delivered to Lender as set forth above.
3.19.4 The property which is subject to the Security Documents to
which Borrower and its Subsidiaries are parties constitutes substantially all
the property of any nature of Borrower and its Subsidiaries.
15
SECTION 3.20 ERISA. No Reportable Event (for which the notice
requirement has not been waived by the United States Department of Labor) has
occurred during the immediately preceding six-year period with respect to any
Single Employer Plan, and each Single Employer Plan has complied and has been
administered in all material respects, in accordance with applicable provisions
of ERISA and the Internal Revenue Code. The present value of all benefits vested
under each Single Employer Plan maintained by Borrower or any Commonly
Controlled Entity (based on those assumptions used to fund such Employee Plan)
did not, as of the last annual valuation date applicable thereto, exceed the
value of the assets of such Employee Plan allocable to such vested benefits,
except with respect to the EDAC Technologies Corporation Gros-Ite Industries
Employees' Pension Plan. Neither Borrower, nor any Commonly Controlled Entity
has during the immediately preceding six-year period, had a complete or partial
withdrawal from any Multiemployer Plan, and the liability to which Borrower or
any Commonly Controlled Entity would become subject under ERISA if Borrower or
any Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the most recent valuation date applicable thereto is
not in excess of $0.00. Neither Borrower, nor any Commonly Controlled Entity has
received notice that any Multiemployer Plan is in reorganization or is insolvent
nor, to the best knowledge of Borrower, is any such Multiemployer Plan in
reorganization or insolvent, nor, to the best knowledge of Borrower, is such a
reorganization or insolvency likely to occur. The present value (determined
using actuarial and other assumptions which are reasonable in respect of the
benefits provided and the employees participating) of the liability of Borrower
for post-retirement benefits to be provided to its current and former employees
under Employee Plans which are welfare benefit plans (as defined in Section 3(l)
of ERISA) does not, in the aggregate, exceed the assets under all such Employee
Plans allocable to such benefits.
SECTION 3.21 Environmental Compliance.
Except as set forth in Schedule 3.21 and subject to any
information to the contrary indicated in the Environmental Reports:
3.21.1 Borrower (including in such term for the purposes of
this Section 3.21, any present or former Affiliate of Borrower for whose
environmental liability Borrower or any Subsidiary of Borrower might be
responsible) is in material compliance with all Environmental Laws.
3.21.2 Borrower has obtained and is in compliance with all
material permits, certificates, licenses, approvals and other authorizations
required by the Environmental Laws, and has filed all material notifications
required by the Environmental Laws, in connection with its ownership or use of
any real estate or the operation of its business.
3.21.3 There are no outstanding notices of violation, orders,
claims, citations, complaints, penalty assessments, suits or other proceedings,
administrative, civil or criminal, at law or in equity, pending against
Borrower, and to Borrower's knowledge, no investigation or review is pending or
threatened against Borrower by any governmental entity with respect to any
alleged material violation of any Environmental Law in connection with its
ownership or use of any real estate or the conduct of its business which would
have a Material Adverse Effect.
16
3.21.4 To the best of Borrower's knowledge, all toxic,
polluting or hazardous substances or wastes (collectively "Hazardous
Substances") generated or managed by Borrower have been transported in
compliance with the Environmental Laws to storage, treatment, recycling or
disposal facilities permitted or authorized to handle such substance by the
government agency with jurisdiction thereof.
3.21.5 No notification of Release (as defined in Subsection
3.21.6 below) of a Hazardous Substance pursuant to CERCLA, the Federal Clean
Water Act or the Clean Air Act, or any state or local environmental law,
regulation or ordinance has been received or filed by Borrower as to any
property now or formerly owned or occupied by Borrower. No property now occupied
or owned by Borrower, is listed or proposed for listing on the National Priority
List under CERCLA and, to Borrower's knowledge, no property currently or
formerly owned or Occupied by Borrower is listed or proposed for listing on the
National Priority List under CERCLA, or on the Comprehensive Environmental
Response, Compensation Liability Information System ("CERCLIS"), or any similar
state list of sites requiring investigation or clean-up.
3.21.6 No Hazardous Substances have been released, discharged
or disposed of, spilled, leaked, pumped, poured, emitted, emptied, injected,
leached, dumped or allowed to escape ("Release") in any material respect, during
the period of Borrower's ownership or occupancy, other than as allowed by the
Environmental Laws, at, on, or under any property now owned or occupied by
Borrower, or during such time as Borrower formerly owned or occupied any
property, by Borrower, or to Borrower's knowledge, by any third party or in the
conduct of Borrower's business which release could be reasonably expected to
have a Material Adverse Effect.
3.21.7 Borrower has not received from any federal, state or
local environmental regulatory entity, any requests for information, notices of
claim, demand letters, or other notifications that, in connection with the
ownership or use of any real estate or the conduct of Borrower's business, it is
or may be potentially responsible with respect to any investigation or clean-up
of Hazardous Substances or toxic wastes or pollutants at any sites and such
responsibility could reasonable be expected to have a Material Adverse Effect.
3.21.8 To the best of Borrower's knowledge, no polychlorinated
biphenyls ("PCB's"), asbestos-containing materials, or underground storage
tanks, active or abandoned are or have been present at any property now owned,
operated or occupied by Borrower, nor were they present during such time as
Borrower formerly owned, operated or occupied any property.
3.21.9 To the best knowledge of Borrower, no Hazardous
Substance has come to be located at any site which is listed or proposed for
listing under CERCLA, CERCLIS or on any similar state list, or which is the
subject of federal, state or local enforcement actions or other investigations,
which may lead to any material claims against Borrower or any claims against
Lender for clean-up costs, remedial work, damages to natural resources or for
personal injury claims, including, but not limited to, claims under CERCLA.
17
3.21.10 Except for the Environmental Reports, or as otherwise
listed in Schedule 3.21 and heretofore provided to Lender, there have been no
environmental inspections, investigations, studies, audits, tests, reviews or
other analyses ("Reports") conducted in relation to either (i) any property or
business now owned, operated, or leased by Borrower or (ii) any property
previously owned, operated or leased by Borrower, provided that such Report was
prepared by or on behalf of Borrower.
SECTION 3.22 Licenses and Permits. Except as set forth on Schedule
3.22, Borrower is current and in good standing with respect to all governmental
approvals, permits, certificates, licenses, inspections, consents and franchises
(collectively, "Approvals") necessary to continue to conduct its business and to
own or lease and operate its properties as heretofore conducted, owned, leased
or operated and as presently contemplated to be conducted, owned, leased or
operated, except for Approvals the failure to which obtain is not likely,
individually or in the aggregate, to have a Material Adverse Effect.
SECTION 3.23 Other Names. The business conducted by Borrower, or any
Subsidiary of Borrower has not been conducted under any corporate, trade or
fictitious name other than as listed on Schedule 3.23 hereto or as may be
disclosed pursuant to Section 4.29 below.
SECTION 3.24 Strikes; Work Stoppages; Immigration Law. There are no
strikes, work stoppages or controversies pending or to the best of Borrower's
knowledge threatened, between Borrower and any of its Subsidiaries and any of
their employees which would cause a Material Adverse Effect.
SECTION 3.25 Capital Structure. True and correct listings of the
shareholder's of any Subsidiary or Affiliate of Borrower as of the date hereof,
including the number of shares owned by each, are attached hereto as Schedule
3.25. Borrower's outstanding shares consist solely of 4,444,438 common shares.
There are no outstanding securities, rights, options, warrants, shareholders
agreements, registration rights agreements or other agreements relating to any
interest of any sort in Borrower except as set forth on Schedule 3.25.
SECTION 3.26 Customer and Trade Relations. As of the date hereof,
there exists no actual or to Borrower's knowledge threatened, termination,
cancellation, material limitation of or any material modification or material
change in the business relationship of Borrower or any of its Subsidiaries with
any customer or group of customers of Borrower whose purchases individually or
in the aggregate are material to the operations of Borrower or any of its
Subsidiaries or in any business relationship of Borrower or any of its
Subsidiaries with any material supplier to Borrower or any of its Subsidiaries.
SECTION 3.27 Intentionally Omitted.
SECTION 3.28 Accuracy of Information. No Loan Document, no schedule
or exhibit thereto and no other document, certificate, report, statement or
other information furnished to Lender in connection herewith or with the
consummation of the transactions contemplated hereby contains any material
misstatement of fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading. There is no fact
18
materially adversely affecting the assets, business, operations or prospects of
Borrower or any of its Subsidiaries which has not been set forth in an exhibit
or schedule hereto or otherwise disclosed in writing by Borrower to Lender with
specific reference to this Agreement or the financing evidenced hereby.
SECTION 3.29 Survival of Warranties. All representations and
warranties contained in the Loan Documents shall survive the execution and
delivery of the Loan Documents and, for purposes of Sections 8.4 and 8.5, the
termination thereof.
ARTICLE IV
COVENANTS
So long as any Obligation remains outstanding or unsatisfied, or
Lender has any obligation to make Loans hereunder Borrower agrees that:
SECTION 4.1 Financial Covenants of Borrower. Borrower will not for
any period set forth below:
4.1.1 Leverage Ratio. Permit the Leverage Ratio to be greater
than 4.75 to 1.00 during any applicable measuring period.
4.1.2 Initial Debt Service Coverage Ratio. Permit the Initial
Debt Service Coverage Ratio to be less than 1.00 to 1.00 as of December 31,
2004.
4.1.3 Continuing Debt Service Coverage Ratio. Permit the
Continuing Debt Service Coverage Ratio to be less than 1.25 to 1.00 during any
applicable measuring period.
SECTION 4.2 Reporting Requirements. Borrower will furnish to Lender:
4.2.1 As soon as available and in any event within fifteen
(15) days after the end of each calendar month, agings of accounts receivable
and accounts payable and inventory listings in form reasonably satisfactory to
Lender, and a completed Borrowing Base Certificate in substantially the form
attached hereto as Exhibit E.
4.2.2 As soon as available and in any event within forty five
(45) days after the end of each fiscal quarter, (a) a consolidated and
consolidating balance sheet of Borrower and its Subsidiaries for such fiscal
quarter, and (b) consolidated and consolidating statements of income and
retained earnings and cash flows of Borrower and its Subsidiaries for such
fiscal quarter, in reasonable detail, prepared in accordance with GAAP for the
period from the end of the preceding Fiscal Year to the end of such fiscal
quarter, all in a form reasonably satisfactory to Lender and duly certified by
Borrower's chief financial officer or chief executive officer, on behalf of
Borrower, as fairly presenting the financial condition of Borrower and its
Subsidiaries at the end of such periods and the results of the operations of
Borrower and its Subsidiaries for such periods (subject to normal year-end audit
adjustments) and having been prepared in accordance with GAAP, together with a
Compliance Certificate of such officer.
19
4.2.3 as soon as available and in any event within one hundred
twenty (120) days after the end of each Fiscal Year of Borrower, (a) a
consolidated and consolidating balance sheet of Borrower as at the end of such
Fiscal Year, and (b) consolidated and consolidating statements of income,
retained earnings and cash flow of Borrower and its Subsidiaries for such Fiscal
Year, all in reasonable detail, including all supporting schedules and comments,
prepared in accordance with GAAP and setting forth in comparative form
corresponding figures for the preceding Fiscal Year, and accompanied by (i) a
report and an opinion (which shall not be qualified in any material respect),
each in form and substance reasonably satisfactory to Lender, by independent
certified public accountants of recognized standing selected by Borrower and
reasonably satisfactory to Lender, with (ii) a Compliance Certificate of
Borrower's chief financial officer or chief executive officer;
4.2.4 as soon as practicable and in any event within fifteen
(15) days after filing complete copies of all federal and state tax returns of
Borrower and its Subsidiaries, as applicable, each of which shall be signed and
certified by Borrower to be true, correct and complete, or if an extension is
filed with respect to the filing of any such tax return, a copy of such
extension within fifteen (15) days of filing of such extension;
4.2.5 as soon as possible and in any event within three (3)
Business Days after Borrower obtains knowledge of the occurrence of a Default or
an Event of Default, or any Material Adverse Effect, the written statement of
the chief executive officer or the chief financial officer of Borrower setting
forth the details of such Default, Event of Default, or Material Adverse Effect
and the statement of such officer setting forth the action which Borrower
proposes to take with respect thereto;
4.2.6 promptly after the sending thereof, copies of all
statements, reports and other information which Borrower distributes to any
holders of its Indebtedness or its securities or filed with the Securities and
Exchange Commission or any national securities exchange;
4.2.7 (a) promptly after the request therefor by Lender,
copies of each annual report (Form 5500 series) for any Employee Plan which
Borrower or any of its Commonly Controlled Entities files under ERISA with the
Internal Revenue Service, and (ii) promptly after the filing or receipt thereof,
copies of any other report or notice which Borrower or any of its Commonly
Controlled Entities files with or receives from the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or from any plan sponsor (as defined
in Section 3(16)(B) of ERISA), in respect of any Employee Plan and which
evidences the Pension Benefit Guaranty Corporation's intention to terminate any
Employee Plan or to have a trustee appointed to administer any Employee Plan or
which concerns the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA;
4.2.8 promptly after the commencement thereof but in any event
not later than five (5) Business Days after service of process with respect
thereto on, or the obtaining of knowledge thereof by Borrower notice of each
action, suit or proceeding before any court, arbitrator or governmental
department, commission, board, bureau, agency or instrumentality which, if
determined adversely, would have a Material Adverse Effect and copies of any
notice of default under any material lease or other material agreement;
20
4.2.9 as soon as practicable and in any event within ten (10)
days of delivery to Borrower, a copy of any material letter issued by Borrower's
independent public accountants or other management consultants with respect to
Borrower's financial or accounting systems or controls, including all so-called
"management letters"; and
4.2.10 promptly upon request, such other information
concerning the condition or operations, financial or otherwise, of Borrower as
Lender may from time to time reasonably request.
SECTION 4.3 Use of Proceeds. Borrower will use the proceeds of the
Term Loan only to pay off an existing loan with General Electric Credit
Corporation and related expenses, and will use the proceeds of Revolving Credit
Loans only to pay off an existing loan with General Electric Credit Corporation
and for general working capital purposes, and will use the proceeds of the
Equipment Loans only for the purchase of certain Eligible Equipment.
SECTION 4.4 Compliance with Laws, Etc. Borrower will and will cause
each of its Subsidiaries to comply in all material respects with all applicable
laws, rules, regulations and orders, and all contracts and agreements to which
it or its properties are subject, such compliance to include, without
limitation, compliance with ERISA with respect to any Employee Plan, paying
before the same become delinquent all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or its
properties, and paying all lawful claims which if unpaid might become a lien or
charge upon any of its properties, except to the extent such taxes, assessments
and governmental charges or levies are contested in good faith by proper
proceedings which stay the imposition of any penalty, fine or lien resulting
from the non-payment thereof and with respect to which adequate reserves have
been set aside for the payment thereof and such contest will not in the
reasonable judgment of Lender endanger its interest in any Collateral.
SECTION 4.5 Preservation of Existence, Etc. Borrower will and will
cause each of its Subsidiaries to maintain and preserve its existence, rights
and privileges, and become or remain duly qualified and in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary,
except where failure to do so, individually or in the aggregate, is not likely
to have a Material Adverse Effect.
SECTION 4.6 Obtaining of Permits, Etc. Borrower will and will cause
each of its Subsidiaries to obtain, maintain and observe all permits, licenses,
authorizations, approvals and accreditation necessary or useful in the proper
conduct of its business, except where failure to do so, individually or in the
aggregate, is not likely to have a Material Adverse Effect.
SECTION 4.7 Maintenance of Insurance. Borrower will and will cause
each of its Subsidiaries to maintain the insurance required by the Security
Agreement and the Mortgages; and Borrower and its Subsidiaries will maintain
with financially sound and reputable insurance companies or associations
satisfactory to Lender insurance (including, without limitation, comprehensive
general liability and hazard insurance) with respect to its properties and
business and the properties and business of its Subsidiary, in such amounts and
covering such risks, as is required by any governmental authority having
jurisdiction with respect thereto or as is carried
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generally in accordance with sound business practice by companies in similar
businesses similarly situated. Lender will be named a lender loss payee as its
interests may appear with respect to all such insurance.
SECTION 4.8 Intentionally Omitted.
SECTION 4.9 Maintenance of Properties, Etc. Borrower will and will
cause each of its Subsidiaries to maintain and preserve all of its properties
necessary or useful in the proper conduct of its business in good working order
and condition, ordinary wear and tear excepted, and comply at all times with the
material provisions of all material leases to which it is a party or under which
it occupies property, so as to prevent any material loss or forfeiture thereof
or thereunder.
SECTION 4.10 Keeping of Records and Books of Account. Borrower will
and will cause each of its Subsidiaries to keep adequate records and books of
account with complete entries made in accordance with GAAP reflecting all of its
financial transactions, including, but not limited to all transactions between
or among Borrower and its Affiliates.
SECTION 4.11 Inspection Rights. Upon reasonable notice (and for this
purpose no more than two Business Days notice shall be required under any
circumstances) if no Event of Default or Default shall exist, or at any time
with or without notice after the occurrence of an Event of Default or Default,
Borrower shall, and shall cause each of its Subsidiaries to, allow any
representative of Lender to visit and inspect any of the properties of Borrower
and any of its Subsidiaries, to conduct field examinations, to examine the books
of account and other records and files of Borrower and any of its Subsidiaries
(including, without limitation, the financial statements (audited and unaudited,
to the extent prepared) of each Subsidiary and information with respect to each
business operated by Borrower and any of its Subsidiaries), to make copies
thereof and to discuss the affairs, business, finances and accounts of Borrower
and its Subsidiaries with its personnel and accountants, all at Borrower's
expense. Lender's inspections are solely for the protection of Lender and no
action or inaction of Lender shall constitute any representation by Lender that
Borrower is in compliance with the terms of any Loan Documents or that Lender
approves of Borrower's affairs, business, finances or accounts.
SECTION 4.12 Operating Accounts. Borrower will and will cause each
of its Subsidiaries to maintain all of its operating accounts with Lender and
provide that all amounts deposited in any bank account not located at Lender
(other than reasonable amounts maintained for payroll purposes at a local bank
located outside the geographic area serviced by Lender) will be transferred
daily to an account located at Lender.
SECTION 4.13 Liens on Property. Borrower will not and will not
permit any of its Subsidiaries to create or suffer to exist, any lien, security
interest or other charge or encumbrance, or any other type of preferential
arrangement, upon or with respect to any of its properties, rights or other
assets, whether now owned or hereafter acquired, other than the following
(referred to collectively as "Permitted Liens"):
4.13.1 the liens or security interests existing on the
date hereof and listed on Schedule 4.13 hereto;
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4.13.2 liens or security interests granted to Lender;
4.13.3 landlord's liens and inchoate liens arising by
operation of law to secure claims for the purchase of labor, services,
materials, equipment or supplies to the extent that payment thereof shall not
more than 90 days past due or are being contested in good faith by appropriate
proceedings for which appropriate reserves have been established;
4.13.4 liens for taxes, assessments or other
governmental charges which are non-delinquent or being contested in good faith
and by appropriate proceedings and with respect to which proper reserves have
been taken in accordance with generally accepted accounting principles;
4.13.5 deposits or pledges to secure obligations under
workers' compensation, social security or similar laws, or under unemployment
insurance;
4.13.6 deposits or pledges to secure (or deposits or
pledges to secure letters of credit to secure) bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in the ordinary
course of business in an aggregate amount not to exceed $250,000;
4.13.7 judgment liens and attachments that have been
stayed or bonded;
4.13.8 liens on deposits of property or funds delivered
to stay litigation in aggregate amounts not exceeding $100,000;
4.13.9 (a) all purchase money liens disclosed on the
Perfection Certificate, (b) additional purchase money liens incurred after the
Closing Date in the ordinary course of business not exceeding, at any one time
outstanding, $100,000, and (c) operating leases permitted under Section 4.30;
and
4.13.10 other liens incidental to the conduct of
Borrower's and its Subsidiaries businesses or the ownership of their Real
Property and assets which were not incurred in connection with the borrowing of
money or the obtaining of advances or credit, and which do not in the aggregate
materially detract from the value of the Real Property and assets or materially
impair the use thereof in the operation of its business easements, rights of
way, and similar restrictions or encumbrances not interfering with the ordinary
conduct of business of Borrower or any of its Subsidiaries.
SECTION 4.14 Indebtedness. Borrower will not create, incur, assume,
guaranty or remain liable, contingently or otherwise, with respect to or suffer
to exist any Indebtedness other than:
4.14.1 indebtedness created by the Loan Documents;
4.14.2 indebtedness existing on the date hereof as set
forth on Schedule 3.7 hereto;
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4.14.3 guarantees permitted under Section 4.19 hereof;
4.14.4 purchase money indebtedness secured by liens
permitted by Section 4.13.9;
4.14.5 unsecured accounts payable to trade creditors
which (a) are not outstanding for more than 90 days from the original billing
date, or (b) are outstanding for more than 90 days from the original billing
date but which are disputed by Borrower, and for which Borrower has provided
sufficient reserves for payment in the event such dispute by Borrower is
unsuccessful;
4.14.6 indebtedness of any Subsidiary to Borrower.
SECTION 4.15 Loans and Investments. Borrower will not and will not
permit any of its Subsidiaries to extend credit (other than advances and
extensions of credit in the ordinary course of business) to any Person, or
purchase or acquire any capital stock, assets, obligations or other securities
of or make any capital contribution to or otherwise invest in or acquire any
interest in any Person, except, so long as no Default or Event of Default exists
or would result therefrom:
4.15.1 investments in United States Treasury obligations
and other obligations guaranteed by the U.S. government or an agency thereof;
4.15.2 certificates of deposit, bankers acceptances and
other "money market instruments" issued by any bank or trust company organized
under the laws of the United States or any state thereof and having capital and
surplus not less than $100,000,000 and whose long-term debt is rated at least
"A" by Standard & Poor's Corporation or by another similar nationally recognized
rating service;
4.15.3 open market commercial paper rated in one of the
two highest credit rating categories for commercial paper of Standard & Poor's
Corporation or of another similar nationally recognized rating service;
4.15.4 repurchase agreements with any bank or trust
company organized under the laws of the United States or any state thereof and
having capital and surplus not less than $100,000,000 and whose long-term debt
is rated at least "A" by Standard & Poor's Corporation or by another similar
nationally recognized rating service relating to United States Treasury
obligations, in each case maturing in less than one year;
4.15.5 travel advances and other advances to employees
and independent contractors in the ordinary course of business not in excess of
$25,000 outstanding at any time on a consolidated basis for Borrower and its
Subsidiaries; and
4.15.6 investments by Borrower and its Subsidiaries in
Borrower or any Subsidiary of Borrower existing on the date hereof and
additional investments therein made in the ordinary course of business on the
same basis as such investments have been customarily made.
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SECTION 4.16 No Negative Pledge. Borrower will not and will not
permit any Subsidiary to agree with any Person not to mortgage, pledge or
otherwise encumber any of Borrower's or any Subsidiary's property (except for
property which is the subject of permitted Capitalized Lease Obligations or
permitted purchase money security interests).
SECTION 4.17 Merger, Consolidation, Acquisition. Borrower will not
and will not permit any of its Subsidiaries to acquire all or substantially all
of the assets or business of any Person, whether by purchase of stock or assets,
merger or consolidation, or otherwise (or enter into any agreement to do so),
except for the purchase of inventory in the ordinary course of Borrower's
business; provided that any Subsidiary may merge with any other Subsidiary and
any Subsidiary may merge with Borrower so long as Borrower is the surviving
corporation.
SECTION 4.18 Sale of Assets, Etc. Borrower will not, without
Lender's prior written consent, which may be withheld in Lender's sole
discretion, sell assign, transfer, lease or otherwise dispose of any of its
properties or assets (whether now owned or hereafter acquired) to any Person,
other than (a) inventory sold in the ordinary course of business and (b) sales
or other disposition of used equipment in the ordinary course of business in an
amount not to exceed $100,000 (based on the then book value (taking into account
depreciation)) in any fiscal year.
SECTION 4.19 Guarantees, Etc. Borrower will not and will not permit
any of its Subsidiaries to assume, guarantee, endorse or otherwise become
directly or contingently liable including, without limitation, liable by way of
agreement, contingent or otherwise, to purchase, to provide funds for payment,
to supply funds to or otherwise invest in the debtor or otherwise to assure the
creditor against loss, in connection with any Indebtedness of any other Person,
other than guarantees by endorsement of negotiable instruments for deposit or
collection in the ordinary course of business; provided that Borrower may
guaranty any Indebtedness of any Subsidiary and any Subsidiary may guaranty and
Indebtedness of Borrower or any Subsidiary to the extent such Indebtedness is
permitted hereby.
SECTION 4.20 Change in Nature of Business. Borrower will not and
will not permit any of its Subsidiaries to make any material change in the
nature of its business, or discontinue or liquidate any material part of its
operations without the prior written consent of Lender.
SECTION 4.21 Pension Plans. Borrower will and will cause each of its
Subsidiaries to:
4.21.1 keep in full force and effect any and all Single
Employer Plans which are presently in existence or may, from time to time, come
into existence under ERISA, unless such Employee Plans can be terminated without
(a) causing a Material Adverse Effect, and/or (b) causing Borrower to incur more
than $300,000 in (i) out of pocket costs and expenses, and/or (ii) accrued
liabilities in accordance with GAAP;
4.21.2 make contributions to all its Employee Plans in a
timely manner and in a sufficient amount to comply in all material respects with
the requirements of ERISA;
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4.21.3 comply in all material respects with the
requirements of ERISA which relate to such Employee Plans; and
4.21.4 notify Lender immediately upon receipt by
Borrower of any notice of the institution of any proceeding or other third party
action which may result in the termination of any Employee Plan or any
assessment against Borrower with respect to any Employee Plan, and deliver to
Lender, promptly after the filing or receipt thereof, copies of all material
reports or notices relating to such proceeding or related action which Borrower
files or receives under ERISA with or from the Internal Revenue Service, the
Pension Benefit Guaranty Corporation, or the U.S. Department of Labor.
SECTION 4.22 Environmental Compliance. Borrower will and will cause
each of its Subsidiaries to:
4.22.1 comply in all material respects with
Environmental Laws, and obtain, be in material compliance with, and maintain all
material permits, certificates, licenses, approvals and other authorizations
relating to the Management (as defined in the definition of "Environmental Laws"
set forth in Section 7.1) or Release of Hazardous Substances (as those terms are
defined in Section 3.21), required by the Environmental Laws, and file when due
all notifications required by the Environmental Laws in connection with its
ownership or use of any real estate or the operation of its business;
4.22.2 transport or arrange for the transport of all
Hazardous Substances generated by Borrower's or any Subsidiary's business in
compliance, in all material respects, with the Environmental Laws to storage,
treatment, recycling and disposal facilities permitted or authorized to handle
such Hazardous Substances by the government agencies with jurisdiction thereof;
4.22.3 not arrange for the disposal (as defined under
CERCLA) of any Hazardous Substances removed from the premises of third parties
nor become the operator (as defined under CERCLA) of any such third party
premises;
4.22.4 keep the property owned or occupied by Borrower
and any Subsidiary free of the presence of Hazardous Substances, except in such
quantities used in the ordinary course of business, and in compliance with all
applicable Environmental Laws;
4.22.5 not Release or allow the Release of any Hazardous
Substances, other than as allowed by the Environmental Laws, at, upon, under or
within the property owned or occupied by Borrower or any Subsidiary or any third
party location at which Borrower or any Subsidiary conducts its business (any
such event (not so allowed) being hereinafter referred to as a "Hazardous
Discharge"); and
4.22.6 notify Lender within ten (10) Business Days of
any Hazardous Discharge, any notice of violation, request for information or
notification that it is potentially responsible for investigation or cleanup of
environmental conditions at the property owned or occupied by Borrower or any
Subsidiary, demand letter or complaint, order, claim, penalty assessment,
citation or any other notice, any suit or other proceeding, administrative,
civil or criminal, at law or in equity, pending or threatened against Borrower
or any Subsidiary
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(collectively referred to as "Environmental Complaint") received from or filed
by any person or entity, including any federal, state or local governmental
authority, with respect to any alleged violation of any Environmental Law or
with respect to Management of Hazardous Substances or any other environmental
matter in connection with Borrower's or any Subsidiary's ownership or use of any
real estate or the conduct of its business, and forward a copy of same to Lender
and give written notice of same to Lender which notice shall describe in
reasonable detail the facts and circumstances giving rise to the Hazardous
Discharge or Environmental Complaint.
SECTION 4.23 Distributions. Borrower will not and will not permit
any of its Subsidiaries to make or declare any Distribution, except that any
Subsidiary may make distributions to Borrower or to any other Subsidiary.
SECTION 4.24 Transactions with Affiliates; Payments to Affiliates.
Borrower will not and will not permit any of its Subsidiaries to directly or
indirectly enter into any transaction with an Affiliate on terms less favorable
to Borrower (including, but not limited to, price and credit terms) than would
be the case if such transaction had been effected at arms length with a Person
other than an Affiliate.
SECTION 4.25 Inconsistent Agreements. Borrower will not and will not
permit any of its Subsidiaries to enter into any agreement containing any
provision which would be violated or breached by any Borrowing hereunder or by
the performance by Borrower or any of its Subsidiaries of its obligations
hereunder or under any Loan Document.
SECTION 4.26 Fiscal Year. Borrower will not change its Fiscal Year.
SECTION 4.27 Subsidiaries. Borrower will not form or acquire any
Subsidiaries other than those listed on Schedule 3.2.
SECTION 4.28 Accounts Receivable. Borrower will not and will not
permit any of its Subsidiaries to sell, discount or otherwise dispose of notes,
accounts receivable or other obligations owing to Borrower or any of its
Subsidiaries except for the purpose of collection in the ordinary course of
business.
SECTION 4.29 Collateral Locations and Change In Names. The location
of the principal place of business and chief executive office of Borrower and
each of its Subsidiaries and the locations of Collateral as set forth on
Schedule 3.19 hereto shall not be changed nor shall there be established
additional places of business or additional locations at which Collateral is
stored, kept or processed unless Borrower shall have given Lender at least
thirty (30) days prior written notice of its intention to do so, and Borrower or
such Subsidiary has adequately perfected the interest of Lender in all
Collateral, including executing and filing any additional financing statements
and other documents or notices as required for such perfection or requested by
Lender. Borrower will not and will not permit any of its Subsidiaries to change
its corporate name or operate under any assumed or trade name (other than as
disclosed on Schedule 3.23) without giving Lender thirty (30) days prior written
notice of its intent to do so and without complying with the provisions of the
Security Agreement with respect to such change in name.
SECTION 4.30 Limitation on Leases. Borrower and its Subsidiaries on
a consolidated basis will not incur, create or assume any commitment to make any
direct or
27
indirect payment, whether as rent or otherwise under any lease, rental or other
arrangement (but excluding Capitalized Lease Obligations) if upon entering into
any such lease the sum of all lease payments of Borrower and its Subsidiaries on
a consolidated basis (including those under such lease) would increase by more
than $100,000 in any Fiscal Year, nor will Borrower or any Subsidiary of
Borrower materially modify or terminate any lease of Real Property without the
prior written consent of Lender if such modification or termination is likely to
have a Material Adverse Effect.
SECTION 4.31 Payment of Debt. Borrower will not and will not permit
any of its Subsidiaries to make any payment on Funded Debt prior to the date it
is legally obligated to do so.
SECTION 4.32 Officer, Shareholder and Director Loans. Borrower or
any Subsidiary will not obtain any financing, loans or credit from any officer,
shareholder or director of Borrower unless such indebtedness is fully
subordinated as to payment and lien priority to the Obligations of Borrower to
Lender. Any such subordination will, at Lender's discretion, be effected by a
subordination and intercreditor agreement between such officer, shareholder or
director, Borrower and Lender, providing for (in addition to such subordination)
payment and remedy blockage until such time as the Obligations are paid in full.
SECTION 4.33 Further Assurances. Borrower will cooperate with Lender
and execute such further instruments and documents as Lender shall reasonably
request to carry out to its satisfaction the transactions contemplated by this
Agreement.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.1 Events of Default. Any of the following shall constitute
an Event of Default hereunder:
5.1.1 Borrower shall fail to pay any principal of or
interest on any Note (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) on the date when due; or Borrower shall fail
to pay any other amount payable hereunder within fifteen (15) days following the
date payment is due; or
5.1.2 Any representation or warranty made by Borrower or
any of its Subsidiaries or any officer of Borrower or any of its Subsidiaries in
any Loan Document, or certificate or writing delivered pursuant to any Loan
Document or remade in connection with any Borrowing shall have been incorrect in
any material respect when made or remade; provided, Borrower shall have the
right to cure non-intentional misrepresentations which are subject to cure by
taking the requisite action, or paying such requisite amounts, needed to effect
such cure within fifteen (15) days after written notice thereof from Lender to
Borrower of such non-intentional misrepresentation;
5.1.3 Borrower shall fail to perform or observe any
covenant set forth in Article IV hereof other than those Sections specifically
set forth in Section 5.1.4; or
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5.1.4 Borrower or any of its Subsidiaries shall fail to
perform or observe any term, covenant, condition or agreement contained in
Sections 4.2, 4.4, 4.5, 4.6, 4.9, 4.21 or 4.22 hereof or otherwise or in any
Loan Document (other than a term, covenant, condition or agreement a default in
the performance of which is elsewhere in this Section specifically dealt with)
to be performed or observed by Borrower and such failure shall remain unremedied
for fifteen (15) days after written notice of such failure has been given to
Borrower by Lender; or
5.1.5 Borrower or any of its Subsidiaries shall (i) fail
to pay any of its Indebtedness (excluding Indebtedness evidenced by the Notes),
or any interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Indebtedness, or (ii) fail to perform or observe
any term, covenant or condition to be performed or observed by it under any
agreement or instrument relating to any such Indebtedness when required to be
performed or observed, and such failure shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such failure to perform or observe is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness, or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated maturity
thereof; or
5.1.6 Borrower or any of its Subsidiaries shall be
generally not paying its debts as they become due or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any petition shall be filed by or against Borrower or
any such Subsidiary under the federal bankruptcy laws, or any other proceeding
shall be instituted by or against Borrower or any such Subsidiary seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for Borrower or any such Subsidiary or for
any substantial part of its property; or Borrower or any such Subsidiary shall
take any action to authorize or effect any of the actions set forth above in
this Section and, in the case of the institution of any involuntary proceeding
against Borrower or any such Subsidiary such proceeding shall not be discharged
within sixty (60) days of its commencement; or
5.1.7 Any material provision of any Loan Document shall
at any time for any reason be declared to be null and void, or the validity or
enforceability thereof shall be contested by Borrower or any of its
Subsidiaries, or a proceeding shall be commenced by Borrower or any of its
Subsidiaries thereto, or by any governmental agency or authority having
jurisdiction over Borrower or any of its Subsidiaries thereto, seeking to
establish the invalidity or unenforceability thereof, or Borrower or of its
Subsidiaries shall deny that it has any liability or obligation purported to be
created under any Loan Document; or
5.1.8 Any Security Document, after delivery thereof,
shall for any reason, fail or cease to create a valid and perfected, and except
to the extent permitted by the terms hereof or thereof, first priority lien on
or security interest in any of the Collateral purported to be covered thereby;
or
29
5.1.9 A judgment, order, attachment, writ, levy or
similar process for the payment of money exceeding any applicable insurance
coverage by more than $100,000 shall be rendered against Borrower or any of its
Subsidiaries and shall remain unsatisfied and there shall be any period of
thirty (30) consecutive days during which a stay of enforcement of such
judgment, order, attachment, writ, levy or similar process by reason of a
pending appeal or otherwise, shall not be in effect; or
5.1.10 If (i) any Reportable Event that creates a
reasonable probability of the termination of any Employee Plan or of the
appointment by the appropriate United States District Court of a trustee to
administer any such Plan shall have occurred or (ii) Borrower or any
Commonly-Controlled Entity (as defined in ERISA) withdraws from any
Multiemployer Plan, or (iii) the plan administrator of any Employee Plan files
with the Pension Benefit Guaranty Corporation a notice of intention to terminate
such Plan, or (iv) the Pension Benefit Guaranty Corporation institutes
proceedings to terminate any such Plan or to appoint a trustee to administer any
such Plan, and if, in any of the cases described in the foregoing clauses (i)
through (iv), Lender further reasonably determine that the "amount of unfunded
guaranteed benefits" (as defined by Section 4001(a) (17) of ERISA) resulting
upon termination of such Employee Plan or the amount of liability resulting from
the withdrawal from any such Multiemployer Plan would have either a Material
Adverse Effect or would exceed the $300,000 threshold specified in Section
4.21.1; or
5.1.11 An "Event of Default" (as defined in any other
Loan Document) shall occur and be continuing; or
5.1.12 A Change of Control shall occur; or
5.1.13 A Management Change shall occur.
SECTION 5.2 Remedies. If any Event of Default shall occur and be
continuing, Lender by notice to Borrower may (a) declare the Revolving Credit
Commitment and/or the Equipment Loan Commitment to be terminated, whereupon the
obligation of Lender to make Revolving Credit Loans and/or Equipment Loans shall
forthwith terminate, and (b) declare the outstanding principal balance of the
Notes, all interest thereon and all other amounts payable under this Agreement,
the Notes and the other Loan Documents to be immediately due and payable,
whereupon the Notes, such interest and all such amounts shall be and become due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are expressly waived by Borrower; provided that, in the case of an
Event of Default referred to in Section 5.1.6, the Commitment shall immediately
terminate and the Notes, all interest thereon and all other amounts payable
under this Agreement and the other Loan Documents shall be immediately due and
payable, all without presentment, demand, protest or other notice of any kind,
all of which are expressly waived by Borrower. If any Event of Default shall
occur and be continuing, Lender shall also have the remedies provided elsewhere
herein and in the other Loan Documents and applicable law.
ARTICLE VI
RIGHT OF SET-OFF
30
SECTION 6.1 Right of Set-Off. Lender is hereby authorized at any
time and from time to time, upon the occurrence and during the continuance of an
Event of Default, to the fullest extent permitted by law, to set-off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by Lender or any of
its Affiliates to or for the credit or the account of Borrower or any of its
Subsidiaries against any and all of the Obligations of Borrower and its
Subsidiaries irrespective of whether or not Lender shall have made any demand
under the Loan Documents, and although such Obligations may be unmatured, and
Borrower hereby grants Lender a security interest in such deposits as collateral
security for the Obligations. Lender agrees promptly to notify Borrower after
any such set-off and application made by Lender; provided, that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which Lender
may have.
ARTICLE VII
DEFINITIONS; CERTAIN TERMS
SECTION 7.1 Definitions. As used in this Agreement, the following
terms shall have the respective meanings indicated below (such meanings to be
applicable equally to both the singular and plural forms of such terms):
"Accounts" has the meaning specified in the UCC.
"Affiliate", as to any Person, means any other Person which directly
or indirectly controls, is controlled by or is under common control with such
Person.
"Approvals" has the meaning set forth in Section 3.22.
"Authorized Officer" means, with respect to any act to be performed
or duty to be discharged by any Person which is not an individual, any officer
or other representative thereof authorized to perform such act or discharge such
duty.
"Borrower" means EDAC Technologies Corporation, a Wisconsin
corporation, its successors and assigns.
"Borrowing" means a borrowing by Borrower pursuant to Article I
hereof, consisting of the advance on or after the Effective Date of a Loan or
Loans by Lender to Borrower.
"Borrowing Base" means, on any date, a dollar amount equal to the
sum of (a) 80% of Eligible Receivables and (b) 50% of Eligible Inventory.
"Borrowing Base Certificate" means a monthly borrowing base
certificate substantially in the form of Exhibit E attached hereto.
"Borrowing Notice" means a properly completed notice substantially
in the form attached hereto as Exhibit D.
31
"Business Day" means a day when Lender is open for the transaction
of banking business at its principal banking offices in New Britain, Connecticut
other than a Saturday, Sunday or other day on which banks located in the State
of Connecticut are required or authorized to be closed.
"Capital Expenditures" means the unfinanced portion of all
expenditures, and principal payments with respect to the financed portion of all
expenditures (including the principal portion of capitalized lease payments),
made for any fixed assets or improvements, or for replacements, substitutions or
additions thereto, which have a useful life of more than one year and are or
should be capitalized in accordance with GAAP, including, but not limited to,
the direct or indirect acquisition of such assets by way of increased product or
service charges, offset items or otherwise.
"Capitalized Lease Obligations" means all lease obligations that, in
accordance with generally accepted accounting principles, have been or should be
capitalized on the books of the lessee and, for purposes hereof, the amount of
any such obligation shall be the capitalized amount thereof determined in
accordance with such principles.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendment
and Reauthorization Act of 1986 and all other amendments thereto, together with
the rules and regulations promulgated thereunder as in effect from time to time.
"CERCLIS" has the meaning set forth in Section 3.21.5.
"Change of Control" means, with respect to EDAC Technologies
Corporation, a change in the identity of more than 50% of the current directors
of the company, by resignation, removal, or otherwise within any consecutive
twenty four (24) month period.
"Closing Date" means the date upon which this Agreement is
executed..
"Closing Financial Statements" has the meaning set forth in
Section 3.9.
"Collateral" means all of the property (tangible and intangible)
subject to the lien or security interest created by any mortgage, deed of trust,
security agreement, pledge agreement, assignment or other security document
heretofore or hereafter executed by Borrower or its Subsidiaries as security for
all or any part of the Obligations.
"Commitment" means either or both of the Revolving Credit Commitment
and the Equipment Loan Commitment.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is or was, during the immediately preceding six-year period,
under common control with Borrower within the meaning of Section 4001 of ERISA.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit F signed by the chief financial officer or the chief executive
officer on behalf of Borrower (a) certifying that no Default or Event of Default
has occurred or if one has occurred a statement as
32
to the nature thereof and the actions taken with respect thereto and (b) to the
extent applicable showing in reasonable detail calculations demonstrating
compliance with the covenants set forth in Section 4.1.
"Continuing Debt Service Coverage Ratio" means the ratio of (a)
Operating Cash Flow less (i) all dividends, withdrawals and non-cash income of
Borrower and its Subsidiaries on a consolidated basis, (ii) cash expenditures
with respect to taxes, and (iii) accrued but unfunded capital expenditures, to
(b) Fixed Charges for any period; tested initially on a trailing actual year to
date results basis each quarter, and beginning March 31, 2006 and each quarter,
thereafter on a rolling 4 quarter basis.
"Conversion" means the conversion of the Equipment Loan from a Prime
Rate Loan to a FHLBB Amortizing Loan on the Conversion Date.
"Conversion Date" means July 31, 2005.
"Current Maturities of Long-Term Debt" means, as of any date, the
total principal amount of all Indebtedness constituting long-term debt of
Borrower and its Subsidiaries on a consolidated basis (excluding the outstanding
principal amount of Prime Rate Loans incurred under this Agreement) which is
required to be paid on such date and during the twelve (12) month period
immediately following such date (but not including the anniversary of such date)
as determined in accordance with GAAP.
"Default" means any event or occurrence which with the passing of
time, the giving of notice, or both, would become an Event of Default.
"Distribution" means the declaration or payment of any distribution
on or in respect of any equity interest of any Person (or any options, warrants,
or rights to purchase or subscribe for the same); the purchase, redemption, or
other retirement of any class of equity interest of any Person (or any options,
warrants, or rights to purchase or subscribe for the same), directly or
indirectly through a Subsidiary or otherwise; the return of capital by any
Person to its investors as such; or any other distribution on or in respect of
any equity interest of any Person.
"Effective Date" has the meaning specified in the Background
provision of this Agreement.
"Eligible Equipment" means that equipment related to Borrower's
business which Borrower acquires in whole or in part with the proceeds of the
Equipment Loan.
"Eligible Inventory" means, at any date of determination thereof,
the aggregate value (determined at the lower of cost or market on a basis
consistent with that used in the preparation of the Financial Statements
referred to in Section 4.2) at such date of all Inventory owned by Borrower or
any of its Subsidiaries, recorded on Borrower's Financial Statements in
accordance with GAAP and located in any jurisdiction in the United States of
America as to which appropriate UCC financing statements have been filed naming
Borrower or such Subsidiary, as the case may be, as "debtor" and Lender as
"secured party", all net of any amounts payable by Borrower or such Subsidiary
in respect of commissions, processing fees or other charges, excluding, however,
without duplication (a) any such Inventory which has been shipped
33
to a customer, even if on a consignment or "sale or return" basis; (b) any
Inventory subject to a Lien (other than Liens created pursuant to the Security
Agreement) including a landlord's or warehouseman's Lien (other than any such
Lien that has been waived pursuant to a landlord's or warehouseman's waiver),
(c) any item of Inventory for which a reserve shall be required in accordance
with GAAP consistently applied with past practice; provided that such item of
Inventory shall be excluded only to the extent of the amount of such reserve;
(d) any Inventory not subject to a valid and perfected first-priority Lien in
favor of Lender under the Security Agreement, subject to no prior or equal Lien;
(e) any Inventory not produced by Borrower or such Subsidiary in compliance with
the applicable requirements of the Fair Labor Standards Act; (f) any supply,
scrap or obsolete Inventory and any Inventory that is not reasonably marketable,
(g) any Inventory located at any property leased by Borrower or such Subsidiary
in respect of which a landlord's consent agreement in form and substance
reasonably satisfactory to Lender is not in full force and effect, and (h) any
Inventory constituting Work-in-Process.
"Eligible Receivables" means, at any date of determination thereof,
the aggregate amount of all accounts receivable at such date due to Borrower or
any of its Subsidiaries, recorded on Borrower's Financial Statements in
accordance with GAAP, excluding the following (determined without duplication):
(a) (i) any account receivable due from an account debtor that
is not both domiciled in the United States of America or Canada and (if not a
natural person) organized under the laws of the United States of America or
Canada or any political subdivision thereof, except to the extent that (A) such
account receivable is secured by one or more letters of credit that are (1) in
favor of Lender or Borrower (and in which Lender has a fully perfected first
priority security interest) or (2) assigned to Lender; provided that in each
case such letters of credit are (x) in form and substance reasonably acceptable
to Lender and (y) issued by a bank doing business in the United States and
reasonably acceptable to Lender, or (B) in the case of any account receivable
due from an account debtor that is located in Canada or any political
subdivision thereof, the aggregate amount of all accounts receivable that are
due that otherwise satisfy the requirements of this definition of "Eligible
Receivables" do not exceed $1,000,000, and (ii) any account receivable that is
not denominated and payable in U.S. dollars;
(b) any account receivable that does not comply with all
applicable legal requirements, to the extent such non-compliance could have an
adverse effect on the value of such account receivable or the validity or
binding nature of the related obligation, including, without limitation, all
laws, rules, regulations and orders of any governmental or judicial authority;
(c) any account receivable in respect of which there is any
unresolved dispute with the account debtor, but only to the extent of such
dispute;
(d) any account receivable that remains unpaid for more than
90 days from the date of the original issuance of the invoice therefor;
(e) any unbilled account receivable and any account receivable
in respect of Goods not yet shipped or in respect of services not yet rendered;
34
(f) any account receivable arising outside the ordinary course
of business of Borrower and its Subsidiaries;
(g) any account receivable in respect of which there has been
established a contra account, or which is due from an account debtor to whom
Borrower or such Subsidiary owes a trade payable, but only to the extent of such
account or trade payable;
(h) any account receivable that is not subject to a first
priority perfected Lien under the Security Agreement, and any account receivable
evidenced by an "instrument" (as defined in the UCC) not in the possession of
Lender;
(i) any account receivable due from an account debtor (i) as
to which on such date accounts receivable representing more than 50% of the
aggregate amount of all accounts receivable of such account debtor have remained
unpaid for more than 90 days from the date of the original issuance of the
invoice therefor, (ii) in respect of which Lender shall have notified Borrower
that such account debtor does not have a satisfactory credit standing as
determined in good faith by Lender in accordance with commercially reasonable
standards, (iii) that is a Subsidiary or Affiliate of Borrower, (iv) that is the
United States of America or any department, agency or instrumentality thereof,
unless Borrower or such Subsidiary has complied in all respects with the Federal
Assignment of Claims Act of 1940, or (v) that is the subject of a case or
proceeding of the type described in Section 5.1.6;
"Employee Plan" means an employee pension benefit plan covered by
Title IV of ERISA and maintained in whole or in part for, or contributed to on
behalf of, employees of Borrower or any of its Commonly Controlled Entities.
"Environmental Complaint" has the meaning set forth in Section
4.22.6.
"Environmental Laws" means all applicable Federal, state, and local
laws, statutes, ordinances, rules, regulations and valid orders relating to the
use, possession, handling, generation, transportation, treatment, storage,
recycling, discharge, disposal, emission, presence, or Release (as defined in
Section 3.21), or the threat of Release of (collectively "Management"), or any
remedial, removal or response action in connection with, any hazardous, toxic
and polluting substances or wastes.
"Environmental Reports" means (a) with respect to the Real Property
known as 1790, 1798, 1806 New Britain Avenue in Farmington, Connecticut, a
certain report dated 7/24/00 and entitled "Phase 1 Environmental Site
Assessment, ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ - ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇", (▇) with respect to the Real Property known as ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ in
Farmington, Connecticut, a certain report dated January 2004 and entitled "Phase
1 Environmental Site Assessment Update, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
a certain report dated June 29, 1998 and entitled "Phase 1 Environmental Site
Assessment, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇" and a certain report dated
June 29, 1998" and entitled "Phase II Environmental Site Assessment, ▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇", and (c) with respect to the Real Property sold
by EDAC in 2000 known as ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ in Farmington, Connecticut, a certain
report dated June 29, 1998 and entitled "Phase 1 Environmental Site Assessment,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ Connecticut".
35
"Equipment Loan" means the series of Prime Rate Loans made to
Borrower prior to the Conversion Date to fund the purchase of certain Eligible
Equipment related to the business operations of Borrower, which Loans will
convert to one FHLBB Amortizing Loan on the Conversion Date.
"Equipment Loan Commitment" means Lender's commitment to make a
series of Loans prior to Conversion to fund the purchase of Eligible Equipment
in an aggregate amount not to exceed $1,500,000.
"Equipment Loan Fixed Rate" means a fixed rate equal to 5 yr (Term)
5 yr (Amort) Regular Amortizing Advance Rate for the FHLBB as published in the
last week prior to the Conversion Date on the FHLBB internet site under
"Rates/Amortizing Advances" (▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇.▇▇▇) or such other
the applicable publication of such rates by the FHLBB subsequently designated by
Lender, plus two and one half (2.5%), calculated three (3) Business Days prior
to Conversion.
"Equipment Loan Maturity Date" means July 31, 2010.
"Equipment Loan Note" means Borrower's promissory note,
substantially in the form of Exhibit C hereto, evidencing the indebtedness of
Borrower to Lender resulting from the making of Equipment Loans.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, together with the rules and regulations
promulgated thereunder as in effect from time to time.
"Event of Default" means any of the events set forth in Article V
hereof.
"Financial Statements" means the financial statements required to be
delivered by Borrower to Lender periodically pursuant to Section 4.2.
"Lender" has the meaning specified in the preamble hereto.
"FHLBB" means the Federal Home Loan Bank of Boston.
"FHLBB Amortizing Loan" means the Term Loan and the Equipment Loan
prior to the Conversion Date.
"Fiscal Year" means the twelve month accounting period of Borrower
commencing on the day after the previous fiscal year ends and ending on the
Saturday closest to December 31 of each calendar year.
"Fixed Charges" means for any period the sum of interest expense on
Indebtedness, Current Maturities of Long-Term Debt (including the principal
component of Capitalized Lease Obligations) for such period for Borrower and its
Subsidiaries and a consolidated basis determined in accordance with GAAP.
36
"Funded Debt" means the sum of all indebtedness for borrowed money
(including without limitation, the principal portion of capital lease
obligations, debt subordinated to Lender and unreimbursed drawings under letters
of credit) determined on a consolidated basis for Borrower and its Subsidiaries
in accordance with GAAP.
"GAAP" means generally accepted accounting principles consistently
applied.
"Goods" has the meaning specified in the UCC.
"Hazardous Discharge" has the meaning specified in Section 4.22.5.
"Hazardous Substances" has the meaning specified in Section 3.21.4.
"Indebtedness" means, with respect to any Person, (a) all
indebtedness or other obligations of such Person for borrowed money or for the
deferred purchase price of property or services, including, without limitation,
a letter of credit reimbursement obligation, or any other indebtedness which is
evidenced by a promissory note or other instrument (b) all indebtedness or other
obligations of any other Person for borrowed money or for the deferred purchase
price of property or services, the payment or collection of which such Person
has guaranteed (except by reason of endorsement for collection in the ordinary
course of business) or in respect of which such Person is liable, contingently
or otherwise, including, without limitation, liable by way of agreement to
purchase, to provide funds for payment, to supply funds to or otherwise to
invest in such other Person, or otherwise to assure a creditor against loss, (c)
all indebtedness or other obligations of any other Person for borrowed money or
for the deferred purchase price of property or services secured by (or for which
the holder of such indebtedness has an existing right, contingent or otherwise,
to be secured by) any mortgage, deed of trust, pledge, lien, security interest
or other charge or encumbrance upon or in property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such indebtedness or
obligations, (d) Capitalized Lease Obligations of such Person, (e) all
obligations of such Person in respect of letters of credit and bankers
acceptances, (f) any equity or other interest in such Person which, by its
terms, is convertible into a debt instrument (g) all obligations under any
interest rate swap agreement or similar agreement and (h) withdrawal liability
incurred under ERISA by Borrower or any of its Affiliates to any multiemployer
plan (as defined in Section 4001(a)(3) of ERISA).
"Initial Debt Service Coverage Ratio" means the ratio of (i)
Operating Cash Flow less all dividends, withdrawals and non-cash income of
Borrower and its Subsidiaries on a consolidated basis, to (ii) Fixed Charges for
the period ending December 31, 2004.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Inventory" has the meaning specified in the UCC.
"Investment Securities" means all investments of Borrower in any
Person (whether such investment is evidenced by a stock, bond or other
instrument) permitted by the provisions of Section 4.15 which are of a type
dealt in or traded on securities exchanges or securities markets.
37
"Leverage Ratio" means the ratio of Total Liabilities minus
Subordinated Indebtedness, to the sum of (a) Tangible Net Worth, plus (b)
Subordinated Indebtedness, minus (c) loans owing to Borrower or any Subsidiaries
from officers thereof.
"Loans" means the Term Loan, any Revolving Credit Loan and any
Equipment Loan.
"Loan Documents" means this Agreement, the Notes, the Security
Agreement, the Perfection Certificate, the Mortgages, and all other instruments
or agreements hereafter executed and delivered to Lender by Borrower pursuant to
the terms hereof or of any Loan Document.
"Management Change" means the termination of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇
employment as chief executive officer and President of EDAC Technologies
Corporation prior to the last occurring Maturity Date.
"Material Adverse Effect" has the meaning set forth in Section 3.8.
"Maturity Date" means the Revolving Credit Loan Maturity Date, the
Equipment Loan Maturity Date, or the Term Loan Maturity Date, as applicable.
"Multiemployer Plan" means an Employee Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Mortgages" means the Mortgages entered into by Borrower with
respect to all Real Property securing all the Loans.
"Net Income" means income (loss) after income and franchise taxes
that, in accordance with GAAP, should be classified as net income (loss) of
Borrower and its Subsidiaries on a consolidated basis determined in accordance
with GAAP for the relevant accounting period.
"Note" means each of the Revolving Credit Note and the Term Loan
Note and any promissory note or notes issued in exchange or replacement
therefor, evidencing the indebtedness of Borrower to Lender resulting from the
making of Loans.
"Obligations" means (a) the obligation of Borrower to pay, as and
when due and payable (by scheduled maturity or otherwise), all amounts from time
to time owing by it in respect of the Loan Documents, whether for principal,
interest, fees or otherwise, and (b) the obligation of Borrower to perform or
observe all of its other obligations from time to time existing under the Loan
Documents.
"Operating Cash Flow" means for any period for Borrower and its
Subsidiaries on a consolidated basis, Net Income plus (a) depreciation and
amortization, (b) interest expense (including, without limitation, the interest
component of payments under Capitalized Lease Obligations) and (c) taxes,
determined in accordance with GAAP.
"PCB's" has the meaning specified in Section 3.21.8.
38
"Perfection Certificates" means the Perfection Certificates
delivered by Borrower and its Subsidiaries setting forth information concerning
Borrower's and such Subsidiaries Collateral.
"Permitted Liens" has the meaning specified in Section 4.13.
"Person" means an individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization or joint venture, or a
court or government or any agency or political subdivision thereof.
"Prime Rate" means, from time to time, the rate which Lender
announces from time to time as its prime lending rate, such rate to change at
the opening of business on the day of each change in the prime rate. The rate
announced by Lender as its prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
"Prime Rate Loan" means the Revolving Credit Loan and the Equipment
Loan prior to the Conversion Date.
"Pro Forma Financial Statements" means the pro forma financial
statements of Borrower and its consolidated Subsidiaries as of the date of this
Agreement delivered to Lender.
"Prohibited Transaction" has the meaning specified in Title I of
ERISA.
"Real Property" means all of Borrower's or any Subsidiary of
Borrower's now or hereafter owned or leased estates in real property, including,
without limitation, all fees, leaseholds and future interest, together with all
of Borrower's now or hereafter owned or leased interests in the improvements
thereon, the fixtures attached thereto and the easements appurtenant thereto.
"Release" has the meaning specified in Section 3.21.6.
"Reportable Event" has the meaning specified therefor in Title IV of
ERISA.
"Reports" has the meaning specified in Section 3.21.10.
"Revolving Credit Commitment" means Lender's commitment to make a
series of Loans to fund Borrower's working capital needs which shall not have an
aggregate outstanding principal balance at any time exceeding $5,000,000.
"Revolving Credit Loan" means a Loan made pursuant to Section 1.1.1.
"Revolving Credit Loan Maturity Date" means July 31, 2005.
"Revolving Credit Note" means Borrower's promissory note,
substantially in the form of Exhibit A hereto, evidencing the indebtedness of
Borrower to Lender resulting from the making of Revolving Credit Loans.
39
"Security Agreement" means (a) the Security Agreement entered into
by Borrower granting Lender a security interest in substantially all the
personal property assets of Borrower and (b) a Security Agreement entered into
by Borrower's Subsidiaries granting Lender a security interest in substantially
all the personal property of such Subsidiaries.
"Security Documents" means the Security Agreement, the Mortgages,
all UCC financing statements filed or required to be filed with respect thereto
and any other agreement entered into to provide security for the payment of the
Obligations.
"Single Employer Plan" means any Employee Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Subordinated Indebtedness" means any Indebtedness (other than the
Loans) which is subordinated in lien and payment to the Loans.
"Subsidiary" means with respect to a Person, any partnership,
corporation or entity of which such Person owns or holds, directly or
indirectly, more than a 50% voting or equity interest.
"Tangible Net Worth" of any Person means, at any date, the net worth
of such Person at such date (calculated as Total Assets minus Total
Liabilities), excluding, however, from the determination of the Total Assets of
such Person at such date, (a) all goodwill, organizational expenses, research
and development expenses, trademarks, trade names, copyrights, patents, patent
applications, licenses and rights in any thereof, and other similar intangibles,
(b) all prepaid expenses, deferred charges or unamortized debt discount and
expense, (c) securities which are not readily marketable, (d) cash held in a
sinking or other analogous fund established for the purpose of redemption,
retirement, defeasance or prepayment of any Indebtedness, (e) any write-up in
the book value of any asset resulting from a revaluation thereof and (f) any
items not included in clauses (a) through (e) above which are treated as
intangibles in conformity with GAAP.
"Term Loan" means the Loan made pursuant to Section 1.1.3.
"Term Loan Note" means Borrower's promissory note substantially in
the form of Exhibit B hereto, evidencing the indebtedness of Borrower to Lender
from the making of the Term Loan.
"Term Loan Maturity Date" means January 1, 2010.
"Total Assets" of any Person means, at any date, the total assets of
such Person and its Subsidiaries at such date determined on a consolidated basis
in conformity with GAAP minus (a) any minority interest in non-wholly-owned
Subsidiaries that would be reflected on a consolidated balance sheet of such
person and its Subsidiaries at such date prepared in conformity with GAAP and
(b) any securities issued by such Person held as treasury securities.
"Total Liabilities" of any Person means, at any date, all
obligations which in conformity with GAAP would be included in determining total
liabilities as shown on the liabilities side of a consolidated balance sheet of
such Person and its Subsidiaries at such date,
40
and in any event includes all Indebtedness of such Person or any of its
Subsidiaries at such date (other than intercompany Indebtedness), whether or not
the same would be so shown.
"UCC" means the Uniform Commercial Code as in effect in the state of
Connecticut.
"Voting Securities" means, with respect to any entity, interest of
all classes the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the Persons directing such entity
or otherwise control such entity.
"Work-in-Process" means Inventory which has been subject to one or
more manufacturing or assembly operations for which Borrower has incurred or
accrued costs of materials, labor, and overhead, but which remains a partially
assembled product requiring additional manufacturing, assembly, or inspection
operations to become a stockable and saleable finished product.
"Yield Maintenance Fee" means the result of the following
calculation:
The Federal Home Loan Bank of Boston Amortizing Rate corresponding
to a maturity date closest to the remaining term of the FHLBB Amortizing Loan
being prepaid, shall be subtracted from the stated interest rate of such FHLBB
Amortizing Loan, or the default rate, if applicable. If the result is zero or a
negative number, there shall be no Yield Maintenance Fee due and payable. If the
result is a positive number, then the resulting percentage shall be multiplied
by the amount of the principal balance being prepaid. The resulting amount shall
be divided by 360 and multiplied by the number of days remaining in the term of
the FHLBB Amortizing Loan being prepaid. Said amount shall be discounted to
present value by using the above referenced Federal Home Loan Bank of Boston
Amortizing Rate and the number of days remaining in the term of the FHLBB
Amortizing Loan being prepaid. The resulting amount shall be the yield
maintenance fee due to Lender upon prepayment of the principal of the FHLBB
Amortizing Loan.
SECTION 7.2 Accounting and Other Terms. All accounting terms used in
this Agreement which are not otherwise defined herein shall be construed in
accordance with generally accepted accounting principles unless otherwise
expressly stated herein. All terms used in this Agreement which are defined in
Article 9 of the UCC in effect in the state of Connecticut on the date hereof
and which are not otherwise defined shall have the same meanings herein as set
forth therein.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and shall be mailed, telecopied, or delivered.
8.1.1 If to Borrower:
EDAC Technologies Corporation
41
Gros-Ite, Industries, Inc.
Apex Machine Tool Company, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Purple, CFO and VP
with a required copy to:
Rogin Nassau
CityPlace I
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
8.1.2 If to Lender:
BankNorth, N.A
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Senior Vice President
with a required copy to:
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 8.1. All such notices and other communications shall be
effective (a) if mailed, when received or three (3) Business Days after mailing,
whichever is earlier; (b) if telecopied, when received; or (c) if delivered,
when delivered, except that notices to Lender pursuant to Article I shall not be
effective until received by Lender.
SECTION 8.2 Amendments, Etc. No amendment of any provision of any
Loan Document shall be effective unless it is in writing and signed by Borrower
and Lender, and no waiver of any provision of any Loan Document, nor consent to
any departure by Borrower therefrom, shall be effective unless it is in writing
and signed by Lender and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 8.3 No Waiver; Remedies, Etc. No failure on the part of
Lender to exercise, and no delay in exercising, any right hereunder or under any
other Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right.
42
The rights and remedies of Lender provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of Lender under any Loan Document
against any party thereto are not conditional or contingent on any attempt by
Lender to exercise any of its rights under any other Loan Document against such
party or against any other Person.
SECTION 8.4 Fees, Costs, Expenses and Taxes. Whether or not any
Loans are made hereunder or the transactions contemplated hereby are
consummated, Borrower will pay on demand all fees, costs and expenses in
connection with the preparation, execution, delivery, filing, and recording of
the Loan Documents and the other documents to be delivered under the Loan
Documents, including, without limitation, the fees, out-of-pocket expenses and
other reasonable disbursements of ▇▇▇▇ ▇▇▇▇▇▇▇, counsel to Lender, and of any
other counsel retained by Lender with respect to advising Lender as to its
rights and remedies under the Loan Documents out-of-pocket costs and expenses,
if any, including reasonable legal, audit and other reasonable expenses of
Lender incurred in connection with any waiver or amendment of any Loan Document
or in connection with the administration and enforcement of the Loan Documents
and the other documents to be delivered under the Loan Documents. In addition,
Borrower will pay any and all stamp and other similar taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing and
recording of the Loan Documents and the other documents to be delivered under
the Loan Documents, and will save Lender harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
SECTION 8.5 Indemnity. Borrower agrees to indemnify Lender and its
directors, its Affiliates, officers, employees, agents and controlling persons
against, and to hold Lender and each such Person harmless from, any and all
losses, claims, damages, liabilities and related reasonable expenses, including
reasonable counsel fees and expenses, incurred by or asserted against Lender or
any such Persons arising out of, in any way in connection with, or as a result
of (a) this Agreement, any of the Loan Documents, and the other documents
contemplated hereby or thereby, the performance by the parties hereto and
thereto of their respective obligations hereunder and thereunder and
consummation of the transactions contemplated hereby and thereby, (bb) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not Lender or any such Person is a party thereto, (c) breach of any
representation, warranty or covenant hereof by Borrower or (d) environmental
conditions, including without limitation, the presence of Hazardous Substances
at, on, under or within any property owned or occupied by Borrower or any of
Borrower's Subsidiaries, the Release or threat of Release of Hazardous
Substances at such property whether into the air, soil, ground or surface
waters, or any Environmental Complaint (as defined in Section 4.22); provided,
however, any such indemnity shall not as to any indemnified party, apply to any
such losses, claims, damages, liabilities or related expenses arising from its
breach of this Agreement or gross negligence or willful misconduct. Borrower
agrees to respond on Lender's behalf to any matter subject to subsection (d)
above or, at Lender's election, to pay the costs, as incurred, of Lender's
response. Borrower hereby waives and releases Lender from any and all losses,
claims, damages, and liabilities, known or unknown, foreseen or unforeseen,
which exist or which may arise in the future under common or statutory law,
including CERCLA or any other Environmental Laws now or hereafter in effect,
except to the extent caused by Lender's gross negligence or willful misconduct.
The provisions of this Section shall remain operative and in full force and
effect
43
regardless of the expiration of the term of this Agreement or any other of the
Loan Documents, the repayment of the Loans, the invalidity or unenforceability
of any term or provision of this Agreement, the Notes or any other Loan
Document, or any investigation made by or on behalf of Lender. All amounts due
under this Section shall be payable on written demand therefor.
SECTION 8.6 Severability of Provisions. Any provision of this
Agreement, or of any other Loan Document, which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or invalidity without invalidating the remaining portions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 8.7 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Borrower and Lender and their respective
successors and assigns, except that Borrower shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent of
Lender.
SECTION 8.8 Assignment and Participation. Lender may sell
participations of its rights and obligations under this Agreement (including,
without limitation all or a portion of its Commitment, the advances owing to it
and the Obligations held by it); provided, however, that (i) Lender's
obligations under the Loan Documents remain unchanged, (ii) Lender shall remain
solely responsible to Borrower for performance of such obligations, (iii) Lender
shall remain the holder of the Note for all purposes of this Agreement, (iv)
Borrower shall continue to deal solely and directly with Lender in connection
with Lender's rights and obligations under this Agreement and (v) voting rights
will be limited to changes in interest rates, maturity dates and commitment
amounts and releases of Collateral.
SECTION 8.9 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
SECTION 8.10 Entire Agreement. This Agreement and the other Loan
Documents represent the entire agreement between the parties with respect to the
transactions contemplated hereby and supersede all prior agreements and
understandings, written or oral.
SECTION 8.11 JURISDICTION AND VENUE. IN ANY JUDICIAL PROCEEDING
RELATED TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED IN ANY COUNTY IN THE STATE OF CONNECTICUT WHERE LENDER
MAINTAINS AN OFFICE AND AGREES NOT TO RAISE ANY OBJECTION TO SUCH JURISDICTION
OR TO THE LAYING OR MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING IN SUCH
COUNTY. BORROWER AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE
DULY EFFECTED UPON BORROWER BY MAILING A COPY THEREOF, BY REGISTERED MAIL,
POSTAGE PREPAID, TO BORROWER.
44
SECTION 8.12 WAIVER OF JURY TRIAL. EXCEPT AS PROHIBITED BY LAW, EACH
PARTY HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. FURTHER BORROWER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER, IN ANY SUCH LITIGATION, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL
OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER
ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF
THIS AGREEMENT AND THAT LENDER WOULD NOT EXTEND CREDIT TO BORROWER IF THE
WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.
SECTION 8.13 Governing Law. This Agreement and the Note and the
other Loan Documents shall be governed by, and construed in accordance with, the
law of the State of Connecticut.
SECTION 8.14 Prejudgment Remedy Waiver. BORROWER HEREBY REPRESENTS,
COVENANTS AND AGREES THAT THE PROCEEDS OF THE LOANS SHALL BE USED FOR GENERAL
COMMERCIAL PURPOSES AND THAT THE LOANS ARE "COMMERCIAL TRANSACTIONS" AS DEFINED
BY THE STATUTES OF THE STATE OF CONNECTICUT. BORROWER HEREBY WAIVES ALL RIGHTS
TO NOTICE AND PRIOR COURT HEARING OR COURT ORDER UNDER CONNECTICUT GENERAL
STATUTES, SECTIONS 52-278A ET SEQ., AS AMENDED, OR UNDER ANY OTHER STATE OR
FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES LENDER MAY EMPLOY
TO ENFORCE ITS RIGHTS AND REMEDIES HEREUNDER OR UNDER ANY SECURITY DOCUMENT TO
WHICH IT IS A PARTY. MORE SPECIFICALLY, BORROWER ACKNOWLEDGES THAT LENDER'S
ATTORNEY MAY, PURSUANT TO CONNECTICUT GENERAL STATUTES, SECTION 52-278F, ISSUE A
WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A COURT ORDER. BORROWER
ACKNOWLEDGES AND RESERVES ITS RIGHT TO NOTICE AND A HEARING SUBSEQUENT TO THE
ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY BY LENDER'S ATTORNEY, AND LENDER
ACKNOWLEDGES BORROWER'S RIGHT TO SAID HEARING SUBSEQUENT TO THE ISSUANCE OF SAID
WRIT. BORROWER FURTHER HEREBY WAIVES ANY REQUIREMENT OR OBLIGATION OF LENDER TO
POST A BOND OR OTHER SECURITY IN CONNECTION WITH ANY PREJUDGMENT REMEDY OBTAINED
BY LENDER. BORROWER ACKNOWLEDGES AND AGREES THAT ALL OF THE WAIVERS CONTAINED IN
THIS SECTION HAVE BEEN MADE KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
INTELLIGENTLY, AND WITH THE ADVICE OF ITS COUNSEL.
SECTION 8.15 Time of the Essence Time is of the essence with respect
to every provision of this Agreement relating to performance by a particular
time or date, or within a particular period.
SECTION 8.16 Patriot Act Notice Lender hereby notifies Borrower
that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L.
107-56, signed into law
45
October 26, 2001 (the "Patriot Act"), it is required to obtain, verify and
record information that identifies Borrower, which information includes the name
and address of Borrower and other information that will allow Lender, as
applicable, to identify Borrower in accordance with the Patriot Act.
SECTION 8.17 Joint and Several Liability Each Borrower shall have
joint and several liability with respect to all of the Obligations under this
Credit Agreement.
(Signatures on the following page)
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
EDAC TECHNOLOGIES CORPORATION
By:/s/▇▇▇▇▇ ▇. Purple
-----------------------------------
Name: ▇▇▇▇▇ ▇. Purple
Title: Vice President
GROS-ITE, INDUSTRIES, INC.
By:/s/▇▇▇▇▇ ▇. Purple
-----------------------------------
Name: ▇▇▇▇▇ ▇. Purple
Title: Secretary
APEX MACHINE TOOL COMPANY, INC.
By:/s/▇▇▇▇▇ ▇. Purple
-----------------------------------
Name: ▇▇▇▇▇ ▇. Purple
Title: Secretary
LENDER:
BANKNORTH, N.A.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: SVP
47
Exhibit A
REVOLVING CREDIT NOTE
$5,000,000.00 January 3, 2005
Hartford, Connecticut
FOR VALUE RECEIVED, the undersigned, EDAC TECHNOLOGIES CORPORATION,
a Wisconsin corporation, GROS-ITE, INDUSTRIES, INC., a Connecticut corporation,
and APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation (individually and
collectively referred to herein as "Borrower"), promise to pay to the order of
BANKNORTH, N.A. (hereinafter, together with its successors in interest and
assigns, called the "Lender"), at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, in lawful money of the United States of America
in immediately available funds:
(a) the principal amount of FIVE MILLION DOLLARS
($5,000,000.00), or if less, the aggregate amount of all Revolving
Credit Loans made by Lender to Borrower, and outstanding, pursuant
to the Credit Agreement dated as of January 3, 2005 (as amended and
in effect from time to time, the "Credit Agreement"), among Borrower
and Lender, on the Revolving Credit Maturity Date; and
(b) interest on the principal balance hereof from time to time
outstanding from the date hereof through and including the date on
which such principal amount is paid in full, at the times and at the
rates provided in the Credit Agreement.
This Note evidences borrowings of the Revolving Credit Loans under,
and has been issued by Borrower in accordance with, the terms of the Credit
Agreement. Lender and any holder hereof are entitled to the benefits of the
Credit Agreement and may enforce the agreements of Borrower contained therein,
and any holder may exercise the respective remedies provided for thereby or
otherwise available in respect thereof, all in accordance with the respective
terms thereof.
All capitalized terms used in this Note without definition and which
are defined in the Credit Agreement shall have the same meanings herein as in
the Credit Agreement.
Borrower has the right in certain circumstances to prepay the whole
or part of the principal of this Note on the terms and conditions specified in
the Credit Agreement.
If any one or more Events of Default shall occur and be continuing,
the entire unpaid principal amount of this Note and all of the unpaid interest
accrued thereon may become or be declared due and payable in the manner and with
the effect provided in the Credit Agreement.
48
Any check, draft or money order remitted in settlement of this Note
may be handled for collection in accordance with the practice of the collecting
bank or banks, and shall not be deemed payment until and unless good funds are
actually received by or credited to Lender.
Borrower waives presentment, demand, notice, protest and all other
demands and notices (except for notices and demands expressly provided for in
the Loan Documents (as defined in the Credit Agreement)) in connection with the
delivery, acceptance, performance, default or enforcement of this Note, assent
to any extension or postponement of the time of payment or any other indulgence,
and the addition or release of any other party or person primarily or
secondarily liable.
This Note shall be governed by and construed in accordance with the laws
of the State of Connecticut.
All references to the "Lender" and the "Borrower" shall apply to their
respective heirs, successors and assigns.
Each Borrower shall have joint and several liability with respect to the
Revolving Credit Loans.
IN WITNESS WHEREOF, has caused this Note to be signed in its
corporate name and its corporate seal to be impressed hereon by its duly
authorized officer on the day and in the year first above written.
EDAC TECHNOLOGIES CORPORATION
By:__________________________________
Name:
Title:
GROS-ITE, INDUSTRIES, INC.
By:__________________________________
Name:
Title:
APEX MACHINE TOOL COMPANY, INC.
By:__________________________________
Name:
Title:
49
Exhibit B
TERM LOAN NOTE
$5,000,000.00 January 3, 2005
Hartford, Connecticut
FOR VALUE RECEIVED, the undersigned, EDAC TECHNOLOGIES CORPORATION,
a Wisconsin corporation, GROS-ITE, INDUSTRIES, INC., a Connecticut corporation,
and APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation (individually and
collectively referred to herein as "Borrower"), promise to pay to the order of
BANKNORTH, N.A. (hereinafter, together with its successors in interest and
assigns, called the "Lender"), at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, in lawful money of the United States of America
in immediately available funds:
(a) the principal amount of FIVE MILLION DOLLARS
($5,000,000.00) in the amounts and on the dates set forth on
Schedule I to the Credit Agreement dated as of January 3, 2005 (as
amended and in effect from time to time, the "Credit Agreement"),
among Borrower and Lender; and
(b) interest on the principal balance hereof from time to time
outstanding from the date hereof through and including the date on
which such principal amount is paid in full, at the times and at the
rates provided in the Credit Agreement.
This Note evidences the borrowing of the Term Loan under, and has
been issued by Borrower in accordance with the terms of, the Credit Agreement.
Lender and any holder hereof are entitled to the benefits of the Credit
Agreement and may enforce the agreements of Borrower contained therein, and any
holder may exercise the respective remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the respective terms
thereof.
All capitalized terms used in this Note without definition and which
are defined in the Credit Agreement shall have the same meanings herein as in
the Credit Agreement.
Borrower has the right in certain circumstances to prepay the whole
or part of the principal of this Note on the terms and conditions specified in
the Credit Agreement.
If any one or more Events of Default shall occur and be continuing,
the entire unpaid principal amount of this Note and all of the unpaid interest
accrued thereon may become or be declared due and payable in the manner and with
the effect provided in the Credit Agreement.
50
Any check, draft or money order remitted in settlement of this Note
may be handled for collection in accordance with the practice of the collecting
bank or banks, and shall not be deemed payment until and unless good funds are
actually received by or credited to Lender.
Borrower waives presentment, demand, notice, protest and all other
demands and notices (except for notices and demands expressly provided for in
the Loan Documents (as defined in the Credit Agreement)) in connection with the
delivery, acceptance, performance, default or enforcement of this Note, assent
to any extension or postponement of the time of payment or any other indulgence,
and the addition or release of any other party or person primarily or
secondarily liable.
This Note shall be governed by and construed in accordance with the laws
of the State of Connecticut.
All references to the "Lender" and the "Borrower" shall apply to their
respective heirs, successors and assigns.
Each Borrower shall have joint and several liability with respect to the
Term Loan.
IN WITNESS WHEREOF, has caused this Note to be signed in its
corporate name and its corporate seal to be impressed hereon by its duly
authorized officer on the day and in the year first above written.
EDAC TECHNOLOGIES CORPORATION
By:___________________________________
Name:
Title:
GROS-ITE, INDUSTRIES, INC.
By:___________________________________
Name:
Title:
APEX MACHINE TOOL COMPANY, INC.
By:___________________________________
Name:
Title:
51
Exhibit C
EQUIPMENT LOAN NOTE
$1,500,000.00 January 3, 2005
Hartford, Connecticut
FOR VALUE RECEIVED, the undersigned, EDAC TECHNOLOGIES CORPORATION,
a Wisconsin corporation, GROS-ITE, INDUSTRIES, INC., a Connecticut corporation,
and APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation (individually and
collectively referred to herein as "Borrower"), promise to pay to the order of
BANKNORTH, N.A. (hereinafter, together with its successors in interest and
assigns, called the "Lender"), at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, in lawful money of the United States of America
in immediately available funds:
(a) prior to the Conversion Date, interest only on the
principal amount the Equipment Loans made to Borrower in an
aggregate amount not to exceed ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($1,500,000.00) as set forth in the Credit Agreement dated
as of January 3, 2005 (as amended and in effect from time to time,
the "Credit Agreement"), among Borrower and Lender; and
(b) after the Conversion Date, the principal amount of ONE
MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00), or if less,
the aggregate outstanding amount of all Equipment Loans made by
Lender to Borrower prior to the Conversion Date, in the monthly
installments specified in the Credit Agreement, and payable in its
entirety on the Revolving Credit Maturity Date; and
(c) interest on the principal balance hereof from time to time
outstanding from the date hereof through and including the date on
which such principal amount is paid in full, at the times and at the
rates provided in the Credit Agreement.
This Note evidences borrowings of the Equipment Loan under, and has
been issued by Borrower in accordance with the terms of, the Credit Agreement.
Lender and any holder hereof are entitled to the benefits of the Credit
Agreement and may enforce the agreements of Borrower contained therein, and any
holder may exercise the respective remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the respective terms
thereof.
All capitalized terms used in this Note without definition and which
are defined in the Credit Agreement shall have the same meanings herein as in
the Credit Agreement.
52
Borrower has the right in certain circumstances to prepay the whole
or part of the principal of this Note on the terms and conditions specified in
the Credit Agreement.
If any one or more Events of Default shall occur and be continuing,
the entire unpaid principal amount of this Note and all of the unpaid interest
accrued thereon may become or be declared due and payable in the manner and with
the effect provided in the Credit Agreement.
Any check, draft or money order remitted in settlement of this Note
may be handled for collection in accordance with the practice of the collecting
bank or banks, and shall not be deemed payment until and unless good funds are
actually received by or credited to Lender.
Borrower waives presentment, demand, notice, protest and all other
demands and notices (except for notices and demands expressly provided for in
the Loan Documents (as defined in the Credit Agreement)) in connection with the
delivery, acceptance, performance, default or enforcement of this Note, assent
to any extension or postponement of the time of payment or any other indulgence,
and the addition or release of any other party or person primarily or
secondarily liable.
This Note shall be governed by and construed in accordance with the laws
of the State of Connecticut.
All references to the "Lender" and the "Borrower" shall apply to their
respective heirs, successors and assigns.
Each Borrower shall have joint and several liability with respect to the
Equipment Loan.
IN WITNESS WHEREOF, has caused this Note to be signed in its
corporate name and its corporate seal to be impressed hereon by its duly
authorized officer on the day and in the year first above written.
EDAC TECHNOLOGIES CORPORATION
By:___________________________________
Name:
Title:
GROS-ITE, INDUSTRIES, INC.
By:___________________________________
Name:
Title:
53
APEX MACHINE TOOL COMPANY, INC.
By:___________________________________
Name:
Title:
54
Exhibit D
FORM OF BORROWING NOTICE
Banknorth, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Credit Agreement dated as of January 3, 2005
("Credit Agreement") between EDAC Technologies Corporation,
Gros-ite Industries, Inc. and Apex Machine Tool Company, Inc.
("Borrower") and Banknorth, N.A. ("Lender")
Ladies and Gentlemen:
Pursuant to Section 1.1.5 of the Credit Agreement, Borrower hereby
requests that the following Revolving Credit Loan or Term Loan be made under the
Credit Agreement:
Principal Amount of Revolving
Credit Loan: $_________________
Principal Amount of Equipment
Loan: $_________________
Term Loan: $ 5,000,000
Borrower hereby represents and warrants as of the date hereof and as
of the date of the requested Revolving Credit Loan that:
1. The representations and warranties contained in Article III of
the Credit Agreement and in each other Loan Document are true
and correct and will remain true and correct in all material
respects after giving effect to the requested Revolving Credit
Loan and/or Equipment Loan and the application of the proceeds
therefrom;
2. No Default or Event of Default has occurred and is continuing,
or would result from the making of the requested Revolving
Credit Loan or the application of proceeds therefrom; and
3. Since the date of the most recent annual Financial Statements
delivered to Lender no material adverse change in the
operations or condition, financial or otherwise, of Borrower,
has occurred and is continuing.
4. [For Revolving Credit Loan - Based on the last Borrowing Base
Certificate which was delivered to Lender, which was fully
completed, executed and true and correct in all respects on
the date delivered, the
55
outstanding principal balance of the Revolving Credit Loan is
equal to or less than the Revolving Credit Commitment.] [For
Equipment Loan - Based on the last Borrowing Base Certificate
which was delivered to Lender, which was fully completed,
executed and true and correct in all respects on the date
delivered, the outstanding principal balance of the Equipment
Loan is equal to or less than the Equipment Loan Commitment.
Capitalized terms used herein without definition have the meaning
given to them in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned, has caused this Borrowing
Notice to be executed by its duly authorized officer this ____ day of
__________, ____.
EDAC TECHNOLOGIES CORPORATION
By:___________________________________
Name:
Title:
GROS-ITE, INDUSTRIES, INC.
By:___________________________________
Name:
Title:
APEX MACHINE TOOL COMPANY, INC.
By:___________________________________
Name:
Title:
56
Exhibit E
FORM OF BORROWING BASE CERTIFICATE
Pursuant to the provisions of the Credit Agreement, dated as of January 3,
2005 (as amended, restated, supplemented and/or modified from time to time, the
"Credit Agreement") by and among EDAC TECHNOLOGIES CORPORATION, GROS-ITE
INDUSTRIES, INC. AND APEX MACHINE TOOL COMPANY, INC. and BANKNORTH, N.A.:
I, ____________, the ______________(1) of EDAC TECHNOLOGIES CORPORATION.,
a Wisconsin corporation, and the ________ of GROS-ITE INDUSTRIES, INC. and APEX
MACHINE TOOL COMPANY, INC., each a Connecticut corporation (individually and
collectively the "Borrower"), DO HEREBY CERTIFY that annexed hereto as Annex A
is a true and accurate calculation of the ______ Borrowing Base of Borrower as
of ______________, 20__, determined in accordance with the requirements of the
Credit Agreement.
Capitalized terms used herein without definition shall have the meaning assigned
to such terms in the Credit Agreement.
IN WITNESS WHEREOF, I have signed this certificate as of this ___ day
of ________, 20__.
EDAC TECHNOLOGIES CORPORATION
By:___________________________________
Name:
Title:
GROS-ITE, INDUSTRIES, INC.
By:___________________________________
Name:
Title:
------------------
(1) In accordance with Section 1.1.5 of the Credit Agreement, this certificate
should be completed and certified by an Authorized Officer.
57
APEX MACHINE TOOL COMPANY, INC.
By:___________________________________
Name:
Title:
58
ANNEX A
EDAC Technologies Corporation
Gros-ite Industries, Inc.
Apex Machine Tool Company, Inc.
(all numbers in thousands)
As of __________, 20__
CALCULATION OF BORROWING BASE:
ACCOUNTS RECEIVABLE:
Aggregate of all accounts receivable of Borrower or its
Subsidiaries:(1) $_________
LESS:
(a) Foreign accounts and accounts not denominated
in US dollars and Canadian accounts
over $1,000,000 __________
(b) accounts receivable that do not comply with all
applicable legal requirements, to the extent such
non-compliance could have an adverse effect on the
value of such account receivable or the validity or
binding nature of the related obligation __________
(c) accounts receivable subject to an unresolved
dispute with account debtors (to the extent of
such dispute) __________
(d) accounts receivable that remain unpaid for more
than 90 days from the date of the original invoice __________
(e) Unbilled accounts receivable and accounts receivable
for unshipped Goods or unrendered services __________
------------------
(1) Attached hereto is a reconciliation of the information provided herein with
Borrower's Financial Statements.
(f) accounts receivable arising outside the ordinary
course of business of Borrower or its Subsidiaries __________
(g) accounts receivable for which have been established
a contra account, or to an account debtor to whom
Borrower or such Subsidiary owes a trade payable,
but only to the extent of such account or trade
payable __________
(h) accounts receivable not subject to a first
priority perfected Lien under the Security
Agreement and accounts receivable evidenced by
an "instrument" (as defined in the UCC) not in
possession of Lender __________
(i) accounts receivable due from an ineligible
account debtor __________
TOTAL INELIGIBLE RECEIVABLES
ELIGIBLE RECEIVABLES $_________ X 80 % = _________
INVENTORY::(2)
The Aggregate value (determined at the lower of cost
or market on a basis consistent with that used in the
preparation of the Financial Statements referred to
in Section 3.9 of the Credit Agreement) of all
Inventory owned by Borrower or any of its Subsidiaries
and located in any jurisdiction in the United States
of America as to which appropriate UCC financing
statements have been filed naming Borrower or such
Subsidiary, as the case may be, as "debtor"
and the Lender as "secured party", all net of any
amounts payable by Borrower or such Subsidiary in
respect of commissions, processing fees or other
charges __________
LESS:
(i). Inventory shipped to a customer, even if on a
consignment or "sale or return" basis __________
------------------
(2) Attached hereto is a reconciliation of the information provided herein with
Borrower's Financial Statements.
(ii). Inventory that is subject to a Lien (other than
Liens created pursuant to the Security Agreement)
including landlord's or warehouseman's Liens
(other than any such Lien that has been waived
pursuant to a landlord's or warehouseman's waiver) __________
(iii). Inventory against which a reserve is required in
accordance with GAAP consistently applied with past
practice, but only to the extent of the amount of
such reserve __________
(iv). Inventory not subject to a valid and perfected
first priority Lien in favor of Lender under the
Security Agreement, and subject to no prior
or equal Lien __________
(v). Inventory not produced by Borrower or such
Subsidiary in compliance with the applicable
requirements of the Fair Labor Standards Act __________
(vi). Supply, scrap or obsolete Inventory and Inventory
not reasonably marketable __________
(vii). Inventory located at any property leased by
Borrower or such Subsidiary in respect of which
a landlord's consent agreement in form and
substance reasonably satisfactory to Lender is
not in full force and effect. __________
(viii). Work-in-Process. __________
Total Ineligible Inventory $_________
ELIGIBLE INVENTORY $_________ X 50 % = ________
BORROWING BASE TOTAL
(add the percentage of Eligible Receivables
to the percentage of Eligible Inventory)........... $_________
TOTAL REVOLVING CREDIT OUTSTANDING........................ $_________
TOTAL REVOLVING CREDIT AVAILABLE - OR -................... $_________
TOTAL AMOUNT BY WHICH REVOLVING CREDIT IS
OVERDRAWN.............................................. $_________
Exhibit F
FORM OF COMPLIANCE CERTIFICATE
In accordance with the provisions of Sections 4.2.2 and 4.2.3 of the
Credit Agreement dated as of January 3, 2005, as amended through the date hereof
(the "Credit Agreement") by and among EDAC Technologies Corporation, Gros-ite
Industries, Inc. and Apex Machine Tool Company, Inc. (the "Borrower"), and
Banknorth, N.A., I, ____________________, the ____________________ and
authorized officer of Borrower, do hereby certify to Lender as follows:
(a) The representations and warranties made by Borrower and any
Subsidiaries in the Credit Agreement and other Loan Documents are true
with the same effect as though such representations and warranties are
made on and as of this date;
(b) No Default or Event of Default has occurred or now exists; and
(c) Borrower is in compliance with the financial covenants set forth
in Article 9 of the Credit Agreement as more fully set forth below and on Annex
1 hereto:
Actual Required
------ ------------
1. Leverage Ratio (Section 4.1.1) 4.75 to 1.00
2. Initial Debt Service Coverage Ratio 1.00 to 1.00
(Section 4.1.2)
3. Continuing Debt Service Coverage Ratio 1.00 to 1.00
for rolling four quarters
Attached hereto as Annex 1 are calculations supporting the figures reported
above and also a reconciliation of such figures with Borrower's Financial
Statements.
Any capitalized terms which are used in this Certificate and which are not
defined herein, but which are defined in the above-described Credit Agreement,
shall have the meanings given to those terms in the Credit Agreement.
IN WITNESS WHEREOF, I have executed this Certificate the _____ day of
__________, 200___.
EDAC TECHNOLOGIES CORPORATION
By:____________________________________
Name:
Title:
GROS-ITE, INDUSTRIES, INC.
By:____________________________________
Name:
Title:
APEX MACHINE TOOL COMPANY, INC.
By:____________________________________
Name:
Title:
6
CREDIT AGREEMENT
Dated as of January 3, 2005
between
EDAC TECHNOLIGIES CORPORATION
GROS-ITE INDUSTRIES, INC.
APEX MACHINE TOOL COMPANY, INC.
and
BANKNORTH, N.A.
7
TABLE OF CONTENTS
Page
----
ARTICLE I....................................................................... 1
SECTION 1.1 Revolving Credit and Term Loans.................................. 1
SECTION 1.2 Fees............................................................. 6
SECTION 1.3 Computation of Interest and Fees; Payment Procedures............. 6
SECTION 1.4 Capital Adequacy................................................. 6
SECTION 1.5 Default Interest................................................. 7
SECTION 1.6 Maximum Rate..................................................... 7
ARTICLE II...................................................................... 7
SECTION 2.1 Conditions Precedent to Initial Loans............................ 7
SECTION 2.2 Conditions Precedent to Additional Loans......................... 11
ARTICLE III..................................................................... 11
SECTION 3.1 Existence........................................................ 11
SECTION 3.2 Subsidiaries, etc................................................ 11
SECTION 3.3 Corporate Authorizations......................................... 12
SECTION 3.4 No Violation..................................................... 12
SECTION 3.5 Authorizations and Approvals..................................... 12
SECTION 3.6 Validity......................................................... 12
SECTION 3.7 Indebtedness..................................................... 12
SECTION 3.8 Pending Litigation............................................... 12
SECTION 3.9 Financial Statements............................................. 13
SECTION 3.10 Solvency........................................................ 13
SECTION 3.11 Margin Securities............................................... 13
SECTION 3.12 Taxes........................................................... 13
SECTION 3.13 Nature of Business.............................................. 14
SECTION 3.14 Title to Property; Liens........................................ 14
SECTION 3.15 Restrictions on Borrower and its Subsidiaries................... 14
SECTION 3.16 Chief Executive Offices......................................... 14
SECTION 3.17 Investment Company Act.......................................... 14
SECTION 3.18 Intellectual Property; Accreditation............................ 14
SECTION 3.19 The Security Documents.......................................... 15
SECTION 3.20 ERISA........................................................... 16
SECTION 3.21 Environmental Compliance........................................ 16
SECTION 3.22 Licenses and Permits............................................ 18
SECTION 3.23 Other Names..................................................... 18
SECTION 3.24 Strikes; Work Stoppages; Immigration Law........................ 18
SECTION 3.25 Capital Structure............................................... 18
SECTION 3.26 Customer and Trade Relations.................................... 18
SECTION 3.27 Intentionally Omitted........................................... 18
SECTION 3.28 Accuracy of Information......................................... 18
SECTION 3.29 Survival of Warranties.......................................... 19
ARTICLE IV...................................................................... 19
SECTION 4.1 Financial Covenants of Borrower.................................. 19
SECTION 4.2 Reporting Requirements........................................... 19
SECTION 4.3 Use of Proceeds.................................................. 21
SECTION 4.4 Compliance with Laws, Etc........................................ 21
SECTION 4.5 Preservation of Existence, Etc................................... 21
SECTION 4.6 Obtaining of Permits, Etc........................................ 21
SECTION 4.7 Maintenance of Insurance......................................... 21
SECTION 4.9 Maintenance of Properties, Etc................................... 22
SECTION 4.10 Keeping of Records and Books of Account......................... 22
SECTION 4.11 Inspection Rights............................................... 22
SECTION 4.12 Operating Accounts.............................................. 22
SECTION 4.13 Liens on Property............................................... 22
SECTION 4.14 Indebtedness.................................................... 23
SECTION 4.15 Loans and Investments........................................... 24
SECTION 4.16 No Negative Pledge.............................................. 25
SECTION 4.17 Merger, Consolidation, Acquisition.............................. 25
SECTION 4.18 Sale of Assets, Etc............................................. 25
SECTION 4.19 Guarantees, Etc................................................. 25
SECTION 4.20 Change in Nature of Business.................................... 25
SECTION 4.21 Pension Plans................................................... 25
SECTION 4.22 Environmental Compliance........................................ 26
SECTION 4.23 Distributions................................................... 27
SECTION 4.24 Transactions with Affiliates; Payments to Affiliates............ 27
SECTION 4.26 Fiscal Year..................................................... 27
SECTION 4.27 Subsidiaries.................................................... 27
SECTION 4.28 Accounts Receivable............................................. 27
SECTION 4.29 Collateral Locations and Change In Names........................ 27
SECTION 4.30 Limitation on Leases............................................ 27
SECTION 4.31 Payment of Debt................................................. 28
SECTION 4.32 Officer, Shareholder and Director Loans......................... 28
SECTION 4.33 Further Assurances.............................................. 28
ARTICLE V....................................................................... 28
SECTION 5.1 Events of Default................................................ 28
SECTION 5.2 Remedies......................................................... 30
ARTICLE VI...................................................................... 30
SECTION 6.1 Right of Set-Off................................................. 31
ARTICLE VII..................................................................... 31
SECTION 7.1 Definitions...................................................... 31
SECTION 7.2 Accounting and Other Terms....................................... 41
ARTICLE VIII.................................................................... 41
SECTION 8.1 Notices, Etc..................................................... 41
SECTION 8.2 Amendments, Etc.................................................. 42
SECTION 8.3 No Waiver; Remedies, Etc......................................... 42
SECTION 8.4 Fees, Costs, Expenses and Taxes.................................. 43
SECTION 8.5 Indemnity........................................................ 43
SECTION 8.6 Severability of Provisions....................................... 44
SECTION 8.7 Successors and Assigns........................................... 44
SECTION 8.8 Assignment and Participation..................................... 44
SECTION 8.9 Counterparts..................................................... 44
SECTION 8.10 Entire Agreement................................................ 44
SECTION 8.12 WAIVER OF JURY TRIAL............................................ 45
3
SECTION 8.13 Governing Law................................................... 45
SECTION 8.14 Prejudgment Remedy Waiver....................................... 45
SECTION 8.15 Time of the Essence............................................. 45
SECTION 8.16 Patriot Act Notice.............................................. 45
SECTION 8.17 Joint and Several Liablity...................................... 46
Exhibit A....................................................................... 48
Exhibit B....................................................................... 50
Exhibit A....................................................................... 52
Exhibit C....................................................................... 55
Exhibit D....................................................................... 57
Exhibit F....................................................................... 5
Schedule 3.2 - Subsidiaries
Schedule 3.4 - Violations
Schedule 3.7 - Indebtedness
Schedule 3.8 - Pending Litigation
Schedule 3.16 - Chief Executive Office
Schedule 3.19 - Filing Jurisdictions
Schedule 3.21 - Environmental Compliance
Schedule 3.22 - Licenses and Permits
Schedule 3.23 - Fictitious Trade Names
Schedule 3.25 - Capital Structure
Schedule 4.13 - Permitted Liens
Schedule I - Term Loan Payment Schedule
4
