WAIVER, AMENDMENT AND CONSENT AGREEMENT
THIS WAIVER, AMENDMENT AND CONSENT AGREEMENT (this "Agreement") is
made and entered into as of the 6th day of March, 2002, by and among FLEET
CAPITAL CORPORATION ("Lender"), a Rhode Island corporation with an office at 200
Glastonbury Boulevard, Glastonbury, Connecticut 06033; and UNITED INDUSTRIAL
CORPORATION, a Delaware corporation, and the following of its subsidiaries: AAI
CORPORATION ("AAI"), a Maryland corporation, DETROIT STOKER COMPANY, a Michigan
corporation; AAI ENGINEERING SUPPORT INC., a Maryland corporation, AAI/ACL
TECHNOLOGIES, INC., a Maryland corporation and MIDWEST METALLURGICAL LABORATORY,
INC., a Michigan corporation (each a "Borrower" and collectively the
"Borrowers"). Capitalized terms used, but not defined, herein shall have the
meanings given to such terms in the Credit Agreement (defined below).
WHEREAS, the Borrowers and the Lender are parties to the Loan and
Security Agreement, dated as of June 28, 2001, (the "Credit Agreement"); and
WHEREAS, the Borrowers have requested and the Lender has agreed to
waive certain of the provisions of the Credit Agreement and has consented to
certain matters, including, without limitation, certain amendments and
modifications of the Credit Agreement, all on the terms and conditions set forth
herein;
NOW THEREFORE, in consideration of the premises, and in reliance
thereon, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Waiver.
(i) The Lender hereby retroactively waives the non-compliance by
Borrowers with the terms of Section 8.3.1 of the Credit Agreement for the 4
fiscal quarters ended December 31, 2001.
(ii) The Lender hereby waives the requirements of and compliance by
Borrowers with the terms of Section 10.2 of the Credit Agreement.
Section 2. Amendments and Consents. Subject to the satisfaction in
full, on or prior to the Agreement Effective Date, of the conditions precedent
set forth in Section 3 below, the Lender hereby consents as follows:
(i) that during the period from the date hereof to June 30, 2002
unless and until an Event of Default occurs, the third sentence of Section 1.1.1
of the Credit Agreement shall be amended by deleting therefrom the reference to
the figures "25,000,000" and substituting therefor the figures "32,000,000";
(ii) that Section 10.3 of the Credit Agreement is hereby amended by
deleting therefrom the reference to the figures "10,000,000" and substituting
therefor the figures "11,000,000";
(iii) that unless and until an Event of Default occurs, the
definition of "Consolidated Fixed Charge Coverage Ratio" contained in the Credit
Agreement shall be deleted in its entirety and the following substituted
therefor:
(iv) "Consolidated Fixed Charge Coverage Ratio - means for the
period in question, the ratio of (a) (A) the sum of the Borrower's earnings
before interest, taxes, depreciation and amortization, plus (B) if the period in
question includes the fiscal quarter ending December 31, 2001, $12,000,000, plus
(C) if the period in question includes the fiscal quarter ending March 31, 2002,
$12,000,000, plus (D) if the period in question includes the fiscal quarter
ending June 30, 2002, $12,000,000, plus (E) if the period in question includes
the fiscal quarter ending September 30, 2002, $9,000,000, plus (F) if the period
in question includes the fiscal quarter ending December 31, 2002, $6,000,000,
plus (G) if the period in question includes the fiscal quarter ending March 31,
2003, $6,000,000, minus (H) Capital Expenditures; divided by (b) the sum of cash
taxes, dividends, stock repurchases, scheduled principal payments of the Loans,
principal payments on Capitalized Lease Obligations and interest, as determined
in accordance with GAAP.".
Section 3. Conditions Precedent to Lender's Consent. Lender shall
not consent, or be deemed to have consented to the consents and amendments set
forth in Section 2 above, unless each of the following conditions shall have
been satisfied on or prior to the Agreement Effective Date (as defined in
Section 4 below):
(i) The Borrowers shall have delivered to the Lender a duly executed
original of the Tri-Party Blocked Account Agreement, substantially in the form
of Exhibit C to the Credit Agreement.
(ii) The Borrowers shall have paid a fee of $15,000 to Lender.
(iii) The Borrowers shall have paid to counsel for the Lender an
amount of $11,929.15 in respect of fees owing in connection with the securing
and perfecting of the Collateral in favor of the Lender under and pursuant to
the terms of the Credit Agreement, in addition the Borrowers shall pay the
reasonable costs and expenses of such counsel incurred in connection with this
Agreement.
Section 4. Conditions to Effectiveness of Agreement. This Agreement
shall become effective as of the date hereof only when the following conditions
shall have been satisfied (the date of satisfaction of such conditions being
referred to herein as the "Agreement Effective Date"):
(i) The Lender shall have received a copy of this Agreement duly
executed by the Borrowers and the Lender.
(ii) The Lender shall have received such other information,
approvals, opinions, documents or instruments as it may reasonably request.
Section 5. Company's Representations and Warranties. In order to
induce the Lender to enter into this Agreement, the Borrowers jointly and
severally represent and warrant to
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the Lender that, as of the Agreement Effective Date, after giving effect to the
effectiveness of this Agreement, the following statements are true and correct
in all material respects:
(i) Authorization of Agreements. The execution and delivery of this
Agreement by each Borrower and its performance under the Credit Agreement as
amended by this Agreement (the "Amended Agreement") are within the each such
Borrower's corporate powers and have been duly authorized by all necessary
corporate action on the part of each such Borrower.
(ii) No Conflict. The execution and delivery by each Borrower of
this Agreement and the performance by each Borrower of the Amended Agreement do
not contravene any such Borrower's certificate of incorporation or by laws or
any other contractual restriction where such a contravention has a reasonable
possibility of having a Material Adverse Effect or contravene any law or
governmental regulation or court decree or order binding on or affecting any
such Borrower; or
(iii) Binding Obligation. This Agreement has been duly executed and
delivered by each Borrower and this Agreement and the Amended Agreement
constitute the legal, valid and binding obligations of each Borrower,
enforceable against each Borrower in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally and by
general principles of equity.
(iv) Governmental Approval, Regulation, etc. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other Person is required for the due
execution, delivery or performance of this Agreement by any Borrower.
(v) Incorporation of Representations and Warranties from Credit
Agreement. Other than as amended hereby each of the representations and
warranties set forth in Section 7 of the Credit Agreement is true and correct.
Section 6. Acknowledgement. Each Borrower acknowledges and agrees
that each of the Security Documents to which it is a party or otherwise bound
shall continue in full force and effect. Each Borrower hereby confirms that each
Security Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guaranty or secure, as the case may be, the
payment and performance of all obligations guaranteed or secured thereby, as the
case may be.
Section 7. Miscellaneous.
(i) Effect on the Credit Agreement and the Other Loan Documents.
Except as specifically set forth herein, the terms, provisions and conditions of
the Credit Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed and the Borrowers remain bound to
perform their obligations thereunder.
(ii) Applicable Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
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STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF
LAWS.
(iii) Headings. The various headings of this Agreement are inserted
for convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
(iv) Counterparts and Incorporation. This Agreement may be executed
by the parties hereto in several counterparts and by the different parties on
separate counterparts, each of which shall be deemed to be an original and all
of which shall constitute together but one and the same instrument. Following
execution and delivery of this Agreement any reference to the Loan and Security
Agreement or Credit Agreement shall be deemed a reference to such document as
hereby amended.
(v) Notice. Any notice to be given hereunder shall comply with
Section 12.8 of the Credit Agreement.
(vi) Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provisions in any other
jurisdiction.
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IN WITNESS WHEREOF, this Waiver, Amendment and Consent Agreement has
been duly executed and delivered as of the day and year first above written.
FLEET CAPITAL CORPORATION
By: /s/ Linda M. Smyth
-----------------------------------
Name: Linda M. Smyth
Title: Vice President
UNITED INDUSTRIAL CORPORATION
By: /s/ James H. Perry
-----------------------------------
Name: James H. Perry
Title: Vice President
AAI CORPORATION
By: /s/ James H. Perry
-----------------------------------
Name: James H. Perry
Title: Vice President
DETROIT STOKER COMPANY
By: /s/ James H. Perry
-----------------------------------
Name: James H. Perry
Title: Vice President
AAI ENGINEERING SUPPORT INC.
By: /s/ James H. Perry
-----------------------------------
Name: James H. Perry
Title: Vice President
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AAI/ACL TECHNOLOGIES, INC.
By: /s/ James H. Perry
-----------------------------------
Name: James H. Perry
Title: Vice President
MIDWEST METALLURGICAL LABORATORY, INC.
By: /s/ James H. Perry
-----------------------------------
Name: James H. Perry
Title: Vice President
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