AMENDED AND RESTATED
EWP BRIDGE LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is made and
entered into as of this 21st day of November, 2001 by and between KEYSTONE
CONSOLIDATED INDUSTRIES, INC., a Delaware corporation (the "Company"); the
lenders listed in Annex I hereto (individually a "Lender" and collectively, the
"Lenders"); and EWP FINANCIAL LLC, a Delaware limited liability company, as
agent for the Lenders (the "Agent").
Recitals:
WHEREAS, the Company, the Lenders and the Agent entered into that certain
EWP Bridge Loan Agreement dated as of November 1, 2001 (the "Original Loan
Agreement"); and
WHEREAS, the Loans to be made under the Original Loan Agreement were
intended fully by the parties to be secured by the Company's investment in
Engineered Wire Products, Inc. ("EWP"), a subsidiary of the Company;
WHEREAS, the Company's investment in EWP is comprised of and evidenced by
certificates representing in the aggregate all of the outstanding capital stock
of EWP issued in the name of the Company and an account maintained on the
Company's books and records, which account is styled as "Loan Account - EWP,
Account Number 480.20" but which account, in fact, represents the Company's net
investment in EWP (the "EWP Investment");
WHEREAS, the initial balance of the EWP Investment, which arose in
connection with the transaction whereby the Company acquired all of the equity
interest in EWP not already owned by the Company, was approximately
$12,000,000.00, and as of September 30, 2001 the balance of the EWP Investment
was approximately $8,400,000.00;
WHEREAS, the Original Loan Agreement inadvertently failed to include a
provision relating to the assignment of the EWP Investment to the Agent as
security for the Loans (as that term is used in the Original Loan Agreement and
this Agreement) as the parties had fully intended;
WHEREAS, the Company, the Lenders and the Agent fully intended to include
such a provision in the Original Loan Agreement and desire to amend and restate
the Original Loan Agreement as herein provided;
WHEREAS, no Loans have been made against the Commitment as of the date
hereof;
WHEREAS, the Company has requested that the Lenders make loans to the
Company in the aggregate amount of up to $6,000,000.00; and
WHEREAS, the Lenders are willing to make such loans to the Company on the
terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, the parties promise and agree as follows:
ARTICLE I
Definitions
In addition to terms defined elsewhere in this Agreement, the following
definitions shall apply for purposes of this Agreement:
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Business Day" means a day other than a Saturday, a Sunday or a day on
which banking institutions in the City of Dallas, Texas are authorized by
law, regulation or executive order to remain closed. If a payment date
called for herein or in the Note is not a Business Day, payment may be made
on the next succeeding day that is a Business Day.
"Commitment" means, with respect to each Lender, the amount set forth
opposite such Lender's name in Annex I, as the same may be adjusted from
time to time as a result of assignments to or from such Lender pursuant to
Section 7.8 hereof.
"Contract" means any contract, agreement, undertaking or commitment
(written or oral, formal or informal, firm or contingent) to which the
Company or any of its Subsidiaries is a party or by which the Company, any
of its Subsidiaries, or any of their respective assets are bound, and which
has current operative or executory effect.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to
the circumstances as of the date of determination.
"Governmental Authority" means the United States, any state or
municipality, the government of any foreign country, any subdivision of any
of the foregoing, or any authority, department, commission, board, bureau,
agency, court, or instrumentality of any of the foregoing.
"Holder" means a Lender and any subsequent holder of a Note.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's
acceptances, or representing obligations in respect of a lease that would
at such time be required to be capitalized on a balance sheet in accordance
with GAAP or the balance deferred and unpaid of the purchase price of any
property (other than contingent or "earnout" payment obligations), except
any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the guarantee, whether or not conditional, by such Person of any
indebtedness of any other Person.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell or give a security interest in and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity.
"Required Holders" means Holders holding not less than fifty-one
percent (51%) of the aggregate principal amount of the Loans then
outstanding (or fifty-one percent (51%) of the Commitments if no Loans are
then outstanding).
"Restructuring" means the consummation of any restructuring,
reorganization (whether or not pursuant to Bankruptcy Law) and/or
recapitalization of the Company and its Subsidiaries, as well as its
successors, affecting, in each case, existing and potential debt
obligations and other claims of or against the Company and/or such
Subsidiaries or successors.
"Subsidiary" means any corporation, general or limited partnership,
limited liability company, association or other business entity of which
securities or other ownership interests representing more than fifty
percent (50%) of the ordinary voting power are, at the time as of which any
determination is being made, owned or controlled by the Company or one or
more Subsidiaries of the Company.
"SEC" means the Securities and Exchange Commission.
"1933 Act" means the Securities Act of 1933, as amended.
ARTICLE II
Loans; Notes; Closing and Closing Date
2.1. Commitment; Revolving Loans; Notes. Subject to the terms and
conditions set forth in this Agreement, and relying upon the representations and
warranties of the Company herein set forth, each Lender severally agrees, from
time to time during the period from and including the Closing Date to but not
including the Maturity Date, to make a loan or loans to the Company in aggregate
principal amount at any time outstanding not to exceed the Commitment of such
Lender. The Commitment of each Lender is revolving in nature, and the Company
may borrow, repay and reborrow an aggregate principal amount up to the
applicable Commitment at any time and from time to time without premium or
penalty, subject to the terms and conditions of this Agreement. The amounts
borrowed by the Company pursuant to each Commitment (each such borrowing a
"Loan" and, collectively, the "Loans", and the aggregate amount of all such
Loans outstanding from time to time, the "Loan Amount") shall be evidenced by
notes of like tenor except as to principal amount in the form of Exhibit A
hereto (each a "Note" and, collectively, the "Notes"), the terms and conditions
of which are incorporated in and made a part of this Agreement. Each Note shall
be dated the Closing Date and be made payable to the order of the respective
Lender for the principal sum of each such Lender's Commitment.
2.2. Closing; Closing Date. The closing hereunder (the "Closing") shall
occur at 10:00 a.m. at the offices of the Company on or before November 21,
2001, or such other time and place as the parties may agree in writing (the
"Closing Date"), upon satisfaction of the terms and conditions to the Lender's
obligations as set forth in Section 4.1 hereof.
2.3. Notice of Borrowing. In the event that the Company shall elect to
borrow from the Lenders pursuant hereto, the Company shall give written notice
thereof to each Lender not later than three (3) Business Days prior to the
proposed date of such Loans. Each such notice shall be by facsimile
transmission, promptly confirmed by letter, and shall specify therein: (i) the
date of such proposed Loans, which shall be a Business Day; (ii) the aggregate
amount of such proposed Loans, which Loans shall be in increments of $100,000;
(iii) each Lender's pro rata portion of the aggregate amount of such proposed
Loans (i.e., such Lender's respective Loan) (determined on the basis of the
ratio of such Lender's Commitment to the aggregate amount of all Commitments),
which when aggregated together with the amount of all Loans of such Lender then
outstanding shall not exceed the Commitment of such Lender; (iv) the bank
account or accounts to which the proceeds of such Loans should be paid by the
Lenders; and (v) the intended use of the proceeds of such Loans. Upon such
notice properly given, and subject to the determination by the Required Holders
that (i) the Company has satisfied the terms and conditions to the Lenders'
obligations as set forth in Section 4.2 hereof, including, without limitation,
compliance satisfactory to the Required Holders in their sole discretion with
the terms of Section 6.2(a) for use of proceeds, and (ii) there is no additional
borrowing availability under that certain Amended and Restated Revolving Loan
and Security Agreement dated December 29, 1995 between the Company and Congress
Financial Corporation, as amended (the "Congress Facility"), the Lenders shall
each fund their respective Loans at the time and to the account(s) specified in
the Company's notice.
ARTICLE III
Terms of Loans and Note
3.1. Interest Rate; Payment; Usury.
(a) Provided that no Event of Default has occurred and is continuing and
subject to the other provisions of this Agreement, the Loan Amount shall bear
interest at a rate per annum equal to three percent (3%) plus the rate from time
to time published in the Wall Street Journal as the prime rate, whether or not
such announced rate is the best rate available at any bank or other financial
institution (the "Interest Rate"). During any period that an Event of Default
shall have occurred and be continuing, interest on the Loan Amount shall accrue
at a rate equal to the Interest Rate plus two percent (2%) (the "Default
Interest Rate"). Notwithstanding anything contained herein to the contrary, in
no event shall the interest rate on the Loans, including the Default Interest
Rate, exceed the highest rate permitted by applicable law. Interest on the
Loans, including interest at the Default Interest Rate, shall be based on a
360-day year, and interest shall accrue and be payable for the actual number of
calendar days elapsed. Interest shall be payable in arrears commencing on the
30th day of November, 2001 and continuing thereafter on the last day of each
subsequent month until the Loan Amount and all accrued interest have been paid
in full.
(b) It is the intention of the Company and the Lenders to conform strictly
to applicable usury laws now or hereafter in force, and any interest payable
under this Agreement or the Notes shall be subject to reduction to an amount not
to exceed the maximum non-usurious amount for commercial loans allowed under
such applicable usury laws as now or hereafter construed by the courts having
jurisdiction over such matters. In the event such interest (whether designated
as interest, service charges, points, origination fees, or otherwise) does
exceed the maximum legal rate, it shall be (i) canceled automatically to the
extent that such interest exceeds the maximum legal rate; (ii) if already paid,
at the option of each Holder, either be rebated to the Company or credited on
the principal amount of the Loans evidenced by the Note held by such Holder; or
(iii) if the Loans have been prepaid in full, then such excess shall be rebated
to the Company. It is further agreed, without limitation of the foregoing, that
all calculations of the rate of interest contracted for, charged, or received
under this Agreement and the Notes that are made for the purpose of determining
whether such rate exceeds the maximum legal rate, shall be made, to the extent
permitted by applicable law, by amortizing, prorating, allocating, and spreading
throughout the full stated term of the Loans (and any extensions of the term
thereof that may be hereafter granted) all such interest at any time contracted
for, charged, or received from the Company or otherwise by the Holders so that
the rate of interest on account of the Loans, as so calculated, is uniform
throughout the term thereof. If the Company is exempt or hereafter becomes
exempt from applicable usury statutes or for any other reason the rate of
interest to be charged on the Loans is not limited by law, none of the
provisions of this paragraph shall be construed so as to limit or reduce the
interest or other consideration payable under this Agreement or the Notes or
under any instrument securing payment thereof. The terms and provisions of this
paragraph shall control and supersede every other provision of all agreements
between the parties hereto.
3.2 Unused Commitment Fee. Up to and including the Maturity Date or date of
earlier acceleration of the Loans, the Company shall pay each Lender a fee on
the unused portion of its Commitment, payable at maturity and quarterly on the
last Business Day of each March, June, September and December, in an amount
equal to 37.5 basis points per annum multiplied by the difference between such
Lender's Commitment and the average Loan Amount owed to such Lender during such
quarter or portion thereof.
3.3. Maturity Date. Unless the same shall become due earlier as a result of
acceleration of the maturity, the Loans shall mature on the earlier of: (i) the
date of consummation of the Restructuring or (ii) the six (6) month anniversary
of the Closing Date (the earlier of such dates being referred to herein as the
"Maturity Date"), at which time the outstanding principal balance of the Loans
and all accrued and unpaid interest and commitment fees shall become due and
payable.
3.4. Prepayments. The Company may from time to time and at any time prepay
the Loans, in whole or in part and without premium or penalty, provided that
after giving effect to any such prepayment there is a minimum of $1,000,000 of
borrowing availability under the Congress Facility. Any partial prepayment shall
be applied first to interest which is accrued and unpaid and then to principal.
3.5. Manner of Payment. The Company shall make payments in respect of the
Loans (including principal and interest) by wire transfer of immediately
available funds to the accounts specified by the Holders. Notwithstanding any
other provision in this Agreement or the Notes, the Company covenants and agrees
and the Lenders among themselves agree that all payments made by the Company of
interest and principal, including any prepayments, shall be made to and for the
benefit of the Holders pro rata according to the outstanding principal balance
of their respective Notes.
3.6. Events of Default. Each of the following constitutes an "Event of
Default":
(a) default for five (5) days in the payment when due of interest on
any of the Notes;
(b) default in payment when due of the principal on any of the Notes;
(c) failure of the Company to make payments to the Holders of interest
or principal due on the Notes or of any prepayments other than pro rata
according to the outstanding principal balance of their respective Notes;
(d) the occurrence and continuation of an "Event of Default" under
that certain Term Loan and Credit Agreement dated as of March 10, 1995 by
and among EWP, NBD Bank, The Huntington National Bank, BankOne and NBD
Bank, as agent, as amended, extended, modified, or renewed from time to
time or under any agreement evidencing the refinancing of indebtedness
thereunder;
(e) the occurrence and continuation of an "Event of Default" under the
Congress Facility;
(f) the occurrence and continuation of an "Event of Default" under the
Stock Pledge Agreement or the Collateral Assignment (each as defined in
Article IV hereof);
(g) the acceleration for any reason of any of the obligations of the
Company, prior to the express maturity of such obligations, under its $100
million 9 5/8% Senior Secured Notes due 2007;
(h) failure by the Company for fifteen (15) days after notice from the
Agent (at the direction of the Required Holders) to comply with the
provisions described under Article VI hereof;
(i) failure by the Company for thirty (30) days after notice from the
Agent (at the direction of the Required Holders) to comply with any of its
covenants or agreements in this Agreement or the Notes other than covenants
and agreements which are subject to subsections (a) through (h) of this
Section 3.6;
(j) any of the representations or warranties of the Company set forth
in this Agreement or incorporated herein by reference or set forth in any
statement or schedule delivered pursuant to this Agreement was untrue or
incorrect in any material respect as of the date of execution of this
Agreement or as of the Closing Date or the date subsequent thereto of the
making of any additional Loan, in either case as if made on such date;
(k) the Company or any of its Subsidiaries pursuant to or within the
meaning of Bankruptcy Law: (i) commences a voluntary case; (ii) consents to
the entry of an order for relief against it in an involuntary case; (iii)
consents to the appointment of a custodian of it or for all or
substantially all of its property or assets; or (iv) makes a general
assignment for the benefit of its creditors; or
(l) a court of competent jurisdiction enters an order or decree in an
involuntary case or proceeding under any Bankruptcy Law that: (i) is for
relief against the Company or any of its Subsidiaries; (ii) appoints a
custodian of the Company or any of its Subsidiaries or for all or
substantially all of the property of the Company or any of its
Subsidiaries; or (iii) orders the liquidation of the Company or any of its
Subsidiaries; and in any such case, the order or decree remains unstayed
and in effect for 60 consecutive days.
3.7. Acceleration.
(a) Declaration of Acceleration. If any Event of Default occurs and is
continuing, the Agent shall, at the direction of the Required Holders
(given in the sole discretion of such Holders) and upon notice to the
Company (i) terminate the Commitments or (ii) declare the outstanding
principal of, and accrued and unpaid interest on, the Notes and all other
amounts owing under this Agreement and the Notes to be immediately due and
payable, or either one or both of the foregoing, whereupon the Commitments
shall terminate forthwith and all such amounts shall become immediately due
and payable, as the case may be; provided, however, that in the case of an
Event of Default arising from any event described in clauses (k) or (l) of
Section 3.6 hereof, the Loans and the Notes shall ipso facto become due and
payable without further action or notice on the part of the Agent or any
Holder.
(b) Rescission. At any time after a declaration of acceleration with
respect to the Notes, the Agent shall, at the direction of the Required
Holders (given in the sole discretion of such Holders), rescind and cancel
such declaration and its consequences. No such rescission shall affect any
subsequent Default or impair any right with respect thereto.
3.8. Other Remedies. If an Event of Default occurs and is continuing, the
Agent shall, at the direction of the Required Holders (given in the sole
discretion of such Holders), pursue any available remedy to collect the payment
of principal and interest (including interest at the Default Interest Rate) on
the Notes or to enforce the performance of any provision of such Notes, this
Agreement, the Stock Pledge Agreement or the Collateral Agreement. A delay or
omission by the Agent in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
3.9. Waiver Of Past Defaults. The Agent, at the direction of the Required
Holders (given in the sole discretion of such Holders) shall waive in writing
any existing Default or Event of Default and its consequences under this
Agreement. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Agreement; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
3.10. Priorities. Any sums collected by a Holder hereunder or under a Note
held by it shall be applied first to all costs and expenses of collection,
including reasonable attorneys' fees, then to accrued and unpaid interest
(including at the Default Interest Rate to the extent applicable) and then to
principal due on such Holder's Note.
ARTICLE IV
Conditions to Lender's Obligations
4.1. Conditions at Closing Date. Each Lender's obligation to make the
initial Loan on the Closing Date shall be subject to the satisfaction of the
following conditions on or before the Closing Date, except to the extent waived
by the Required Holders in writing:
(a) The Company shall have reimbursed the Lenders for the fees and
expenses for which the Company is liable pursuant to the terms of Section
7.5, below, to the extent documented to the Company as of the Closing;
(b) The Company shall have paid to each Lender an origination fee in
the amount of two percent (2%) of its Commitment;
(c) (i) The Bridge Loan Stock Pledge Agreement attached hereto as
Exhibit B (the "Stock Pledge Agreement"), pertaining to the Company's
shares of the common stock of EWP, a wholly owned subsidiary of the
Company, shall have been executed and delivered, together with the blank
stock powers and certificates pertaining thereto, by or on behalf of the
Company to and in favor of the Agent for the benefit of the Holders, and
such agreement shall be in full force and effect and (ii) the Collateral
Assignment attached hereto as Exhibit C (the "Collateral Assignment"),
pertaining to the Company's investment in EWP, shall have been executed and
delivered by or on behalf of the Company to and in favor of the Agent for
the benefit of the Holders, and such Collateral Assignment shall be in full
force and effect;
(d) Each of the representations and warranties of the Company set
forth in this Agreement or incorporated herein by reference or set forth in
any statement or schedule delivered pursuant to this Agreement are true and
correct in all material respects as of the date of execution of this
Agreement and as of the date of the Closing Date as if made on such date;
(e) The Company shall not be in default with respect to any of its
covenants and agreements set forth in Article VI of this Agreement or set
forth elsewhere in this Agreement;
(f) No Default or Event of Default shall have occurred and be
continuing;
(g) The Company shall have delivered to the Lenders a certificate,
executed by an officer of the Company acceptable to the Required Holders
and dated as of the Closing Date, certifying to the Company's fulfillment
of the conditions specified in subsections (a) through (f) of this Section
4.1, and expressly detailing, and certifying the compliance with Section
6.2(a) hereof with regard to, the intended use of the proceeds of such
Loan; and
(h) No other Lender shall have defaulted on its obligation to make its
respective Loan hereunder.
4.2. Conditions at Subsequent Date. Each Lender's obligation to make a Loan
on any date subsequent to the Closing Date shall be subject to the satisfaction
of the following conditions on or before the proposed date of such Loan, except
to the extent waived by the Required Holders in writing:
(a) The Company shall have reimbursed the Lenders for the fees and
expenses for which the Company is liable pursuant to the terms of Section
7.5, below, to the extent documented to the Company as of the closing of
such Loan;
(b) Each of the representations and warranties of the Company set
forth in this Agreement or incorporated herein by reference or set forth in
any statement or schedule delivered pursuant to this Agreement are true and
correct in all material respects as of the date of the closing of such Loan
as if made on such date;
(c) The Company shall not be in default with respect to any of its
covenants and agreements set forth in Article VI of this Agreement or set
forth elsewhere in this Agreement;
(d) No Default or Event of Default shall have occurred and be
continuing;
(e) The Company shall have delivered to the Lenders a certificate,
executed by an officer of the Company, acceptable to the Required Holders
and dated as of the date of the closing of such Loan, certifying to the
Company's fulfillment of the conditions specified in subsections (a)
through (d) of this Section 4.2, and expressly detailing, and certifying
the compliance with Section 6.2(a) hereof with regard to, the intended use
of the proceeds of such Loan; and
(f) No other Lender shall have defaulted on its obligation to make its
respective Loan hereunder.
4.3. Waiver; Termination. The Required Holders may in their sole discretion
waive in writing any of the conditions set forth in Sections 4.1 or 4.2 hereof.
If the conditions to the Lenders' obligations set forth in Section 4.1 hereof
shall not have been satisfied by the Company or waived by the Required Holders
on or before November 30, 2001, the Required Holders may in their sole
discretion terminate the obligations and benefits of the Lenders pursuant to
this Agreement without any liability on the part of the Agent or the Lenders to
any other Person.
ARTICLE V
Representations and Warranties
5.1. Representations and Warranties of the Company. In order to induce the
Lenders to enter into this Agreement, the Company represents and warrants to the
Lenders on the date hereof and on and as of the date of each Loan, as if made on
and as of such date, which representations and warranties shall survive such
date and be independent of any investigation or lack of investigation of the
Company made by or on behalf of the Agent or the Lenders, as follows:
(a) Organization and Standing. The Company is duly incorporated and
validly existing under the laws of the State of Delaware, and has all
requisite corporate power and authority to own or lease its properties and
assets and to conduct its business as it has been and is proposed to be
conducted. The Company is qualified to do business and in good standing in
each jurisdiction in which the failure to so qualify could have a material
adverse effect upon its assets, properties, liabilities, financial
condition, results of operations or business.
(b) Capacity of the Company; Consents; Execution of Agreements. The
Company has the requisite corporate power, authority, and capacity to enter
into this Agreement, the Note, the Stock Pledge Agreement and the
Collateral Assignment and to perform the transactions and obligations to be
performed by the Company hereunder and thereunder. Except as described on
Schedule 5.1(b) hereto, no consent, authorization, approval, license,
permit or order of, or filing with, any Person or Governmental Authority is
required in connection with the execution and delivery of this Agreement,
the Notes, the Stock Pledge Agreement and the Collateral Assignment or the
performance by the Company of the transactions and obligations to be
performed by it hereunder and thereunder, except as contemplated by said
agreements. The failure to obtain any of the consents described on Schedule
5.1(b) prior to the Closing Date will not have a material adverse effect
upon the Company's assets, properties, liabilities, financial condition,
results of operations or business. The execution and delivery of this
Agreement, the Notes, the Stock Pledge Agreement and the Collateral
Assignment by the Company, and the performance of the transactions and
obligations contemplated hereby and thereby by the Company, have been duly
authorized by all requisite action of the Company. This Agreement has been,
and the Notes, the Stock Pledge Agreement and the Collateral Assignment
will be, duly executed and delivered by a duly authorized officer of the
Company and constitutes, or when executed and delivered will constitute, a
valid and legally binding agreement of the Company, enforceable in
accordance with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar
laws, both state and federal, affecting the enforcement of creditors'
rights or remedies in general from time to time in effect and the exercise
by courts of equity powers or their application of principles of public
policy.
(c) Valid Issuance. The Notes to be issued hereunder, when issued by
the Company to the Lenders pursuant to the terms of this Agreement, will be
duly authorized and validly issued.
(d) Conflicts; Defaults. The execution and delivery of this Agreement,
the Notes and the Stock Pledge Agreement by the Company, and the
performance by the Company of the transactions and obligations contemplated
hereby and thereby to be performed, will not: (i) violate, conflict with,
or constitute a default under any of the terms or provisions of its
certificate of incorporation or bylaws, or any provisions of, or result in
the acceleration of any obligation under, any Contract, note, debt
instrument, security agreement, or other instrument to which the Company,
or any Subsidiary is a party or by which the Company, or any Subsidiary or
any of their respective assets is bound; (ii) result in the creation or
imposition of any Liens or claims upon the assets of the Company or any
Subsidiary or their issued and outstanding capital stock, except with
respect to the stock of EWP to be pledged under the Stock Pledge Agreement
or as otherwise contemplated by the Collateral Assignment; (iii) constitute
a violation of any law, statute, judgment, decree, order, rule, or
regulation of a Governmental Authority applicable to the Company, or any
Subsidiary; or (iv) constitute an event which, after notice or lapse of
time or both, would result in any of the foregoing. The Company is not
presently in violation of any provision of its certificate of incorporation
or bylaws.
(e) Compliance with Laws. Neither the Company nor any Subsidiary is in
violation of, nor do any of their respective operations violate in any
respect, any statute, law, or regulation of any Governmental Authority
applicable to the Company or a Subsidiary, as the case may be, any of their
respective assets, or the conduct of their respective businesses
("Applicable Laws"), the violation of which reasonably could be anticipated
to have a material adverse effect upon the Company's or a Subsidiary's
respective assets, properties, liabilities, financial condition, results of
operations or business, and no material expenditures are or, based on
present requirements, will be required of the Company or its Subsidiaries
in order for them to comply or remain in compliance with any Applicable
Laws.
(f) Litigation. Neither the Company nor any Subsidiary is a party to
any material legal action, suit, claim, investigation or proceeding which
is not adequately described in a periodic report heretofore filed by the
Company with the SEC, and, to the best of the Company's knowledge and
belief after due inquiry, there exist no facts or circumstances which
reasonably could be anticipated to result in any such action, suit, claim,
investigation, or proceeding.
(g) Taxes. The Company has prepared and duly and timely filed with
each appropriate Governmental Authority, all material federal, state,
municipal, local and foreign tax returns, information returns and other
reports required to be filed on or before the date of this Agreement or the
making of any Loan and has paid all material taxes required to be paid by
the Company prior to the date of this Agreement or the making of any Loan
in respect of the periods covered by such returns and reports, except such
taxes as are being contested in good faith.
(h) Environmental Compliance. The Company and its Subsidiaries are in
compliance with all applicable federal, state and local laws and
requirements (including permit requirements) relating to the protection of
health or the environment in connection with the ownership, operation and
condition of its properties and business, except as described in a periodic
report heretofore filed by the Company with the SEC or where failure to
comply would not have a material adverse effect on the business or
operations of the Company or any Subsidiary.
(i) Securities Laws. No consent, authorization, approval, permit, or
order of or filing with any Governmental Authority is required in order for
the Company to execute and deliver this Agreement, the Stock Pledge
Agreement or the Collateral Assignment or to offer, issue, sell or deliver
the Notes. Based in part on the representations of the Lenders and under
the circumstances contemplated hereby and under current laws and
regulations, the offer, issuance, sale and delivery of the Notes to the
Lenders are exempt from the prospectus delivery and registration
requirements of the 1933 Act.
(j) Disclosure. The Company has fully responded to all written
requests for information and has accurately answered, to the best of the
Company's knowledge and belief after due inquiry, all written questions
from the Lenders concerning the assets, properties, liabilities, financial
condition, results of operations, business and prospects of the Company and
its Subsidiaries, and has not knowingly withheld any facts relating thereto
which it reasonably believed to be material with respect to the assets,
properties, liabilities, financial condition, results of operations,
business or prospects of the Company or any Subsidiary. No information in
this Agreement, or in any Schedule or Exhibit attached to this Agreement or
delivered to the Lenders in connection herewith, contains any untrue
statement of a material fact or when considered together with all such
information delivered to the Lenders omits to state any material fact
necessary in order to make the statements made in the light of the
circumstances under which they were made, when taken as a whole, not
misleading. The disclosures made in writing by the Company in connection
with this Agreement do not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made
therein not misleading. There is no fact or circumstance relating to the
Company or any Subsidiary which materially and adversely affects or in the
future may, in the reasonable business judgment of the Company, be expected
materially and adversely to affect the same which has not been set forth in
this Agreement or the Schedules hereto.
5.2. Representations and Warranties of the Lenders. Each Lender (solely as
to itself and not as to any other Lender) represents and warrants to the Company
that:
(a) Investment Intent. The Note to be issued to such Lender is being
acquired for its own account and not with the view to, or for resale in
connection with, any distribution or public offering thereof within the
meaning of the 1933 Act. Such Lender understands that such Note has not
been registered under the 1933 Act by reason of its issuance in a
transaction exempt from the registration and prospectus delivery
requirements of the 1933 Act pursuant to Section 4(2) thereof. It further
understands that such Note will bear the following legend and agrees that
it will hold such Note subject thereto:
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAW. NEITHER THIS NOTE NOR ANY PORTION
HEREOF OR INTEREST HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF UNLESS THE SAME IS REGISTERED UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE AND THE COMPANY SHALL HAVE RECEIVED, AT
THE EXPENSE OF THE HOLDER HEREOF, EVIDENCE OF SUCH EXEMPTION
REASONABLY SATISFACTORY TO THE COMPANY (WHICH MAY INCLUDE, AMONG OTHER
THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY).
(b) Capacity of the Lender; Execution of Agreement. Such Lender has
all requisite power, authority, and capacity to enter into this Agreement,
and to perform the transactions and obligations to be performed by it
hereunder. This Agreement has been duly authorized, executed and delivered
by it and constitutes its valid and legally binding obligation, enforceable
in accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar
laws, both state and federal, affecting the enforcement of creditors'
rights or remedies in general from time to time in effect and the exercise
by courts of equity powers or their application of principles of public
policy.
(c) Accredited Investor. Such Lender and, if such Lender is a limited
partnership or limited liability company, each partner or member of such
Lender, is an "accredited investor" as defined in Rule 501 (a) of
Regulation D promulgated under the 1933 Act.
ARTICLE VI
Covenants and Agreements
6.1. Affirmative Covenants. So long as any Indebtedness remains outstanding
under this Agreement and the Notes, the Company covenants and agrees that it
will and will cause each Subsidiary to:
(a) Certain Information and SEC Reports. Furnish to each Lender in
form and substance satisfactory to the Required Holders:
(i) within five (5) days after the Company learns of the
commencement or overtly threatened commencement of any material claim
or suit, legal or equitable, or of any administrative, arbitration, or
other similar proceeding against the Company or any of its
Subsidiaries, or any of their respective businesses, assets, or
properties which claim or proceeding, if determined adversely to the
Company or such Subsidiary, would be likely to have a material adverse
effect on the Company and its Subsidiaries, taken as a whole, written
notice of the nature and extent of such suit or proceeding;
(ii) within five (5) days after the Company learns of any
circumstance or event which reasonably can be expected to have a
material adverse effect on the assets, properties, liabilities,
financial condition, results of operations, business, or prospects of
the Company or any Subsidiary, written notice of the nature and extent
of such circumstance or event;
(iii) simultaneous with the transmission thereof to the Company's
shareholders, copies of (or notice from an EDGAR watch service of) all
financial statements, proxy statements, reports and any other general
written communications which the Company sends to its shareholders and
copies (or notice from an EDGAR watch service of) of all registration
statements and all regular, special or periodic reports which it files
with the SEC or with any securities exchange on which any of its
securities are then listed, and copies of all press releases and other
statements made available generally by the Company to the public
concerning material developments in the Company's businesses; and
(iv) within ten (10) days after a Holder makes a reasonable
request therefor, such other data relating to the business, affairs
and financial condition of the Company or any of its Subsidiaries.
(b) Taxes. Pay and discharge all taxes and other governmental charges
before the same shall become overdue, unless and to the extent only that
such payment is being contested in good faith.
(c) Insurance. Maintain insurance coverage on its physical assets and
against other business risks in such amounts and of such types as are
customarily carried by companies similar in size and nature, and in the
event of acquisition of additional property, real or personal, or of
incurrence of additional risks of any nature, increase such insurance
coverage in such manner and to such extent as prudent business judgment and
present practice would dictate.
(d) Examination of Books. Permit each Lender, through its authorized
attorneys, accountants and representatives, to examine the Company's books,
accounts, records, ledgers and assets of every kind and description at all
reasonable times upon oral or written request of such Lender, at the
Company's cost and expense (provided that so long as the Company shall not
be in default, the Company shall be obligated to pay for no more than one
(1) such examination per year).
(e) Notification of Events of Default, Acceleration or Material
Adverse Effect. Promptly notify each Lender of any condition or event which
constitutes, or with the passage of time and/or the giving of notice would
constitute, an Event of Default under this Agreement or of payment defaults
aggregating more than $500,000 on any Indebtedness of the Company and its
Subsidiaries or of any acceleration of the maturity of any Indebtedness of
the Company and its Subsidiaries aggregating more than $500,000, and
promptly inform each Lender of the existence or occurrence of any condition
or event (other than conditions having an effect on the economy in general)
which could reasonably be anticipated to have a material adverse effect
upon the Company's financial condition.
(f) Maintenance of Licenses. Maintain in good standing all licenses
required by any Governmental Authority that may be necessary or required
for the Company and its Subsidiaries to carry on their respective
businesses, where the failure to maintain such licenses would have a
material adverse effect on the Company and its Subsidiaries taken as a
whole.
(g) ERISA Compliance. Comply with all material requirements imposed by
the Employee Retirement Income Security Act of 1974 as presently in effect
or hereafter promulgated, including but not limited to, the minimum funding
requirements of any defined contribution employee benefit plan.
(h) Compliance with Law. Comply in all material respects with all
applicable laws, rules, regulations and orders of any Governmental
Authority, such compliance to include, without limitation, paying before
the same become delinquent all taxes, assessments, and governmental charges
imposed upon it or upon its property, except to the extent that compliance
with any of the foregoing is then being contested in good faith by
appropriate legal proceedings and with respect to which adequate financial
reserves have been established on the books and records of the Company and
except where the failure to comply would not have a material adverse effect
on the Company and its Subsidiaries, taken as a whole.
6.2. Negative Covenants. The Company covenants and agrees that so long as
any Indebtedness remains outstanding under this Agreement and the Notes, without
the prior written consent of the Required Holders, the Company will not:
(a) Use of Proceeds. Use all or any portion of the proceeds of any
Loan for any purpose other than the funding and payment of ongoing
operating expenses of the Company arising or becoming due on or subsequent
to the Closing Date or, with respect to any Loan made thereafter, the date
of the making of such Loan. The Company expressly covenants and agrees
that, without limiting the generality of the foregoing, the Company will
not apply any portion of the proceeds of any Loan to the payment of any
past due indebtedness of the Company to any vendor or supplier or to the
satisfaction of any other past due trade payables of the Company.
(b) No Mergers, Etc. Enter into any merger or consolidation or sell,
lease, transfer or dispose of all, substantially all, or any material part
of its assets, except (i) in the ordinary course of its business, or (ii)
upon the consent of the Required Holders at the time to any such
transaction, and subject in either such case to the approval of the Board
of Directors of the Company in accordance with the provisions of the
Company's bylaws.
(c) Limitations on Indebtedness. Become or remain obligated, or suffer
or permit any Subsidiary to become or remain obligated, for any
Indebtedness, except:
(i) Existing Indebtedness as set forth on Schedule 6.2(c) hereto;
and
(ii) Indebtedness arising pursuant to this Agreement.
ARTICLE VII
Miscellaneous
7.1. Waiver and Amendments. No failure or delay on the part of the Agent or
the Lenders in the exercise of any power or right, and no course of dealing
between the Company and the Agent or the Lenders, shall operate as a waiver of
such power or right, nor shall any single or partial exercise of any power or
right preclude other or further exercise thereof or the exercise of any other
power or right. Remedies provided for herein are cumulative and not exclusive of
any remedies which may be available to the Agent or the Lenders at law or in
equity. No notice to or demand on the Company required hereunder or under the
Notes shall in any event entitle the Company to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the right of
the Agent or the Lenders to any other or further action and any circumstances
without notice or demand. No amendment, modification or waiver of, or consent
with respect to, any provision of this Agreement or the Notes shall in any event
be effective with respect to any Lender unless the same shall be in writing and
signed and delivered by the Required Holders; provided, however, that no such
amendment, modification, termination or waiver shall, without the consent of all
of the Lenders: (i) authorize or permit the extension of time for, or any
reduction of the amount of, any payment of the principal of, or interest on, the
Notes, any rate of interest applicable thereto, or any fees or other amounts
payable thereunder; (ii) amend or terminate the respective Commitment of any
Lender or modify the provisions of this Section 7.1 or the definition of
Required Holders; or (iii) provide for the release of any collateral subject to
the Stock Pledge Agreement or the Collateral Assignment. Any waiver of any
provision of this Agreement or the Notes, and any consent to any departure by
the Company from the terms of any provision of this Agreement or the Notes,
shall be effective only in the specific instance and for the specific purpose
for which it is given.
7.2. The Agent. Each Lender hereby irrevocably designates and appoints the
Agent to act as specified herein and in the Stock Pledge Agreement and the
Collateral Assignment or as directed by the Required Holders, and each such
Lender hereby irrevocably authorizes the Agent to take such action on its behalf
under the provisions of this Agreement, the Stock Pledge Agreement and the
Collateral Assignment or as directed by the Required Holders, and to exercise
such powers and perform such duties as are expressly delegated to the Agent by
the terms of this Agreement, the Stock Pledge Agreement and the Collateral
Assignment or as directed by the Required Holders, together with such other
powers as are reasonably incidental thereto. The Agent agrees to act as such
upon the express conditions contained in this Section 7.2. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein, in the
Stock Pledge Agreement or in the Collateral Assignment or as directed by the
Required Holders, nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Agent. The provisions
of this Section 7.2 are solely for the benefit of the Agent, and the Lenders and
the Company shall not have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation or relationship of agency or trust
with or for the Company. Neither the Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such person
under or in connection with this Agreement (except for its or such person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by the Company or any of its officers contained in this Agreement, the Stock
Pledge Agreement, the Collateral Assignment or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or for any failure of the
Company to perform its obligations hereunder. The Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Company. The
Agent shall not be responsible to any Lender for the effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement, the
Stock Pledge Agreement or the Collateral Assignment or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports
certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Lenders or by or on behalf of the Company
to the Agent or any Lender or be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained herein or therein or as to the use of the proceeds of
the Loans or of the existence or possible existence of any Default or Event of
Default. Each Lender expressly acknowledges that neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the Company shall be
deemed to constitute any representation or warranty by the Agent to any Lender.
Each Lender represents to the Agent that it has, independently and without
reliance upon the Agent, or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Company and made its own
decision to make its Loans hereunder and enter into this Agreement. The Lenders
agree to indemnify the Agent in its capacity as such ratably according to their
respective Commitments, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, reasonable
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Agent in its capacity as such
in any way relating to or arising out of this Agreement, the Stock Pledge
Agreement or the Collateral Assignment, or any documents contemplated by or
referred to herein or the transactions contemplated hereby or any action taken
or omitted to be taken by the Agent under or in connection with any of the
foregoing, but only to the extent that any of the foregoing is not paid by the
Company, provided that no Lender shall be liable to the Agent for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting solely from the Agent's gross negligence or willful misconduct. The
agreements in this Section 7.2 shall survive the payment of all Loans.
7.3. Notices. All notices and other communications required or permitted
under this Agreement shall be in writing and, if mailed by prepaid registered or
certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) Business Days after
the post-mark date thereof. Except as otherwise provided herein, notices may
also be given by recognized overnight courier services or delivered by hand or
facsimile transmission. In the event of delivery by overnight courier service,
such notice shall be deemed to have been received as of the regularly scheduled
time for delivery established by such courier service. In the event of delivery
by hand, such notice shall be deemed effective when delivered. In the event of
delivery by facsimile transmission, such notice shall be deemed effective upon
confirmation of transmission. All notices and other communications under this
Agreement shall be given to the parties hereto at the following addresses:
If to the Company:
Keystone Consolidated Industries, Inc.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240
Attention: Chief Financial Officer
Fax: (972) 448-1408
With a copy to:
Richards, Layton & Finger, P.A.
One Rodney Square
Post Office Box 551
Wilmington, Delaware 19899
Attention: Mark D. Collins, Esq.
Fax: (302) 651-7701
If to the Agent:
EWP Financial LLC
Three Lincoln Centre
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240
Attention: Bobby D. O'Brien
Fax: (972) 448-1445
With a copy to:
Rogers & Hardin LLP
2700 International Tower
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Edward J. Hardin, Esq.
Fax: (404) 525-2224
If to the Lenders:
To the address for each Lender set forth on Annex I hereto.
Any party hereto may change the address to which notices shall be directed under
this Section 7.2 by giving written notice of such change to the other parties.
7.4. Restriction on Transfer. The Lenders acknowledge that the Notes have
not been registered under the 1933 Act, as amended, or the securities laws of
any state. Accordingly, the Notes may not be sold or otherwise disposed of or
transferred, unless such sale, disposition or transfer is registered under the
1933 Act and applicable state securities laws or unless the Company has received
an opinion of counsel reasonably acceptable to the Company that such sale,
disposition or transfer is exempt from such registration. The Notes shall bear a
restrictive legend to the foregoing effect.
7.5. Expenses. The Company shall reimburse the Lenders for all of their
reasonable out-of-pocket expenses incurred in the negotiation, preparation,
execution and delivery of this Agreement, the Notes, the Stock Pledge Agreement,
the Collateral Assignment and related matters, and all related due diligence,
including, without limitation, the expenses of legal counsel and accountants.
The Company shall also reimburse each Holder for all of its out-of-pocket
expenses incurred in the administration, waiver, modification and enforcement of
any of its rights under this Agreement, the Note held by it, the Stock Pledge
Agreement and the Collateral Assignment, including, without limitation, the
reasonable expenses of legal counsel and accountants. In addition, the Company
shall be responsible for any documentary taxes incurred in connection with the
transactions contemplated by this Agreement and the Notes.
7.6. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction, shall as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
7.7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to any
choice or conflict of law provision or rule (whether of the State of Texas or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Texas.
7.8. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that the Company may not, without the prior written
consent of all of the Lenders, assign its rights or obligations hereunder or
under the Notes, the Stock Pledge Agreement or the Collateral Assignment, and
the Lenders shall not be obligated to make any Loan to any entity other than the
Company. No Lender may assign, or sell a participation in, all or any portion of
its rights or obligations under this Agreement, the Notes, the Stock Pledge
Agreement or the Collateral Assignment, without the prior written consent of the
Required Holders. With the prior written consent of the Required Holders, any
Lender may assign all or a portion of its Loans and Commitment hereunder to one
or more Persons, each of which assignees shall become a party to and be bound
by, and shall make the representations and warranties of a Lender under, this
Agreement by execution of an assignment agreement in the form of Exhibit D
hereto (an "Assignment Agreement"). In connection with any such assignment, the
Company shall, upon request by the assignor and assignee and return of the
original Note in favor of the assignor, issue replacement Note(s) to the
assignee and, if applicable, the assignor in the amount of their respective
Commitments set forth in the applicable Assignment Agreement.
7.9. Headings. Headings used in this Agreement are for convenience only and
shall not be used in connection with the interpretation of any provision hereof.
7.10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute one and the same instrument.
7.11. Withholding Tax. The Lenders acknowledge that the Company will be
required to comply with the requirements of the Internal Revenue Service
relative to backup withholding and the Lenders may be subject to backup
withholding depending on their individual status and compliance with applicable
filing requirements of the Internal Revenue Service.
7.12 Entire Agreement. This Agreement, together with the exhibits and
schedules hereto, constitutes the entire agreement between the parties hereto
relating to the subject matter hereof and supersedes all prior negotiations,
discussions, writings and agreements between them, including, without
limitation, the Original Loan Agreement.
[Remainder of page intentionally left blank.
Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned thereunto duly authorized as of the date first
written above.
THE COMPANY:
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
By:
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Name:
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Title:
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THE AGENT:
EWP FINANCIAL LLC
By:
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Name:
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Title:
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THE LENDERS:
EWP FINANCIAL LLC
By:
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Name:
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Title:
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By:
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Name:
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Title:
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ANNEX I
% of Total
Name of Lender Address of Lender Commitment Commitment
-------------- ----------------- ---------- ----------
EWP Financial LLC Three Lincoln Centre $6,000,000 100%
5430 LBJ Freeway
Suite 1740
Dallas, Texas 75240
Total Commitment Amount: $6,000,000
Exhibit A
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAW. NEITHER THIS NOTE NOR ANY PORTION HEREOF OR INTEREST
HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
UNLESS THE SAME IS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAW, OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND THE COMPANY
SHALL HAVE RECEIVED, AT THE EXPENSE OF THE HOLDER HEREOF, EVIDENCE OF SUCH
EXEMPTION REASONABLY SATISFACTORY TO THE COMPANY (WHICH MAY INCLUDE, AMONG OTHER
THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY).
PROMISSORY NOTE
$6,000,000.00 Dallas, Texas
November 21, 2001
FOR VALUE RECEIVED, KEYSTONE CONSOLIDATED INDUSTRIES, INC., a Delaware
corporation (the "Company"), promises to pay to the order of EWP Financial LLC
(the "Holder"), at 5430 LBJ Freeway, Suite 1740, Dallas, Texas 75240, or such
other place as designated in writing by the Holder, the principal sum of SIX
MILLION DOLLARS ($6,000,000.00) or, if less, the then unpaid principal amount of
Loans made by the Holder to the Company pursuant to that certain EWP Bridge Loan
Agreement dated as of November 1, 2001 by and between the Company, EWP Financial
LLC, as Agent, the Holder, and the other Lenders party thereto (the "Loan
Agreement"), together with interest on the principal balance outstanding from
time to time in accordance with the provisions of this Note. This Note is
executed and delivered by the Company pursuant to the Loan Agreement, the terms
and conditions of which are incorporated herein by reference. Unless otherwise
indicated herein, capitalized terms used in this Note have the same meanings set
forth in the Loan Agreement.
1. Interest Rate; Payment; Usury.
(a) Provided that no Event of Default has occurred and is continuing
and subject to the other provisions of this Note, the outstanding principal
of this Note shall bear interest at a rate per annum equal to three percent
(3%) plus the rate from time to time published in the Wall Street Journal
as the prime rate, whether or not such announced rate is the best rate
available at any bank or other financial institution (the "Interest Rate").
During any period that an Event of Default shall have occurred and be
continuing, interest on the outstanding principal of this Note shall accrue
at a rate equal to the Interest Rate plus two percent (2%) (the "Default
Interest Rate"). Notwithstanding anything contained herein to the contrary,
in no event shall the interest rate on this Note, including the Default
Interest Rate, exceed the highest rate permitted by applicable law.
Interest on this Note, including interest at the Default Interest Rate,
shall be based on a 360-day year, and interest shall accrue and be payable
for the actual number of calendar days elapsed. Interest shall be payable
in arrears commencing on the 30th day of November, 2001 and continuing
thereafter on the last day of each subsequent month until the principal and
all accrued interest have been paid in full.
(b) It is the intention of the Company and the Holder to conform
strictly to applicable usury laws now or hereafter in force, and any
interest payable under this Note or the Loan Agreement shall be subject to
reduction to an amount not to exceed the maximum non-usurious amount for
commercial loans allowed under such applicable usury laws as now or
hereafter construed by the courts having jurisdiction over such matters. In
the event such interest (whether designated as interest, service charges,
points, origination fees or otherwise) does exceed the maximum legal rate,
it shall be (i) canceled automatically to the extent that such interest
exceeds the maximum legal rate; (ii) if already paid, at the option of the
Holder, either be rebated to the Company or credited on the principal
amount of this Note; or (iii) if this Note has been prepaid in full, then
such excess shall be rebated to the Company. It is further agreed, without
limitation of the foregoing, that all calculations of the rate of interest
contracted for, charged, or received under this Note and the Loan Agreement
that are made for the purpose of determining whether such rate exceeds the
maximum legal rate, shall be made, to the extent permitted by applicable
law, by amortizing, prorating, allocating, and spreading throughout the
full stated term of this Note (and any extensions of the term thereof that
may be hereafter granted) all such interest at any time contracted for,
charged, or received from the Company or otherwise by the Holder so that
the rate of interest on account of this Note, as so calculated, is uniform
throughout the term thereof. If the Company is exempt or hereafter becomes
exempt from applicable usury statutes or for any other reason the rate of
interest to be charged on this Note is not limited by law, none of the
provisions of this paragraph shall be construed so as to limit or reduce
the interest or other consideration payable under this Note or the Loan
Agreement or under any instrument securing payment thereof. The terms and
provisions of this paragraph shall control and supersede every other
provision of all agreements between the Company and the Holder.
2. Maturity. Unless the same shall become due earlier as a result of
acceleration of the maturity, this Note shall mature on the earlier of: (i) the
date of consummation of the Restructuring or (ii) the six (6) month anniversary
of the Closing Date, at which time the outstanding principal balance of this
Note and all accrued and unpaid interest shall become due and payable.
3. Revolving Loans; Prepayments. Subject to the terms and conditions of the
Loan Agreement, the Company may from time to time and at any time prior to the
Maturity Date borrow, repay and reborrow under this Note or prepay this Note, in
whole or in part and without premium or penalty. Any payment shall be applied
first to interest which is accrued and unpaid and then to principal.
4. Manner of Payment. The Company shall make payments in respect of this
Note (including principal and interest) by wire transfer of immediately
available funds to the account specified by the Holder.
5. Events of Default; Acceleration. The maturity of this Note is subject to
acceleration pursuant to Section 3.7 of the Loan Agreement if an Event of
Default occurs and is continuing pursuant to Section 3.6 of the Loan Agreement.
6. Collection Expenses. In the event the Company fails to pay any
installment of interest or principal when due, the Company shall pay to the
Holder, in addition to the amounts due, all costs of collection, including
reasonable attorneys' fees.
7. Company Waivers. The Company, for itself and its successors and assigns,
hereby waives demand, presentment, protest, diligence, notice of dishonor and
any other formality in connection with this Note and expressly agrees that this
Note, or any payment hereunder, may be extended from time to time and that the
Holder may accept security for this Note or release security for this Note, all
without in any way affecting the liability of the Company hereunder.
8. Governing Law. All questions concerning the construction, validity and
interpretation of this Note shall be governed by and construed in accordance
with the laws of the State of Texas, without giving effect to any choice or
conflict of law provision or rule (whether of the State of Texas or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Texas.
9. Collateral. The Company's obligations under this Note are secured by
collateral pledged pursuant to the Stock Pledge Agreement.
10. Amendment and Waiver. Subject to the Loan Agreement, the provisions of
this Note may be amended and waived only with the prior written consent of the
Company and the Holder of this Note.
11. Amendment, Restatement and Replacement of Prior Note. This Note amends,
supplements, restates, replaces and supercedes in its entirety that certain
promissory note dated November 1, 2001 in the original principal amount of $6.0
million payable to the order of EWP Financial LLC and executed by the Company.
[Remainder of page intentionally left blank.
Signature page follows.]
IN WITNESS WHEREOF, the Company has executed this Note on the date first
written above.
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
By:
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Name:
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Title:
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EXHIBIT B
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (the "Agreement") is dated as of November 21,
2001 by and between KEYSTONE CONSOLIDATED INDUSTRIES, INC., a Delaware
corporation (the "Pledgor"), and EWP FINANCIAL LLC, a Delaware limited liability
company, as agent for the lenders under the hereinafter described Loan Agreement
(the "Pledgee").
Recitals:
WHEREAS, pursuant to that certain Amended and Restated Loan Agreement dated
as of November 21, 2001 (the "Loan Agreement") by and between the Pledgor, the
Pledgee, and the Lenders party thereto (individually a "Lender" and,
collectively, the "Lenders"), the Pledgor has made promissory notes of even date
herewith aggregating up to an original principal amount of $6,000,000.00, each
payable to a Lender (individually, the "Note" and, collectively, the "Notes");
WHEREAS, the Pledgor has agreed to enter into this Agreement and to pledge
all of the outstanding shares of common stock of Engineered Wire Products, Inc.,
an Ohio corporation and a wholly-owned subsidiary of the Pledgor ("EWP"),
registered in the name of the Pledgor (the "Stock") as security for performance
of its obligations under the Loan Agreement and the Notes; and
WHEREAS, capitalized terms used but not otherwise defined herein shall have
the same meanings given to such terms in the Loan Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and to secure the payment and performance of the
Pledgor's obligations under the Loan Agreement and the Notes, the parties hereto
agree as follows:
SECTION 1. Pledge. As collateral security for the due and punctual payment
of the indebtedness and obligations referred to in Section 2 hereof, the Pledgor
hereby pledges, hypothecates, transfers, sets over, delivers and assigns unto
the Pledgee, and hereby grants the Pledgee a first security interest in the
following:
(a) the Stock and the certificates representing the Stock, and all cash,
securities and other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for all or any
portion of the Stock; and
(b) all securities hereafter delivered to the Pledgee by the Pledgor in
substitution for any of the foregoing, all certificates and instruments
representing or evidencing such securities, together with all interest, cash,
securities and other property at any time and from time to time received,
receivable or otherwise distributed in respect of, in exchange for or on
conversion of any or all thereof (all such Stock, indebtedness, shares,
certificates, interest, cash, securities and other property received, receivable
or otherwise distributed in respect of any or all thereof being included within
the definition of "Collateral" for purposes of this Agreement).
TO HAVE AND TO HOLD the Collateral, together with all rights, titles,
interests, privileges and preferences appertaining or incidental thereto, unto
the Pledgee, its successors and assigns, forever, subject, however, to the
terms, covenants and conditions hereinafter set forth.
SECTION 2. Indebtedness and Obligations Secured. This Agreement and the
Collateral secure repayment of the indebtedness and the obligations of the
Pledgor indicated below (collectively, the "Obligations"), equally and ratably
as to all such indebtedness and obligations and without preference or priority
as to any class of such indebtedness or obligations or any component thereof:
(a) the indebtedness evidenced by the Loan Agreement and the Notes (and any
promissory note of the Pledgor issued in exchange for, or replacement of, or
substitution for, any of the Notes, which shall be included in the term "Notes"
as used herein), with interest and premiums thereon as therein provided;
(b) all other amounts payable by the Pledgor under the Loan Agreement and
the Notes, including without limitation, all fees, costs, expenses and
indemnities payable by the Pledgor thereunder;
(c) all indebtedness of the Pledgor arising under this Agreement and all
costs and expenses of the Pledgee in enforcing this Agreement, the Loan
Agreement and the Notes; and
(d) all renewals and extensions, in whole or in part, of the Notes or of
any other indebtedness or obligation described above.
SECTION 3. Representations and Warranties. The Pledgor hereby represents
and warrants that as of the date hereof: (i) the Pledgor is the holder of record
of all of the Stock; (ii) the Stock pledged hereunder constitutes all of the
issued and outstanding capital stock of EWP; (iii) the Pledgor has good, right
and lawful authority to enter into this Agreement and to pledge the Collateral
in the manner hereby done or contemplated and will defend its title thereto
against the claims of all persons whomsoever; (iv) there are no liens, claims,
pledges, security interests, encumbrances or rights of third parties whatsoever
with respect to the Collateral; (v) this Agreement has been duly authorized,
executed and delivered and constitutes the legal, valid and binding obligation
of the Pledgor, enforceable in accordance with its terms; and (vi) no consent or
approval of any court, governmental body or regulatory authority (federal, state
or local) is or was necessary to the validity of the pledge granted hereby.
SECTION 4. Appointment of Agents; Registration in Nominee Name. The Pledgee
shall have the right to appoint one or more agents for the purpose of retaining
physical possession of the certificates or instruments representing or
evidencing the Collateral, which certificates or instruments may be held (in the
discretion of the Pledgee) in the name of the Pledgor, endorsed or assigned in
blank or in favor of the Pledgee, or in the name of the Pledgee or any agent
appointed by the Pledgee to retain physical possession of such certificates or
instruments, or in the name of any nominee of the Pledgee or any such agent. In
addition, the Pledgee shall at all times have the right to exchange certificates
or instruments representing or evidencing the Collateral for certificates or
instruments of smaller or larger denominations. The Pledgor hereby agrees that
any registrar or transfer agent for any securities included in the Collateral
shall be entitled to rely on the provisions of this Section 4 as conclusive
evidence of the authority of the Pledgee to effect re-registration of any such
securities in the name of the Pledgee or that of its agents or its or their
nominees or to exchange certificates or instruments representing or evidencing
such Collateral for certificates or instruments of smaller or larger
denominations, notwithstanding any notice or direction to such registrar or
transfer agent from the Pledgor to the contrary.
SECTION 5. Voting Rights; Dividends; Etc.
(a) Until there shall occur an Event of Default (as set forth in Section 6
hereof), the Pledgor shall be entitled to exercise any and all voting or
consensual rights and powers relating or pertaining to the Collateral or any
part thereof for the term of this Agreement, and upon the occurrence of an Event
of Default, the Pledgee shall be entitled to exercise such rights and powers;
and
(b) The Pledgor shall not be entitled to receive and retain any and all
cash dividends and interest payable on the Collateral, and any and all stock or
liquidating dividends, distributions and property, returns of capital or other
distributions made on or in respect of the Collateral, whether resulting from a
subdivision, combination or reclassification of the outstanding capital stock of
the Pledgee or received in exchange for or on conversion of the Collateral or
any part thereof or as a result of any merger, consolidation, acquisition or
other exchange of assets to which the Pledgee may be a party or otherwise, and
any and all cash and other property received in payment of the principal or in
redemption of or in exchange for or on conversion of any Collateral (either at
maturity, upon call for redemption, upon forced conversion or otherwise), shall
be and become part of the Collateral pledged hereunder and, if received by the
Pledgor, shall forthwith be delivered to the Pledgee or its designated agent
(accompanied by proper instruments of assignment or stock or bond powers
executed by the Pledgor in accordance with the Pledgee's instructions) to be
held subject to the terms of this Agreement.
SECTION 6. Events of Default. The occurrence and continuation of any of the
following events shall constitute an Event of Default under this Agreement:
(a) Any Event of Default as defined in the Loan Agreement or the Notes; and
(b) Any default in the due observance or performance of any term, covenant,
warranty, agreement or condition contained in this Agreement, which default
continues for five (5) calendar days after the Pledgee, at the direction of the
Required Holders, gives notice of such failure to the Pledgor.
SECTION 7. Remedies Upon Default. Upon the occurrence and during the
continuation of an Event of Default hereunder, the Pledgee may, at the direction
of the Required Holders, in addition to the exercise by the Pledgee of its
rights and remedies under any other Section of this Agreement or under the Loan
Agreement or the Notes, or otherwise available to it at law or in equity:
(a) apply the cash (if any) then held by it as collateral hereunder to the
payment of any Obligations, whether or not then due and in any order selected by
the Pledgee; and
(b) if there shall be no such cash or the cash so applied shall be
insufficient to pay all such Obligations in full, exercise all the rights and
remedies of a secured party under the Uniform Commercial Code in effect in the
State of Texas at that time and sell (in compliance with applicable securities
laws) the Collateral, or any part thereof, at public or private sale, at any
broker's board, upon any securities exchange, at the Pledgee's offices or
elsewhere, for cash, upon credit or for future delivery, as the Pledgee may deem
appropriate in the circumstances and commercially reasonable, irrespective of
the impact of any such sales on the market price of the Collateral. In that
connection, the Pledgee shall have the right to impose such limitations and
restrictions on the sale of the Collateral as the Pledgee may deem to be
necessary or appropriate to comply with any law, rule or regulation (federal,
state or local) having applicability to the sale, including, without limitation,
restrictions on the number and qualifications of the offerees and requirements
for any necessary governmental approvals, and the Pledgee shall be authorized at
any such sale (if it deems it advisable to do so) to restrict the prospective
offerees or purchasers to persons who will represent and agree that they are
purchasing securities included in the Collateral for their own account and not
with a view to the distribution or sale thereof in violation of applicable
securities laws. Upon consummation of any such sale, the Pledgee shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right on the part of the Pledgor, and
the Pledgor hereby waives (to the extent permitted by law) all rights of
redemption, stay or appraisal that it now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted. The
Pledgee shall give the Pledgor at least ten (10) calendar days' prior written
notice of the Pledgee's intention to make any public or private sale of such
Collateral. Such notice shall state the time and place fixed for sale, and the
Collateral, or portion thereof, to be offered for sale. Any such sale shall be
held at such time or times within ordinary business hours and at such place or
places as the Pledgee may fix in the notice of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Pledgee may (in its sole and absolute discretion)
determine; and the Pledgee may itself bid (which bid may be in whole or in part
in the form of cancellation of Obligations) for and purchase the whole or any
part of the Collateral and shall be entitled, for purposes of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at such sale, to use and apply any of the Obligations owed to
the Pledgee as a credit on account of the purchase of any Collateral payable by
the Pledgee at such sale. The Pledgee shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of Collateral may have been given. The Pledgee may, without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In the event the sale of all or any part of
the Collateral is made on credit or for future delivery, the Collateral so sold
may be retained by the Pledgee until the sale price is paid by the purchaser or
purchasers thereof, but the Pledgee shall not incur any liability in the event
any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in the event of any such failure, such Collateral may be
sold again upon like notice. As an alternative to exercising the power of sale
herein conferred upon it, the Pledgee may proceed by a suit or suits at law or
in equity to foreclose this Agreement and sell the Collateral, or any portion
thereof, pursuant to a judgment or decree of a court or courts of competent
jurisdiction.
SECTION 8. Application of Proceeds of Sale; Deficiency; Acknowledgement.
(a) The proceeds of any sale of the Collateral sold pursuant to Section 7 hereof
shall be applied by the Pledgee as follows:
First: to the payment of the costs and expenses of such sale, including the
out-of-pocket expenses of the Pledgee and the reasonable fees and out-of-pocket
expenses of counsel employed in connection therewith, and the payment of all
costs and expenses incurred by the Pledgee in connection with the administration
and enforcement of this Agreement, to the extent that such costs and expenses
shall not have been previously reimbursed or paid to the Pledgee;
Second: to the payment or prepayment in full of all other Obligations,
whether or not then due and in any order selected by the Pledgee as directed by
the Required Holders; and
Third: the balance (if any) of such proceeds shall be paid to the Pledgor
or as a court of competent jurisdiction may direct.
(b) The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws, the Pledgee may be compelled, with respect to
any sale of all or any part of the Collateral, to limit purchasers to those who
will agree, among other things, to acquire the Collateral for their own account,
for investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges that any such private sales may be at prices and on terms
less favorable to the Pledgee than those obtainable through a public sale
without such restrictions (including, without limitation, a public offering made
pursuant to a registration statement under the Securities Act), and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that the
Pledgee shall have no obligation to delay the sale of any Collateral for the
period of time necessary to permit the issuer thereof to register it for a form
of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would agree to do so.
SECTION 9. Pledgee Appointed Attorney-In-Fact. The Pledgor hereby appoints
the Pledgee the Pledgor's attorney-in-fact, with full power of substitution, for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any agreement or instrument on behalf of the Pledgor that
the Pledgee may deem necessary or advisable to accomplish the purposes hereof,
which appointment is coupled with an interest and is irrevocable. Without
limiting the generality of the foregoing, the Pledgor agrees and understands
that the Pledgee shall have the right and power to receive, endorse and collect
all checks and other orders for the payment of money made payable to the Pledgor
representing any dividend, principal or interest payment or other distribution
payable or distributable in respect of the Collateral or any part thereof and to
give full discharge for the same.
SECTION 10. Responsibility of the Pledgee; Care of Collateral. Neither the
Pledgee, nor any director, officer, employee or agent of the Pledgee, shall be
liable for any action taken or omitted to be taken by it or them relative to
this Agreement or any of the Collateral except for its or their gross negligence
or willful misconduct, and the Pledgee shall not be liable for any action or
omission to act on the part of any agent appointed by the Pledgee to act
hereunder or with respect to the Collateral (or any part thereof), selected by
the Pledgee with reasonable care. Notwithstanding the provisions of Section 5
hereof, the Pledgee shall have no duty to exercise any voting or any other
consensual rights and powers becoming vested in the Pledgee with respect to the
Collateral or any part thereof, to exercise any right to redeem, convert or
exchange any securities included in the Collateral, to enforce or see to the
payment of any dividend, principal or interest or any other distribution payable
or distributable on or with respect to the Collateral or any part thereof or
otherwise to preserve any rights in respect of the Collateral against any third
parties, and the Pledgee shall not be liable or accountable to the Pledgor in
respect of any of the foregoing. The Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if the Pledgee
shall take such action for such purpose as the Pledgor may request in writing,
but the failure of the Pledgee to take any action requested by the Pledgor shall
not, in and of itself, be deemed to constitute a failure on the part of the
Pledgee to exercise reasonable care in respect of the custody and preservation
of the Collateral or any part thereof.
SECTION 11. Expenses. The Pledgor agrees to pay the Pledgee, upon its
demand, all of the Pledgee's out-of-pocket expenses (including its reasonable
attorneys' fees) incurred in connection with the administration or enforcement
of this Agreement, the care and custody of the Collateral (or any part thereof),
the registration, re-registration or transfer of the Collateral (or any part
thereof) and the sale or collection of the Collateral (or any part thereof).
Should the Pledgor fail to do any act or thing that the Pledgor has covenanted
to do hereunder, or should any representation or warranty on the part of the
Pledgor contained herein be breached, the Pledgee may (but shall not be
obligated to) do the same or cause it to be done, or remedy any such breach, and
there shall be added to the liabilities of the Pledgor hereunder, the cost or
expense to the Pledgee in so doing, and any and all amounts expended by the
Pledgee in taking any such action shall be repayable to it by the Pledgor upon
the Pledgee's demand.
SECTION 12. No Waiver; Cumulative Remedies. No failure on the part of the
Pledgee to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy by the Pledgee preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
All remedies of the Pledgee hereunder are cumulative and are not exclusive of
any other remedies available to the Pledgee at law or in equity.
SECTION 13. Termination and Release of Collateral. This Agreement shall
terminate when all Obligations secured hereby have been fully paid and
performed, at which time the Pledgee shall reassign and redeliver (or cause to
be reassigned or redelivered) to the Pledgor, or to such person or persons as
the Pledgor shall designate, against receipt, such of the Collateral (if any) as
shall not have been sold or otherwise applied by the Pledgee pursuant to the
terms hereof and as shall still be held by it hereunder, together with
appropriate instruments of assignment and release.
SECTION 14. Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and, if mailed by prepaid
registered or certified mail, return receipt requested, shall be deemed to have
been received on the earlier of the date shown on the receipt or five (5)
calendar days after the post-mark date thereof. Notices may be given by
recognized overnight courier services and shall be deemed to have been received
as of the regularly scheduled time for delivery established by such courier
service. In addition, notices hereunder may be delivered by hand, in which case
the notice shall be deemed effective when delivered, or by facsimile
transmission, in which case it shall be deemed effective upon confirmation of
transmission. All notices and other communications under this Agreement shall be
given to the parties hereto at the following addresses:
If to the Pledgor:
Keystone Consolidated Industries, Inc.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240
Attn: Chief Financial Officer
Fax: (972) 448-1408
With a copy to:
Richards, Layton & Finger, P.A.
One Rodney Square
Post Office Box 551
Wilmington, Delaware 19899
Attn: Mark D. Collins, Esq.
Fax: (302) 651-7701
If to the Pledgee:
EWP Financial LLC
Three Lincoln Centre
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240
Attn: Bobby D. O'Brien
Fax: (972) 448-1445
With a copy to:
Rogers & Hardin LLP
2700 International Tower
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attn: Edward J. Hardin, Esq.
Fax: (404) 525-2224
Any party hereto may change the address to which notices shall be directed under
this Section 14 by giving written notice of such change to the other parties.
SECTION 15. Further Assurances. The Pledgor agrees to do such further acts
and things, and to execute and deliver such agreements and instruments,
including without limitation stock and bond powers, as the Pledgee may at any
time request in connection with the administration or enforcement of this
Agreement or related to the Collateral or any part thereof or in order better to
assure and confirm unto the Pledgee its rights, powers and remedies hereunder.
SECTION 16. Binding Agreement; Assignment. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and assigns, except that
the Pledgor shall not be permitted to assign this Agreement or any interest in
the Collateral, or any part thereof, or otherwise pledge, encumber or grant any
option with respect to the Collateral, or any part thereof, or any cash or
property held by the Pledgee as collateral under this Agreement, without the
prior written consent of the Pledgee.
SECTION 17. Miscellaneous. Neither this Agreement nor any provisions hereof
may be amended, modified, waived, discharged or terminated, nor may any of the
Collateral be released or the pledge or the security interest created hereby
extended, except by an instrument in writing signed on behalf of the party to be
charged. The Section headings used herein are for convenience of reference only
and shall not define or limit the provisions of this Agreement. This Agreement
may be executed in counterparts, each of which shall be deemed to be an original
and both of which together shall constitute the Agreement. This Agreement
replaces and supercedes in its entirety that certain Stock Pledge Agreement
dated as of November 1, 2001 by and between Pledgee and Pledgor that was
delivered pursuant to the Original Loan Agreement (as defined in the Loan
Agreement).
SECTION 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Texas or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Texas.
[Remainder of page intentionally left blank.
Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered as of the date first above written.
THE PLEDGOR:
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
By:
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Name:
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Title:
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THE PLEDGEE:
EWP FINANCIAL LLC, as Agent
By:
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Name:
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Title:
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EXHIBIT C
COLLATERAL ASSIGNMENT
THIS COLLATERAL ASSIGNMENT (this "Collateral Assignment") is made as of
November 21, 2001 by KEYSTONE CONSOLIDATED INDUSTRIES, INC., a Delaware
corporation (the "Assignor"), for the benefit of EWP FINANCIAL LLC, a Delaware
limited liability company, acting as agent (the "Agent") for itself and for all
additional Lenders (collectively with the Agent, the "Lenders") pursuant to the
terms and conditions of the Loan Agreement (as hereinafter defined).
Recitals:
WHEREAS, pursuant to that certain Amended and Restated Loan Agreement dated
as of November 21, 2001 (the "Loan Agreement") by and between the Assignor, the
Agent, and the Lenders, the Assignor has made promissory notes of even date
herewith aggregating up to an original principal amount of $6,000,000.00, each
payable to a Lender (individually, the "Note" and, collectively, the "Notes");
WHEREAS, the Assignor has made an investment in Engineered Wire Products,
Inc., an Ohio corporation and a wholly-owned subsidiary of Assignor ("EWP"),
which investment, in part, is comprised of and evidenced by an account
maintained on the Assignor's books and records, which account is styled as "Loan
Account - EWP, Account Number 480.20" but which account, in fact, represents the
Assignor's net investment in EWP (together with any and all modifications
thereto, extension thereof and substitution therefor, the "EWP Investment");
WHEREAS, the initial balance of the EWP Investment, which arose in
connection with the transaction whereby the Assignor acquired all of the equity
interest in EWP not already owned by the Assignor, was approximately
$12,000,000.00, and as of September 30, 2001 the balance of the EWP Investment
was approximately $8,400,000.00;
WHEREAS, the Lenders have agreed to make the Loans (as defined in the Loan
Agreement) available to the Assignor with the condition precedent that the
Assignor collaterally assign and grant to the Agent, for itself and as agent for
the Lenders, a security interest in, and lien on, all right, title and interest
of the Assignor in, to, and under EWP Investment as collateral and security for
the Obligations (as hereinafter defined); and
WHEREAS, all capitalized terms used in this Collateral Assignment and not
defined herein shall have the meaning given to such terms in the Loan Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and to secure the payment and performance of the
Assignor's obligations under the Loan Agreement and the Notes, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section 1.1 Recitals. The Recitals set forth hereinabove are incorporated
herein by reference.
Section 1.2 Rules of Construction.
(a) The words "hereof", "herein", "hereunder" "hereto", and other words of
similar import refer to this Collateral Assignment in its entirety.
(b) The terms "agree" and "agreements" contained herein are intended to
include and mean "covenant" and "covenants".
(c) References to Articles, Sections, and other subdivisions of this
Collateral Assignment are to the designated Articles, Sections, and other
subdivisions of this Collateral Assignment as originally executed.
(d) The headings of this Collateral Assignment are for convenience only and
shall not define or limit the provisions hereof.
(e) All references made (i) in the neuter, masculine or feminine gender
shall be deemed to have been made in all such genders, and (ii) in the singular
or plural number shall be deemed to have been made, respectively, in the plural
or singular number as well.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 EWP Investment. The Assignor represents and warrants to the
Lenders that (a) the EWP Investment is not evidenced by any promissory note or
other instrument, (b) the Assignor has not made any previous collateral
assignment of the EWP Investment except for collateral assignments which have
been terminated prior to or as of the date hereof, and (c) no financing
statement covering EWP Investment is on file in any public office except
financing statements in favor of the Lenders and except those which have been
terminated prior to or as of the date hereof.
ARTICLE III
COLLATERAL ASSIGNMENT
Section 3.1 Collateral Assignment. As security and collateral for the
payment and performance of, and compliance with, all of the Obligations, the
Assignor hereby collaterally assigns to the Agent, for itself and as agent for
the Lenders, and grants to the Agent, for itself and as agent for the Lenders, a
lien on, and security interest in, all right, title and interest of the Assignor
in, to, and under the EWP Investment, together with all cash and non-cash
proceeds, distributions or payments in respect thereof; provided, however, that
nothing contained herein shall impose upon the Lenders any obligations or
liabilities of the Assignor under EWP Investment, and provided further that the
Lenders shall not exercise any rights under EWP Investment unless and until (a)
an Event of Default (except with respect to this Collateral Assignment) has
occurred and continues beyond the expiration of any applicable grace and/or
notice and cure periods, under the Loan Agreement or (b) Assignor fails to duly
observe and perform any term, covenant or agreement set forth in this Collateral
Assignment, which failure shall remain uncured for more than thirty (30) days
after written notice thereof to the Assignor by the Agent unless the nature of
the failure is such that (a) it cannot be cured within the thirty (30) day
period, and Assignor institutes corrective action within the thirty (30) day
period and (b) Assignor diligently pursues such action and completes the cure
within ninety (90) days (an "Event of Default"). As used in this Agreement, the
term "Obligations" shall mean all:
(a) the indebtedness evidenced by the Loan Agreement and the Notes (and any
promissory note of the Assignor issued in exchange for, or replacement of, or
substitution for, any of the Notes, which shall be included in the term "Notes"
as used herein), with interest and premiums thereon as therein provided;
(b) all other amounts payable by the Assignor under the Loan Agreement and
the Notes, including without limitation, all fees, costs, expenses and
indemnities payable by the Assignor thereunder;
(c) all indebtedness of the Assignor arising under this Agreement and all
costs and expenses of the Agent in enforcing this Collateral Assignment, the
Loan Agreement and the Notes; and
(d) all renewals and extensions, in whole or in part, of the Notes or of
any other indebtedness or obligation described above.
ARTICLE IV
COVENANTS
Until payment and performance in full of all of the Obligations, the
Assignor hereby covenants and agrees as follows:
Section 4.1 Further Assurances. The Assignor shall promptly upon request
execute, acknowledge and deliver any financing statement, renewal, affidavit,
deed, collateral assignment, continuation statement, security agreement,
certificate or other document as the Agent may reasonably require in order to
perfect, preserve, maintain, protect, continue and/or extend the collateral
assignment, lien or security interest of the Lenders under this Collateral
Assignment and its priority. The Assignor shall pay to the Agent on demand all
taxes, costs and expenses incurred by the Lenders in connection with the
preparation, execution, recording and filing of any such document or instrument
mentioned aforesaid. Such taxes, costs and expenses shall constitute and become
a part of the Obligations.
Section 4.2 Performance under the EWP Investment. The Assignor shall fully,
promptly and faithfully comply with and perform all of its obligations and
duties under the EWP Investment in accordance with the terms thereof, will make
no changes or amendments to the EWP Investment without the prior written consent
of the Agent, and will deliver to the Agent to hold as collateral hereunder any
amounts received by the Assignor in respect of the EWP Investment.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.1 Remedies upon Default. Subject to the provisions and
understandings of Section 3.1 of this Collateral Assignment, upon or at any time
after the occurrence and during the continuance of an Event of Default, the
Agent may, without notice, without regard to the adequacy of security for the
Obligations and in addition to any other remedy which the Lenders may have at
law or in equity under the Loan Agreement or the Stock Pledge Agreement, either
in person or by agent, with or without bringing any action or proceeding, or by
a receiver to be appointed by a court, enforce any and all rights and remedies
of the Assignor under and in connection with the EWP Investment, and subject to
the provisions of the Loan Agreement and Section 3.1 of this Collateral
Assignment, enforce or modify the EWP Investment and do any acts which the Agent
deems proper to protect the security hereof. The Assignor agrees that the
failure of the Assignor to comply with any of the covenants contained herein for
a period of thirty (30) days after the date the Agent notifies the Assignor in
writing shall constitute an immediate Event of Default under the Loan Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Continuation of Collateral Assignment. Upon the payment and
performance in full of all of the Obligations, this Collateral Assignment shall
become and be void and of no effect, but the affidavit of any officer of the
Agent showing any part of the Obligations to remain unpaid or unperformed, shall
be and constitute conclusive evidence of the validity, effectiveness and
continuing force of this Collateral Assignment, and any Person may and is hereby
authorized to rely thereon.
Section 6.2 Successors and Assigns. The rights, powers, privileges and
discretions (hereinafter collectively called the "rights") specifically granted
to the Lenders are not in limitation of, but in addition to, those to which the
Lenders are entitled under any general or local law relating to such collateral
assignments. The rights to which the Lenders may be entitled shall inure to the
benefit of their successors and assigns. All the rights of the Lenders are
cumulative and not alternative and may be enforced successfully or concurrently.
Failure of the Lenders to exercise any of their rights shall not impair any of
their rights nor be deemed a waiver thereof and no waiver of any of their rights
shall be deemed to apply to any other such rights nor shall it be effective
unless in writing and signed by the Agent. The terms and conditions agreed to by
the Assignor and the covenants of the Assignor shall be binding upon its
successors and assigns, but this provision does not waive any prohibition of
assignment or any requirement of consent to an assignment.
Section 6.3 Waiver of Acceptance by Assignor. The Assignor hereby waives
acceptance of this Collateral Assignment by the Lenders.
Section 6.4 Illegality; Severability. If fulfillment of any provision
hereof or any transaction related hereto, at the time transcending the limit of
validity prescribed by law, then ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity; and if any clause or provision
herein contained operates or would prospectively operate to invalidate this
Collateral Assignment in whole or part, then such clause or provision only shall
be void as though not herein contained, and the remainder of this Collateral
Assignment shall remain operative and in full force and effect.
Section 6.5 Amendments. Neither this Collateral Assignment nor any term,
condition, representation, warranty, covenant or agreement hereof may be
changed, waived, discharged or terminated orally, but, rather, only by an
instrument in writing by the party against whom such change, waiver, discharge
or termination is sought.
Section 6.6 Governing Law. This Collateral Assignment shall be governed and
construed in accordance with the laws of the State of Texas without giving
effect to any choice of law provision or rule (whether of the State of Texas or
any other jurisdiction) that would cause the application of any jurisdiction
other than the State of Texas.
Section 6.7 Duplicate Originals. This Collateral Assignment may be executed
in any number of duplicate originals, each of which shall be an original but all
of which together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Assignor has executed this Collateral Assignment by its
duly authorized partner or officer, under seal, as of the day and year first
above written.
ASSIGNOR:
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
By:
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Name:
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Title:
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EXHIBIT D
ASSIGNMENT AGREEMENT
Dated ________________
Reference is made to the Amended and Restated EWP Bridge Loan Agreement
dated as of November 21, 2001 among Keystone Consolidated Industries, Inc., EWP
Financial LLC, as Agent, and the Lenders party thereto (as such Loan Agreement
may hereafter be amended, modified or supplemented from time to time, the "Loan
Agreement"). Terms defined in the Loan Agreement are used herein as therein
defined.
________________ (the "Assignor") and ________________ (the "Assignee")
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without recourse
and without representation or warranty (other than as expressly provided
herein), and the Assignee hereby purchases and assumes from the Assignor, that
interest in and to all of the Assignor's rights and obligations under the Loan
Agreement as of the date hereof which represents the percentage interest
specified in Annex I (the "Assigned Share") of all of Assignor's outstanding
rights and obligations under the Loan Agreement, including, without limitation,
all rights and obligations with respect to the Assigned Share of the Assignor's
Commitment and of the Loans and the Notes held by the Assignor. After giving
effect to such sale and assignment, the Assignee's Commitment will be as set
forth in Annex I.
2. The Assignor (i) represents and warrants that it is duly authorized to
enter into and perform the terms of this Assignment Agreement, that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any liens or security interests; (ii)
makes no other representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan Agreement or the Stock Pledge Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement or the Stock Pledge Agreement or any other instrument or
document furnished pursuant thereto; and (iii) makes no other representation or
warranty and assumes no responsibility with respect to the financial condition
of the Company or the performance or observance by the Company of any of its
obligations under the Loan Agreement or the Stock Pledge Agreement or any other
instrument or document furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly authorized to
enter into and perform the terms of this Assignment Agreement; (ii) confirms
that it has received a copy of the Loan Agreement, the Stock Pledge Agreement
and the Collateral Agreement, together with copies of the financial statements
referred to therein and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment Agreement; (iii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Agreement; (iv) appoints and authorizes the Agent to take such action as agent
on its behalf to exercise such powers under the Loan Agreement, the Stock Pledge
Agreement and the Collateral Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Agreement are required to be
performed by it as a Lender; and (vi) makes the representations and warranties
to the Company set forth in Section 5.2 of the Loan Agreement.
4. Following the execution of this Assignment Agreement by the Assignor and
the Assignee, an executed original hereof (together with all attachments) will
be delivered to the Agent. The effective date of this Assignment Agreement shall
be the date of execution hereof by the Assignor and the Assignee (the
"Settlement Date").
5. As of the Settlement Date, (i) the Assignee shall be a party to the Loan
Agreement and, to the extent provided in this Assignment Agreement, have the
rights and obligations of a Lender thereunder and under the Stock Pledge
Agreement and the Collateral Agreement; and (ii) the Assignor shall, to the
extent provided in this Assignment Agreement, relinquish its rights and be
released from its obligations under the Loan Agreement, the Stock Pledge
Agreement and the Collateral Agreement.
6. It is agreed that upon the effectiveness hereof, the Assignee shall be
entitled to all interest on the Assigned Share of the Loans which accrue on and
after the Settlement Date. It is further agreed that all payments of principal
made by the Company on the Assigned Share of the Loans which occur on and after
the Settlement Date will be paid directly to the Assignee. Upon the Settlement
Date, the Assignee shall pay to the Assignor an amount specified by the Assignor
in writing which represents the Assigned Share of the principal amount of the
respective Loans made by the Assignor pursuant to the Loan Agreement which are
outstanding on the Settlement Date, net of any closing costs, and which are
being assigned hereunder. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Loan Agreement for periods prior
to the Settlement Date directly between themselves on the Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
8. This Assignment Agreement may be executed in counterparts, and by
different parties on separate counterparts, each of which shall be an original
and all of which collectively shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
as Assignor as Assignee
By: By:
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Its: Its:
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ANNEX I
to
ASSIGNMENT AGREEMENT
1. Amounts:
Commitment Loans
Aggregate Amount $_____________ $_______________
for all Lenders
Assigned Share ____________% ____________%
Amount of $______________ $______________
Assigned Share
Amount retained by $______________ $______________
Assignor
2. Notices:
ASSIGNOR: ASSIGNEE:
Attn: Attn:
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Telephone: Telephone:
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Fax: Fax:
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3. Payment Instructions:
ASSIGNOR: ASSIGNEE:
ABA No.: ABA No.:
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Account No.: Account No.:
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Reference: Reference:
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Attn: Attn:
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